UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Carpet-on-the-Go, Inc.
(Name of issuer in its charter)
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Nevada 2273 88-0470862
(State or other (Primary Standard (I.R.S.
jurisdiction of Industrial Classification Employer
incorporation) Code No.) Identification
No.)
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____________________________
1000 N. Green Valley Pkwy., #440-195
Henderson, NV 89014
(702) 650-2050
(Address and telephone number of principal executive offices)
____________________________
Premier Corporate Services, Inc.
1000 N. Green Valley Pkwy., #440-195
Henderson, NV 89014
(702) 650-2050
(Name, address and telephone number of agent for service)
____________________________
Approximate date of proposed sale to the public: As soon as
reasonably practicable after the effective date of this
Registration Statement.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis, pursuant to Rule 415
under the Securities Act of 1933 check the following box. ___
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
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 or the earlier
effective registration statement for the same offering. __
If delivery of the prospectus is expected to be made pursuant to
Rule 434, check the following box. __
_________________________________
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Title of Amount to Proposed Proposed Amount of
each class be maximum maximum registration
of registered offering aggregate fee
securities (1) price per offering
to be unit price(2)
registered
Common 12,500,000 $0.01 $125,000 $33.00
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(1) In the event of a stock split, stock dividend or similar
transaction involving the common stock, in order to prevent
dilution, the number of shares registered shall be automatically
increased to cover additional shares in an indeterminate amount
in accordance with Rule 416(a) under the Securities Act of 1933,
as amended.
(2) Estimated solely for purposes of calculating registration
fee pursuant to Rule 457 under the Securities Act of 1933, as
amended.
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
Carpet-on-the-Go, Inc.
12,500,000 Shares of Common Stock
Carpet-on-the-Go, Inc., a Nevada corporation (the "Company"), is
hereby offering up to 12,500,000 shares of its $0.001 par value
common stock (the "Shares"), pursuant to the terms of this
prospectus for the purpose of providing working capital for the
Company. See "Plan of Distribution" and "Use of Proceeds."
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH
DEGREE OF RISK AND SUBSTANTIAL DILUTION. ONLY INVESTORS WHO CAN
BEAR THE RISK OF LOSS OF THEIR ENTIRE INVESTMENT SHOULD INVEST.
SEE "RISK FACTORS."
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
TABLE OF CONTENTS
Page
Summary Information........................................... 1
Cautionary Statement Regarding Projections and Forward
Looking Statements............................................ 3
Risk Factors.................................................. 4
Use of Proceeds............................................... 6
Determination of Offering Price............................... 6
Dilution...................................................... 6
Selling Security Holders...................................... 7
Plan of Distribution.......................................... 7
Legal Proceedings............................................. 8
Directors, Executive Officers, Promoters and Control Persons.. 8
Security Ownership of Certain Beneficial Owners
and Management................................................ 10
Description of Securities..................................... 11
Interest of Named Experts and Counsel......................... 12
Disclosure of Commission Position on Indemnificatin for
Securities Act Liabilities.................................... 12
Organization Within the Last Five Years....................... 13
Description of Business....................................... 13
Management's Plan of Operation................................ 13
Description of Property....................................... 15
Certain Relationships and Related Transactions................ 15
Market for Common Equity and Related Stockholder Matters...... 15
Executive Compensation........................................ 17
Financial Statements.......................................... 17
Changes In and Disagreements With Accounting and
Financial Disclosure.......................................... 28
Available Information......................................... 28
SUMMARY INFORMATION
The Company
The Company was incorporated under the laws of the State of
Nevada on April 10, 2000 as Carpet-on-the-Go, Inc. Its principal
executive offices are located at 1000 N. Green Valley Pkwy., #440-
195, Henderson, NV 89014. The Company was organized to engage in
any lawful corporate business. The Company has been in the
developmental stage since inception and has no operating history
other than organizational matters.
The Company's intent is to develop its full-service direct
marketing format to offer customers a wide selection of
competitively priced wall-to-wall carpeting products. The Company
would like to optimally offer a wide range of services, including
interior design consulting, measuring, delivery and installation,
and unconditional satisfaction guarantees.
The Offering
This is the initial public offering of common stock of Carpet-on-
the-Go, Inc., and no public market currently exists for shares of
the Company's common stock. There have been no sales of shares
from one investor to another. This is not an underwritten
offering, and the Shares are not presently traded on any
recognized exchange or market.
It is our intention to apply to have the Shares listed for
trading on the National Association of Securities Dealers
("NASD") OTC Electronic Bulletin Board Market as soon as possible
after the date of this prospectus.
* The Company is offering up to 12,500,000 Shares of its
common stock.
- If the maximum offering is achieved, there will be
15,500,000 Shares of common stock outstanding.
- If the minimum offering is achieved, there will be 4,000,000
Shares of common stock outstanding.
* No sales commissions will be paid in connection with the
sales of these Shares.
* If all the Shares are sold, assuming they are sold at the
offering price of $0.01 per share, the net proceeds to the
Company will be $125,000 less certain costs associated with this
offering.
* The net proceeds will be used for working capital. See "Use
of Proceeds."
Liquidity of Investment
Although the Shares will be registered and "free trading," there
is no current market for the Shares. Therefore, an investor may
not be able to sell his or her Shares when he or she wishes and
may consider his or her investment to be long-term.
Investment in the Company involves risks due in part to a limited
financial and operating history of Company, as well as
competition in the carpet industry. Also, certain potential
conflicts of interest arise due to the relationship of the
Company to management and others.
THE SHARES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE,
ACCEPTANCE OF THE SUBSCRIPTIONS BY THE COMPANY AND APPROVAL OF
CERTAIN LEGAL MATTERS BY COUNSEL TO THE COMPANY.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OR OPEN OFFER TO BUY INTO SECURITIES OFFERED HEREBY
IN A STATE IN WHICH, OR TO A PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
INFORMATION CONTAINED HEREIN SUBSEQUENT TO THE DATE THEREOF.
HOWEVER, IF A MATERIAL CHANGE OCCURS, THIS PROSPECTUS WILL BE
AMENDED OR SUPPLEMENTED ACCORDINGLY FOR ALL EXISTING
SHAREHOLDERS, AND FOR ALL PROSPECTIVE INVESTORS WHO HAVE NOT YET
BEEN ACCEPTED AS SHAREHOLDERS IN THE COMPANY.
THIS PROSPECTUS DOES NOT INTENTIONALLY OMIT ANY MATERIAL FACT OR
CONTAIN ANY UNTRUE STATEMENT OF MATERIAL FACT. NO PERSON OR
ENTITY HAS BEEN AUTHORIZED BY THE COMPANY TO GIVE ANY INFORMATION
OR MAKE A REPRESENTATION, WARRANTY, COVENANT, OR AGREEMENT WHICH
IS NOT EXPRESSLY PROVIDED FOR OR CONTAINED IN THIS PROSPECTUS; IF
GIVEN OR MADE, SUCH INFORMATION, REPRESENTATION, WARRANTY,
COVENANT, OR AGREEMENT MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
THE COMPANY IS NOT CURRENTLY A REPORTING COMPANY, AS THAT TERM IS
DEFINED IN THE SECURITIES EXCHANGE ACT OF 1934. EACH PERSON WHO
RECEIVES A PROSPECTUS WILL HAVE AN OPPORTUNITY TO MEET WITH
REPRESENTATIVES OF THE COMPANY DURING NORMAL BUSINESS HOURS UPON
WRITTEN OR ORAL REQUEST TO THE COMPANY, IN ORDER TO VERIFY ANY OF
THE INFORMATION INCLUDED IN THIS PROSPECTUS AND TO OBTAIN
ADDITIONAL INFORMATION REGARDING THE COMPANY. IN ADDITION, EACH
SUCH PERSON WILL BE PROVIDED WITHOUT CHARGE, UPON WRITTEN OR ORAL
REQUEST, A COPY OF ANY OF THE INFORMATION THAT IS INCORPORATED BY
REFERENCE IN THE PROSPECTUS AND THE ADDRESS (INCLUDING TITLE OR
DEPARTMENT) AND TELEPHONE NUMBER TO WHICH SUCH REQUEST IS TO BE
DIRECTED.
ALL OFFEREES AND SUBSCRIBERS WILL BE ASKED TO ACKNOWLEDGE IN
WRITING THAT THEY HAVE READ THIS PROSPECTUS CAREFULLY AND
THOROUGHLY, AND UNDERSTOOD THE CONTENTS THEREOF, THEY WERE GIVEN
THE OPPORTUNITY TO OBTAIN ADDITIONAL INFORMATION, AND THEY DID SO
TO THEIR SATISFACTION.
CAUTIONARY STATEMENT REGARDING PROJECTIONS AND FORWARD LOOKING
STATEMENTS
This prospectus and documents included by reference contain
forward-looking statements within the meaning of:
1) Section 27 of the Securities Act of 1933;
2) Section 21E of the Securities Exchange Act of 1934; and
3) The Private Securities Litigation Reform Act of 1995.
Forward-looking statements relate to our future operations. They
estimate the happening of future events and are not based on
historical facts. Forward-looking statements may be identified by
terms such as:
believes predicts estimates
intends may anticipates
projects will probable
forecasts expects continue
This is not a comprehensive list. Similar terms, variations of
those terms, and the negative of those terms may also identify
forward-looking statements.
The "Risk Factors" discussed in this prospectus are cautionary
statements. They identify some of the factors that could cause
actual results to be significantly different from those predicted
in the forward-looking statements. The forward-looking statements
and documents included by reference were compiled by our
management based upon assumptions they considered reasonable.
These assumptions are subject to significant business, economic,
and competitive uncertainties and contingencies, many of which
are beyond our control. Therefore, forecasted and actual results
will likely vary and those variations may be material.
There can be no assurance that the statements, estimates, and
projections contained in this prospectus will be achieved. Thus,
we make no representation or warranty as to their accuracy or
completeness. In addition, we cannot guarantee that any forecast
in this prospectus will be achieved.
These forward-looking statements were compiled as of the date of
this prospectus or the date of the documents included by
reference, as the case may be. We do not intend to update these
statements. Therefore, you should evaluate them by considering
any changes that may have occurred after the date such forward-
looking statements appear.
We cannot guarantee that any of the assumptions relating to the
forward-looking statements or the documents included by reference
will prove to be accurate. Therefore, we urge you and your
advisors to review these forward-looking statements, to consider
the assumptions upon which they are based, and to ascertain their
reasonableness.
RISK FACTORS
THE PURCHASE OF THE SECURITIES OFFERED HEREBY INVOLVES
SIGNIFICANT RISKS. PROSPECTIVE INVESTORS SHOULD GIVE CAREFUL
ATTENTION TO THE FOLLOWING STATEMENTS RESPECTING CERTAIN RISKS
APPLICABLE TO THE OFFERING.
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company
has had no operating history and has received no revenues or
earnings from operations. The Company has no significant assets
or financial resources. The Company will, in all likelihood,
sustain operating expenses without corresponding revenues, at
least until it is able to secure financing to hire employees who
know the carpet industry. This may result in the Company
incurring a net operating loss which will increase continuously
until the Company raises enough capital to start marketing the
carpeting.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success
of the Company's proposed plan of operation will depend to a
great extent on the operations, financial condition, and
management of the Company after knowledgeable personnel is hired.
While management intends to hire appropriate personnel who have
an operating knowledge of the carpet industry, it cannot assure
that the Company will successfully locate employees meeting such
criteria. In the event the Company does raise enough capital to
hire key employees and purchase material, the success of the
Company is dependent upon numerous other factors beyond the
Company's control.
COMPETITION. The Company is, and will continue to be, an
insignificant participant in the business of marketing carpeting
for the businessman. A large number of established and well
financed entities, are active in the business of marketing
carpeting. Nearly all such entities have significantly greater
financial resources, technical expertise, and managerial
capabilities than the Company. No assurance can be given that the
Company's competitors will not substantially increase resources
devoted to the production and marketing of products competitive
with those of the Company, which could require the Company to
reduce prices or increase spending on product development,
marketing and sales, any of which could have a material adverse
effect on the Company. The Company is, consequently, at a
competitive disadvantage in being able to manufacture carpeting
and become a successful company in the carpeting industry.
Competition in the floor covering market is intense due to the
significant number of retailers. Large retailers provide
significant competition, including the Home Depot, Inc., Lowe's
Corporation and Sears, Roebuck & Co. The principal methods of
competition within the retail carpeting industry include product
selection and merchandising, customer service and price. The
Company's business competes with other carpet manufacturers and
manufacturers of alternative floor coverings such as wood or
tile.
FLUCTUATIONS IN SEASONALITY AND CYCLICAL NATURE OF THE FLOOR
COVERING INDUSTRY. The floor covering industry historically has
been adversely impacted by economic downturns. The Company
believes that the industry is significantly influenced by
economic conditions generally and particularly by consumer
behavior, consumer confidence, the level of personal
discretionary spending, the condition of the residential and
commercial construction industries, interest rates, credit
availability and the overall strength of the economy. There can
be no assurance that a prolonged economic downturn would not have
a material adverse effect on the Company.
NO AGREEMENT FOR MANUFACTURING OR SUPPLYING MATERIALS OR
PERSONNEL. The Company has no arrangement, agreement, or
understanding with respect to supplying material or personnel to
aid in the operation of its business. There can be no assurance
the Company will successfully raise enough capital to hire
personnel or be able to purchase the material to market
carpeting. The Company has been in the developmental stage since
inception and has no operations to date. Other than issuing
shares to its original shareholder, the Company never commenced
any operational activities other than identifying the industry
that management believes that there is an opportunity for
success. The Company has not established a specific length of
operating history or a specified level of earnings, assets, net
worth or other criteria which it will require to be able to
market carpeting.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While
seeking investment and personnel with knowledge of the carpet
industry, management anticipates devoting up to twenty hours per
week to the business of the Company. The Company's officers have
not entered into written employment agreements with the Company
and are not expected to do so in the foreseeable future. The
Company has not obtained key man life insurance on its officers
or directors. Notwithstanding the combined limited experience and
time commitment of management, loss of the services of any of
these individuals would adversely affect development of the
Company's business and its likelihood of continuing operations.
See "Management."
CONFLICTS OF INTEREST - GENERAL. The Company's officers and
directors do not participate in other business ventures, which
compete directly with the Company. Additional conflicts of
interest and non "arms-length" transactions may also arise in the
event the Company's officers or directors are involved in the
management of any firm with which the Company transacts business.
The Company's Board of Directors has adopted a resolution which
prohibits the Company from entering into any agreement with any
entity in which management serve as officers, directors or
partners, or in which they or their family members own or hold
any ownership interest. Management is not aware of any
circumstances under which this policy could be changed while
current management is in control of the Company. See "Directors,
Executive Officers, Promoters and Control Persons - Conflicts of
Interest."
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company
has not conducted or received results of market research
indicating that demand exists for the sale and marketing of
carpets contemplated by the Company.
REGULATION. Although the Company will be subject to regulation
under the Securities Exchange Act of 1934, management believes
the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company will not
be engaged in the business of investing or trading in securities.
The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the
Company under the Investment Company Act of 1940 and,
consequently, any violation of such Act would subject the Company
to material adverse consequences.
INDOOR AIR QUALITY. The effect of carpet products on indoor air
quality has been the subject of debate in recent years. Although
it is uncertain whether emissions from carpet pose a health
hazard, there can be no assurance that researchers will not
detect hazardous levels of emissions from carpet. The discovery
of adverse health effects resulting from carpet, or the public
perception thereof, could result in a material adverse effect on
the Company's operations.
USE OF PROCEEDS
Following the issuance of the Shares of common stock offered for
sale by the Company to the public (assuming they are sold for
cash), gross proceeds to the Company will be approximately
$125,000. The Company intends to use these proceeds to seek and
hire employees with a knowledge of the carpet industry.
Additionally, the Company intends to establish contacts with
suppliers for material to be used in the marketing of carpets.
These proceeds, less the expenses of the offering, will be used
to provide working capital for the Company.
Management anticipates expending these funds for the purposes
indicated above. To the extent that such expenditures require the
utilization of funds in excess of the amounts anticipated,
supplemental amounts may be drawn from other sources, including,
but not limited to, general working capital and/or external
financing. The proceeds of this offering that are not expended
immediately may be deposited in interest or non-interest bearing
accounts, or invested in government obligations, certificates of
deposit, commercial paper, money market mutual funds, or similar
investments.
DETERMINATION OF OFFERING PRICE
The offering price of the Shares has been arbitrarily determined
by the Company based upon factors such as the Company's capital
needs and the percentage of ownership to be held by investors as
a result of this offering. The offering price does not
necessarily bear any relationship to assets, book value,
earnings history or other historical factors.
DILUTION
"Net tangible book value" is the amount that results from
subtracting the total liabilities and intangible assets of an
entity from its total assets. "Dilution" is the difference
between the public offering price of a security such as the
common stock, and its net tangible book value per share
immediately after the offering, giving effect to the receipt of
net proceeds in the Offering. As of the July 31, 2000, the net
tangible book value of the Company was $0.001.
If the Company achieves the sale of the maximum offered shares at
the public offering price, the pro forma net tangible book value
of the Company would be $128,000 or approximately $0.008 per
share, which would represent an immediate increase of $0.007 in
net tangible book value per share and $0.002 per share, or 20%,
dilution to new investors, assuming all the Shares are sold at
the offering price of $0.01 per share.
If the Company achieves only the sale of the minimum offered
shares at the public offering price, the pro forma net tangible
book value of the Company would be $13,000 or approximately
$0.003 per share, which would represent an immediate increase of
$0.002 in net tangible book value per share and $0.007, or 70%,
per share dilution to new investors, assuming the Shares are sold
at the offering price of $0.01 per share.
SELLING SECURITY HOLDERS
There are no security holders of the Company offering securities.
PLAN OF DISTRIBUTION
Subject to the terms and conditions of the offering, the Company
is offering the Shares on a "best efforts, all or none" basis
with respect to the first 1,000,000 Shares, and a "best efforts"
basis with respect to the remaining 11,500,000 Shares, which will
be made available to the public at $0.01. Pending the sale of at
least 1,000,000 Shares, all proceeds of the offering will be held
in a special non-interest bearing account with Bank of America,
Las Vegas, Nevada. Unless at least 1,000,000 Shares are sold
within 30 days of the date of the prospectus, or 90 days if
extended, this offering will terminate and all funds will be
promptly returned to the subscribers without interest thereon or
deduction therefrom. Closing of the offering could take place as
late as two weeks after the maximum 90 day offering period. Once
subscriptions for 1,000,000 Shares ($10,000) have been deposited,
there will be an initial closing after which the offering will
continue for an additional 11,500,000 Shares on a "best efforts"
basis subject to subsequent closings. There can be no assurance
that any or all of the Shares being offered will be sold.
The gross proceeds to the Company represented by issue of all the
Shares for cash under this offering to the public will be
$125,000. No commissions or other fees will be paid, directly or
indirectly, by the Company, or any of its principals, to any
person or firm in connection with solicitation of sales of the
shares. These securities are offered by the Company subject to
prior issue and to approval of certain legal matters by counsel.
Opportunity to Make Inquiries
The Company will make available to each Offeree, prior to any
issue of the Shares, the opportunity to ask questions and receive
answers from the Company concerning any aspect of the investment
and to obtain any additional information contained in this
prospectus, to the extent that the Company possesses such
information or can acquire it without unreasonable effort or
expense.
Execution of Documents
Each person desiring to be issued Shares must complete, execute,
acknowledge, and deliver to the Company certain documents. By
executing these documents, the subscriber is agreeing that such
subscriber will be a shareholder in the Company and will be
otherwise bound by the Articles of Incorporation and the By-Laws
of the Company in the form attached to this prospectus.
Promptly upon receipt of the subscription documents by the
Company, a determination will be made as to whether a prospective
investor will be accepted as a shareholder. The Company may
reject a subscriber for any reason, including:
* Failure to conform to the requirements of this prospectus or
the failure to follow the proper subscription procedure.
* Insufficient documentation.
* Over subscription to the offering.
* Other reasons as the Company determines to be in its best
interest.
If a subscription is rejected, in whole or in part, the
subscription funds, or portion thereof, will be promptly returned
to the prospective investor without interest by depositing a
check, made payable the investor, in the amount of his funds in
the United States mail, certified returned-receipt requested.
Subscriptions may not be revoked, cancelled, or terminated by the
subscriber, except as provided by the terms of this prospectus.
LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
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Name Age Position Term
Richard Mestas 55 President/Director Since April 11,2000
Kenneth Sitton 53 Secretary/Director Since May 15, 2000
Roy Chew 62 Treasurer/Director Since May 15, 2000
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Richard Mestas; President/Director
Richard Mestas has been an officer and director of the Company
since April 11, 2000.
Since February 1999, Richard Mestas has been employed as a Floor
Covering Consultant for Carpet Barn, Las Vegas, Nevada. He is
responsible for the floor plan development and sales, laying out
carpeting jobs and ensuring the completion of the carpeting jobs.
From 1984 through 1998, Mr. Mestas was employed by Reynosa
Enterprise as a Sales and Maintenance Consultant. While there, he
led Seminars on Chemical Cleaning, OSHA Bloodborne Pathogen
Compliance and Safety Procedures.
From 1997 through 1998, he was an owner and partner of Southern
Valley Air, which was an air conditioning company.
From 1995 through 1998, Mr. Mestas was a partner of X-Lant Window
Cleaning, where he helped build and develop contracts in the
Hotel & Casino industry, such as Boulder Station, Texas Station,
Stardust, Showboat, Stratosphere, Primadonna, Whiskey Pete's,
Buffalo Bill's, etc.
From 1981 through 1995, he was an owner of Mestas Enterprise, a
high rise window cleaning company, where he developed contracts
with Albertson's Store, Arizona Charlie's Hotel, Bally's Hotel,
California Hotel, Fremont Hotel, Main St. Hotel, Horseshoe Hotel,
Frontier Hotel, Landmark Hotel, Stardust Hotel, Showboat Hotel,
Tropicana Hotel, etc.
Kenneth Sitton, Secretary/Director
Mr. Kenneth Sitton has been an officer and director of the
Company since May 15, 2000.
Since 1992, Mr. Sitton has managed two retail stores for Carpet
Barn, Inc., where he has been responsible for recruiting and
training new hires as well as all management duties.
From 1985 to 1992, Mr. Sitton was Vice President of Sales for
Springfield Floor Covering, where he managed fourteen
salespeople, accounting for $9 million per year in sales.
From 1981 to 1985, he was a manager for Color Tile and
responsible for all management duties. Mr. Sitton was named
National Manager of the Year in 1984.
From 1978 to 1985, Mr. Sitton worked for Montgomery Wards as a
Department Manager. He was responsible for the plumbing,
heating/air conditioning department as well as all building
supplies. Mr. Sitton was also responsible for the management
training program for merchandise management in Joplin, MO.
From 1970 to 1978, Mr. Sitton was the co-owner and manager of
Tiny's Steak House, where he performed all management duties.
Roy Chew, Treasurer/Director
Mr. Roy Chew has been an officer and director of the Company
since May 15, 2000.
Since 1996, Mr. Chew has been employed at Carpet Barn, Inc., Las
Vegas, Nevada, where his responsibilities include retail sales,
bidding and sizing jobs.
From 1994 to 1996, Mr. Chew was employed at Color Tile/Floors A
Plenty, Tulsa, Oklahoma. He was responsible for retails sales
relating to commercial and contract sales.
From 1989 to 1994, he was employed at Carpet Barn, Inc., Las
Vegas, Nevada, in the Contract Department, where he was
responsible for sizing and bidding jobs.
From 1987 to 1989, Mr. Chew worked in retail sales for Fashion
Floors, Etc. in Richardson, Texas.
From 1986 to 1987, he was employed by J.R.'s World of Carpets in
Tulsa, Oklahoma in retail and commercial sales.
From 1984 to 1985, Mr. Chew was responsible for contract and
commercial sales as the sales manager for Apollo Carpets and
Furniture in Tucson, Arizona.
From 1981 to 1984, Mr. Chew was the President and General Manager
for Carpet Barn dba Grigsby's World of Carpets. He was
responsible for contract and retail sales.
From 1978 to 1981, Mr. Chew worked heavily with builders in
commercial and retail sales for Carpet Mill Direct dba World of
Carpet in Tulsa, Oklahoma.
From 1972 to 1977, Mr. Chew was the Sales Manager for Carpet
City, Inc. for the Bartlesville, Oklahoma store.
From 1967 to 1972, Mr. Chew was the Retail Manager in charge of
sales for Superior Carpets in Tulsa, Oklahoma.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth each person known to the Company,
as of November 1, 2000, to be a beneficial owner of five percent
(5%) or more of the Company's common stock, by the Company's
directors individually, and by all of the Company's directors and
executive officers as a group.
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Title of Class Name and Address Amount and Percent of
of Beneficial Owner Nature of Class
Beneficial
Ownership
(1)(2)
Common Stock Richard Mestas 3,000,000 100.00%
53 Tidwell Ln.
Henderson, NV 89014
Common Stock Kenneth Sitton 0 0.00%
1000 N. Green Valley
Pkwy., #440-195
Henderson, NV 89014
Common Stock Roy Chew 0 0.00%
2935 Aloha #205
Las Vegas, NV 89121
Common Stock All directors and 3,000,000 100.00%
officers as a group
(3 persons)
</TABLE>
(1) Beneficial ownership has been determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934. Pursuant to
the rules of the Securities and Exchange Commission, shares of
common stock which an individual or group has a right to acquire
within 60 days pursuant to the exercise of options or warrants
are deemed to be outstanding for the purpose of computing the
percentage ownership of such individual or group, but are not
deemed to be beneficially owned and outstanding for the purpose
of computing the percentage ownership of any other person shown
in the table.
(2) None of the Company's officers or directors has the right to
acquire any amount of the Shares within sixty days from options,
warrants, rights, conversion privilege, or similar obligations.
DESCRIPTION OF SECURITIES
The Company's Articles of Incorporation authorizes the issuance
of 25,000,000 shares of common stock, par value $0.001 per share.
The shares are non-assessable, without pre-emptive rights, and do
not carry cumulative voting rights. Holders of common shares are
entitled to one vote for each share on all matters to be voted on
by the stockholders. The shares are fully paid, non-assessable,
without pre-emptive rights, and do not carry cumulative voting
rights. Holders of common shares are entitled to share ratably in
dividends, if any, as may be declared by the Company from time-to-
time, from funds legally available. In the event of a
liquidation, dissolution, or winding up of the Company, the
holders of shares of common stock are entitled to share on a pro-
rata basis all assets remaining after payment in full of all
liabilities.
Management is not aware of any circumstances in which additional
shares of any class or series of the Company's stock would be
issued to management or promoters, or affiliates or associates of
either.
Shares Eligible for Future Sale
All of the 3,000,000 Shares which are currently held, directly or
indirectly, by management have been issued in reliance on the
private placement exemption under the Securities Act of 1933, as
amended (the "Act"). See "Security Ownership of Certain
Beneficial Owners and Management." Such shares will not be
available for sale in the open market without separate
registration except in reliance upon Rule 144 under the Act. In
general, under Rule 144 a person (or persons whose shares are
aggregated) who has beneficially owned shares acquired in a non-
public transaction for at least one year, including persons who
may be deemed affiliates of the Company (as that term is defined
under the Act) would be entitled to sell within any three-month
period a number of shares that does not exceed the greater of 1%
of the then outstanding shares of common stock, or the average
weekly reported trading volume on all national securities
exchanges and through NASDAQ during the four calendar weeks
preceding such sale, provided that certain current public
information is then available. If a substantial number of the
shares owned by these shareholders were sold pursuant to Rule 144
or a registered offering, the market price of the common stock
could be adversely affected.
All Shares registered in the instant offering shall be eligible
for resale to the general public should there be a need for this
type of securities. The Company makes no representations or
guarantee that the Shares registered hereunder shall have a
market for resale.
INTEREST OF NAMED EXPERTS AND COUNSEL
No named expert or counsel was hired on a contingent basis, or
will receive a direct or indirect interest in the Company in
exchange for preparation of the prospectus, or was a promoter,
underwriter, voting trustee, director, officer or employee of the
Company.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
The Company and its affiliates may not be liable to its
shareholders for errors in judgment or other acts, or omissions
not amounting to intentional misconduct, fraud or a knowing
violation of the law, since provisions have been made in the
Articles of Incorporation and By-Laws limiting such liability.
The Articles of Incorporation and By-Laws also provide for
indemnification of the officers and directors of the Company in
most cases for any liability suffered by them or arising from
their activities as officers and directors of the Company if they
were not engaged in intentional misconduct, fraud or a knowing
violation of the law. Therefore, purchasers of these securities
may have a more limited right of action than they would have
except for this limitation in the Articles of Incorporation and
By-Laws.
The officers and directors of the Company are accountable to the
Company as fiduciaries, which means such officers and directors
are required to exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to institute legal
action on behalf of himself and all others similarly stated
shareholders to recover damages where the Company has failed or
refused to observe the law.
Shareholders may, subject to applicable rules of civil procedure,
be able to bring a class action or derivative suit to enforce
their rights, including rights under certain federal and state
securities laws and regulations. Shareholders who have suffered
losses in connection with the purchase or sale of their interest
in the Company in connection with such sale or purchase,
including the misapplication by any such officer or director of
the proceeds from the sale of these securities, may be able to
recover such losses from the Company.
Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons
of the small officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.
ORGANIZATION WITHIN THE LAST FIVE YEARS
There are no relationships or transactions to be reported.
DESCRIPTION OF BUSINESS
Carpet-on-the-Go, Inc. (the "Company") is a Nevada corporation
formed on April 10, 2000. Its principal place of business is
located at 1000 N. Green Valley Pkwy., #440-195, Henderson, NV
89014. The Company was organized to engage in any lawful
corporate business.
MANAGEMENT'S PLAN OF OPERATION
The Company is focusing its plan of operation on the marketing
and sale of carpeting door-to-door with the use of swatches. The
Company currently does not employ any salespeople but hopes
through the instant offering that it can raise capital to hire or
consult with persons who have experience and connections to
people and/or entities in the industry. The Company intends to
introduce an innovative way of marketing carpet, in which the
public will be able to purchase carpeting from their own home
from a salesperson that will carry swatches of the carpeting,
measure the area to be carpeted and have the carpeting delivered
to the home within a 24 hour time period. The Company believes
there exists a need for carpeting in the $10-14/sq. yard range
and hopes that its carpeting shall be sold in that price range.
As additional funds become available, the Company's objective is
to position itself as the leading provider of floor coverings in
the Las Vegas residential retail market and to eventually become
the leading provider of floor coverings in selected markets
throughout the United States.
The Company believes that significant opportunities exist for
floor covering retailers that can achieve cost advantages and
operating efficiencies through internal growth. To take advantage
of these opportunities the Company is pursuing a strategy of
developing a key sales staff in markets experiencing significant
growth in population and homebuilding that do not have a dominant
floor covering retailer. The Company is reviewing various markets
throughout the United States to determine their desirability for
expansion. The Company is also considering internal expansion
through the hiring of key management and personnel in the
southwestern United States where the Company believes it can
expand its relationships with regional homebuilders which it
already services in Las Vegas. However, there can be no assurance
as to the viability of this approach.
The Company's strategy includes the following:
Las Vegas Market
Replacement Sales Penetration. The Company intends to increase
its sales for new homeowners. Homeowners provide the Company's
sales representative with the floor plans and layout of the home.
This allows the sales representative to then provide a homeowner
with alternatives specifically tailored to the floor plan of the
customer's home, as well as one-stop shopping for homeowners with
respect to their floor covering needs. The Company's sales
representative is a significant element in the Company's plan to
enhance service to homeowners. Based on estimates of the Las
Vegas Homebuilder's Association, the total new homes market for
carpet in Las Vegas is projected to grow at an annual rate of 5%
to 10% over the next 10 years. There can be no assurance that the
Las Vegas market will grow as projected or that the Company will
be able to increase or maintain its market share.
Offer Superior Service. The Company believes that the most
important factor in its ability to compete is the quality of the
customer service it offers. The Company believes that it will
offer the highest quality customer service in Las Vegas. This
service begins with the offering of a full range of carpeting and
includes a policy of a 24 hour installation and guarantee against
carpet installation defects for as long as the buyer owns the
home. The Company also inspects all floor covering installations
in homes and intends to create a customer service department to
handle all complaints and installation problems. Management
believes these programs will have a positive effect on the
Company's reputation with homeowners which enhances the Company's
ability to be selected as the floor covering referral for
subsequent customers and allow the Company to gain customers for
life. The Company also intends to continue to offer what it
believes is quality technical service and assistance to its
customers in both the new home and replacement sales markets.
Representatives of the Company will assist in all phases of
customers' projects, from conceptualization, design and product
selection to actual installation. In addition, the Company will
be staffed with specially trained design consultants that are
highly knowledgeable regarding the broad range of decorating
possibilities provided by the Company's products. The Company
intends to continue to hire salespersons with experience in floor
covering or related trades, and to continue to train such
salespersons with respect to its products and services. The
Company believes that such programs will have a positive effect
on results of operations, although there can be no assurance of
this.
The door-to-door marketing provides customers the opportunity to
consult with trained personnel concerning the multitude of design
possibilities utilizing the products offered by the Company.
Competitive Prices. A second factor affecting the Company's
ability to compete is the pricing of its products. The Company
intends to offer the lowest prices in the region while
maintaining a high profit margin. The Company intends to offer
low prices and also to continue its policy of offering to beat
any competitor's price.
The Company also intends to eventually expand its business to
certain markets throughout the United States where there is no
dominant competitor. These potential targeted markets, like Las
Vegas, will be experiencing high growth in population and home
building. The Company believes that it can duplicate its
successful concepts in these high growth markets and that it can
compete in these markets through its demonstrated ability to
compete on service and price. However, there can be no assurance
that such expansion will be effected or, if effected that any new
facilities will be operated profitably.
The Company believes that the relaxed environment of having these
representatives visiting the homes will increase the average
total sale price and gross margin for its sales, although there
can be no assurance in this regard.
According to regional publications, the Las Vegas area is one of
the fastest growing in the country. According to the Las Vegas
Review Journal, during 1999 an average of 5,000 persons relocated
to Las Vegas each month, and the Las Vegas (Clark County)
population has increased to over 1.2 million. Such statistics
illustrate the high numbers of persons arriving in the Las Vegas
area and the potential strength of the retail floor covering
market.
Training
The Company will strive to develop the technical and sales skills
of its personnel to ensure that customers consistently receive
knowledgeable and courteous assistance. The Company's training
programs will be oriented toward emphasizing the importance of
customer service, improving selling skills and creating realistic
expectations. The Company will provide training for its entry-
level personnel through an in-house training program, which
combines on-the-job training with formal presentations by the
Company. In addition, ongoing instruction will be given to all
sales and customer service personnel.
DESCRIPTION OF PROPERTY
The Company neither owns nor leases any real property at this
time. The Company does have the use of a limited amount of office
space from its Resident Agent, located at 1000 N. Green Valley
Pkwy., #440-195, Henderson, NV 89014, at no cost to the Company,
and management expects this arrangement to continue. The Company
pays its own charges for long distance telephone calls and other
miscellaneous secretarial, photocopying, and similar expenses.
This is a verbal agreement between the Resident Agent and the
Board of Directors.
As additional funds become available, the Company intends to
lease a warehousing facility in order to make the carpeting more
readily available.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors has passed a resolution which contains a
policy that the Company will not do business with any entity in
which any of the Company's Officers, Directors, principal
shareholders or their affiliates or associates serve as officer
or director or hold any ownership interest. Management is not
aware of any circumstances under which this policy may be changed
through their own initiative.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Capitalization
The Company is authorized to issue 25,000,000 shares of Common
Stock, $0.001 par value per share.
The Company's stock is not listed on any exchange. Management has
not undertaken any discussions, preliminary or otherwise, with
any prospective market maker concerning the participation of such
market maker in the after-market for the Company's securities and
management does not intend to initiate any such discussions until
such time as the Company has raised enough capital to hire
employees and enter into contracts with material suppliers and is
conducting business. There is no assurance that a trading market
will ever develop or, if such a market does develop, that it will
continue.
Market Price
The Registrant's Common Stock is not quoted on any exchange at
the present time.
Effective August 11, 1993, the Securities and Exchange Commission
adopted Rule 15g-9, which established the definition of a "penny
stock," for purposes relevant to the Company, as any equity
security that has a market price of less than $5.00 per share or
with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer
approve a person's account for transactions in penny stocks; and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve
a person's account for transactions in penny stocks, the broker
or dealer must (i) obtain financial information and investment
experience and objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker
or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating
to the penny stock market, which, in highlight form, (i) sets
forth the basis on which the broker or dealer made the
suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks
of investing in penny stocks in both public offerings and in
secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in
the account and information on the limited market in penny
stocks.
The National Association of Securities Dealers, Inc. (the
"NASD"), which administers NASDAQ, has recently made changes in
the criteria for initial listing on the NASDAQ Small Cap market
and for continued listing. For initial listing, a company must
have net tangible assets of $4 million, market capitalization of
$50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years.
For initial listing, the common stock must also have a minimum
bid price of $4 per share. In order to continue to be included on
NASDAQ, a company must maintain $2,000,000 in net tangible assets
and a $1,000,000 market value of its publicly-traded securities.
In addition, continued inclusion requires two market makers and a
minimum bid price of $1.00 per share.
However, there can be no assurances that the Company will qualify
its securities for listing on NASDAQ or some other national
exchange, or be able to maintain the maintenance criteria
necessary to insure continued listing. The failure of the Company
to qualify its securities or to meet the relevant maintenance
criteria after such qualification in the future may result in the
discontinuance of the inclusion of the Company's securities on a
national exchange. In such events, trading, if any, in the
Company's securities may then continue in the non-NASDAQ over-the-
counter market. As a result, a shareholder may find it more
difficult to dispose of, or to obtain accurate quotations as to
the market value of, the Company's securities.
Holders
There is currently one holder of the Company's securities. The
Company issued 3,000,000 shares of common stock to the current
president and director on July 31, 2000.
Dividends
The Registrant has no plans to pay any dividends in the future
upon issuance of the Company's stock.
EXECUTIVE COMPENSATION
The Company's officers and directors do not receive any
compensation for their respective services rendered to the
Company, nor have they received such compensation in the past.
They have agreed to act without compensation until authorized by
the Board of Directors, which is not expected to occur until the
Company has generated revenues from operations. As of the date
of this prospectus, the Company has no funds available to pay
directors. Further, none of the directors are accruing any
compensation.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the
Company for the benefit of its employees.
FINANCIAL STATEMENTS
(a) The following documents are filed as exhibits to this
Registration Statement:
Financial Statements for the period from April 10, 2000
(inception) to July 31, 2000.
CARPET-ON-THE-GO, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
CONTENTS
<TABLE>
<S> <C>
PAGE
INDEPENDENT AUDITORS' REPORT F-1
BALANCE SHEET F-2
STATEMENT OF OPERATIONS F-3
STATEMENT OF STOCKHOLDERS' DEFICIENCY F-4
STATEMENT OF CASH FLOWS F-5
NOTES TO FINANCIAL STATEMENTS F-6 - F-8
</TABLE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS OF CARPET-ON-THE-GO, INC.:
We have audited the accompanying balance sheet of CARPET-ON-THE-
GO, INC. (A Development Stage Company) as of July 31, 2000 and
the related statements of operations, stockholder's equity and
cash flows for the period from April 10, 2000 (inception) to
July 31, 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 presentation. We
believe that our audit provides 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 CARPET-ON-THE-GO, INC. as of July 31, 2000 and the
results of its operations and its cash flows for the period
from April 10, 2000 (inception) to July 31, 2000 in conformity
with generally accepted accounting principles.
MERDINGER, FRUCHTER, ROSEN & CORSO, P.C.
Certified Public Accountants
New York, New York
July 31, 2000
F-1
CARPET-ON-THE-GO, INC.
(A Development Stage Company)
BALANCE SHEET
JULY 31, 2000
<TABLE>
<S> <C>
ASSETS $ -
=======
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities $ -
-------
STOCKHOLDER'S EQUITY
Common stock, $0.001 par value;
25,000,000 shares authorized,
3,000,000 shares issued and outstanding 3,000
Deficit accumulated during
the development stage (3,000)
-------
Total stockholder's equity -
-------
Total liabilities and stockholder's equity $ -
=======
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-2
CARPET-ON-THE-GO, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM APRIL 10, 2000
(INCEPTION) TO JULY 31, 2000
<TABLE>
<S> <C>
Revenue $ -
General and administrative expenses 3,000
---------
Loss from operations before provision for income taxes (3,000)
Provision for income taxes -
---------
Net loss $ (3,000)
Net loss per share - basic and diluted $ -
=========
Weighted average number of common shares
outstanding 3,000,000
=========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-3
CARPET-ON-THE-GO, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDER'S EQUITY
APRIL 10, 2000 (INCEPTION) TO JULY 31, 2000
<TABLE>
<S> <C> <C> <C> <C>
Deficit
Accumulated
During the
COMMON STOCK Development
Shares Amount Stage Total
--------- ---------- --------- ---------
Balance, April 10, 2000 - $ - $ - $ -
Issuance of shares for
services - July 31, 2000 3,000,000 3,000 - 3,000
Net loss - - (3,000) (3,000)
--------- -------- -------- ---------
Balance, July 31, 2000 3,000,000 $ 3,000 $(3,000) $ -
========= ======== ======== =========
</TABLE>
The accompanying notes are an integral part of the financial
statements.
F-4
CARPET-ON-THE-GO, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
APRIL 10, 2000 (INCEPTION) TO JULY 31, 2000
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (3,000)
Stock issued for services 3,000
NET CASH USED IN OPERATING ACTIVITIES -
---------
CASH AND CASH EQUIVALENTS - April 10, 2000 -
---------
CASH AND CASH EQUIVALENTS - July 31, 2000 $ -
=========
</TABLE>
SUPPLEMENTAL INFORMATION:
During the initial period April 10 to July 31, 2000,
the Company paid no cash for interest or income taxes.
The accompanying notes are an integral part of these consolidated
financial statements.
F-5
CARPET-ON-THE-GO, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2000
NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Carpet-on-the-Go, Inc. (the "Company") is currently
a development-stage company under the provisions of
the Financial Accounting Standards Board ("FASB")
Statement of Financial Accounting Standards ("SFAS")
NO. 7. The Company was incorporated under the laws
of the state of Nevada on April 10, 2000.
Use of Estimates
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial
statements and the reported amounts of revenue and
expenses during the reporting period. Actual
results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments
purchased with original maturities of three months
or less to be cash equivalents.
Income Taxes
Income taxes are provided for based on the liability
method of accounting pursuant to SFAS No. 109,
"Accounting for Income Taxes". Deferred income
taxes, if any, are recorded to reflect the tax
consequences on future years of differences between
the tax bases of assets and liabilities and their
financial reporting amounts at each year-end.
Earnings Per Share
The Company calculates earnings per share in
accordance with SFAS No. 128, "Earnings Per Share",
which requires presentation of basic earnings per
share ("BEPS") and diluted earnings per share
("DEPS"). The computation of BEPS is computed by
dividing income available to common stockholders by
the weighted average number of outstanding common
shares during the period. DEPS gives effect to all
dilutive potential common shares outstanding during
the period. The computation of DEPS does not assume
conversion, exercise or contingent exercise of
securities that would have an antidilutive effect on
earnings. As of July 31, 2000, the Company has no
securities that would effect loss per share if they
were to be dilutive.
Comprehensive Income
SFAS No. 130, "Reporting Comprehensive Income",
establishes standards for the reporting and display
of comprehensive income and its components in the
financial statements. The Company had no items of
other comprehensive income and therefore has not
presented a statement of comprehensive income.
F-6
CARPET-ON-THE-GO, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2000
NOTE 2 - INCOME TAXES
The components of the provision for income taxes for the period
from April 10, 2000 (inception) to July 31, 2000, are as
follows:
<TABLE>
<S> <C>
Current Tax Expense
U.S. Federal $ -
State and Local -
--------
Total Current -
--------
Deferred Tax Expense
U.S. Federal -
State and Local -
--------
Total Deferred -
--------
Total Tax Provision (Benefit) from
Continuing Operations $ -
========
</TABLE>
The reconciliation of the effective income tax rate
to the Federal statutory rate is as follows:
<TABLE>
<S> <C>
Federal Income Tax Rate 34.0%
Effect of Valuation Allowance ( 34.0)%
---------
Effective Income Tax Rate 0.0%
=========
</TABLE>
At July 31, 2000, the Company had net carryforward
losses of $3,000. Because of the current uncertainty
of realizing the benefits of the tax carryforward, a
valuation allowance equal to the tax benefits for
deferred taxes has been established. The full
realization of the tax benefit associated with the
carryforward depends predominantly upon the Company's
ability to generate taxable income during the
carryforward period.
Deferred tax assets and liabilities reflect the net
tax effect of temporary differences between the
carrying amount of assets and liabilities for
financial reporting purposes and amounts used for
income tax purposes. Significant components of the
Company's deferred tax assets and liabilities as of
July 31, 2000 are as follows:
<TABLE>
<S> <C>
Deferred Tax Assets
Loss Carryforwards $ 1,000
Less: Valuation Allowance (1,000)
--------
Net Deferred Tax Assets $ -
========
</TABLE>
Net operating loss carryforwards expire in 2020.
F-7
CARPET-ON-THE-GO, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2000
NOTE 3 - COMMON STOCK
On July 31, 2000, the Company issued 3,000,000 shares
of common stock for services valued at $3,000.
F-8
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Registrant has not changed accountants since its formation,
and Management has had no disagreements with the findings of its
accountants.
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form SB-2 with
the Commission under the Securities Act for the registration of
the common stock offered by this prospectus. For purposes of this
prospectus, the term Registration Statement means the initial
registration statement and any and all amendments thereto. This
prospectus omits certain information contained in the
registration statement as permitted by the rules and regulations
of the Commission. For further information with respect to the
Company and the common stock offered, please refer to the
registration statement, including the exhibits thereto.
Statements contained in this prospectus concerning the contents
of any contract or other document are not necessarily complete,
and where such contract or other document is an exhibit to the
registration statement, or otherwise, each such statement, is
qualified by the provisions of such exhibit.
Following the effectiveness of this Registration Statement the
Company intends to file a separate registration statement on Form
8-A, at which time the Company will become subject to the
informational requirements of the Exchange Act, and in accordance
therewith will file periodic reports, proxy and information
statements, and other information with the Commission. Reports,
registration statements, proxy and information statements, and
other information filed by the Company with the Commission. The
registration statement can be inspected and copied at prescribed
rates at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, NW, Room 1024,
Washington, D.C. 20549, and at its regional offices located at
500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and
Seven World Trade Center, Suite 1300, New York, New York 10048.
Copies of these materials may be obtained at prescribed rates
from the Public Reference Section of the Commission at 450 Fifth
Street, NW, Room 1024, Washington, D.C. 20549. by calling 1-800-
SEC-0330. The Commission maintains a site on the World Wide Web
(http://www.sec.gov) that contains reports, registration
statements, proxy and information statements, and other
information.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Information on this Item is set forth in the prospectus under the
heading "Disclosure of Commission Position on Indemnification for
Securities Act Liabilities."
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Information on this Item is set forth in the Prospectus under the
heading "Use of Proceeds."
RECENT SALES OF UNREGISTERED SECURITIES
With respect to the issuances of stock made, the Registrant
relied on Section 4(2) of the Securities Act of 1933, as amended.
No advertising or general solicitation was employed in offering
the Shares. The securities were not offered for the purpose of
resale or distribution, and the transfer thereof was
appropriately restricted.
EXHIBITS
Exhibit Description.
3.1 Articles of Incorporation
3.2 By-Laws of the Registrant
5 Opinion of Counsel
23.1 Consent of Counsel contained in Exhibit 5.1
23.2 Consent of Independent Auditors
27 Financial Data Schedule
UNDERTAKINGS
The undersigned registrant hereby undertakes to:
(a) (1) File, during any period in which it offers or sells
securities, a post-effective amendment to this
registration statement to:
i. include any prospectus required by 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
notwithstanding the forgoing, any increase or decrease in
volume of 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 prospects filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in the
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
0registration statement.
iii. include any additional or changed material information on
the plan of distribution.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of
the securities offered, and the offering of the securities at
that time to be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
(b) Provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations and
registered in such names as required by the underwriter to permit
prompt delivery to each purchaser.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the small business issuer
pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the small
business issuer of expenses incurred or paid by a director,
officer or controlling person of the small business issuer in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection
with the securities being registered, the small business issuer
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.
______________________________________________
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, thereunto duly authorize, in the
City of Las Vegas, State of Nevada, on November 1, 2000.
CARPET-ON-THE-GO, INC.
By: /s/ Richard Mestas
Richard Mestas, President
Special Power of Attorney
The undersigned constitute and appoint Richard Mestas their
true and lawful attorney-in-fact and agent with full power of
substitution, for him and in his name, place, and stead, in any
and all capacities, to sign any and all amendments, including
post-effective amendments, to this Form SB-2 Registration
Statement, and to file the same with all exhibits thereto, and
all documents in connection therewith, with the Securities and
Exchange Commission, granting such attorney-in-fact the full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that such
attorney-in-fact may lawfully do or cause to be done by virtue
hereof.
In accordance with the requirements of the Securities Act of
1933, this registration statement has been signed by the
following persons in the capacities and on the dates stated:
<TABLE>
<S> <C> <C>
Signature Title Date
/s/ Richard Mestas President (Chief Executive November 1, 2000
Officer) and Director
/s/ Kenneth Sitton Secretary and Director November 1, 2000
/s/ Roy Chew Treasurer (Chief Financial November 1, 2000
and Accounting Officer) and
Director
</TABLE>
