LIFESTREAM INC, SB-2, 2000-10-05

LIFESTREAM INC
SB-2, 2000-10-05

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 5, 2000
REGISTRATION NO.____________
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________

FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________

LIFESTREAM INC.
(EXACT NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

WASHINGTON 5499 91-2033678
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) INDUSTRIAL CODE) IDENTIFICATION NUMBER)

#4020 - 8171 ACKROYD ROAD
RICHMOND, BRITISH COLUMBIA V6X 3K1, CANADA
(604) 618-3189
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
_____________________

AGENT FOR SERVICE: WITH A COPY TO:
HERMAN POON, PRESIDENT JAMES L. VANDEBERG
LIFESTREAM INC. OGDEN MURPHY WALLACE, PLLC
#4020 - 8171 ACKROYD ROAD 1601 FIFTH AVENUE, SUITE 2100
RICHMOND, BRITISH COLUMBIA V6X 3K1, CANADA SEATTLE, WASHINGTON 98101
(604) 618-3189 (206) 447-7000

(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
============================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

Class A Common Stock . . . 1,000,000 $ .01 $ 10,000.00 $ 2.64
============================================================================================

============================================================================================
</TABLE>

THE REGISTRATION HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

<PAGE>
SUBJECT TO COMPLETION-[ENTER DATE, 2000]

PROSPECTUS

, 2000

LIFESTREAM INC.

#4020 - 8171 ACKROYD ROAD
RICHMOND, BRITISH COLUMBIA V6X 3K1, CANADA
(604) 618-3189

1,000,000 SHARES OF COMMON STOCK

This is the initial public offering of common stock of Lifestream Inc., and
no public market currently exists for shares of Lifestream's common stock. The
initial public offering price is $0.01 per share of common stock which was
arbitrarily determined. The offering is on a best efforts-no minimum basis.
There is no minimum purchase requirement and no arrangement to place funds in an
escrow, trust, or similar account. The latest date on which this offering will
close will be 30 days after the date of this prospectus.

_____________________

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 2.

_____________________

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

WE WILL AMEND AND COMPLETE THE INFORMATION IN THIS PROSPECTUS. THE INFORMATION
IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE
SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

<PAGE>
TABLE OF CONTENTS

PAGE
----
PART I-PROSPECTUS

PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . 1

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

DETERMINATION OF OFFERING PRICE . . . . . . . . . . . . . . . . . . . . 3

SELLING SECURITY HOLDERS . . . . . . . . . . . . . . . . . . . . . . . 3

PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . 3

LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS . . . . . 4

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . . 4

DESCRIPTION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . 5

INTEREST OF NAMED EXPERTS AND COUNSEL . . . . . . . . . . . . . . . . . 5

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

DESCRIPTION OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . 6

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION . . . . . . . 14

DESCRIPTION OF PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . 16

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . . . . . 16

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS . . . . . . . 16

EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . 16

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . F-1

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . F-7

<PAGE>
PROSPECTUS SUMMARY

LIFESTREAM

Lifestream Inc. is a corporation formed under the laws of the State of
Washington, whose principal executive offices are located in Richmond, British
Columbia, Canada.

The primary objective of the business is designed to market high-quality,
low-cost vitamins, minerals, nutritional supplements, and other health and
fitness products to medical professionals, alternative health professionals,
martial arts studios and instructors, sports and fitness trainers, other health
and fitness professionals, school and other fund raising programs and other
similar types of customers via the Internet for sale to their clients in New
York City, Manhattan and Staten Island

NAME, ADDRESS, AND TELEPHONE NUMBER OF REGISTRANT

Lifestream Inc.
#4020 - 8171 Ackroyd Road
Richmond, British Columbia V6X 3K1, CANADA
(604) 618-3189

<TABLE>
<CAPTION>
THE OFFERING
<S> <C>
Price per share Offered. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$0.01
Common Stock Offered by Lifestream. . . . . . . . . . . . . . . . . . . . . . .1,000,000 shares
Common Stock Outstanding Prior to Offering. . . . . . . . . . . . . . . . . . 2,500,000 shares
Common Stock Outstanding After Offering Assuming 50% of the Offering is Sold 3,000,000 shares
Common Stock Outstanding After Offering Assuming 100% of the Offering is Sold 3,500,000 shares
</TABLE>

Lifestream expects to use the net proceeds for organizational purposes and
to determine the feasibility of selling Vitamineralherb.com products to specific
markets.

1
<PAGE>
RISK FACTORS

Lifestream Has Incurred Losses Since Its Inception April 24, 2000 and
Expects Losses to Continue For the Foreseeable Future

Lifestream is in the extreme early stages of development and could fail
before implementing its business plan. It is a "start up" venture that will
incur net losses for the foreseeable future. Lifestream has only recently
acquired its principal asset. Lifestream will incur additional expenses before
becoming profitable, if it ever becomes profitable. It is a relatively young
company that has no history of earnings or profit. There is no assurance that it
will operate profitably in the future or provide a return on investment in the
future.

Changes or Interruptions to Lifestream's Arrangements with Its Supplier May
Have an Adverse Effect on Its Ability to Operate

If Lifestream's licensor defaults under its agreement with its supplier,
Lifestream could lose access to its manufacturing source, and Lifestream's
distribution rights would become meaningless. Similarly, any dispute between the
supplier and licensor could prevent Lifestream from selling or delivering
product to its customers. Any termination or impairment of Lifestream's license
rights and access to products could prevent Lifestream from implementing its
business plan, thereby limiting its profitability and decreasing the value of
its stock.

If the Vitamineralherb.com Business Plan Does Not Prove To Be Feasible,
Lifestream May Be Considered a Blank Check Company Which Would Restrict
Resales of Its Stock

If the Vitamineralherb.com business plan does not prove to be economically
feasible, and Lifestream does not otherwise have a specific business plan or
purpose, Lifestream would be considered a "blank check company", which could
limit an investor's ability to sell its stock, thereby decreasing the value of
the stock. A "blank check company" is subject to Rule 419 of the Securities Act.
Pursuant to Rule 419, all funds raised by and securities issued in connection
with a public offering by a blank check company must be held in escrow, and any
such securities may not be transferred. Many states have also enacted statutes,
rules and regulations limiting the sale of securities of blank check companies
within their respective jurisdictions. As a result, Lifestream would have great
difficulty raising additional capital. In addition, there would be a limited
public market, if any, for resale of the shares of Lifestream common stock
issued in this offering.

Lifestream May Need Additional Financing Which May Not Be Available, or
Which May Dilute the Ownership Interests of Investors

Lifestream's ultimate success will depend on its ability to raise
additional capital. No commitments to provide additional funds have been made by
management or other shareholders. Lifestream has not investigated the
availability, source or terms that might govern the acquisition of additional
financing. When additional capital is needed, there is no assurance that funds
will be available from any source or, if available, that they can be obtained on
terms acceptable to Lifestream. If not available, Lifestream's operations would
be severely limited, and it would be unable to implement its business plan.

Purchasers Must Rely on Mr. Poon's Abilities For All Decisions As He Will
Control the Majority of the Stock After the Offering. Lifestream Has No
Employment Agreement With Mr. Poon and He Spends Only Part-time On Its
Business. His Leaving May Adversely Effect Lifestream's Ability To Operate

Mr. Poon is serving as Lifestream's sole officer and director. Lifestream
will be heavily dependent upon Mr. Poon's entrepreneurial skills and experience
to implement its business plan and may, from time to time, find that his
inability to devote full time and attention to its affairs will result in
delay(s) in progress towards the implementation of its business plan or in a
failure to implement its business plan. Moreover, Lifestream does not have an
employment agreement with Mr. Poon and as a result, there is no assurance that
he will continue to manage its affairs in the future. Nor has Lifestream
obtained a key man life insurance policy on Mr. Poon. Lifestream could lose the
services of Mr. Poon, or Mr. Poon could decide to join a competitor or otherwise
compete directly or indirectly with entleyCapitalCorp.com, which would have a
significant adverse effect on its business and could cause the price of its
stock to be worthless. The services of Mr. Poon would be difficult to replace.

2
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements under "Prospectus Summary", "Risk Factors",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", "Description of Business", and elsewhere in this prospectus
constitute forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may", "will", "should",
"expects", "plans", "anticipates", "believes", "estimated", "predicts",
"potential", or "continue" or the negative of such terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties, and other factors that may cause Lifestream's actual
results, levels of activity, performance, or achievements to be materially
different from any future results, levels of activity, performance, or
achievements expressed or implied by such forward-looking statements. These
factors include, among other things, those listed under "Risk Factors" and
elsewhere in this prospectus. Although Lifestream believes that the expectations
reflected in the forward-looking statements are reasonable, it cannot guarantee
future results, levels of activity, performance, or achievements.

USE OF PROCEEDS

The net proceeds to Lifestream from the sale of the 1,000,000 shares of
common stock offered by Lifestream hereby at an assumed initial public offering
price of $.01 per share are estimated to be $10,000. Lifestream expects to use
the net proceeds as follows:

<TABLE>
<CAPTION>
PURPOSE ASSUMING SALE OF ASSUMING SALE OF
------ ------------------ -----------------
50% OF STOCK BEING 100% OF STOCK BEING
------------------ -------------------
OFFERED OFFERED
------- -------
<S> <C> <C>
Organizational Purposes . . . . . . . . . $ 1,000 $ 1,000
Feasibility of License/Market Research . $ 4,000 $ 9,000
</TABLE>

Lifestream continually evaluates other business opportunities that may be
available to it, whether in the form of assets acquisitions or business
combinations. Lifestream may use a portion of the proceeds for these purposes.
Lifestream is not currently a party to any contracts, letters of intent,
commitments or agreements and is not currently engaged in active negotiations
with respect to any acquisitions.

Lifestream has not yet determined the amount of net proceeds to be used
specifically for any of the foregoing purposes. Accordingly, Lifestream's
management will have significant flexibility in applying the net proceeds of the
offering.

DETERMINATION OF OFFERING PRICE

Lifestream arbitrarily determined the price of the Units in this Offering.
The offering price is not an indication of and is not based upon the actual
value of Lifestream. It bears no relationship to the book value, assets or
earnings of Lifestream or any other recognized criteria of value. The offering
price should not be regarded as an indicator of the future market price of the
securities.

SELLING SECURITY HOLDERS

There are no selling security holders.

PLAN OF DISTRIBUTION

Lifestream will offer and sell its common stock through its sole officer
and director, Herman Poon, pursuant to and in compliance with Rule 3a4-1 of the
Exchange Act. There are currently no plans at present to conduct any general
solicitation in conjunction with this offering (other than the filing of this
registration statement). However, if Mr. Poon is unable to sell all of the
shares in this offering to purchasers with whom he has a pre-existing
relationship in jurisdictions where those sales may be permitted, he may engage
in a general solicitation under Rule 135 of the Securities Act of 1933. All
sales will be made in compliance with the securities laws of local
jurisdictions. Mr. Poon intends to offer Lifestream's stock to potential buyers
who qualify under the relevant exemptions provided by British Columbia law,
primarily the "sophisticated purchaser" exemptions under Revised Statutes of
British Columbia Section 128.

3
<PAGE>
LEGAL PROCEEDINGS

Lifestream is not a party to any pending legal proceeding or litigation and
none of its property is the subject of a pending legal proceeding. Further, the
officer and director knows of no legal proceedings against Lifestream or its
property contemplated by any governmental authority.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

The following table sets forth the name, age and position of each director
and executive officer of Lifestream:

NAME AGE POSITION
---- --- ---------
Herman Poon 43 President, Secretary, Treasurer, Director

In April, 2000, Mr. Poon was elected as the sole officer and director of
Lifestream, of which he is the sole stockholder. He will serve until the first
annual meeting of Lifestream's shareholders and his successors are elected and
qualified. Thereafter, directors will be elected for one-year terms at the
annual shareholders' meeting. Officers will hold their positions at the pleasure
of the board of directors, absent any employment agreement.

Mr. Poon has been a business consultant for RTC Enterprise, Richmond, B.C.,
since 1999. His services include organizing the 1999 Chinese Investment Forum
for 60 exhibitors and 3000 investors, and founding a company to invest in the
China wireless broadband telecom project. Prior to that, he served as the
Project Vice President of Business Development and Operations for Natural
Glacial Waters Inc. of Vancouver, B.C. His duties included commission a new $7
million bottling plant startup, handling contract bottling arrangements, and
resolving vendor issues. From 1994 through 1997, Mr. Poon was Executive Vice
President of Corporate Development for The Tradeglobe Group, of Vancouver, B.C.
He established 3 new companies in high tech, resource and manufacturing; oversaw
corporate planning and development for 6 related companies; managed corporate
financing with government and outside investors; administered marketing projects
for the Canadian RADARSAT program; and oversaw various Pacific Rim trading
projects. Mr. Poon is a certified general accountant.

There are no plans, arrangements, or understandings pending for Lifestream
to acquire any or to be acquired by any company. Lifestream has engaged in
discussions concerning potential business combinations, but has not entered into
any agreement for such a combination.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of September 1, 2000, Lifestream's
outstanding common stock owned of record or beneficially by each Executive
Officer and Director and by each person who owned of record, or was known by
Lifestream to own beneficially, more than 5% of its common stock, and the
shareholdings of all Executive Officers and Directors as a group. Each person
has sole voting and investment power with respect to the shares shown.

<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
NAME OWNED SHARES OWNED
---- ----- ------------
<S> <C> <C>
Herman Poon . . . . . . . . . . . . . . . . . . 2,500,000 100%
President, Secretary, Treasurer, and Director
#4020 - 8171 Ackroyd Road
Richmond, BC Canada V6X 3K1
All Executive Officers and Directors as a Group
(1 Individual) . . . . . . . . . . . . . . . 2,500,000 100%
</TABLE>

DESCRIPTION OF SECURITIES

The following description of Lifestream's capital stock is a summary of the
material terms of its capital stock. This summary is subject to and qualified in
its entirety by Lifestream's articles of incorporation and bylaws, and by the
applicable provisions of Washington law.

The authorized capital stock of Lifestream consists of 120,000,000 shares:
100,000,000 shares of Common Stock having a par value of $0.0001 per share and
20,000,000 shares of Preferred Stock having a par value of $0.0001 per share.
The articles of incorporation do not permit cumulative voting for the election
of directors, and shareholders do not have any preemptive rights to purchase
shares in any future issuance of Lifestream's common stock.

4
<PAGE>
The holders of shares of common stock of Lifestream do not have cumulative
voting rights in connection with the election of the Board of Directors, which
means that the holders of more than 50% of such outstanding shares, voting for
the election of directors, can elect all of the directors to be elected, if they
so choose, and, in such event, the holders of the remaining shares will not be
able to elect any of Lifestream's directors.

The holders of shares of common stock are entitled to dividends, out of
funds legally available therefor, when and as declared by the Board of
Directors. The Board of Directors has never declared a dividend and does not
anticipate declaring a dividend in the future. Each outstanding share of common
stock entitles the holder thereof to one vote per share on all matters. The
holders of the shares of common stock have no preemptive or subscription rights.
In the event of liquidation, dissolution or winding up of the affairs of
Lifestream, holders are entitled to receive, ratably, the net assets of
Lifestream available to shareholders after payment of all creditors.

All of the issued and outstanding shares of common stock are duly
authorized, validly issued, fully paid, and non-assessable. To the extent that
additional shares of Lifestream's common stock are issued, the relative
interests of existing shareholders may be diluted.

INTEREST OF NAMED EXPERTS AND COUNSEL

Neither Elliott Tulk Pryce Anderson nor Ogden Murphy Wallace, PLLC was
employed on a contingent basis in connection with the registration or offering
of Lifestream's common stock.

DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Lifestream's articles of incorporation provide that it will indemnify its
officers and directors to the full extent permitted by Washington state law.
Lifestream's bylaws provide that it will indemnify and hold harmless each person
who was, is or is threatened to be made a party to or is otherwise involved in
any threatened proceedings by reason of the fact that he or she is or was a
director or officer of Lifestream or is or was serving at the request of
Lifestream as a director, officer, partner, trustee, employee, or agent of
another entity, against all losses, claims, damages, liabilities and expenses
actually and reasonably incurred or suffered in connection with such proceeding.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
Lifestream pursuant to the forgoing provisions or otherwise, Lifestream has been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in that Act and is,
therefore, unenforceable.

5
<PAGE>
DESCRIPTION OF BUSINESS

General

Lifestream was incorporated under the laws of the State of Washington on
April 24, 2000, and is in its early developmental and promotional stages. To
date, Lifestream's only activities have been organizational, directed at
acquiring its principal asset, raising its initial capital and developing its
business plan. Lifestream has not commenced commercial operations. Lifestream
has no full time employees and owns no real estate.

Acquisition of The License

On April 24, 2000, Lifestream's sole shareholder, Herman Poon, in return
for 2,500,000 shares of Lifestream's common stock and a promissory note for
$50,000, transferred to Lifestream his rights under that certain License
Agreement with Vitamineralherb.com. The License Agreement grants an exclusive
right to distribute Vitamineralherb.com products to health and fitness
professionals in New York City, Manhattan and Staten Island via the Internet.
Mr. Poon acquired the license from Vitamineralherb.com for $35,000.

The License

Lifestream has a three year license to market and sell vitamins, minerals,
nutritional supplements, and other health and fitness products to medical
professionals, alternative health professionals, martial arts studios and
instructors, sports and fitness trainers, other health and fitness
professionals, school and other fund raising programs and other similar types of
customers via the Internet for sale to their clients. Lifestream's territory is
New York City, Manhattan and Staten Island. The license will be automatically
renewed unless Lifestream or Vitamineralherb.com gives the other notice of its
intent not to renew.

Vitamineralherb.com has agreed to provide certain business administrative
services to Lifestream, including product development, store inventory, website
creation and maintenance, establishment of banking liaisons, and development and
maintenance of an order fulfillment system, thereby enabling Lifestream to focus
strictly on marketing and sales. Some services, such as development of the
website and the order fulfillment system, will be provided by
Vitamineralherb.com, while others, such as product development and store
inventory, will be provided by the product supplier. Vitamineralherb.com sets
the price for products based on the manufacturer's price, plus a mark up which
Vitamineralherb.com and Lifestream share equally.

Lifestream and its customers will also be able to request quotes for and
order custom-formulated and custom-labeled products via the website. Three
different labeling options are available to customers: First, products may be
ordered with the manufacturer's standard label with no customization. Second,
the fitness or health professional may customize the labels by adding its name,
address, and phone number to the standard label. In most cases, these labels
would be a standardized label with product information and a place on the label
for the wording "Distributed by." This gives these health and fitness
professionals a competitive edge. Third, labels may be completely customized for
the health or fitness professional.

When a fitness or health professional becomes a client, Lifestream's
salesperson will show the client how to access the Vitamineralherb website. The
client is assigned an identification number that identifies it by territory,
salesperson, and business name, address, and other pertinent information. The
health or fitness professional may then order the products it desires directly
through the Vitamineralherb.com website. It is anticipated that the customer
will pay for the purchase with a credit card, electronic check ("e-check"), or
debit card. All products will be shipped by the manufacturer directly to the
professional or its clients.

The website will be maintained by Vitamineralherb.com, and each licensee
will pay an annual website maintenance fee of $500. All financial transactions
will be handled by Vitamineralherb.com's Internet clearing bank. The
Vitamineralherb webmaster will download e-mail orders several times a day, check
with clearing bank for payment and then submit the product order and electronic
payment to the supplier. Vitamineralherb.com will then forward the money due
Lifestream via electronic funds transfer. Vitamineralherb's software will track
all sales through the customer's identification number, and at month end, e-mail
to Lifestream and customer a detailed report including sales commissions.
Vitamineralherb has indicated that it will use e-commerce advertising such as
banner ads on major servers and websites, as well as trying to insure that all
major search engines pick Vitamineralherb.com first. Sales originating from the
website to customers located in New York City, Manhattan and Staten Island will
automatically be assigned to Lifestream.

Vitamineralherb.com's website is currently operational, but is not yet
complete. Vitamineralherb.com is finalizing the product list and the automated
ordering function (manual ordering via email is currently available).

6
<PAGE>
Vitamineralherb.com has established a banking liaison, and is in the process of
setting up the internet processing facility through that bank. These items
should be complete by August 1, 2000.

Background on the Manufacturer and Distributor

Vitamineralherb.com entered into a Manufacturing Agreement, dated June 9,
2000, with Ives Formulation Co., of San Diego, California. Ives Formulation is a
wholly-owned subsidiary of Ives Health Company, Inc., a public company traded on
the Bulletin Board under the symbol "IVEH". Ives Formulation has been a contract
manufacturer of vitamin, mineral, nutritional supplement, and alternative health
products for various marketing organizations. In addition to a line of standard
products, Ives Formulation is able to manufacture custom blended products for
customers, and to supply privately labeled products for Lifestream's customers
at a minimal added cost. Vitamineralherb.com has just begun developing its
vitamin marketing and distributorship business.

Implementation of Business Plan: Milestones

Lifestream's business plan is to determine the feasibility of selling
Vitamineralherb.com products to targeted markets. Should Lifestream determine
that its business plan is feasible, it intends to employ salespeople to call on
medical professionals, alternative health professionals, martial arts studios
and instructors, sports and fitness trainers, other health and fitness
professionals, school and other fund raising programs and other similar types of
customers to interest these professionals in selling to their clients
high-quality, low-cost vitamins, minerals, nutritional supplements, and other
health and fitness products. These professionals would sell the products to
their clients via the Internet. Lifestream will achieve implementation of its
business plan by meeting the following milestones:

- MILESTONE 1-MARKET SURVEY. In order to determine the feasibility of
its business plan, Lifestream must conduct research into the various
potential target markets. The market analysis research will likely
consist of a telephone survey to 100-200 potential clients, focusing
on three or four of the core target markets, such as chiropractors,
health clubs, and alternative medicine practitioners. The survey would
likely contain questions which would determine the marketing approach
and acceptability of specific products. The survey would take
approximately four to six weeks. The cost of the survey is estimated
to range from $10,000-$13,500, which would be paid for in part out of
the proceeds of this offering.

- MILESTONE 2:-HIRE SALESPEOPLE. Should Lifestream determine that the
exploitation of the license is feasible, it will then have to engage
salespeople to market the products. Lifestream expects that it may
hire two salespeople during its first year of operation. The hiring
process would include running advertisements in the local newspaper
and conducting interviews. It is anticipated that hiring the
salespeople may take four to eight weeks. The cost of hiring the
salespeople, not including compensation, is estimated at $20,000.

- MILESTONE 3: ESTABLISH AN OFFICE. Lifestream would then have to
establish an office or offices for the sales force in the appropriate
market or markets. This would include an office, equipment such as
computers and telephones, and sample inventory for the salespeople. It
is anticipated that it may take eight to twelve weeks to locate
acceptable office space and select and purchase equipment. The expense
of office rental, equipment and inventory samples is estimated to be
$45,000 per year.

- MILESTONE 4: DEVELOPMENT OF ADVERTISING CAMPAIGN. The next step would
be to develop an advertising campaign, including establishing a list
of prospects based on potential clients identified in the market
survey, and designing and printing sales materials. It is anticipated
that it would take approximately six to ten weeks to develop the
advertising campaign, although, depending on the availability of
resources, Lifestream will attempt to develop its advertising campaign
concurrently with establishing an office. The cost of developing the
campaign is estimated at approximately $12,000 per year.

- MILESTONE 5: IMPLEMENTATION OF ADVERTISING CAMPAIGN/SALES CALLS.
Implementation of the advertising campaign would begin with mailing
the sales materials to the identified list of prospects. Approximately
two to four weeks thereafter, the salespeople would begin telephone
follow ups and scheduling of sales calls. Although it will be
necessary to make sales calls throughout the life of the company, it
is estimated that the first round of sales calls will take
approximately eight to twelve weeks to complete. The cost of salary
and expenses for two salespeople is estimated at $248,000 per year.

- MILESTONE 6: ACHIEVE REVENUES. It is difficult to quantify how long it
will take to convert a sales call into actual sales and revenues.
Lifestream will not begin receiving orders until its sales force is
able to convince potential clients to begin offering such products to
their customers, or to convert from an existing supplier. Lifestream
hopes that clients would begin placing orders within weeks of a sales
call, but it may take several months before people begin to purchase
products. Moreover, customers may not be willing to pay for products
at the time they order, and may insist on buying on account, which

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would delay receipt of revenues another month or two. Assuming
Lifestream has received all necessary approvals to begin raising funds
by November 1, 2000, and assuming an offering period of approximately
one month, in a best case scenario Lifestream may receive its first
revenues as early as May 1, 2001. However, a more realistic estimate
of first revenues would be December 1, 2001 or later.

As discussed more fully in the Management's Discussion and
Analysis-Liquidity and Capital Resources section, the expenses of implementing
Lifestream's business plan will likely exceed the funds raised by this offering,
and Lifestream will have to obtain additional financing through an offering or
through capital contributions by current shareholders. No commitments to provide
additional funds have been made by management or shareholders. Accordingly,
there can be no assurance that any additional funds will be available on terms
acceptable to Lifestream or at all.

Industry Background

Growth of the Internet and electronic commerce. The Internet has become an
increasingly significant medium for communication, information and commerce.
According to NUA Internet Surveys, as of February 2000, there were approximately
275.5 million Internet users worldwide. At the IDC Internet Executive Forum held
on September 28-29, 1999, IDC stated that in 1999 US $109 billion in purchases
were impacted by the Internet. IDC's vice president, Sean Kaldor, indicated that
figure is expected to increase more than ten-fold over the next five years to US
$1.3 trillion in 2003, with $842 million completed directly over the Web.
Lifestream believes that this dramatic growth presents significant opportunities
for online retailers.

The vitamin, supplement, mineral and alternative health product market. In
recent years, a growing awareness of vitamins, herbs, and other dietary
supplements by the general public has created a whole new segment in the field
of medicine and health care products. According to Jupiter Communications,
online sales of such products are expected to be US $434 million in the year
2003, up from $1 million in 1998. Lifestream believes that several factors are
driving this growth, including a rapidly growing segment of the population that
is concerned with aging and disease, a growing interest in preventative health
care, favorable consumer attitudes toward alternative health products and a
favorable regulatory statute, the Dietary Supplement Health and Education Act of
1994.

Competition

The electronic commerce industry is new, rapidly evolving and intensely
competitive, and Lifestream expects competition to intensify in the future.
Barriers to entry are minimal and current and new competitors can launch sites
at a relatively low cost. In addition, the vitamin, supplement, mineral and
alternative health product market is very competitive and highly fragmented,
with no clear dominant leader and increasing public and commercial attention.

Lifestream's competitors can be divided into several groups including:

- traditional vitamins, supplements, minerals and alternative health
products retailers;

- the online retail initiatives of several traditional vitamins,
supplements, minerals and alternative health products retailers;

- online retailers of pharmaceutical and other health-related products
that also carry vitamins, supplements, minerals and alternative health
products;

- independent online retailers specializing in vitamins, supplements,
minerals and alternative health products;

- mail-order and catalog retailers of vitamins, supplements, minerals
and alternative health products, some of which have already developed
online retail outlets; and

- direct sales organizations, retail drugstore chains, health food store
merchants, mass market retail chains and various manufacturers of
alternative health products.

Many of Lifestream's potential competitors have longer operating histories,
larger customer or user bases, greater brand recognition and significantly
greater financial, marketing and other resources than Lifestream has. In
addition, an online retailer may be acquired by, receive investments from, or
enter into other commercial relationships with, larger, well-established and
well-financed companies as use of the Internet and other electronic services
increases. Competitors have and may continue to adopt aggressive pricing or
inventory availability policies and devote substantially more resources to
website and systems development than Lifestream does. Increased competition may
result in reduced operating margins and loss of market share.

Lifestream believes that the principal competitive factors in its market
are:

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- ability to attract and retain customers;

- breadth of product selection;

- product pricing;

- ability to customize products and labeling;

- quality and responsiveness of customer service.

Lifestream believes that it can compete favorably on these factors.
However, Lifestream will have no control over how successful its competitors are
in addressing these factors. In addition, with little difficulty, Lifestream's
online competitors can duplicate many of the products or services offered on the
Vitamineralherb.com site.

Lifestream believes that traditional retailers of vitamins, supplements,
minerals and other alternative health products face several challenges in
succeeding:

- Lack of convenience and personalized service. Traditional retailers
have limited store hours and locations. Traditional retailers are also
unable to provide consumers with product advice tailored to their
particular situation.

- Limited product assortment. The capital and real estate intensive
nature of store-based retailers limit the product selection that can
be economically offered in each store location.

- Lack of Customer Loyalty. Although the larger traditional retailers
often attract customers, many of these customers are only one-time
users. People are often attractive to the name brands, but find the
products too expensive. It is understood that these are quality
products and have value, but the multilevel structure of marketing
often employed by large retailers mandate high prices.

As a result of the foregoing limitations, Lifestream believes there is
significant unmet demand for an alternative shopping channel that can provide
consumers of vitamins, supplements, minerals and other alternative health
products with a broad array of products and a convenient and private shopping
experience.

Lifestream hopes to attract and retain consumers through the following key
attributes of its business:

- Broad Expandable Product Assortment. Lifestream's product selection is
substantially larger than that offered by store-based retailers.

- Low Product Prices. Product prices can be kept low due to volume
purchases through Lifestream's affiliation with Vitamineralherb.com
and other licensees. Product prices will also be lower due to
Lifestream's lack of need of inventory and warehouse space. All
products are shipped from International Formulation and
Manufacturing's inventory.

- Accessibility to Customized Products. At minimal cost, health and
fitness practitioners may offer their customers customized products.

- Access to Personalized Programs. Health or fitness professional can
tailor vitamin and dietary supplement regimes to their clients.

Regulatory Environment

The manufacturing, processing, formulating, packaging, labeling and
advertising of the products Lifestream sells in Canada are or may be subject to
regulation by Health Canada which administers the Food and Drugs Act along with
relevant regulation thereto. Regulated products include herbal remedies, natural
health remedies, functional foods and nutraceuticals. Health Canada regulates
the formulation, manufacture, labeling and distribution of foods, including
dietary supplements, cosmetics and over-the-counter or homeopathic drugs. Under
the Food and Drugs Act, a variety of enforcement actions are available to Health
Canada against marketers of unapproved drugs or "adulterated" or "misbranded"
products. The remedies available to Health Canada include: criminal prosecution;
an injunction to stop the sale of a company's products; seizure of products;
adverse publicity; and "voluntary" recalls and labeling changes.

The Consumer Packaging and Labeling Act, as administered by Industry
Canada, requires that certain information labeling be presented in a prescribed
manner on all foods, drugs, dietary supplements and cosmetics. A product may be
deemed an unapproved drug and "misbranded" if it bears improper claims or
improper labeling.

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The manufacturing, processing, formulating, packaging, labeling and
advertising of the products Lifestream sells may also be subject to regulation
by one or more U.S. federal agencies, including the Food and Drug
Administration, the Federal Trade Commission, the United States Department of
Agriculture and the Environmental Protection Agency. These activities also may
be regulated by various agencies of the states, localities and foreign countries
in which consumers reside.

The Food and Drug Administration, in particular, regulates the formulation,
manufacture, labeling and distribution of foods, including dietary supplements,
cosmetics and over-the- counter or homeopathic drugs. Under the Federal Food,
Drug, and Cosmetic Act, the Food and Drug Administration may undertake
enforcement actions against companies marketing unapproved drugs, or
"adulterated" or "misbranded" products. The remedies available to the Food and
Drug Administration include: criminal prosecution; an injunction to stop the
sale of a company's products; seizure of products; adverse publicity; and
"voluntary" recalls and labeling changes.

Food and Drug Administration regulations require that certain informational
labeling be presented in a prescribed manner on all foods, drugs, dietary
supplements and cosmetics. Specifically, the Food, Drug, and Cosmetic Act
requires that food, including dietary supplements, drugs and cosmetics, not be
"misbranded." A product may be deemed an unapproved drug and "misbranded" if it
bears improper claims or improper labeling. The Food and Drug Administration has
indicated that promotional statements made about dietary supplements on a
company's website may constitute "labeling" for purposes of compliance with the
provisions of the Food, Drug, and Cosmetic Act. A manufacturer or distributor of
dietary supplements must notify the Food and Drug Administration when it markets
a product with labeling claims that the product has an effect on the structure
or function of the body. Noncompliance with the Food, Drug, and Cosmetic Act,
and recently enacted amendments to that Act discussed below, could result in
enforcement action by the Food and Drug Administration.

The Food, Drug, and Cosmetic Act has been amended several times with
respect to dietary supplements, most recently by the Nutrition Labeling and
Education Act of 1990 and the Dietary Supplement Health and Education Act of
1994. The Dietary Supplement Health and Education Act created a new statutory
framework governing the definition, regulation and labeling of dietary
supplements. With respect to definition, the Dietary Supplement Health and
Education Act created a new class of dietary supplements, consisting of
vitamins, minerals, herbs, amino acids and other dietary substances for human
use to supplement the diet, as well as concentrates, metabolites, extracts or
combinations of such dietary ingredients. Generally, under the Dietary
Supplement Health and Education Act, dietary ingredients that were on the market
before October 15, 1994 may be sold without Food and Drug Administration
pre-approval and without notifying the Food and Drug Administration. In
contrast, a new dietary ingredient, i.e., one not on the market before October
15, 1994, requires proof that it has been used as an article of food without
being chemically altered or evidence of a history of use or other evidence of
safety establishing that it is reasonably expected to be safe. Retailers, in
addition to dietary supplement manufacturers, are responsible for ensuring that
the products they market for sale comply with these regulations. Noncompliance
could result in enforcement action by the Food and Drug Administration, an
injunction prohibiting the sale of products deemed to be noncompliant, the
seizure of such products and criminal prosecution.

The Food and Drug Administration has indicated that claims or statements
made on a company's website about dietary supplements may constitute "labeling"
and thus be subject to regulation by the Food and Drug Administration. With
respect to labeling, the Dietary Supplement Health and Education Act amends, for
dietary supplements, the Nutrition Labeling and Education Act by providing that
"statements of nutritional support," also referred to as "structure/function
claims," may be used in dietary supplement labeling without Food and Drug
Administration pre-approval, provided certain requirements are met. These
statements may describe how particular dietary ingredients affect the structure
or function of the body, or the mechanism of action by which a dietary
ingredient may affect body structure or function, but may not state a drug
claim, i.e., a claim that a dietary supplement will diagnose, mitigate, treat,
cure or prevent a disease. A company making a "statement of nutritional support"
must possess substantiating evidence for the statement, disclose on the label
that the Food and Drug Administration has not reviewed the statement and that
the product is not intended for use for a disease and notify the Food and Drug
Administration of the statement within 30 days after its initial use. It is
possible that the statements presented in connection with product descriptions
on Lifestream's site may be determined by the Food and Drug Administration to be
drug claims rather than acceptable statements of nutritional support. In
addition, some of Lifestream's suppliers may incorporate objectionable
statements directly in their product names or on their products' labels, or
otherwise fail to comply with applicable manufacturing, labeling and
registration requirements for over-the-counter or homeopathic drugs or dietary
supplements. As a result, Vitamineralherb.com may have to remove objectionable
statements or products from its site or modify these statements, or product
names or labels, in order to comply with Food and Drug Administration
regulations. Such changes could interfere with Lifestream's marketing of
products and could cause us to incur significant additional expenses.

In addition, the Dietary Supplement Health and Education Act allows the
dissemination of "third party literature" in connection with the sale of dietary
supplements to consumers at retail if the publication meets statutory
requirements. Under the Dietary Supplement Health and Education Act, "third
party literature" may be distributed if, among other things, it is not false or
misleading, no particular manufacturer or brand of dietary supplement is
promoted, a balanced view of available scientific information on the subject

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matter is presented and there is physical separation from dietary supplements in
stores. The extent to which this provision may be used by online retailers is
not yet clear, and Lifestream cannot assure you that all pieces of "third party
literature" that may be disseminated in connection with the products Lifestream
offers for sale will be determined to be lawful by the Food and Drug
Administration. Any such failure could render the involved product an unapproved
drug or a "misbranded" product, potentially subjecting us to enforcement action
by the Food and Drug Administration, and could require the removal of the
noncompliant literature from Vitamineralherb.com's website or the modification
of Lifestream's selling methods, interfering with Lifestream's continued
marketing of that product and causing us to incur significant additional
expenses. Given the fact that the Dietary Supplement Health and Education Act
was enacted only five years ago, the Food and Drug Administration's regulatory
policy and enforcement positions on certain aspects of the new law are still
evolving. Moreover, ongoing and future litigation between dietary supplement
companies and the Food and Drug Administration will likely further refine the
legal interpretations of the Dietary Supplement Health and Education Act. As a
result, the regulatory status of certain types of dietary supplement products,
as well as the nature and extent of permissible claims will remain unclear for
the foreseeable future. Two areas in particular that pose potential regulatory
risk are the limits on claims implying some benefit or relationship with a
disease or related condition and the application of the physical separation
requirement for "third party literature" as applied to Internet sales.

In addition to the regulatory scheme under the Food, Drug and Cosmetic Act,
the advertising and promotion of dietary supplements, foods, over-the-counter
drugs and cosmetics is subject to scrutiny by the Federal Trade Commission. The
Federal Trade Commission Act prohibits "unfair or deceptive" advertising or
marketing practices, and the Federal Trade Commission has pursued numerous food
and dietary supplement manufacturers and retailers for deceptive advertising or
failure to substantiate promotional claims, including, in many instances, claims
made via the Internet. The Federal Trade Commission has the power to seek
administrative or judicial relief prohibiting a wide variety of claims, to
enjoin future advertising, to seek redress or restitution payments and to seek a
consent order and seek monetary penalties for the violation of a consent order.
In general, existing laws and regulations apply fully to transactions and other
activity on the Internet. The Federal Trade Commission is in the process of
reviewing its policies regarding the applicability of its rules and its consumer
protection guides to the Internet and other electronic media. The Federal Trade
Commission has already undertaken a new monitoring and enforcement initiative,
"Operation Cure-All," targeting allegedly bogus health claims for products and
treatments offered for sale on the Internet. Many states impose their own
labeling or safety requirements that differ from or add to existing federal
requirements.

Lifestream cannot predict the nature of any future Canadian or U.S. laws,
regulations, interpretations or applications, nor can it determine what effect
additional governmental regulations or administrative orders, when and if
promulgated, would have on its business in the future. Although the regulation
of dietary supplements is less restrictive than that of drugs and food
additives, Lifestream cannot assure you that the current statutory scheme and
regulations applicable to dietary supplements will remain less restrictive.
Further, Lifestream cannot assure you that, under existing laws and regulations,
or if more stringent statutes are enacted, regulations are promulgated or
enforcement policies are adopted, it is or will be in compliance with these
existing or new statutes, regulations or enforcement policies without incurring
material expenses or adjusting its business strategy. Any laws, regulations,
enforcement policies, interpretations or applications applicable to Lifestream's
business could require the reformulation of certain products to meet new
standards, the recall or discontinuance of certain products not capable of
reformulation, additional record keeping, expanded documentation of the
properties of certain products, expanded or different labeling or scientific
substantiation.

Regulation of the Internet. In general, existing laws and regulations apply
to transactions and other activity on the Internet; however, the precise
applicability of these laws and regulations to the Internet is sometimes
uncertain. The vast majority of such laws were adopted prior to the advent of
the Internet and, as a result, do not contemplate or address the unique issues
of the Internet or electronic commerce. Nevertheless, numerous federal and state
government agencies have already demonstrated significant activity in promoting
consumer protection and enforcing other regulatory and disclosure statutes on
the Internet. Additionally, due to the increasing use of the Internet as a
medium for commerce and communication, it is possible that new laws and
regulations may be enacted with respect to the Internet and electronic commerce
covering issues such as user privacy, freedom of expression, advertising,
pricing, content and quality of products and services, taxation, intellectual
property rights and information security. The adoption of such laws or
regulations and the applicability of existing laws and regulations to the
Internet may impair the growth of Internet use and result in a decline in
Lifestream's sales.

A number of legislative proposals have been made at the federal, state and
local level, and by foreign governments, that would impose additional taxes on
the sale of goods and services over the Internet, and certain states have taken
measures to tax Internet-related activities. Although Congress recently placed a
three-year moratorium on new state and local taxes on Internet access or on
discriminatory taxes on electronic commerce, existing state or local laws were
expressly excepted from this moratorium. Further, once this moratorium is
lifted, some type of federal and/or state taxes may be imposed upon Internet
commerce. Such legislation or other attempts at regulating commerce over the
Internet may substantially impair the growth of commerce on the Internet and, as
a result, adversely affect Lifestream's opportunity to derive financial benefit
from such activities.

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Employees

Lifestream is a development stage company and currently has no employees.
Lifestream is currently managed by Herman Poon, its sole officer and director.
Lifestream looks to Mr. Poon for his entrepreneurial skills and talents. For a
complete discussion of Mr. Poon's experience, please see "Directors and
Executive Officers." Management plans to use consultants, attorneys and
accountants as necessary and does not plan to engage any full-time employees in
the near future. Lifestream may hire marketing employees based on the projected
size of the market and the compensation necessary to retain qualified sales
employees. A portion of any employee compensation likely would include the right
to acquire stock in Lifestream, which would dilute the ownership interest of
holders of existing shares of its common stock.

Available Information and Reports to Securities Holders

Lifestream has filed with the Securities and Exchange Commission a
registration statement on Form SB-2 with respect to the common stock offered by
this prospectus. This prospectus, which constitutes a part of the registration
statement, does not contain all of the information set forth in the registration
statement or the exhibits and schedules which are part of the registration
statement. For further information with respect to Lifestream and its common
stock, see the registration statement and the exhibits and schedules thereto.
Any document Lifestream files may be read and copied at the Commission's Public
Reference Room located at 450 Fifth Street N.W., Washington D.C. 20549, and the
public reference rooms in New York, New York, and Chicago, Illinois. Please call
the Commission at 1-800-SEC-0330 for further information about the public
reference rooms. Lifestream's filings with the Commission are also available to
the public from the Commission's website at http://www.sec.gov.

Upon completion of this offering, Lifestream will become subject to the
information and periodic reporting requirements of the Securities Exchange Act
and, accordingly, will file periodic reports, proxy statements and other
information with the Commission. Such periodic reports, proxy statements and
other information will be available for inspection and copying at the
Commission's public reference rooms, and the website of the Commission referred
to above.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion and analysis of Lifestream's financial condition
and results of operations should be read in conjunction with the Financial
Statements and accompanying notes and the other financial information appearing
elsewhere in this Prospectus.

This prospectus contains forward-looking statements, the accuracy of which
involve risks and uncertainties. Words such as "anticipates," "believes,"
"plans," "expects," "future," "intends" and similar expressions are used to
identify forward-looking statements. This prospectus also contains
forward-looking statements attributed to certain third parties relating to their
estimates regarding the potential markets for Vitamineralherb products.
Prospective investors should not place undue reliance on these forward-looking
statements, which apply only as of the date of this prospectus. Lifestream's
actual results could differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by
Lifestream described in "Risk Factors" and elsewhere in this prospectus. The
following discussion and analysis should be read in conjunction with
Lifestream's Financial Statements and Notes thereto and other financial
information included elsewhere in this prospectus.

Results of Operations

During the period from April 24, 2000 through June 30, 2000, Lifestream has
engaged in no significant operations other than organizational activities,
acquisition of the rights to market Vitamineralherb and preparation for
registration of its securities under the Securities Act of 1933, as amended. No
revenues were received by Lifestream during this period.

For the current fiscal year, Lifestream anticipates incurring a loss as a
result of organizational expenses, expenses associated with registration under
the Securities Act of 1933, and expenses associated with setting up a company
structure to begin implementing its business plan. Lifestream anticipates that
until these procedures are completed, it will not generate revenues, and may
continue to operate at a loss thereafter, depending upon the performance of the
business.

Lifestream's business plan is to determine the feasibility of marketing the
Vitamineralherb products in various markets, and, if the products prove to be in
demand, begin marketing and selling Vitamineralherb products.

Liquidity and Capital Resources

Lifestream remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
shareholders' equity. Consequently, Lifestream's balance sheet as of June 30,
2000, reflects total assets of $29,167, in the form of a license. Organizational
expenses and accrued offering costs of $40,000 were paid for by the sole
shareholder and expensed to operations.

In order to determine the feasibility of its business plan, Lifestream
plans, during the next six to twelve months, to conduct research into these
various potential target markets. Should Lifestream determine that the
exploitation of the license is feasible, it will engage salespeople to market
the products. Based primarily on discussions with the licensor, Lifestream
believes that during its first operational quarter, it will need a capital
infusion of approximately $85,000 to achieve a sustainable sales level where
ongoing operations can be funded out of revenues. This capital infusion is
intended to cover costs of advertising, hiring and paying two salespeople, and
administrative expenses. In addition, Lifestream will need approximately
$260,000 in the event it determines that its market will not pay in advance and
it will have to extend credit. These expenses will exceed the funds raised by
this offering, and Lifestream will have to obtain additional financing through
an offering or capital contributions by current shareholders.

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Lifestream is conducting this offering, in part, because it believes that
an early registration of its equity securities will minimize some of the
impediments to capital formation that otherwise exist. By having a registration
statement in place, Lifestream believes it will be in a better position, either
to conduct a future public offering of its securities or to undertake a private
placement with registration rights, than if it were a completely private
company. Registering its shares will help minimize the liquidity discounts
Lifestream may otherwise have to take in a future private placement of its
equity securities, because investors will have a high degree of confidence that
the Rule 144(c)(1) public information requirement will be satisfied, and a
public market will exist to effect Rule 144(g) broker transactions. Lifestream
believes that the cost of registering its securities, and undertaking the
affirmative disclosure obligations that such a registration entails, will be
more than offset by avoiding deep liquidity discounts in future sales of
securities. No specific private investors have been identified, but Lifestream's
management has general knowledge of an investor class interested in investing in
companies that can demonstrate a clear path to an early liquidity event.

No commitments to provide additional funds have been made by management or
shareholders. Accordingly, there can be no assurance that any additional funds
will be available on terms acceptable to Lifestream or at all. Lifestream
expects to begin earning revenues shortly after a sales force is in place.

In addition, Lifestream may engage in a combination with another business.
Lifestream cannot predict the extent to which its liquidity and capital
resources will be diminished prior to the consummation of a business combination
or whether its capital will be further depleted by the operating losses (if any)
of the business entity with which Lifestream may eventually combine. Lifestream
has engaged in discussions concerning potential business combinations, but has
not entered into any agreement for such a combination.

Lifestream will need additional capital to carry out its business plan or
to engage in a business combination. No commitments to provide additional funds
have been made by management or other shareholders. Accordingly, there can be no
assurance that any additional funds will be available on terms acceptable to
Lifestream or at all. Lifestream has no commitments for capital expenditures.

DESCRIPTION OF PROPERTY

Lifestream currently maintains limited office space, occupied by Herman
Poon, for which it pays no rent. Its address is #4020 - 8171 Ackroyd Road,
Richmond, British Columbia V6X 3K1, Canada and its phone number is (604)
618-3189. Lifestream does not believe that it will need to obtain additional
office space at any time in the foreseeable future until its business plan is
more fully implemented.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

No director, executive officer or nominee for election as a director of
Lifestream, and no owner of five percent or more of Lifestream's outstanding
shares or any member of their immediate family has entered into or proposed any
transaction in which the amount involved exceeds $60,000.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

No established public trading market exists for Lifestream's securities.
Lifestream has no common equity subject to outstanding purchase options or
warrants. Lifestream has no securities convertible into its common equity. There
is no common equity that could be sold pursuant to Rule 144 under the Securities
Act or that Lifestream has agreed to register under the Securities Act for sale
by shareholders. Except for this offering, there is no common equity that is
being, or has been publicly proposed to be, publicly offered by Lifestream.

As of September 1, 2000, there were 2,500,000 shares of common stock
outstanding, held by 1 shareholder of record. Upon effectiveness of the
registration statement that includes this prospectus, all of Lifestream's
outstanding shares will be eligible for sale.

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To date Lifestream has not paid any dividends on its common stock and does
not expect to declare or pay any dividends on its common stock in the
foreseeable future. Payment of any dividends will depend upon Lifestream's
future earnings, if any, its financial condition, and other factors as deemed
relevant by the Board of Directors.

EXECUTIVE COMPENSATION

No officer or director has received any remuneration from Lifestream.
Although there is no current plan in existence, it is possible that Lifestream
will adopt a plan to pay or accrue compensation to its officers and directors
for services related to the implementation of Lifestream's business plan.
Lifestream has no stock option, retirement, incentive, defined benefit,
actuarial, pension or profit-sharing programs for the benefit of directors,
officers or other employees, but the Board of Directors may recommend adoption
of one or more such programs in the future. Lifestream has no employment
contract or compensatory plan or arrangement with any executive officer of
Lifestream. The director currently does not receive any cash compensation from
Lifestream for his service as a member of the board of directors. There is no
compensation committee, and no compensation policies have been adopted. See
"Certain Relationships and Related Transactions."

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Lifestream Inc.

(A Development Stage Company)

Index

Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . . F-1

Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2

Statement of Operations. . . . . . . . . . . . . . . . . . . . . . . . . F-3

Statement of Cash Flows. . . . . . . . . . . . . . . . . . . . . . . . . F-4

Statement of Stockholders' Equity. . . . . . . . . . . . . . . . . . . . F-5

Notes to the Financial Statements. . . . . . . . . . . . . . . . . . . . F-6

<PAGE>
Elliott Tulk Pryce Anderson E/T/P/A
Chartered Accountants

<TABLE>
<CAPTION>
<S> <C> <C>
Suite 1101 Tel: 604/684-5357 A PARTNERSHIP OF INCORPORATED PROFESSIONALS
750 West Pender St. Fax: 604/684-0187 Robin A.W. Elliott, FCA Barrie C. Anderson, CA
Vancouver, BC E-Mail: [email protected] Don M. Prest, CA Keith S. Elliott, CA
Canada V6C 2T8 www.etpa.bc.ca Lisa M. Humer, CA
</TABLE>

Independent Auditor's Report
------------------------------

To the Board of Directors
Lifestream Inc.
(A Development Stage Company)

We have audited the accompanying balance sheet of Lifestream Inc. (A Development
Stage Company) as of June 30, 2000 and the related statements of operations,
stockholders' equity and cash flows for the period from April 24, 2000 (Date of
Inception) to June 30, 2000. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with U.S. generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the aforementioned financial statements present fairly, in all
material respects, the financial position of Lifestream Inc. (A Development
Stage Company), as of June 30, 2000, and the results of its operations and its
cash flows for the period from April 24, 2000 (Date of Inception) to June 30,
2000, in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company has not generated any revenues or conducted any
operations since inception. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also discussed in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

/s/ Elliott Tulk Pryce Anderson

CHARTERED ACCOUNTANTS
Vancouver, Canada
July 13, 2000

MEMBER
IGAF
THE INTERNATIONAL GROUP OF
ACCOUNTING FIRMS

F-1
<PAGE>
Lifestream Inc.
(A Development Stage Company)
Balance Sheet
(expressed in U.S. dollars)

June 30,
2000
$

Asset
License (Notes 3 and 4) 29,167
=======

Liabilities and Stockholders' Equity
Current Liability
Note payable (Note 4) 50,000
-------

Stockholders' Equity
Common Stock, 100,000,000 common shares authorized with a par
value of $.0001; 2,500,000 common shares issued and outstanding 250
Additional Paid in Capital 24,750
-------

25,000
-------

Preferred Stock, 20,000,000 preferred shares authorized with a
par value of $.0001; none issued -
-------

Deficit Accumulated During the Development Stage (45,833)
-------

29,167
=======

Contingent Liability (Note 1)
Commitment (Note 3)

F-2david

(The accompanying notes are an integral
part of the financial statements)
<PAGE>
<TABLE>
<CAPTION>
Lifestream Inc.
(A Development Stage Company)
Statement of Operations
(expressed in U.S. dollars)

From April 24, 2000
(Date of Inception)
to June 30, 2000
$
<S> <C>

Revenue -
--------
Expenses
Amortization of license 5,833
Organizational expenses and offering costs 40,000
--------

Net Loss (45,833)
========
</TABLE>

F-3

(The accompanying notes are an integral
part of the financial statements)

<PAGE>
<TABLE>
<CAPTION>
Lifestream Inc.
(A Development Stage Company)
Statement of Operations
(expressed in U.S. dollars)

From April 24, 2000
(Date of Inception)
to June 30, 2000
$
<S> <C>

Cash Flows to Operating Activities
Net loss (45,833)
Non-cash items
Amortization of license 5,833
Organizational expenses and offering costs
paid by issuing a promissory note 40,000
-------

Net Cash Used by Operating Activities -
-------

Change in cash -
-------

Cash - beginning of period -
-------

Cash - end of period -
=======

Non-Cash Financing Activities
A total of 2,500,000 shares were issued to a director
at a fair market value of $0.01 per share for the
acquisition of a License and organizational and
offering costs paid (Note 3) 25,000

A note payable was assumed by the Company for
the acquisition of a license and organizational expenses
and offering costs paid by a director (Notes 3 and 5) 50,000
-------

75,000
=======

Supplemental Disclosures
Interest paid -
Income tax paid -
</TABLE>

F-4

(The accompanying notes are an integral
part of the financial statements)

<PAGE>
<TABLE>
<CAPTION>
Lifestream Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
From April 24, 2000 (Date of Inception) to June 30, 2000
(expressed in U.S. dollars)

Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Total Stage
# $ $ $ $
<S> <C> <C> <C> <C> <C>
Balance - April 24, 2000 (Date of Inception) - - - - -
Stock issued for a license and organizational
costs at a fair market value of $0.01 per share 2,500,000 250 24,750 25,000 -

Net loss for the period - - - - (45,833)
--------- ------ -------- ------- ---------

Balance - June 30, 2000 2,500,000 250 24,750 25,000 (45,833)
========= ====== ======== ======= =========
</TABLE>

F-5

(The accompanying notes are an integral
part of the financial statements)

<PAGE>
Lifestream Inc.
(A Development Stage Company)
Notes to the Financial Statements
(expressed in U.S. dollars)

1. Development Stage Company

Lifestream Inc. herein (the "Company") was incorporated in the State of
Washington, U.S.A. on April 24, 2000. The Company acquired a license to
market and distribute vitamins, minerals, nutritional supplements, and
other health and fitness products in the New York City boroughs of
Manhatten and Staten Island. The grantor of the license offers these
products for sale from various suppliers on their Web Site.

The Company is in the development stage.

In a development stage company, management devotes most of its activities
in developing a market for its products. Planned principal activities have
not yet begun. The ability of the Company to emerge from the development
stage with respect to any planned principal business activity is dependent
upon its successful efforts to raise additional equity financing and/or
attain profitable operations. There is no guarantee that the Company will
be able to raise any equity financing or sell any of its products at a
profit. There is substantial doubt regarding the Company's ability to
continue as a going concern.

2. Summary of Significant Accounting Policies

(a) Year end

The Company's fiscal year end is December 31.

(b) License

The cost to acquire a license is capitalized as incurred. These costs are
being amortized on a straight-line basis over the next twelve months,
commencing June 1, 2000.

The Company considers all highly liquid instruments with a maturity of
three months or less at the time of issuance to be cash equivalents.

(d) Revenue Recognition

The Company recognizes revenue on a net profit basis after the grantor of
its license receives 50% of the profits. Revenue will be recorded when the
grantor of the license has received cleared funds, made and paid for the
order with the supplies of the product, and net profit is determined by the
grantor.

(e) Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the periods. Actual results could differ from those estimates.

F-6
<PAGE>
3. License

The Company's only asset is a license to market vitamins, minerals,
nutritional supplements and other health and fitness products in the New
York City boroughs of Manhatten and Staten Island, through the Grantor's
Web Site. The Company desires to market these products to medical
practitioners, alternative health professionals, martial arts studios and
instructors, sports and fitness trainers, other health and fitness
practitioners, school and other fund raising programs and other similar
types of customers. The license was acquired on April 24, 2000 for a term
of three years. The Company must pay an annual fee of $500 for maintenance
of the Grantor's Web Site commencing on the anniversary date. The Grantor
of the license retains 50% of the profits.

See Note 4 for consideration paid to a related party for the assignment of
this license.

4. Note Payable

The note payable is unsecured, non-interest bearing and is repayable upon
the successful completion of an Initial Public Offering of the common stock
of the Company and sale of all registered shares pursuant to such offering.

5. Related Party Transactions

The License referred to in Note 3 was assigned to the Company by the sole
director and President of the Company for consideration of 2,500,000 shares
having a fair market value of $25,000 and the assumption of a note payable.
The Grantor of the License is not related to the Company.

The Company issued 25,000,000 shares having a fair market value of $0.01
each and assumed a note payable to the President of the Company for
organizational expenses and offering costs in the amount of $40,000.

F-7
<PAGE>
PART II-INFORMATION NOT REQUIRED IN PROSPECTUS

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Lifestream's Articles of Incorporation provide that it must indemnify its
directors and officers to the fullest extent permitted under Washington law
against all liabilities incurred by reason of the fact that the person is or was
a director or officer of Lifestream or a fiduciary of an employee benefit plan,
or is or was serving at the request of Lifestream as a director or officer, or
fiduciary of an employee benefit plan, of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise.

The effect of these provisions is potentially to indemnify Lifestream's
directors and officers from all costs and expenses of liability incurred by them
in connection with any action, suit or proceeding in which they are involved by
reason of their affiliation with Lifestream. Pursuant to Washington law, a
corporation may indemnify a director, provided that such indemnity shall not
apply on account of: (a) acts or omissions of the director finally adjudged to
be intentional misconduct or a knowing violation of law; (b) unlawful
distributions; or (c) any transaction with respect to which it was finally
adjudged that such director personally received a benefit in money, property, or
services to which the director was not legally entitled.

The bylaws of Lifestream, filed as Exhibit 3.2, provide that it will
indemnify its officers and directors for costs and expenses incurred in
connection with the defense of actions, suits, or proceedings against them on
account of their being or having been directors or officers of Lifestream,
absent a finding of negligence or misconduct in office. Lifestream's Bylaws also
permit it to maintain insurance on behalf of its officers, directors, employees
and agents against any liability asserted against and incurred by that person
whether or not Lifestream has the power to indemnify such person against
liability for any of those acts.

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The securities are being registered for the account of selling
shareholders, and all of the following expenses will be borne by such
shareholders. The amounts set forth are estimates except for the SEC
registration fee:

AMOUNT TO
BE PAID
----------
SEC registration fee . . . . . . . . . . . . . . . . $ 3
Printing and engraving expenses . . . . . . . . . . . --
Attorneys' fees and expenses . . . . . . . . . . . . 40,000
Accountants' fees and expenses . . . . . . . . . . . 1,500
Transfer agent's and registrar's fees and expenses . 500
Miscellaneous . . . . . . . . . . . . . . . . . . . . 965
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . $ 42,968
==========

The Registrant will bear all expenses shown above.

RECENT SALES OF UNREGISTERED SECURITIES

Set forth below is information regarding the issuance and sales of
Lifestream's securities without registration since its formation. No such sales
involved the use of an underwriter and no commissions were paid in connection
with the sale of any securities.

On April 24, 2000, Lifestream issued 2,500,000 shares of common stock to
Herman Poon in compensation, along with a promissory note for $50,000, for the
license of Vitamineralherb.com rights. The issuance of the shares was exempt
from registration under Rule 506 of Regulation D, and sections 3(b) and 4(2) of
the Securities Act of 1933, as amended, due to Mr. Poon's status as the founder
and initial management of Lifestream, and his status as an accredited investor,
and the limited number of investors (one).

II-1
<PAGE>
EXHIBITS

The following exhibits are filed as part of this Registration Statement:

EXHIBIT
NUMBER DESCRIPTION
------ -----------

3.1 Articles of Incorporation
3.2 Bylaws
4.1 Specimen Stock Certificate
4.2 Stock Subscription Agreement
5.1 Opinion re: legality
10.1 License Agreement
10.2 Assignment of License Agreement
10.3 Promissory Note
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (see Exhibit 5.1)
27.1 Financial Data Schedule
_________

UNDERTAKINGS

The Registrant hereby undertakes that it will:

(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:

(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;

(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information
in the registration statement; and

(iii) Include any additional or changed material information on the
plan of distribution.

(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the Offering of the securities of the securities at that time to be
the initial bona fide Offering.

(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the Offering.

(4) Provide to the Underwriters at the closing specified in the
underwriting agreement certificates in such denominations and registered in such
names as required by the Underwriters to permit prompt delivery to each
purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

II-2
<PAGE>
SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, British Columbia, Canada, on October 3,
2000.

Lifestream Inc.

By: /s/ Herman Poon
---------------------------------
HERMAN POON
PRESIDENT

In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates stated.

SIGNATURE TITLE DATE
--------- ----- ----

/s/ Herman Poon President, Secretary, Treasurer, October 3, 2000
------------------------- and Director
HERMAN POON

II-3
<PAGE>
LIST OF EXHIBITS

The following exhibits are filed as part of this Registration Statement:

EXHIBIT
NUMBER DESCRIPTION
------ -----------
3.1 Articles of Incorporation
3.2 Bylaws
4.1 Specimen Stock Certificate
4.2 Stock Subscription Agreement
5.1 Opinion re: legality
10.1 License Agreement
10.2 Assignment of License Agreement
10.3 Promissory Note
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (see Exhibit 5.1)
27.1 Financial Data Schedule
__________

<PAGE>