Registration No. 333-47578
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
Amendment # 4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Shopathomekids.Com, Inc.
(Name of Small Business Issuer in its charter)
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Texas 5961 75-2882140
(State or Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of organization) Classification Code Number Identification No.)
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223 E. FM 1382, Suite 12720
Cedar Hill, Texas, 75104
(972) 293-2424 Fax (972) 293-1171
(Address and telephone number of Registrant's principal executive
offices and principal place of business)
Lewis Prowse II
223 E. FM 1382, Suite 12720
Cedar Hill, Texas, 75104
(972) 293-2424 Fax (972) 293-1171
(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as practicable after
this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [x]_________________________.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462 (b) under the Securities Act, please check the following box and
list the Securities Act. [ ] __________________.
If this Form is a post-effective amendment filed pursuant to Rule 462 (c) under
the Securities Act, please check the following box and list the Securities Act
registration statement number [ ] __________________.
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, please check the following box and list the Securities Act
registration statement number [ ] _________________.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box [ ]_________________________.
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Title of Each Class of Amount to be Proposed maximum Proposed Maximum Amount Of
Securities to be Registered Offering Price Offering Price (1) Registration Fee (3)
registered **** Per Share (1) ***** *******
Common stock, $.001 400,000 $ 0.25 $ 100,000 $ 26.40
Common stock, $.001 (2) 3,399,300 $ 0.25 $ 849,825 $ 224.35
Total 3,799,300 $ 0.25 $ 949,825 $ 250.75
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(1) Estimated solely for purposes of calculating the registration fee.
(2) Represents common stock to be registered on behalf of the 21 selling
security-holders.
(3) Previously paid by wire transfer
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
,8(a), MAY DETERMINE.
1
Preliminary Prospectus
Shopathomekids.com, Inc.
a Nevada corporation
3,799,300 shares of common stock
This prospectus relates to 3,799,300 shares of common stock of
Shopathomekids.com, Inc. 3,399,300 of the shares are issued and outstanding
shares of common stock acquired by the selling security holders in private
placement transactions which were exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933. No national securities
exchange or the Nasdaq Stock Market lists the common stock being offered by the
selling security holders, and we have not applied for listing or quotation with
any national securities exchange or automated quotation system. Additionally, we
are registering 400,000 shares to be offered to a limited number of persons.
Our shares are going to be sold by our officers and directors namely Lewis
Prowse II our President and Larry Ballard our Secretary/Treasurer. The shares
will be sold on a best efforts basis with no minimum sale required. All funds
will be immediately available to us as soon as they are received.
This offering will end 120 days from the effective date of this prospectus. We
have the option of extending this offering for an additional 120 days if needed.
Additionally, we are registering 400,000 shares to be offered to a limited
number of persons. The 400,000 shares to be offered by us shall be offered and
sold:
o For a purchase price of $0.25 per share;
o Without any underwriting discounts or commissions; and
o If all of the shares offered by us are purchased, the proceeds to
Shopathomekids.com, Inc. will be $100,000.
The shares of common stock have not been registered for sale by the selling
security holders under the securities laws of any state as of the date of this
prospectus. Brokers or dealers effecting transactions in the shares should
confirm the registration thereof under the securities laws of the states in
which transactions occur or the existence of any exemption from registration.
See "risk factors" on pages 4 to 8 for factors to be considered before investing
in the shares of our common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed. The
selling security holders may not sell their securities until the registration
statement filed with the Securities and Exchange Commission is effective. In
addition, we may not sell our securities until this registration statement
becomes effective. This prospectus is not an offer to sell these securities and
it is not soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
The date of this prospectus is September 23, 2000 Subject to Completion
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TABLE OF CONTENTS
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Prospectus Summary................................................................................4
Risk Factors......................................................................................4
Use of proceeds...................................................................................8
Determination of Offering Price..................................................................11
Dilution.........................................................................................11
Plan of Distribution.............................................................................12
Legal Proceedings................................................................................13
Directors, Executive Officers, Promoters and Control persons.....................................13
Security Ownership of Certain Beneficial Owners and Management...................................14
Selling Security Holder..........................................................................15
Description of Securities........................................................................17
Interest of Named Experts and Counsel............................................................18
Disclosure of Commission Position on Indemnification for Securities Act Liabilities..............18
Description of Business..........................................................................19
Management' Discussion and Analysis of Financial Condition and Results of Operations.............21
Description of Property..........................................................................23
Certain Relationships and Related Transactions...................................................23
Market for Common Equity and Related Stockholder Matters.........................................24
Executive Compensation...........................................................................24
Financial Statements.............................................................................25
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.............26
Indemnification of Directors and Officers........................................................26
Recent Sales of Unregistered Securities..........................................................26
Exhibits.........................................................................................26
Signatures ...................................................................................27
Power of Attorney...............................................................................28
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Outside Back Cover Page
Dealer Prospectus Delivery Obligation
Until _______, all dealers that effect transactions in these securities, whether
or not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealers' obligations to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
3
Prospectus Summary
Our Business: Our principal business address is 223 E. FM
1382, Suite 12720, Cedar Hill, Texas,
75104; our main business telephone number
is 972.293.2424.
We were formed to offer an alternative to
kids and teens who want to find a common
gathering place on the internet to share
ideas through live chat channels in what we
believe to be a safe and secure environment
for young people.
We have been developing our web site since
inception in October 1999. We are not
currently prepared to accept orders at this
time. We expect to be able to accept orders
by March 15, 2001. We expect a full launch
by May 30, 2001. We have not had any
revenues and do not expect any revenues
until the full launch of our web site. We
have secured the services of S.D.S Wholesale
to distribute the products we will offer for
sale.
We plan to offer a new product for kids and
teens to purchase products through the
internet via a proprietary online credit
card system that can be funded by parents
and family members. The card system will be
password protected and function similarly to
a standard credit card. The amount the
purchaser can spend is directly related to
the amount of funds that have been
contributed to the account by the customer
or a family member. We are currently testing
our website and expect to go online for
transactions mid way through the first
quarter of 2001.
We plan to generate revenue by selling our
products through our website to members who
visit our site. Parents will be able to
purchase products for their children and
will be able to add money to their
children's on line credit card.
Mr. Lewis Prowse II is our president. Our
only employees are Larry Ballard, Secretary
Treasurer; Tarja Mees; Director and Romie
Krickbaum, Director. None of our Officers or
Directors have experience in the internet
sector specifically e-commerce. However, our
Officers and directors have management,
accounting, customer service and internet
technology knowledge that will be helpful in
the running of an internet based business.
Our State of Organization: We were incorporated in Texas on October
27, 1999.
Number of Shares offered shares The selling security holders want to sell
3,399,300 shares of our common stock. The
were acquired by the selling security
holders in private placement transactions
which were exempt from the registration and
prospectus delivery requirements of the
Securities Act of 1933. We also intend to
sell 400,000 shares of our common stock
being registered pursuant to this
registration statement. We will sell the
shares we are registering only to those
individuals who have received a copy of the
prospectus. In addition , we will attempt
to sell only to those individuals who have
knowledge of the internet and e-commerce
industry. We believe that most, if not
all, of the shares we are registering
will be sold to business associates of Mr.
Prowse, our President and Mr. Ballard,
our Secretary/Treasurer and our founding
shareholders. The termination date of the
offering will occur 240 days from the date
this registration statement is declared
effective by the Securities and Exchange
Commission.
Estimated use of are purchased. We will receive as
much as $100,000 if all of the shares
offered by us at $0.25 per share proceeds:
We intend to use any proceeds form such sale
for the purchase of technology equipment,
promotion of our website, corporate
development, establish strategic
relationships, secure suppliers and for
working capital. The proceeds from the sale
of the shares will be immediately available
for use by us. The proceeds from the sale of
the shares we are registering will not be
held in escrow. We will no receive any of
the proceeds from the sale of the shares
offered by the selling security holders.
4
RISK FACTORS
In addition to the other information specified in this prospectus, the following
risk factors should be considered carefully in evaluating our business before
purchasing any of the shares of common stock. A purchase of the shares is
speculative in nature and involves a lot of risks. No purchase of our common
stock should be made by any person who is not in a position to lose the entire
amount of his investment.
Our Officers and Directors are offering shares for sale
Our Officers and Directors are included as selling security holders. Our
Officers and Directors are offering 3,000,000 shares of the 3,399,300 shares
being registered. The selling security holders, including our officers and
directors, may sell all of their shares as soon as possible, which could
significantly decrease the price of our common stock and reduce our officers'
and directors' desire to see us succeed. Our Officers and Directors were issued
their shares for services performed on our behalf.
All of the stock owned by the selling security holders, including our officers
and directors, will be registered by the registration statement of which this
prospectus is a part. The selling security holders, including our officers and
directors, may sell some or all of their shares immediately after they are
registered. In the event that the selling security holders sell some or all of
their shares, the price of our common stock could decrease significantly.
Because we are a new company with losses since our formation, we anticipate that
we will lose money in the foreseeable future, we may not be able to achieve
profitable operations.
Since inception, October 27, 1999 we have incurred significant losses.
As of November 30, 2000, we have incurred net losses of $31,660.
We expect operating losses and negative cash flow to continue for the
foreseeable future. We anticipate our losses will increase significantly from
current levels because we expect to incur additional costs and expenses related
to:
- brand development, marketing and other promotional activities;
- the continued development of our Web site, transaction-processing systems and
network infrastructure;
- the expansion of our product offerings and Web site content; and
- strategic relationship development.
Our ability to become profitable depends on our ability to generate and
sustain substantially higher net sales while maintaining reasonable expense
levels. If we do achieve profitability, we cannot be certain that we would be
able to sustain or increase profitability on a quarterly or annual basis in the
future. See "Selected Financial Data" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations".
Seasonality could cause our quarterly sales to fluctuate dramatically
5
Because we are in the business of selling toys, the demand for our
products could change dramatically depending on the time of the year. For
example; during the Christmas holiday season the demand for our products should
be higher than the summer months. As a result of the fluctuating demand our
sales will be dramatically affected which will change our results form
operations from quarter to quarter.
There is a possibility that customers may not receive their products in a
timely manner
We do not plan to store any inventory of products. As a result there is
a possibility customers may not receive products in a timely manner if the
distributor occurs difficulty in receiving or acquiring products. If this
becomes a problem there is a possibility that we may lose customers and would
eventually affect our operating results. If this occurs our stock price could
become extremely volatile.
Because we do not have long-term or exclusive vendor contracts, we may not be
able to get sufficient quantities of popular children's products in a timely
manner. As a result, we could lose customers
In our industry it is vital to have long-term and exclusive vendor
contracts in order for customers to receive their products in a timely manner.
If we are not able to offer our customers sufficient quantities of toys or other
products in a timely manner, we could lose customers and our net sales could be
below expectations. Our success depends on our ability to purchase products in
sufficient quantities at competitive prices, particularly for the holiday
shopping season. As is common in the industry, we do not have long-term or
exclusive arrangements with any vendor or distributor that guarantee the
availability of toys or other children's products for resale. Therefore, we do
not have a predictable or guaranteed supply of toys or other products.
The management has limited experience in relation to the internet and
marketing industry. There is no guarantee that management will have the ability
to be successful in starting and managing an ongoing business. Because of the
lack of experience of management there is a possibility you may lose your entire
investment. In addition, all decisions with respect to the management of our
Company will be made exclusively by our officers and directors. Investors will
only have rights associated with minority ownership interest rights to make
decision which effect Shopathomekids.com, Inc.. The success of
Shopathomekids.com, Inc. , to a large extent, will depend on the quality of the
directors and officers we can attract. Accordingly, no person should invest in
the Shares unless he is willing to entrust all aspects of the management to our
officers and directors. At present we do not have key man life insurance. If a
catastrophic event were to occur to either of our officers or directors it will
have an adverse effect on our business.
We have had limited prior operations and few assets
We have no revenues from our operations, and our assets consists of
minimal computer equipment and software.. We have only been in operation since
our incorporation date of October 27, 1999.There can be no assurance that we
will generate revenues in the future; and there can be no assurance that we will
operate at a profitable level. See "Description of Business." If we are unable
to obtain customers and generate sufficient revenues so that it can profitably
operate, Shopathomekids.com, Inc. 's business will not succeed. In this event,
investors in the Shares may lose their entire investment.
We do not have supplier contracts
We do not currently have supplier contracts for our products that will
be sold. The size of our Company may prevent us from securing adequate supplier
contracts and we may therefore be unable to compete in the marketplace if the
products that are wished to be purchased cannot be procured. If this occurs
there is a possibility you may lose your entire investment.
6
We may not be able to compete successfully against current and future
competitors.
The online commerce market is new, rapidly evolving and intensely
competitive. Increased competition is likely to result in price reductions,
reduced gross margins and loss of market share, any of which could seriously
harm our net sales and results of operations. We expect competition to intensify
in the future because current and new competitors can enter our market with
little difficulty and can launch new Web sites at a relatively low cost. In
addition, the children's toy, video game, software, video and music retailing
industries are intensely competitive.
We currently or potentially compete with a variety of other companies,
including:
- traditional store-based toy and children's product retailers such as Toys R
Us, FAO Schwarz, Zany Brainy and Noodle Kidoodle;
- major discount retailers such as Wal-Mart, Kmart and Target;
- online efforts of these traditional retailers, including the online stores
operated by Toys R Us, Wal-Mart and FAO Schwarz;
- physical and online stores of entertainment entities that sell and license
children's products, such as The Walt Disney Company and Warner Bros.;
- catalog retailers of children's products;
- vendors or manufacturers of children's products that currently sell some of
their products directly online, such as Mattel and Hasbro;
- other online retailers that include children's products as part of their
product offerings, such as Amazon.com, Barnesandnoble.com, CDnow, Beyond.com and
Reel.com;
- Internet portals and online service providers that feature shopping services,
such as AOL, Yahoo!, Excite and Lycos; and
- various smaller online retailers of children's products, such as
BrainPlay.com, Red Rocket and Toysmart.com.
We lack diversification of our business
The size of our Company makes it unlikely that we will be able to
commit our funds to diversify our business until we have a proven track record,
and Shopathomekids.com, Inc. may not be able to achieve the same level of
diversification as larger entities engaged in this type of business. We are
relying on one main focus that of offering products through our website.
7
We do not anticipate paying cash dividends in the near future
We do not anticipate paying cash dividends on our Shares for the
foreseeable future and we intend to retain any future earnings to finance the
growth of our business. Payment of dividends, if any, will depend, among other
factors, on earnings, capital requirements, and the general operating and
financial condition of Shopathomekids.com, Inc., and will be subject to legal
limitations on the payment of dividends out of paid-in capital.
Our officers and directors may have conflicts of interest that may detract from
their services to Shopathomekids.com, Inc..
Therefore, our officers and directors may not devote sufficient time to our
affairs. The persons serving as our officers and directors have existing
responsibilities and may have additional responsibilities to provide management
and services to other entities. As a result, conflicts of interest between us
and the other activities of those persons may occur from time to time, in that
our officers and directors shall have conflicts of interest in allocating time,
services, and functions between the other business ventures in which those
persons may be or may become involved and our affairs.
We anticipate that we will need to raise additional capital to market and
distribute our wireless telecommunications technology and complete our
development.
To market our website and distribute our products and complete our development,
we will be required to raise additional funds. We believe that we may be able to
acquire additional financing at commercially reasonable rates. There can be no
assurance that we will be able to obtain additional financing at commercially
reasonable rates. We anticipate that we will spend a lot of funds on the
marketing and development of our website. Our failure to obtain additional funds
would significantly limit or eliminate our ability to fund our sales and
marketing activities. This would have a material adverse affect on our ability
to continue our operations.
We anticipate that we may seek additional funding through public or private
sales of our securities. That could include equity securities, or through
commercial or private financing arrangements. Adequate funds may not be
available when needed or on terms acceptable to us. In the event that we are not
able to obtain additional funding on a timely basis, we may be required to limit
any proposed operations or eliminate certain or all of our marketing programs,
either of which could have a material adverse affect on our results of
operations.
We will not sell any assurance shares
The 400,000 Shares being offered to the public are to be offered
directly by us, and no individual, firm, or corporation has agreed to purchase
or take down any of the shares. No assurance can be given that any or all of the
Shares will be sold.
We lack a public market for shares of our common stock, which may make it
difficult for investors to sell their shares.
There is no public market for shares of our common stock. We cannot guaranty
that an active public market will develop,
8
or be sustained. Therefore, investors may not be able to find purchasers for
their shares of our common stock. Should there develop a significant market for
our shares, the market price for those shares may be significantly affected by
such factors as our financial results and introduction of new products and
services. Factors such as announcements of new or enhanced products by us or our
competitors and quarter-to-quarter variations and our results of operations, as
well as market conditions in the high technology sector may have a significant
impact on the market price of our shares. Further, the stock market has
experienced extreme volatility that has particularly affected the market prices
of stock of many companies and that volatility often has been unrelated or
disproportionate to the operating performance of those companies.
Shares Eligible for Future Sale
After the offering we will have 8,818,300 shares of common stock outstanding
assuming the maximum of 400,000 shares are sold. Of this amount, the 3,799,300
shares being offered hereby will be freely tradable unless held by affiliates.
The remaining 5,013,900 shares of common stock will be "restricted securities"
as defined in Rule 144 of the Securities Act of 1933, and will become eligible
for public sale subject to the volume limitations and other conditions of Rule
144 commencing one year from the date of their issuance. However, 3,000,000 of
the shares being registered are held by the Officers and Directors. They will be
able to sell their shares only if they are successful in obtaining a listing on
the OTC Bulletin Board.
In general, under Rule 144, a person who has owned shares of our common stock
for at least one year would be entitled to sell within any three-month period a
number of shares that does not exceed the greater of:
- One percent of the number of shares of common stock then outstanding,
which will equal approximately 88,183 shares immediately after this
offering; or
- The average weekly trading volume of the common stock on the OTC Bulletin
Board during the four calendar weeks preceding the filing of a notice on
Form 144 with respect to such sale.
Sales under Rule 144 are also subject to manner of sale provisions and
notice requirements and to the availability of current public information about
us.
USE OF PROCEEDS
Following the issuance of 400,000 shares of common stock offered for sale by our
company to the public, this will represent net proceeds to us of approximately
$86,200 (after deducting expenses of this offering). These proceeds will be used
to provide capital for the further development and marketing of our products,
allow us to develop strategic alliances and provide us working capital and
manage liquidity needs.
The following table sets forth the use of proceeds from this offering.
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Use of Proceeds Amount Percent
-------------------------------- -------- --------
-------- --------
Transfer Agent Fee $ 1,000 .01%
-------------------------------- -------- --------
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Printing Costs $ 1,000 .01%
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-------------------------------- -------- --------
Legal Fees $ 10,000 10%
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-------------------------------- -------- --------
Accounting Fees $ 2,500 10%
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Marketing $ 35,000 16%
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Purchase Products $ 20,000 20%
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Working Capital $ 30,000 33.3%
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Total $100,000 100%
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Management anticipates expending these funds for the purposes indicated above.
To the extent that expenditures are less than projected, the resulting balances
will be retained and used for general working capital purposes which will be
allocated according to the discretion of the Board of Directors. Conversely, to
the extent that expenditures require the utilization of funds in excess of the
amounts anticipated, supplemental amounts may be drawn from other sources,
including, but not limited to, general working capital and/or external
financing. The net proceeds of this offering that are not expended immediately
may be deposited in interest or non-interest bearing accounts, or invested in
government obligations, certificates of deposit, commercial paper, money market
mutual funds, or similar investments.
Opportunity to make inquiries.
We will make available to each Offeree, prior to any sale of the Shares, the
opportunity to ask questions and receive answers from the management of
Shopathomekids.com, Inc. concerning any aspect of the investment and to obtain
any additional information contained in this Memorandum, to the extent that we
possess the requested information or can acquire it without unreasonable effort
or expense.
Subscription Procedures.
Each person desiring to subscribe to the Shares must complete, execute,
acknowledge, and deliver to the us a Subscription Agreement, which will contain,
among other provisions, representations as to the investor's qualifications to
purchase the common stock and his ability to evaluate and bear the risk of an
investment in the Shopathomekids.com, Inc. By executing the subscription
agreement, the subscriber is agreeing that if the Subscription Agreement is
accepted by the management of Shopathomekids.com, Inc., the subscriber will be
considered a shareholder in Shopathomekids.com, Inc.
10
Promptly upon receipt of subscription documents by Shopathomekids.com, Inc., it
will make a determination within 5 business days as to whether a prospective
investor will be accepted as a shareholder in Shopathomekids.com, Inc..
Shopathomekids.com, Inc. may reject a subscriber's Subscription Agreement for
any reason. Subscriptions will be rejected for failure to conform to the
requirements of this Prospectus (such as failure to follow the proper
subscription procedure), insufficient documentation, over subscription to
Shopathomekids.com, Inc., or other reasons as Shopathomekids.com, Inc.
determines to be in its' best interest. If a subscription is rejected, in whole
or in part, the subscription funds, or portion thereof, will be promptly
returned to the prospective investor without interest by depositing a check
(payable to said investor) in the amount of said funds in the United States
mail, certified returned-receipt requested. Subscriptions may not be revoked,
canceled, or terminated by the subscriber, except as provided herein.
DETERMINATION OF OFFERING PRICE
The offering price is not based upon Shopathomekids.com, Inc. 's net worth,
total asset value, or any other objective measure of value based upon accounting
measurements.
DILUTION
Dilution is a reduction in the net tangible book value of a purchaser's
investment measured by the difference between the purchase price and the net
tangible book value of the Shares after the purchase takes place. The net
tangible book value of Common Stock is equal to stockholders' equity applicable
to the Common Stock as shown on the our balance sheet divided by the number of
shares of Common Stock outstanding. As a result of the dilution, in the event
the we are liquidated, a purchaser of Shares may receive less than his initial
investment and a present stockholder may receive more.
Our net tangible book value as of November 30, 2000 was $4,928 or .0005 per
share. The adjusted pro forma book net tangible book value after this offering
will be $0.0118 based on an assumed initial public offering price of $0.25 per
share. Therefore, purchasers of shares of common stock in this offering will
realize immediate dilution of $0.2382 cents per share or over 94.8% of their
investment. The following table illustrates dilution:
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Assumedinitial public offering price per share ............................ $ 0.25
Net tangible book value per share as of November 3o, 2000 ................. $ 0.0005
Increase in net tangible book value per share attributable to new investors $ 0.0113
Pro forma net tangible book value per share after this offering ........... $ 0.0118
Dilution per share to new investors ....................................... $ 0.2382
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The following table presents the following data as of November, 30, 2000 and
assumes an offering price of $0.25 per share for our new investors:
o the average price per share paid before deducting estimated underwriting
fees and our estimated offering expenses; and
o the average price per share when the stock was issued for payment.
11
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. Shares of ** **
. Common ** ** Average Price
. Stock Consideration ** Per Share
. Acquired Amount Percent ***
Existing shareholders . 8,418,300 $ 8,418 7.7% $ .001
New Investors 400,000 $ 100,000 92.2% $ .25
Totals 8,818,300 $ 108,418 100% 100%
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PLAN OF DISTRIBUTION
The shares of common stock covered by this Offering are being offered directly
by our President Lewis Prowse. We have not employed the services of an
underwriter to market the shares. The offering will be open for 120 days. If at
the end of 120 days we have not raised any funds, the offering will be extended
for an additional 120 days. If the 240 day period expires without raising any
funds, we will stop all fund raising activities at that time. We will market the
shares to a limited number of individuals known to management within the state
of Texas. After a prospectus has been delivered to a prospective purchaser we
will sell our shares to the individuals who initiate contact to inform us they
elect to subscribe to our offering.
Our President Lewis Prowse II and our Secretary/Treasurer Larry Ballard will
offer a maximum of 400,000 Shares of our common stock, par value $.001 per Share
to the public. The 400,000 shares will be offered to a limited number of
individuals. Messrs. Prowse and Ballard will not sell any of their personal
shares until after the shares are trading on the OTC Bulletin Board maintained
by the NASD as per the oral agreement between Shopathomekids.com, Inc. and our
officers and directors. The funds will be available to us as soon as the shares
are sold. The minimum purchase required of an investor is $100.00. The gross
proceeds to Shopathomekids.com, Inc. will be $100,000 if all the Shares offered
are sold. No commissions or other fees will be paid to Messieurs Prowse or
Ballard directly or indirectly by us in relation to this offering. The Officers
and Directors will not be offering their shares in private transactions. Our
Officers and Directors will be able to sell their shares through the open market
when we are admitted to trade on the OTC Bulletin Board maintained by the NASD.
Each person desiring to subscribe to the Shares must complete, execute,
acknowledge, and deliver to Shopathomekids.com, Inc. a Subscription Agreement,
which will contain, among other provisions, representations as to the investor's
qualifications to purchase the common stock and his ability to evaluate and bear
the risk of an investment in Shopathomekids.com, Inc.. By executing the
subscription agreement, the subscriber is agreeing that if the Subscription
Agreement is accepted, the subscriber will be deemed, a shareholder of
Shopathomekids.com, Inc.
Promptly upon receipt of subscription documents by us, we will make a
determination within 5 business days as to whether a prospective investor will
be accepted as a shareholder in Shopathomekids.com, Inc. We may reject a
subscriber's Subscription Agreement for any reason. Subscriptions will be
rejected for failure to conform to the requirements of this Prospectus (such as
failure to follow the proper subscription procedure), insufficient
documentation, over subscription to Shopathomekids.com, Inc., or other reasons
as we may determine to be in our best interest. If a subscription is rejected,
in whole or in part, the subscription funds, or portion thereof, will be
promptly returned to the prospective investor without interest by depositing a
check (payable to said investor) in the amount of said funds in the United
States mail, certified returned-receipt requested. Subscriptions may not be
revoked, canceled, or terminated by the subscriber, except as provided herein.
Limited Public Market for Our Securities.
12
Prior to the Offering, there has been no public market for the Shares being
offered. There can be no assurance that an active trading market will develop or
that purchasers of the Shares will be able to resell their securities at prices
equal to or greater than the respective initial public offering prices. The
market price of the Shares may be affected significantly by factors such as
announcements by Shopathomekids.com, Inc. or its competitors, variations in our
results of operations, and market conditions in the toy sales and e-commerce
industries in general. The market price may also be affected by movements in
prices of stock in general. As a result of these factors, purchasers of the
Shares offered hereby may not be able to liquidate an investment in the Shares
readily or at all.
Penny Stock Regulations.
Our Shares will be quoted on the "Electronic Bulletin Board" regulated by the
National Association of Securities Dealers. In view of the fact that no broker
will be involved in the Offering, it is likely to be difficult to find a broker
who is willing to make an active market in the stock. The Securities and
Exchange Commission (the "Commission") has adopted regulations which generally
define "penny stock" to be any equity security that has a market price less than
$5.00 per share. Shopathomekids.com, Inc.'s shares will become subject to rules
that impose additional sales practice requirements on broker-dealers who sell
penny stocks to persons other than established customers and accredited
investors (generally those with assets in excess of $1,000,000 or annual income
exceeding $400,000, or $300,000 together with their spouse). For transactions
covered by these rules, broker-dealers must make a special suitability
determination for the purchase of these securities and must have received the
purchaser's written consent to the transaction prior to the purchase.
Additionally, for any transaction effected involving a penny stock, unless
exempt, the rules require the delivery, prior to the transaction, of a
disclosure schedule prepared by the Commission relating to the penny stock
market. A broker-dealer also must disclose the commissions payable to both the
broker-- dealer and the registered representative, and current quotations for
the securities. Finally, monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks. Consequently, these rules may restrict the
ability of broker-dealers to sell Shopathomekids.com, Inc.'s Shares and may
affect the ability of purchasers in the Offering to sell our securities in the
secondary market. There is no assurance that a market will develop for
Shopathomekids.com, Inc. 's Shares.
LEGAL PROCEEDINGS
We are not a party to any material pending legal proceedings.
DIRECTORS, EXECUTIVE OFFICERS
AND CONTROL PERSONS
The names, ages, and respective positions of the directors, officers, and
significant employees of Shopathomekids.com, Inc. are set forth below. There are
no other persons which can be classified as a controlling person of
Shopathomekids.com, Inc. .
Lewis Prowse II, 46, our President as well as Director has, for the past 15
years, been a partner in Anderson and Prowse Services, a plumbing and electrical
repair service in Desoto, Texas. As the owner/operator he is responsible for all
day to day operations of running a successful business including managing all
accounts payable and receivable as well as all quarterly and year end filings.
Larry E. Ballard, 26, is our Secretary/Treasurer and also a Director. Larry has
attention to detail and a sincere passion for the area of bookkeeping and
secretarial tasks. From 1998 thru the present he has been employed by J.M.C.
Food Service Distribution, Inc. Maintaining client accounts delivering &
maintaining products. Aug. 1995- Aug. 1998 Larry was employed by P.F.G.
Performance, Inc. of Mckinney, Tx. As a Customer Service Representative.
13
Tarja J. Mees, 29, Director, has recently acquired extensive IT skills, as well
as in depth knowledge in platforms such as Sun Solaris, Unix, and a variety of
Internet based development systems. She held the position of Office
Administrator for Lew Lieberbaum & Co., Inc., a retail brokerage firm in Dallas,
Texas, where she was responsible for the day to day business operations of the
branch as well as the daily, weekly, monthly reports. She held this position
from 1994 to 1996.. From 1996 to present , Tarja has been the President of TAR
Financial, a private business consulting company, where she has been involved in
numerous private businesses and in the planning of businesses going from private
corporations into the public marketplace.
Romie Krickbaum, 51, Director brings to us over 20 years of Customer Service
experience. She is currently employed by W.N.A. Cups Illustrated as a Customer
Service Representative. Duties include pricing, accounts receivable, and
maintaining relationships with various clients. From Oct. 1991 thru July 1998
she was the Customer Service Manager for the Wal-mart store located in
Lancaster, Texas.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
.The following table sets forth, as of July 31, 2000 the outstanding Shares of
common stock of Shopathomekids.com, Inc. owned of record or beneficially by each
person who owned of record, or was known by Shopathomekids.com, Inc. to own
beneficially, more than 5% of Shopathomekids.com, Inc.'s Common Stock, and the
name and share holdings of each officer and director and all officers an
directors as a group:
<TABLE>
<S> <C> <C> <C> <C>
-- -- -- -- Percentage of
-- -- -- -- Class Owned if
-- -- -- -- the Beneficial
-- -- -- Percent of Class Owners Sell all
Title of Name and Address of Amount and Nature Owned Before the of their
Class Beneficial Owner of Beneficial Offering Registered Shares
Owner
Lewis Prowse II
Common President
211 Bob White
Desoto, TX 75123 1,017,500 12.1% 5.8%
Larry Ballard
Secretary/Treasurer
Common 1525 Jesse Ramsey
Blvd.
Cedar Hill, TX 75104 1,017,500 12.1% 5.8%
Tarja Mees
Director
Common 1353 Middleton Dr.
Cedar Hill, TX 75104 2,981,000 35.1% 22.2%
Romie Krickbaum
Director
Common 708 Hillcrest
Cedar Hill, TX 75104 3,003,000 35.3% 22.5%
Common All officers and
Directors as a group 8,019,000 94.6% 56.3%
Common All officers and
Directors as a group 8,019,000 94.6% 56.3%
</TABLE>
14
SELLING SECURITY-HOLDERS
Shopathomekids.com, Inc. is registering for offer and sale shares of its common
stock held by it's Officers and Directors along with 21 other selling
security-holders.. The selling security-holders may offer their shares for sale
on a continuous basis pursuant to Rule 415 under the 1933 Act. SEE "RISK
FACTORS--Additional Shares Entering Public Market without Additional Capital
Pursuant to Rule 144" and the "Officers and Directors" May sell their shares
Subsequent to the effective date of this prospectus, Shopathomekids.com, Inc.
intends to apply for quotation on the OTC Bulletin Board which is maintained by
Nasdaq for its common stock; however, there can be no assurance that the common
stock will be accepted for quotation thereon. SEE "RISK FACTORS--No Current
Trading Market for Shopathomekids.com, Inc. 's Securities" and "DESCRIPTION OF
SECURITIES--Admission to Quotation to Nasdaq SmallCap Market and NASD OTC
Bulletin Board"
All of the shares registered herein will become tradeable after this
registration statement has been declared effective and may be sold after we have
been admitted to trade on the Over The Counter Bulletin Board maintained by the
National Association of Securities Dealers.
The following table sets forth the beneficial ownership of the shares held by
each person who is considered a selling security-holder.
<TABLE>
<S> <C> <C> <C> <C>
--------- --------- ------------- -------------
--------- --------- ------------- -------------
-- Number of Percentage of Percentage of
Name and Address of Common Shares Stock Owned Stock Owned
Beneficial Owner Stock Owned Prior tored After the
-- for Sale Offering Offering (1)
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Lewis Prowse II
President
211 Bob White
Desoto, TX 75123 (2) 1,017,500 500,000 12.1% 5.8%
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Larry Ballard
Secretary/Treasurer
1525 Jesse Ramsey Blvd
Cedar Hill, TX 75104 (2) 1,017,500 500,000 12.1% 5.8%
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Tarja Mees
Director
1353 Middleton Dr.
Cedar Hill, TX 75104 (2) 2,981,000 1,000,000 35.1% 22.2%
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Romie Krickbaum
Director
708 Hillcrest
Cedar Hill, TX 75104 (2) 3,003,000 1,000,000 35.3% 22.5%
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Addie McConachie
704 Bridgeport Dr. # 3
Bismark, ND 58504 44,000 44,000 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Carol Jean Gehlke
23 Corporate Plaza #180
Newport Beach, CA. 92660 30,800 30,800 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Ken Krickbaum
800 West Renner Rd. #2626
Richardson, TX 75080 16,500 16,500 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Kevin Krickbaum
820 Preston Road
Red Oak, TX 75154 6,600 6,600 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Maria Morado
2736 McKinney
Lancaster, TX 75146 5,500 5,500 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Bette Grigorio
2043 Noble View Drive
Rancho Palos Verdes, CA90275 5,500 5,500 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Michelle Grigorio
800 West Renner Road #2626
Richardson TX, 75080 6,600 6,600 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Clark Krickbaum
545 Fawn Ridge Drive # 120
Dallas, TX 75224 16,500 16,500 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Cody Shane Living Trust
Dtd. 12/29/98
301 N. Joe Wilson # 511
Cedar Hill, TX 75104 49,500 49,500 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Wade J. Vogel
1108 27th Street N.W
Mandan, ND 58554 11,000 11,000 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
David Clifton
753 Bandit Trail
Keller, TX 76180 11,000 11,000 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Arlin Mees
4727 Thunder Road
Dallas, TX 75224 5,500 5,500 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Tammy Mees
2021 N. 3rd Street
Bismarck, ND 58501 5,500 5,500 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Ralph Rodriguez
1334 Boyd Street
Cedar Hill, TX 75104 5,500 5,500 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Aaron T. Solganic
2419 Ellis Street
Dallas, TX 75204 5,500 5,500 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Ron Terranova
8533 Vivid Violet
Las Vegas, NV 89143 5,500 5,500 * *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
Kelly Charles
87 Sea Holly
Henderson, NV 89014 168,300 168,300 2% *
--------- --------- ------------- -------------
--------- --------- ------------- -------------
</TABLE>
Total Shares Registered for Sale 3,399,300
--------------------------------------------------- ------------ -------------
* Denotes less than 1%
(1) Assumes sale of all shares offered by the selling security holders.
16
(2) Represents our Officers and Directors who will be selling their shares.
In the event the selling security-holders receive payment for the sale of their
shares, Shopathomekids.com, Inc. will not receive any of the proceeds from these
sales. Shopathomekids.com, Inc. is bearing all expenses in connection with the
registration of the shares for the selling security-holders.
The shares owned by the selling security-holders are being registered pursuant
to Rule 415 of the General Rules and Regulations of the Securities and Exchange
Commission, which Rule pertains to delayed and continuous offerings and sales of
securities. In regard to the shares offered under Rule 415, Shopathomekids.com,
Inc. has given certain undertakings in Part II of the Registration statement of
which this prospectus is a part which, in general, commit Shopathomekids.com,
Inc. to keep this prospectus current during any period in which offers or sales
are made pursuant to Rule 415.
DESCRIPTION OF SECURITIES
General Description
The securities being offered are shares of common stock. The Articles of
Incorporation authorize the issuance of 100,000,000 shares of common stock, with
a par value of $0.001 and 50,000,000 shares of preferred stock at $0.001 The
holders of the Shares: (a) have equal ratable rights to dividends from funds
legally available therefore, when, as, and if declared by the Board of Directors
of Shopathomekids.com, Inc. ; (b) are entitled to share ratably in all of the
assets of Shopathomekids.com, Inc. available for distribution upon winding up of
the affairs of Shopathomekids.com, Inc. ; (c) do not have preemptive
subscription or conversion rights and there are no redemption or sinking fund
applicable thereto; and (d) are entitled to one non-cumulative vote per share on
all matters on which shareholders may vote at all meetings of shareholders.
These securities do not have any of the following rights: (a) cumulative or
special voting rights; (b) preemptive rights to purchase in new issues of
Shares; (c) preference as to dividends or interest; (d) preference upon
liquidation; or (e) any other special rights or preferences. In addition, the
Shares are not convertible into any other security. There are no restrictions on
dividends under any loan other financing arrangements or otherwise. See a copy
of the Articles of Incorporation, and amendments thereto, and Bylaws of
Shopathomekids.com, Inc. , attached as Exhibit 3.1, Exhibit 3.2, and Exhibit
3.3, respectively, to this Form SB-2.
Non-Cumulative Voting.
The holders of Shares of Common Stock of Shopathomekids.com, Inc. do not have
cumulative voting rights, which means that the holders of more than 50% of our
outstanding Shares, voting for the election of directors, can elect all of the
directors to be elected, if they so choose. In this event, the holders of the
remaining Shares will not be able to elect any of Shopathomekids.com, Inc. 's
directors. Our officers will hold approximately 56.4 percent of our outstanding
common stock. Therefore, our Officers and Directors will be able to control the
vote on any matters requiring a shareholder vote.
Dividends.
We do not currently intend to pay cash dividends. Shopathomekids.com, Inc. 's
proposed dividend policy is to make distributions of its revenues to its
stockholders when Shopathomekids.com, Inc. 's Board of Directors deems
distributions appropriate. Because Shopathomekids.com, Inc. does not intend to
make cash distributions, potential shareholders would need to sell their shares
to realize a return on their investment. There can be no assurances of the
projected values of the shares, nor can there be any guarantees of the success
of Shopathomekids.com, Inc. .
A distribution of revenues will be made only when, in the judgment of
Shopathomekids.com, Inc. 's Board of Directors, it
17
is in the best interest of Shopathomekids.com, Inc. 's stockholders to do so.
The Board of Directors will review, among other things, the investment quality
and marketability of the securities considered for distribution; the impact of a
distribution of the investee's securities on its customers, joint venture
associates, management contracts, other investors, financial institutions, and
our internal management, plus the tax consequences and the market effects of an
initial or broader distribution of our securities.
Transfer Agent.
We have engaged the services of Nevada Agency and Trust Company of Reno, Nevada
to act as transfer agent and registrar.
INTEREST OF NAMED EXPERTS AND COUNSEL
No named expert or counsel was hired on a contingent basis, will receive a
direct or indirect interest in the small business issuer, or was a promoter,
underwriter, voting trustee, director, officer, or employee of the small
business issuer.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
No director of Shopathomekids.com, Inc. will have personal liability to
Shopathomekids.com, Inc. or any of its stockholders for monetary damages for
breach of fiduciary duty as a director involving any act or omission of any
director since provisions have been made in the Articles of Incorporation
limiting liability. The foregoing provisions shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to
Shopathomekids.com, Inc. or its stockholders, (ii) for acts or omissions not in
good faith or, which involve intentional misconduct or a knowing violation of
law, (iii) under applicable Sections of the Texas Revised Statutes, (iv) the
payment of dividends in violation of Section 78.300 of the Texas Revised
Statutes or, (v) for any transaction from which the director derived an improper
personal benefit.
The By-laws provide for indemnification of the directors, officers, and
employees of Shopathomekids.com, Inc. in most cases for any liability suffered
by them or arising out of their activities as directors, officers, and employees
of Shopathomekids.com, Inc. if they were not engaged in willful misfeasance or
malfeasance in the performance of his or her duties; provided that in the event
of a settlement the indemnification will apply only when the Board of Directors
approves a settlement and reimbursement as being for the best interests of the
Corporation. The Bylaws, therefore, limit the liability of directors to the
maximum extent permitted by Texas law (Section 78.751).
The officers and directors of Shopathomekids.com, Inc. are accountable to
Shopathomekids.com, Inc. as fiduciaries, which means they are required to
exercise good faith and fairness in all dealings affecting Shopathomekids.com,
Inc. . In the event that a shareholder believes the officers and/or directors
have violated their fiduciary duties, the shareholder may, subject to applicable
rules of civil procedure, be able to bring a class action or derivative suit to
enforce the shareholder's rights, including rights under applicable federal and
state securities laws and regulations to recover damages from and require an
accounting by management.. Shareholders who have suffered losses in connection
with the purchase or sale of their interest in Shopathomekids.com, Inc. in
connection with a sale or purchase, including the misapplication by any officer
or director of the proceeds from the sale of these securities, may be able to
recover those losses from Shopathomekids.com, Inc. .
The registrant undertakes the following:
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to
18
directors, officers and controlling persons of the small business issuer
pursuant to the foregoing provisions, or otherwise, the small business issuer
has been advised that in the opinion of the Securities and Exchange Commission
that indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
DESCRIPTION OF BUSINESS
SHOPATHOMEKIDS.COM, INC.
History and Organization
We were formed in the State of Texas as Yippyyahoo.com, Inc. on October 27 1999.
In June 2000 the our was changed to the current name of Shopathomekids.com, Inc.
At the time of the name change the President Mrs. Romie Krickbaum resigned as
President. As a result of the resignation of Mrs. Krickbaums, Mr. Lewis Prowse
II was elected as the new president and took control at that time. Also in
February 2000 there was a 1100 to 1 forward split in preparation for this
registration statement and the process of going public. We were formed to allow
kids and teens a central gathering place on the internet to chat, play
intereactive games and shop for kids and teens products in what we believe to be
a safe environment that promotes a moral lifestyle.
Our principal office location is 223 E. FM 1382, Suite 12720 Cedar
Hill, Texas, 75104 The telephone number is (817) 577-4726.
The Business
We are a developmental stage company that is in the business of retailing
products to young consumers eighteen years old or younger via the Internet. We
intend to use the internet to transact business, market our products, and
provide customer service. The products offered by us will include name brand
toys, games, electronics, and software that targets young consumers. Young
consumers will also be able to chat, send email, and play free games online.
We are truly virtual! There will be no storefront and little inventory.
Customers connect via our website (www.shopathomekids.com), where they can
search a database of name brand products by title, author, subject, or keyword.
If the customer finds a product they want to buy, they then use online forms to
specify shipping information, gift-wrapping, etc. Payment is by credit card,
submitted via the Web - the transaction is safeguarded by encryption. Our
encryption will allow secure storage of credit card information that cannot be
accessed by the merchant account. Only the owner of the credit card will be
allowed access to his or her information. We plan to also offer a means to
prepay a credit card for use by younger consumers. We intend to create a full
interactive shopping experience by providing the means to communicate with
customer service representatives via video-conferencing and/or an internet phone
as technology advances and offer quality service to customers. Through our
technology we are able to filter the types of websites accessed by users
directly form our website. In order for a user to go to another website that may
not be suitable for kids, the user must leave our website before access to the
unsuitable website can be gained.
Marketing
We are currently attempting to introduce our company to suppliers and other
companies that will allow us to offer more products through our website. Our
primary efforts are being focused on telephone introductions. Thus far we have
secured the services of S.D.S. Wholesale to provide products for distribution.
We have been unable to secure additional alliances because of the size of our
company and lack of experience of our management.
We intend to utilize several marketing channels to build our brand name and gain
market share. Traditional advertising
19
such as TV, cable, radio, newspapers, and magazines will be used to market the
website to consumers. Also, banner ads will be used at kids target sites over
the Internet. Shopathomekids.com will form strategic alliances with other
Internet portals that target young consumers to build market share. According to
IDC, online merchants pay anywhere from $0.90 to $2.67 per visitor for large
volume marketing deals with portals.
Current software that enables us to capture our customer's information and
determine buying habits will be utilized to offer the younger member a more
personalized experience. There are currently three types of technologies that
help better manage customer relationships: post-sales follow-up, customer
segmentation and evaluation, and stickiness drivers. They all automate and
facilitate the various aspects of customer relationship management.
We plan to utilize Post-sales follow-up to offer superior customer service for
all sales with self-service tools. These include lists of frequently asked
questions and their answers, knowledge databases, and message boards. We intend
to integrate support and management into their cost of sales. Customer
evaluation and segmentation technologies help companies analyze and profile site
visitors so they can determine who the most profitable customers are. Stickiness
drivers are tools and programs that keep customers coming back to a particular
site. By deploying these tools, we can streamline our service offerings and
costs, evaluate and target our key-customer base, and market to them on a
one-to-one basis. This strategy should build lifetime value and retention for
the long term.
We intend to make attempts co-advertise with suppliers and well-known Internet
portal and advertising companies to increase brand awareness. The key to
building market share and brand recognition is to gain exclusive alliances with
suppliers and Internet advertisers. To achieve this, we must prove that we are a
viable candidate for long-term growth, and will require payments in advance to
"lock-in" advertising.
Marketing and Product Objectives
Our marketing intent is to take full advantage of our brand potential while
building a base from which other revenues' sources can be mined in the retail
business. These are detailed in three areas below:
|_| Current Markets. We are not currently in any markets and we do not have any
customers. Our goal is to establish our brand at the retail level and gain
access into the retail markets. In addition, we believe that after a full
launch of our web site and gain customers we will attempt to increase
consumer awareness and hope to stimulate repeat purchases. With this
increase in sales, more desirable supplier distribution channels should
become available, increasing efficiency and saving costs.
|_| New Markets. We will attempt distribute and market its products worldwide,
offering several languages and currency options to assist the international
customer, allowing a simple purchase by the consumer.
We intend to register and trademark our brand name to prevent competitors from
copying our name.
KidZ-and-TeenZ Credit Card
We intend to enable our young consumers to use a Shopathomekids.com credit card
online controlled by parents, grandparents, or friends. For example, a kids
parent may want to prepay fifty dollars to provide a gift. However, the parent
may not want to pick the gift. The kid can use the credit card to transact
purchases online and play video games, while learning the value of money. We
intend to partner with a financial institution to provide a secure transaction
processing system and limit the risks associated with credit card processing. We
also intend to build an internal transaction processing system that will enable
in house servers to provide fast execution of customer transactions.
Recently, four sites have launched, that make it easy for kids to shop online
without their own credit card. ICanBuy, RocketCash, Cybermoola, and DoughNET let
parents set up accounts for their kids with a credit card, cash or money
20
order. Parents can set spending limits and keep track of what's being purchased.
All of the sites position themselves as environments where kids can learn to
manage money and credit. We will differentiate ourself by providing a complete
shopping experience to young consumers.
Competition
Our major competition will be companies that have a great deal more assets and
established sales such as Amazon.com, E-toys, and Toys R us. We realize that we
can not compete directly with these companies however, we do believe that we
have differences that will make our website appealing. The differences are
listed below in the section labeled "Points of Difference"
Points of Difference
There are several "points of difference"-characteristics that should make
Shopathomekids.com more attractive to young consumers:
1. Interactive shopping; Shopathomekids.com intends to offer the customer a
simple and exciting shopping experience. Young consumers will interact with
others online and interact with customer service. Chat rooms will be
available as will email capabilities. Young consumers will be able to play
online video games once they have gained access to the website. The fact
that consumers can play games and shop within the same web site should make
our web site more attractive.
2. Credit Card for Young Consumers; Shopathomekids.com intends to offer to
kids a prepaid credit card for online purchases. Parents can purchase a
gift by prepaying the card. The kid selects the product to be purchased.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following financial review and analysis is intended to assist prospective
investors in understanding and evaluating the financial condition and results of
operations of Shopathomekids.com, Inc., for the year ended November 30, 2000.
This information should be read in conjunction with their Financial Statements
and accompanying notes thereto, "Selected Financial Data" and other detailed
information regarding Shopathomekids.com, Inc. appearing elsewhere in this
Prospectus.
OVERVIEW
We were formed in October 1999 as Yippyyahoo.com, Inc. as a website that would
offer products, video games and chat areas for kids and teens under the age of
18. In June 2000 the name was changed to its current name of Shopathomekids.com,
Inc. and has been operating under that name since. We plan to offer a
proprietary credit card system that will allow young people to purchase products
through the internet. The purchaser will only be able to purchase products in an
amount no more than the amount of credit that has been credited to their card.
21
RESULTS OF OPERATIONS
Limited Operations
Since inception in October 1999 we reported a loss of ($31,660) as of November
30, 2000 or a loss of ($0.003) per share. We have only had limited operations
and have not had any revenues through November 30, 2000 since our incorporation
in October 1999. As of November 30, 2000 we have been conducting web development
and contacting possible suppliers and distributors for products that will be
offered on our website. We have secured S.D.S Wholesale as the initial supplier
for our products. S.D.S. Wholesale supplies products to small retail outlets
primarily in the eastern united states.
Capital and Liquidity
Liquidity is a measure of a company's ability to meet potential cash
requirements, including ongoing commitments to fund lending activities and for
general purposes. We have relied on loans from shareholders in the past for
operating expenses.
We have a significant ongoing liquidity needs to support our existing business
and continued growth. Our liquidity is actively managed on a periodic basis and
our financial status, including our liquidity, is reviewed periodically by our
management. This process is intended to ensure the maintenance of sufficient
funds to meet our ongoing capital needs.
We have historically relied upon loans from shareholders to provide for our
capital requirements. Management believes that funds received from this
offering, together with cash on hand at November 30, 2000 will be sufficient to
provide for our capital requirements for at least the next 12 months. We may
seek additional equity financing in the fourth quarter of 2001 through an
offering of our common stock, and contemplate that this offering, before
expenses relating to the offering, will be no less than $2 million and no more
than $5 million. There can no assurance that we will be able to complete an
additional offering of our common stock.
12 MONTH PLAN OF OPERATION
Fourth Quarter 2000- Third Quarter 2001
We are developing a website community that will offer access to online video
games and shopping, as well as, chat rooms that cater to both young kids and
teenagers. We will attempt to form strategic partnerships with wholesalers and
distributors of brand name merchandise including toys, games, and electronics
that will enable us to sell to consumers directly over the Internet. In addition
to solidifying partnerships with established shippers to ensure timely delivery
of merchandise to the consumer.
We are making efforts to form strategic alliances with other Internet portals
that target young consumers to build market share and try to form alliances in
order to co-advertise with suppliers and with companies such as AOL and Yahoo!
to increase brand awareness. We are also in the process of creating banner ads
and will promote banner ad exchange opportunities with other web sites in order
to increase market share. We have secured the services of S.D.S Wholesale as a
distributor for products that will be ordered.
We will continue development of our online credit card, which is controlled by
parents, grandparents, or friends, which enables young consumers to use a
shopathomekids.com credit card. The credit card system is scheduled to go online
by the second quarter of 2001. Our website is scheduled to go online midway
through the first quarter of 2001. At that time, until our credit card system is
operational, customers will be able to purchase products through the traditional
method of placing the credit card information in a standardized form. We also
expect to have several other languages and currency options developed and in use
by the third quarter of 2001.
22
We are currently testing our website. It is operational however, we are not
accepting orders at this time. Our developers will continue to test the system
to ensure optimal performance of all systems from Log on to shipment of product
and customer satisfaction. We plan to have all of our testing completed by
midway through the first quarter of 2001 in order to do a limited launch of our
website.
During the fourth quarter 2000 and first quarter 2001 we intend to conduct
several test runs of the entire system, conduct site analysis, transaction
analysis and evaluate accordingly, hardware, software, and personnel
requirements to initiate a full launch of our website second quarter 2001.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards ("SFAS") No. 133, ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, which establishes accounting and
reporting standards for derivative instruments and hedging activities. SFAS No.
133 requires recognition of all derivative instruments in the statement of
financial position as either assets or liabilities and the measurement of
derivative instruments at fair value. SFAS No. 133 is effective for fiscal years
beginning after June 15, 1999. FAS 137 amended FAS 133 and changed the effective
date for fiscal years beginning after June 15, 2000. The adoption of SFAS No.
133 and 137 is not expected to affect the financial statements of
Shopathomekids.com, Inc.
MARKET SUMMARY
Our main focus is to fulfill a demand for more kid oriented websites that are
safe and secure.
The following has been provided to show the current type of market and
statistical data in relation to the market Shopathomekids.com, Inc. will be
competing in:
|_| FIND/SVP reports that 14% of the under-18 consumer is currently online in
the U.S. There are currently more than 10 million children online today. 45
million children are expected to be online by 2002.
|_| Computer Intelligence reports that more than 50% of U.S. households with
kids own PC's.
|_| USA Today reports that 98% of U.S. teens have used a computer. And, of
those, 32% of 16 and 17 year olds spend 5+ hours a week online.
|_| Jupiter Research reports that the number of kids with classroom Web access
will increase from 1.5 million in 1996 to 20.0 million in 2002.
DESCRIPTION OF PROPERTY
We currently own the following property in connection with our operations:
(a) We currently have computer equipment, software and office furniture
valued at $17,420.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have a loan outstanding to shareholder Carol Jean Gelhke for $30,000 and is
payable by the year 2002. For more information concerning the promissory note
please SEE EXHIBIT 99.1. We have an additional loan outstanding to Clark
Krickbaum of $10,000 from October 28, 1999. We will pay $10,000 interest if the
note is paid within 18 months; if repaid after 18 months, the we will pay
interest of $20,000. We also issued 168,300
23
shares of our common stock for business consulting to shareholder Kelly Charles
valued at $14,020. For more information SEE NOTE # 5 OF NOTES TO FINANCIAL
STATEMENTS.
MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS.
(a) Market Information.
Shopathomekids.com, Inc. 's Shares are not traded.
(b) Holders of Common Equity.
As of November 30, 2000, there were 21 shareholders of record of our
common stock.
(c) Dividends.
We have not declared or paid a cash dividend to Stockholders. The Board
of Directors presently intends to retain any earnings to finance our
operations and does not expect to authorize cash dividends in the
foreseeable future. Any payment of cash dividends in the future will
depend upon Shopathomekids.com, Inc. 's earnings, capital requirements
and other factors.
EXECUTIVE COMPENSATION
(a) No officer or director of Shopathomekids.com, Inc. is receiving any
remuneration at this time and does not plan to offer any remuneration
until the corporation has sustained revenues.
(b) There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors, or employees of the corporation in the event of
retirement at normal retirement date pursuant to any presently existing
plan provided or contributed to by the corporation or any of its
subsidiaries.
(c) No remuneration is proposed to be in the future directly or indirectly by
the corporation to any officer or director under any plan which is
presently existing.
24
FINANCIAL STATEMENTS
Set forth below are the our audited financial statements for the period
ended July 31, 2000. The following financial statements are attached to this
report and filed as a part thereof.
Shopathomekids.com has adopted the provisions of Financial Accounting Standards
Board Statement No. 109, Accounting for Income Taxes. They account for income
taxes pursuant to the provisions of the Financial Accounting Standards Board
Statement No. 109, "Accounting for Income Taxes", which requires an asset and
liability approach to calculating deferred income taxes. The asset and liability
approach requires the recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between the carrying
amounts and the tax basis of assets and liabilities.
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 on
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.
25
SHOPATHOMEKIDS.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
JULY 31, 2000
<PAGE>
SHOPATHOMEKIDS.COM, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
CONTENTS
<TABLE>
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
BALANCE SHEET 2
STATEMENT OF OPERATIONS 3
STATEMENT OF STOCKHOLDERS' DEFICIENCY 4
STATEMENT OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6-9
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS OF SHOPATHOMEKIDS.COM, INC.
We have audited the accompanying balance sheet of Shopathomekids.com, Inc. (A
Development Stage Company) as of July 31, 2000 and the related statements of
operations, stockholders' equity and cash flows for the period from October 27,
1999 (inception) to July 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Shopathomekids.com, Inc. as of
July 31, 2000 and the results of its operations and its cash flows for the
period from October 27, 2000 (inception) to July 31, 2000 in conformity with
generally accepted accounting principles.
MERDINGER, FRUCHTER, ROSEN & CORSO, P.C.
Certified Public Accountants
New York, New York
August 25, 2000
<PAGE>
<TABLE>
<CAPTION>
November 30, July 31,
2000 2000
------------ -----------
------------ -----------
<S> ................................................. <C> <C>
ASSETS ........................................ (unaudited)
Current assets
Cash and cash equivalents ................ $ $
516 8,881
Property and equipment, net of accumulated
depreciation of 4,100 and $2,600 ............ 18,217
14,820
Other assets ................................. 34,026
34,020
-------- --------
-------- --------
Total assets .......................... $ 52,753 $ 57,721
======== ========
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accrued interest
7,825 4,125
Notes payable ............................ 10,000 10,000
--------
-------- --------
Total current liabilities ................ 17,825 14,125
Notes payable, less current portion .......... 30,000 30,000
--------
-------- --------
Total liabilities ..................... 47,825 44,125
--------
-------- --------
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value;
50,000,000 shares authorized, no shares
issued and outstanding .................... --
--------
Common stock, $0.001 par value;
100,000,000 shares authorized,
8,418,300 shares issued and outstanding
8,418 8,418
Additional paid in capital .................. 28,170 28,170
Deficit accumulated during
the development stage ..................... (31,660) (22,992)
-------- --------
-------- --------
Total stockholders' equity ............ 4,928 13,596
-------- --------
-------- --------
Total liabilities and stockholders' equity 52,753 $ 57,721
======== ========
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE>
SHOPATHOMEKIDS.COM, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
October 27, 1999
August 1, 2000 to (inception) to October 27, 1999
July 31, (inception) to
November 30, 2000 2000 November 30, 2000
-------------------- -------------------- ----------------------
-------------------- -------------------- ----------------------
(unaudited) (unaudited)
<S> <C> <C> <C>
Revenue $ $ $
----------- ---------------- -----------
Website development -- 4,330 4,330
Marketing, general and administrative 3,468 10,562 14,030
Interest expense 3,700 5,500 9,200
Depreciation expense 1,500 2,600 4,100
----------- ---------------- -----------
----------- ---------------- -----------
Loss from operations before income taxes (8,668) (22,992) (31,660)
Income tax expense -- -- --
----------- ---------------- -----------
----------- ---------------- -----------
Net loss $ (8,668) $ (22,992) $ (31,660)
=========== ================ ===========
=========== ================ ===========
Net loss per share - basic and diluted $ -- $ -- $ --
=========== ================ ===========
=========== ================ ===========
Weighted average shares outstanding 8,418,300 8,281,680 8,315,203
=========== ================ ===========
=========== ================ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 3 -
<PAGE>
SHOPATHOMEKIDS.COM, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
Common Stock Additional Accumulated
Paid-in During Development
<S> <C> <C> <C> <C> <C>
* Shares Amount Capital Stage Total
Balance, October 27, 1999 -- $ -- $ -- $ -- $
Issuance of founders shares,
November 20, 1999 8,140,000 8,140 (8,140) -- --
Contribution of fixed assets -- -- 13,400 -- 13,400
Sale of shares, November 20, 1999 49,500 49 4,077 -- 4,126
Issuance of shares for interest,
November 20, 1999 16,500 17 1,358 -- 1,375
Issuance of shares for services,
November 20, 1999 44,000 44 3,623 -- 3,667
Issuance of shares for services,
June 14, 2000 168,300 168 13,852 -- 14,020
Net loss -- -- -- (22,992) (22,992)
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Balance, July 31, 2000 8,418,300 8,418 28,170 (22,992) 13,596
Net loss -- -- -- (8,668) (8,668)
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Balance, November 30, 2000 (unaudited) 8,418,300 $ 8,418 $ 28,170 $ (31,660) $ 4,928
========= ========= ========= ========= =========
</TABLE>
The accompanying notes are integral part of these financial statements.
- 4 -
SHOPATHOMEKIDS.COM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
October 27, 1999 October 27, 1999
August 1, 2000 to (inception) to (inception) to
November 30, 2000 July 31, 2000 November 30, 2000
--------------------- ---------------- ---------------------
--------------------- ---------------- ---------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES (unaudited) ----- (unaudited)
Net loss $ (8,668) $(22,992) $(31,660)
Adjustments to reconcile net loss to net cash used
by operating activities:
Expenses paid by stockholder
1,500 2,626 2,626
Depreciation
- 2,600 4,100
Common stock issued for services
- 3,667 3,667
Increase in accrued interest
3,700 5,500 9,200
------------------------------
------------------------------
Net cash used in operating activities (3,468) (8,599) (12,067)
-------------------- -----------
-------------------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (4,897) (4,020) (8,917)
-------------------- -----------
-----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable - 40,000 40,000
Increase in deferred offering costs - (20,000) (20,000)
Sale of common stock - 1,500 1,500
---------------------------------
---------------------------------
Net cash provided by financing activities - 21,500 21,500
---------------------------------
---------------------------------
Net (decrease) increase in cash and cash equivalents (8,365) 8,881 516
CASH AND CASH EQUIVALENTS - Beginning
of period 8,881 - -
------------------------------------
------------------------------------
CASH AND CASH EQUIVALENTS - End of period $ 516 $ 8,881 $ 516
===================================
=================================
</TABLE>
SUPPLEMENTAL INFORMATION:
During the initial period October 21, 1999 to November 30, 2000, the
Company paid no cash for interest or income taxes (unaudited).
During the initial period October 21, 1999 to July 31, 2000, the
Company paid no cash for interest or income taxes.
The accompanying notes are an integral part of these financial statements.
- 5 -
<PAGE>
SHOPATHOMEKIDS.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2000
NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Shopathomekids.com, Inc. (the "Company") is currently a development-stage
company under the provisions of the Financial Accounting Standards Board
("FASB") Statement of Financial Accounting Standards ("SFAS") NO. 7. The Company
was incorporated under the laws of the state of Texas on October 27, 1999 as
Yippyyahoo.com, Inc. and changed its name on June 2, 2000.
The Company is a business-to-consumer ("B2C") Internet portal that enables the
younger consumer (under 18) the ability to purchase safely online, Email, and
chat with others. The Company has developed a website community that offers
access to online video games and shopping, as well as chat rooms that cater to
both young kids and teenagers. A proprietary credit card is currently in
development, called the KidZ-n-TeenZ credit card, that will enable young
consumers to transact online. The following domain names have been registered
and are currently in use:
www.shopathomekids.com
www.kidz2000.com
www.teenz2000.com
Unaudited Financial Information
In the opinion of the Company, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly its financial position as of November
30, 2000 and the results of its operations and cash flows for the initial period
ended November 30, 2000. These statements are condensed and therefore do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents.
- 6 -
<PAGE>
SHOPATHOMEKIDS.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2000
NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Property and Equipment
Property and equipment is stated at cost and are depreciated
using the straight-line method over their estimated useful
lives, generally five years.
Maintenance and repairs are charged to expense as incurred.
Concentration of Credit Risk
The Company places its cash in what it believes to be
credit-worthy financial institutions. However, cash balances
may exceed FDIC insured levels at various times during the
year.
Fair Value of Financial Instruments
The carrying value of cash and cash equivalents and accrued
expenses approximates fair value due to the relatively short
maturity of these instruments. The carrying value of notes
payable approximates fair value as the instruments were
issued currently at market rates.
Long-lived Assets
Long-lived assets to be held and used are reviewed for
impairment whenever events or changes in circumstances
indicate that the related carrying amount may not be
recoverable. When required, impairment losses on assets to
be held and used are recognized based on the fair value of
the assets and long-lived assets to be disposed of are
reported at the lower of carrying amount or fair value less
cost to sell.
Income Taxes
Income taxes are provided for based on the liability method
of accounting pursuant to SFAS No. 109, "Accounting for
Income Taxes". Deferred income taxes, if any, are recorded
to reflect the tax consequences on future years of
differences between the tax bases of assets and liabilities
and their financial reporting amounts at each year-end.
Earnings Per Share
The Company calculates earnings per share in accordance with
SFAS No. 128, "Earnings Per Share", which requires
presentation of basic earnings per share ("BEPS") and
diluted earnings per share ("DEPS"). The computation of BEPS
is computed by dividing income available to common
stockholders by the weighted average number of outstanding
common shares during the period. DEPS gives effect to all
dilutive potential common shares outstanding during the
period. The computation of DEPS does not assume conversion,
exercise or contingent exercise of securities that would
have an antidilutive effect on earnings. As of July 31,
2000, the Company has no securities that would effect loss
per share if they were to be dilutive.
- 7 -
<PAGE>
SHOPATHOMEKIDS.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2000
NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Earnings Per Share (continued)
On June 12, 2000, the Company effected a 1,100 for 1 stock
split. All share and per share items in these financial
statements have been retroactively restated to reflect this
stock split.
Comprehensive Income
SFAS No. 130, "Reporting Comprehensive Income", establishes
standards for the reporting and display of comprehensive
income and its components in the financial statements. The
Company had no items of other comprehensive income and
therefore has not presented a statement of comprehensive
income.
Offering Costs
Offering costs consist primarily of professional fees. These
costs are charged against the proceeds of the sale of the
common stock in the periods in which they occur.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment is summarized as follows:
<TABLE>
<S> <C> <C>
November 30, July 31,
2000 2000
------------- ------------
Computer Equipment & Software $ 18,317 $ 13,420
Furniture and Fixtures 4,000 4,000
----------- ------------
22,317 17,420
Less: Accumulated Depreciation 4,100 2,600
------------ ------------
$ 18,217 $ 14,820
============= =============
</TABLE>
Depreciation expense for the period ended July 31, 2000 was
$2,600, and for the period ended November 30, 2000 was
$4,100.
NOTE 3 - NOTES PAYABLE
The Company is obligated under two notes payable, as
follows:
o $10,000 pursuant to a note dated October 28, 1999. The Company will pay
$10,000 interest if the note is paid within 18 months; if repaid after 18
months, the Company will pay interest of $20,000.
o $30,000 pursuant to a note dated June 5, 2000. The note bears interest at 10%
per year and is due on June 5, 2002.
- 8 -
<PAGE>
SHOPATHOMEKIDS.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2000
NOTE 4 - OTHER ASSETS
Other assets consist of offering costs which will be charged
to the proceeds of the sale of common stock in the period in
which it occurs.
NOTE 5 - NON-CASH FINANCIAL ACTIVITIES
16,500 shares of common stock, valued at $1,375, were
issued as a payment of interest on a note.
44,000 shares of common stock, valued at $3,667, were
issued as a payment for services.
168,300 shares of common stock, valued at $14,020, were
issued as a payment for services.
Stockholders contributed fixed assets with a historical
cost basis of $13,400.
- 9 -
CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS AND ACCOUNTING MATTERS
None.
PART TWO. INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Information on this item is set forth in Prospectus under the heading
"Disclosure of Commission Position on Indemnification for Securities Act
Liabilities."
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Information on this item is set forth in the Prospectus under the heading "Use
of Proceeds."
RECENT SALES OF UNREGISTERED SECURITIES
On or about November 20 1999, we issued 8,140,000 shares of our common stock to
our founders in a transaction which we believe satisfies the requirements of
that certain exemption from the registration and prospectus delivery
requirements of the Securities Act of 1933, which exemption is specified by the
provisions of Section 4(2) of the Securities Act of 1933, as amended. The shares
were issued as payment for consulting services valued at $8,140.
We issued 16,500 shares of our common stock to Carol Jean Gehlke in a
transaction which we believe satisfies the requirements of that certain
exemption from the registration and prospectus delivery requirements of the
Securities Act of 1933, which exemption is specified by the provisions of
Section 4(2) of the Securities Act of 1933, as amended. The shares were issued
as an interest payment on a note to a shareholder and was valued at $1,375.
We issued 44,000 shares of our common stock to Addie McConachie in a transaction
which we believe satisfies the requirements of that certain exemption from the
registration and prospectus delivery requirements of the Securities Act of 1933,
which exemption is specified by the provisions of Section 4(2) of the Securities
Act of 1933, as amended. The shares were issued as payment for business
consulting services provided to us, which were valued at $3,667.
On or about June 14, 2000, we issued 168,300 shares of our common stock to Kelly
Charles in a transaction which we believe satisfies the requirements of that
certain exemption from the registration and prospectus delivery requirements of
the Securities Act of 1933, which exemption is specified by the provisions of
Section 4(2) of the Securities Act of 1933, as amended. The shares were issued
as payment for consulting services provided to us throughout the process of
going public, which were valued at $14,020.
EXHIBITS
The Exhibits required by Item 601 of Regulation S-B, and an index thereto, are
attached.
UNDERTAKINGS
The undersigned registrant hereby undertakes to:
(a) (1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section10(a)(3) of the Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the registration
statement. (iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
26
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering. .
(b) Provide to the underwriter at the closing specified in the underwriting
agreement certificates in the appropriate denominations and registered in the
appropriate names as required by the underwriter to permit prompt delivery to
each purchaser.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission that indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against the liabilities mentioned (other than the
payment by the small business issuer of expenses incurred or paid by a director,
officer or controlling person of the small business issuer in the successful
defense of any action, suit or proceeding) is asserted by any director, officer
or controlling person in connection with the securities being registered, the
small business issuer will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether an indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of this type of issue.
Exhibit Description
Number
3.1 Articles of Incorporation*
3.2 Bylaws*
3.3 Certificate of Amendment*
3.4 Certificate of Amendment*
5.1 Opinion Re: Legality ** See 23.1 Consent of Counsel
23.1 Consent of Counsel*
23.2 Consent of Accountant*
24.1 Power of Attorney** See Signature Pages
27.1 Financial Data Schedule*
99.1 Promissory Note to Shareholder *
99.2 Subscription Agreement *
99.3 Summary of Oral Agreement between
Officer and Director and Shopathomekids.com, Inc.**
99.4 Distribution between S.D.S. Wholesale
and Shopathomekids.com, Inc.**
*Filed By Previous Amendment
** Filed with this Amendment
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as amended,
we certify that we have reasonable grounds to believe that we meet all of the
requirements of filing on Form SB-2 and authorized this Registration Statement
to be signed on our behalf by the undersigned, in the city of Cedar Hill, state
of Texas, on January 14, 2001.
Shopathomekids.com, Inc.
By:/s/ Lewis Prowse II
Lewis Prowse II
President
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed on this 10the day of January, 2001, the
following persons in the capacities and on the dates stated:
<TABLE>
<S> <C> <C>
SIGNATURE TITLE DATE
/s/ Lewis Prowse II Director January 14, 2001
/s/ Tara Mees Director January 14, 2001
/s/ Romie Krickbaum Director January 14, 2001
/s/ Larry Ballard Director January 14, 2001
</TABLE>
27
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and hereby
authorizes Lewis Prowse II with the full power of substitution, as
attorney-in-fact, to sign in such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this Registration Statement. In accordance with the requirements
of the Securities Act of 1933, this Registration Statement was signed by the
following persons in the capacities and on the dates stated.
<TABLE>
<S> <C> <C>
SIGNATURE TITLE DATE
/s/ Lewis Prowse II Director January 14, 2001
/s/ Tara Mees Director January 14, 2001
/s/ Romie Krickbaum Director January 14, 2001
/s/ Larry Ballard Director January 14, 2001
</TABLE>
