As filed with the Securities and Exchange Commission on October 6, 2000
File No.
------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form SB-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MENTOR PROMOTIONS, INC.
(Exact name of registrant as specified in its charter)
Nevada 522200 75-2900513
----------------------------- ------------------------- -----------------
(State or jurisdiction of (Primary Industrial I.R.S. Employer
incorporation or organization) Classification Code No.) Identification No.
892 Steger Town Drive, Suite 34, Rockwall, Texas 75032 (972) 772-7740
-----------------------------------------------------------------------
(Address, including the ZIP code & telephone number, including area code of
Registrant's principal executive office)
Mark Wells
892 Steger Town Drive, Suite 34, Rockwall, Texas 75032 (972) 772-7740
------------------------------------------------------------------------
(Name, address, including zip code, and telephone number, including area code
of agent for service)
Copies to: T. Alan Owen & Associates, P.C.
--------- -------------------------------
Attorneys at Law
1112 E. Copeland Road, Suite 420
Arlington, Texas 76011
(817) 460-4498
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------------------------
Title of Each Amount Proposed Maximum Proposed Amount of
Class of Securities To be Offering Price Maximum Aggregate Registration
to be Registered Registered Per Share (1) Offering Price (1) Fee
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock,
$0.001 par value
Minimum 200,000 $0.25 $ 50,000 $269
Maximum 2,000,000 $0.25 $ 500,000 $269
Common stock
$0.001 par value (2) 200,000 $0.25 $ 25,000
-------------------------------------------------------------------------------------------
Total maximum 4,200,000 $0.25 $ 525,000 $269 (3)
</TABLE>
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 the registration statement
shall hereafter 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.
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Represents securities being registered for resale by selling security
holders.
(3) Represents minimum fee.
<PAGE>
Initial public offering
prospectus
Mentor Promotions, Inc.
Minimum of 200,000 shares of common stock, and a
Maximum of 2,000,000 shares of common stock
$0.25 per share
We are making a best efforts offering to sell common stock in our company. The
common stock will be sold by our sole officer and director, Mark Wells. The
offering price was determined arbitrarily and we will raise a minimum of $50,000
and a maximum of $500,000. The funds will be held in escrow by an attorney until
the minimum amount is sold, at which time the funds will be released to the
company and stock certificates issued. The offering will end on April 10, 2001
and should we not sell the minimum amount, the funds will promptly be returned
to investors, and no interest will be paid on these funds.
The Offering:
Per Share Minimum Maximum
--------- ------- -------
Public Offering Price . . . $0.25 $ 50,000 $500,000
There is currently no market for our securities and no market may ever develop
for our securities.
----------------------------
This investment involves a high degree of risk. You should purchase shares only
if you can afford a complete loss. See "Risk Factors" Beginning on Page 3.
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 the prospectus. Any representation to the contrary is a
criminal offense.
-----------------------------
This Prospectus is dated October 6, 2000
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PROSPECTUS SUMMARY
OUR COMPANY
We were incorporated on August 2, 2000 in the State of Nevada. Our
executive offices are located at 892 Steger Town Drive, Suite 34, Rockwall,
Texas 75032. We are engaged in the promotion of companies and/or products over
the internet. The funds from this offering will allow us to increase further
develop our advertising and marketing strategies, evaluate and create new email
lists for marketing and make agreements with websites in order to increase
exposure on behalf of our clients and potential clients. The minimum funds
raised in this offering will take us to a point where we reach the operating
stage.
As well as being a newly formed company, we:
o are controlled by one individual;
o rely on our sole officer and director to manage the business, this
offering and continuing operations to see us through to profitability;
o have limited operating history with little revenue from operations;
o operate in an industry with low barriers of entry which could add to
our competition, and one in which there are many competitors already,
many of which have much greater resources than we do; and
o received a report from our independent certified public accountant who
gave us a 'going concern' opinion which states that we do not have
sufficient capital or operations to show that we can continue as a
viable business for the coming year.
THE OFFERING
Minimum Maximum
------- -------
Common stock offered 200,000 2,000,000
Total shares outstanding after this offering 4,400,000 6,200,000
Officers, directors and their affiliates will not be able to purchase shares in
this offering.
USE OF PROCEEDS
Most of the money you invest will represent proceeds to the company. We will use
the proceeds from this offering to:
o pay expenses of this offering
o develop our technology to accumulate and analyze demographic
information
o marketing and general working capital
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RISK FACTORS
You should carefully consider the risks described below and all other
information contained in this prospectus before making an investment decision.
We are a recently formed company, formed in the State of Nevada on August 2,
2000, with limited activity and expect to have losses that may continue for the
foreseeable future.
We have not achieved profitability from continued operations and expect to incur
net losses for the foreseeable future. We expect to incur significant operating
expenses and, as a result, will need to generate significant revenues to achieve
profitability, which may not occur. Even if we do achieve profitability, we may
be unable to sustain or increase profitability on a quarterly or annual basis in
the future. If we are unable to achieve profitability, your investment in our
common stock may decline or become worthless.
We rely on our sole officer for decisions and he will retain substantial control
over our business after the offering and may make decisions that are not in the
best interest of all stockholders.
Upon completion of this offering, our sole officer will, in the aggregate,
beneficially own approximately 90.91% (or 64.52% if maximum is sold) of the
outstanding common stock. As a result, our sole officer will have the ability to
control substantially all the matters submitted to our stockholders for
approval, including the election and removal of directors and any merger,
consolidation or sale of all or substantially all of our assets. He will also
control our management and affairs. Accordingly, this concentration of ownership
may have the effect of delaying, deferring or preventing a change in control of
us, impeding a merger, consolidation, takeover or other business combination
involving us or discouraging a potential acquirer from making a tender offer or
otherwise attempting to take control of us, even if the transaction would be
beneficial to other stockholders. This in turn could materially cause the value
of our stock to decline or become worthless.
We may have to raise additional capital which may not be available or may be too
costly.
Our capital requirements are and will continue to be more than our operating
income. We do not have sufficient cash to indefinitely sustain operating losses.
Our potential profitability depends on our ability to generate and sustain
substantially higher net sales while maintaining reasonable expense levels. We
cannot assure you that we will be able to operate on a profitable basis or that
cash flow from operations will be sufficient to pay our operating costs. We
anticipate that the funds raised in this offering will be sufficient to fund
operations through June 2001. Thereafter, if we do not achieve profitability, we
will need to raise additional capital to finance our operations. We anticipate
seeking additional financing through debt or equity offerings. We cannot assure
you that additional financing will be available to us, or, if available, any
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financing will be on terms acceptable or favorable to us. If we need and cannot
raise additional funds, further development of our business, upgrades in our
technology, additions to our product lines may be delayed and we otherwise may
not be able to execute our business plan, all of which may have a material
adverse effect on our operations; if this happens, the value of your investment
will decline and may become worthless.
We may experience difficulties with developing our technology to accumulate and
analyze data which could cause us to have poor performance in our business,
which could cause us to lose customers and in turn could cause the value of your
investment to decline or become worthless.
We will be dependent upon our ability to accumulate and analyze demographic data
in order to target specific portions of the internet market which our clients
will expect us to be able to do. If we are unable to obtain or develop the
technology to accumulate enough email addresses and analyze the demographic
information, we may find it difficult to obtain clients to promote and this will
have an adverse effect on our business and the value of your investment may
decline or become worthless.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. These
forward-looking statements are not historical facts but rather are based on
current expectations, estimates and projections about our industry, our beliefs
and our assumptions. Words such as "anticipates", "expects", "intends", "plans",
"believes", "seeks" and "estimates", and variations of these words and similar
expressions, are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond our control, are
difficult to predict and could cause actual results to differ materially from
those expressed, implied or forecasted in the forward-looking statements. In
addition, the forward-looking events discussed in this prospectus might not
occur. These risks and uncertainties include, among others, those described in
"Risk Factors" and elsewhere in this prospectus. Readers are cautioned not to
place undue reliance on these forward-looking statements, which reflect our
management's view only as of the date of this prospectus.
USE OF PROCEEDS
The total cost of the minimum offering is estimated to be $16,769, or
$33,769 if the maximum is sold consisting primarily of legal, accounting and
blue sky fees.
The following table sets forth how we anticipate using the proceeds
from selling common stock in this offering, reflecting the minimum and maximum
subscription amounts:
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$50,000 $500,000
Minimum Maximum
--------------------------------------------------------------------------------
Legal, Accounting & Printing Expenses 9,500 26,500
Other Offering Expenses 7,269 7,269
Net Proceeds to Company 33,231 466,231
-------- ---------
TOTAL $ 50,000 $ 500,000
The following describes each of the expense categories:
o legal, accounting and printing expense is the estimated costs
associated with this offering;
o other offering expenses includes SEC registration fee, blue sky fees
and miscellaneous expenses with regards to this offering.
The following table sets forth how we anticipate using the net proceeds
to the company:
$50,000 $500,000
Minimum Maximum
--------------------------------------------------------------------------------
Development of website $ 10,000 $ 50,000
Office equipment 4,000 46,000
Salaries -0- 90,000
Internet security -0- 15,000
Buying/developing new email lists 24,000 245,000
General corporate overhead 5,231 20,231
-------- ---------
Proceeds to company $ 33,231 $ 466,231
We have a fully operational website which is our main asset. To date,
our internet activity is limited and we have little revenue from operations.
DILUTION
If you purchase common stock in this offering, you will experience an
immediate and substantial dilution in the projected book value of the common
stock from the price you pay in this initial offering.
The projected book value of our common stock as of September 30, 2000
was $20,668 or $0.005 per share. Projected book value per share is equal to our
total assets, less total liabilities, divided by the number of shares of common
stock outstanding.
After giving effect to the sale of common stock offered by us in this
offering, and the receipt and application of the estimated net proceeds (at an
initial public offering price of $0.25 per share, after deducting estimated
offering expenses), our projected book value as of September 30, 2000 would be
approximately $53,889 or $0.01 per share, if the minimum is sold, and $486,899
or $0.08 per share, if the maximum is sold.
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This means that if you buy stock in this offering at $0.25 per share,
you will pay substantially more than our current shareholders. The following
represents your dilution:
o if the minimum of 200,000 shares are sold, an immediate decrease in
book value to our new shareholders from $0.25 to $0.01 per share and
an immediate increase in book value per common share to our current
stockholders.
o if the maximum of 4,000,000 shares are sold, an immediate decrease in
book value to our new shareholders from $0.25 to $0.08 per share and
an immediate increase in book value per common share to our current
stockholders.
The following table illustrates this per share dilution:
Minimum Maximum
Assumed initial public offering price $0.25 $0.25
Projected book value as of September 30, 2000 $0.00 $0.00
Projected book value after this offering $0.01 $0.08
Increase attributable to new stockholders: $0.01 $0.08
Projected book value
as of September 30, 2000 after this offering $0.01 $0.08
Decrease to new stockholders ($0.24) ($0.17)
Percentage dilution to new stockholders 96 % 68 %
The following table summarizes on a projected basis as of September 30,
2000, shows the differences between the number of shares of common stock
purchased, the total consideration paid and the total average price per share
paid by the existing stockholders and the new investors purchasing shares of
common stock in this offering:
Minimum offering
----------------
Number Percent Average
of shares of shares Amount price per
owned owned paid share % paid
--------------------------------------------------------------------------------
Current
shareholders 2,200,000 91.7 $ 14,000 $ 0.006 18.9
New investors 200,000 8.3 $ 50,000 $ 0.25 81.1
----------------------------------------------------------
Total 2,400,000 100.0 $ 74,000
Maximum offering
----------------
Number Percent Average
of shares of shares Amount price per
owned owned paid share % paid
--------------------------------------------------------------------------------
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Current
shareholders 2,200,000 52.4 $ 14,000 $ 0.006 2.7
New investors 2,000,000 47.6 $ 500,000 $ 0.25 97.3
-----------------------------------------------------------
Total 4,200,000 100.0 $ 527,000
PLAN OF DISTRIBUTION
This is a direct participation offering of our common stock and is
being sold on our behalf by our sole officer and director, who will receive no
commission on such sales. All sales will be made by personal contact by our sole
officer and director, Mark Wells. We will not be mailing our prospectus to
anyone or soliciting anyone who is not personally known by Mr. Wells, introduced
to Mr. Wells and personally contacted by him or referred to him.
The money we raise in this offering before the minimum amount is sold
will be held under an escrow agreement with T. Alan Owen & Associates, P.C.,
Attorneys at Law. Such funds will be refunded immediately, without interest, if
the minimum amount is not sold by April 6, 2001.
Certificates for shares of common stock sold in this offering will be
delivered to the purchasers by Signature Stock Transfer, Inc., the stock
transfer company chosen by the company as soon as the minimum subscription
amount is raised.
USE OF PROCEEDS
The total cost of the offering is estimated to be $16,769 if the
minimum is sold, or $33,769 if the maximum is sold, consisting primarily of
legal, accounting and blue sky fees. We will pay these costs out of the funds we
raise in this offering.
The following table shows how we plan to use the proceeds from selling
common stock in this offering, reflecting the minimum and maximum subscription
amounts:
$50,000 $500,000
minimum maximum
--------------------------------------------------------------------------------
Legal, accounting & printing expenses 9,500 26,500
Other offering expenses 7,269 7,269
Net proceeds to company 33,231 466,231
-------- ---------
Total $ 50,000 $ 500,000
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The following describes each of the expense categories:
o legal, accounting and printing expense is the estimated costs
associated with this offering;
o other offering expenses includes SEC registration fee, blue sky fees
and miscellaneous expenses with regards to this offering.
The following table shows how we plan to use the net proceeds to the
company:
$50,000 $500,000
minimum maximum
--------------------------------------------------------------------------------
Development of website $ 10,000 $ 50,000
Office equipment 4,000 46,000
Salaries -0- 90,000
Internet security -0- 15,000
Buying/developing new email lists 24,000 245,000
General corporate overhead 5,231 20,231
---------- ----------
Proceeds to company $ 33,231 $ 466,231
We have a fully operational website which is our main asset. To date,
our internet activity is limited and we have little revenue from operations.
DESCRIPTION OF BUSINESS
We were incorporated in Nevada on August 2, 2000. Our founder, Mark
Wells is our sole director, officer and employee and holds 4,000,000 shares of
common stock which we issued to him for $4,000, composed of $500 cash and $3,500
of his services.
We are a company that promotes products or companies on the internet.
The internet has become a significant part of our lives, both in business and
personally. Although we do not use our website to solicit business at this time,
we have a basic website which is in process of being updated at
http://www.mentor-promotions.com, which describes our various services. Our main
method of advertising our services is through direct contact.
The method we use to promote or advertise a product or business is via
the internet. To date, we have had limited activity because we need more money
to fund online questionnaires, purchasing email lists, etc.
When we raise the funds from this offering, we will have sufficient
funds and we will focus on email, banner ads and links to other sites. We will
purchase email lists for specific categories and develop other lists, refine and
analyze the lists in order to better target our email advertising to get the
greatest response per email. We also plan to develop a variety of services to
assist companies promote themselves or their products over the internet.
Our goal is to become a boutique advertiser on the internet by
assisting companies to target their advertising specifically to persons whose
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demographic data and interests as indicated by them on questionnaires meet the
parameters of our clients.
Our initial concentration will be twofold:
o firstly, to purchase email lists of internet users who fit certain
profiles;
o secondly, we will develop a software system that can take the
demographic and interest information that we buy or gather from people
over the internet. When complete, this system will allow us to
automate the choosing of all email addresses that relate to a specific
target category or interest type and design an email advertisement and
sent it without having to physically determine which emails to send
the advertisement to.
As part of our service we plan to:
o analyze site traffic; this includes th return frequency of visitors,
their country of origin, which sites are sending visitors and search
engines used to find your site;
o 24 hour monitoring of the website; this includes pager notification if
necessary, instant email notification, weekly email summary reports
and even monitors your competitors sites;
o monitor how many hits the website gets;
o monitor the links and images on all pages of the website;
o customize a clients website to include links that appear to be part of
the site itself i.e. a search engine link;
o submission of a clients site to search engines; this can increase
traffic and exposure to a site. Depending upon the services subscribed
for, we will purchase, on behalf of the client, services that offer a
site to come up in the top twenty or fifty lists of a search engine;
o customize a message board on the website; and
o have a poll where clients can survey their visitors on any topic;
these are good for getting interest and getting return visits.
As we develop the systems to integrate and analyze the data from
visitors, from email questionnaires or from purchased email lists, we will be
able to provide a complete range of services to a client for the promotion of
their product or business over the internet.
Growth Strategy:
----------------
Our objective is to initially target businesses that need to get their
name known to internet users. We have chosen this strategy because a business by
advertising or promoting its name will draw internet users to its website and
there will be able to sell one or more products. The key for those companies
will be to have an appealing and user friendly website.
We believe that there are many companies needing our services because
of the higher projected growth for the direct marketing (internet) channel is
primarily based on an increased user familiarity with PCs, coupled with the
emergence of industry standards and component commonality, and the resultant
increase in customer comfort with using the internet to research or purchase
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products without the need to "touch and feel" them. In addition, broader product
offerings, lower prices and greater purchasing convenience that direct marketers
generally provide over traditional retail stores and local dealers.
Status of product or services based on public information requiring an
investment or material assets of the issuer.
--------------------------------------------------------------------------------
As we are a new company, we do not have any information that has been
made public or that will require an investment or material asset of ours.
Dependence on One or a Few Major Customers.
------------------------------------------
As we are a new company, we have limited business and so it is too
early to tell if we could become dependent on one or a few large companies as
our customers. We do not anticipate becoming dependent on a few companies as our
source of income.
Need for Governmental Approval of Principal Products or Services.
----------------------------------------------------------------
We are not aware of any governmental approval requirements to transact
this type of business.
Effect of Existing or Probable Governmental Regulations on the Business.
-----------------------------------------------------------------------
We are not aware of any probable governmental regulations on our
business that would affect our operations.
Research and Development.
------------------------
We have no research and development. We will enter into a program to
accumulate demographic and other data on internet users and this will be an
ongoing part of our business.
Costs and Effects of Compliance with Environmental Laws.
-------------------------------------------------------
We are not aware of nor do we anticipate any environmental laws with
which we will have to comply.
Number of Employees.
-------------------
We have one employee, the President, who is not paid at this time.
Operations and Technology.
-------------------------
We have a basic system whereby we can promote companies and/or their
products over the internet. The system is not proprietary and will be
continually upgraded as newer and better systems become available for us to
service our clients. Our real technology will be in the processes we use to
accumulate and analyze data which we purchase or collect. Accordingly, our
future success will depend our ability to adapt to rapidly changing internet
marketing strategies and to continually improve the performance, features and
reliability of our service in response to our clients needs and competitive
services and evolving demands of the marketplace.
Additional information.
----------------------
We have made no public announcements to date and have no additional or
new products or services. In addition, we don't intend to spend funds in the
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field of research and development, but as previously outlined, we do intend to
spend monies on customer sponsored research activities relating to the
development of new email lists, services or techniques; and as previously
described, we anticipate spending funds on improvement of existing systems,
services and techniques.
PLAN OF OPERATIONS
Following is our plan of operations based upon the amount of capital we
raise in this offering. We are currently seeking to raise between $50,000 and
$500,000 to expand our business. Our market is defined as those companies who
wish to expose themselves or their products to viewers over the internet and do
not have the ability or expertise to do it themselves.
Assuming we raise the minimum amount in this offering, netting approximately
$43,231 to the company, we will be able to fund the following:
o Develop our website in order to automate many of the functions of
accumulating the data and;
o Design enhancements to our existing website;
o Purchase computer equipment so that we can have our own server
and secure our information;
o Purchase email lists;
o Develop a marketing program whereby we send out email research
questionnaires to develop our own email lists based upon our own
questionnaire; and
o Use for general corporate overhead such as telephones, printing,
etc.
At this level of funding, we would be able to attract clients, generate
revenue be profitable and operationally self sustaining and will not need to
raise additional capital for operations.
Assuming we raise the maximum amount in this offering, netting approximately
$466,231 to the company, we will be able to accomplish the following in addition
to the activities listed above:
o hire a full time programmer to assist with our plan of business
to increase our effectiveness and response time;
o expand our number of email lists, purchase new ones and increase
the amount of email lists we develop internally;
o institute a program of internet security in order to protect our
email lists and the information; and
o hire a salesman to market our services.
This level of funding will allow us to purchase or develop a
significant inventory of email lists in order to offer them to customers to
promote their companies and/or their products. This will allow us to be
profitable and give us financial resources to accelerate our growth through the
increase in the number of email addresses and lists that we have and develop and
the hiring or a salesman to promote our services.
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DESCRIPTION OF PROPERTY
Our corporate facilities are shared with our sole officer and director
which includes the use of telephones and equipment for $100.00 per month. This
arrangement will started in August 2000 and will continue until such time as the
Company needs and can afford to lease its own office facilities.
We also lease space on an internet service provider's server based upon
the amount of memory we use.
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
The directors and officers of the company, their ages and principal
positions are as follows:
Name Age Position
--------------------------------------------------------------------------------
Mark Wells 42 President; Secretary and Director
Background of Directors and Executive Officers:
Mark Wells. Mr. Wells has had extensive experience in financial analysis and
bringing financial programs to market in both the commercial and public markets.
He has over fifteen (15) years experience in commercial and public finance with
a broad and successful history in sales management, new territory development,
contract negotiations and financial analysis. He has been regional manager of
with General Electric Capital Corporation since 1999 where he is responsible for
sales, marketing and coordinating inside sales efforts for General Electric
Capital's vendor financial services information technology division. Prior to
his joining General Electric Capital Corporation, he held positions as: a
finance executive with Computer Leasing Group; regional manager of Copelco
Capital; and vice-president of VAResources, a computer leasing company. He has
been president of a private company, Covenant Holdings Group, LLC since 1999.
Initially, Mr. Wells will not spend full time on the activities of the
company since his current activities would take up some of his time. Mr. Wells's
activities include his current job but can devote more and more time to the
activities of the company as time goes on. Initially, he expects to spend five
hours per week and increase that weekly time as the activities of the company
require. Mr. Wells is prepared to devote himself full time to the success of the
company.
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REMUNERATION OF DIRECTORS AND OFFICERS
Our sole officer and director has received no compensation other than
the 3,500,000 shares of common stock he received for services on August 2, 2000
and has no employment contract with the company.
Name of Person Capacity in which he served Aggregate
Receiving compensation to receive remuneration remuneration
--------------------------------------------------------------------------------
Mark Wells President, Secretary 3,500,000 shares
and Treasurer of common stock
Mr. Wells received the common stock upon formation of the company and
it is impracticable to determine the cash value. Since the common stock was
issued upon forming of our company for services performed which we cannot
estimate the value since that work continues through the filing and
effectiveness of this registration statement, with no other compensation to be
granted for the work done on this filing.
As of the date of this offering, we have no plans to pay any
remuneration to anyone in or associated with our company. When we have funds
and/or revenue, our board of directors will determine any remuneration at that
time.
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
On August 2, 2000, the president of the company received 4,000,000
shares of common stock which we issued to him for $4,000, composed of $500 cash
and $3,500 of his services.
On August 28, 2000, we entered into an agreement with a company to
develop and link our website for which the company received a total of 200,000
shares valued at $0.05 per share.
As of the date of this filing, there are no agreements or proposed
transactions, whether direct or indirect, with anyone, but more particularly
with any of the following:
o a director or officer of the issuer;
o any principal security holder;
o any promoter of the issuer;
o any relative or spouse, or relative of such spouse, of the above
referenced persons.
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<TABLE>
<CAPTION>
PRINCIPAL SHAREHOLDERS
The following table lists the officers, directors and stockholders who,
at the date hereof, own of record or beneficially, directly or indirectly, more
than 10% of the outstanding common stock, and all officers and directors of the
company:
Name and Address Amount owned
Title of Owner before offering Percent
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
President, Secretary Mark Wells 4,000,000 95.24%
And Director 709-B West Rusk, Suite 500
Rockwall, Texas 75032
---------------------------
Total 4,200,000 100.00%
After offering: Minimum 4,000,000 90.90%
--------------
Maximum 4,000,000 64.52%
</TABLE>
SECURITIES BEING OFFERED
We are offering for sale common stock in our company at a price of
$0.25 per share. We are offering a minimum of 200,000 shares and a maximum of
2,000,000 shares. The authorized capital in our company consists of 25,000,000
shares of common stock, $0.001 par value per share. As of September 30, 2000, we
had 4,200,000 shares of common stock issued and outstanding.
Every investor who purchases our common stock is entitled to one vote
at meetings of our shareholders and to participate equally and ratably in any
dividends declared by us and in any property or assets that may be distributed
by us to the holders of common stock in the event of a voluntary or involuntary
liquidation, dissolution or winding up of the company.
The existing stockholders have no preemptive rights to purchase common
stock offered for sale by us, and no right to cumulative voting in the election
of our directors.
RELATIONSHIP WITH ISSUER OF EXPERTS NAMED IN REGISTRATION STATEMENT
The experts named in this registration statement were not hired on a
contingent basis and have no direct or indirect interest in our company. Our
attorney may purchase shares in this offering. Our certified public accountant
may not purchase shares in this offering.
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LEGAL PROCEEDINGS
We are not involved in any legal proceedings at this time.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
We have retained the same accountant, Charles E. Smith, as our
independent certified public accountant since our inception on August 2, 2000.
We have had no disagreements with him on accounting and disclosure issues.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our certificate of incorporation provides that the liability of our
officers and directors for monetary damages shall be eliminated to the fullest
extent permissible under Nevada law, which includes elimination of liability for
monetary damages for defense of civil or criminal actions. The provision does
not affect a director's responsibilities under any other laws, such as the
federal securities laws or state or federal environmental laws.
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
such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
We have no underwriting agreement and therefore no provision for
indemnification of officers and directors is made in an underwriting by a broker
dealer.
LEGAL MATTERS
Our attorney has passed upon the legality of the common stock issued
before this offering and passed upon the common stock offered for sale in this
offering. Our attorney is T. Alan Owen & Associates, P.C., 1112 E. Copeland
Road, Suite 420, Arlington, Texas 76011.
EXPERTS
The financial statements as of September 30, 2000, and for the period
from inception (August 2, 2000) to September 30, 2000 of the company included in
this prospectus have been audited by Charles E. Smith, independent certified
public accountant, as set forth in his report. The financial statements have
been included in reliance upon the authority of him as an expert in accounting
and auditing.
15
<PAGE>
DIVIDEND POLICY
To date, we have not declared or paid any dividends on our common
stock. We do not intend to declare or pay any dividends on our common stock in
the foreseeable future, but rather to retain any earnings to finance the growth
of our business. Any future determination to pay dividends will be at the
discretion of our board of directors and will depend on our results of
operations, financial condition, contractual and legal restrictions and other
factors it deems relevant.
TRANSFER AGENT
We will serve as our own transfer agent and registrar for the common
stock until such time as this registration is effective and we sell the minimum
offering, then we intend to retain Signature Stock Transfer, Inc., 14675 Midway
Road, Suite 221, Dallas, Texas 75244.
16
<PAGE>
Charles E. Smith
Certified Public Accountant
709-B West Rusk
Suite 580
Rockwall, Texas 75087
TELEPHONE (214) 212-2307
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders
of Mentor Promotions, Inc.
I have audited the accompanying balance sheets of Mentor Promotions,
Inc. (a development stage company) as of September 30, 2000, and the related
statements of operations, stockholders' equity and accumulated deficit, and cash
flows for the period from inception (August 2, 2000) to September 30, 2000.
These financial statements are the responsibility of the Company's management.
My responsibility is to express an opinion on these financial statements based
on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Mentor Promotions,
Inc. as of September 30, 2000, and the results of operations and its cash flows
for the period from inception (August 2, 2000) to September 30, 2000 in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As described in Note F to the
financial statements the Company is a start up enterprise and presently does not
have capital resources which raises doubt about the Company's ability to
continue as a going concern. The financial statements do not include any
adjustment that might arise from the outcome of this uncertainty.
/s/ Charles E. Smith
--------------------
Charles E. Smith
Rockwall, Texas
October 6, 2000
F-1
<PAGE>
<TABLE>
<CAPTION>
MENTOR PROMOTIONS, INC.
BALANCE SHEETS
September 30, 2000
ASSETS
------
Sept 30, 2000
----------------
<S> <C>
CURRENT ASSETS:
Cash $191
Marketable securities 12,500
----------------
Total Current Assets $12,691
PROPERTY AND EQUIPMENT:
Website (net of $556 in amortization) 9,444
----------------
TOTAL ASSETS $22,135
================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
Accounts payable $325
Income taxes payable 1,142
----------------
Total Liabilities 1,467
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 25,000,000 shares authorized,
4,200,000 shares issued and outstanding 4,200
Additional paid-in-capital 10,000
Equity accumulated during the development stage 6,468
----------------
Total Stockholders' Equity 20,668
----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $22,135
================
</TABLE>
See accompanying notes F-2
<PAGE>
MENTOR PROMOTIONS, INC.
STATEMENT OF OPERATIONS
Period from inception (August 2, 2000) to September 30, 2000
Period from
Inception
(Aug 2, 2000)
to
Sept 30, 2000
----------------
REVENUE:
Sales $12,500
COST OF SALES: 0
----------------
GROSS PROFIT 12,500
OPERATING EXPENSE:
Depreciation and amortization 556
Consulting - related party 3,500
General and administrative 834
----------------
Total Operating Expense 4,890
----------------
Net Operating Income 7,610
Provision for income taxes (1,142)
----------------
NET LOSS $6,468
================
Weighted average shares outstanding 4,111,864
================
Loss per share - basic and diluted ($0.00)
================
See accompanying notes F-3
<PAGE>
<TABLE>
<CAPTION>
MENTOR PROMOTIONS, INC.
STATEMENT OF STOCKHOLDERS' EQUITY AND ACCUMULATED DEFICIT
Period from inception (August 2, 2000) to August 31, 2000
Common Stock Paid In
Shares Amount Capital Total
-------------------------------------------------------------- ----------------
<S> <C> <C> <C> <C>
Balance,
August 2, 2000
(date of inception) -0- -0- -0- -0-
Shares issued on August 2, 2000 for:
Cash 500,000 500 500
Services 3,500,000 3,500 3,500
August 28, 2000 for:
Website development 200,000 200 9,800 10,000
Paid in capital by shareholder 200 200
Net Loss 6,468
-------------------------------------------------------------- ----------------
Balance
Septemebr 30, 2000 4,200,000 $4,200 $10,000 $20,668
============================================================== ================
</TABLE>
See accompanying notes F-4
<PAGE>
<TABLE>
<CAPTION>
MENTOR PROMOTIONS, INC.
STATEMENT OF CASH FLOWS
Period from inception (August 2, 2000) to September 30, 2000
Period from
Inception
(Aug 2, 2000)
to
Sept 30, 2000
----------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $6,468
Adjustments to reconcile net loss to net
cash (used) by operating activities:
Items not requiring cash:
Amortization 556
Paid in capital by shareholder 200
Stock issued for services 3,500
Adjustments for other operating activities:
Marketable securities received in payment for services (12,500)
Increase in accounts payable 1,467
----------------
NET CASH (USED) BY OPERATING ACTIVITIES: (309)
CASH FLOWS FROM INVESTING ACTIVITIES: 0
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock 500
----------------
Total cash flows from financing activities 500
----------------
NET INCREASE IN CASH $191
CASH, BEGINNING OF PERIOD 0
----------------
CASH, END OF PERIOD $191
================
</TABLE>
Non-cash investing activity - the company issued 200,000 shares valued
at $0.05 per share for a total of $10,000 for development of its
website.
See accompanying notes F-5
<PAGE>
MENTOR PROMOTIONS, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
Note A - Nature of Business and Summary of Significant Accounting Policies:
---------------------------------------------------------------------------
History: The Company was organized August 2, 2000 under the name of Mentor
Promotions, Inc. in the State of Nevada. The Company's business plan outlines
its plan of operations which is to promote business and/or products over the
internet. Its development activities included the setting up of the Company's
website and soliciting clients to provide services to.
Basis of Accounting:
-------------------
It is the Company's policy to prepare its financial statements on the accrual
basis of accounting in conformity with generally accepted accounting principles.
Sales are recorded as income in the period in which they are earned and expenses
are recognized in the period in which the related liability is incurred.
Revenue Recognition:
-------------------
Revenue is recognized when a loan is closed. The company receives a fee for each
loan that is processed through its website and subsequently closed.
Cash and Cash Equivalents:
-------------------------
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments with a maturity of three months or less to be cash
equivalents.
Profit (Loss) per Common Share:
------------------------------
Loss applicable to common share is based on the weighted average number of
shares of common stock outstanding during the period presented.
Accounting Estimates:
--------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions that affect the amount reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Stock based compensation:
------------------------
The Company accounts for stock based compensation in accordance with FAS 123 and
APB No. 25 and the Financial Accounting Standards Board Interpretation No. 44.
This requires that we base the issuance of stock at the fair value of the
consideration received.
F-6
<PAGE>
MENTOR PROMOTIONS, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
Note A - Nature of Business and Summary of Significant Accounting Policies
(con't):
--------------------------------------------------------------------------------
Software Development Costs: The Company accounts for its software development
costs under the provisions of Statement of Position 98-1 "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use", which was
issued by the AICPA in 1998. This requires the capitalization of the costs
incurred in connection with developing or obtaining internal-use software.
Income Tax:
----------
The Company is subject to the greater of federal income taxes computed under the
regular system or the alternative minimum tax (ATM) system. The Company uses an
asset and liability approach for the accounting and financial reporting of
income tax as required by SFAS No. 109. Under this method, deferred tax assets
and liabilities are determined based on temporary differences between the
financial carrying amounts and the tax bases of assets and liabilities using
enacted tax rates in effect in the years in which the temporary differences are
expected to reverse.
Note B - Web site:
-----------------
The Company's paid $10,000 for development of its website which was paid by
issuing 200,000 shares of common stock. The cost of the web site is being
amortized over three years starting in August 2000.
The cost of developing the web site is accounted for under the provisions of
Statement of Position 98-1 "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use", which was issued by the AICPA in 1998.
This requires the capitalization of the costs incurred in connection with
developing or obtaining internal-use software.
In March 2000, the Financial Accounting Standards Board issued Interpretation
No. 44 (FIN No. 44) "Accounting for Certain Transactions Involving Stock
Compensation", an interpretation of APB Opinion No. 25" which was effective July
1, 2000. The website development was paid for by issuing 200,000 shares of
common stock, the value of which was $0.05 per share which was arbitrarily
determined and negotiated since there was no readily determinable market value
for the Company's shares.
F-7
<PAGE>
MENTOR PROMOTIONS, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
Note C - Stockholders' Equity:
-----------------------------
Common Stock:
-------------
The Company is authorized to issue 25,000,000 common shares of stock at a par
value of $0.001 per share. These shares have full voting rights. At September
30, 2000, there were 4,200,000 shares outstanding respectively. The Company has
not paid a dividend to its shareholders.
Common stock issuances
On August 2, 2000, the Company issued 2,000,000 shares to the President for
$4,000, comprised of $500 cash and $3,500 of his services. The services were
valued at $3,500 and the stock issued at par.
On August 28, 2000, the Company issued to an unrelated party 200,000 shares of
stock for the development of its website valued at $10,000. The value assigned
of $0.05 per share was arbitrarily determined and negotiated by the Company and
the developers of the website since there was no readily determinable market
value for the shares.
Note D - Income Taxes:
---------------------
The Company had a net operating income of $7,610 for the period presented and
has recorded a tax liability of $1,142. The Company's year end is December 31.
The Company has adopted the asset and liability method of accounting for income
taxes as required by SFAS No. 109. In accordance with SFAS No. 109, the Company
has recorded a valuation allowance equal to the deferred tax asset as a result
of the Company's "going concern" opinion referred to in Note F and the
uncertainty that it will be realized.
Note E - Related Party Transactions:
-----------------------------------
In August 2000, the Company issued to its President 4,000,000 shares in
consideration for $4,000, comprised of $500 cash and $3,500 of his services. The
services were valued at $3,500 and the stock was issued at par.
Note F - Going Concern:
----------------------
The Company has minimal capital resources available to meet obligations expected
to be incurred given that it is a start up enterprise. Accordingly, the
Company's continued existence is dependent upon the successful operation of the
Company's plan of operations, selling common stock in the Company, or obtaining
financing. Unless these conditions among others are met, the Company may be
unable to continue as a going concern.
F-8
<PAGE>
No dealer, salesman or any other person has been authorized to give any
quotation or to make any representations in connection with the offering
described herein, other than those contained in this Prospectus. If given or
made, such other information or representation'; must not he relied upon as
having been authorized by the company or by any underwriter. This prospectus
does not constitute an offer to sell, or a solicitation of an otter to buy any
securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such an offer or solicitation in such jurisdiction.
TABLE OF CONTENTS
Prospectus Summary 2
Corporate Information 2
Risk Factors 3
Forward Looking Statements 4
Dilution 5
Plan of Distribution 7
Use of Proceeds 7
Description of Business 8
Plan of Operations 11
Description of Property 12
Director's, Executive Officers and Significant Employees 12
Remuneration of Officers and Directors 13
Interest of Management and Others in Certain Transactions 13
Principal Shareholders 13
Securities Being Offered 14
Relationship with Issuer of Experts Named in Registration Statement 14
Legal Proceedings 14
Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure 15
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities 15
Legal Matters 15
Experts 15
Dividend Policy 16
Transfer Agent 16
Financial Statements F-1
Until the (90th day after the later of (1) the effective date of the
registration statement or (2) the first date on which the securities are offered
publicly), 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' obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Indemnification of Directors and Officers
Not applicable.
Item 14. Other Expenses of Issuance and Distribution
All expenses, including all allocated general administrative and
overhead expenses, related to the offering or the organization of the Company
will be borne by the Company.
The following table sets forth a reasonable itemized statement of all
anticipated out-of-pocket and overhead expenses (subject to future
contingencies) to be incurred in connection with the distribution of the
securities being registered, reflecting the minimum and maximum subscription
amounts.
Minimum Maximum
-------------------------------
SEC Registration Fee $ 269 $ 269
Printing and Engraving Expenses 2,000 19,000
Legal Fees and Expenses 5,000 5,000
Edgar Fees 1,800 1,800
Accounting Fees and Expenses 2,500 2,500
Blue Sky Fees and Expenses 5,000 5,000
Miscellaneous 200 200
-------------------------------
TOTAL $ 16,769 $ 33,769
Item 15. Recent Sales of Unregistered Securities
The Company sold on August 2, 2000 to its founder 4,000,000 shares of
common stock which was issued to him for $4,000, composed of $500 cash and
$3,500 of his services. This stock was issued under the exemption under the
Securities Act of 1933, section 4(2); this section states that transactions by
an issuer not involving any public offering is an exempted transaction. The
company relied upon this exemption because in a private transaction during
August 2000, the founder, sole officer and director purchased stock for a
combination of $500 cash and $3,500 of services.
The Company issued 200,000 shares on August 28, 2000 to a company in
consideration for building and developing the website. This stock was valued at
$10,000 or $0.05 per share. This stock was issued under the exemption under the
Securities Act of 1933, section 4(2); this section states that transactions by
an issuer not involving any public offering is an exempted transaction. The
company relied upon this exemption because in a private transaction on August
20, 2000, this company developed the web site in exchange for 200,000 shares of
stock valued at $0.05 per share or a total of $10,000 with no broker dealer
involved in the transaction. The purchasers were sophisticated investors who
purchased the stock for their own account and not with a view toward
distribution to the public. The certificates evidencing the securities bear
legends stating that the shares may not be offered, sold or otherwise
transferred other than pursuant to an effective registration statement under the
Securities Act, or an exemption from such registration requirements.
<PAGE>
Item 16. Exhibits
The following Exhibits are filed as part of the Registration
Statement:
Exhibit No. Identification of Exhibit
3.1 - Articles of Incorporation
3.2 - By Laws
4.2 - Specimen Stock Certificate
10.4 - Subscription Escrow Agreement
10.6 - Form of Subscription Agreement
23.1 - Opinion of T Alan Owen & Associates, P.C., Attorneys at Law
23.2 - Consent of T Alan Owen & Associates, P.C., Attorneys at Law
23.3 - Consent of Charles E. Smith, Certified Public Accountant
Item 17. Undertakings
The Registrant hereby undertakes to:
(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; and (ii) Reflect in the prospectus any facts or
events which, individually or together,
represent a fundamental change in the information in the Registration Statement.
(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.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
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 such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form SB-1 and authorizes this Registration Statement
to be signed on its behalf by the undersigned, being duly authorized, in the
City of Rockwall, State of Texas, on the date indicated below.
Mentor Promotions, Inc.
By: /s/ Mark Wells
-------------------------------
Mark Wells, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following person in the capacity and on
the date indicated:
Signature Title Date
--------------------------------------------------------------------------------
By: /s/ Mark Wells President, Secretary,
------------------------------- Treasurer; Director October 6, 2000
Mark Wells, President
