U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
Amendment No. 1
General form for registration of securities of small
business issuers Under Section 12(b) or (g) of the
Securities Exchange Act of 1934
Nutripure.com
-------------
(Name of Small Business Issuer in its charter)
Nevada
------
(State or other jurisdiction of incorporation or organization)
Applied For
-----------
(I.R.S. Employer Identification No.)
1725 Gillespie Way, El Cajon, California 90220
----------------------------------------------
Principal Executive Offices
619 596 8600
------------
(Issuer's Telephone No.)
Securities to be Registered under Section 12(b) of the Act: None
Securities to be Registered under Section 12(g) of the Act: Common Stock
(Title of Stock)
Total number of pages: 82
Index to Exhibits Appears on Page 23
<PAGE>
Item 1
(a) Business Development
------------------------
Nutripure.com (Nutripure or the Company) was organized as a Nevada corporation
in December, 1999 as a wholly owned subsidiary of Innovative Medical Services
(IMS) for the purpose of conducting the below described e-commerce business. In
January 2000 the Board of Directors of IMS declared a dividend of one share of
Nutripure.com common stock for every ten shares of IMS held on the record date.
The record date for the dividend is June 9, 2000.
On December 21, 1999, Nutripure.com entered into an Agreement with Bergen
Brunswig Corporation whereby Nutripure.com would develop and maintain the below
described e-commerce website. On March 5, 2000 the website became active.
Relationship of Nutripure.com with Innovative Medical Services
Since inception in December 1999, IMS has provided all of the Company's
facilities, equipment and personnel. The accountable value of the facilities,
equipment and personnel provided to the Company up to the date of the website
sale agreement was included in the sale price.
IMS will continue to provide the Company with facilities, equipment and
personnel for the foreseeable future. IMS and the Company will respectively
continue to accrue the accountable costs thereof as related party accounts
receivable and accounts payable.
The Company anticipates that beginning August 1, 2000 it will sublease
approximately 2,000 square feet of adjoining office space from IMS as this
additional space becomes available to IMS from its present unrelated tenant.
Depending upon the amount and timing of Company revenue, the Company anticipates
hiring up to six of its own non-executive employees either directly from IMS or
as new hires.
For the foreseeable future, management functions such as strategic planning,
corporate finance planning, legal and accounting services will continue to be
provided by IMS and accounted for as described above. At such time that the
Company begins to realize net income from operations, a committee of the
Company's Board of Directors the majority of which are the directors who are not
also IMS officers and directors, will determine whether to offer a management
contract to IMS or to seek independent management for the Company.
The Company anticipates filing a consolidated tax return with IMS provided at
July 31, 2000, IMS owns at least 80% of the Company's outstanding common stock.
Any tax payable or tax benefit will be allocated to the respective companies
based upon their taxable income. If IMS owns less than 80% of the Company's
common stock at July 31, 2000, the Company will file a separate tax return.
The By-Laws of the Company provide that any transaction with IMS or resolution
of a dispute between the Company and IMS must be approved by a majority of the
Company's directors who are not officers or directors of IMS.
(b) Narrative Description of Business
-------------------------------------
Nutripure.com is an e-commerce website providing consumers a wide variety of
vitamins, minerals, nutritional supplements, homeopathic remedies and natural
products. In addition to products, the website offers comprehensive health and
wellness information in an easy-to-access, intuitive reference format. The
website will also present the Nutripure line of water filtration systems.
The market for online vitamins, minerals and supplements as well as for water
treatment systems is growing rapidly as scientific research endorses the
benefits of such products. The ever growing consumer group for these products
include health conscious adults, fitness participants, athletes, parents, senior
citizens and people suffering from illnesses and ailments who are looking for
alternative or complementary treatments to traditional medicine.
The Company intends to add a membership feature to Nutirpure.com whereby
consumers may purchase a one-year membership. The membership will allow
customers to purchase products from Nutripure.com at a significant discount -
often at or near cost. The Company plans to launch advertising campaigns to
stimulate participation in the membership program and may team with strategic
partners to maximize marketing efforts.
Nutripure.com has formed a strategic alliance with Bergen Brunswig Corporation
to provide a seamless online interface for efficient, direct-to-consumer
distribution of products through Bergen Brunswig's strategically located,
state-of-the-art distribution facility in Louisville, Kentucky. Orders placed on
Nutripure.com are simultaneously transmitted to Bergen Brunswig's distribution
facility where the order is picked, packed and shipped to the consumer as
quickly as within 24 hours. The alliance combines the strengths of
Nutripure.com's aggressive sales, marketing and customer support programs with
Bergen Brunswig's leadership, buying power and order fulfillment and delivery
system.
Nutripure.com was formally launched on March 5, 2000.
Nutripure.com competes with retailers, wholesalers, manufacturers, catalog
sellers and online merchants. Within this competitive environment, Nutripure.com
has positioned itself as a premier source for specialty health products and
credible, scientifically-based health resource information. Online banner and
keyword advertising will be strongly supported by national advertising
campaigns, beginning with radio advertisements, that will drive consumers to the
website while branding the "Nutripure" name. As revenues from Nutripure.com
grow, so will the magnitude of the advertising campaigns, which may extend into
popular magazine print placement and television advertising.
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Bergen Brunswig will act as the sole wholesaler for products sold on
Nutripure.com. A leading supplier of pharmaceuticals, medical-surgical supplies
and specialty healthcare products, Bergen's customers include the nation's
healthcare providers (hospitals, nursing homes and physicians), drug stores,
manufacturers and patients. As such, Bergen Brunswig proves to be a reliable
source for products.
Nutripure.com has entered into a three-year internet fulfillment services
agreement with Bergen Brunswig Corporation. The contract provides for a monthly
service fee in addition to a per item fulfillment fee to be paid to Bergen
Brunswig by Nutripure.com. Nutripure.com will also pay a software and database
license fee for the product images and ingredient database for all Bergen
Brunswig products featured on the website. The contract also stipulates a rebate
program in which Bergen Brunswig will pay Nutripure.com quarterly rebates based
on purchase volume. Nutripure.com has also entered into licensing agreements
with Healthnotes and Utah Health Infomatics for third-party health resource
content and personal profiling tools, respectively.
Governmental regulation of some vitamins, minerals, supplements, homeopathic
remedies and natural products may in the future limit our sales or add
additional costs to distribution. At this time, however, Nutripure.com does not
expect any impact from government approval or regulation because, through Bergen
Brunswig, it is offering only products that comply with current regulatory
requirements, including FDA labeling rules.
As per the company's agreement with Bergen Brunswig, the company will obtain and
maintain a listed chemicals license from the DEA (Drug Enforcement
Administration) and will report the sale and shipment of all products pursuant
to the requirements of the DEA and comply with all comparable state
requirements.
Nutripure.com has four employees which are its executive officers.
Item 2. Management Discussion & Analysis or Plan of Operation
This section contains forward-looking statements that involve risks and
uncertainties. These forward-looking statements are not guarantees of our future
performance. They are subject to risks and uncertainties related to business
operations, some of which are beyond our control. Our actual results may differ
materially from those anticipated in these forward-looking statements.
Plan of Operations
The Company's Plan of Operation for the fourth quarter of the current fiscal
year and for the next fiscal year is to hire its employees and commence a
multi-media advertising campaign to drive visits to the website and produce
revenue through sales.
At the present time, all of the personnel who developed and maintain the
Company's website are employees of Innovative Medical Services. In addition the
Company intends to hire full time webpage graphic designers, customer service
representatives and marketing representatives. The Company anticipates that it
will hire up to ten individuals during the current fiscal year and that its
parent corporation, Innovative Medical Services will provide all other
management, legal and accounting services.
The Company's advertising campaign is expected to be launched before the end of
the current fiscal year and reach its highest projected levels during the next
fiscal year. The multi-media program will include paid and bartered internet
advertising on internet portals such as America Online, Yahoo and Lycos and
websites whose operators are expected to execute cross marketing agreements with
the Company. The Company will also launch a radio advertising campaign and
enclose advertisements and coupons in the Innovative Medical Services Nutripure
residential water filtration products.
The Company is projecting expenditures of approximately $1,000,000 for
personnel, marketing, advertising, computer hardware and software,
administrative and other expenses over the next twelve months. The Company
anticipates funding these expenditures through loans or equity investment by
Innovative Medical Services, operational revenues or additional sales of
securities of the Company in private or public offerings. These funds are in
addition to the $500,000 received from the sale of 1,000,000 shares of its
common stock during the period of December 1999 through February 2000.
In December 1999, the Company purchased its HTML/ASP version website from its
parent corporation, Innovative Medical Services for $1,000,000 of which $407,000
has been paid. HTML/ASP stands for Hyper Text Mark-up Language and Active Server
Pages. These are the commonly used software for website design and operation.
The balance of $593,000 is included in accounts payable. In addition, Innovative
Medical Services agreed to create an XML version of the website on or before May
1, 2000 which it will sell to the Company for an additional $1,000,000. XML
stands for Extensible Mark-up Language which is the most advanced software for
website design and operation. The Company's Internet Fulfillment Services
Agreement with Bergen Brunswig requires a new website programmed in XML. Payment
of any amounts due to Innovative Medical Services will be deferred until such
time that the payments can be made from revenues or additional equity investment
without impairing the development of the Company's business.
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Item 3. Description of Property
The Company's business is operated from the headquarters of IMS. IMS operates in
a 10,000 square foot facility located in a light industrial/office park in El
Cajon, California. This location houses all administrative, executive, sales,
assembly, shipping and manufacturing functions for the IMS as well as the
Company. IMS leases the space from an unaffiliated third party under a
sixty-five month agreement commencing July 1, 1996. The monthly rental is $0.61
per square foot plus $0.08 per square foot for maintenance of common areas.
There is also a fixed yearly increase of 4%. IMS has also signed an amendment to
the lease to allow for an option to lease the building for an additional five
years.
<PAGE>
Item 4. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners holding five percent
or greater of the 10,000,000 shares of common stock outstanding as of
May 31, 2000.
Title of Class Name and Address Amount and Nature % of
of Beneficial Owner of Beneficial Owner Class
Common Innovative Medical Services 8,000,000 80.4%
1725 Gillespie Way
El Cajon, CA 92020
(b) Security Ownership of Management
Name and Address(1) Amount and Nature % of
Title of Class of Beneficial Owner of Beneficial Owner Class
Common Michael Krall 200,000 2.0%
Rodney Adler(2) 350,000 3.5%
Mathew Kanter 300,000 3.0%
Donna Singer 75,000 0.75%
Gary Brownell 75,000 0.75%
William Shewalter 125,000 1.25%
Steven Nelson 50,000 0.5%
Dennis Brovarone 50,000 0.5%
All officers and Directors
as a Group (8 persons) 1,175,000 11.75%
(1) The address of the officers and directors is in care of the Company, 1725
Gillespie Way, El Cajon, California 92020.
(2) Includes 250,000 shares held by Adler Corporation Pty, Ltd., which Mr.
Adler controls.
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Item 5. Directors, Executive Officers, Promoters and Control Persons
(a) Directors and Executive Officers
Name Age Position First Year
with Company
Michael L. Krall 47 President, CEO & Director 1999
Donna Singer 30 Secretary and Director 1999
Gary Brownell 51 Chief Financial Officer 1999
Steven Nelson 52 V-P of Pharm. Info. & Director 1999
Rodney Adler 41 Director 1999
Dennis Brovarone 44 Director 1999
Mathew Kanter 37 Director 1999
William Shewalter 46 Director 1999
Business Experience
RODNEY S. ADLER Rodney S. Adler served as CEO of FAI Insurances Limited for 11
years from 1988 until the takeover of FAI by HIH Insurance Limited (HIH.AX).
Since that time, Mr. Adler has remained a Director of FAI and is a Director of
HIH. Mr. Adler is a Governor of The Sydney Institute, a Director of One.Tel
Limited (ONE.AX), Chairman of Medicine Quantale Limited (MQL.AX), a Director of
Anaconda Nickel (ANL.AX) and the Joint Chairman of Juvenile Diabetes Australia.
Mr. Adler was appointed a Member of the Order of Australia for his service to
the community and to the support of business and philanthropy. Mr. Adler holds a
Bachelor of Commerce Degree from the University of New South Wales, a Master of
Economics Degree from Macquarie University and is a Fellow of the Institute of
Chartered Accountants in Australia. Mr. Adler is an Adjunct Professor in the
Faculty of Business at the University of Technology Sydney, where he frequently
lectures.
DR. STEVEN E. NELSON Dr. Steven E. Nelson has been practicing pharmacy for over
25 years, with an ongoing emphasis on nutritional supplementation and
nutritional medicine. Dr. Nelson maintains a private practice of clinical
wellness centers in Las Vegas, Nevada and Palm Springs, California in which he
focuses on the clinical use of natural medicines. Previously, Dr. Nelson owned
pharmacies and practiced pharmacy in many settings from retail and home health
care to hospital environments, including specialties of oncology, ophthalmology,
obstetrics and gynecology, surgery, pediatrics, general medicine and infectious
disease. From 1988 to 1998, Dr. Nelson owned a Medicine Shoppe pharmacy in
Banning, California. In 1990, Dr. Nelson opened his Wellness Clinic in Banning.
Since 1998, Dr. Nelson has been a consulting pharmacist to several hospital
pharmacies and has opened an additional Wellness Clinic in Las Vegas, Nevada.
Dr. Nelson holds a Bachelor of Science, Pharmacy degree from the University of
Wisconsin, a Doctor of Pharmacy degree from the University of Michigan and a PhD
in Clinical Nutrition from Purdue. Dr. Nelson belongs to the International
Association of Certified Clinical Nutritionists (IACCN) and is a Clinical Fellow
of the British Institute of Homeopathy. Mr. Nelson is not required to devote any
specific amount of time to the affairs of the Company. He is expected to provide
whatever time necessary on a timely basis. Mr. Nelson is primarily responsible
for responding to inquiries on nutritional information from the website.
DENNIS BROVARONE Mr. Brovarone has been Securities Law Counsel and a Director of
Innovative Medical Services since 1996. He has been practicing corporate and
securities law since 1986 and as a solo practitioner since 1990. Since December
1997, Mr. Brovarone has served as the President and Chairman of the Board of
Directors of Ethika Corporation, a publicly held, Mississippi corporation
investment holding company with its office in Westminster, Colorado. Since
January 1999 Mr. Brovarone has served as a Director of Elgrande.com, Inc., a
publicly held Nevada corporation with offices is Vancouver, British Columbia.
From January 1995 to March 1998 Mr. Brovarone served as President (Chairman) of
the Board of Directors of The Community Involved Charter School, a four year old
K-12 public school located in Lakewood, Colorado, operating under an independent
charter and serving approximately 350 students in an individualized,
experiential learning environment. Mr. Brovarone lives and works in Westminster,
Colorado. Mr. Brovarone is not required to devote any specific amount of time to
the affairs of the Company. He is expected to provide whatever time necessary on
a timely basis. Mr. Brovarone is primarily responsible for the Company's
corporate and securities law compliance.
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GARY W. BROWNELL Mr. Brownell has been the Chief Financial Officer and a
Director of Innovative Medical Services since 1996. Mr. Brownell is a Certified
Public Accountant in a private partnership practice. He is the partner in charge
of taxes and municipal audits for his firm. Mr. Brownell graduated from San
Diego State University in 1973 with a Bachelor of Science degree in accounting.
He received his Certified Public Accountant designation in 1983. Mr. Brownell
has been a partner in Brownell and Duffy since 1985. Mr. Brownell is not
required to devote any specific amount of time to the affairs of the Company. He
is expected to provide whatever time necessary on a timely basis. Mr. Brownell
is primarily responsible for the Company's accounting and financial planning.
MATTHEW D. KANTER Matthew D. Kanter has more than 20 years of experience in
technology management and services. Since October 1998, Mr. Kanter is the
President of USi New York (NASDAQ: USIX) where he is responsible for all
e-commerce and e-business services for the northeast region of
USinternetworking, Inc. Until it was acquired by USi and from January 1992 to
October 1998, Mr. Kanter served as President, CEO and Technical Director of
Advanced Communication Resources (ACR), which delivers applications development
and systems integration services to the financial services community in the
Northeastern United States. Before joining ACR, Mr. Kanter was Manager of
Technical Services at Simpson, Thacher and Bartlett, one of the largest law
firms in the country. Mr. Kanter has also served as an independent consultant,
and has in-depth expertise in databases and database architecture. Majoring in
statistics and information systems, Mr. Kanter attended Baruch College in the
City University of New York. He is a Microsoft Certified Systems Engineer, A
Sybase Certified Instructor, and a Novell Certified Network Instructor.
MICHAEL L. KRALL Mr. Krall is the President, CEO and Chairman of the Board of
Directors of Innovative Medical Services, a position he has held since 1993. He
is responsible for the strategic planning, product development, and day-to-day
operations of IMS. Previously, Mr. Krall was the President and CEO of
Bettis-Krall Construction, Inc. a successful building-development company of
custom homes and commercial property in San Diego County, California. He has
also held numerous positions in general management in the hospitality industry.
Mr. Krall attended Pepperdine University (economics, statistics mechanical
engineering). He previously served 4 years in the United States Marine Corps and
was elected, by general election, to a 4 year term on the Valle de Oro Planning
Board. Mr. Krall lives in El Cajon, California with his wife, Connie and two
children. Mr. Krall is not required to devote any specific amount of time to the
affairs of the Company. He is expected to provide whatever time neccessary on a
timely basis. Mr. Krall has overall management responsibility including but not
limited to strategic planning, contract negotiation and corporate finance.
WILLIAM SHEWALTER Bill Shewalter has over 23 years of experience in finance,
management and new business development, primarily in the real estate
development industry. He is the Chief Operating Officer of The Goodman Company,
a West Palm Beach, Florida - based Real Estate Management and Development
Company where he has served since 1997. Mr. Shewalter has a Bachelor of Science
Degree from Illinois State University, an MBA from Northwestern University and
is a Certified Public Accountant.
DONNA SINGER Ms. Singer is the Executive Vice President of Innovative Medical
Services. From 1996-1998 Ms. Singer served as Vice President of Operations for
the Company. Ms. Singer is responsible for company operations, corporate
communications, investor relations, marketing and sales. Previously, Ms. Singer
served as the investor relations executive at Western Garnet International, a
Toronto Stock Exchange mining company. Ms. Singer graduated from Gonzaga
University with a Bachelor of Arts degree and lives with her husband in
Lakeside, California. Ms. Singer is not required to devote any specific amount
of time to the affairs of the Company. She is expected to provide whatever time
neccessary on a timely basis. Ms Singer is primarily responsible for investor
relations, marketing, strategic planning, corporate finance and contract
negotiations.
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Item 6.
(a) Executive Compensation Table
The Company has omitted the Executive Compensation Table as it has not paid any
cash or non-cash compensation to any of its officers.
(b) Option/SAR Grants in Last Fiscal Year (Individual Grants):
No options have been granted to date.
(c) Aggregated Option/SAR Exercises and Option/SAR Values for last fiscal year:
None
(d) Long-term Incentive Plans -- Awards in last fiscal year: None
The Company has not otherwise awarded any stock options, stock appreciation
rights or other form of derivative security or common stock or cash bonuses to
its executive officers and directors.
(e) Compensation of Directors
1. Standard Arrangements: The members of the Company's Board of Directors
are reimbursed for actual expenses incurred in attending Board
meetings.
2. Other Arrangements: There are no other arrangements.
(f) Employment Contracts, Termination of Employment, and Change-in-control
Arrangements
The Company's executive officers do not work pursuant to written employment
agreements or draw salaries. In the event compensation is to be paid at a future
time, such compensation will be determined by the Board of Directors and are
reviewed annually.
Item 7. Certain Relationships and Related Transactions
The Company's By-Laws include a provision regarding Related Party Transactions
which requires that each participant to such transaction identify all direct and
indirect interests to be derived as a result of the Company's entering into the
related transaction. A majority of the disinterested members of the board of
directors must approve any Related Party Transaction.
The following shares were granted to the Officers and Directors upon the
organization of the Company for their agreement to serve:
Name # of Shares
----------------------------------------------
Michael Krall 200,000
Rodney Adler 100,000
Mathew Kanter 100,000
Donna Singer 75,000
<PAGE>
Gary Brownell 75,000
William Schewalter 75,000
Steven Nelson 50,000
Dennis Brovarone 50,000
In December 1999, the Company purchased its HTML/ASP version website from its
parent corporation, Innovative Medical Services for $1,000,000 of which $407,000
has been paid. The balance of $593,000 is included in accounts payable. In
addition, Innovative Medical Services agreed to create a XML version of the
website on or before May 1, 2000 which it will sell to the Company for an
additional $1,000,000. Payment of any amounts due to Innovative Medical Services
will be deferred until such time that the payments can be made from revenues or
additional equity investment without impairing the development of the Company's
business.
Item 8. Description of Securities
The authorized capital stock of Company consists of 50,000,000 shares of common
stock and 10,000,000 shares of preferred stock, the rights and preferences of
which may be determined by the Board of Directors prior to issuance. No warrants
to acquire common stock have been authorized. There are no outstanding
obligations of the Company to repurchase, redeem or otherwise acquire any shares
of the Company's common stock.
The common stock carry no preemptive rights, are not convertible, redeemable,
assessable or entitled to the benefits of any sinking fund. The common stock
affords the holders no cumulative voting rights, and the holders of a majority
of the shares voting for the election of the directors can elect all of the
directors if they should choose to do so.
PART II
Item 1. Market Price of and Dividends on the Company's Common Equity and Other
Shareholder Matters
(a) Market Information
The Company's stock is not listed for sale on any exchange or trading medium.
The Company intends to seek the listing of its Common Stock on the OTC
Electronic Bulletin Board upon the effectiveness of this Form 10-SB. Until such
time, there is no public market for the Company's Common Stock. During December
1999 through February 2000, the Company sold 900,000 shares for $450,000 to nine
accredited investors in a private placement of securities exempt from
registration pursuant to Rule 504 of Regulation D. There are 19 holders of
restricted securities as defined by Rule 144, none of which have not been held
in excess of one year. The shares held by the affiliates may only be sold
pursuant to Rule 144. The Company has not agreed to file any registration
statements for its existing shareholders.
(b) Holders
There are nineteen holders of the Company's Common Stock as of May 31, 2000.
(c) Dividends
The Company has paid no dividends to date on its Common Stock. The Company
reserves the right to declare a dividend when operations merit.
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Item 2. Legal Proceedings: There are no legal proceedings to report.
Item 3. Changes in and Disagreements with Accountants: None
Item 4. Recent Sales of Unregistered Securities
During the past three years, the Company sold securities which were not
registered under the Securities Act of 1933, as amended, as set forth below.
<TABLE>
<CAPTION>
Date Name # of shares issued Consideration (U.S. $)
---- ---- ------------------ ----------------------
<S> <C> <C> <C>
12/06/99 Innovative Medical Services 8,000,0000 $8000.00
Creative Corporate Solutions 200,000 Services
Michael Krall 200,000 Services
Rodney Adler 100,000 Services
Mathew Kanter 100,000 Services
Donna Singer 75,000 Services
Gary Brownell 75,000 Services
William Schewalter 25,000 Services
Steven Nelson 50,000 Services
Dennis Brovarone 50,000 Services
Eugene Peiser 25,000 Services
Patrick Galuska 25,000 Services
James Pritsiolas 25,000 Services
-------
Total 9,000,000
12/28/99 James Pritsiolas 50,000 $25,000
12/31/99 Strang Mechanical Inc. Emp. Ret. Trust 50,000 $25,000
12/31/99 Giltner B. Stevens 50,000 $25,000
01/05/00 Adler Corporation PTY, Ltd. 250,000 $125,000
01/06/00 Albert Pick III 100,000 $50,000
01/06/00 William Shewalter 50,000 $25,000
01/26/00 FTP, Inc. 150,000 $75,000
02/02/00 N. Herrick Irrev. Securities Trust 50,000 $25,000
02/15/00 N. Herrick Irrev. Securities Trust 50,000 $25,000
02/29/00 Mathew Kanter 200,000 $100,000
------- --------
Total 1,000,000 $500,000
</TABLE>
The Company was not a reporting company pursuant to the Securities Exchange Act
of 1934 nor was it a development stage company with no business plan. Thus it
was eligible to rely upon Rule 504 as a safe harbor exemption from the
registration requirements of the Securities Act of 1933. Moreover, Rule 504 was
available in that the Company sold less than $1,000,000.00 worth of securities
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in the previous 12 month period and except for the Company's officers and
directors, the purchasers were unaffiliated accredited investors. The Company
relied upon the exemption from registration set forth in Section 4(2) of the
Securities Act of 1933 and the Rule 504 safe harbor exemption for the sales of
securities for cash. These sales were entirely private transactions pursuant to
which all material information as specified in Rule 502(b)(2) was made available
to the purchasers.
Item 5. Indemnification of Directors and Officers
Article 11 of the Company's By-laws provides that every person who was or is a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or a person for whom he is the legal representative
is or was a director or officer of the corporation or is or was serving at the
request of the corporation or for its benefit as a director or officer of
another corporation, or as its representative in a partnership, joint venture,
trust or other enterprise, shall be indemnified and held harmless to the fullest
extent legally permissible under the General Corporation Law of the State of
Nevada against all expenses, liability and loss (including attorney's fees,
judgments, fines and amounts paid or to be paid in settlement) reasonably
incurred or suffered by him in connection therewith. The expenses of officers
and directors incurred in defending a civil or criminal action, suit or
proceeding must be paid by the corporation as they are incurred and in advance
of the final disposition of the action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if it
is ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. Such right of indemnification
shall be a contract right which may be enforced in any manner desired by such
person. Such right of indemnification shall not be exclusive of any other right
which such directors, officers or representatives may have or hereafter acquire
and, without limiting the generality of such statement, they shall be entitled
to their respective rights of indemnification under any bylaw, agreement, vote
of stockholders, provision of law or otherwise, as well as their rights under
Article 11.
Nevada Revised Statutes Section 78.7502 provides for discretionary and mandatory
indemnification of officers, directors, employees and agents as follows:
1. A corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed legal proceeding,
except by or in the right of the corporation, by reason of the fact that the
person is or was a director, officer, employee or agent of the corporation,
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by the person in connection with
the action, suit or proceeding if the person acted in good faith and in a manner
which was reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that the person is or was a director, officer, employee or agent of the
corporation, against expenses, including amounts paid in settlement and
attorneys' fees actually and reasonably incurred by the person in connection
with the defense or settlement of the action or suit if the person acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation.
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Indemnification may not be made for any claim, issue or matter as to which such
a person has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the corporation or for
amounts paid in settlement to the corporation, unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
3. To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subsections 1 and 2, or in defense of any claim, issue
or matter therein, the corporation shall indemnify the person against expenses,
including attorneys' fees, actually and reasonably incurred in connection with
the defense.
Nevada Revised Statutes Section 78.751 requires authorization for discretionary
indemnification; advancement of expenses and limitation on indemnification and
advancement of expenses as follows:
1. Any discretionary indemnification under NRS 78.7502 unless ordered by a court
or advanced pursuant to subsection 2, may be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding so orders, by independent
legal counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the
action, suit or proceeding cannot be obtained, by independent legal
counsel in a written opinion.
11
<PAGE>
The following financial statements are filed as part of this registration
statement:
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
NUTRIPURE.COM
(A DEVELOPMENT STAGE COMPANY)
February 29, 2000
<PAGE>
C O N T E N T S
Page
----
Independent Auditors' Report 1
Financial Statements
Balance Sheet 2
Statements of Operations 3
Statements of Stockholders' Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6-10
12
<PAGE>
MILLER AND MCCOLOM
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditors' Report
Board of Directors
NUTRIPURE.COM
We have audited the accompanying balance sheet of Nutripure.com (a
Development Stage Company) as of February 29, 2000, and the related statements
of operations, stockholders' equity, and cash flows for the period December 8,
1999 (inception) to February 29, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentations.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Nutripure.com (a Development
Stage Company) as of February 29, 2000, and the results of its operations and
its cash flows for the period December 8, 1999 (inception) to February 29, 2000,
in conformity with generally accepted accounting principles.
/s/ Miller and McCollom
Denver, Colorado
March 7, 2000
2170 South Parker Road Suite 270 - Denver Colorado 80231-303 745-2217
Fax 303 745-2265
13
<PAGE>
NUTRIPURE.COM
(a Development Stage Company)
Balance Sheet
February 29, 2000
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 850
Stock subscriptions receivable 100,000
Total current assets 100,850
-------
Property, plant and equipment
Internet supersite 1,000,000
---------
Total property, plant and equipment $1,000,000
---------
Total assets $1,100,850
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - related parties $ 593,400
---------
STOCKHOLDERS' EQUITY (Note 4)
Class A common stock, $0.001 par value; authorized
10,00,000 shares, issued and outstanding 509,000
Accumulated deficit (1,550)
------
Total stockholders' equity 507,450
-------
Total liabilities and stockholders' equity $ 1,100,850
===========
The accompanying notes are an integral part of the financial statement.
2
<PAGE>
NUTRIPURE.COM
(a Development Stage Company)
For the Period December 8, 1999 (Inception) through February 29, 2000
Net sales $ -
Cost of sales -
--------
Gross profit -
--------
General and administrative expenses 1,550
--------
Total operating costs 1,550
--------
Operating income (loss) (1,550)
--------
Income (loss) before income taxes (1,550)
Federal and state income taxes -
--------
Net income (loss) $ (1,550)
--------
Net income (loss) per common share (basic) $ *
--------
Net income (loss) per common share (diluted) $ *
--------
Weighted average number of shares outstanding 9,500,000
=========
* Less than ($.01)
The accompanying notes are an integral part ofthe financial statement.
3
<PAGE>
NUTRIPURE.COM
(a Development Stage Company)
Statement of Stockholders' Equity
For the Period from December 8, 1999 (inception) through February 29, 2000
<TABLE>
<CAPTION>
Accumulated
Deficit during
Common Shares development
Shares Amount stage Total
---------------------------- ----------------------------
Balance, beginning of period
Common shares issued:
<S> <C> <C> <C> <C>
Issuance of common stock 8,000,000 $ 8,000 $ - $ 8,000
for cash on December 6, 1999
Issuance of common stock
for services on December 6, 1999 1,000,000 1,000 - 1,000
Issuance of common stock
for cash on December 28, 1999 50,000 25,000 - 25,000
Issuance of common stock
for cash on December 31, 1999 100,000 50,000 - 50,000
Issuance of common stock
for cash on January 5, 2000 250,000 125,000 - 125,000
Issuance of common stock
for cash on January 6, 2000 150,000 75,000 - 75,000
Issuance of common stock
for cash on January 26, 2000 150,000 75,000 - 75,000
Issuance of common stock
for cash on February 2, 2000 50,000 25,000 - 25,000
Issuance of common stock
for cash on February 15, 2000 50,000 25,000 - 25,000
Issuance of common stock
for cash on February 29, 2000 100,000 50,000 - 50,000
Stock subscription (Note 8) 100,000 50,000 - 50,000
Net loss for period - - (1,550) (1,550)
---------- --------- -------- ---------
Balance, end of period 10,000,000 $ 509,000 $ (1,550) $ 507,450
========== ========= ======== =========
</TABLE>
The accompanying notes are an integral part of the financial statement.
4
<PAGE>
NUTRIPURE.COM
(a Development Stage Company)
Statements of Cash Flows
For the Period from December 8, 1999 (inception) through February 29, 2000
Operating activities:
Net loss $ (1,550)
Stock issued for services 1,000
Changes in assets and liabilities
Increase in accounts payable 593,400
-----------
Net cash provided by operations 592,850
-----------
Investing activities
Acquisition of property and equipment (1,000,000)
-----------
Net cash (used by) investing activities (1,000,000)
-----------
Financing activities
Issuance of common stock 408,000
Offering costs -
--------
Net cash provided by financing activities 408,000
--------
Increase in cash 850
Cash at beginning of period -
--------
Cash at end of period $ 850
========
Supplemental disclosure of cash flow information
Cash paid during the period for
Interest $ -
Income taxes $ -
Supplemental schedule of noncash investing and financing activities
Issuance of 1,000,000 shares of
common stock for services $ 1,000
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
NUTRIPURE.COM
(a Development Stage Company)
Notes to Financial Statements
February 29, 2000
Note 1 - Summary of Significant Accounting Policies
Organization and Business Activity
Nutripure.com was incorporated in the state of Nevada on December 8, 1999. The
Company was formed as a wholly owned subsidiary of Innovative Medical Services
(IMS), a public company trading on NASDAQ under the symbol PURE. Nutripure.com
is an e-commerce web supersite providing consumers a wide variety of vitamins,
minerals, nutritional supplements, homeopathic remedies and natural products. In
addition to products, the website offers comprehensive health and wellness
information in an easy-to-access, intuitive reference format. The website will
also present the IMS Nutripure line of water filtration systems. The Company is
in the development stage as its operations principally involve internet sales
and have not generated any revenue from these activities. On March 1, 2000, the
Company launched its e-commerce web supersite.
Revenue Recognition
The Company will recognize revenue from product sales, net of any discounts,
when the products are shipped to customers. Outbound shipping and handling
charges will be included in net sales. The Company will provide an allowance for
sales returns based on historical experience.
Intangible Assets
SOP 98-1 requires all costs related to the development of internal use software
other than those incurred during the application development stage to be
expensed as incurred. Costs incurred during the application development stage
are required to be capitalized and amortized over the estimated useful life of
the software. No amortization expense has been recorded during the period ended
February 29, 2000.
In April 1998, the American Institute of Certified Public Accountants issued SOP
98-5, Reporting on the Costs of Start-up Activities. SOP 98-5 is effective for
the Company's fiscal year ending December 31, 1999. SOP 98-5 requires costs of
start-up activities and organization costs to be expensed as incurred. The
Company expensed $400 in organization during the period.
6
<PAGE>
NUTRIPURE.COM
(a Development Stage Company)
Notes to Financial Statements
February 29, 2000
Note 1 - Summary of Significant Accounting Policies
Long-Lived Assets
In accordance with Financial Accounting Standards Board ("FASB") Statement of
Financial Accounting Standards ("SFAS") No. 121, Accounting for Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of. Long-lived and
intangible assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
Impairment is measured by comparing the carring value of the long-lived assets
to the estimated undiscounted future cash flows expected to result from use of
the assets and their ultimate disposition. In circumstances where impairment is
determined to exist, the Company will write down the asset to its fair value
based on the present value of estimated expected future cash flows. To date, no
such impairment has been indicated.
Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.
Actual results could differ from those estimates.
Net Income (Loss) Per Common Share
The Company adopted FASB Statement No. 128, Earnings Per Share ("SFAS 128"),
which is effective for periods ending after December 15, 1997. Entities that
have only common stock outstanding are required to present basic earnings per
share amounts. Diluted per share amounts assume the conversion, exercise or
issuance of all potential common stock instruments unless the effect is to
reduce a loss or increase the income per common share from continuing
operations. The Company has authorized and issued only common stock as of
February 29, 2000.
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers all highly
liquid debt instruments with an original maturity of three months or less to be
cash equivalents.
Income Taxes
The Company recognizes deferred tax assets and liabilities based on differences
between the financial reporting and tax bases of assets and liabilities using
the enacted tax rates and laws that are expected to be in effect when the
differences are expected to be recovered.
Advertising Expense
Advertising production costs will be expensed as incurred. Costs of
communication advertising associated with television, radio, print and other
media are expensed when such services are used. Costs associated with Web portal
advertising contracts are amortized on a straight-line basis over the period
such advertising is expected to be used. The value of bartered advertising is
based on recent cash cost of advertising or advertising income. Advertising
expense for the period ended February 29, 2000 was zero.
7
<PAGE>
NUTRIPURE.COM
(a Development Stage Company)
Notes to Financial Statements
February 29, 2000
Note 2 - Property, Plant and Equipment
The following is a summary of property, plant, and equipment - at cost, net of
amortization:
Internet supersite $ 1,000,000
Less: accumulated amortization -
-----------
Total $ 1,000,000
===========
The Internet Super-site is being amortized over a five year period. Amortization
expense charged to general and administrative expense for the period ended
February 29, 2000, was $0.
Note 3 - Common Stock
On January 10, 2000, the Board of Directors of Innovative Medical Services voted
to declare a dividend in kind of NUTRIPURE.com common stock. Holders of
Innovative Medical Services Common Stock will receive one share of Nutripure.com
common stock for each ten shares of Innovative Medical Services common stock
held as of a record date to be specified. The distribution is expected to be
taxable as a dividend to each stockholder of Innovative Medical Services on the
date of distribution. Following the distribution, Innovative Medical Services
expects that a public market will exist for the Nutripure.com common stock. The
record date and distribution date for the dividend will promptly follow
completion of the registration of Nutripure.com as a reporting issuer with the
Securities and Exchange Commission.
Note 4 - Related Party Transactions
During the period ending February 29, 2000, the Company purchased a fully
functional e-commerce internet supersite (HTML/ASP version) from its parent
company Innovative Medical Services (IMS) for a purchase price of $1,000,000.
The purchase agreement dated December 10, 1999, provided that IMS will sell to
the Company, its right, title and interest in the website including various
agreements with internet service providers, licensing agreements and fulfillment
services agreement with Bergen Brunswig Corporation (BBC) (see Note 9).
Additionally, IMS agreed to create a XML version of the website to meet BBC's
requirements on or before May 1, 2000. The Company agreed to pay IMS sum of
$1,000,000 upon completion and successfully re-launching the XML version. Of
this amount $407,000 has been paid, the remaining $593,000 is included in
accounts payable - related parties on the accompanying financial statements and
as a corresponding inter-company accounts receivable on the books of IMS.
8
<PAGE>
NUTRIPURE.COM
(a Development Stage Company)
Notes to Financial Statements
February 29, 2000
Note 5 - Income Taxes
No provision for income taxes have been provided in the accompanying financial
statement. The Corporation has a net operating loss carryforward of $1,550 which
will expire in 2020. The tax benefit of the net operating loss carryforward has
not been recognized due to the uncertainty of realization.
The net deferred tax asset due to loss carryforward is as follows:
Deferred tax asset $ 233
Valuation allowance (233)
------
$ -
======
Note 6 - Basis of Presentation
The Company has no revenue from its e-commerce web supersite. It is the
Company's intent to raise additional capital through private placements or
public offerings of its equity securities and use the capital for development of
its web supersite and advertising.
Note 7 - Uncertainty Due to the Year 2000 Issue
The Year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
year 2000 dates is processed. In addition, similar problems may arise in some
systems which use certain dates in 1999 to represent something other than a
date.
The effects of the Year 2000 issue may be experienced before, on, or after
January 1, 2000, and, if not addressed, the impact on operations and financial
reporting may range from minor errors to significant systems failure, which
could affect an entity's ability to conduct normal business operations. It is
not possible to be certain that all aspects of the Year 2000 issue affecting the
entity, including those related to the efforts of customers, suppliers, or other
third parties, will be fully resolved.
Note 8 - Stock Subscription Receivable
On March 3, 2000, the Company received $100,000 in cash as payment for its stock
subscription.
<PAGE>
NUTRIPURE.COM
(a Development Stage Company)
Notes to Financial Statements
February 29, 2000
Note 9 - Fulfillment Services Agreement
Nutripure.com has a three-year internet fulfillment services agreement with
Bergen Brunswig Corporation (Bergen Brunswig) whereby Bergen Brunswig will be
the sole wholesaler for products sold on the Company's website. The contract
provides for a monthly service fee in addition to a per item fulfillment fee to
be paid to Bergen Brunswig by the Company. Nutripure.com will also pay a
software and database license fee for the product images and ingredient database
for all Bergen Brunswig products features on the website. The contract also
stipulates a rebate program in which Bergen Brunswig will pay Nutripure.com
quarterly rebates based on purchase volume. Nutripure.com has also entered into
licensing agreements with Healthnotes and Utah Health Infomatics for third-party
health resource content and personal profiling tools, respectively. (See Note
4.)
-10-
<PAGE>
PART III
Item 1. Index to Exhibits
3. (i) Articles of Incorporation *
(ii) Amended By-laws
10.1 Internet Fulfillment Services Agreement dated December 21, 1999
(Certain information omitted and filed under a Request for Confidential
Treatment)
10.2 Purchase Agreement between Nutripure.com and Innovative Medical
Services dated December 10, 1999
27 Finaicial Date Schedule
* Previously Filed
23
<PAGE>
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Company caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
NUTRIPURE.COM.
By: /s/MICHAEL L. KRALL
-------------------
Michael L. Krall, President,
Chief Executive Officer, Director May 30, 2000
/s/ GARY BROWNELL
-----------------
Gary Brownell, Chief Financial Officer, Director May 30, 2000
/s/ DONNA SINGER
----------------
Donna Singer, Secretary, Director May 30, 2000
/s/ RODNEY ADLER
----------------
Rodney Adler, Director May 30, 2000
/s/ DENNIS BROVARONE
--------------------
Dennis Brovarone, Director May 30, 2000
/s/ MATHEW KANTER
-----------------
Mathew Kanter, Director May 30, 2000
/s/ STEVEN NELSON
-----------------
Steven Nelson, Director May 30, 2000
/s/ WILLIAM SCHEWALTER
-----------------------
William Schewalter, Director May 30, 2000
24
<PAGE>
