As filed with the Securities and Exchange Commission October 27, 2000
File No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
e Nutrition, Inc.
(Exact name of registrant as specified in its charter)
Nevada 87-0567853
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
386 North 210 East
Mapleton, Utah 84664
(Address and telephone number of registrant's principal offices)
Steven L. White
President, e Nutrition, Inc.
386 North 210 East
Mapleton, Utah 84664
801-489-0222
(Name, address and telephone number of agent for service)
Copies to:
Cletha A. Walstrand, Esq.
Lehman Walstrand & Associates
8 East Broadway, Suite 620
Salt Lake City, UT 84111-2204
(801) 532-7858
(801) 363-1715 fax
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes
effective.
The securities being registered on the Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933.
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act 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. [ ]
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If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
Title of each class Amount to be Proposed offering Proposed maximum Amount of
of securities to registered price per share aggregate offering registration
be registered price fee
Common Stock 750,000 shares $0.20 per share $150,000 $39.60
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The number of shares to be registered is estimated solely for
the purpose of calculating the registration fee. Registrant
hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act
of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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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 is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
PROSPECTUS
Subject to completion October ____, 2000
$100,000 Minimum / $150,000 Maximum
e Nutrition, Inc.
COMMON STOCK
This is e Nutrition's initial public offering. We are
offering a minimum of 500,000 shares and a maximum of 750,000
shares of common stock. The public offering price is $0.20 per
share. No public market exists for our shares.
See "Risk Factors" beginning on page 2 for certain
information you should consider before you purchase the shares.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of the
securities or passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal
offense.
The shares are offered on a "minimum/maximum, best efforts"
basis directly through our officers and directors. No commission
or other compensation related to the sale of the shares will be
paid to any of our officers or directors. The proceeds of the
offering will be placed and held in an escrow account at Brighton
Bank, 311 South State Street, Salt Lake City, UT 84111, until a
minimum of $100,000 in cash has been received as proceeds from
sale of shares. If we do not receive the minimum proceeds within
90 days from the date of this prospectus, unless extended by us
for up to an additional 30 days, your investment will be promptly
returned to you without interest and without any deductions. We
may terminate this offering prior to the expiration date.
Price to Public Commissions Proceeds to Company
Per Share $0.20 $-0- $0.20
Minimum $100,000 $-0- $100,000
Maximum $150,000 $-0- $150,000
The date of this Prospectus is -------------, 2000.
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PROSPECTUS SUMMARY
About our company
We were formed as a Nevada corporation on March 13, 1996,
originally under the name of Zacman Enterprises, Inc. to pursue
the business of consulting. Because we did not have the
management, funding or corporate mission to operate the business,
we were unsuccessful. On June 14, 2000, we changed our name to e
Nutrition, Inc. with the intent to focus on the business of
marketing and distributing nutritional supplements. We have
commenced only limited operations. The proceeds from this
offering are needed so we can continue operations and implement
our growth and marketing plan. We intend to fund several
promotional campaigns in order to advertise our products and
initiate sales. Our objective is to increase our customer base
and identify new markets in which to sell our products.
Our principal executive offices are located at 386 North 210
East, Mapleton, Utah 84664. Our telephone number is (801) 489-0222.
About our offering
Common Stock Offered by Us 500,000 shares minimum
750,000 shares maximum
Common Stock to be 12,150,000 shares minimum
Outstanding 12,400,000 shares maximum
After the Offering
Use of Proceeds Proceeds from this offering will be
used to advertise our products and
initiate sales by funding various
promotions and other marketing
campaigns.
RISK FACTORS
Investing in our stock is very risky and you should be able
to bear a complete loss of your investment.
Because we are a new business, investment in our company is
risky. We have an extremely limited operating history so it will
be difficult for you to evaluate an investment in our stock. We
have limited experience and a short history of operations,
especially with respect to marketing and selling any products.
We have had only minimal revenues and we cannot assure that we
will be profitable. As a young company, we are especially
vulnerable to the problems, delays, expenses and difficulties
encountered by any company in the development stage.
If we do not raise money through this offering, it is
unlikely we can continue operations. We have limited assets and
need the proceeds from this offering to continue our business,
identify new markets and sell our products. If we cannot raise
at least the minimum offering amount, we will have to seek other
sources of financing or we will be severely limited in achieving
our plan of operation. There is no assurance that additional
sources of financing will be available at all or at a reasonable
cost.
Our products may not be accepted in the market. Retail
customers must accept our products as beneficial and worthwhile.
Market acceptance will require substantial education about the
benefits of our products. If consumers do not accept our
products or acceptance takes a long time, then revenues and
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profits will be reduced. We can provide no assurance that there
will be a favorable market for our products or that we can
realize a profitable rate of return.
We have no product liability insurance and may not be able
to get any on reasonable terms. We may incur liability to
consumers based on claims that our nutritional supplements are
harmful or ineffective. Such claims, even if unfounded, could
cause damage to our reputation, result in expensive product
recalls, or result in high litigation expense. We intend to
maintain liability insurance when and to the extent such
insurance is available on a cost effective basis.
We depend on licenses to supply us with products to market.
The loss of our product licenses would mean we have no product to
sell. In the event our license agreements terminate for any
reason, we would lose our rights to manufacture and market our
current products. Further, the inability to obtain additional
licenses will limit the products we can sell.
We have limited experience in sales and marketing. We have
no experience in nutritional supplement sales, marketing, or
distribution. Our current plan is to employ direct mail
marketing efforts to sell our products. We also intend to obtain
assistance from an e-commerce company to help market our
products. We cannot assure you that we will be able to establish
sales and distribution capabilities or that we will be able to
enter into agreements with established companies to sell our
products.
We do not own any manufacturing facilities and depend on
third parties to make our products. We do not own any
manufacturing facilities or equipment and do not employ any
manufacturing personnel. We use third parties to manufacture our
products on a contract basis. We cannot assure you that we will
be able to obtain contract manufacturing services on reasonable
terms.
We cannot assure the completion of the "minimum-maximum,
best efforts" offering. The shares are being offered on a
"minimum-maximum, best efforts" only basis and no individual or
firm is committed to purchase or take down any of the shares.
There is no assurance that we will sell any portion of the
shares. In the event that at least $100,000 has not been
received within 90 days of the date of this prospectus, which
time period may be extended for up to an additional 30 days in
our discretion, funds will be promptly returned to investors
without interest and without deducting expenses of this offering.
As such, you could invest money for as long as 120 days and have
your investment returned without interest. Anytime after the
minimum amount is received prior to termination of the offering,
the escrowed funds will be transmitted to us and shares will then
be issued and no refunds will be made to you.
We arbitrarily determined our offering price. The offering
price of the shares was arbitrarily determined by our management.
The offering price bears no relationship to our assets, book
value, net worth or other economic or recognized criteria of
value. In no event should the offering price be regarded as an
indicator of any future market price of our securities. In
determining the offering price, we considered such factors as the
prospects for our products, our management's previous experience,
our historical and anticipated results of operations and our
present financial resources.
FORWARD-LOOKING STATEMENTS
You should carefully consider the risk factors set forth
above, as well as the other information contained in this
prospectus. This prospectus contains forward-looking statements
regarding events, conditions, and financial trends that may
affect our plan of operation, business strategy, operating
results, and financial position. You are cautioned that any
forward-looking statements are not guarantees of future
performance and are subject to risks and uncertainties. Actual
results may differ materially from those included within the
forward-looking statements as a result of various factors.
Cautionary statements in this "Risk Factors" section and
elsewhere in this prospectus identify important risks and
uncertainties
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affecting our future, which could cause actual results to differ
materially from the forward-looking statements made in this
prospectus.
DILUTION AND COMPARATIVE DATA
As of August 31, 2000, we had an unaudited net tangible book
value (total tangible assets less total liabilities) of $28,210,
or a net tangible book value per share of approximately $.002.
The following table shows the dilution to your equity interest
without taking into account any changes in our net tangible book
value after August 31, 2000, except the sale of the minimum and
maximum number of shares offered.
Assuming Minimum Assuming Maximum
Shares Sold Shares Sold
Shares Outstanding 12,150,000 12,400,000
Public offering proceeds $100,000 $150,000
at $0.20 per share
Net tangible book value $.002 $.002
before offering
Increase attributable to $.006 $.01
purchase of shares by
new investors
Pro forma net tangible $.008 $.012
book value after offering
Dilution per share to new investors $.192 $.188
Percent dilution 95% 93%
The following table summarizes the comparative ownership and
capital contributions of existing common stock shareholders and
investors in this offering as of August 31, 2000:
Shares Owned Total Average Price
Number Consideration Per Share
%
Amount
Present Shareholders
Minimum Offering 11,650,000 22% $ 28,210 $.002
Maximum Offering 11,650,000 15.8% $ 28,210 $.002
New Investors
Minimum Offering 500,000 78% $100,000 $.20
Maximum Offering 750,000 84.2%0 $150,000 $.20
The numbers used for Present Shareholders assumes that none
of the present shareholders purchase additional shares in this
offering.
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USE OF PROCEEDS
The net proceeds to be realized by us from this offering,
after deducting estimated offering related expenses of
approximately $25,000 is approximately $75,000 if the minimum
number of shares is sold and $125,000 if the maximum number of
shares is sold.
The following table sets forth our best estimate of the use
of proceeds from the sale of the minimum and maximum amount of
shares offered. Since the dollar amounts shown in the table are
estimates only, actual use of proceeds may vary from the
estimates shown.
Description Assuming Sale of Assuming Sale of
Minimum Offering Maximum Offering
Total Proceeds $100,000 $150,000
Less Estimated Offering Expenses 25,000 25,000
Net Proceeds Available 75,000 125,000
Use of Net Proceeds
Direct mail marketing 15,000 25,000
ECommerce 10,000 20,000
Retail outlet 15,000 20,000
Product development 10,000 20,000
Working capital 10,000 25,000
Lease & royalties 15,000 15,000
TOTAL NET PROCEEDS $ 75,000 $125,000
The working capital reserve may be used for general
corporate purposes to operate, manage and maintain the current
and proposed operations including wages and salaries,
professional fees, expenses and other administrative costs.
Pending expenditures of the proceeds of this offering, we
may make temporary investments in short-term, investment grade,
interest-bearing securities, money market accounts, insured
certificates of deposit and/or in insured banking accounts.
DETERMINATION OF OFFERING PRICE
The offering price of the shares was arbitrarily determined
by our management. The offering price bears no relationship to
our assets, book value, net worth or other economic or recognized
criteria of value. In no event should the offering price be
regarded as an indicator of any future market price of our
securities. In determining the offering price, we considered
such factors as the prospects for our products, our management's
previous experience, our historical and anticipated results of
operations and our present financial resources.
CAPITALIZATION
The following tables sets forth our capitalization as of the
date of this prospectus, on an actual basis. This table should
be read in conjunction with the financial statement of the
company and the notes thereto.
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Stockholders' equity:
Preferred stock, $0.001 par value, authorized 5,000,000
shares; no shares issued or outstanding
Common stock, $0.001 par value, authorized 50,000,000
Shares; 11,650,000 shares issued and outstanding $11,650
Capital in excess of par value 14,850
Earnings accumulated during the development stage 1,710
Total Stockholders equity $28,210
DESCRIPTION OF BUSINESS
General
We were formed as a Nevada corporation on March 13, 1996,
originally under the name of Zacman Enterprises, Inc. to pursue
the business of consulting. Because we did not have the
management, funding or corporate mission to operate the business,
we were unsuccessful. On June 14, 2000, we changed our name to e
Nutrition, Inc. with the intent to focus on the business of
marketing and distributing nutritional supplements. We have
commenced only limited operations. The proceeds from this
offering are needed so we can continue operations and implement
our growth and marketing plan. We intend to fund several
promotional campaigns in order to advertise our products and
initiate sales. Our objective is to increase our customer base
and identify new markets in which to sell our products.
Our business
We are a direct mail marketing company engaged in the
development and marketing of nutritional supplements. We do not
manufacture the products we sell and we do not carry a large
inventory. We contract for the manufacture of our products to
independent nutritional product formulators who specialize in
nutritional supplements. Our strategy is to out source all or
most of our operations so that we can focus on the marketing of
our products.
We named the company, e Nutrition, to affiliate ourselves
with the growing crowd of businesses doing commerce on the
internet. Although, our main focus has been with direct mail, we
intend to sell our products on the internet through third
parties.
We commenced limited operations in June 2000 by securing the
exclusive rights to market the nutritional supplement, Hi-Q. Hi-
Q is a food supplement which focuses on providing the human brain
with the essential nutrients it needs to function at optimum
capacity. Hi-Q was previously marketed by HomeQuest, Inc. and
Insight USA, Inc. Both of these companies marketed the product
through multi-level marketing plans during the period of 1997-
1999.
Our licensing agreement provides us an exclusive right to
prepare and sell nutritional products under the trade name of Hi-
Q. The license is for a period of one year commencing June 2000
and is renewable on an annual basis. The total cost of the
license was $5,000 initial payment and $5,000 per quarter for the
duration of the agreement. In addition, we pay a royalty of
$1.00 for each bottle of Hi-Q manufactured. The license is
limited to the United States.
We out source the production and packaging of all our
products. Our current manufacturer is Uintah Packaging. Should
Uintah Packaging be unable to fulfill our orders, other
competitive manufacturers are readily available.
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Our products
We intend to capitalize on a unique niche in the growing
U.S. market of nutritional supplements. Hi-Q Golden and other Hi-
Q brain food supplements focus on the specific nutrients required
by the human brain in order to function at peak capacity. The Hi-
Q product line includes the following:
* Hi-Q Smart Start, a chewable tablet formulated for younger
children who cannot swallow capsules
* Hi-Q Junior, to be taken by children under 12
* Hi-Q Teen, formulated for teenagers
* Hi-Q Prime, formulated for adults
* Hi-Q Golden, formulated for seniors
At the present time, we are only marketing Hi-Q Prime and Hi-
Q Golden and anticipate commencing marketing activities on our
remaining products upon the closing of this offering. We are
also seeking additional nutritional products to include in our
marketing activities.
Our products are a unique blend of vitamins, chelated
minerals, botanicals and other nutrients. The developer of Hi-Q
incorporated all of the nutritional supplements known to be
"brain foods" and combined these supplements with additional
supplements to create age specific products.
The ingredients of our Hi-Q products have a number of
benefits to the human body, but we intentionally focus on those
ingredients that provide nutrition to the brain. The brain
nutrient ingredients are identified below.
Vitamins
Vitamin A, or beta carotene, is an anti-oxidant and slows
the aging process. People with insufficient amounts of vitamin A
in their diet usually have poor night vision and age faster.
The vitamin B complex must be provided in the same balance
found in nature or it works poorly. Hi-Q has a balanced B
complex. If the body doesn't have optimum amounts it will have
low energy and difficulty learning. The eyes get tired easily
and are more prone to cataracts. High cholesterol levels are
associated with low vitamin B levels.
Vitamin C is a powerful anti-oxidant that reduces
cholesterol and blood pressure and produces anti-stress hormones.
Vitamin D is essential for absorbing calcium and phosphorus.
Vitamin E in its natural form, d-alpha tocopherol, is a
powerful anti-oxidant that fights free radicals which are
incomplete oxygen molecules that attach to normal cells and
damage them. Free radicals are potent factors in cell aging,
especially brain cells.
Minerals
Minerals may be the most important ingredient which the
brain uses to make neuro-transmitters. Our minerals are chelated
by Albion Labs, which holds most of the chelated-mineral patents
today.
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Chelation bonds mineral molecules to amino acids then transports
the mineral to the cells where it is needed. Chelated minerals
are far more readily assimilated by the body.
We include calcium because it transmits nerve impulses.
This of course benefits more than just the brain. For example if
you are low in calcium you will usually have leg cramps and high
blood pressure.
Because there is so little chomiumin in our soils, our
water, and refined foods, we have more chromium in Hi-Q than any
other mineral. It helps retard the aging process and stabilizes
blood sugar, which affects moods and brain function.
Zinc sharpens taste and smell. Fifty percent of the elderly
are deficient in zinc.
We include other minerals such as iron, magnesium, selenium,
copper, manganese, molybdenum, potassium, phosphorus and iodine,
all of which play important roles in brain metabolism.
Botanicals and other phytonutrients
We have included herbs, roots, and plants to help the user
feel, concentrate and remember better. Ginko Leaf Extract is one
of the most studied herbs of our time and is included to help
treat age-related brain disorders. It increases the oxygen flow
to the brain and it being used to treat the symptoms of
Alzheimer's. Ginko seems to improve memory, mental performance,
depression, and senile reaction time. Ginko is also known as a
powerful anti-oxidant.
Grape Seed is also a powerful anti-oxidant, and in some
cases, many times more powerful than vitamins C and E.
Bilberry Fruit helps with night blindness, visual fatigue,
nearsightedness, dark adaptation and other vision problems.
Siberian ginseng root boosts energy levels, improves mental
state and outlook on life. It may assist memory, concentration,
alertness and improve learning clarity.
Gotula Kola is known as the "memory herb" and is used to
treat memory loss and increase learning ability.
Other botanicals included are licorice root, tomato fruit,
broccoli, cabbage and turmeric.
Other nervous system nutrients
Soy lecithin improves memory, helps in mental disorders, and
is believed by some experts to promote the ability to learn. The
brain is 70% lecithin by weight.
Choline is needed to maintain brain function, memory and
learning.
Inositol is vital for hair growth, helps prevent hardening
of the arteries, and helps reduce cholesterol.
L-Lysine is the "limiting" amino acid that completes the
incomplete vegetable proteins. Deficiencies result in difficulty
concentrating.
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L-Cysteine is a great free radical destroyer, and protects
the brain from damage due to alcohol and tobacco smoke. It also
promotes fat burning and muscle building.
L-Methionine helps prevent hardening of the arteries, which
restricts blood flow to the brain. The body uses it to
manufacture choline.
DHEA
Hi-Q Golden includes DHEA, a natural anti-aging hormone, to
help preserve health and mental faculties.
Competition
The nutritional supplement industry is highly competitive.
We will be competing with a number of other companies, including
large producers and marketing companies and other independent
contractors with greater financial resources and, in some cases,
with financial resources to engage in e-commerce, personnel and
facilities substantially greater than ours. There can be no
assurance that customers will purchase from us rather than from
our competitors, or that we can compete effectively with these
larger entities.
Independent retailers of nutritional supplements include
privately owned health food stores, of which approximately 7,000
exist in the U.S. today according to a survey by the National
Nutritional Foods Association. In addition, nutritional
supplements are sold widely in pharmacies, wholesale outlets and
clubs and supermarkets.
The nutritional supplement industry is fragmented and
includes several large manufacturers and many smaller producers
and distributors. While a few companies are vertically
integrated, most companies contract for finished products. The
largest manufacturers typically generate revenues more than $200
million. Several of these companies are publicly traded and
represent a growth sector in the stock market. Large
pharmaceutical companies are entering the market by using their
in-house capabilities as well as by entering strategic alliances
with existing nutritional supplement companies, or by acquiring
existing companies.
Marketing and advertising
At present, we have limited our direct mailing efforts to
advertising inserts in a single publication, "The Ruff Times", a
financial newsletter, with the majority of the subscribers
retired and aging. The insert is a stand alone marketing piece
which details what the product does. We include a business reply
envelope with the marketing insert. Our first insert in the July
2000 edition of "The Ruff Times" created sales of 450 bottles of
Hi-Q. Our second insert in August 2000 is showing a response
rate equal or greater to that of July 2000. Because of the
response to our direct mailing effort, we intend to pursue
additional direct mail avenues and broaden our target audience.
We are also implementing an Autoship program that is
designed to make our customers "repeat customers." We offer a
discount to customers who are willing to signup for the Autoship
program. The Autoship program allows the customer the option to
purchase the product on a monthly basis with no further contact
with e Nutrition. Participants in the Autoship program receive a
discount of $5.00 per bottle.
Hi-Q products are sold in bottles that contain a month
supply for one individual. Each month the customers' credit card
is charged and another month supply is shipped. This keeps the
customer in full
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supply month after month without interruption. The Autoship plan
saves the company the expense of re-selling the customer each
month.
We intend to publish a short newsletter, describing the
virtues of our products, each month to be sent with each Autoship
order. We expect this effort to help us retain our Autoship
customers as well as promote the products to interested friends
to whom the newsletter is given.
In addition to direct mail, we intend to pursue
relationships with e-commerce businesses. We anticipate, that
upon receipt of the proceeds of this offering, we can begin
negotiating with various e-commerce businesses to promote our
products.
Governmental Regulation
The two principal federal agencies that regulate dietary
supplements, including vitamins, nutritional supplements and
minerals, are the Food and Drug Administration and the Federal
Trade Commission. Among other matters, FDA regulations govern
claims that assert the health or nutritional value of a product.
Many FDA and FTC remedies and process, including imposing civil
penalties in the millions of dollars and commencing criminal
prosecution, are available under federal statutes and regulations
if product claims violate the law. Similar enforcement action
may also result from noncompliance with other regulatory
requirements, such as FDA labeling rules. The FDA also reviews
some product claims that companies must submit for agency
evaluation and may find them unacceptable. State, local and
foreign authorities may also bring enforcement actions for
violations of these laws.
The FTC and certain states regulate advertising, product and
promotional claims, and other consumer matters, including
advertising of our products. The FTC has in the past several
years instituted enforcement actions against several dietary
supplement companies for alleged or actual false or misleading
advertising of certain products.
We intend to comply with all Federal, state and local
regulations regarding the manufacture, packaging and advertising
of our products.
Employees
Mr. Steven L. White, our sole officer and director along
with his wife, Angela White, are e Nutrition's only employees at
the present time. At such time as we generate sufficient
business, we will consider hiring additional employees on either
a full or part time basis.
Our success will be largely dependent upon the efforts and
active participation of one person, Mr. Steven L. White. The
loss of his services may adversely affect our business
operations. Mr. White does have other interests and it is
uncertain whether these would affect the amount of time spent
operating our business or give rise to a conflict of interest.
We do not have key man insurance in place for any personnel and
do not anticipate purchasing key man insurance until such time as
revenues from operations allow.
We have a marketing agreement in place with Mr. Howard Ruff
who acts as a marketing consultant. The agreement is for a
period of one year. We will pay Mr. Ruff $2.00 for each bottle
of Hi-Q sold through his efforts. Hi-Q used for promotional
efforts are excluded. Mr. Ruff has over thirty-three years of
experience in successfully developing and selling nutritional
products.
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Facilities
We currently maintain limited office space, provided by Mr.
Steven L. White, for which we pay no rent. The address is 386
North 210 East, Mapleton, Utah 84664. The space provided meets
the current needs of the Company. Should our operations expand,
additional space may be needed in the future.
Legal proceedings
Our company is not a party to any bankruptcy, receivership
or other legal proceeding, and to the best of our knowledge, no
such proceedings by or against e Nutrition, Inc. have been
threatened.
PLAN OF OPERATION
We commenced our current operations in June 2000 with our
test market using direct mail inserts. The response was
favorable and we anticipate similar results from future direct
mail efforts. However, in order to pursue additional direct
mail efforts, investigate e-commerce relationships, and introduce
our other products, we must receive the proceeds from this
offering.
Should we receive only the minimum offering, we will realize
a net of $75,000. We will use these funds to test market through
direct mailing efforts and introduce our other products as well
as to pay off the remaining balance on the license agreement of
$15,000. We anticipate that with the minimum offering amount, we
can continue our operations for a period of twelve months.
Should we receive the maximum amount of the offering, we
will realize a net of $125,000. This amount will enable us to
increase our marketing efforts and explore internet relationships
for marketing and distribution of our products as well as pay off
the remaining balance on the license agreement. We anticipate
that with the maximum offering amount, we can continue our
operations and increase our marketing efforts for a period of
twelve months.
If we are unable to raise the minimum offering amount, it
will be necessary for us to find additional funding in order to
market our products. In this event, we may seek additional
financing in the form of loans or sales of our stock and there is
no assurance that we will be able to obtain financing on
favorable terms or at all or that we will find qualified
purchasers for the sale of any stock.
Results of Operations
For the eight months ended August 31, 2000
The Company commenced its current business operations in
June 2000.
Sales were $31,282 for the eight months ended August 31,
2000. Cost of sales for that period were $12,808 with a gross
profit of $18,474. General and administrative expenses were
$14,852 for the eight months ended August 31, 2000. Tax expense
was $697 and we recognized a net income of $2,925 for the eight
months ended August 31, 2000.
Net cash used in operating activities for the eight month
period ended August 31, 2000 was $7,970. Net cash provided by
financing activities was $25,000. We had a net increase in cash
of $17,030. As of August 31, 2000, we had $17,315 in cash on
hand.
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MANAGEMENT
Our business will be managed by our sole officer and
director, Mr. Steven L. White.
Name Age Position Since
Steven L. White 45 Sole Officer and Director June 2000
The following is a brief biography of Mr. Steven L. White,
president, chief executive officer and director.
Mr. Steven L. White, Sole Officer and Director. Mr. White
earned his Bachelor of Science Degree from Brigham Young
University in 1980 with a major in Accounting and a Minor in
English. He is a member of the American Institute of Certified
Public Accountants and has been employed by one national and two
local CPA firms. Since 1983, Mr. White has been employed in
private accounting and has been the controller and chief
financial officer of several small businesses which include
Phoenix Ink, LLC, a financial newsletter publisher, from1999 to
present; HomeQuest, Inc., an educational software marketing
company, from 1993 to 1998; InfoLink Technologies, Inc., a
software development company, from 1991 to 1992; Jefferson
Institute, Inc., an investment seminar company, from 1986 to 1990
and Video Ventures, Inc., a publicly held video rental company,
from 1983 to 1985. Mr. White is the President and a director of
New Horizon Education, Inc., a publicly traded company.
COMPENSATION
No compensation has been awarded to, earned by or paid to
any of the officers or directors of e Nutrition. We currently do
not have any employment agreements in place for officers or
directors. We anticipate entering an employment agreement with
our sole officer at such time as we generate sufficient revenue.
We do not anticipate compensating any directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our policy is stated in Article X of our articles of
incorporation. A contract or transaction either between our
company and a director, or between a director and another company
in which he is financially interested is not necessarily void or
voidable if the relationship or interest is disclosed or known to
the board of directors and the stockholders are entitled to vote
on the issue, or if it is fair and reasonable to our company. A
common or interested director may be counted in determining the
presence of a quorum at a meeting of the board of directors or
committee thereof which authorizes, approves or ratifies the
contract or transaction.
On June 9, 2000, we issued 10,000,000 shares of common stock
to Mr. Steven L. White, sole officer and director. We received
$10,000 for the shares.
PRINCIPAL STOCKHOLDERS
The following table sets forth the beneficial ownership of
our common stock as of the date of this prospectus, and as
adjusted to reflect the sale of 500,000 should the minimum number
of shares be sold and to reflect the sale of 750,000 should the
maximum number of shares be sold.
The table includes:
* each person known to us to be the beneficial owner of more
than five percent of the outstanding shares
12
<PAGE>
* each director of e Nutrition, Inc.
* each named executive officer of e Nutrition, Inc.
Name & Address # of Shares % Before % After Offering
Beneficially Offering Minimum Maximum
Steven L. White 10,000,000 85.83% 82.30% 80.64%
386 North 210 East
Mapleton, UT 84664
All directors
and executive 10,000,000 85.83% 82.30% 80.64%
officers as a
group (1 person)
Mr. Steven L. White is the sole officer and director of e Nutrition, Inc.
DESCRIPTION OF THE SECURITIES
Common Stock
We are authorized to issue up to 50,000,000 shares of common
stock with a par value of $.001. As of the date of this
prospectus, there are 11,650,000 shares of common stock issued
and outstanding.
The holders of common stock are entitled to one vote per
share on each matter submitted to a vote of stockholders. In the
event of liquidation, holders of common stock are entitled to
share ratably in the distribution of assets remaining after
payment of liabilities, if any. Holders of common stock have no
cumulative voting rights, and, accordingly, the holders of a
majority of the outstanding shares have the ability to elect all
of the directors. Holders of common stock have no preemptive or
other rights to subscribe for shares. Holders of common stock
are entitled to such dividends as may be declared by the board of
directors out of funds legally available therefor. The
outstanding common stock is, and the common stock to be
outstanding upon completion of this offering will be, validly
issued, fully paid and non-assessable.
We anticipate that we will retain all of our future
earnings, if any, for use in the operation and expansion of our
business. We do not anticipate paying any cash dividends on our
common stock in the foreseeable future.
Preferred Stock
We are authorized to issue up to 5,000,000 shares of
preferred stock with a par value of $.001. As of the date of
this prospectus, there are no shares of preferred stock issued
and outstanding.
Our preferred stock may be issued from time to time in one
or more series, with such distinctive serial designations as may
be stated or expressed in the resolution or resolutions providing
for the issue of such stock adopted from time to time by our
board of directors. Our board of directors are expressly
authorized to fix:
* Voting rights
* The consideration for which the shares are to be issued;
* The number of shares constituting each series;
* Whether the shares are subject to redemption and the terms of redemption;
13
<PAGE>
* The rate of dividends, if any, and the preferences and
whether such dividends shall be cumulative or noncumulative;
* The rights of preferred stockholders regarding liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding up of e Nutrition; and
* The rights of preferred stockholders regarding conversion or
exchange of shares for another class
of our shares.
Transfer Agent
Interwest Transfer Company, Inc., 1981 East 4800 South, Salt
Lake City, Utah 84124, is our transfer agent.
SHARES AVAILABLE FOR FUTURE SALE
As of the date of this prospectus, there are 11,650,000
shares of our common stock issued and outstanding. Upon the
effectiveness of this registration statement, 500,000 shares of
common stock will be freely tradeable if the minimum number of
shares are sold and 750,000 shares of common stock will be freely
tradable if the maximum number of shares are sold. The remaining
11,650,000 shares of common stock will be subject to the resale
provisions of Rule 144. Sales of shares of common stock in the
public markets may have an adverse effect on prevailing market
prices for the common stock.
Rule 144 governs resale of "restricted securities" for the
account of any person (other than an issuer), and restricted and
unrestricted securities for the account of an "affiliate of the
issuer. Restricted securities generally include any securities
acquired directly or indirectly from an issuer or its affiliates
which were not issued or sold in connection with a public
offering registered under the Securities Act. An affiliate of
the issuer is any person who directly or indirectly controls, is
controlled by, or is under common control with the issuer.
Affiliates of the company may include its directors, executive
officers, and person directly or indirectly owning 10% or more of
the outstanding common stock. Under Rule 144 unregistered
resales of restricted common stock cannot be made until it has
been held for one year from the later of its acquisition from the
company or an affiliate of the company. Thereafter, shares of
common stock may be resold without registration subject to Rule
144's volume limitation, aggregation, broker transaction, notice
filing requirements, and requirements concerning publicly
available information about the company ("Applicable
Requirements"). Resales by the company's affiliates of
restricted and unrestricted common stock are subject to the
Applicable Requirements. The volume limitations provide that a
person (or persons who must aggregate their sales) cannot, within
any three-month period, sell more that the greater of one percent
of the then outstanding shares, or the average weekly reported
trading volume during the four calendar weeks preceding each such
sale. A non-affiliate may resell restricted common stock which
has been held for two years free of the Applicable Requirements.
MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Currently, there is no public trading market for our
securities and there can be no assurance that any market will
develop. If a market develops for our securities, it will likely
be limited, sporadic and highly volatile.
Presently, we are privately owned. This is our initial
public offering. Most initial public offerings are underwritten
by a registered broker-dealer firm or an underwriting group.
These underwriters generally will act as market makers in the
stock of a company they underwrite to help insure a public market
for the stock. This offering is to be sold by our sole officer
and director. We have no commitment from any brokers to sell
shares in this offering. As a result, we will not have the
typical broker public market interest normally generated with an
initial public offering. Lack of a market for
14
<PAGE>
shares of our common stock could adversely affect a shareholder
in the event a shareholder desires to sell his shares. The
company does anticipate a market maker filing for listing on the
Over the Counter Bulletin Board should the offering succeed.
Broker-dealers are subject to certain restrictions when they
deal in our securities that impair the liquidity of the common
stock. Public trading of the common stock is covered by Rule
15c2-6 of the Securities Exchange Act of 1934, which imposes
certain sales practice requirements on broker-dealers who sell
certain designated securities to persons other than established
customers and certain categories of investors. For transactions
covered by the Rule, the broker-dealer must make a suitability
determination for the purchaser and receive the purchaser's
written agreement to the transaction prior to sale. Under
certain circumstances, the purchaser may enjoy the right to
rescind the transaction within a certain period of time.
Consequently, so long as the common stock is a designated
security under the Rule, the ability of broker-dealers to effect
certain trades may be affected adversely, thereby impeding the
development of a meaningful market in the common stock.
PLAN OF DISTRIBUTION
Mr. Steven L. White, the sole officer and director of the
company will sell the common shares offered hereunder on a "best
efforts" basis. We have appointed Brighton Bank, 311 South State
Street, Salt Lake City, Utah 84111 as the escrow agent who will
hold proceeds from the sale of shares until the minimum $100,000
has been received. If we have not received $100,000 within 90
days from the date of this prospectus, unless extended by us for
up to an additional 30 days, funds will be promptly returned to
investors without interest and without any deductions. In order
to buy our shares, you must complete and execute the subscription
agreement and make payment of the purchase price for each share
purchased either in cash or by check payable to the order of e
Nutrition, Inc.
Solicitation for purchase of our shares will be made only by
means of this prospectus and communications with our sole officer
and director who is employed to perform substantial duties
unrelated to the offering, who will not receive any commission or
compensation for their efforts, and who is not associated with a
broker or dealer.
LEGAL MATTERS
The legality of the issuance of the shares offered hereby
and certain other matters will be passed upon for e Nutrition,
Inc. by Lehman Walstrand & Associates, Salt Lake City, Utah.
EXPERTS
The audited financial statements of e Nutrition, Inc. as of
December 31, 1999 (audited), appearing in this Prospectus and
Registration Statement have been prepared by Pritchett, Siler &
Hardy, P.C., as set forth in their report appearing elsewhere
herein, and are included in reliance upon such report given upon
the authority of said firm as experts in accounting and auditing.
15
<PAGE>
ADDITIONAL INFORMATION
We have filed a Registration Statement on Form SB-2 under
the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the shares offered hereby. This Prospectus does
not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. For further
information with respect to e Nutrition and the shares offered
hereby, reference is made to the Registration Statement and the
exhibits and schedules filed therewith. Statements contained in
this Prospectus as to the contents of any contract or any other
document referred to are not necessarily complete, and in each
instance reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement, each
such statement being qualified in all respects by such reference.
A copy of the Registration Statement, and the exhibits and
schedules thereto, may be inspected without charge at the public
reference facilities maintained by the Securities and Exchange
Commission in Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the regional offices of the Commission located at
Seven World Trade Center, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661, and copies of all or any part of the Registration
Statement may be obtained from the Commission upon payment of a
prescribed fee. This information is also available from the
Commission's Internet web site, http://www.sec.gov.
16
<PAGE>
e NUTRITION, INC.
[A Development Stage Company]
CONTENTS
PAGE
- Independent Auditors' Report 18
- Balance Sheets, December 31, 1999 and 1998 19
- Statements of Operations, for the years ended
December 31, 1999 and 1998, and for the
period from inception on March 13, 1996
through December 31, 1999 20
- Statement of Stockholders' Equity, from inception
on March 13, 1996 through December 31, 1999 21
- Statements of Cash Flows, for the years ended
December 31, 1999 and 1998, and for the
period from inception on March 13, 1996
through December 31, 1999 22
- Notes to Financial Statements 23
- Unaudited Balance Sheet, August 31, 2000 26
- Unaudited Statements of Operations, for the
eight months ended August 31, 2000 and
1999 and for the period from inception on
March 13, 1996 through August 31, 2000 27
- Unaudited Statement of Stockholders' Equity,
from inception on March 13, 1996 through
August 31, 2000 28
- Unaudited Statements of Cash Flows, for the
eight months ended August 31, 2000 and 1999
and for the period from inception on March 13,
1996 through August 31, 2000 29
- Notes to Unaudited Financial Statements 30
17
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
e NUTRITION, INC.
Mapleton, Utah
We have audited the accompanying balance sheets of e Nutrition,
Inc. [a development stage company] at December 31, 1999 and 1998,
and the related statements of operations, stockholders' equity
and cash flows for the years ended December 31, 1999 and 1998 and
for the period from inception on March 13, 1996 through December
31, 1999. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements audited by us present
fairly, in all material respects, the financial position of e
Nutrition, Inc. [a development stage company] as of December 31,
1999 and 1998, and the results of its operations and its cash
flows for the years ended December 31, 1999 and 1998 and for the
period from inception on March 13, 1996 through December 31,
1999, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note 5 to the financial statements, the Company has incurred
losses since its inception and has not yet been successful in
establishing profitable operations, raising substantial doubt
about its ability to continue as a going concern. Management's
plans in regards to these matters are also described in Note 5.
The financial statements do not include any adjustments that
might result from the outcome of these uncertainties.
/s/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
July 6, 2000
Salt Lake City, Utah
18
<PAGE>
e NUTRITION, INC.
[A Development Stage Company]
BALANCE SHEETS
ASSETS
December 31,
__________________
1999 1998
________ ________
CURRENT ASSETS:
Cash in bank $ 285 $ 78
________ ________
Total Current Assets 285 78
________ ________
$ 285 $ 78
________ ________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES: $ - $ -
________ ________
Total Current Liabilities - -
________ ________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
5,000,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.001 par value,
50,000,000 shares authorized,
1,500,000 and 1,000,000, shares
issued and outstanding at 1999 and
1998, respectively 1,500 1,000
Capital in excess of par value - -
(Deficit) accumulated during the
development stage (1,215) (922)
________ ________
Total Stockholders' Equity 285 78
________ ________
$ 285 $ 78
________ ________
The accompanying notes are an integral part of these financial
statements.
19
<PAGE>
e NUTRITION, INC.
[A Development Stage Company]
STATEMENTS OF OPERATIONS
For the From Inception on
Years Ended March 13,
December 31, 1996 Through
_______________________ December 31,
1999 1998 1999
___________________________________
REVENUE $ - $ - $ -
EXPENSES:
General and Administrative 293 431 1,215
___________________________________
LOSS BEFORE INCOME TAXES (293) (431) (1,215)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
___________________________________
NET LOSS $ (293) $ (431) $ (1,215)
___________________________________
LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.00)
___________________________________
The accompanying notes are an integral part of these financial
statements.
20
<PAGE>
e NUTRITION, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON MARCH 13, 1996
THROUGH DECEMBER 31, 1999
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
____________________________________ Excess of Development
Shares Amount Shares Amount Par Value Stage
___________________________________________________________
BALANCE, March 13,
1996 - $ - - $ - $ - $ -
Issuance of 1,000,000
shares of common stock for
cash at $.001 per share,
March, 1996 - - 1,000,000 1,000 - -
Net loss for the period ended
December 31, 1996 - - - - - -
BALANCE, December 31,
1996 - - 1,000,000 1,000 - -
Net loss for the year ended
December 31, 1997 - - - - - (491)
BALANCE, December 31,
1997 - - 1,000,000 1,000 - (491)
Net loss for the year ended
December 31, 1998 - - - - - (431)
BALANCE, December 31,
1998 - - 1,000,000 1,000 - (922)
Issuance of 500,000 shares
of common stock for cash
at $.001 per share,
February, 1999 - - 500,000 500 - -
Net loss for the year ended
December 31, 1999 - - - - - (293)
BALANCE, December 31,
1999 - $ - 1,500,000 $ 1,500 $ - $(1,215)
The accompanying notes are an integral part of this financial
statement.
21
<PAGE>
e NUTRITION, INC.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
For the From Inception on
Years Ended March 13,
December 31, 1996 Through
_____________ December 31,
1999 1998 1999
___________________________
Cash Flows From Operating
Activities:
Net loss $ (293) $ (431) $ (1,215)
Adjustments to reconcile net loss to
net cash used by operating activities:
Changes in assets and liabilities - - -
__________________________
Net Cash Provided (Used) by
Operating Activities (293) (431) (1,215)
___________________________
Cash Flows From Investing
Activities - - -
__________________________
Net Cash Provided by Investing
Activities - - -
__________________________
Cash Flows From Financing
Activities:
Proceeds from issuance of common stock 500 - 1,500
__________________________
Net Cash Provided by Financing
Activities 500 - 1,500
__________________________
Net Increase (Decrease) in Cash 207 (431) 285
Cash at Beginning of Period 78 509 -
__________________________
Cash at End of Period $ 285 $ 78 $ 285
________________________________
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For the year ended December 31, 1999:
None.
For the year ended December 31, 1998:
None
The accompanying notes are an integral part of these financial
statements.
22
<PAGE>
e NUTRITION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - e Nutrition, Inc. (the Company) was organized
under the laws of the State of Nevada on March 13, 1996. The
Company has not commenced planned principal operations and is
considered a development stage company as defined in Statement of
Financial Accounting Standards (SFAS) No. 7. The Company is
seeking potential business ventures. The Company has, at the
present time, not paid any dividends and any dividends that may
be paid in the future will depend upon the financial requirements
of the Company and other relevant factors.
Loss Per Share - The computation of loss per share is based on
the weighted average number of shares outstanding during the
period presented in accordance with Statement of Financial
Accounting Standards No. 128, "Earnings Per Share". [See Note 7]
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Accounting 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, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from
those estimated.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about
Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities",
SFAS No. 134, "Accounting for Mortgage-Backed Securities.", SFAS
No. 135, "Rescission of FASB Statement No. 75 and Technical
Corrections", SFAS No. 136, "Transfers of Assets to a not for
profit organization or charitable trust that raises or holds
contributions for others", and SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB statement No. 133 ( an amendment of FASB
Statement No. 133.)," were recently issued. SFAS No. 132, 133,
134, 135, 136 and 137 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
NOTE 2 - CAPITAL STOCK
Common Stock - During March 1996, in connection with its
organization, the Company issued 1,000,000 shares of its
previously authorized, but unissued common stock. The shares
were issued for $1,000 cash (or $.001 per share).
During February 1999, the Company issued 500,000 shares of its
previously authorized, but unissued common stock for $500 cash.
23
<PAGE>
e NUTRITION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". FASB 109 requires the Company to provide a
net deferred tax asset/liability equal to the expected future tax
benefit/expense of temporary reporting differences between book
and tax accounting methods and any available operating loss or
tax credit carryforwards. At December 31, 1999, the Company has
available unused operating loss carryforwards of approximately
$1,200, which may be applied against future taxable income and
which expire in various years through 2019.
The amount of and ultimate realization of the benefits from the
operating loss carryforwards for income tax purposes is
dependent, in part, upon the tax laws in effect, the future
earnings of the Company, and other future events, the effects of
which cannot be determined. Because of the uncertainty
surrounding the realization of the loss carryforwards the Company
has established a valuation allowance equal to the tax effect of
the loss carryforwards and, therefore, no deferred tax asset has
been recognized for the loss carryforwards. The net deferred tax
assets are approximately $420 as of December 31, 1999 with an
offsetting valuation allowance of the same amount resulting in a
change in the valuation allowance of approximately $100 during
1999.
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - As of December 1999, the Company has
not paid any compensation to any officers or directors of the
Company.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his home as a mailing address, as needed, at no
expense to the Company.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company has incurred losses since its inception and
has not yet been successful in establishing profitable
operations. These factors raise substantial doubt about the
ability of the Company to continue as a going concern. In this
regard, management is proposing to raise any necessary additional
funds not provided by operations through loans or through
additional sales of its common stock. There is no assurance that
the Company will be successful in raising this additional capital
or achieving profitable operations. The financial statements do
not include any adjustments that might result from the outcome of
these uncertainties.
24
<PAGE>
e NUTRITION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - SUBSEQUENT EVENTS
During June 2000, the Company issued 10,000,000 shares of its
previously authorized, but unissued common stock for $10,000 (or
$.001 per share).
During June 2000, the Company issued 150,000 shares of its
previously authorized, but unissued common stock for $15,000 (or
$.10 per share).
Marketing Agreement - The Company entered into a Marketing
Agreement with Howard J. Ruff, the Marketer, who shall consult
and oversee the marketing of nutritional products known by the
trade name "HI-Q". This agreement shall commence on June 6, 2000
and shall continue for one year. The Company will pay two
dollars for each bottle of HI-Q sold by the efforts of the
Marketer on a weekly basis. This excludes bottles used for
promotional efforts.
License Agreement - The Company entered into a License Agreement
with Phoenix Ink, L.L.C., which grants them the exclusive right
to engage under the terms hereof in the business of manufacturing
and selling nutritional products under the trade name HI-Q. This
license shall commence on June 6, 2000 and shall continue for one
year and shall be renewable annually. The Company shall pay the
sum of $5,000 as an initial payment. The Company shall further
pay a quarterly amount of $5,000 for the duration of the
agreement and a dollar royalty for each bottle manufactured,
which shall accrue at the time of manufacturing and be paid
monthly as the bottles are sold.
NOTE 7 - LOSS PER SHARE
The following data shows the amounts used in computing loss per
share:
From Inception on
For the March 13,
Years Ended 1996 Through
December 31, December 31,
___________________________________
1999 1998 1999
___________________________________
Loss from continuing operations
available to common shareholders
(numerator) $ (293) $ (431) $ (1,215)
__________________________________
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 1,421,918 1,000,000 1,111,311
___________________________________
25
<PAGE>
NUTRITION, INC.
[A Development Stage Company]
BALANCE SHEET
[Unaudited]
ASSETS
August 31,
2000
__________
CURRENT ASSETS:
Cash in bank $ 17,315
Inventory 4,092
Prepaid expenses 2,500
__________
Total Current Assets 23,907
OTHER ASSETS:
Deferred stock offering costs 5,000
__________
$ 28,907
___________
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES: $ 697
__________
Total Current Liabilities 697
__________
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.001 par value,
5,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
50,000,000 shares authorized,
11,650,000 shares issued and
outstanding, respectively 11,650
Capital in excess of par value 14,850
Earnings accumulated during the
development stage 1,710
__________
Total Stockholders' Equity 28,210
__________
$ 28,907
___________
The accompanying notes are an integral part of this financial
statement.
26
<PAGE>
e NUTRITION, INC.
[A Development Stage Company]
STATEMENTS OF OPERATIONS
[Unaudited]
For the From Inception on
Eight Months Ended March 13,
August 31, 1996 Through
__________________ August 31,
2000 1999 2000
____________________________________
REVENUE
Sales $ 31,282 $ - $ 31,282
COST OF GOODS SOLD 12,808 - 12,808
____________________________________
GROSS PROFIT 18,474 - 18,474
EXPENSES:
General and Administrative 14,852 249 16,067
____________________________________
INCOME (LOSS) BEFORE INCOME
TAXES 3,622 (249) 2,407
CURRENT TAX EXPENSE 697 - 697
DEFERRED TAX EXPENSE - - -
____________________________________
NET INCOME (LOSS) $ 2,925 $ (249) $ 1,710
_______________________________________
EARNINGS (LOSS) PER
COMMON SHARE $ .00 $ (.00) $ .00
_______________________________________
The accompanying notes are an integral part of these financial
statements.
27
<PAGE>
e NUTRITION, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON MARCH 13, 1996
THROUGH AUGUST 31, 2000
[Unaudited]
Earnings
(Deficit)
Accumulated
Common Stock Capital in During the
________________ Excess of Development
Shares Amount Par Value Stage
__________________________________________
BALANCE, March 13, 1996 - $ - $ - $ -
Issuance of 1,000,000
shares of common stock for
cash at $.001 per share,
March, 1996 1,000,000 1,000 - -
Net loss for the period ended
December 31, 1996 - - - -
__________________________________________
BALANCE, December 31, 1996 1,000,000 1,000 - -
Net loss for the year ended
December 31, 1997 - - - (491)
__________________________________________
BALANCE, December 31, 1997 1,000,000 1,000 - (491)
Net loss for the year ended
December 31, 1998 - - - (431)
__________________________________________
BALANCE, December 31, 1998 1,000,000 1,000 - (922)
Issuance of 500,000 shares
of common stock for cash
at $.001 per share,
February, 1999 500,000 500 - -
Net loss for the year ended
December 31, 1999 - - - (293)
__________________________________________
BALANCE, December 31, 1999 1,500,000 1,500 - (1,215)
Issuance of 10,000,000 shares
of common stock for cash at
$.001 per share, June 9, 2000 10,000,000 10,000 - -
Issuance of 150,000 shares
of common stock for cash at
$.10 per share, June 21, 2000 150,000 150 14,850 -
Net income for the period ended
August 31, 2000 - - - 2,925
__________________________________________
BALANCE, August 31, 2000 11,650,000 $ 11,650 $14,850 $ 1,710
__________________________________________
The accompanying notes are an integral part of this financial
statement.
28
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e NUTRITION, INC.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
[Unaudited]
For the From Inception on
Period Ended March 13,
August 31, 1996 Through
____________________ August 31,
2000 1999 2000
_________________________________
Cash Flows From Operating Activities:
Net income (loss) $ 2,925 $ (249) $ 1,710
Adjustments to reconcile net loss to
net cash used by operating activities:
Changes in assets and liabilities:
(Increase) in inventory (4,092) - (4,092)
(Increase) in prepaid expenses (7,500) - (7,500)
Increase in taxes payable 697 - 697
______________________________
Net Cash Provided (Used) by
Operating Activities (7,970) (249) (9,185)
______________________________
Cash Flows From Investing Activities - - -
______________________________
Net Cash Provided by Investing
Activities - - -
______________________________
Cash Flows From Financing Activities:
Proceeds from issuance of common stock 25,000 500 26,500
______________________________
Net Cash Provided by Financing
Activities 25,000 500 26,500
______________________________
Net Increase (Decrease) in Cash 17,030 251 17,315
Cash at Beginning of Period 285 78 -
________________________________
Cash at End of Period $ 17,315 $ 329 $ 17,315
________________________________
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For the period ended August 31, 2000:
None.
For the period ended August 31, 1999:
None
The accompanying notes are an integral part of these financial
statements.
29
<PAGE>
e NUTRITION, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - e Nutrition, Inc. (the Company) was organized
under the laws of the State of Nevada on March 13, 1996. The
Company has not commenced planned principal operations and is
considered a development stage company as defined in Statement of
Financial Accounting Standards (SFAS) No. 7. The Company is
seeking potential business ventures. The Company has, at the
present time, not paid any dividends and any dividends that may
be paid in the future will depend upon the financial requirements
of the Company and other relevant factors.
Loss Per Share - The computation of loss per share is based on
the weighted average number of shares outstanding during the
period presented in accordance with Statement of Financial
Accounting Standards No. 128, "Earnings Per Share". [See Note 8]
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Accounting 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, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from
those estimated.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about
Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities",
SFAS No. 134, "Accounting for Mortgage-Backed Securities.", SFAS
No. 135, "Rescission of FASB Statement No. 75 and Technical
Corrections", SFAS No. 136, "Transfers of Assets to a not for
profit organization or charitable trust that raises or holds
contributions for others", and SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB statement No. 133 ( an amendment of FASB
Statement No. 133.)," were recently issued. SFAS No. 132, 133,
134, 135, 136 and 137 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
NOTE 2 - INVENTORY
The following is a summary of inventory - at cost as of August
31, 2000. At August 31, 2000 management estimated that a reserve
for obsolescence was not necessary.
2000
__________
Finished goods $ 4,092
Raw materials -
__________
$ 4,092
__________
30
<PAGE>
e NUTRITION, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 3 - CAPITAL STOCK
Common Stock - During March 1996, in connection with its
organization, the Company issued 1,000,000 shares of its
previously authorized, but unissued common stock. The shares
were issued for $1,000 cash (or $.001 per share).
During February 1999, the Company issued 500,000 shares of its
previously authorized, but unissued common stock for $500 cash.
During June 2000, the Company issued 10,000,000 shares of its
previously authorized, but unissued common stock for $10,000 (or
$.001 per share).
During June 2000, the Company issued 150,000 shares of its
previously authorized, but unissued common stock for $15,000 (or
$.10 per share).
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards (SFAS) No. 109. SFAS
109 requires the Company to provide a net deferred tax asset or
liability equal to the expected future tax benefit or expense of
temporary reporting differences between book and tax accounting
and any available operating loss or tax credit carryforwards.
Due to a change in ownership during June 2000, the Company's net
operating loss from prior years will not be available to be
carried over and used to offset future income.
At August 31, 2000, the Company had no deferred tax assets or
liabilities.
Period Ended
August 31,
2000
__________
Current income tax expense:
Federal $ 516
State 181
__________
Net current tax expense $ 697
__________
31
<PAGE>
e NUTRITION, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 4 - INCOME TAXES [CONTINUED]
The reconciliation of income tax from continuing operations
computed at the U.S. federal statutory tax rate to the Company's
effective rate is as follows:
Period Ended
August 31,
2000
_________
Computed tax at the expected
federal statutory rate 15.00%
State income taxes, net of federal benefit 4.75%
_________
Effective income tax rates 19.75%
_________
NOTE 5 - RELATED PARTY TRANSACTIONS
Management Compensation - As of August 2000, the Company has not
paid any compensation to any officers directors of the Company.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his home as a mailing address, as needed, at no
expense to the Company.
Marketing Agreement - The Company entered into a Marketing
Agreement with Howard J. Ruff, "the Marketer", who shall consult
and oversee the marketing of nutritional products known by the
trade name HI-Q. This agreement shall commence on June 6, 2000
and shall continue for one year. The Company will pay two
dollars for each bottle of HI-Q sold by the efforts of the
Marketer on a weekly basis. This excludes bottles used for
promotional efforts.
License Agreement - The Company entered into a License Agreement
with Phoenix Ink, L.L.C., which grants them the exclusive right
to engage under the terms hereof in the business of manufacturing
and selling nutritional products under the trade name HI-Q. This
license shall commence on June 6, 2000 and shall continue for one
year and shall be renewable annually. The Company shall pay the
sum of $5,000 as an initial payment. The Company shall further
pay a quarterly amount of $5,000 for the duration of the
agreement and a dollar royalty for each bottle manufactured,
which shall accrue at the time of manufacturing and be paid
monthly as the bottles are sold.
32
<PAGE>
e NUTRITION, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company has incurred losses since its inception and
has not yet been successful in establishing profitable
operations. These factors raise substantial doubt about the
ability of the Company to continue as a going concern. In this
regard, management is proposing to raise any necessary additional
funds not provided by operations through loans or through
additional sales of its common stock. There is no assurance that
the Company will be successful in raising this additional capital
or achieving profitable operations. The financial statements do
not include any adjustments that might result from the outcome of
these uncertainties.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
Marketing Agreement - The Company entered into a Marketing
Agreement with Howard J. Ruff, the Marketer, who shall consult
and oversee the marketing of nutritional products known by the
trade name "HI-Q". This agreement shall commence on June 6, 2000
and shall continue for one year. The Company will pay two
dollars for each bottle of HI-Q sold by the efforts of the
Marketer on a weekly basis. This excludes bottles used for
promotional efforts.
License Agreement - The Company entered into a License Agreement
with Phoenix Ink, L.L.C., which grants them the exclusive right
to engage under the terms hereof in the business of manufacturing
and selling nutritional products under the trade name HI-Q. This
license shall commence on June 6, 2000 and shall continue for one
year and shall be renewable annually. The Company shall pay the
sum of $5,000 as an initial payment. The Company shall further
pay a quarterly amount of $5,000 for the duration of the
agreement and a dollar royalty for each bottle manufactured,
which shall accrue at the time of manufacturing and be paid
monthly as the bottles are sold.
NOTE 8 - LOSS PER SHARE
The following data shows the amounts used in computing loss per
share:
For the From Inception on
Period Ended March 13,
August 31, 1996 Through
_____________________ August 31,
2000 1999 2000
____________________________________
Income (loss) from continuing operations
available to common shareholders
(numerator) $ 2,925 $ (249) $ 1,710
_____________________________________
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 4,945,287 1,384,774 1,684,528
_____________________________________
33
<PAGE>
====================================
Until _____________, 2000, all
dealers that effect $150,000
transactions in these
securities, whether or not
participating in this offering,
may be required to deliver a
prospectus. This is in e Nutrition, Inc.
addition to the dealers'
obligation to deliver a
prospectus when acting as
underwriters and with respect
to their unsold allotments or 750,000 Shares
subscriptions. Common Stock
$.001 Par Value
--------------------------------
TABLE OF CONTENTS
--------------------------------
---------------------
Prospectus Summary 2 PROSPECTUS
Risk Factors 2 ---------------------
Forward-Looking Statements 3
Dilution and Comparative Data 4
Use of Proceeds 5
Determination of Offering Price 5
Capitalization 5
Description of Business 6
Plan of Operation 11
Management 12 ___________________ 2000
Compensation 12
Certain Relationships and
Related Transactions 12
Principal Stockholders 12
Description of the Securities 13
Shares Available for Future Sale 14
Market for Common Stock 14
Plan of Distribution 15
Legal Matters 15
Experts 15
Additional Information 16
Index to Financial Statements 17
No dealer, salesperson or other
person has been authorized to
give any information or to make
any representations other than
those contained in this
Prospectus and, if given or
made, such information or
representations must not be
relied upon as having been
authorized by the Company. This
Prospectus does not constitute
an offer to sell or a
solicitation of an offer to buy
any of the securities offered
hereby to whom it is unlawful
to make such offer in any
jurisdiction. Neither the
delivery of this Prospectus nor
any sale made hereunder shall,
under any circumstances, create
any implication that
information contained herein is
correct as of any time
subsequent to the date hereof
or that there has been no
change in the affairs of the
Company since such date.
===================================
34
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our company's charter provides that, to the fullest extent
that limitations on the liability of directors and officers are
permitted by the Nevada Revised Statutes, no director or officer
of the company shall have any liability to the company or its
stockholders for monetary damages. The Nevada Revised Statutes
provide that a corporation's charter may include a provision
which restricts or limits the liability of its directors or
officers to the corporation or its stockholders for money damages
except: (1) to the extent that it is provided that the person
actually received an improper benefit or profit in money,
property or services, for the amount of the benefit or profit in
money, property or services actually received, or (2) to the
extent that a judgment or other final adjudication adverse to the
person is entered in a proceeding based on a finding in the
proceeding that the person's action, or failure to act, was the
result of active and deliberate dishonesty and was material to
the cause of action adjudicated in the proceeding. The company's
charter and bylaws provide that the company shall indemnify and
advance expenses to its currently acting and its former directors
to the fullest extent permitted by the Nevada Revised Business
Corporations Act and that the company shall indemnify and advance
expenses to its officers to the same extent as its directors and
to such further extent as is consistent with law.
The charter and bylaws provide that we will indemnify our
directors and officers and may indemnify our employees or agents
to the fullest extent permitted by law against liabilities and
expenses incurred in connection with litigation in which they may
be involved because of their offices with e Nutrition. However,
nothing in our charter or bylaws of the company protects or
indemnifies a director, officer, employee or agent against any
liability to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
To the extent that a director has been successful in defense of
any proceeding, the Nevada Revised Statutes provide that he shall
be indemnified against reasonable expenses incurred in connection
therewith.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection
with this Registration Statement. We will pay all expenses of the
offering. All of such expenses are estimates, other than the
filing fees payable to the Securities and Exchange Commission.
Securities and Exchange Commission Filing Fee $ 39.60
Printing Fees and Expenses 1,000.00
Legal Fees and Expenses 15,000.00
Accounting Fees and Expenses 7,000.00
Blue Sky Fees and Expenses 1,000.00
Trustee's and Registrar's Fees 500.00
Miscellaneous 460.40
TOTAL $ 25,000.00
35
<PAGE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
During March 1996, in connection with our organization, we
issued 1,000,000 shares of common stock to an accredited investor
for $1,000 cash. This transaction was exempt from registration
pursuant to Section 4(2) of the Securities Act in a transaction
by an issuer not involving a public offering.
On February 25, 1999, we issued 500,000 shares of common
stock to an accredited investor for $500 in cash. This
transaction was exempt from registration pursuant to Section 4(2)
of the Securities Act in a transaction by an issuer not involving
a public offering.
During June 2000, we issued 150,000 shares of common stock
to an accredited investor for $15,000 in cash. This transaction
was exempt from registration pursuant to Section 4(2) of the
Securities Act in a transaction by an issuer not involving a
public offering.
On June 9, 2000, we issued 10,000,000 shares of common stock
to the sole officer and director for $10,000 in cash. This
transaction was exempt from registration pursuant to Section 4(2)
of the Securities Act in a transaction by an issuer not involving
a public offering.
ITEM 27. EXHIBITS.
Exhibit SEC Ref. Title of Document Location
No. No.
1 3.1 Articles of Incorporation Attached
2 3.1 Amended Articles of Incorporation Attached
3 3.1 By-laws Attached
4 5 Legal Opinion included in Exhibit 23.1 Attached
5 10 Material Contract - Phoenix Ink, LLC Attached
6 10 Material Contract - Howard Ruff Attached
7 23.1 Consent of Lehman Walstrand & Associates Attached
8 27 Consent of Pritchett, Siler & Hardy, P.C. Attached
9 99 Financial Data Schedule - December 31, 1999 Attached
10 27 Financial Data Schedule - March 31, 2000 Attached
11 99 Escrow Agreement Attached
12 99 Subscription Agreement Attached
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
provisions described in this Registration Statement or otherwise,
we have been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the us of expenses incurred or paid by a director, officer or
controlling persons of e Nutrition 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, we 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 of whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
36
<PAGE>
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act, the information omitted from
the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this
registration statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
The undersigned 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;
(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 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.
37
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, e Nutrition, Inc., certifies that it has reasonable ground
to believe that it meets all of the requirements of filing on
Form SB-2 and authorizes this Registration Statement to be signed
on its behalf, in the City of Salt Lake, State of Utah, on
October 25, 2000.
e Nutrition, Inc.
By /s/ Steven L. White
Steven L. White
President
Dated: October, 2000
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
person in the capacity and on the dates indicated.
/s/ Steven L. White
Steven L. White
Sole Officer and Director
Dated: October 25, 2000
38
<PAGE>