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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A-1
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
(Amendment No. _________________ )
Heavensent Bears, Inc.
(Name of small business issuer in its charter)
Florida
(State or jurisdiction of
incorporation or organization)
5499
(Primary Standard Industrial
Classification Code Number)
59-3604237
(I.R.S. Employer
Identification No.)
6821 Knightswood Dr. Orlando, Fl. 32818 (407)293-0942
(Address and telephone number of principal executive offices)
6821 Knightswood Dr. Orlando, Fl. 32818
(Address of principal place of business or intended principal place of
business)
Scott Johnson 6821 Knightswood Dr. Orlando, Fl. 32818 (407)293-0942
(Name, address and telephone number of agent for service)
Approximate date of proposed sale to the public:
As soon as practicable after the effective date of this Registration
Statement.
__________________________________
If this Form is filed to register additional
securities for Registration Statement.
n 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 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
Tile of each class of securities to be registered...Common Stock
Dollar amount to be registered...$200,000
Proposed maximum offering price per unit...$0.25
Proposed maximum aggregate offering price..$200,000
Amount of registration fee (1)$100.00
[1] Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c).
Note: Specific details relating to the fee calculation shall be furnished
in notes to the table, including references to provisions to Rule 457
relied upon, if the basis of the calculation
is not otherwise evident from the information presented in the table.
If the filing fee is calculated pursuant to Rule 457(o) under the
Securities Act, only the title of the class of securities to
be registered, the proposed maximum aggregate offering price for that
class of securities and the amount of registration fee need to appear in
the Calculation of Registration Fee table. Any difference between the
dollar amount of securities registered for such offerings and the
dollar amount of securities sold may be carried forward on a future
registration statement pursuant to Rule 429 under the Securities Act.
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.
Page 2
Prospectus
HEAVENSENT BEARS, INC.
SHARES OF COMMON STOCK
No Minimum - 800,000 Maximum
Prior to this offering, there has been no public market for the common stock.
We are offering up to a total of 800,000 shares of common stock on a best
efforts, no minimum, 800,000 shares maximum. The offering price is $0.25
per share. There is no minimum number of shares that we have to sell. There
will be no escrow account. All money received from the offering will be
immediately used by us and there will be no refunds. The offering will
be for a period of 120 days from the effective date. Investing in the
common stock involves certain risks.
See "Risk Factors" starting at page 5.
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Price Per Aggregate Proceeds to Us
Share Offering Price
Common Stock $0.25 $200,000 $180,00
The company is also registering 567,000 shares of restricted common stock
By Selling Shareholders. These shares will not be sold in this offering.
See "Selling Shareholders" on page 26 of this prospectus.
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. The date of this prospectus
is _________________, 2001.
Table of Contents
Page Number
Summary of Prospectus............................4
Risk Factors.....................................5
Risk Associated with Our Company.................5
Risk Associated with this Offering...............6
Use of Proceeds..................................8
Determination of Offering Price..................9
Capitalization...................................10
Dilution of the Price You Pay for Your Shares........10
Plan of Distribution: Terms of the Offering......11
Business.........................................12
Management's Discussion and Analysis of Financial
Condition and Results of Operations..............16
Management.......................................19
Description of Property... ...........19
Executive Compensation...........................20
Disclosure of Commission Position on
Indemnification for Securities Act Liabilities...20
Principal Shareholders...........................20
Description of Securities..........................21
Certain Transactions.............................22
Litigation.......................................22
Experts..........................................22
Legal Matters....................................22
Selling Shareholders.............................23
Financial Statements.............................25
Page 3
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SUMMARY OF PROSPECTUS
*********************************************************
This summary provides an overview of selected information contained in this
prospectus. It does not contain all the information you should consider before
making a decision to purchase the shares we are offering. You should very
carefully and thoroughly read the more detailed information in this
prospectus, and particularly the "Risk Factors" section, review
our financial statements and review other information that is
incorporated by reference in this prospectus.
Summary Information about Our Company
We incorporated in the State of Florida on October 26, 1999, and we have
generated small amounts of revenues (approximately $50,000) from
operations since inception. The company is an Internet e-commerce
based business operating a website called Heavensent Village.
Heavensent Village offers a variety of gift related items such as
chocolates, flavored coffees, coffee accessories, bath and body products
(soaps,lotions and gels) and teddy bears.
On October 26, 1999, we issued 20,000,000 shares of common stock to Scott
Johnson, our officer and director pursuant to the exemption from
registration contained in Section 4(2) of the Securities Act of 1933.
Regulation D Rule 506 Offering was completed in October, 2000. The offering
raised $56,700.00 and 567,000 shares of restricted common were issued in
conjunction with the offering. Those shares are being registered in this
registration statement.
Our administrative office is located at 6821 Knightswood Drive, Orlando,
Florida 32818, telephone (407)293-0942.
Our fiscal year end is June 30.
The Offering
Securities Being Offered.....Up to 800,000 shares of common stock, par value
$0.00001.
Offering Price per Share.... $0.25
Offering Period...... The shares are being offered for a period not to exceed
120 days from effective date.
Net Proceeds to Our Company.....Approximately $180,000.
Use of Proceeds.....We will use the proceeds to pay for the offering
expenses, salaries and working capital. .
Number of Shares Outstanding Before the Offering........20,417,000
Number of Shares Outstanding After the Offering: 21,217,000
The company is also registering 567,000 shares of restricted company stock
by existing shareholders that was purchased in a 506D offering
(June-October 200). The existing shareholders paid $.10/share.
Page 4
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RISK FACTORS
*********************************
AN INVESTMENT IN THESE SECURITIES INVOLVES AN
EXCEPTIONALLY HIGH DEGREE OF RISK AND IS EXTREMELY
SPECULATIVE. IN ADDITION TO THE OTHER INFORMATION
REGARDING OUR COMPANY CONTAINED IN THIS PROSPECTUS,
YOU SHOULD CONSIDER MANY IMPORTANT FACTORS IN
DETERMINING WHETHER TO PURCHASE THE SHARES BEING
OFFERED. THE FOLLOWING RISK FACTORS ARE SOME OF THE
POTENTIAL AND SUBSTANTIAL RISKS WHICH COULD BE INVOLVED
IF YOU DECIDE TO PURCHASE SHARES IN THIS OFFERING.
Risks Associated with our Company
1. We have a limited operating history; We have a history of losses; No
guarantee that we will ever be profitable.
We were incorporated in October 1999 and have not been profitable.
From inception through September 30, 2000 our accumulated deficit was
$73,169. We have a very limited operating history upon which an evaluation
of our future success or failure can be made. Our ability to achieve and
maintain profitability and cash flow is dependent upon our ability to
generate greater revenues than what has been achieved so far. Failure
to generate increased revenues will cause us to go out of business.
2. We have limited capital- Substantially dependent on the proceeds of
this offering to continue as a going concern.
We have limited resources available for marketing of our products. Brand
recognition is very important and with the limited resources the company
will have it may not be able to establish a significant market share.
There is no assurance that we will be able to raise enough money through
this offering to continue as a going concern.
3. The Company's sales are heavily seasonal, with Valentine's Day,
Mother's Day and Christmas as the Company's largest sales seasons. Because
of the seasonality of the Company's business, results for any quarter are
not necessarily indicative of the results that may be achieved for the
full fiscal year. Chocolates and the flavored coffee sampler packets
account for the majority of our sales and are primarily given as
gift items. Management believes that for our company to be successful,
additional products that we carry that are not primarily gift items
will need to be promoted. Successful completion of this offering
is necessary to implement the promotion. Management has no
guarantee that the funds will be raised to accomplish this.
4. Internet Tax or Postal Fee for sending e-mails could severely
impact sales
An Internet Tax could be imposed much like a sales tax. Additionally,
the US Postal Service is seeking to charge a fee for e-mails.
Management feels there is a small likely hood of either event happening
in the near term but if either occurred it would tremendously affect
sales.Internet E-commerce companies rely heavily on e-mails as a
Page 5
way of communicating with customers and potential customers. Our
company primarily uses e-zine advertising. If a fee was imposed
for sending e-mails advertising costs would increase dramatically
for the company.
5. Dependence on Key Personnel to continue as a going concern
As there presently is only one officer and director, if he resigned
or something happened to him, the company would be severely impacted.
Risks Associated with this Offering
1. The Risks of Buying Low Priced Stocks
Our common stock is defined as a "penny stock" under the Securities and
Exchange Act of 1934, and its rules. The Exchange Act and the penny stock
rules impose additional sales practice and disclosure requirements on
broker-dealers who sell our securities to persons other than certain
accredited investors.
Accredited investors are
* institutions with assets in excess of $5,000,000
* individuals with net worth in excess of $1,000,000
* individuals with income exceeding $200,000, or $300,000
(jointly with a spouse).
For transactions covered by the penny stock rules, a broker-dealer must make
a suitability determination for each purchaser and receive the purchaser's
written agreement prior to the sale. In addition, the broker-dealer must
make certain disclosures in penny stock transactions, including:
* the actual sale or purchase price
* the actual bid and offer quotations
* the compensation to be received by the broker-dealer and certain
associated persons, and
* deliver certain disclosures required by the Securities and Exchange
Commission.
Because of the foregoing additional obligations imposed upon brokers, some
brokers will not buy or sell our common stock. This means that you will not
be able to sell your shares as easily as shares in larger corporations.
2. Control of our Company after the Offering
If all shares we are offering in this prospectus are sold, which we can't
guarantee, you, will own approximately 3.7 % of our outstanding common
stock. Our existing stockholders will own approximately 96.3 % of the
outstanding shares, with the vast majority being owned by our officer
and director, Scott Johnson. Mr. Johnson will own 93.6% of the
outstanding shares after the offering. As a result, after completion of
this offering, regardless of the number of shares we sell, our existing
stockholders will be able to elect all of our directors and control
of operations. Our Articles of Incorporation do not provide for
cumulative voting. Cumulative voting is a process that allows a shareholder
to multiply the number of shares he owns times the number of directors to
be elected. That number is the total votes a person can cast for all of
the directors. Those votes can be allocated in any manner to the directors
being elected. Cumulativee voting, in some cases, will allow a minority
group to elect a least one director to the board. Our existing
shareholders do not intend to any shares in this offering. This means
that existing shareholders will not be expanding their ownership.
Page 6
3. Further Dilution of Your Investment
Further dilution is likely is we issue additional shares at a lower price
than the current offering price and either no trading market exists for
our stock or the trading is at a price substantially lower than this
offering price.
4. Benefits to the Company's Present Shareholders
This offering will result in certain benefits to Scott Johnson, who is the
only officer and director. Mr. Johnson owns 20,000,00 shares of our company.
He supplied only services valued at $38,500.00. You, on the other hand,
will be providing all of the cash for our company's operations.
5. There is no Minimum Number of Shares that must be sold and there is no
Escrow Account.
There is no minimum number of shares that must be sold in this offering.
Any money we receive will be immediately appropriated by the Company for
the uses set forth in the "Use of Proceeds" section of this prospectus. No
funds will be placed in an escrow account during the offering period and
no money will be returned once we have accepted the subscription.
By not having an escrow account, with a minimum amount of capital to be
raised before funds are disbursed, the investor is risking total loss of
his investment. If adequate capital is not raised, which management
cannot guarantee, the company will be severely impacted and may not be
able to continue as a going concern.
6. You Will Incur Immediate and Substantial Dilution.
Our existing stockholders acquired their shares at a cost substantially
less than that which you will pay for the shares you purchase in this
offering. Accordingly, any investment you make in these shares will result
in the immediate and substantial dilution of the net tangible book value
of those shares.
Upon completion of this offering the net tangible book value of the 21,217,000
shares to be outstanding, assuming all shares are sold, will be $186,781 or
approximately $0.009. The net tangible book value of the shares held by our
existing stockholders will be increased by $0.008 per share without any
additional investment on their part. You will incur an immediate dilution from
$0.25 per share to $0.009 per share
7. We Do Not Pay Cash Dividends on Our Common Stock.
We have not paid any cash dividends on our common stock to date and we will
not be paying cash dividends to stockholders in the foreseeable future. Any
income we receive from operations will be
reinvested and devoted to our future business operations and/or to expansion.
8. Impact of Potential Future Sales of our Common Stock.
A total of 20,000,000 shares of stock were issued to our officer and director
Scott Johnson. He paid an average price of $0.055. 567,000 shares of stock
were sold in a Regulation D Rule 506 Offering at.10/share.
It is the intention of management, that once this offering is completed,
the company will file to be listed on the OTC Bulletin Board. There is
no assurance that this offering will be completed or that if it is,
the company will be listed on the OTC Bulletin Board.
If a trading market is developed, the shareholders in the 506D offering
Page 7
will likely sell a portion of their stock if the market price goes above
$0.25. If they do sell there stock into the market, the sales may cause
the market price of the stock to drop.
9. No Public Trading Market for the Shares.
There is currently no trading in our common stock. We cannot guarantee you
that an active trading market in our shares will develop in the near future,
even if this offering is successfully completed. Even if a trading market is
developed, we cannot guarantee that it will be sustained for any period of
time.
10. The price of the shares we are offering was arbitrarily determined in
order for us to raise up to a total of $200,000 in this offering.
The offering price bears no relationship whatsoever to our assets,
earnings, book value or other criteria of value. Among the factors
considered were:
* our limited operating history
* the proceeds to be raised by the offering
* the amount of capital to be contributed by purchasers in this offering in
proportion to the amount of stock to be retained by our existing Stockholders,
and our relative cash requirements
11. No Underwriters Due Diligence review in connection with this offering.
Our company is doing a self underwriting. Normally, an underwriting is
completed by a stock brokerage firm. Part of the process by the
underwriter includes doing due diligence. Typically, self
underwritings present more of a risk to investors. The ability to
raise capital is dependent on the management of the company which
may not have the resources that are available to a stock brokerage
firm.
CAUTIONARY STATEMENT REGARDING FORWARDING-LOOKING
STATEMENTS
Some discussions in this prospectus may contain forward-looking statements
that involve risks and uncertainties. A number of important factors could
cause our actual results to differ materially from those expressed in any
forward-looking statements made by us in this prospectus. Such factors
include, those discussed in "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business,"
as well as those discussed elsewhere in this prospectus. Forward-looking
statements are often identified by words like: believe, expect, estimate,
anticipate, intend, project and similar expressions, or words which, by
their nature, refer to future events.
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USE OF PROCEEDS
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The net proceeds from this offering will be $180,000, assuming all shares are
sold, which we can't guarantee, after deducting $20,000, for estimated
offering expenses, including accounting and legal fees.
We will use the proceeds for working capital, internet advertising,
website development, office space, marketing materials, mailing and
fulfillment of samples and a salary of $6,000/month for Mr. Johnson.
Mr. Johnson's base salary of $72,000/year will account for 40% of
Page 8
the offering proceeds. We have not allocated any of our use of
proceeds for hiring employees. Management feels that there will be
no problem finding qualified part time employees in the local area
by running ads in the local college newspapers.
Employees will be hired once the sales reach a volume that
warrants it(approximately $15,000/month).
Breakdown of Use of Proceeds :
Salary for Mr. Johnson............72,000
Internet Advertising 50,000
Office Space 12,000
Marketing Materials 5,000
Website Development 5,000
Mailing & Fulfillment
of samples 5,000
Working Capital 31,000
Total 180,000
If less than the maximum amount of the offering is completed, adjustments
will be made to prioritize the proceeds in the following manner:
1) Internet Advertising will be the number one priority.
2) Mr. Johnson's salary will be $3,000/month until sales reach $20,000/month
3) Mailing and fulfillment of samples
4) Office space, marketing materials, website development and hiring
employees will be put on hold until the company is self funding for
these items.
If it turns out that we have not raised enough money to implement our business
plan, we will try to raise additional funds from a private placement or loans.
At the present time, we have not made any plans to raise additional money and
there is no assurance that we would be able to raise additional money in the
future. If we need additional money and can't raise it, we will have to
suspend or cease operations.
While we currently intend to use the proceeds of this offering substantially
in
the manner set forth above, we reserve the right to reassess and reassign such
use if, in the judgment of our board of directors, such changes are necessary
or advisable. At present, no material changes are contemplated. Should there
be any material changes in the above projected use of proceeds in connection
with this offering, we will issue an amended prospectus reflecting the same.
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DETERMINATION OF OFFERING PRICE
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The price of the shares we are offering was arbitrarily determined in order
for
us to raise up to a total of $200,000 in this offering. The offering price
bears no relationship whatsoever to our assets, earnings, book value or other
criteria of value. Among the factors considered were:
* our limited operating history
* the proceeds to be raised by the offering
* the amount of capital to be contributed by purchasers in this offering in
proportion to the amount of stock to be retained by our existing Stockholders,
and our relative cash requirements.
Page 9
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CAPITALIZATION
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The following table sets forth our capitalization at September 30, 2000, on a
historical basis and as adjusted to reflect the sale of the shares.
9/30/00 As Adjusted
Actual After
Offering
Stockholder's Equity:
Common Stock:
100,000,000 shares authorized,
Par value $0.00001
20,417,000 issued and outstanding $ 201
21,217,000 issued and outstanding $ 202
Additional Paid-in Capital $ 80,199 $ 260,198
Deficit accumulated during the
development stage $ (73,619) $ (73,619)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY $ 6,781 $ 186,781
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DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
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"Dilution" represents the difference between the offering price and the
net tangible book value per share immediately after completion of this
offering. "Net tangible book value" is the amount that results
from subtracting total liabilities and intangible assets from total assets.
Dilution arises mainly as a result of our arbitrary determination of the
offering price of the shares being offered.
Dilution of the value of the shares you purchase is also a result of the lower
book value of the shares held by our existing stockholders. See "Principal
Stockholders."
As of September 30, 2000, the net tangible book value of our shares of common
stock was $6,781 or approximately $0.0003 per share based upon 20,417,000
shares outstanding.
Upon completion of this offering the net tangible book value of the 21,217,000
shares to be outstanding, assuming all shares are sold, will be $186,781 or
approximately $0.009. The net tangible book value of the shares held by our
existing stockholders will be increased by $0.008 per share without any
additional investment on their part. You will incur an immediate dilution from
$0.25 per share to $0.009 per share.
After completion of this offering, you will own approximately 3.7% of the
total
number of shares then outstanding shares for which you will have made a cash
investment of $200,000, or $0.25 per Share.
Our existing stockholders will own approximately 96.3 % of the total number of
shares then outstanding, for which they have made contributions of cash and/or
services and/or other assets, totaling $80,199, or approximately $0.004 per
share.
The vast majority of the existing shares are owned by our officer and
director, Scott Johnson. Mr. Johnson will own 93.6% of the outstanding
shares after the offering.
Page 10
The following table compares the differences of your investment in our shares
with the investment of our existing stockholders.
Price per Share.............................................0.004
Net tangible book value per Share before Offering......... $0.0003
Net tangible book value per Share after Offering...........$0.009
Increase to present Stockholders in net tangible
book value per Share after Offering........................$0.008
Capital Contributions......................................$80,199
Number of Shares outstanding before the Offering..... .....20,417,000
Number of Shares after Offering held by
Existing Shareholders....................................20,417,000
Percentage of ownership after Offering......................96.3 %
Purchasers of Shares in this Offering
Price per Share.............................................$0.25
Dilution per Share..........................................$0.242
Capital contributions.......................................$200,000
Number of Shares in Offering.................................800,000
Percentage of ownership after Offering.......................3.7%
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Plan of Distribution; Terms of the Offering
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Offering will be sold by one of our Officers
We are offering up to a total of 800,000 shares of common stock on a best
efforts, no minimum, 800,000 shares maximum. The offering price is $0.25 per
share. There is no minimum number of shares that we have to sell. There is no
escrow account. All money received from the offering will be immediately used
by us. The offering will be for a period of 120 days.
There is no minimum number of shares that must be sold in this offering. Any
money we receive will be immediately appropriated by the company for the uses
set forth in the Use of Proceeds section of this prospectus. No funds will be
placed in an escrow account during the offering period.
We will sell the shares in this offering through Scott Johnson, one of our
officers and directors. Mr. Johnson:
1) Will receive no commission from the sales of any shares.
2) Will not register as a broker dealer pursuant to
Section 15 of the Securities Exchange Act of 1934 in reliance upon Rule 3a4 1.
3) Is not subject to statutory disqualification at the time of his
participation
4) Is not associated with any Broker/Dealer or has been associated with
any Broker/Dealer in the last 12 months
5) Will perform substantial duties on behalf of the company after the offering
6) Has not participated in selling and offering of securities for any
issuer in the last twelve months
Rule 3a4 1 sets forth those conditions under which a person associated with an
Issuer may participate in the offering of the Issuer's securities and not be
deemed to be a broker dealer. The conditions are that:
1. None of such persons are subject to a statutory disqualification, as that
term is defined in Section 3(a)(39) of the Act, at the time of his
participation; and,
2. None of such persons are compensated in connection with his or her
participation by the payment of commission or other remuneration based either
directly or indirectly on transactions in securities; and
Page 11
3. None of such persons are, at the time of his participation, an associated
person or dealer; and
4. All of such persons meet the conditions of Paragraph (a)(4)(ii) of
Rule 3a4 1 of the Exchange Act, in that they (A) primarily perform, or
are intended primarily to perform at the end of the offering, substantial
duties for or on behalf of the Issuer otherwise than in connection with
transactions in securities; and (B) are not a broker or dealer, or an
associated dealer, or an associated person of a broker or dealer, within
the preceding twelve (12) months; and (C) do not participate in selling
and offering of securities for any issuer more than once every twelve (12)
months other than reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).
No public advertising will be used in this offering. Mr. Johnson will rely
on his personal contacts and referrals from existing shareholders that he
feels are sophisticated and suitable for the risk involved to fund
this offering.
Procedures for Subscribing
If you decide to subscribe for any shares in this offering, you must:
1. Execute and deliver a subscription agreement
2. Deliver a check or certified funds to us for acceptance or rejection.
All checks for subscriptions must be made payable to "Heavensent Bears, Inc."
Right to Reject Subscriptions
We have the right to accept or reject subscriptions in whole or in part, for
any reason or for no reason. All Moneys from rejected subscriptions will be
returned immediately by us to the subscriber, without interest or deductions.
Subscriptions for securities will be accepted or rejected within 48 hours
after we receive them.
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Business
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General
We were incorporated in the State of Florida on October 26, 1999. We are
engaged in the sale of coffee, chocolates, handmade bath products (soaps,
lotions and gels) and teddy bears through our website
www.heavensentvillage.com.
The Company's goal is to become a leading e-tailer in each of its product
areas by selling the finest quality products and by providing superior
customer service, thereby building a high degree of customer loyalty.
Our business office and registered agents office is located at 6821
Knightswood
Drive, Orlando, Florida. Our telephone number is (407)293-0942.
Background
Heavensent Bears, Inc. owns an Internet Shopping Mall
(www.heavensentvillage.com) designed to attract online women shoppers. Our
website features hand crafted teddy bears, bath products, gourmet coffees and
gourmet chocolates.
Sales from November, 1999 through September, 2000 were approximately
$27,000. Coffee sales accounted for 54%($14,600)and chocolates accounted
for 46%($12,400).
Sales from October, 2000 through December, 2000 were approximately
$22,000. Coffee sales accounted for 55%($12,200), Chocolate sales
accounted for 39%($8500) and Bath Products accounted for 6%($1300).
Page 12
E-Commerce Facts
For the first time in the brief history of the Internet, women now out number
men online.
A new report from Jupiter Communications says the number of women online
officially surpassed the number of men during the first quarter of 2000. The
population of women on the Net is also growing faster than the overall online
population.
From the first quarter of 1999 to the first quarter of 2000, almost every
female demographic group experienced exponential growth online. The most
noticeable increase by an age group was among teen-age girls 12 to 17. The
number of those girls online jumped 125 percent. The number of women 55+
also grew by 109.5 percent.
Only women 18-24 showed less online activity this year than last. The number
of Internet-active women in that category decreased by 4.5 percent. Women 35-
44 only posted minor growth. That group's online presence grew by only 4.6
percent. But despite those minor setbacks, the overall population of women
still is growing faster than men.
A closer look inside the numbers shows that women are no longer a niche
market on the Internet. The actual number of teen-age girls on the Web went
from 1,956,000 in 1999 to 4,426,000 in 2000. The number of women 55+ grew
from 1,592,000 in O99 to 3,335,000 during the first quarter of this year.
Those two groups alone now make up approximately 39 percent of the estimated
20 million Americans currently hooked up to the Internet.
Estimated US consumers purchasing something on line in 2001....64 million-up
from 18 million in 98. This growth will result from increased security as well
as a psychological boost in trust, familiarity and overall ease with online
technology.
According to Forrester Research, there will be a hefty increase in online
spending per household -- growing from $1,167 in 1999 to $3,738 in 2004.
Competition
There is intense competition in the products we carry. Each line of products
we carry has several dominant players in their industry that have
substantially more resources than our company.
Our main competition are brick and mortar retail operations. Most of
these operations have limited exposure on the web and view the Internet
as a necessary evil but do not see it as a main source of revenue.
The Internet has made it possible for start up companies to reach millions
of shoppers that were not otherwise accessible without massive ad campaigns.
Competition from other e-tailers in our product areas is also very
intense. Management believes that e-tailing will evolve into 2 distinct
types of e-tailing: the giants of the world such as Wal-Mart and the
small specialty websites that provide unique products with superior
customer service. Success in the smaller specialty niche will be
dependent on managements ability to economically drive traffic to the
website and control costs.
Currently, there is no dominant player on the Internet for the products we
sell. The market is very fragmented with the brick and mortar retailers
not aggressively pursuing the market and the specialty e-tailers
concentrating on just one or two proprietary products.
We feel that our product mix with superior customer service will allow us
to establish a niche market. With the funds from this offering, we are going
to actively pursue becoming the number one site for espresso, flavored
coffee and coffee accessories initially.
Our position in the marketplace now is insignificant. Without the funds
Page 13
from this offering we will not be able to establish the presence necessary
to achieve our goal.
Existing Internet Stores
Coffee (www.heavensentvillage.com/coffee)
We are a reseller of gourmet roasted coffee under our private brand. With the
assistance of the Specialty Coffee Association of America we developed a
Creme Brulee Dessert Flavored Coffee that we offer in 12 flavors.
The coffee bean we selected to use is sourced out of Mexico and we don't
anticipate any supply problems. The beans are roasted by a
gourmet roaster(Poverty Bay Roasters) out of Seattle, WA. We feel this
roaster can handle the volume necessary for us. In the event they can't,
there are several other roasters using the same methods available or we
could purchase our own equipment for approximately $30,000.00
According to the Specialty Coffee Association of America there are
approximately 175 million coffee drinkers in the U.S. (+/- 5 million).
Flavored coffee accounts for 20% of the overall coffee market.
The majority of flavored coffee drinkers are women.
The company introduced a line of upscale coffee accessories in December,
2000. Sales for the month of December were $2,000.
The company has developed three new "house" coffees- a light roast,
a medium roast and a dark or Espresso roast. Initially, we will introduce
the Espresso roast and depending upon the success of this offering, we
will introduce the other two roasts.
Chocolates (www.heavensentvillage.com/chocolate)
Our source for chocolate is a small store(Cascade Candy Company) north
of Seattle, Washington. They make traditional handmade chocolates and
candies.
Our main chocolate products are truffles and large apples dipped in caramel,
chocolate and roasted nuts. The apples help distinguish us from the several
thousands of other chocolate stores.
The chocolate apples have become a real fad in the last two years for
gift giving items. The shopping network QVC popularized them with a
product produced by a company named Mrs. Prindaples. Mrs. Pridables
completely sold out their entire inventory this Christmas season and
quit taking orders two weeks before Christmas. Another company,
Willian Sonoma, carries a similar product and sold out of their
available product when it was mentioned by Rosie O'Donnell on her show.
The apples are relatively easy to make, have good profit margins and
have a shelf life of two weeks which is conducive to shipping. Our source
for the apples is located in Washington which has an abundance of fresh
apples.
Teddy Bears (www.heavensentvillage.com/bears)
A Company out of Toronto( Binkley Bears) produces the bears. We supply all
the raw materials and they provide a finished product. Teddy bears are very
seasonal with Valentine's Day and Mother's Day providing the bulk of the
sales.
The bears are plush bears made out of German fur and German glass
eyes. Management currently has 500 bears in various stages of
completion. Initially, we planned to offer 30 different costumes for
the bears. We have now decided to just offer one themed bear for a
limited number of special occassions such as Mothers Day, Valentines
Day, Graduation, New Baby and Birthday Bears.
Once the initial order of bears we have is sold out, the company plans
Page 14
on sourcing them out of China on an as needed basis.
Bath Products (www.heavensentvillage.com/bath) Our products are sourced
from a facility in North Carolina( Moes Soap Box) and private labeled
under our Heavensent name. We sell handmade soaps (glycerin and
cold processed),lotions and gels.
The raw materials used in the manufacturing of these products are a far
better quality than those used in your local Bath and Body Shops
Basic Business Plan
In order for us to implement our plan, it will be necessary to raise cash from
this offering. Failure to do so could cause us to cease operations or severely
curtail them until capital is raised.
Steps we plan to implement with the cash received from this offering:
Marketing Materials such as brochures and catalogues are very important.
Customers still want to be able to have something in their hands.
Approximately 35% of shoppers on the Internet will not give out their
credit card number over the Internet. They feel more comfortable using
an 800 number or filling out an order form from a catalogue.
We are going to produce in house our marketing materials. Printing costs will
be approximately $5,000.
We received over 15,000 requests for free samples of our flavored coffees
in March, 2000. Several Internet sites that offer "Freebies" mentioned that
we offer free samples of flavored coffee. Management has contacted these
sites and asked them to pull our listing until we get properly funded and
are able to fulfill the sample orders. We still receive over 200 requests a
week for samples. Costs for the coffee (1.5 ounces- enough to make a pot
of coffee), brochure and envelope, labor and postage is $1.25.
We ran a "test" of 1,000 from the requests for free samples the last week in
April. The samples were mailed (no brochures, marketing materials or
directions for making the coffee were included) and a follow up E-mail was
sent with an offer of a variety pack of 14 different flavored coffees in
1.5 ounce sample for $14.95 plus $4.20 for shipping and handling. The next
3 weeks, we received over $3,000 in orders for this item. Our total cost
(including shipping) was $13.00 per item.
Even though the mailing was profitable, we have learned that flavored
coffee is a commodity that is usually not consumed as quickly as normal
coffee. Our goal is to acquire customers that use our products on an
almost daily basis. Management plans on using $5,000 of the proceeds to
do a mailing introducing our new espresso blend of coffee. We will contact
a limited number of the "freebie sites" and offer it for a limited time.
If the test results prove profitable, we will continue the offer and
contact other "freebie sites".
Internet Advertising - Through our test marketing we have found that
Internet "E-zines" are a very cost-effective way of advertising. E-zines
are newsletters, usually free of charge, that are transmitted via E-mail.
Some of these e-zines have circulations of over one million subscribers.
Their current advertising rates are $3-$5 per one thousand subscribers
for a five to six line ad inserted into their newsletter. Typically, these
e-zines don't sell out all of their advertising space and will sell it for
50% off if you are willing to purchase an ad at the last minute.
We plan on using $50,000 of the money raised in this offering for E-zine
advertising.
Page 15
Employees
We intend to hire several minimum wage hourly employees once sales
reach $15,000/month. Our only management employee will be Scott Johnson,
our officer and director.
Employees and Employment Agreements
At present, we have no employees, other than Mr. Johnson, who were
compensated for their services. Mr. Johnson does not have an employment
agreement with us. We presently do not have pension, health, annuity,
insurance, stock options, profit sharing or similar benefit plans; however,
we may adopt such plans in the future. There are presently no personal
benefits available to any employees.
Legal Proceeding
We are not involved in any pending legal proceeding.
- ---------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- ---------------------------------------------------------------------
We are a startup, development stage company and have not yet
realized any significant revenues from our business operations.
There is serious doubt that we can continue as an ongoing business for the
next twelve months unless we obtain additional capital to implement our
business plan. This is because we have not generated any significant
revenues and no significant revenues are anticipated until we begin
implementing our business plan. Accordingly, we must raise cash from
sources other than the sales.
generated from our website. That cash must be raised from other sources. Our
only other source for cash at this time is investments by others in our
company. We must raise cash in order to implement our business plan and
stay in business.
In order to meet our need for cash we are attempting to raise money from this
offering. There is no assurance that we will be able to raise enough money
through this offering to stay in business. If we do not raise all of the money
we need from this offering, we will have to find alternative sources, such as
a
public offering, a private placement of securities, or loans from our officers
or others. At the present time, we have not made any arrangements to raise
additional cash, other than through this offering. If we need additional cash
and can't raise it, we will either have to suspend operations until we do
raise
the cash, or cease operations entirely.
Limited Operating History; Need for Additional Capital
There is limited historical financial information about our company upon which
to base an evaluation of our performance. We are a development stage company
and have not generated any significant revenues from operations. We cannot
guarantee we will be successful in our business operations. Our business is
subject to risks inherent in the establishment of a new business enterprise,
including limited capital resources, possible delays in the implementation of
our business plan, and possible cost overruns due to price and cost increases
in goods and services.
To become profitable and competitive, we must successfully implement our
business plan. We are seeking equity financing in order to provide for the
Page 16
capital required to implement our plan.
We have no assurance that future financing will be available to us on
acceptable terms. If such financing is not available on satisfactory terms,
we may be unable to continue, develop or expand our operations. Equity
financing could result in dilution to existing shareholders.
Plan of Operation
If the company fails to raise any cash from this offering, operations will
be severely hampered. Our business would be able to satisfy its
cash requirements for the next twelve months. Fixed expenses are minimal
and all advertising and product development would be ceased.
If the company is successful in completing this offering several
hourly employees would be hired over the next few months depending on
sales. Management will adjust our business plan accordingly to the amount
of capital that is raised in this offering. Fixed expenses will not be
increased until Management feels fairly confident that the company will be
able to meet the obligations. Internet advertising will be the number
one priority. The Company has a fully functioning e-commerce site that
will be adequate until sales are proven.
The company has no material internal or external sources of liquidity
or any material commitments for capital expenditures.
Results of Operations
From Inception on October 26, 1999
Since inception, Mr. Johnson has provided loans and services for corporate
expenses. He was issued 20,000,000 shares of restricted common stock.
Regulation D 506 Offering was completed in October, 2000 raising $56,700
for the company. 567,000 shares of restricted common stock were issued.
417,000 shares were issued as of September 30 2000 and an additional
150,000 restricted common shares were sold in October, 2000.
Sales have been limited because of start up activities. Our business
is very seasonal with Christmas, Valentine's Day and Mother's Day
being the majority of our sales. Each major holiday since start up
we have done a test advertising campaign.
Sales since inception through September, 2000 are approximately $27,000.
Several expenses associated with being a start up company and going public
were expensed during this time. Below is a listing of major expenses we
have incurred since inception through September, 2000 with comments from
Management:
Cost of Sales- cost of sales were approximately $21,000. Management does
not feel the cost of sales as a percentage to overall sales will be this
high in the future. Product development costs for the flavored coffees
were expensed during this time.
Total expenses were approximately $79,000. Website development and
consulting expenses accounted for approximately $19,000. These expenses
were substantially more than what would be expected in the future. It
was necessary to develop our website. Management feels that these costs
should decrease dramatically as a percentage of sales in the future.
Officers salaries were $32,000 from inception to September, 2000.
Advertising expenses were $7200. Several different internet advertising
mediums were tested during this period. Management feels that advertising
in the future will be approximately 15% of sales.
Postage and delivery expenses were $4,000. Management feels this item
as a percentage of sales a will remain the same in the future.
Professional fees were $3,000. Management expects this item as a
percentage of sales to decrease in the future.
Credit card fees were $1,000. Management expects this item as a percentage
of sales to remain the same in the future.
Page 17
Rent was $8,000. Management anticipates rental fees to increase to
$12,000/yr upon successful completion of this offering.
In the summer of 2000, we concentrated on all the start up problems
we encountered over the last six months:
1) Lack of repeat business from coffee sales
Follow up was done with approximately 100 customers. It was determined
from the feedback that the quality of our flavored coffees was just
average. With the help of the Specialty Coffee Association of America
we developed a premium line of flavored coffees. This line was
introduced in September, 2000 and the follow up feedback has
improved tremendously. Indications of interest for our twelve
sampler package of flavored coffees to be used as gifts for
the Holiday Season for 2000 has been strong.
2) Website E-commerce difficulties
Numerous times during our test ad campaigns we experienced problems
with our website. The company that hosts our website installed upgrades
over the summer of 2000 and since this has been completed reliability
has increased to almost 100%.
3) Seasonality of Sales
In order to increase sales year round we have added a line of upscale
bath products for women and a line of coffee accessories.
We also revamped our coffee section. In the beginning we carried a full
line of coffees from around the world as well as flavored coffees. Based
on our customer research it was determined that these were just average.
We eliminated all of our coffee selections but the new flavored coffees
we recently developed. We are introducing three new "House" coffees-
light roast, medium roast and a dark or espresso roast. The espresso roast
will be launched first with the other two roasts dependent on the success
of our offering. We have sent samples to some of our existing customer base
and feedback has been excellent.
4) Advertising
Since our initial start up we have tested several forms of advertising. We
have determined that advertising in large circulation ezines
(50,000 or greater) that are women related have produced the best
results. Additionally, search engines that allow you to bid on
keywords to be listed at the top of the search result have proved
very effective.
Liquidity and Capital Resources
As of the date of this registration statement, we have yet to generate any
significant revenues from our business operations.
We issued 20,000,000 shares of common stock through a Section 4(2) offering
in October 1999 to Mr. Johnson for services provided in forming the
corporation. Subsequent thereto, the officer/shareholder has provided
office space and management services to the Company in connection with
the operation of the business. The Company has included the fair value
of these services ($32,000 compensation expense and $6500 rent expense)
in its statement of operations so that this statement would not be
misleading. The officer does not expect to be repaid for these
services therefore no officer liability in connection therewith
has been recorded.
As of September 30, 2000, our total assets were $11,954 and our total
liabilities were $5173. Cash and cash equivalents as of September 30, 2000
were $1870.
Page 18
The proceeds of this offering will be adequate to fund our ongoing
operations for the next twelve months.
---------------------------------------------------------------------
MANAGEMENT
- ---------------------------------------------------------------------
Officers and Directors
Each of our directors is elected by the Stockholders to a term of one (1) year
and serves until his or her successor is elected and qualified. Each of our
officers is elected by the board of directors to a term of one (1) year and
serves until his or her successor is duly elected and qualified, or until he
or she is removed from office. The board of directors has no nominating,
auditing or compensation Committees.
The name, address, age and position of our present sole officer and director
is
set forth below:
Name and Address Age Position(s)
Scott Johnson 44 President, Treasurer, Chief
6821 Knightswood Drive Financial Officer, Secretary and a member
Orlando, Florida 32818 of the Board of Directors
The person named above has held his office/position since inception of our
company and is expected to hold his office/position until the next annual
meeting of our stockholders.
Background of Officer and Director
Scott Johnson has been the President, Treasurer, Chief Financial Officer,
Secretary and a member of the board of directors of the company since
inception. From October 1993 to December 1996, Mr. Johnson was President of
Republic Relations, an advertising and marketing firm. From January, 1997 to
present Mr. Johnson has been an independent consultant for web based
businesses. Mr. Johnson is currently not a full-time employee with another
entity.
Education: BS/Accounting University of Central Florida 1979
Conflicts of Interest
We believe that Scott Johnson has no conflicts of interest with our company
presently. Upon successful completion of this offering, Mr. Johnson will
devote
full time to the company.
------------------------------------------------------------------------
DESCRIPTION OF PROPERTY
------------------------------------------------------------------------
Currently, operations are conducted in the residence of our officer
and director, Scott Johnson. He currently rents the residence. Upon
successful completion of the offering the company will rent 1,000
square feet of office space.
Page 19
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EXECUTIVE COMPENSATION
-------------------------------------------------------------------------
Mr. Johnson, our officer and director, was compensated in shares of common
stock ( 20,000,000 shares) for services provided in forming the
corporation. Upon completion of the offering, Mr. Johnson will be
compensated $6,000/month plus 3% of gross sales for his services.
Indemnification
Pursuant to the Articles of Incorporation and Bylaws of the corporation, we
may indemnify an officer or director who is made a party to any proceeding,
including a law suit, because of his position, if he acted in good faith and
in a manner he reasonably believed to be in our best interest. In certain
cases, we may advance expenses incurred in defending any such proceeding.
To the extent that the officer or director is successful on the merits in
any such proceeding as to which such person is to be indemnified, we
must indemnify him against all expenses incurred, including attorney's
fees. With respect to a derivative action, indemnity may be made only
for expenses actually and reasonably incurred in defending the
proceeding, and if the officer or director is judged liable, only by
a court order. The indemnification is intended to be to the
fullest extent permitted by the laws of the State of Florida.
--------------------------------------------------------------------------
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
---------------------------------------------------------------------------
Regarding indemnification for liabilities arising under the Securities Act of
1933, as amended, which may be permitted to directors or officers pursuant to
the foregoing provisions, we are informed 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.
- ---------------------------------------------------------------------
PRINCIPAL STOCKHOLDERS
- ---------------------------------------------------------------------
The following table sets forth, as of the date of this prospectus, the total
number of shares owned beneficially by each of our directors, officers and key
employees, individually and as a group, and the present owners of 5% or more
of our total outstanding shares. The table also reflects what such ownership
will be assuming completion of the sale of all shares in this offering, which
we can't guarantee. The stockholder listed below has direct ownership of his
shares and possesses sole voting and dispositive power with respect to the
shares.
Name and Address Number of Number
Percentage of
Beneficial Shares Before of Shares of Ownership
Owner [1] Offering After Offering After Offering
- ------------------ --------- --------- --------------
Scott Johnson
6821 Knightswood Drive 20,000,000 20,000,000 93.6 %
Orlando, Fl. 32818
**************************
All Officers and 20,000,000 20,000,000 93.6 %
Directors as a group
Page 20
Mr. Johnson may be deemed to be a "parent" and "promoter" of our company,
within the meaning of such terms under the Securities Act of 1933, as amended
by virtue of his direct and indirect stock holdings. Mr. Johnson is the only
"promoter" of our company.
Future Sales by Existing Shareholders
A total of 20,567, 000 shares of common stock were issued to the existing
Stockholders, all of which are "restricted securities" as defined in Rule
144 of the rules and regulations of the SEC promulgated under the
securities Act. Under 144, such shares can be publicly sold, subject to
volume restrictions and certain restrictions on the manner of sale,
commencing one year after their acquisition.
In this offering we are registering 567,000 shares of restricted stock
purchased by investors in our 506 Offering. In the event our company
ever goes public, sales of these securities could have a depressive
effect on the market price, if any, of our common stock.
****************************************************************
Description of Securities
****************************************************************
Common Stock
Our authorized capital stock consists of 100,000,000 shares of common stock,
par value $0.00001 per share. The holders of our common stock:
* have equal ratable rights to dividends from funds legally available
therefor,
when, as and if declared by our board of directors;
* are entitled to share ratably in all of our assets available for
distribution
to holders of common stock upon liquidation, dissolution or winding up of our
affairs;
* do not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions or rights; and
* are entitled to one cumulative vote per share on all matters on which
stockholders may vote.
All shares of common stock now outstanding are fully paid for and non
assessable and all shares of common stock which are the subject of this
offering, when issued, will be fully paid for and non assessable.
Non-cumulative Voting
Holders of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the 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 our directors. After
this offering is completed, the present stockholders will own approximately
95% of our outstanding shares.
Cash Dividends
As of the date of this prospectus, we have not paid any cash dividends to
stockholders. The declaration of any future cash dividend will be at the
discretion of our board of directors and will depend upon our earnings, if
Page 21
any, our capital requirements and financial position, our general economic
conditions, and other pertinent conditions. It is our present intention not to
pay any cash dividends in the foreseeable future, but rather to reinvest
earnings, if any, in our business operations.
Reports
After we complete this offering, we will furnish annual financial reports
to you certified by our independent accountants, and may, in our
discretion, furnish unaudited quarterly financial reports.
Stock Transfer Agent
The stock transfer agent for our securities is Securities Transfer
Corporation, 2592 Dallas Parkway, Suite 102, Frisco, Texas 75034
and its telephone number is (469) 633-0101.
- ---------------------------------------------------------------------
CERTAIN TRANSACTIONS
- ---------------------------------------------------------------------
In October 1999 we issued a total of 20,000,000 shares of restricted common
stock to Scott Johnson, officer and director of our company. This was
accounted
for as a compensation expense of $32,000 and rent/office services for $6,500.
Regulation D506 Offering was done from June-October 2000 raising $56,700
and 567,000 shares of restricted common stock were issued.
- ---------------------------------------------------------------------
LITIGATION
- ---------------------------------------------------------------------
We are not a party to any pending litigation and none is contemplated or
threatened.
- ---------------------------------------------------------------------
EXPERTS
- --------------------------------------------------------------------
Our financial statements for the period from inception to June 30,
2000, included in this prospectus has been audited by James E.
and Associates, P.C., Independent Certified Public
Accountants, 22 Brushwood Court, Dillon, Colorado,
set forth in their report included in this prospectus.
- ---------------------------------------------------------------------
LEGAL MATTERS
- ---------------------------------------------------------------------
Our company is using Scott Johnson to prepare the documents for this
offering. He is an officer and director. He is not an attorney.
Legal opinion as required by the SEC has been issued by
ERIC P.LITTMAN, P.A., 7695 SW 104 Street Suite 210
Miami, FL 33156
Page 22
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SELLING SHAREHOLDERS
-----------------------------------------------------------------------
The company recently completed a Regulation D 506 Offering and is
registering 567,000 shares of restricted common stock purchased in the
506 Offering. This represents 2.8% of the outstanding stock before this
offering and 2.7% of the outstanding stock after this offering assuming
all 800,000 shares are sold. The following shares are being registered
in this offering:
Name of Shareholder Date purchased Number of Shares Purchase Price
Mike Quiel 10/11/00 100,000 $10,000.00
15811. Mustang Dr.
Fountain Hills, Az. 85268
Gavin Kirk 6/30/00 50,000 $5,000.00
1067 Skana Drive
Vancouver, B.C.
Canada VHM 2L2
Rift Resource Group 6/30/00 50,000 $5,000.00
P.O. Box 228
Temple Building
Providenciales,
Turks & Caicos Islands
Bernard Clinton 7/13/00 50,000 $5,000.00
236 Prince St.
Los Gatos, Ca. 95032
Gordon Quiel 7/22/00 50,000 $5,000.00
79080 Barwick Place
Indio, Ca. 92201
Rick Fellows 8/09/00 50,000 $5,000.00
P.O. Box 1664
Islamorada, Fl. 33036
CSP, Inc. 10/4/00 50,000 $5,000.00
207 Jasmine Lane
Longwood, Fl. 32779
New Mgmt System,Inc.9/06/00 32,000 $3,200.00
15310 Mustang Drive
Fountain Hill,
AZ. 85268
Roy Meadows 9/07/00 20,000 $2,000.00
207 Jasmine Lane
Longwood , Fl. 32779
Michelle Fontaine 6/30/00 10,000 $1,000.00
3560 #7 Rd.
Richmond, B.C.
Canada V6V1R4
Mike Marleau 7/07/00 10,000 $1,000.00
1383 Moringside Cres.
Vancouver, B.C.
Canada V6C2W9
Market Media 8/15/00 10,000 $1,000.00
1022 Greenwood Blvd.
Suite 121
Lake Mary, Fl. 32746
Page 23
Caleb Joshua Halley 7/28/00 10,000 $1,000.00
P.O. Box 1664
Islamorada, Fl.33036
Dwain Brannon Group, LLC 8/15/00 10,000 $1,000.00
1022 Greenwood Blvd.
Suite 121
Lake Mary, Fl. 32746
Fairway Capital Partners, LLC8/15/00 10,000 $1,000.00
1022 Greenwood Blvd. Suite 121
Lake Mary, Fl. 32746
Karen Armstrong 7/30//00 10,000 $1,000.00
187 Redding Rd.
Campbell, Ca. 95008
Kephart Family Enterprises 8/15/00 10,000 $1,000.00
2176 Alaqua Drive
Longwood, Fl. 32779
Joe Glen 9/21/00 10,000 $1,000.00
3104 E. Camelback #527
Phoenix, Az. 85016
Harold Minsky 6/30/00 5,000 $500.00
17116 Prarie St.
Northridge, Ca. 91325
John Leo 6/30/00 5,000 $500.00
242 Barrow St.
Jersey City, NJ 07302
Myrna Cedrone 6/30/99 5,000 $500.00
20 Clark St.
Randolph, Ma. 02368
Shirley Ming 6/30/00 5,000 $500.00
6362 Tera Rosa Circle
Boyton Beach, Fl 33437
Marco Myatovic 9/20/00 5,000 $500.00
4318 Northwood Road
Prince George British Columbia
Canada V2K 5R8
Total 567,000 $56,700
- -------------------------------------------------------------------
FINANCIAL STATEMENTS
- ---------------------------------------------------------------------
Our fiscal year end is June 30. We will provide audited financial statements
to our stockholders on an annual basis; the statements will be prepared by an
Independent Certified Public Accountant. Our audited financial statements from
inception to June 30, 2000, immediately follows.
Page 24
Heavensent Bears, Inc.
TABLE OF CONTENTS
Audited Financial Statements
INDEPENDENT AUDITOR'S REPORT F-1
FINANCIAL STATEMENTS
Balance Sheets Audited 6/30/00 F-2
Statements of Operations Audited 6/30/00 F-3
Statement of Stockholders' Equity Audited 6/30/00 F-4
Statements of Cash Flows Audited 6/30/00 F-5
NOTES TO FINANCIAL STATEMENTS Audited 6/30/00 F-6
Balance Sheets Unaudited 9/30/00 F-7
Statements of Operations Unadited 9/30/00 F-8
Statements of Cash Flows Unaudited 9/30/00 F-9
NOTES TO FINANCIAL STATEMENTS Unaudited 9/30/00 F-10
Page 25
F-1
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
Heavensent Bears, Incorporated
We have audited the balance sheet of Heavensent Bears, Incorporated (a
development stage company) as of June 30, 2000 and the related statements of
operations, stockholders' equity and cash flows for period from inception
(October 22, 1999) to June 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the balance sheet is free
of material misstatement. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the balance sheet.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall balance sheet 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 Heavensent Bears,
Incorporated
as of June 30, 2000, and the related statements of operations, stockholders'
equity and cash flows for period from inception (October 22, 1999) to
June 30, 2000, in conformity with generally accepted accounting principles.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Denver, Colorado
September 15, 2000
F-2
<TABLE>
<S> <C>
Heavensent Bears Incorporated
(A Development Stage Company)
Balance Sheet
June 30, 2000
ASSETS
Current assets:
Cash $ 1,870
Accounts receivable 51
Inventory purchase deposits 10,418
Total current assets 12,339
$12,339
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,394
Total current liabilities 6,394
Long-term debt -
Officer advance 5,527
Commitments and contingencies (Note 3)
Stockholders' equity:
Common stock, $.00001 par value
100,000,000 shares authorized,
20,130,000 shares issued and outstanding 201
Additional paid-in capital 51,499
Deficit accumulated during
development stage (51,282)
___ 418_
$12,339
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
Heavensent Bears Incorporated
(A Development Stage Company)
Statement of Operations
For the Period From Inception
(October 22, 1999)
to June 30, 2000
<TABLE>
<S> <C>
Sales $22,751
Cost of sales 13,272
Gross profit 9,479
General and administrative expenses:
Advertising expense 4,115
Compensation of officer 32,000
Internet expenses 8,550
Postage and delivery 2,876
Professional fees 520
Credit card fees 1,576
Rent 6,500
Other 4,624
Total 60,761
Income (loss) from operations (51,282)
Other income and (expense):
Interest expense -
Interest income ___-__
Income before taxes (51,282)
Income taxes ____ -__
Net income (loss) $ (51,282)
Per share information:
Basic (loss) per share $ (0.00)
Weighted average shares
Outstanding 20,014,444
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
Heavensent Bears Incorporated
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period From Inception
(October 22, 1999) to June 30, 2000
<TABLE>
Deficit
Additional Accumulated
Common Stock Paid-in During
Develop-
ACTIVITY Shares Amount Capital ment Stage
Total
<S> <C> <C> <C> <C>
<C>
Shares issued for
services at incep-
tion at par value 20,000,000 $ 200 $ - $ -
$
Shares issued for
cash:June 2000 at
$.10 per share 130,000 1 12,999 -
13,000
Contribution of
salary and expenses
by officer - - 38,500 -
38,500
Net loss for the
period ended
June 30, 2000 __-___ __-___ __-___ (51,282)
(51,282)
Balance June 30,
2000 20,130,000 $201 $ 51,499 (51,282)
418
</TABLE>
See accompanying notes to financial statements.
F-5
Heavensent Bears Incorporated
(A Development Stage Company)
Statements of Cash Flows
For the Period From Inception
(October 22, 1999) to June 30, 2000
<TABLE>
<S> <C>
Net (loss) $(51,282)
Adjustments to reconcile net (loss) to net
cash provided by (used in) operating activities:
Services and costs contributed by officer 38,500
Common stock issued for services 200
Changes in assets and liabilities:
(Increase) in accounts receivable (51)
(Increase) in inventory purchase deposits (10,418)
Increase in accounts payable 6,394
Total adjustments 34,625
Net cash (used in)
operating activities (16,657)
Cash flows from financing activities:
Common stock sold for cash 13,000
Advances from officer 5,527
Net cash provided by
financing activities 18,527
Increase (decrease) in cash 1,870
Cash and cash equivalents,
beginning of period _-__
Cash and cash equivalents,
end of period $1,870
</TABLE>
See accompanying notes to consolidated financial statements.
Supplemental cash flow information:
Cash paid for interest $ -
Cash paid for income taxes $ -
See accompanying notes to consolidated financial statements.
F-6
Heavensent Bears, Incorporated
(A Development Stage Company)
Notes to Financial Statements
June 30, 2000
Note 1. Organization and Summary of Significant Accounting Policies.
The Company was incorporated in Florida on October 22, 1999. The Company
is considered to be in its development stage. The Company's activities to
date have been limited to organization and capital formation and the
limited sale of coffee and candy products online through an internet
shopping website - www.heavensentvillage.com. The Company plans to engage
in the retail sale of coffee, candy and toys through an internet
shopping website. The Company began limited product sales during June
2000, however the sales are not considered to be significant.
Sales of toy products have not commenced.
Inventory and Inventory Purchase Deposits:
Inventory is valued at the lower of cost or market on a first-in
first-out basis. At June 30, 2000, the Company had purchase contracts
for $10,418 of toy inventory from a vendor. The Company has made cash
payments of $6,627 and has included $3,791 in accounts payable as of
June 30, 2000 in connection with this non-cancelable purchase contract.
When the goods are received by the Company, the value thereof will
be transferred to the inventory account.
Revenue Recognition:
Revenue is recognized at the time the product is delivered. Provision
for sales returns will be estimated based on the Company's historical
return experience, however sales returns are not expected to be
significant due to the nature of the products provided
by the Company.
Estimates:
The preparation of the Company's balance sheet requires management to
make estimates and assumptions that affect the amounts reported in the
balance sheet and accompanying notes. Actual results could differ from
these estimates.
Fair value of financial instruments
The Company's short-term financial instruments consist of cash and
cash equivalents and accounts payable. The carrying amounts of these
financial instruments approximate fair value because of their
short-term maturities. Financial instruments that potentially
subject the Company to a concentration of credit risk consist
principally of cash. During the year the Company did not
maintain cash deposits at financial institutions
in excess of the $100,000 limit covered by the Federal Deposit
Insurance Corporation. The Company does not hold or issue
financial instruments for trading purposes nor does it hold
or issue interest rate or leveraged derivative financial
instruments
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities
("SFAS 133"), which is required to be adopted in years beginning after
June 15, 1999. SFAS 133 will require the Company to recognize all
derivatives on the balance sheet at fair value. Derivatives that are
not hedges must be adjusted to fair value through income. If the derivative
is a hedge, depending on the nature of the hedge, changes in the fair value
of derivatives will either be offset against the change in fair value of
hedged assets, liabilities, or firm commitments through earnings or
recognized in other comprehensive income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change
in fair value will be immediately recognized in earnings. The Company
has not yet determined what the effect of SFAS 133 will be on earnings
and the financial position of the Company, however it believes that
it has not to date engaged in significant transactions encompassed
by the statement.
In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1, Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use ("SOP 98-1"). SOP 98-1
provides authoritative guidance on when internal-use software costs
should be capitalized and when these costs should be expensed as incurred.
Effective in 1998, the Company adopted SOP 98-1 at its inception, however
the Company has not incurred costs to date that would require evaluation
in accordance with the SOP.
During 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5 - Reporting on the Costs of
Start-Up Activities. The statement is effective for fiscal years
beginning after December 15, 1998 and requires that the cost of
start-up activities, including organization costs be expensed as
incurred. The Company adopted the statement upon its inception
and has charged to expense an aggregate of $9,070 of organization
and website development costs through May 31, 2000.
In December 1999, the US Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101 which summarizes certain of the
commission staff's views in applying generally accepted accounting
principles to revenue recognition in financial statements. The
Company's revenue recognition policy is in compliance with all
of the commission staff's criteria for revenue recognition.
The Company believes that no adjustments to revenue reported in the
accompanying financial statements
will be required in connection with Staff Accounting Bulletin No. 101.
Note 2. Accounts payable.
Accounts payable at June 30, 2000 consist of trade items incurred in
connection with the operation of the Company's business. The balance
($6,394) consists of $4,045 to inventory vendors, $1,500 for
professional services and $849 for general administrative services.
Note 3. Stockholders' equity.
At inception, the Company issued 20,000,000 shares of it's restricted
common stock to its founder and only officer in exchange for his services
in forming the Company. The shares were valued at par value which amount
is considered by the Company to be the fair value of the services.
During June 2000, the Company sold an aggregate of 130,000 shares of its
common stock to unrelated individuals for gross proceeds of $13,000.
Note 4. Related party transactions
The Company neither owns nor leases any real or personal property.
The Company's major shareholder provides office services and the costs
thereof are included in administrative expenses. At June 30, 2000
the shareholder had contributed $35,000 of unpaid salary and $3,500
of rent and office services to the Company for which repayment to
the shareholder has been waived. The Company has recorded the
transaction as a contribution of additional capital by the
shareholder as the Company does not expect to and is not
required to make cash repayment for the value of the services
provided by the shareholder.
The officers and directors of the Company are involved in other
business activities and may become involved in other business activities in
the future. Such business activities may conflict with the activities of
the Company. The Company has not formulated a policy for the resolution
of any such conflicts that may arise.
As of June 30, 2000 the shareholder had made cash advances to the Company
or paid expenses of the Company aggregating $5,527 that is not expected
to be repaid currently.
Note 5. Income Taxes
Deferred income taxes may arise from temporary differences resulting from
income and expense items reported for financial accounting and tax purposes
in different periods. Deferred taxes are classified as current or
non-current, depending on the classifications of the assets and
liabilities to which they relate. Deferred taxes arising from
temporary differences that are not related to an asset or liability
are classified as current or non-current depending on the periods
in which the temporary differences are expected to reverse. The
Company had no significant deferred tax items arise through
June 30, 2000.
The Company has not provided for income taxes during the period ended
June 30, 2000 as a result of an operating loss. The Company has a net
operating loss carryforward at June 30, 2000 of approximately $12,800.
The Company has fully reserved the deferred tax asset
(approximately $1,900) that would arise from the loss carryforward
since it is more likely than not that the Company will not sustain
a level of operations that would assure the utilization of the loss
in future periods.
F-7
Heavensent Bears Incorporated
(A Development Stage Company)
Balance Sheet
September 30, 2000 (Unaudited)
<TABLE>
<S> <C> <C>
Unaudited
9/30/00 6/30/00
ASSETS
Current assets:
Cash $ 560 $ 1,870
Account receivable 976 51
Inventory purchase deposits 10,418 10,418
Total current assets 11,954 12,339
Total Assets $11,954 12,339
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,173 6,394
Total current liabilities 5,173 6,394
Long term Debt-officer advance - 5,527
Stockholders' equity:
Common stock, $.00001 par value,
100,000,000 shares authorized,
20,417,000 shares issued and 20,130,00
shares respectively
and outstanding 201 201
Additional paid-in capital 80,199 51,499
Deficit accumulated during
development stage (73,619) (51,282)
(51,282)
Total Stockholder Equity 6,781 418
Total Liability and Equity $11,954 12,399
</TABLE>
See accompanying notes to unaudited financial statements.
F-8
Heavensent Bears Incorporated
(A Development Stage Company)
Unaudited Statement of Operations
For the 3 month Period ending 9/30/00
There were no operations for comparable period last year.
<TABLE>
<S>
<C>
Period ending 9/30/00
Sales $ 4,366
Cost of sales 7,976
Gross profit(loss) (3,610)
General and
administrative expenses:
Advertising expense 3,088
Compensation of officer 8,720
Internet expenses 1,800
Postage and delivery 1,235
Professional fees 1,000
Credit Card Fees 125
Rent 1,500
Other 1,257
Total 18,725
Income (loss) from operations (22,335)
Other income and (expense):
Interest expense -
Interest income -
Income before taxes (22,335)
Income taxes -
Net income (loss) $(22,335)
Per share information:
Basic (loss) per share
$ (0.00)
Weighted average shares
outstanding
20,342,333
</TABLE>
See accompanying notes to unaudited financial statements
F-9 Heavensent Bears Incorporated
(A Development Stage Company)
Unuadited
Statements of Cash Flows
For the 3 month Period
Ending 9/30/00
There were no operations for comparable period last year.
Net (loss) $(22,335)
Adjustments to reconcile net (loss)
to net cash provided by (used in)
operating activities:
Services and costs contributed
by officer services 1500
Changes in assets and liabilities:
(Increase) in accounts receivable (386)
Increase in accounts payable and
accrued expenses (1222)
Payback officer loan (5527)
Total adjustments (5635)
Net cash (used in)
operating activities (27,970)
Cash flows from financing
activities:
Common stock sold for cash 28,700
Advances from officer _ - ___
Net cash provided by
financing activities 28,700
Increase (decrease) in cash (730)
Cash and cash equivalents,
beginning of period 1,870
Cash and cash equivalents,
end of period $ 560
Supplemental cash flow information:
Cash paid for interest $ -
Cash paid for income taxes $ -
See accompanying notes to unaudited financial statements.
F-10
Notes to Unaudited Financial Statements
September 30, 2000
Heavensent Bears, Inc.
( A Development Stage Company)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
For the three months ended September 30, 2000
Basis of presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions incorporated in
Regulation SB-2 of the Securities and Exchange Commission. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal
recurring adjustments and accruals) considered necessary for a fair
presentation have been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. The accompanying
financial statements should be read in conjunction with the Company's
financial
statements for the year ended June 30, 2000.
Basic loss per share was computed using the weighted average number of common
shares outstanding.
During the three months ended September 30, 2000, 287,000 shares of restricted
common stock were sold for $28,700.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The only statute, charter provision, bylaw, contract, or other arrangement
under which any controlling person, director or officer of the Registrant
is insured or indemnified in any manner against any liability which he may
incur in his capacity as such, is as follows:.
1. Article XVI of the Articles of Incorporation of the Company, filed as
Exhibit 1 to the Registration Statement.
2. Article XIV of the Bylaws of the Company, filed as Exhibit 2 to the
Registration Statement.
The general effect of the foregoing is to indemnify a control person, officer
or director from liability, thereby making the Company responsible for any
expenses or damages incurred by such control person, officer or director in
any action brought against them based on their conduct in such capacity,
provided they did not engage in fraud or criminal activity.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the offering (assuming all Shares are sold), all of
which are to be paid by the Registrant, are as follows:
SEC Registration Fee $ 100.00
Printing Expenses 2,000.00
Accounting Fees and Expenses 2,500.00
Legal Fees and Expenses 2,000.00
Blue Sky Fees/Expenses 5,000.00
Transfer Agent Fees 3,000.00
Miscellaneous Expenses 5,400.00
----------- TOTAL $ 20,000.00 ===========
------------------------------------------------------------------------
RECENT SALES OF UNREGISTERED SECURITES
-------------------------------------------------------------------------
Mr Johnson was issued 20,000,000 shares of common stock on 10/31/99 for
$200 and future services rendered.
The company recently completed (June-October, 2000) a Regulation D 506
Offering. 567,000 shares of common stock were sold at .10/share raising
$56,700 and netting the company $55,700 after offering expenses. No
commissions were paid in association with this offering.
EXHIBITS.
The following Exhibits are filed as part of this Registration Statement,
pursuant to Item 601 of Regulation K.
Exhibit No. Document Description
- ------------ --------------------
1 Articles of Incorporation.
2 Bylaws
3 Specimen Stock Certificate.
4 Consent of James E. Scheifly & Associates, P.C.,
Certified Public Accountants.
5 Financial Data Schedule.
6 Subscription Agreement.
7 Legality opinion and consent of counsel
UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 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 Act and is,
therefore,unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director,officer or controlling person in connection with the 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 Act and will be governed by the
final adjudication of such issue.
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a post-
effective amendment to this Registration Statement:
a. To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
b. To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement(or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;
c. To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any change to such information in the Registration Statement.
2. That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
2. To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
SIGNATURES
Pursuant to 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 of this Form SB-2 Registration Statement and has duly
caused this Form SB-2 Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Orlando, Florida, on this 31st day
of October,2000.
Heavensent Bears, Inc.
BY: /s/ Scott Johnson
Scott Johnson, President
KNOW ALL MEN BY THESE PRESENT, that each person whose signature
appears below constitutes and appoints Scott Johnson, as true and lawful
attorney-in-fact and agent, with full power of substitution, for his and in
his
name, place and stead, in any and all capacities, to sign any and all
amendment
(including post-effective amendments) to this registration statement, and to
file the same, therewith, with the Securities and Exchange Commission, and to
make any and all state securities law or blue sky filings, granting unto said
attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite or necessary to be done in about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying the confirming all that said attorney-in-fact and
agent, or any substitute or substitutes, may lawfully do or cause to be done
by virtue hereof. Pursuant to the requirements of the Securities Act of 1933,
this Form SB-2 Registration Statement has been signed by the following
persons in the capacities and on the dates indicated:
Signature Title Date
/s/ Scott Johnson President, Treasurer,October 31, 2000
Scott Johnson Chief Financial Officer
and a member of the
Board of Directors
1
4
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