SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of
The Securities Exchange Act of 1934
VITATONICS CORP.
(Exact name of registrant as specified in its charter)
Nevada 35-0511303
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
38 Thorn Oak, Dove Canyon, CA 92679
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(Address of registrant's principal executive offices) (Zip Code)
949.589.8912
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(Registrant's Telephone Number, Including Area Code)
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of Each Exchange on which
to be so registered: each class is to be registered:
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None None
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $.001
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(Title of Class)
Copies to:
Thomas E. Stepp, Jr.
Stepp & Beauchamp LLP
Attorneys-at-Law
1301 Dove Street, Suite 460
Newport Beach, California 92660
949.660.9700
Facsimile 949.660.9010
Page 1 of 12
Exhibit Index is specified on Page 11
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Vitatonics Corp.,
A Nevada Corporation
Index to Form 10-SB Registration Statement
Item Number and Caption Page
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1. Description of Business 3
2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 4
3. Description of Property 7
4. Security Ownership of Certain Beneficial Owners and Management 7
5. Directors, Executive Officers, Promoters and Control Persons 8
6. Executive Compensation - Remuneration of Directors and Officers 9
7. Certain Relationships and Related Transactions 9
8. Legal Proceedings 9
9. Market For Common Equity and Related Shareholder Matters 9
10. Recent Sales of Unregistered Securities 10
11. Description of Securities 10
12. Indemnification of Officers and Directors 11
13. Financial Statements 11
14. Changes in and Disagreements with Accountants 11
15. Financial Statements and Exhibits
15(a) Index to Financial Statements 11
Financial Statements F-1 through F-11
15(b) Index to Exhibits 11
Exhibits E-1 through E-16
Signatures 12
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Item 1. Description of Business.
Development of the Company. Our corporate history contains several mergers and
reincorporations. We were originally organized under the laws of the State of
Nevada on June 18, 1990 using the name CCC-Huntor Associates, Inc. and
reincorporated in Texas using the name Aster Buzbuilders, Inc. in June 1995.
Under a Plan of Reorganization and Merger dated May 14, 1996, Aster Buzbuilders,
Inc. acquired all the capital stock of Vitatonics Corp., a Nevada corporation
which had been incorporated on February 21, 1995 using the name Fitonics
Corporation and which had changed its name to Vitatonics Corp. on March 10,
1995. Under the Plan of Reorganization and Merger, Vitatonics Corp. became a
wholly-owned subsidiary of Aster Buzbuilders, Inc. which, in turn, issued
6,000,000 shares of its common stock to the shareholders of Vitatonics Corp.,
which then dissolved. This reorganization was accounted for as a
recapitalization of Vitatonics Corp. for accounting purposes because its
shareholders controlled the company after the merger. Our executive offices are
located at 38 Thorn Oak, Dove Canyon, CA 92679. Our telephone number is
949.589.8912.
We are in the Vitamin Business. We are engaged in the manufacturing, packaging
and sale and distribution of vitamins, minerals and nutritional supplements. We
have developed our own products but we also intend to distribute vitamin,
mineral and nutritional supplement brands of other producers, as well as
developing its own brands of these products. We plan to develop different
vitamin products sold in single vitamin and in multivitamin combinations with
varying potency levels in various forms, including tablets (both chewable and
time released tablets), powders, two-piece hard shell capsules, and soft gelatin
encapsulated capsules ("soft gels"). We may also develop related products, such
as enzyme, mineral, and antioxidant products, but we will probably enter this
field by distributing products developed by other companies. This will reduce
our research and development costs.
We Do Not Have Any Employees. We do not currently have any employees because we
are using consultants and subcontractors to promote our business and for
accounting and legal services on an as-needed basis. We plan to negotiate
licensing and manufacturing agreements with third parties so that we will
require very few employees, if any, during the next fiscal year.
We Face Significant Competition. Competition in the vitamin and nutrient
supplement industry, and the related non-regulated medical products industry, is
intense. We compete directly with other companies and businesses that have
developed and are in the process of developing technologies and products which
will directly compete with our products. The vitamin industry is a multi-billion
dollar industry in the United States, and we are competing with hundreds of
companies that have more money, employees, and other resources than we have.
Most of these competitors also have more experience in research and development
of vitamin products than we have, and better research and development
facilities. Many of these competitors also have their own manufacturing
facilities. Our competitors have more experience, may have more manufacturing
efficiency, and greater sales and marketing capabilities.
Reports to Security Holders. Although we are not required to deliver an annual
report to security holders, we intend to provide an annual report to our
security holders, which will include audited financial statements. We will
become a reporting company with the Securities and Exchange Commission ("SEC")
on the effective date of this Registration Statement and, when we become a
reporting company with the SEC, the public may read and copy any materials filed
with the SEC at the SEC's Public Reference Room at 450 Fifth Street N.W.,
Washington, D.C. 20549. The public may also obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC. The address of that site is http://www.sec.gov. We don't have an
Internet address.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
We anticipate marketing vitamins and nutritional supplements, as we have done in
the past. We currently do not have any marketing agreements. We have utilized a
multi-level marketing system to market our vitamin products in the past. In the
future, we plan to market our vitamin products to health food stores and other
wholesale and resale sources. We also hope to acquire the right to sell or
distribute other parties' vitamin products. We also plan to re-establish our
past marketing network and add additional products as opportunity allows, either
through licensing the products of others or through corporate acquisitions.
Industry Overview. Based on industry sources, including trade publications, we
believe that the retail market for vitamins and nutritional supplements in the
United States presently exceeds $7 billion annually, and that approximately 45%
of adults in the United States take some form of vitamin or nutritional
supplement. We believe that this market will continue to expand due to
increasing consumer awareness of the health benefits of vitamins and nutritional
supplements and the widely publicized reports of medical research findings
indicating a correlation between the consumption of micro-nutrients, such as
vitamin C and vitamin E (antioxidants) and reduced incidence of diseases such as
heart disease, cancer and stroke. However, there have been studies relating to
certain antioxidants with results which have been contrary to certain of the
favorable indications of other prior and subsequent studies. Also, as scientific
research to date is preliminary, there can be no assurance of future favorable
scientific results and media attention, or the absence of unfavorable or
inconsistent findings.
We believe that the market for vitamins and other nutritional supplements will
continue to grow as the nation's demographics continue to shift towards a more
senior-aged population, who have a greater tendency to use vitamins on a regular
basis. Industry sources indicate that approximately 55% of Americans aged 50 and
over are regular vitamin users. It is anticipated that the 50 and over age group
will be the fastest growing segment of the United States population as the baby
boom generation continues to mature.
Private Label Industry. Sales of private label (that is, store brand) vitamins
have grown significantly in chain drug stores and have become a key ingredient
in the success of retailers. From the consumer's standpoint, store brand
products offer lower-priced and equal if not better quality alternatives to
nationally advertised brand name products. From the retailer's standpoint, such
products allow for lower retail pricing than national brands and yet provide
retailers with higher profit margins. Industry analysts predict that private
label's share of the overall market should grow significantly over the next 10
years. We will try to participate in this growth.
Source and Availability of Raw Materials. The principal raw materials used in
the manufacturing process for our vitamins are natural and synthetic vitamins,
purchased from manufacturers primarily in the United States. We intend to
purchase raw materials from numerous sources and we are confident that the raw
materials necessary to produce vitamin products are readily available from
numerous sources and that we will not become dependent on any one supplier.
We May Be Required to Obtain Licenses and Consents. At some point in the future,
we may be required to obtain licenses or consents from government regulatory
agencies or from the producers or other holders of patents, copyrights or other
similar rights relating to our vitamin products or the technologies for
producing, packaging or distributing our vitamin products. If we were unable, if
so required, to obtain any necessary license or consent on terms which
management considers to be reasonable, we may be required to cease developing,
utilizing, or exploiting products affected by government regulation or by
patents, copyrights or similar rights. In we are challenged by a government
regulatory agency, or by the holders of patents,
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copyrights or other similar rights, we might not have the financial or other
resources to defend any resulting legal action, which could be significant.
We may rely on certain proprietary technologies, trade secrets, and know-how
that are not patentable. Although we may take steps to protect our unpatented
trade secrets and technology, in part through the use of confidentiality
agreements with our employees, consultants and subcontractors, there can be no
assurance that these agreements will not be breached or that our proprietary
trade secrets and know-how will not otherwise become known or be independently
developed or discovered by competitors.
No Assurance of Market Acceptance and Dependence on Principal Products. There
can be no assurance that our products will achieve a significant degree of
market acceptance, or that marekt acceptance, if achieved, will be sustained for
any significant period or that product life cycles will be sufficient (or
substitute products developed) to permit us to recover start-up and other
associated costs.
Dependence on New Product Introductions. The vitamin and nutrient supplement
industry is rapidly changing through the continuous development and introduction
of new products. Our strategy for growth is substantially dependent upon our
ability to introduce new products. Accordingly, we must continually enhance and
improve our products. We may be required to adapt to technological changes in
the industry and develop products to satisfy evolving industry or customer
requirements, any of which could require the expenditure of significant funds
and resources, and we do not have a source or commitment for any such funds and
resources. Development efforts relating to the production and distribution of
the various products to be developed by the company are not substantially
completed. Accordingly, we might be required to refine and improve those
products. Continued refinement and improvement efforts remain subject to the
risks inherent in new product development, including unanticipated technical or
other problems which could result in material delays in product
commercialization or significantly increase costs.
Risk of Product Recall, Product Returns. Product recalls may be issued at our
discretion or may be required by government agencies having regulatory authority
over vitamin products. Product recalls may occur due to disputed labeling
claims, manufacturing issues, quality defects or other reasons. No assurance can
be given that product recalls will not occur in the future. Any product recall
could materially adversely affect our business, financial condition or results
of operations.
We Must Comply with Government Regulations. The vitamin and nutrient supplement
industry has been under increasing scrutiny by various state and federal
regulatory agencies. We will have to comply with various forms of government
regulations, including consumer safety laws. If we are found to violate any of
these laws, we could be put out of business. Even the cost of complying with all
of these laws and regulations could have a material adverse effect on our
business, financial condition and results of operations. We do not presently
require any government approvals to promote vitamin products, but that could
change.
We Do Not Have Product Liability Insurance. Our business exposes us to potential
product liability risks that are inherent in the testing, manufacturing and
marketing of vitamin and nutritional supplement products. We do not have product
liability insurance, and there can be no assurance that we will be able to
obtain or maintain such insurance on acceptable terms or, if obtained, that such
insurance will provide adequate coverage against potential liabilities. We face
an inherent business risk of exposure to product liability and other claims in
the event that consumption of our vitamin products is alleged to have resulted
in adverse effects to consumers. Such risk exists even with respect to those
products that are manufactured in licensed and regulated facilities or that
otherwise possess regulatory approval for commercial sale. There can be no
assurance that we will avoid significant product liability exposure. There can
be no assurance that insurance
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coverage will be available in the future on commercially reasonable terms, or at
all, that such insurance will be adequate to cover potential product liability
claims or that a loss of insurance coverage or the assertion of a product
liability claim or claims would not materially adversely affect our business,
financial condition and results of operations.
Our strategy for growth depends on our ability to market and distribute vitamin
products successfully. Other companies, including those with substantially
greater financial, marketing and sales resources, compete with us, and have the
advantage of marketing existing products with existing production and
distribution facilities. Bigger companies could force us out of the market by
pricing their products lower than ours, or by monopolizing retail sales outlets.
Results of Operations:
Liquidity and Capital Resources. We currently have no cash available. During the
period from inception through February 29, 2000, we had net income of $257,067,
and issued shares of our common stock valued at $17,845 for use as non-cash
financing of services. We have minimal operations and have incurred significant
losses which raise substantial doubt about our ability to continue as a going
concern. We have an accumulated deficit of $974,598 which we have treated as net
operating loss carryforwards which may be offset against future taxable income
through 2020.
Debt Settlements. During the year ended February 28, 1999, our management was
able to negotiate settlement agreements with many of our creditors. Because of
our negative cash flows, many creditors agreed to settle outstanding debts at
significant discounts. A total of $237,768 of our debt was forgiven by our
creditors for the year ended February 28, 1999, which was recorded on our
financial statements as extraordinary income.
In 1998 and part of 1999 we were active in the business of formulating high
quality vitamin products which we sold using a multi-level marketing system. Our
revenues for the year ended February 28, 1999 were $127,617 and for the year
ended February 29, 2000 were $12,954. We are currently inactive and have been
reclassified for accounting purposes as a development stage company. Because we
are not generating any revenues from the sale or licensing of our products, our
only external source of liquidity is the sale of our capital stock.
Sale of Our Securities. At February 27, 1997, we had 10,210,600 shares of common
stock issued and outstanding. During the year ended February 28, 1998, we issued
651,872 shares of our common stock in lieu of debt, at negotiated prices ranging
from $0.20 to $0.82 per share. During the year ended February 28, 1999, we
issued 350,000 shares of our common stock in lieu of debt at $0.01 per share.
During the same year we also issued 1,784,500 shares of our common stock as
compensation for services provided to us, also at $0.01 per share. During that
same year 3,300,000 shares of our common stock, which had been issued to one of
our original promoters, was canceled by the company. At February 29, 2000, we
had approximately 9,896,972 shares of our common stock issued and outstanding.
Manufacturing and Marketing Our Products. The size and scope of the health and
nutritional food supplement business is difficult to determine. Certain foods
may or may not be considered health foods. Estimates of the health food
industry's gross sales run as high as $120 billion per year. In such a vast
industry there are many segments and crossovers. With that in mind, we plan to
focus our initial efforts on the vitamin segment of the industry. We plan to
re-establish our old marketing network and add other products as opportunity and
finances allow. We also plan to establish relationships with vitamin retail
outlets and are looking into selling our vitamins directly to the public over
the Internet.
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The Company also plans to place advertisements in magazines that promote various
sports and activities. These sources, as well as magazines promoting health
products and targeted to the alternative medicine practitioner, will be the main
focus of our magazine advertising. To support the magazine advertising, we will
seek regional marketing contracts with existing manufacturing representatives.
Currently we have no contractual relationships with such representatives and no
assurance can be given that such representation will be available on terms and
conditions that will allow us to sell our products profitably.
Item 3. Description of Property
Property held by the Company. As of the dates specified in the following table,
the company held the following property:
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Property Feb.28, 2000
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Net Operating Loss Carryforwards $974,600.00
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We define cash equivalents as all highly liquid investments with a maturity of 3
months or less when purchased. We currently have no available cash or cash
equivalents. We do not presently own any interests in real estate or any
inventory or equipment.
Item 4. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners. Dan McCormick, a co-founder
and principal shareholder of the company, owns 1,200,000 shares of our common
stock, or approximately 12% of the issued and outstanding common stock.
(b) Security Ownership of Management. The directors and principal executive
officers of the Company beneficially own, in the aggregate, the following shares
of our common stock, including warrants and options:
George Farquhar. Corporate Secretary 1,000,000 shares of common stock
Mr. Farquhar received these shares during the year ended February 28, 1997 as
compensation for services rendered to the company.
Changes in Control. Management is not aware of any arrangements which may result
in "changes in control" as that term is defined by the provisions of Item 403(c)
of Regulation S-B.
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Item 5. Directors, Executive Officers, Promoters and Control Persons
Our directors and principal executive officers are as specified on the following
table:
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Name Age Position
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Daniel T. McCormick 36 president and director
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George Farquhar 59 secretary
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Dennis W. McCormick 34 director
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Biographical Information on Our Officers and Directors.
Daniel T. McCormick, age 36, is the president and a director of the company. Mr.
McCormick began his career as a vitamin distributor with Herbalife, Inc. at the
age of 19. By the age of 22 he and his wife, Marilyn, had earned over $1,000,000
and had built distributorships that produced over $100,000,000 in vitamin sales.
Mr. McCormick joined Body Wise International in 1990 and built the highest
producing sales organization in the company with over 70,000 distributors and
total sales in excess of $350,000,000. He has also served as President of
Natural Success, Inc., a corporation located in Dove Canyon, California which is
in the business of marketing vitamin supplements. He attended Washington State
University and presently resides in Dove Canyon, California.
George R. Farquhar, age 59, is the secretary of the company. Mr. Farquhar worked
at Price Waterhouse prior to entering corporate management as chief financial
officer. He has served as the president of two companies, each with annual
revenues in excess of $200,000,000. For the past 16 years he has been a
consultant to publicly traded companies. He is presently president of Maroka,
Inc., a consulting company. Mr. Farquhar is a Certified Public Accountant. He
received his Master of Business Administration - Finance degree from the
University of Southern California.
Dennis W. McCormick, age 34, is a director of the company. He attended Brigham
Young University on a football scholarship in 1984 and is currently the
assistant manager of a Safeway store, a position he has held since 1992. He is
the former owner of a window cleaning business which serviced over 700 clients.
There are no orders, judgments, or decrees of any governmental agency or
administrator, or of any court of competent jurisdiction, revoking or suspending
for cause any license, permit or other authority to engage in the securities
business or in the sale of a particular security or temporarily or permanently
restraining either any of our officers or directors from engaging in or
continuing any conduct, practice or employment in connection with the purchase
or sale of securities, or convicting such person of any felony or misdemeanor
involving a security, or any aspect of the securities business or of theft or of
any felony, nor are any of our officers or directors also serving as the
officers or directors of any corporation or entity so enjoined.
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Item 6. Executive Compensation - Remuneration of Directors and Officers.
Specified below, in tabular form, is the aggregate annual remuneration of the
company's chief executive officer and the four (4) most highly compensated
executive officers other than the chief executive officer who were serving as
executive officers at the end of the company's last completed fiscal year.
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Name of individual or Capacities in which Aggregate
Identity of Group remuneration was received remuneration
--------------------------------------------------------------------------------
None(1) None None
================================================================================
There was no compensation paid to any executive officer of the company during
our last completed fiscal year.
Item 7. Certain Relationships and Related Transactions
Compensation to Officers and Directors of the Company. As of the date of this
Registration Statement, no compensation has been paid or accrued to any of the
officers or directors of the company.
Item 8. Legal Proceedings
There are no legal actions pending against the company nor are any such legal
actions contemplated.
Item 9. Market For Common Equity and Related Stockholder Matters
As of the date of this Registration Statement, there were 9,896,972 shares of
our common stock issued and outstanding. There have been no cash dividends
declared on the common stock since the company's inception. Dividends are
declared at the sole discretion of the board of directors.
Penny Stock Regulation. The Securities and Exchange Commission has adopted rules
that regulate broker- dealer practices in connection with transactions in "penny
stocks". Penny stocks generally are equity securities with a price of less than
$5.00 (other than securities registered on certain national securities exchanges
or quoted on the Nasdaq system, provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange or system). The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from those rules, deliver a
standardized risk disclosure document which specifies information about penny
stocks and the nature and significance of risks of the penny stock market. The
broker-dealer also must provide the customer with bid and offer quotations for
the penny stock, the compensation of the broker-dealer and its salesperson in
the transaction, and monthly account statements showing the market value of each
penny stock held in the customer's account. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
those rules the broker- dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the trading activity in the secondary market for
a stock that becomes subject to the penny stock rules. If any of our securities
become subject to the penny stock rules, holders of those securities may have
difficulty selling those securities.
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(1) The officers and directors of the company received no direct compensation
during our most recent fiscal year. The officers and directorsare
reimbursed for expenses incurred on behalf of the company.
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Item 10. Recent Sales of Unregistered Securities
There have been no sales of unregistered securities within the last three (3)
years which would be required to be disclosed pursuant to Item 701 of Regulation
S-B.
Item 11. Description of Securities
We are authorized to issue 50,000,000 shares of capital stock, $.001 par value.
As of the date of this Registration Statement, there are 9,896,972 shares of our
capital stock issued and outstanding.
Common Stock. The holders of our common stock are entitled to one vote for each
share held of record on all matters to be voted on by those shareholders. There
is no cumulative voting with respect to the election of directors, with the
result that the holders of more than 50% of the common stock voted for the
election of directors can elect all of those directors. The holders of the
common stock are entitled to receive dividends when, as, and if declared by the
board of directors from funds legally available therefor. In the event of
liquidation, dissolution, or winding up of the company, the holders of common
stock are entitled to share ratably in all assets remaining available for
distribution to them after payment of our liabilities and after provision has
been made for each class of stock, if any, having preference over the common
stock; provided further, however, that all authorized capital stock of the
company is common stock. Holders of shares of the common stock, as such, have no
conversion, preemptive or other subscription rights, and there are no redemption
provisions applicable to the common stock. All of the outstanding shares of our
common stock are fully paid and nonassessable.
Non-Cumulative Voting. The holders of shares of common stock will not have
cumulative voting rights, which means that the holders of more than 50% of the
outstanding common stock, voting for the election of directors, may elect all of
the directors to be elected, if they so desire, and, in such event, the holders
of the remaining common stock may not be able to elect any of the company's
directors.
Registration Rights. Existing holders of shares of our common stock are not
entitled to rights with respect to the registration of such shares under the
Securities Act.
Dividends. The payment of dividends, if any, in the future, shall be determined
by the board of directors, in its discretion, and will depend among other
things, upon our earnings, capital requirements, and our financial condition, as
well as other relevant factors. We have not paid or declared any dividends to
date. Holders of common stock are entitled to receive dividends as declared and
paid from time to time by the board of directors from funds legally available
therefor. We intend to retain any earnings for the operation and expansion of
its business and does not anticipate paying cash dividends in the foreseeable
future.
Preferred Stock. The company has not issued any preferred stock.
Transfer Agent. The company intends to engage the services of Interstate
Transfer Company, 56 West 400 South, Suite 260, Salt Lake City, Utah 84101,
telephone 801.531.7860, fax 801.539.1895, to serve as the Transfer Agent for the
company.
Stock Option Plans. Our board of directors does not currently intend to adopt a
stock option plan; however, the board of directors reserves the right to adopt
such a stock option plan, at its sole discretion, at any time subsequent to this
offering. The terms of any such plan have not been determined.
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Stock Awards Plan. We have not adopted a Stock Awards Plan, but may do so in the
future. The terms of any such plan have not been determined.
Item 12. Indemnification of Directors and Officers
Our Articles of Incorporation do not provide for indemnification for our
directors and officers. We may enter into indemnification agreements with our
executive officers to indemnify each such person for all expenses and
liabilities, including criminal monetary judgments, penalties and fines,
incurred by such person in connection with any criminal or civil action brought
or threatened against such person by reason of such person being or having been
an officer or director or employee of the company. However, we do not currently
have any indemnification agreements, or errors and omissions insurance, for our
officers and directors.
IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION, INDEMNIFICATION FOR
LIABILITIES ARISING PURSUANT TO THE SECURITIES ACT OF 1933 IS CONTRARY TO PUBLIC
POLICY AND, THEREFORE, UNENFORCEABLE.
Item 13. Financial Statements.
Copies of the financial statements specified in Regulation 228.310 (Item 310)
are filed with this Registration Statement, Form 10-SB (see Item 15 below).
Item 14. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
There have been no changes in or disagreements with our accountants since the
formation of the company required to be disclosed pursuant to Item 304 of
Regulation S-B.
Item 15. Financial Statements and Exhibits
(a) Index to Financial Statements. Page
Independent Auditors' Report F-3
Balance Sheet F-4
Statements of Operations F-5
Statements of Stockholders' Equity (Deficit) F-6
Statements of Cash Flows F-7
Notes to the Financial Statements F-9
(b) Index to Exhibits.
Copies of the following documents are filed with this Registration Statement,
Form 10-SB as exhibits:
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Index to Exhibits Page
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2.1 Plan of Reorganization E-1 through E-4
3.1 Articles of Incorporation Fitonics Corporation E-5
3.2 Certificate of Amendment to Articles of Incorporation E-6
3.3 By-Laws of Vitatonics Corp. E-7 through E-15
4. Instruments Defining Rights of Security Holders
(not applicable)
9. Voting Trust Agreement (not applicable)
10. Material Contracts (not applicable)
11. Statement re: Computation of Per Share Earnings
(see financial statements incorporated herein)
12. Statements re: Computation of Ratios (not applicable)
16. Letter re: Change in Certifying Accountant (not applicable)
21. Subsidiaries of the Registrant (not applicable)
24. Power of Attorney (not applicable)
27. Financial Data Schedule E-16
SIGNATURES
In accordance with the provisions of Section 12 of the Securities Exchange Act
of 1934, Vitatonics Corp., a Nevada corporation, has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Newport Beach, State of California, on September
8, 2000.
Vitatonics Corp.,
a Nevada corporation
By: /s/ Daniel McCormick
President
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VITATONICS CORP.
(A Development Stage Company)
FINANCIAL STATEMENTS
July 31, 2000 and February 29, 2000
F-1
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C O N T E N T S
Independent Auditors' Report ............................................... 3
Balance Sheets ............................................................. 4
Statements of Operations ................................................... 5
Statements of Stockholders' Equity (Deficit) ............................... 6
Statements of Cash Flows ................................................... 7
Notes to the Financial Statements .......................................... 9
F-2
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Vitatonics Corp.
(A Development Stage Company)
Newport Beach, California
We have audited the accompanying balance sheets of Vitatonics Corp. (a
development stage company) as of February 29, 2000, and the related statements
of operations, stockholders' equity (deficit), and cash flows for the years
ended February 29, 2000 and February 28, 1999 and from inception of the
development stage through February 29, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Vitatonics corp. (a development
stage company) as of February 29, 2000, and the results of its operations and
its cash flows for the years ended February 29, 2000 and February 28, 1999 and
from inception of the development stage through February 29, 2000 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company currently has minimal operations and a deficit
in stockholders' equity which raises substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 4. The financial statements do not include any
adjustments that might result form the outcome of this uncertainty.
HJ & Associates, LLC
Salt Lake City, Utah
June 12, 2000
F-3
<PAGE>
VITATONICS CORP.
(A Development Stage Company)
Balance Sheets
<TABLE>
<CAPTION>
ASSETS
July 31, February 29,
2000 2000
--------- ---------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ -- $ --
--------- ---------
Total Current Assets -- --
--------- ---------
TOTAL ASSETS $ -- $ --
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 89,915 $ 89,915
Accrued interest 54,094 54,094
Notes payable - related parties (Note 2) 269,873 269,873
--------- ---------
Total Current Liabilities 413,882 413,882
--------- ---------
Total Liabilities 413,882 413,882
--------- ---------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $0.001; authorized 50,000,000
shares; 9,896,972 shares issued and outstanding 9,897 9,897
Additional paid-in capital 553,126 550,819
Accumulated deficit (976,905) (974,598)
--------- ---------
Total Stockholders' Equity (Deficit) (413,882) (413,882)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ -- $ --
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
VITATONICS CORP.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
From
For the For the Inception of the
Five Months Ended Year Ended Development
July 31, ----------------------------- Stage Through
----------------------------- February 29, February 28, July 31,
2000 1999 2000 1999 2000
----------- ----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
REVENUES $ -- $ 11,485 $ 12,954 $ 127,617 $ 140,571
COST OF SALES -- -- -- 40,324 40,324
----------- ----------- ----------- ----------- -----------
GROSS MARGIN -- -- 12,954 87,293 100,247
----------- ----------- ----------- ----------- -----------
EXPENSES
General and administrative 2,307 19,370 24,238 35,062 61,607
----------- ----------- ----------- ----------- -----------
Total Expenses 2,307 19,370 24,238 35,062 61,607
----------- ----------- ----------- ----------- -----------
INCOME FROM OPERATIONS (2,307) (7,885) (11,284) 52,231 38,640
----------- ----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE)
Interest expense -- (3,598) (10,795) (10,853) (21,648)
----------- ----------- ----------- ----------- -----------
Total Other Income (Expense) -- (3,598) (10,795) (10,853) (21,648)
----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEMS (2,307) (11,483) (22,079) 41,378 16,992
EXTRAORDINARY ITEM
Income from debt forgiveness (Note 3) -- -- -- 237,768 237,768
----------- ----------- ----------- ----------- -----------
Total Extraordinary Item -- -- -- 237,768 237,768
----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (2,307) $ (11,483) $ (22,079) $ 279,146 $ 254,760
=========== =========== =========== =========== ===========
BASIC EARNINGS (LOSS) PER SHARE
Before extraordinary items $ (0.00) $ (0.00) $ (0.00) $ 0.01
Extraordinary items (0.00) (0.00) (0.00) 0.02
----------- ----------- ----------- -----------
BASIC EARNINGS (LOSS)
PER SHARE $ (0.00) $ (0.00) $ (0.00) $ 0.03
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 9,896,972 9,896,972 9,896,972 9,870,565
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
VITATONICS CORP.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
Common Additional
` --------------------------------- Paid-in Accumulated
Shares Amount Capital Deficit
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, February 28, 1997 10,210,600 $ 10,210 $ 84,241 $ (749,292)
Common stock issued in lieu of debt
at prices ranging from $0.20 to
$0.82 per share 651,872 652 440,268 --
Common stock issued for services
at $0.02 per share 200,000 200 3,800 --
Net loss for the year ended
February 28, 1998 -- -- -- (482,373)
----------- ----------- ----------- -----------
Balance, February 28, 1998 11,062,472 11,062 528,309 (1,231,665)
Common stock issued in lieu of debt
at $.01 per share 350,000 350 3,150 --
Common stock issued for services
at $.01 per share 1,784,500 1,785 16,060 --
Common stock cancelled (3,300,000) (3,300) 3,300 --
Net income for the year ended
February 28, 1999 -- -- -- 279,146
----------- ----------- ----------- -----------
Balance, February 28, 1999 9,896,972 9,897 550,819 (952,519)
Net loss for the year ended
February 29, 2000 -- -- -- (22,079)
----------- ----------- ----------- -----------
Balance, February 29, 2000 9,896,972 9,897 550,819 (974,598)
Capital contributed for expenses
(unaudited) -- -- 2,307 --
Net loss for the five months ended
July 31, 2000 (unaudited) -- -- -- (2,307)
----------- ----------- ----------- -----------
Balance, July 31, 2000 (unaudited) 9,896,972 $ 9,897 $ 553,126 $ (976,905)
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
VITATONICS CORP.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From
For the For the Inception of the
Five Months Ended Year Ended Development
July 31, ----------------------------- Stage Through
--------------------------- February 29, February 28, July 31,
2000 1999 2000 1999 2000
--------- --------- ---------- ----------- --------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
ACTIVITIES
Net income (loss) $ (2,307) $ (11,483) $ (22,079) $ 279,146 $ 254,760
Adjustments to reconcile net income
(loss) to net cash (used by)
operating activities:
Debt forgiveness -- -- -- (237,768) (237,768)
Common stock issued for services -- -- -- 17,845 17,845
Capital contribution for expenses 2,307 -- -- -- 2,307
Changes in assets and liabilities:
(Increase) decrease in deposits
and prepaid items -- -- -- 500 500
(Increase) decrease in inventory -- -- -- 40,324 40,324
(Increase) decrease in accounts
receivable -- 3,819 3,819 35,267 39,086
Increase (decrease) in accrued
interest -- 3,598 10,795 (13,268) (2,473)
Increase (decrease) in accounts
payable -- (11,737) (8,338) (138,454) (146,792)
--------- --------- --------- --------- ---------
Net Cash (Used by) Operating
Activities -- (15,803) (15,803) (16,408) (32,211)
--------- --------- --------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES -- -- -- -- --
--------- --------- --------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES
Payments on notes payable -
related parties -- -- -- (5,000) (5,000)
--------- --------- --------- --------- ---------
Net Cash Provided (Used by)
Financing Activities -- -- -- (5,000) (5,000)
--------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS -- (15,803) (15,803) (21,408) (37,211)
CASH AT BEGINNING OF PERIOD -- 15,803 15,803 37,211 37,211
--------- --------- --------- --------- ---------
CASH AT END OF PERIOD $ -- $ -- $ -- $ 15,803 $ --
========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
VITATONICS CORP.
(A Development Stage Company)
Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
From
For the For the Inception of the
Five Months Ended Year Ended Development
July 31, ----------------------------- Stage Through
--------------------------- February 29, February 28, July 31,
2000 1999 2000 1999 2000
--------- --------- ---------- ----------- --------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
SUPPLEMENTAL CASH FLOW
INFORMATION:
Cash paid for:
Interest $ -- $ -- $ -- $ -- $ --
Income taxes $ -- $ -- $ -- $ -- $ --
NON CASH FINANCING ACTIVITIES:
Common stock issued for services $ -- $ -- $ -- $17,845 $17,845
Common stock issued in lieu of debt $ -- $ -- $ -- $ 3,500 $ 3,500
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-8
<PAGE>
VITATONICS CORP.
(A Development Stage Company)
Notes to the Financial Statements
July 31, 2000 and February 29, 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Vitatonics Corp. (the Company) was originally incorporated under the laws
of the State of Texas on June 18, 1990 as Aster Buzbuilders, Inc. In May
1996, pursuant to a Plan of Reorganization, the Company changed its name to
Vitatonics Corp.
On May 14, 1996, the Company completed an Agreement and Plan of
Reorganization whereby the Company issued 6,000,000 shares of its common
stock in exchange for all of the outstanding common stock of Vitatonics
Corp., a Nevada company (VC). Pursuant to the reorganization, the name of
the surviving company was Vitatonics Corp. and VC was subsequently
dissolved.
The reorganization was accounted for as a recapitalization of VC because
the shareholders of VC control the Company after the acquisition.
Therefore, VC is treated as the acquiring entity. Accordingly, there was no
adjustment to the carrying value of the assets or liabilities of Vitatonics
Corp. Vitatonics Corp. is the acquiring and surviving entity for legal
purposes and VC is the acquiring entity for accounting purposes.
The Company was in the business of formulating high quality vitamin
products which it sold using a multi-level marketing system. At February
28, 1998, however, the Company was essentially inactive and was
reclassified a "development stage company".
b. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a February year end.
c. Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
d. Provision for Taxes
At February 29, 2000, the Company had net operating loss carryforwards of
approximately $970,000 that may be offset against future taxable income
through 2020. No tax benefit has been reported in the financial statements
because the potential tax benefits of the loss carryforwards are offset by
a valuation allowance of the same amount.
e. 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 reporting period. Actual results could differ from those
estimates.
F-9
<PAGE>
VITATONICS CORP.
(A Development Stage Company)
Notes to the Financial Statements
July 31, 2000 and February 29, 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f. Basic Earnings (Loss) Per Share
The computations of basic earnings (loss) per share of common stock are
based on the weighted average number of common shares outstanding during
the period of the financial statements.
g. Unaudited Financial Statements
The accompanying unaudited financial statements include all of the
adjustments which, in the opinion of management, are necessary for a fair
presentation. Such adjustments are of a normal recurring nature.
NOTE 2 - NOTES PAYABLE - RELATED PARTIES
Notes payable - related parties at July 31, 2000 and February 29, 2000
consisted of the following:
<TABLE>
<CAPTION>
July 31, February 29,
2000 2000
--------- ---------
(Unaudited)
<S> <C> <C>
Note payable to a shareholder, unsecured, interest
at 4%, principal and accrued interest is due on demand. $ 45,000 $ 45,000
Note payable to a shareholder, unsecured, interest
at 4%, principal and accrued interest is due on demand. 75,000 75,000
Note payable to a shareholder, unsecured, interest
at 4%, principal and accrued interest is due on demand. 99,993 99,993
Note payable to a shareholder, unsecured, interest
at 4%, principal and accrued interest is due on demand. 49,880 49,880
--------- ---------
Total notes payable - related parties 269,873 269,873
Less: current portion (269,873) (269,873)
--------- ---------
Long-term notes payable - related parties $ -- $ --
========= =========
</TABLE>
NOTE 3 - DEBT SETTLEMENTS
During the year ended February 28, 1999, management of the Company, as a
result of the Company's negative cash flows, was able to negotiate certain
settlement agreements with various creditors. A total of $237,768 of debt
was forgiven as a result of these settlements which has been recorded as
extraordinary income in the accompanying statement of operations for the
year ended February 28, 1999. Management is currently trying to negotiate
additional settlements with certain of the remaining creditors as of July
31, 2000.
F-10
<PAGE>
VITATONICS CORP.
(A Development Stage Company)
Notes to the Financial Statements
July 31, 2000 and February 29, 2000
NOTE 4 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course
of business. The Company currently has minimal operations and has incurred
significant losses which have resulted in an accumulated deficit of
$976,905 at July 31, 2000 which raises substantial doubt about the
Company's ability to continue as a going concern. The accompanying
financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount
and classification of liabilities that might result from the outcome of
this uncertainty. It is the intent of management to seek a merger with an
existing operating company.
F-11
