<PAGE>
As filed with the Securities and Exchange Commission on September 15, 2000
Registration No. 333-38536
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
To
FORM SB-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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SLW Enterprises Inc.
(Exact name of small business issuer in its charter)
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Washington 5499 91-2022980
(State or other (primary standard (I.R.S. Employer
jurisdiction of industrial code) Identification Number)
incorporation or
organization)
Suite 210, 580 Hornby Street
Vancouver, British Columbia V6C 3B6, CANADA
(604) 687-6991
(Address and telephone number of principal executive offices)
Agent for Service: With a Copy to:
Suzanne Wood, President James L. Vandeberg
SLW Enterprises Inc. Ogden Murphy Wallace, PLLC
Suite 210, 580 Hornby Street 1601 Fifth Avenue, Suite 2100
Vancouver, British Columbia V6C 3B6, Seattle, Washington 98101
CANADA (206) 447-7000
(604) 687-6991
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Proposed
Amount maximum maximum Amount of
Title of each class of To be offering price aggregate registration
securities to be registered Registered per unit offering price fee
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<S> <C> <C> <C> <C>
Class A Common Stock............ 1,000,000 $.01 $10,000.00 $2.64(1)
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</TABLE>
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(1) Previously Paid
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The registration 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.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+We will amend and complete the information in this prospectus. The +
+information in this prospectus is not complete and may be changed. We may not +
+sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION--[enter date, 2000]
PROSPECTUS
SLW Enterprises Inc.
Suite 210, 580 Hornby Street
Vancouver, British Columbia V6C 3B6, CANADA
(604) 662-7000
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1,000,000 Shares of Common Stock
Par Value $.0001 Per Share
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This is the initial public offering of common stock of SLW Enterprises Inc.,
and no public market currently exists for shares of SLW Enterprises' common
stock. The initial public offering price is $0.01 per share of common stock
which was arbitrarily determined. The offering is on a best efforts-no minimum
basis. There is no minimum purchase requirement and no arrangement to place
funds in an escrow, trust, or similar account. The latest date on which this
offering will close will be 30 days after the date of this prospectus.
-----------
This investment involves a high degree of risk.
See "Risk Factors" beginning on page 2.
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Neither the Securities and Exchange Commission nor any State Securities
Commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
PART I--PROSPECTUS
<S> <C>
Prospectus Summary....................................................... 1
Risk Factors............................................................. 2
Special Note Regarding Forward-Looking Statements........................ 3
Use of Proceeds.......................................................... 4
Determination of Offering Price.......................................... 4
Selling Security Holders................................................. 4
Plan of Distribution..................................................... 4
Legal Proceedings........................................................ 5
Directors, Executive Officers, Promoters and Control Persons............. 5
Security Ownership of Certain Beneficial Owners and Management........... 5
Description of Securities................................................ 6
Interest of Named Experts and Counsel.................................... 6
Disclosure of Commission Position on Indemnification for Securities Act
Liabilities............................................................. 6
Description of Business.................................................. 7
Management's Discussion and Analysis or Plan of Operation................ 15
Description of Property.................................................. 16
Certain Relationships and Related Transactions........................... 16
Market for Common Equity and Related Stockholder Matters................. 17
Executive Compensation................................................... 17
Financial Statements..................................................... F-1
Changes In and Disagreements With Accountants on Accounting And Financial
Disclosure.............................................................. II-1
</TABLE>
<PAGE>
PROSPECTUS SUMMARY
SLW ENTERPRISES INC.
SLW Enterprises Inc. is a corporation formed under the laws of the State of
Washington, whose principal executive offices are located in Vancouver, British
Columbia, Canada.
The primary objective of the business is designed to market high-quality,
low-cost vitamins, minerals, nutritional supplements, and other health and
fitness products to medical professionals, alternative health professionals,
martial arts studios and instructors, sports and fitness trainers, other health
and fitness professionals, school and other fund raising programs and other
similar types of customers via the Internet for sale to their clients in
Montana, North Dakota, South Dakota, and Wyoming.
NAME, ADDRESS, AND TELEPHONE NUMBER OF REGISTRANT
SLW Enterprises Inc.
Suite 210, 580 Hornby Street
Vancouver, British Columbia V6C 3B6, CANADA
(604) 687-6991
THE OFFERING
<TABLE>
<S> <C>
Price per share Offered..................................... $0.01
Common Stock Offered by SLW Enterprises..................... 1,000,000 shares
Common Stock Outstanding Prior to Offering.................. 1,600,000 shares
Common Stock Outstanding After Offering Assuming 50%
of the Offering is Sold.................................... 2,100,000 shares
Common Stock Outstanding After Offering Assuming 100%
of the Offering is Sold.................................... 2,600,000 shares
</TABLE>
SLW Enterprises expects to use the net proceeds for organizational purposes
and to determine the feasibility of selling Vitamineralherb.com products to
specific markets.
1
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RISK FACTORS
SLW Enterprises Has Incurred Losses Since Its Inception March 24, 2000 and
Expects Losses to Continue For the Foreseeable Future
SLW Enterprises is in the extreme early stages of development and could
fail before implementing its business plan. It is a "start up" venture that
will incur net losses for the foreseeable future. SLW Enterprises has only
recently acquired its principal asset. SLW Enterprises will incur additional
expenses before becoming profitable, if it ever becomes profitable. It is a
relatively young company that has no history of earnings or profit. There is
no assurance that it will operate profitably in the future or provide a return
on investment in the future.
Changes or Interruptions to SLW Enterprises' Arrangements with Its Supplier
May Have an Adverse Effect on Its Ability to Operate
If SLW Enterprises' licensor defaults under its agreement with its
supplier, SLW Enterprises could lose access to its manufacturing source, and
SLW Enterprises' distribution rights would become meaningless. Similarly, any
dispute between the supplier and licensor could prevent SLW Enterprises from
selling or delivering product to its customers. Any termination or impairment
of SLW Enterprises' license rights and access to products could prevent SLW
Enterprises from implementing its business plan, thereby limiting its
profitability and decreasing the value of its stock.
If the Vitamineralherb.com Business Plan Does Not Prove To Be Feasible, SLW
Enterprises May Be Considered a Blank Check Company Which Would Restrict
Resales of Its Stock
If the Vitamineralherb.com business plan does not prove to be economically
feasible, and SLW Enterprises does not otherwise have a specific business plan
or purpose, SLW Enterprises would be considered a "blank check company", which
could limit an investor's ability to sell its stock, thereby decreasing the
value of the stock. A "blank check company" is subject to Rule 419 of the
Securities Act. Pursuant to Rule 419, all funds raised by and securities
issued in connection with a public offering by a blank check company must be
held in escrow, and any such securities may not be transferred. Many states
have also enacted statutes, rules and regulations limiting the sale of
securities of blank check companies within their respective jurisdictions. As
a result, SLW Enterprises would have great difficulty raising additional
capital. In addition, there would be a limited public market, if any, for
resale of the shares of SLW Enterprises common stock issued in this offering.
SLW Enterprises May Need Additional Financing Which May Not Be Available,
or Which May Dilute the Ownership Interests of Investors
SLW Enterprises' ultimate success will depend on its ability to raise
additional capital. No commitments to provide additional funds have been made
by management or other shareholders. SLW Enterprises has not investigated the
availability, source or terms that might govern the acquisition of additional
financing. When additional capital is needed, there is no assurance that funds
will be available from any source or, if available, that they can be obtained
on terms acceptable to SLW Enterprises. If not available, SLW Enterprises'
operations would be severely limited, and it would be unable to implement its
business plan.
Purchasers Must Rely on Ms. Wood's Abilities For All Decisions As She Will
Control the Majority of the Stock After the Offering. SLW Enterprises Has
No Employment Agreement With Ms. Wood and She Spends Only Part-time On Its
Business. Her Leaving May Adversely Effect SLW Enterprises' Ability To
Operate
Ms. Wood is serving as SLW Enterprises' sole officer and director. SLW
Enterprises will be heavily dependent upon Ms. Wood's entrepreneurial skills
and experience to implement its business plan and may,
2
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from time to time, find that her inability to devote full time and attention to
its affairs will result in delay(s) in progress towards the implementation of
its business plan or in a failure to implement its business plan. Moreover, SLW
Enterprises does not have an employment agreement with Ms. Wood and as a
result, there is no assurance that she will continue to manage its affairs in
the future. Nor has SLW Enterprises obtained a key man life insurance policy on
Ms. Wood. SLW Enterprises could lose the services of Ms. Wood, or Ms. Wood
could decide to join a competitor or otherwise compete directly or indirectly
with BentleyCapitalCorp.com, which would have a significant adverse effect on
its business and could cause the price of its stock to be worthless. The
services of Ms. Wood would be difficult to replace.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under "Prospectus Summary", "Risk Factors",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", "Description of Business", and elsewhere in this prospectus
constitute forward-looking statements. In some cases, you can identify forward-
looking statements by terminology such as "may", "will", "should", "expects",
"plans", "anticipates", "believes", "estimated", "predicts", "potential", or
"continue" or the negative of such terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties, and other factors that may cause SLW Enterprises' actual
results, levels of activity, performance, or achievements to be materially
different from any future results, levels of activity, performance, or
achievements expressed or implied by such forward-looking statements. These
factors include, among other things, those listed under "Risk Factors" and
elsewhere in this prospectus. Although SLW Enterprises believes that the
expectations reflected in the forward-looking statements are reasonable, it
cannot guarantee future results, levels of activity, performance, or
achievements.
3
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USE OF PROCEEDS
The net proceeds to SLW Enterprises from the sale of the 1,000,000 shares of
common stock offered by SLW Enterprises hereby at an assumed initial public
offering price of $.01 per share are estimated to be $10,000. SLW Enterprises
expects to use the net proceeds as follows:
<TABLE>
<CAPTION>
Assuming Sale of Assuming Sale of
50% of Stock 100% of Stock
Purpose Being Offered Being Offered
------- ---------------- ----------------
<S> <C> <C>
Organizational
Purposes............... $1,000 $1,000
Feasibility of
License/Market
Research............... $4,000 $9,000
</TABLE>
SLW Enterprises continually evaluates other business opportunities that may
be available to it, whether in the form of assets acquisitions or business
combinations. SLW Enterprises may use a portion of the proceeds for these
purposes. SLW Enterprises is not currently a party to any contracts, letters of
intent, commitments or agreements and is not currently engaged in active
negotiations with respect to any acquisitions.
SLW Enterprises has not yet determined the amount of net proceeds to be used
specifically for any of the foregoing purposes. Accordingly, SLW Enterprises'
management will have significant flexibility in applying the net proceeds of
the offering.
DETERMINATION OF OFFERING PRICE
SLW Enterprises arbitrarily determined the price of the Units in this
Offering. The offering price is not an indication of and is not based upon the
actual value of SLW Enterprises. It bears no relationship to the book value,
assets or earnings of SLW Enterprises or any other recognized criteria of
value. The offering price should not be regarded as an indicator of the future
market price of the securities.
SELLING SECURITY HOLDERS
There are no selling security holders.
PLAN OF DISTRIBUTION
SLW Enterprises will sell a maximum of 1,000,000 shares of its common stock
to the public on a "best efforts" basis. There can be no assurance that any of
these shares will be sold. This is not an underwritten offering. SLW
Enterprises has not committed to keep the registration statement effective for
any set period of time. The gross proceeds to SLW Enterprises will be $10,000
if all the shares offered are sold. SLW Enterprises will offer and sell its
common stock through its sole officer and director, Suzanne Wood, pursuant to
and in compliance with Rule 3a4-1 of the Exchange Act. There are currently no
plans at present to conduct any general solicitation in conjunction with this
offering (other than the filing of this registration statement). However, if
Ms. Wood is unable to sell all of the shares in this offering to purchasers
with whom she has a pre-existing relationship in jurisdictions where those
sales may be permitted, she may engage in a general solicitation under Rule 135
of the Securities Act of 1933. All sales will be made in compliance with the
securities laws of local jurisdictions. Ms. Wood intends to offer SLW
Enterprises' stock to potential buyers who qualify under the relevant
exemptions provided by British Columbia law, primarily the "sophisticated
purchaser" exemptions under Revised Statutes of British Columbia Section 128.
No commissions or other fees will be paid, directly or indirectly, by SLW
Enterprises, or any of its principals, to any person or firm in connection with
solicitation of sales of the shares. No public market currently exists for
shares of SLW Enterprises' common stock. SLW Enterprises intends to apply to
have its shares traded on the OTC bulletin board under the symbol "SLWE".
4
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LEGAL PROCEEDINGS
SLW Enterprises is not a party to any pending legal proceeding or litigation
and none of its property is the subject of a pending legal proceeding. Further,
the officer and director knows of no legal proceedings against SLW Enterprises
or its property contemplated by any governmental authority.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table sets forth the name, age and position of each director
and executive officer of SLW Enterprises Inc.:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Suzanne Wood................... 43 President, Secretary, Treasurer, Director
</TABLE>
In April, 2000, Ms. Wood was elected as the sole officer and director of SLW
Enterprises, of which she is the sole stockholder. She will serve until the
first annual meeting of SLW Enterprises' shareholders and her successors are
elected and qualified. Thereafter, directors will be elected for one-year terms
at the annual shareholders' meeting. Officers will hold their positions at the
pleasure of the board of directors, absent any employment agreement.
Since 1986, Ms. Wood has been the principal of Wood & Associates, financial
and corporate management consultants providing services in corporate financing
and mergers and acquisitions. Ms. Wood is an accountant with over 20 years' in
experience in the finances and corporate management of private and public
companies. After graduating from the University of British Columbia, Ms. Wood
spent several years with Revenue Canada, Taxation, primarily with its Business
Audit Division. During this period she participated in the Certified General
Accountants Program. Ms. Wood has completed the Canadian Securities Course and
remains current in the changes relating to securities matters through continued
participation in various professional development programs and seminars. Since
leaving government services she provides general consulting services to
companies in connection with the development of new business ventures. She
participates in efforts to raise capital for the companies by assisting in the
strategic business planning and advising with respect to the company's capital
structure. Part of her services includes the performance of a financial and
strategic audit of the company in order to assist the company to formulate its
future strategies. Ms. Wood assists with the performance of due diligence
related to potential business arrangements. Through her network of business
contacts cultivated over numerous years, she has assisted companies with the
development of world-wide marketing, promotional and fund raising strategies.
She is currently on the Board of Directors of a number of private and public
companies including Genetronics Biomedical Ltd., a company listed on the
Toronto and Amex Stock Exchange.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of May 1, 2000, SLW Enterprises'
outstanding common stock owned of record or beneficially by each Executive
Officer and Director and by each person who owned of record, or was known by
SLW Enterprises to own beneficially, more than 5% of its common stock, and the
shareholdings of all Executive Officers and Directors as a group. Each person
has sole voting and investment power with respect to the shares shown.
<TABLE>
<CAPTION>
Shares Percentage of
Name Owned Shares Owned
---- --------- -------------
<S> <C> <C>
Suzanne Wood, President, Secretary, Treasurer, and 1,600,000 100%
Director...........................................
Suite 210, 580 Hornby Street
Vancouver, BC V6C 3B6 Canada
All executive officers & directors as a group
(1 individual)..................................... 1,600,000 100%
</TABLE>
5
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DESCRIPTION OF SECURITIES
The following description of SLW Enterprises' capital stock is a summary of
the material terms of its capital stock. This summary is subject to and
qualified in its entirety by SLW Enterprises' articles of incorporation and
bylaws and by the applicable provisions of Washington law.
The authorized capital stock of SLW Enterprises consists of 120,000,000
shares: 100,000,000 shares of Common Stock having a par value of $0.0001 per
share and 20,000,000 shares of Preferred Stock having a par value of $0.0001
per share. The articles of incorporation do not permit cumulative voting for
the election of directors, and shareholders do not have any preemptive rights
to purchase shares in any future issuance of SLW Enterprises' common stock.
The holders of shares of common stock of SLW Enterprises do not have
cumulative voting rights in connection with the election of the Board of
Directors, which means that the holders of more than 50% of such outstanding
shares, voting for the election of directors, can elect all of the directors to
be elected, if they so choose, and, in such event, the holders of the remaining
shares will not be able to elect any of SLW Enterprises' directors.
The holders of shares of common stock are entitled to dividends, out of
funds legally available therefor, when and as declared by the Board of
Directors. The Board of Directors has never declared a dividend and does not
anticipate declaring a dividend in the future. Each outstanding share of common
stock entitles the holder thereof to one vote per share on all matters. The
holders of the shares of common stock have no preemptive or subscription
rights. In the event of liquidation, dissolution or winding up of the affairs
of SLW Enterprises holders are entitled to receive, ratably, the net assets of
SLW Enterprises Inc. available to shareholders after payment of all creditors.
All of the issued and outstanding shares of common stock are duly
authorized, validly issued, fully paid, and non-assessable. To the extent that
additional shares of SLW Enterprises' common stock are issued, the relative
interests of existing shareholders may be diluted.
INTEREST OF NAMED EXPERTS AND COUNSEL
Neither Elliott Tulk Pryce Anderson nor Ogden Murphy Wallace, PLLC was
employed on a contingent basis in connection with the registration or offering
of SLW Enterprises' common stock.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
SLW Enterprises' articles of incorporation provide that it will indemnify
its officers and directors to the full extent permitted by Washington state
law. SLW Enterprises' bylaws provide that it will indemnify and hold harmless
each person who was, is or is threatened to be made a party to or is otherwise
involved in any threatened proceedings by reason of the fact that he or she is
or was a director or officer of SLW Enterprises or is or was serving at the
request of SLW Enterprises as a director, officer, partner, trustee, employee,
or agent of another entity, against all losses, claims, damages, liabilities
and expenses actually and reasonably incurred or suffered in connection with
such proceeding.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of SLW
Enterprises pursuant to the forgoing provisions or otherwise, SLW Enterprises
has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in that
Act and is, therefore, unenforceable.
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DESCRIPTION OF BUSINESS
General
SLW Enterprises was incorporated under the laws of the State of Washington
on March 22, 2000, and is in its early developmental and promotional stages. To
date, SLW Enterprises' only activities have been organizational, directed at
acquiring its principal asset, raising its initial capital and developing its
business plan. SLW Enterprises has not commenced commercial operations. SLW
Enterprises has no full time employees and owns no real estate.
Acquisition of The License
On April 13, 2000, SLW Enterprises' sole shareholder, Suzanne Wood,
transferred to SLW Enterprises her rights under that certain License Agreement
with Vitamineralherb.com. The License Agreement grants an exclusive right to
distribute Vitamineralherb.com products to health and fitness professionals in
Montana, North Dakota, South Dakota and Wyoming via the Internet. The license
was acquired from Vitamineralherb.com for a promissory note for $35,000 payable
from SLW Enterprises to Vitamineralherb.com upon the successful completion of
the initial public offering pursuant to this registration statement and sale of
all shares registered in the offering. Ms. Wood intends to loan to SLW
Enterprises the $35,000 for payment of the license fee, which will be evidenced
by a promissory note payable to Ms. Wood by SLW Enterprises. Pursuant to the
license, SLW Enterprises is required to use its best efforts to cause this
registration statement to become effective as soon as possible after filing.
The License
SLW Enterprises has a three year license to market and sell vitamins,
minerals, nutritional supplements, and other health and fitness products to
medical professionals, alternative health professionals, martial arts studios
and instructors, sports and fitness trainers, other health and fitness
professionals, school and other fund raising programs and other similar types
of customers via the Internet for sale to their clients. The license will be
automatically renewed unless SLW Enterprises or Vitamineralherb.com gives the
other notice of its intent not to renew.
Vitamineralherb.com has agreed to provide certain business administrative
services to SLW Enterprises, including product development, store inventory,
website creation and maintenance, establishment of banking liaisons, and
development and maintenance of an order fulfillment system, thereby enabling
SLW Enterprises to focus strictly on marketing and sales. Some services, such
as development of the website and the order fulfillment system, will be
provided by Vitamineralherb.com, while others, such as product development and
store inventory, will be provided by the product supplier. Vitamineralherb.com
sets the price for products based on the manufacturer's price, plus a mark up
which Vitamineralherb.com and SLW Enterprises share equally.
SLW Enterprises and its customers will also be able to request quotes for
and order custom-formulated and custom-labeled products via the website. Three
different labeling options are available to customers: First, products may be
ordered with the manufacturer's standard label with no customization. Second,
the fitness or health professional may customize the labels by adding its name,
address, and phone number to the standard label. In most cases, these labels
would be a standardized label with product information and a place on the label
for the wording "Distributed by." This gives these health and fitness
professionals a competitive edge. Third, labels may be completely customized
for the health or fitness professional.
When a fitness or health professional becomes a client, SLW Enterprises'
salesperson will show the client how to access the Vitamineralherb website. The
client is assigned an identification number that identifies it by territory,
salesperson, and business name, address, and other pertinent information. The
health or fitness professional may then order the products it desires directly
through the Vitamineralherb.com website. It is anticipated that the customer
will pay for the purchase with a credit card, electronic check ("e-check"), or
debit card. All products will be shipped by the manufacturer directly to the
professional or its clients.
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The website will be maintained by Vitamineralherb.com, and each licensee
will pay an annual website maintenance fee of $500. All financial transactions
will be handled by Vitamineralherb.com's Internet clearing bank. The
Vitamineralherb webmaster will download e-mail orders several times a day,
check with clearing bank for payment and then submit the product order and
electronic payment to the supplier. Vitamineralherb.com will then forward the
money due SLW Enterprises via electronic funds transfer. Vitamineralherb's
software will track all sales through the customer's identification number, and
at month end, e-mail to SLW Enterprises and customer a detailed report
including sales commissions. Vitamineralherb has indicated that it will use e-
commerce advertising such as banner ads on major servers and websites, as well
as trying to insure that all major search engines pick Vitamineralherb.com
first. Sales originating from the website to customers located in British
Columbia will automatically be assigned to SLW Enterprises.
Vitamineralherb.com's website is currently operational, but is not yet
complete. Vitamineralherb.com is finalizing the product list and the automated
ordering function (manual ordering via email is currently available).
Vitamineralherb.com has established a banking liaison, and is in the process of
setting up the internet processing facility through that bank. These items
should be complete by August 1, 2000.
Background on the Manufacturer and Distributor
Vitamineralherb.com entered into a Manufacturing Agreement, dated June 9,
2000, with Ives Formulation Co., of San Diego, California. Ives Formulation is
a wholly-owned subsidiary of Ives Health Company, Inc., a public company traded
on the Bulletin Board under the symbol "IVEH". Ives Formulation has been a
contract manufacturer of vitamin, mineral, nutritional supplement, and
alternative health products for various marketing organizations. In addition to
a line of standard products, Ives Formulation is able to manufacture custom
blended products for customers, and to supply privately labeled products for
SLW Enterprises' customers at a minimal added cost. Vitamineralherb.com has
just begun developing its vitamin marketing and distributorship business.
Implementation of Business Plan: Milestones
SLW Enterprises' business plan is to determine the feasibility of selling
Vitamineralherb.com products to targeted markets. Should SLW Enterprises
determine that its business plan is feasible, it intends to employ salespeople
to call on medical professionals, alternative health professionals, martial
arts studios and instructors, sports and fitness trainers, other health and
fitness professionals, school and other fund raising programs and other similar
types of customers to interest these professionals in selling to their clients
high-quality, low-cost vitamins, minerals, nutritional supplements, and other
health and fitness products. These professionals would sell the products to
their clients via the Internet. SLW Enterprises will achieve implementation of
its business plan by meeting the following milestones:
. Milestone 1: Market Survey. In order to determine the feasibility of its
business plan, SLW Enterprises must conduct research into the various
potential target markets. The market analysis research will likely
consist of a telephone survey to 100-200 potential clients, focusing on
three or four of the core target markets, such as chiropractors, health
clubs, and alternative medicine practitioners. The survey would likely
contain questions which would determine the marketing approach and
acceptability of specific products. The survey would take approximately
four to six weeks. The cost of the survey is estimated to range from
$10,000-$13,500, which would be paid for in part out of the proceeds of
this offering.
. Milestone 2: Hire Salespeople. Should SLW Enterprises determine that the
exploitation of the license is feasible, it will then have to engage
salespeople to market the products. SLW Enterprises expects that it may
hire two salespeople during its first year of operation. The hiring
process would include running advertisements in the local newspaper and
conducting interviews. It is anticipated that hiring the salespeople may
take four to eight weeks. The cost of hiring the salespeople, not
including compensation, is estimated at $20,000.
8
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. Milestone 3: Establish an Office. SLW Enterprises would then have to
establish an office or offices for the sales force in the appropriate
market or markets. This would include an office, equipment such as
computers and telephones, and sample inventory for the salespeople. It
is anticipated that it may take eight to twelve weeks to locate
acceptable office space and select and purchase equipment. The expense
of office rental, equipment and inventory samples is estimated to be
$45,000 per year.
. Milestone 4: Development of Advertising Campaign. The next step would be
to develop an advertising campaign, including establishing a list of
prospects based on potential clients identified in the market survey,
and designing and printing sales materials. It is anticipated that it
would take approximately six to ten weeks to develop the advertising
campaign, although, depending on the availability of resources, SLW
Enterprises will attempt to develop its advertising campaign
concurrently with establishing an office. The cost of developing the
campaign is estimated at approximately $12,000 per year.
. Milestone 5: Implementation of Advertising Campaign/Sales
Calls. Implementation of the advertising campaign would begin with
mailing the sales materials to the identified list of prospects.
Approximately two to four weeks thereafter, the salespeople would begin
telephone follow ups and scheduling of sales calls. Although it will be
necessary to make sales calls throughout the life of the company, it is
estimated that the first round of sales calls will take approximately
eight to twelve weeks to complete. The cost of salary and expenses for
two salespeople is estimated at $248,000 per year.
. Milestone 6: Achieve Revenues. It is difficult to quantify how long it
will take to convert a sales call into actual sales and revenues. SLW
Enterprises will not begin receiving orders until its sales force is
able to convince potential clients to begin offering such products to
their customers, or to convert from an existing supplier. SLW
Enterprises hopes that clients would begin placing orders within weeks
of a sales call, but it may take several months before people begin to
purchase products. Moreover, customers may not be willing to pay for
products at the time they order, and may insist on buying on account,
which would delay receipt of revenues another month or two. Assuming
SLW Enterprises has received all necessary approvals to begin raising
funds by October 1, 2000, and assuming an offering period of
approximately one month, in a best case scenario SLW Enterprises may
receive its first revenues as early as April 1, 2001. However, a more
realistic estimate of first revenues would be November 1, 2001 or later.
As discussed more fully in the Management's Discussion and Analysis--
Liquidity and Capital Resources section, the expenses of implementing SLW
Enterprises' business plan will likely exceed the funds raised by this
offering, and SLW Enterprises will have to obtain additional financing through
an offering or through capital contributions by current shareholders. No
commitments to provide additional funds have been made by management or
shareholders. Accordingly, there can be no assurance that any additional funds
will be available on terms acceptable to SLW Enterprises or at all.
Industry Background
Growth of the Internet and electronic commerce. The Internet has become an
increasingly significant medium for communication, information and commerce.
According to NUA Internet Surveys, as of February 2000, there were
approximately 275.5 million Internet users worldwide. At the IDC Internet
Executive Forum held on September 28-29, 1999, IDC stated that in 1999 US $109
billion in purchases were impacted by the Internet. IDC's vice president, Sean
Kaldor, indicated that figure is expected to increase more than ten-fold over
the next five years to US $1.3 trillion in 2003, with $842 million completed
directly over the Web. SLW Enterprises believes that this dramatic growth
presents significant opportunities for online retailers.
The vitamin, supplement, mineral and alternative health product market. In
recent years, a growing awareness of vitamins, herbs, and other dietary
supplements by the general public has created a whole new
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<PAGE>
segment in the field of medicine and health care products. According to Jupiter
Communications, online sales of such products are expected to be US $434
million in the year 2003, up from $1 million in 1998. SLW Enterprises believes
that several factors are driving this growth, including a rapidly growing
segment of the population that is concerned with aging and disease, a growing
interest in preventative health care, favorable consumer attitudes toward
alternative health products and a favorable regulatory statute, the Dietary
Supplement Health and Education Act of 1994.
Competition
The electronic commerce industry is new, rapidly evolving and intensely
competitive, and SLW Enterprises expects competition to intensify in the
future. Barriers to entry are minimal and current and new competitors can
launch sites at a relatively low cost. In addition, the vitamin, supplement,
mineral and alternative health product market is very competitive and highly
fragmented, with no clear dominant leader and increasing public and commercial
attention.
SLW Enterprises' competitors can be divided into several groups including:
. traditional vitamins, supplements, minerals and alternative health
products retailers;
. the online retail initiatives of several traditional vitamins,
supplements, minerals and alternative health products retailers;
. online retailers of pharmaceutical and other health-related products
that also carry vitamins, supplements, minerals and alternative health
products;
. independent online retailers specializing in vitamins, supplements,
minerals and alternative health products;
. mail-order and catalog retailers of vitamins, supplements, minerals and
alternative health products, some of which have already developed online
retail outlets; and
. direct sales organizations, retail drugstore chains, health food store
merchants, mass market retail chains and various manufacturers of
alternative health products.
Many of SLW Enterprises' potential competitors have longer operating
histories, larger customer or user bases, greater brand recognition and
significantly greater financial, marketing and other resources than SLW
Enterprises has. In addition, an online retailer may be acquired by, receive
investments from, or enter into other commercial relationships with, larger,
well-established and well-financed companies as use of the Internet and other
electronic services increases. Competitors have and may continue to adopt
aggressive pricing or inventory availability policies and devote substantially
more resources to website and systems development than SLW Enterprises does.
Increased competition may result in reduced operating margins and loss of
market share.
SLW Enterprises believes that the principal competitive factors in its
market are:
. ability to attract and retain customers;
. breadth of product selection;
. product pricing;
. ability to customize products and labeling;
. quality and responsiveness of customer service.
SLW Enterprises believes that it can compete favorably on these factors.
However, SLW Enterprises will have no control over how successful its
competitors are in addressing these factors. In addition, with little
difficulty, SLW Enterprises' online competitors can duplicate many of the
products or services offered on the Vitamineralherb.com site.
10
<PAGE>
SLW Enterprises believes that traditional retailers of vitamins,
supplements, minerals and other alternative health products face several
challenges in succeeding:
. Lack of convenience and personalized service. Traditional retailers have
limited store hours and locations. Traditional retailers are also unable
to provide consumers with product advice tailored to their particular
situation.
. Limited product assortment. The capital and real estate intensive nature
of store-based retailers limit the product selection that can be
economically offered in each store location.
. Lack of Customer Loyalty. Although the larger traditional retailers
often attract customers, many of these customers are only one-time
users. People are often attractive to the name brands, but find the
products too expensive. It is understood that these are quality products
and have value, but the multilevel structure of marketing often employed
by large retailers mandate high prices.
As a result of the foregoing limitations, SLW Enterprises believes there is
significant unmet demand for an alternative shopping channel that can provide
consumers of vitamins, supplements, minerals and other alternative health
products with a broad array of products and a convenient and private shopping
experience.
SLW Enterprises hopes to attract and retain consumers through the following
key attributes of its business:
. Broad Expandable Product Assortment. SLW Enterprises' product selection
is substantially larger than that offered by store-based retailers.
. Low Product Prices. Product prices can be kept low due to volume
purchases through SLW Enterprises' affiliation with Vitamineralherb.com
and other licensees. Product prices will also be lower due to SLW
Enterprises' lack of need of inventory and warehouse space. All products
are shipped from International Formulation and Manufacturing's
inventory.
. Accessibility to Customized Products. At minimal cost, health and
fitness practitioners may offer their customers customized products.
. Access to Personalized Programs. Health or fitness professional can
tailor vitamin and dietary supplement regimes to their clients.
Regulatory Environment
The manufacturing, processing, formulating, packaging, labeling and
advertising of the products SLW Enterprises sells may be subject to regulation
by one or more U.S. federal agencies, including the Food and Drug
Administration, the Federal Trade Commission, the United States Department of
Agriculture and the Environmental Protection Agency. These activities also may
be regulated by various agencies of the states, localities and foreign
countries in which consumers reside.
The Food and Drug Administration, in particular, regulates the formulation,
manufacture, labeling and distribution of foods, including dietary
supplements, cosmetics and over-the- counter or homeopathic drugs. Under the
Federal Food, Drug, and Cosmetic Act, the Food and Drug Administration may
undertake enforcement actions against companies marketing unapproved drugs, or
"adulterated" or "misbranded" products. The remedies available to the Food and
Drug Administration include: criminal prosecution; an injunction to stop the
sale of a company's products; seizure of products; adverse publicity; and
"voluntary" recalls and labeling changes.
Food and Drug Administration regulations require that certain informational
labeling be presented in a prescribed manner on all foods, drugs, dietary
supplements and cosmetics. Specifically, the Food, Drug, and Cosmetic Act
requires that food, including dietary supplements, drugs and cosmetics, not be
"misbranded." A product may be deemed an unapproved drug and "misbranded" if
it bears improper claims or improper labeling. The Food and Drug
Administration has indicated that promotional statements made about dietary
11
<PAGE>
supplements on a company's website may constitute "labeling" for purposes of
compliance with the provisions of the Food, Drug, and Cosmetic Act. A
manufacturer or distributor of dietary supplements must notify the Food and
Drug Administration when it markets a product with labeling claims that the
product has an effect on the structure or function of the body. Noncompliance
with the Food, Drug, and Cosmetic Act, and recently enacted amendments to that
Act discussed below, could result in enforcement action by the Food and Drug
Administration.
The Food, Drug, and Cosmetic Act has been amended several times with respect
to dietary supplements, most recently by the Nutrition Labeling and Education
Act of 1990 and the Dietary Supplement Health and Education Act of 1994. The
Dietary Supplement Health and Education Act created a new statutory framework
governing the definition, regulation and labeling of dietary supplements. With
respect to definition, the Dietary Supplement Health and Education Act created
a new class of dietary supplements, consisting of vitamins, minerals, herbs,
amino acids and other dietary substances for human use to supplement the diet,
as well as concentrates, metabolites, extracts or combinations of such dietary
ingredients. Generally, under the Dietary Supplement Health and Education Act,
dietary ingredients that were on the market before October 15, 1994 may be sold
without Food and Drug Administration pre-approval and without notifying the
Food and Drug Administration. In contrast, a new dietary ingredient, i.e., one
not on the market before October 15, 1994, requires proof that it has been used
as an article of food without being chemically altered or evidence of a history
of use or other evidence of safety establishing that it is reasonably expected
to be safe. Retailers, in addition to dietary supplement manufacturers, are
responsible for ensuring that the products they market for sale comply with
these regulations. Noncompliance could result in enforcement action by the Food
and Drug Administration, an injunction prohibiting the sale of products deemed
to be noncompliant, the seizure of such products and criminal prosecution.
The Food and Drug Administration has indicated that claims or statements
made on a company's website about dietary supplements may constitute "labeling"
and thus be subject to regulation by the Food and Drug Administration. With
respect to labeling, the Dietary Supplement Health and Education Act amends,
for dietary supplements, the Nutrition Labeling and Education Act by providing
that "statements of nutritional support," also referred to as
"structure/function claims," may be used in dietary supplement labeling without
Food and Drug Administration pre-approval, provided certain requirements are
met. These statements may describe how particular dietary ingredients affect
the structure or function of the body, or the mechanism of action by which a
dietary ingredient may affect body structure or function, but may not state a
drug claim, i.e., a claim that a dietary supplement will diagnose, mitigate,
treat, cure or prevent a disease. A company making a "statement of nutritional
support" must possess substantiating evidence for the statement, disclose on
the label that the Food and Drug Administration has not reviewed the statement
and that the product is not intended for use for a disease and notify the Food
and Drug Administration of the statement within 30 days after its initial use.
It is possible that the statements presented in connection with product
descriptions on SLW Enterprises' site may be determined by the Food and Drug
Administration to be drug claims rather than acceptable statements of
nutritional support. In addition, some of SLW Enterprises' suppliers may
incorporate objectionable statements directly in their product names or on
their products' labels, or otherwise fail to comply with applicable
manufacturing, labeling and registration requirements for over-the-counter or
homeopathic drugs or dietary supplements. As a result, Vitamineralherb.com may
have to remove objectionable statements or products from its site or modify
these statements, or product names or labels, in order to comply with Food and
Drug Administration regulations. Such changes could interfere with SLW
Enterprises' marketing of products and could cause us to incur significant
additional expenses.
In addition, the Dietary Supplement Health and Education Act allows the
dissemination of "third party literature" in connection with the sale of
dietary supplements to consumers at retail if the publication meets statutory
requirements. Under the Dietary Supplement Health and Education Act, "third
party literature" may be distributed if, among other things, it is not false or
misleading, no particular manufacturer or brand of dietary supplement is
promoted, a balanced view of available scientific information on the subject
matter is presented and there is physical separation from dietary supplements
in stores. The extent to which this
12
<PAGE>
provision may be used by online retailers is not yet clear, and SLW Enterprises
cannot assure you that all pieces of "third party literature" that may be
disseminated in connection with the products SLW Enterprises offers for sale
will be determined to be lawful by the Food and Drug Administration. Any such
failure could render the involved product an unapproved drug or a "misbranded"
product, potentially subjecting us to enforcement action by the Food and Drug
Administration, and could require the removal of the noncompliant literature
from Vitamineralherb.com's website or the modification of SLW Enterprises'
selling methods, interfering with SLW Enterprises' continued marketing of that
product and causing us to incur significant additional expenses. Given the fact
that the Dietary Supplement Health and Education Act was enacted only five
years ago, the Food and Drug Administration's regulatory policy and enforcement
positions on certain aspects of the new law are still evolving. Moreover,
ongoing and future litigation between dietary supplement companies and the Food
and Drug Administration will likely further refine the legal interpretations of
the Dietary Supplement Health and Education Act. As a result, the regulatory
status of certain types of dietary supplement products, as well as the nature
and extent of permissible claims will remain unclear for the foreseeable
future. Two areas in particular that pose potential regulatory risk are the
limits on claims implying some benefit or relationship with a disease or
related condition and the application of the physical separation requirement
for "third party literature" as applied to Internet sales.
In addition to the regulatory scheme under the Food, Drug and Cosmetic Act,
the advertising and promotion of dietary supplements, foods, over-the-counter
drugs and cosmetics is subject to scrutiny by the Federal Trade Commission. The
Federal Trade Commission Act prohibits "unfair or deceptive" advertising or
marketing practices, and the Federal Trade Commission has pursued numerous food
and dietary supplement manufacturers and retailers for deceptive advertising or
failure to substantiate promotional claims, including, in many instances,
claims made via the Internet. The Federal Trade Commission has the power to
seek administrative or judicial relief prohibiting a wide variety of claims, to
enjoin future advertising, to seek redress or restitution payments and to seek
a consent order and seek monetary penalties for the violation of a consent
order. In general, existing laws and regulations apply fully to transactions
and other activity on the Internet. The Federal Trade Commission is in the
process of reviewing its policies regarding the applicability of its rules and
its consumer protection guides to the Internet and other electronic media. The
Federal Trade Commission has already undertaken a new monitoring and
enforcement initiative, "Operation Cure-All," targeting allegedly bogus health
claims for products and treatments offered for sale on the Internet. Many
states impose their own labeling or safety requirements that differ from or add
to existing federal requirements.
SLW Enterprises cannot predict the nature of any future U.S. laws,
regulations, interpretations or applications, nor can it determine what effect
additional governmental regulations or administrative orders, when and if
promulgated, would have on its business in the future. Although the regulation
of dietary supplements is less restrictive than that of drugs and food
additives, SLW Enterprises cannot assure you that the current statutory scheme
and regulations applicable to dietary supplements will remain less restrictive.
Further, SLW Enterprises cannot assure you that, under existing laws and
regulations, or if more stringent statutes are enacted, regulations are
promulgated or enforcement policies are adopted, it is or will be in compliance
with these existing or new statutes, regulations or enforcement policies
without incurring material expenses or adjusting its business strategy. Any
laws, regulations, enforcement policies, interpretations or applications
applicable to SLW Enterprises' business could require the reformulation of
certain products to meet new standards, the recall or discontinuance of certain
products not capable of reformulation, additional record keeping, expanded
documentation of the properties of certain products, expanded or different
labeling or scientific substantiation.
Regulation of the Internet. In general, existing laws and regulations apply
to transactions and other activity on the Internet; however, the precise
applicability of these laws and regulations to the Internet is sometimes
uncertain. The vast majority of such laws were adopted prior to the advent of
the Internet and, as a result, do not contemplate or address the unique issues
of the Internet or electronic commerce. Nevertheless, numerous federal and
state government agencies have already demonstrated significant activity in
promoting consumer protection and enforcing other regulatory and disclosure
statutes on the Internet. Additionally, due to
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<PAGE>
the increasing use of the Internet as a medium for commerce and communication,
it is possible that new laws and regulations may be enacted with respect to the
Internet and electronic commerce covering issues such as user privacy, freedom
of expression, advertising, pricing, content and quality of products and
services, taxation, intellectual property rights and information security. The
adoption of such laws or regulations and the applicability of existing laws and
regulations to the Internet may impair the growth of Internet use and result in
a decline in SLW Enterprises' sales.
A number of legislative proposals have been made at the federal, state and
local level, and by foreign governments, that would impose additional taxes on
the sale of goods and services over the Internet, and certain states have taken
measures to tax Internet-related activities. Although Congress recently placed
a three-year moratorium on new state and local taxes on Internet access or on
discriminatory taxes on electronic commerce, existing state or local laws were
expressly excepted from this moratorium. Further, once this moratorium is
lifted, some type of federal and/or state taxes may be imposed upon Internet
commerce. Such legislation or other attempts at regulating commerce over the
Internet may substantially impair the growth of commerce on the Internet and,
as a result, adversely affect SLW Enterprises' opportunity to derive financial
benefit from such activities.
Employees
SLW Enterprises is a development stage company and currently has no
employees. SLW Enterprises is currently managed by Suzanne Wood, its sole
officer and director. SLW Enterprises looks to Ms. Wood for her entrepreneurial
skills and talents. Management plans to use consultants, attorneys and
accountants as necessary and does not plan to engage any full-time employees in
the near future. SLW Enterprises may hire marketing employees based on the
projected size of the market and the compensation necessary to retain qualified
sales employees. A portion of any employee compensation likely would include
the right to acquire stock in SLW Enterprises, which would dilute the ownership
interest of holders of existing shares of its common stock.
Available Information and Reports to Securities Holders
SLW Enterprises has filed with the Securities and Exchange Commission a
registration statement on Form SB-2 with respect to the common stock offered by
this prospectus. This prospectus, which constitutes a part of the registration
statement, does not contain all of the information set forth in the
registration statement or the exhibits and schedules which are part of the
registration statement. For further information with respect to SLW Enterprises
and its common stock, see the registration statement and the exhibits and
schedules thereto. Any document SLW Enterprises files may be read and copied at
the Commission's Public Reference Room located at 450 Fifth Street NW.,
Washington D.C. 20549, and the public reference rooms in New York, New York,
and Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for further
information about the public reference rooms. SLW Enterprises' filings with the
Commission are also available to the public from the Commission's website at
http://www.sec.gov.
Upon completion of this offering, SLW Enterprises will become subject to the
information and periodic reporting requirements of the Securities Exchange Act
and, accordingly, will file periodic reports, proxy statements and other
information with the Commission. Such periodic reports, proxy statements and
other information will be available for inspection and copying at the
Commission's public reference rooms, and the website of the Commission referred
to above.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis of SLW Enterprises' financial
condition and results of operations should be read in conjunction with the
Financial Statements and accompanying notes and the other financial information
appearing elsewhere in this Prospectus.
This prospectus contains forward-looking statements, the accuracy of which
involve risks and uncertainties. Words such as "anticipates," "believes,"
"plans," "expects," "future," "intends" and similar expressions are used to
identify forward-looking statements. This prospectus also contains forward-
looking statements attributed to certain third parties relating to their
estimates regarding the potential markets for Vitamineralherb products.
Prospective investors should not place undue reliance on these forward-looking
statements, which apply only as of the date of this prospectus. SLW
Enterprises' actual results could differ materially from those anticipated in
these forward-looking statements for many reasons, including the risks faced by
SLW Enterprises described in "Risk Factors" and elsewhere in this prospectus.
The following discussion and analysis should be read in conjunction with SLW
Enterprises' Financial Statements and Notes thereto and other financial
information included elsewhere in this prospectus.
Results of Operations
During the period from March 22, 2000 through April 30, 2000, and the three
months ended July 31, 2000. SLW Enterprises has engaged in no significant
operations other than organizational activities, acquisition of the rights to
market Vitamineralherb and preparation for registration of its securities under
the Securities Act of 1933, as amended. No revenues were received by SLW
Enterprises during this period.
For the current fiscal year, SLW Enterprises anticipates incurring a loss as
a result of organizational expenses, expenses associated with registration
under the Securities Act of 1933, and expenses associated with setting up a
company structure to begin implementing its business plan. SLW Enterprises
anticipates that until these procedures are completed, it will not generate
revenues, and may continue to operate at a loss thereafter, depending upon the
performance of the business.
SLW Enterprises' business plan is to determine the feasibility of marketing
the Vitamineralherb products in various markets, and, if the products prove to
be in demand, begin marketing and selling Vitamineralherb products.
Liquidity and Capital Resources
SLW Enterprises remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
shareholders' equity. Consequently, SLW Enterprises' balance sheet as of April
30, 2000, and July 31, 2000 reflects total assets of nil.
SLW Enterprises' business plan is to determine the feasibility of selling
Vitamineralherb.com products to targeted markets. Should SLW Enterprises
determine that its business plan is feasible, it intends to employ salespeople
to call on medical professionals, alternative health professionals, martial
arts studios and instructors, sports and fitness trainers, other health and
fitness professionals, school and other fund raising programs and other similar
types of customers to interest these professionals in selling to their clients
high-quality, low-cost vitamins, minerals, nutritional supplements, and other
health and fitness products. These professionals would sell the products to
their clients via the Internet.
In order to determine the feasibility of its business plan, SLW Enterprises
plans, during the next six to twelve months, to conduct research into these
various potential target markets. Should SLW Enterprises determine that the
exploitation of the license is feasible, it will engage salespeople to market
the products. Based primarily on discussions with the licensor, SLW Enterprises
believes that during its first operational quarter, it will need a capital
infusion of approximately $85,000 to achieve a sustainable sales level where
15
<PAGE>
ongoing operations can be funded out of revenues. This capital infusion is
intended to cover costs of advertising, hiring and paying two salespeople, and
administrative expenses. In addition, SLW Enterprises will need approximately
$260,000 in the event it determines that its market will not pay in advance and
it will have to extend credit. These expenses will exceed the funds raised by
this offering, and SLW Enterprises will have to obtain additional financing
through an offering or capital contributions by current shareholders.
SLW Enterprises is conducting this offering, in part, because it believes
that an early registration of its equity securities will minimize some of the
impediments to capital formation that otherwise exist. By having a registration
statement in place, SLW Enterprises believes it will be in a better position,
either to conduct a future public offering of its securities or to undertake a
private placement with registration rights, than if it were a completely
private company. Registering its shares will help minimize the liquidity
discounts SLW Enterprises may otherwise have to take in a future private
placement of its equity securities, because investors will have a high degree
of confidence that the Rule 144(c)(1) public information requirement will be
satisfied, and a public market will exist to effect Rule 144(g) broker
transactions. SLW Enterprises believes that the cost of registering its
securities, and undertaking the affirmative disclosure obligations that such a
registration entails, will be more than offset by avoiding deep liquidity
discounts in future sales of securities. No specific private investors have
been identified, but SLW Enterprises' management has general knowledge of an
investor class interested in investing in companies that can demonstrate a
clear path to an early liquidity event.
No commitments to provide additional funds have been made by management or
shareholders. Accordingly, there can be no assurance that any additional funds
will be available on terms acceptable to SLW Enterprises or at all. SLW
Enterprises expects to begin earning revenues shortly after a sales force is in
place.
In addition, SLW Enterprises may engage in a combination with another
business. SLW Enterprises cannot predict the extent to which its liquidity and
capital resources will be diminished prior to the consummation of a business
combination or whether its capital will be further depleted by the operating
losses (if any) of the business entity with which SLW Enterprises may
eventually combine. SLW Enterprises has engaged in discussions concerning
potential business combinations, but has not entered into any agreement for
such a combination.
SLW Enterprises will need additional capital to carry out its business plan
or to engage in a business combination. No commitments to provide additional
funds have been made by management or other shareholders. Accordingly, there
can be no assurance that any additional funds will be available on terms
acceptable to SLW Enterprises or at all. SLW Enterprises has no commitments for
capital expenditures.
DESCRIPTION OF PROPERTY
SLW Enterprises currently maintains limited office space, occupied by
Suzanne Wood, for which it pays no rent. Its address is Suite 210, 580 Hornby
Street, Vancouver, British Columbia V6C 3B6, Canada and its phone number is
(604) 687-6991. SLW Enterprises does not believe that it will need to obtain
additional office space at any time in the foreseeable future until its
business plan is more fully implemented.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No director, executive officer or nominee for election as a director of SLW
Enterprises and no owner of five percent or more of SLW Enterprises'
outstanding shares or any member of their immediate family has entered into or
proposed any transaction in which the amount involved exceeds $60,000.
16
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MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No established public trading market exists for SLW Enterprises' securities.
SLW Enterprises has no common equity subject to outstanding purchase options or
warrants. SLW Enterprises has no securities convertible into its common equity.
There is no common equity that could be sold pursuant to Rule 144 under the
Securities Act or that SLW Enterprises has agreed to register under the
Securities Act for sale by shareholders. Except for this offering, there is no
common equity that is being, or has been publicly proposed to be, publicly
offered by SLW Enterprises.
As of September 1, 2000, there were 1,600,000 shares of common stock
outstanding, held by 1 shareholder of record. Upon effectiveness of the
registration statement that includes this prospectus, all of SLW Enterprises'
outstanding shares will be eligible for sale.
To date SLW Enterprises has not paid any dividends on its common stock and
does not expect to declare or pay any dividends on its common stock in the
foreseeable future. Payment of any dividends will depend upon SLW Enterprises'
future earnings, if any, its financial condition, and other factors as deemed
relevant by the Board of Directors.
EXECUTIVE COMPENSATION
No officer or director has received any remuneration from SLW Enterprises.
Although there is no current plan in existence, it is possible that SLW
Enterprises will adopt a plan to pay or accrue compensation to its officers and
directors for services related to the implementation of SLW Enterprises'
business plan. SLW Enterprises has no stock option, retirement, incentive,
defined benefit, actuarial, pension or profit-sharing programs for the benefit
of directors, officers or other employees, but the Board of Directors may
recommend adoption of one or more such programs in the future. SLW Enterprises
has no employment contract or compensatory plan or arrangement with any
executive officer of SLW Enterprises. The director currently does not receive
any cash compensation from SLW Enterprises for her service as a member of the
board of directors. There is no compensation committee, and no compensation
policies have been adopted. See "Certain Relationships and Related
Transactions."
17
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SLW ENTERPRISES INC.
(A Development Stage Company)
<TABLE>
<CAPTION>
Index
-----
<S> <C>
Independent Auditor's Report.............................................. F-1
Balance Sheets............................................................ F-2
Statements of Operations.................................................. F-3
Statements of Cash Flows.................................................. F-4
Statements of Stockholders' Equity........................................ F-5
Notes to the Financial Statements......................................... F-6
</TABLE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
SLW Enterprises Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of SLW Enterprises Inc. (A
Development Stage Company) as of April 30, 2000 and the related statements of
operations, stockholders' equity and cash flows for the period from March 22,
2000 (Date of Inception) to April 30, 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 U.S. 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 aforementioned financial statements present fairly, in
all material respects, the financial position of SLW Enterprises Inc. (A
Development Stage Company), as of April 30, 2000, and the results of its
operations and its cash flows for the period from March 22, 2000 (Date of
Inception) to April 30, 2000, in conformity with U.S. generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has not generated any revenues or conducted
any operations since inception. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also discussed in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Elliott Tulk Pryce Anderson
CHARTERED ACCOUNTANTS
Vancouver, Canada
September 7, 2000
F-1
<PAGE>
SLW ENTERPRISES INC.
(A Development Stage Company)
BALANCE SHEETS
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
July 31, April 30,
2000 2000
----------- ---------
(unaudited)
ASSETS
------
<S> <C> <C>
License (Notes 3 and 4).................................. $ -- $ --
======== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
Current Liabilities
Note payable (Note 4).................................. 35,000 35,000
-------- --------
Stockholders' Equity
Common Stock, 100,000,000 common shares authorized with
a par value of $.0001; 1,600,000 common shares issued
and outstanding....................................... 160 160
Additional Paid in Capital............................. 15,840 15,840
-------- --------
16,000 16,000
-------- --------
Preferred Stock, 20,000,000 preferred shares authorized
with a par value of $.0001; none issued................. -- --
-------- --------
Deficit Accumulated During the Development Stage......... (51,000) (51,000)
-------- --------
-- --
-------- --------
$ -- $ --
======== ========
Contingent Liability (Note 1)
Commitment (Note 3)
</TABLE>
(The accompanying notes are an integral part of the financial statements)
F-2
<PAGE>
SLW ENTERPRISES INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
Accumulated From
(Date of From March 22, 2000
Inception) to Three Months Ended (Date of Inception)
July 31, 2000 July 31, 2000 to April 30, 2000
---------------- ------------------ -------------------
(unaudited) (unaudited)
<S> <C> <C> <C>
Revenue................. $ -- $-- $ --
-------- ---- --------
Expenses
Legal and
organizational....... 16,000 -- 16,000
License written-off... 35,000 -- 35,000
-------- ---- --------
Net Loss................ (51,000) -- (51,000)
======== ==== ========
Loss per share.......... -- (.03)
======== ==== ========
</TABLE>
(The accompanying notes are an integral part of the financial statements)
F-3
<PAGE>
SLW ENTERPRISES INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
Accumulated From From March 22, 2000
(Date of Inception) Three Months Ended (Date of Inception)
to July 31, 2000 July 31, 2000 to April 30, 2000
------------------- ------------------ -------------------
(unaudited)
<S> <C> <C> <C>
Cash Flows to Operating
Activities
Net loss.............. $(51,000) $-- $(51,000)
Non-cash items
Legal and
organizational
costs.............. 16,000 -- 16,000
License written-
off................ 35,000 -- 35,000
-------- ---- --------
Net Cash Used by
Operating Activities... -- -- --
-------- ---- --------
Change in cash.......... -- -- --
Cash--beginning of
period................. -- -- --
-------- ---- --------
Cash--end of period..... -- -- --
======== ==== ========
Non-Cash Financing
Activities
A total of 1,600,000
shares were issued to
a director at a fair
market value of $0.01
per share for legal
and organizational
expenses paid........ 16,000 -- 16,000
A note payable was
assumed by the
Company for the
acquisition of a
License from a
director (Notes 3 and
5)................... 35,000 -- 35,000
-------- ---- --------
51,000 -- 51,000
======== ==== ========
Supplemental Disclosures
Interest paid......... -- -- --
Income tax paid....... -- -- --
</TABLE>
(The accompanying notes are an integral part of the financial statements)
F-4
<PAGE>
SLW ENTERPRISES INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
---------------- Paid-in Development
Shares Amount Capital Total Stage
--------- ------ ---------- ------- -----------
<S> <C> <C> <C> <C> <C>
Balance--March 22, 2000 (Date
of Inception)................. -- $ -- $ -- $ -- $ --
Stock issued for legal and
organizational expenses at a
fair market value of
$0.01 per share............. 1,600,000 160 15,840 16,000 --
Net loss for the period...... -- -- -- -- (51,000)
--------- ---- ------- ------- --------
Balance--April 30, 2000........ 1,600,000 160 15,840 16,000 (51,000)
Net loss for the period...... -- -- -- -- --
--------- ---- ------- ------- --------
Balance--July 31, 2000
(unaudited)................... 1,600,000 160 15,840 16,000 (51,000)
========= ==== ======= ======= ========
</TABLE>
(The accompanying notes are an integral part of the financial statements)
F-5
<PAGE>
SLW ENTERPRISES INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(expressed in U.S. dollars)
1. DEVELOPMENT STAGE COMPANY
SLW Enterprises Inc. herein (the "Company") was incorporated in the State of
Washington, U.S.A. on March 22, 2000. The Company acquired a license to market
and distribute vitamins, minerals, nutritional supplements, and other health
and fitness products in Montana, North Dakota, South Dakota and Wyoming, in
which the grantor of the license offers these products for sale from various
suppliers on their Web Site.
The Company is in the development stage.
In a development stage company, management devotes most of its activities in
developing a market for its products. Planned principal activities have not yet
begun. The ability of the Company to emerge from the development stage with
respect to any planned principal business activity is dependent upon its
successful efforts to raise additional equity financing and/or attain
profitable operations. There is no guarantee that the Company will be able to
raise any equity financing or sell any of its products at a profit. There is
substantial doubt regarding the Company's ability to continue as a going
concern.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Year end
The Company's fiscal year end is April 30.
(b) License
The cost to acquire the License was capitalized. The cost will be
amortized on a straight-line basis over twelve months.
The carrying value of the License is evaluated in each reporting period
to determine if there were events or circumstances which would indicate a
possible inability to recover the carrying amount. Such evaluation is based
on various analyses including assessing the Company's ability to bring the
commercial applications to market, related profitability projections and
undiscounted cash flows relating to each application which necessarily
involves significant management judgment.
(c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of
three months or less at the time of issuance to be cash equivalents.
(d) 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 revenues and expenses
during the periods. Actual results could differ from those estimates.
3. LICENSE
The Company's only asset is a license to market vitamins, minerals,
nutritional supplements and other health and fitness products through the
Grantor's Web Site. The Company desires to market these products to medical
practitioners, alternative health professionals, martial arts studios and
instructors, sports and fitness
F-6
<PAGE>
SLW ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS--(Continued)
(expressed in U.S. dollars)
trainers, other health and fitness practitioners, school and other fund raising
programs and other similar types of customers in Montana, North Dakota, South
Dakota and Wyoming. The license was acquired on April 13, 2000 for a term of
three years. The Company must pay an annual fee of $500 for maintenance of the
Grantor's Web Site commencing on the anniversary date. The Grantor of the
license retains 50% of the profits.
The Company paid total consideration of $35,000 for the license with a note
payable of $35,000. See Note 5.
The License has been written-off to operations as at April 30, 2000 due to
the lack of historical cash flow of Vitaminmineralherb.com. However, it is the
Company's intention to determine if it is economically feasible to commercially
exploit a business plan.
4. NOTE PAYABLE
The note payable is unsecured, non-interest bearing and is repayable upon
the successful completion of an Initial Public Offering of the common stock of
the Company and sale of all registered shares pursuant to such offering.
5. RELATED PARTY TRANSACTION
The License referred to in Note 3 was assigned to the Company by the sole
director and President of the Company for consideration of the assumption of a
note payable of $35,000. The License was recorded at the transferors cost of
$35,000 which was also fair market value.
The Grantor of the License is not related to the Company.
6. SUBSEQUENT EVENT
The Company has filed an SB-2 Registration Statement with the U.S.
Securities Exchange Commission. Once declared effective the Company will offer,
on a best efforts basis, 1,000,000 common shares at $0.01 per share for cash
proceeds of $10,000.
F-7
<PAGE>
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
SLW Enterprises' Articles of Incorporation provide that it must indemnify
its directors and officers to the fullest extent permitted under Washington law
against all liabilities incurred by reason of the fact that the person is or
was a director or officer of SLW Enterprises or a fiduciary of an employee
benefit plan, or is or was serving at the request of SLW Enterprises as a
director or officer, or fiduciary of an employee benefit plan, of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise.
The effect of these provisions is potentially to indemnify SLW Enterprises'
directors and officers from all costs and expenses of liability incurred by
them in connection with any action, suit or proceeding in which they are
involved by reason of their affiliation with SLW Enterprises. Pursuant to
Washington law, a corporation may indemnify a director, provided that such
indemnity shall not apply on account of: (a) acts or omissions of the director
finally adjudged to be intentional misconduct or a knowing violation of law;
(b) unlawful distributions; or (c) any transaction with respect to which it was
finally adjudged that such director personally received a benefit in money,
property, or services to which the director was not legally entitled.
The bylaws of SLW Enterprises, filed as Exhibit 3.2, provide that it will
indemnify its officers and directors for costs and expenses incurred in
connection with the defense of actions, suits, or proceedings against them on
account of their being or having been directors or officers of SLW Enterprises,
absent a finding of negligence or misconduct in office. SLW Enterprises' Bylaws
also permit it to maintain insurance on behalf of its officers, directors,
employees and agents against any liability asserted against and incurred by
that person whether or not SLW Enterprises has the power to indemnify such
person against liability for any of those acts.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The amounts set forth are estimates except for the SEC registration fee:
<TABLE>
<S> <C>
SEC registration fee................................................ $ 35
Printing and engraving expenses..................................... -0-
Attorneys' fees and expenses........................................ 16,000
Accountants' fees and expenses...................................... 1,500
Transfer agent's and registrar's fees and expenses.................. 500
Miscellaneous....................................................... 965
-------
Total............................................................... $19,000
=======
</TABLE>
The Registrant will bear all expenses shown above.
RECENT SALES OF UNREGISTERED SECURITIES
Set forth below is information regarding the issuance and sales of SLW
Enterprises' securities without registration since its formation. No such sales
involved the use of an underwriter and no commissions were paid in connection
with the sale of any securities.
II-1
<PAGE>
On April 13, 2000, SLW Enterprises issued 1,600,000 shares of common stock
to Suzanne Wood in satisfaction of legal expenses ($16,000). The issuance of
the shares was exempt from registration under Rule 506 of Regulation D, and
sections 3(b) and 4(2) of the Securities Act of 1933, as amended, due to
Ms. Woods' status as the founder and initial management of SLW Enterprises, and
her status as an accredited investor, and the limited number of investors
(one).
EXHIBITS
The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
3.1* Articles of Incorporation
3.2* Bylaws
4.1* Specimen Stock Certificate
4.2* Stock Subscription Agreement
5.1* Opinion re: legality
10.1* License Agreement
10.2* Assignment of License Agreement
10.3* Promissory Note to Vitamineralherb.com Inc.
23.1 Consent of Independent Auditors
23.2* Consent of Counsel (see Exhibit 5.1)
27.1 Financial Data Schedule
27.2 Financial Data Schedule
</TABLE>
--------
* Previously filed.
UNDERTAKINGS
The Registrant hereby undertakes that it will:
(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
(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 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.
(4) Provide to the Underwriters at the closing specified in the
underwriting agreement certificates in such denominations and registered in
such names as required by the Underwriters to permit prompt delivery to
each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.
II-2
<PAGE>
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-3
<PAGE>
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 authorized, in the City of Vancouver, British Columbia, Canada, on
September 15, 2000.
SLW Enterprises Inc.
/s/ Suzanne Wood
By: _________________________________
Suzanne Wood,
President
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates stated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Suzanne Wood President, Secretary, September 15, 2000
______________________________________ Treasurer, and Director
Suzanne Wood
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
3.1* Articles of Incorporation
3.2* Bylaws
4.1* Specimen Stock Certificate
4.2* Stock Subscription Agreement
5.1* Opinion re: legality
10.1* License Agreement
10.2* Assignment of License Agreement
10.3* Promissory Note to Vitamineralherb.com Inc.
23.1 Consent of Independent Auditors
23.2* Consent of Counsel (see Exhibit 5.1)
27.1 Financial Data Schedule
27.2 Financial Data Schedule
</TABLE>
--------
* Previously filed.
