U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUER
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
OZOLUTIONS INC.
(Name of Small Business Issuer in its charter)
Delaware 98-0229321
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
30 Denver Crescent, Suite 200, Toronto, Ontario, Canada M2J 1G8
(Address of Principal Executive Offices and Zip Code)
Issuer's Telephone Number: (416) 490-0254
Securities to be registered under Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Act:
Common Stock, Par Value $0.001
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TABLE OF CONTENTS
ITEM NUMBER AND CAPTION Page
Part I
1. Description of Business 3
2. Management's Discussion and Analysis or Plan of 6
Operations
3. Description of Properties 7
4. Security Ownership of Certain Beneficial Owners and 7
Management
5. Directors, Executive Officers, Promoters and Control 8
Persons
6. Executive Compensation 9
7. Certain Relationships and Related Transactions 10
8. Description of Securities 10
Part II
1. Market Price of and Dividends on the Registrant's 10
Common Equity and Related Stockholder Matters
2. Legal Proceedings 11
3. Changes in and Disagreements with Accountants 11
4. Recent Sales of Unregistered Securities 11
5. Indemnification of Directors and Officers 11
Part F/S Financial Statements 12
Part III
1. Index to Exhibits 12
2. Description of Exhibits 12
2
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
Ozolutions Inc. is a Delaware corporation engaged in the
business of distributing ozone water treatment systems.
Ozolutions has an exclusive distributorship agreement with Hankin
Ozone Systems Limited, a Canadian corporation, which allows us to
market and sell the complete range of Hankin water treatment
products in Mexico and the Caribbean Zone. In addition,
Ozolutions has an exclusive agreement to market in the Province
of Ontario, Canada, a new compact ozone power generator called
the OzoTitan, which can be used by consumers and smaller
commercial and institutional customers to purify water.
Under our distribution agreements for Mexico and the
Caribbean Zone, we receive a commission for completed sales. In
Ontario we are entitled to purchase from Hankin the OzoTitan and
related products at Hankin's established prices, which are no
higher than prices to other distributors, and we resell the
product to end users at a mark-up.
We began our marketing efforts in Mexico and the Caribbean
Zone in July 2000, and are considering eight potential water
treatment projects in Mexico and the Caribbean Zone. We expect to
commence a marketing program for the OzoTitan in Ontario in
September 2000. We have yet to realize any revenue from sale of
water treatment systems, but we project we will complete sales of
our first systems before the end of March 2001.
Ozolutions was formed as a Delaware corporation in January
1996 under the name "Unipak Process, Inc." as a subsidiary of
Aban Hytek, Inc. ("AHI"). It received certain assets of AHI for
its stock and the stock was spun-off to the stockholders of AHI
in connection with a business reorganization between AHI and an
unrelated party. In October 1999, Ozolutions changed its name to
Rico Resources 1999, Inc., in connection with its plan at that
time to engage in the business of developing a gold mining
prospect in Costa Rica. This business endeavor was abandoned
based on management's determination that the project was not
viable. In June 2000, Ozolutions acquired marketing rights to
the products of Hankin from 1421209 Ontario Limited for 8,000,000
shares of Ozolutions common stock, or approximately 42% of the
outstanding shares, CDN$25,000 paid at closing, and
USD$1,000,000, of which $550,000 is payable on the earlier of 60
days following the establishment of a public market in Ozolutions
common stock or November 21, 2000, $250,000 on the earlier of 150
days following the establishment of a public market in Ozolutions
common stock or April 21, 2001, and $200,000 on the earlier of
180 days following the establishment of a public market in
Ozolutions common stock or August 21, 2001. In connection with
the acquisition, we changed our name to Ozolutions Inc.
Ozolutions' offices are located at 30 Denver Crescent, Suite
200, Toronto, Ontario, Canada M2J 1G8, where our telephone number
is (416) 490-0254.
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Our Distributorship
In Mexico and the Caribbean Zone Ozolutions is entitled to
market on an exclusive basis Hankin ozone generating equipment
systems used for water treatment in various applications. Each
distribution agreement is for a term of three years and is
renewable for two additional three year terms subject to
Ozolutions obtaining in each territory at least CDN$1,000,000 of
sales in each term. We are required to use our best efforts to
procure orders in the territories and to maintain a sales force
commensurate with the sale of CDN$1,000,000 or more in each
territory. Each order or contract for purchase of a Hankin
system must be submitted to Hankin for final pricing and
approval, and we receive a commission on the final contract
price. Our commission is 10% of the first CDN$100,000 of the
contract price, 7.5% of the next CDN$100,000, 6% of the next
CDN$300,000, 2% of the next CDN$500,000, and 1% of any remaining
amount.
In Ontario, Canada Ozolutions is the exclusive distributor
for Hankin's Point of Use and Point of Entry water treatment
units, which are referred to as the OzoTitan, and related
products. This distribution agreement is for a term of three
years and is renewable for two additional three-year terms
without minimum sale requirements. We are required to use our
best efforts to procure orders in the territories and to maintain
a sales force for that purpose. Under the agreement we purchase
the OzoTitan and related products from Hankin at published prices
to all distributors and, if there are no published prices, at
prices no higher than those charged other distributors. We
resell the product to end users at a mark-up of between 40% and
65%.
Hankin Products
Hankin offers a wide range of ozone process equipment for
use in treating water for recreational, industrial, municipal and
other commercial applications. These would include swimming and
wave pool facilities, treatment of industrial effluent, treatment
of cooling tower water, municipal water treatment, purification
of drinking water, and bottled water purification. The equipment
consists of modules or component parts that can be configured to
meet the specific treatment needs of the customer. In unusual
applications, Hankin can design custom systems for the customer.
The price for ozone process systems range from CDN$3,900 for
smaller turnkey systems to CDN$300,000 for larger systems.
The OzoTitan is the latest in a long line of efficient,
dependable and easy to use ozone generators from Hankin. It
incorporates the latest electronics and semi-conductor technology
integrated with a dielectric assembly to provide a low-cost, high
efficiency ozone generator. Perhaps the most significant feature
of the OzoTitan is its great versatility. Due to its size,
weight and energy consumption, it can be used in almost any of
the following applications.
- Small bottled water systems
- Cooling water treatment
- Laboratory use
- Ultra pure water
- Residential/cottage use
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The OzoTitan comes cabinet mounted with connections in the
rear of the unit. Controls are front panel mounted for easy
access. Electrical components are maintained at a cool operating
temperature by a cabinet mounted fan. Tubing and fittings in
contact with ozonated gas are constructed of glass, 316 stainless
steel or Teflon.
Hankin has been engaged in the business of designing,
manufacturing, and selling ozone generating equipment systems
since 1972. It is a publicly-held Canada corporation with total
sales for the fiscal years ended September 30, 1999 and 1998 of
CDN$13,662,896 and CDN$11,115,436, respectively.
Marketing Strategy
Ozolutions intends to market Hankin systems in Mexico and
the Caribbean Zone primarily to national, state, and local
governmental units and municipalities as a solution for their
water treatment needs. These marketing efforts will be
undertaken primarily by management and through independent
contractors and consultants. We are now establishing our
independent contractors in Mexico and the Caribbean Zone and are
pursuing directly contacts with government officials responsible
for water projects. These efforts have resulted in the
identification of sales opportunities in food processing, water
bottling, hotels, hospitals, and industrial cooling towers.
Historically, ozone based water treatment products were only
available to medium and larger sized municipal, industrial and
institutional users. The OzoTitan has the potential to increase
greatly the number of units sold because it opens the market to
consumers and smaller commercial and institutional customers.
Since June 2000, we have been developing a dealer network in
Ontario of independent contractors to promote the OzoTitan for
use in home and small industrial applications.
Ozolutions has engaged two consultants to assist with the
development of our marketing effort. Edward G. Deans will assist
us with the development of the market in Mexico and the Caribbean
Zone under a consulting agreement that pays to him a fee of
$90,000 per year over the three-year term of the agreement.
Either party may cancel the agreement after the first year on six
months prior notice to the other. Ronald L. Larocque &
Associates Ltd. will provide at least six hours per month of
marketing and business development services to Ozolutions for
$12,000 payable over the one-year term of the consulting
agreement. Additional services may be rendered at the rate of
$175 per hour.
Competition
Hankin products compete with similar products manufactured
by other multi-national companies, many of which have greater
financial and marketing resources than Ozolutions. These
companies are pursuing the market for water treatment solutions
in areas, such as Mexico and the Caribbean Zone, where there is a
growing need for water treatment facilities. We believe we can
compete with these companies based on price and product
performance.
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Government Regulation
Ozolutions sales activity in various countries may be
subject to local business licensing requirements, to the extent
such requirements exist in a given country. We do not believe
these licensing requirements represent a significant barrier to
our distribution business. Generally, on sale of Hankin products
in various countries Hankin is responsible for complying with any
import and installation regulations applicable to the systems
sold. The adoption of NAFTA several years ago has removed any
significant barriers to the importation of Hankin products in the
countries where we are pursuing our sales efforts.
Employees
As of June 30, 2000, Ozolutions employed a total of three
persons, including two executives and one clerical employee.
None of the its employees is represented by a labor union.
Ozolutions has experienced no work stoppages and believes that
its relations with its employees are good.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
Plan of Operation
Ozolutions believes its general, selling and administrative
expenses over the next year will be approximately $255,000. As
we are a distributor for Hankin products, product is shipped by
Hankin against purchase orders we place either directly to the
end user or to us for delivery to the end user. Accordingly, we
do not require any significant amount of capital for inventory or
facilities required to maintain and distribute inventory.
Ozolutions is required to make a payment of USD$550,000 to
1421209 Ontario Limited no later than November 21, 2000, as part
of the purchase price for the distribution rights it acquired
form Ontario Limited. Additional payments of USD$250,000 and
USD$200,000 are due no later than April 21, 2001 and August
21, 2001.
Following the filing of this registration statement and
assuming a public market for our common stock develops,
Ozolutions intends to seek debt or equity financing from sources
yet to be identified to fund its operations. In this regard,
Ontario Limited has agreed to loan to Ozolutions USD$300,000 to
finance a portion of the purchase price at the time Ontario Limited
receives its first payment from us under a note due in two years
bearing interest at an annual rate of 6.5%.
Until Ozolutions receives outside financing to fund its
capital commitments, its operations will be limited to those that
can be effected through its officers, directors and consultants.
These persons have verbally agreed to defer payment of
compensation from Ozolutions until revenue generated from sales
of product and financing from outside sources provides sufficient
working capital to fund operations and payment of their
compensation.
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Forward-Looking Statements
The Private Securities Litigation Reform Act of 1985
provides a safe harbor for forward-looking statements made by
Ozolutions, except where such statements are made in connection
with an initial public offering. All statements, other than
statements of historical fact, which address activities, actions,
goals, prospects, or new developments that Ozolutions expects or
anticipates will or may occur in the future, including such
things as expansion and growth of its operations and other such
matters are forward-looking statements. Any one or a combination
of factors could materially affect Ozolutions' operations and
financial condition. These factors include competitive
pressures, success or failure of marketing programs, changes in
pricing and availability of services and products offered to
members, legal and regulatory initiatives affecting member
marketing and rebate programs or long distance service, and
conditions in the capital markets. Forward-looking statements
made by Ozolutions are based on knowledge of its business and the
environment in which it operates as of the date of this report.
Because of the factors listed above, as well as other factors
beyond its control, actual results may differ from those in the
forward-looking statements.
ITEM 3. DESCRIPTION OF PROPERTIES
The Company uses offices at 30 Denver Crescent, Suite 200,
Toronto, Ontario, Canada M2J 1G8, provided by one of its officer
and director at no charge.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth as of July 31, 2000, the
number and percentage of the outstanding shares of common stock
which, according to the information supplied to Ozolutions, were
beneficially owned by (i) each person who is currently a
director, (ii) each executive officer, (iii) all current
directors and executive officers as a group and (iv) each person
who, to the knowledge of Ozolutions, is the beneficial owner of
more than 5% of the outstanding common stock. Except as
otherwise indicated, the persons named in the table have sole
voting and dispositive power with respect to all shares
beneficially owned, subject to community property laws where
applicable.
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Amount and Nature of Beneficial
Ownership
Common Percent
Name and Address Shares of Class
1421209 Ontario Limited (1) 8,000,000 42.1
134 Melrose Avenue
Toronto, Ontario CN M5M 1Y7
Max Weissengruber (2) 0 0
30 Denver Crescent, Suite 200
Toronto, Ontario, CN M2J 1G8
James A. Clemenger (2) 0 0
53 Duggan Avenue
Toronto, Ontario, CN M4V 1Y1
Dennis P. Caplice (2) 0 0
1210 Don Mills Road, #125
Toronto, Ontario, CN M3B 3N1
All Executive officers and 0 0
Directors as a Group (3 persons)
________________________________
(1) Carl Lavoie is the sole owner of 1421209 Ontario Limited.
From 1991 to the present, Mr. Lavoie has served as a
Director of Financial Services with CB Richard Ellis Limited
of Toronto, Ontario, where he has provided commercial
mortgage and real estate transaction development and
consulting services.
(2) These persons are all of the directors and executive
officers of Ozolutions.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS
Directors and Officers
The following table sets forth the names, ages, and
positions with Ozolutions for each of the directors and officers.
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Name Age Positions (1) Since
Max Weissengruber 62 President and Director April 2000
James A. Clemenger 44 Secretary, Treasurer and Director April 2000
Dennis P. Caplice 64 Director April 2000
All directors hold office until the next annual meeting of
stockholders and until their successors are elected and qualify.
Officers serve at the discretion of the Board of Directors.
The following is information on the business experience of
each director and officer.
Max Weissengruber has been a Managing Partner with Acris
Partners of Toronto, Ontario for the past seven years. Acris
partners is engaged in the business of conducting employee
surveys and developing marketing communications materials and
customized training packages.
James A. Clemenger has been employed since November 1999 as
a Sales Manager for Dynamex of Toronto, Ontario, where he is
responsible for marketing sales programs for a specialized high
priority courier service. From May 1997 to October 1999, he
provided consulting services to MacLeod Trading Inc. on Latin
America trading opportunities and development of product
distribution strategies. Mr. Clemenger was Consul and Trade
Commissioner for the Colombian Government trade Bureau in Toronto
form June 1991 through October 1996 where he was responsible for
promoting expansion of Colombian goods and services exports to
Canada. He earned a Masters of Business Administration from the
University of Western Ontario in 1995.
Dennis Caplice has been retired since 1992 from his position
of Deputy Minister of Government Services for the Province of
Ontario, where he was responsible for common services,
purchasing, and land and buildings for the Government of Ontario.
He is formally a director and President of the Pollution
Control Association of Ontario, a former board member of the
International Joint Commission's Water Quality Advisory Board
(US/Canada boundary waters), and is a member of the Professional
Engineers Organization of Ontario. Mr. Caplice earned a Masters
of Science in Sanitary Engineering from the University of Toronto
in 1961.
ITEM 6. EXECUTIVE COMPENSATION
No executive compensation was paid to any officer of
Ozolutions during the year ended December 31, 1999, or from that
date to the present. Each of the current executive officers have
agreed to defer any compensation until Ozolutions obtains
sufficient capital from operations or outside sources to cover
compensation expenses.
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no proposed transactions and no transactions
during the past two years to which the Company was a party and in
which any current officer, director, or principal stockholder, or
their affiliates or associates, was also a party.
ITEM 8. DESCRIPTION OF SECURITIES
The authorized capitalization of Ozolutions consists of
50,000,000 shares of common stock, par value $0.001, of which
18,999,133 shares are outstanding. Holders of common stock are
entitled to one vote for each share held on all matters submitted
to a vote of shareholders and do not have cumulative voting
rights. Accordingly, holders of a majority of the shares of all
common stock outstanding entitled to vote in any election of
directors may elect all of the directors standing for election.
Holders of common stock are entitled to receive ratably such
dividends, if any, as may be declared by the board of directors
out of funds legally available therefor. Upon the liquidation,
dissolution or winding up of Ozolutions, the holders of all
shares of common stock are entitled to receive ratably the net
assets of Ozolutions available after the payment of all debts and
other liabilities. Holders of common stock have no preemptive,
subscription, redemption or conversion rights.
The Securities Exchange Act of 1934 and regulations
promulgated thereunder place restrictions on trading activities
in "penny stocks." Penny stocks are defined as equity securities
priced under $5.00, which are not listed for trading on a
national exchange or Nasdaq and are securities of issuers with a
net tangible book value less than $2,000,000 (if in business for
three years), a net tangible book value less than $5,000,000 (if
in business less than three years), and average annual revenues
less than $6,000,000 for the prior three years. Under this
definition, the common stock of Ozolutions may very well be a
penny stock if a trading market develops. Brokers dealing in
penny stocks are subject to special rules of disclosure to their
clients regarding the risks of penny stock transactions, current
market price, and trading activity and compensation to the
broker. In addition, brokers are required to determine the
suitability of penny stock transactions for each of their clients
and obtain from each client written consent to participation in
penny stock transactions. These regulatory burdens discourage a
number of brokers from becoming involved in a security until it
is no longer a penny stock, which may adversely affect the depth
and liquidity of any future market in the common stock of
Ozolutions.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
From the date of inception to the date of this registration
statement there has been no public trading market for Ozolutions'
common stock. Following the filing of this registration
statement, Ozolutions will seek out one or more stock brokerage
firms to make a market in our stock and submit an application for
quotation of our common stock on the OTC Bulletin Board. There
is no assurance that a trading market in the common stock will be
established in the future.
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Since its inception, no dividends have been paid on our
common stock. Ozolutions intends to retain any earnings for use
in its business activities, so it is not expected that any
dividends on the common stock will be declared and paid in the
foreseeable future.
On July 31, 2000, there were 1,530 holders of record of the
Company's Common Stock.
ITEM 2. LEGAL PROCEEDINGS
Ozolutions is not a party to any material pending legal
proceedings, and to the best of our knowledge, no such
proceedings by or against Ozolutions have been threatened.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
There have been no changes in or disagreements with
accountants since the Company's organization.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
Under the Asset Purchase Agreement dated June 21, 2000,
between Ozolutions and 1421209 Ontario Limited, Ozolutions issued
to Ontario Limited 8,000,000 shares of common stock to acquire
all of Ontario Limited's distribution rights to Hankin products.
These shares were issued in reliance on the exemptions from
registration under Sections 3(b) and/or 4(2) of the Securities
Act of 1933, and the safe harbor from registration provided in
Regulation S. No broker was involved in the transaction and no
commissions were paid to any person.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by the Delaware General Corporation Law,
Ozolutions' Certificate of Incorporation provides that no
director or officer shall have any liability to Ozolutions or its
stockholders for monetary damages except: (1) to the extent that
it is provided that the person actually received an improper
benefit or profit in money, property or services, for the amount
of the benefit or profit in money, property or services actually
received, or (2) to the extent that a judgment or other final
adjudication adverse to the person is entered in a proceeding
based on a finding in the proceeding that the person's action, or
failure to act, was the result of active and deliberate
dishonesty and was material to the cause of action adjudicated in
the proceeding. Ozolutions' Bylaws provide that it shall
indemnify and advance expenses to its officers and directors with
respect to liabilities arising form their service to Ozolutions.
However, nothing in the Certificate of Incorporation or Bylaws of
Ozolutions protects or indemnifies a director, officer, employee
or agent against any liability to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office.
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PART F/S
FINANCIAL STATEMENTS
The financial statements of Ozolutions appear at the end of
this registration statement beginning with the Index to Financial
Statements on page 14.
PART III
ITEM 1. INDEX TO EXHIBITS
ITEM 2. DESCRIPTION OF EXHIBITS
Copies of the following documents are included as exhibits
to this report.
Exhibit Form 1-A Title of Document
No. Ref. No.
1 (2) Certificate of Incorporation, as amended
2 (2) By-Laws
3 (6) Asset Purchase Agreement dated June 21,
2000
4 (6) Assignment of Contract - Mexico
5 (6) Assignment of Contract - Caribbean
6 (6) Assignment of Contract - Ontario
7 (6) Loan Agreement dated June 21, 2000
8 (6) Consulting Agreement - Edward G. Deans
9 (6) Consulting Agreement - R.L. Larocque &
Associates
10 (15) Financial Data Schedules
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act
of 1934, the registrant caused this registration statement to be
signed on its behalf by the undersigned thereunto duly
authorized.
OZOLUTIONS, INC.
Date: August 7, 2000 By: /s/ Max Weissengruber, President
In accordance with the Exchange Act, this registration
statement has been signed by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
Dated: August 7, 2000 /s/ Max Weissengruber, Chief Executive Officer
and Director
Dated: August 7, 2000 /s/ James A. Clemenger, Chief Financial Officer
and Director
Dated: August 12, 2000 /s/ Dennis P. Caplice, Director
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OZOLUTIONS, INC.
Index to Financial Statements
Report of Independent Accountants 15
Balance Sheets as of June 30, 2000 and December 31, 1999 16
Statements of Changes in Stockholders' Equity (Deficit)
for the period from inception December 31, 1999
and June 30, 2000 17
Statements of Operations for the period from inception
To June 30, 2000, for the six-month period ended June
30, 2000, and from Inception to December 31, 1999 18
Statements of Cash Flows for the period from inception
to December 31, 1999 and June 30, 2000, and for the
six-month period ended June 30, 2000 19
Notes to Financial Statements 20
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Rotenberg & Company, LLP
Certified Public Accountants & Consultants
500 First Federal Plaza, Rochester, N.Y. 14614
(716) 546-1158 Fax (716) 546-2943
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
and Stockholders
Ozolutions, Inc.
Toronto, Ontario, Canada
We have audited the accompanying balance sheets of
Ozolutions, Inc. (A Delaware Corporation) as of June 30, 2000 and
December 31, 1999, and the related statements of operations,
changes in stockholders' equity (deficit), and cash flows for the
period from the date of inception (January 10, 1996) to December
31, 1999 and 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
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 presentation of the financial statements. We believe
that our audits 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 Ozolutions, Inc. as of June 30, 2000 and December 31 1999, and
the results of its operations and its cash flows for the period
from the date of inception (January 10, 1996) to December 31, 1999
and June 30, 2000, in conformity with generally accepted
accounting principles.
Rotenberg & Company, LLP
Rochester, New York
July 13, 2000
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OZOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Toronto, Ontario, Canada
BALANCE SHEETS
June 30, December 31,
2000 1999
ASSETS
Cash and Cash Equivalents $ - $ -
Contracts 1,025,217 -
Total Assets $ 1,025,217 $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Due to 1421209 Ontario Limited -
Due Within One Year $ 500,000 $ -
Due to Stockholder 21,883 50
Loan Payable - 1421209 Ontario Limited 300,000 -
Total Current Liabilities 821,883 50
Other Liabilities
Due to 1421209 Ontario Limited -
Due After One Year 200,000 -
Total Liabilities 1,021,883 50
Stockholders' Equity (Deficit)
Common Stock: $.001 Par; 50,000,000
Shares Authorized June 30, 2000,
20,000,000 Shares Authorized December
31, 1999; 18,999,133 Issued and
Outstanding at June 30, 2000 and
December 31, 1999 18,999 10,999
Additional Paid-in Capital 17,217 -
Deficit Accumulated During Development
Stage (32,882) (11,049)
Total Stockholders' Equity (Deficit) 3,334 (50)
Total Liabilities and Stockholders'
Equity (Deficit) $ 1,026,217 $ -
The accompanying notes are an integral part of this financial
statement.
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OZOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Toronto, Ontario, Canada
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) FOR THE
PERIOD FROM THE DATE OF INCEPTION (JANUARY 10, 1996) TO DECEMBER
31,1999 AND JUNE 30,2000
Deficit
Accumulated
Additional During
Number Par Common Paid In Developing Stockholders'
of Shares Value Stock Capital Stage Deficit
Balance -
January 10, 1996 - $ - $ - $ - $ - $ -
Common Stock 10,999,133 0.001 10,999 - - 10,999
Net Loss for the
Period - - - - (11,049) (11,049)
Balance - December
31,1999 10,999,133 0.00 10,999 - (11,049) (50)
Common Stock 8,000,000 0.001 8,000 17,217 - 25,217
Net Loss for
the Period - - - - (21,833) (21,833)
Balance - June
30, 2000 18,999,133 $0.001 $18,999 $17,217 $(32,882) $ 3,334
The accompanying notes are an integral part of this financial
statement.
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OZOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Toronto, Ontario, Canada
STATEMENTS OF OPERATIONS FOR THE PERIOD FROM THE DATE OF INCEPTION
(JANUARY 10, 1996) TO DECEMBER 31,1999 AND JUNE 30,2000 AND FOR
THE SIX MONTHS ENDED JUNE 30,2000
Inception to Six Months Ended Inception to
June 30, 2000 June 30, 2000 December31, 1999
Revenues $ - $ - $ -
Expenses
Organization Costs 11,049 - 11,049
Professional Fees 16,333 16,333 -
Transfer Agent Fees 5,500 5,500 -
Total Expenses 32,882 21,833 11,049
Net Loss for the Period $(32,882) $(21,833) $(11,049)
Weighted Average Outstanding
Shares 18,999,133 18,999,133 10,999,133
Earnings (loss) per Share -
Basic and Diluted $(0.0017) $(0.0011) $ (0.0010)
The accompanying notes are an integral part of this financial
statement.
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OZOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Toronto, Ontario, Canada
STATEMENTS OF CASH FLOWS FOR THE PERIOD FROM THE DATE OF INCEPTION
(JANUARY 10, 1996) TO DECEMBER 31,1999 AND JUNE 30,2000 AND FOR
THE SIX MONTHS ENDED JUNE 30,2000
Inception to Inception to
June 30, Six Months Ended December 31,
2000 June 30, 2000 1999
Cash Flows from Operating Activities
Net Loss for the Period $ (32,882) $ (21,833) $ (11,049)
Changes in Assets and Liabilities:
Contracts (1,025,217) (1,025,217) -
Due to Ontario Limited 700,000 700,000 -
Due to Stockholder 21,883 21,833 50
Loan Payable - Ontario Limited 300,000 300,000 -
Net Cash Flows from Operating
Activities (36,216) (25,217) (10,999)
Cash Flows from Investing
Activities - - -
Cash Flows from Financing Activities
Paid-in Capital 17,217 17,217 -
Proceeds from Common Stock 18,999 8,000 10,999
Not Cash Flows from Financing
Activities 36,216 25,217 10,999
Net Increase in Cash and
Cash Equivalents - - -
Cash and Cash Equivalents -
Beginning of Period - - -
Cash and Cash Equivalents -
End of Period $ - $ - $ -
The accompanying notes are an integral part of this financial
statement.
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OZOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Toronto, Ontario, Canada
NOTES TO FINANCIAL STATEMENTS
Note A - The Company
The company was incorporated under the laws of the state of
Delaware on January 10, 1996 as Unipack Process, Inc. The name of
the company was changed to Rico Resources 1999, Inc. on October
22, 1999. On April 12, 2000 a Certificate of Amendment was filed
with the Secretary of the State of Delaware changing the name to
Ozolutions, Inc. The company increased the number of authorized
shares of common stock from 20,000,000 to 50,000,000 shares of
$.001 par value common stock. The company's principal office is
located in Toronto, Ontario, Canada.
Scope of Business
At the present time the company is in the development stage and
does not provide any product or service. The company intends to be
an international marketer and distributor of water purification
systems using ozone technology. The markets the company will
target are Mexico, Caribbean, and Ontario, Canada.
The company's future success is dependent upon its ability to
raise sufficient capital in order to continue to develop its
market for its services. There is no guarantee that such capital
will be available on acceptable terms, if at all.
Purchase of Business
The company purchased the exclusive marketing rights to distribute
"Hankin Atlas Ozone Systems" products in Canada and Mexico from
1421209 Ontario Limited. The purchase price was for One Million
($1,000,000) Dollars, U.S, Twenty-five Thousand ($25,000) Dollars,
Canadian, and the issue of Eight Million (8,000,000) common shares
of Ozolutions, Inc. The Twenty-five Thousand ($25,000) Dollars
Canadian is a non-refundable deposit paid to the Solicitors in
trust for 1421209 Ontario Limited. The sum of Five Hundred and
Fifty Thousand ($550,000) Dollars, U.S. and the delivery of Eight
Million (8,000,000) common shares of stock are payable on or
before the sixtieth (601h ) day following the qualification for
trading of the Ozolutions, Inc. common shares on a recognized
United States Securities Exchange, but in no case later than
November 21, 2000. The sum of Two Hundred and Fifty Thousand
($250,000) Dollars, U.S. is payable on or before the one hundred
fiftieth (1501h) day following the qualifications for trading of
the Ozolutions, Inc. common shares on a recognized United States
Securities Exchange, but in no case later than April 21, 2001. The
remainder of the purchase price for Two Hundred Thousand
($200,000) Dollars, U.S. is payable on or before the expiration of
one hundred eighty days after the shares of Ozolutions, Inc. have
been qualified for trading on a recognized United States
Securities Exchange, but in no case later than August 21, 2001.
Note B - Summary of Significant Accounting Policies Method of Accounting
The company maintains its books and prepares its financial
statements on the accrual basis of accounting.
continued -
20
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OZOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Toronto, Ontario, Canada
NOTES TO FINANCIAL STATEMENTS
Note B - Summary of Significant Accounting Policies - continued
Development Stage
The company has operated as a development stage enterprise since
its inception by devoting substantially all of its efforts to
financial planning, raising capital, research and development, and
developing markets for its services. The company prepares its
financial statements in accordance with the requirements of
Statement of Financial Accounting Standards No. 7, Accounting and
Reporting by Development Stage Enterprises.
Earnings (Loss) Per Common Share
Earnings (loss) per common share is computed in accordance with
SFAS No. 128, "Earnings Per Share," by dividing income available
to common stockholders by weighted average number of common shares
outstanding for each period.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expense during the reporting
period. Actual results can differ from those estimates.
Organizational Expenses
Organizational expenses represent management, consulting, legal,
accounting, and filing fees incurred to date in the formation of
the corporation. Organizational costs are expensed as incurred
pursuant Statement of Position 98-5 on Reporting on the Costs of
Start-Up Activities.
Note C - Stockholders' Equity Common Stock
The company's Securities are not registered under the Securities
Act of 1933 and, therefore, no offering may be made which would
constitute a "Public Offering" within the meaning of the United
States Securities Act of 1933, unless the shares are registered
pursuant to an effective registration statement under the Act.
The stockholders may not sell, transfer, pledge or otherwise
dispose of the common shares of the company in the absence of
either an effective registration statement covering said shares
under the 1933 Act and relevant state securities laws, or an
opinion of counsel that registration is not required under the Act
or under the securities laws of any such state.
Initial Capitalization
The company had all of its organizational costs paid by the
shareholders. The shareholders paid $10,999 for these services for
which they received 10,999,133 shares of the company's common
stock.
Shares Issued in Connection with the Purchase of the Business
The company issued Eight Million (8,000,000) Shares of common
stock as part of the purchase of the business. See Note A for
details.
21
<PAGE>
OZOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Toronto, Ontario, Canada
NOTES TO FINANCIAL STATEMENTS
Note D - Loan Agreement
The company signed a loan agreement on June 21, 2000 with 1421209
Ontario Limited for Three Hundred Thousand ($300,000) Dollars,
U.S. to finance a portion of the purchase price. The loan is
payable quarterly in arrears with an interest rate of Six and One-
Half Percent (6.5 %) per annum, and is payable in full in two (2)
years.
Note E - Subsequent Event
The company signed a consulting agreement on July 1, 2000. The
consulting services consist of managerial services, advising on
production, distribution, sales and promotion, labor negotiations,
contract negotiations, financial services, and such other
consulting services as the company and consultant agree upon. The
agreement is in effect September 1, 2000 through August 31, 2001
with an annual fee of Ninety Thousand ($90,000) Dollars, U.S.
Note F - Related Party Transactions
The expenses of Ozolutions, Inc. have been paid on behalf of one
of the stockholders, therefore a Due to Stockholder account has
been set up. The balance for the period from inception (January
10, 1996) to June 30, 2000 and December 31, 1999 is $21,883 and
$50, respectively.
22
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