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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Trickortreat.ws, Inc.
(Name of small business issuer in its charter)
California
(State or jurisdiction of
incorporation or organization)
5182
(Primary Standard Industrial
Classification Number)
33-0906463
(I.R.S. Employer Identification
Number)
3665 Ruffin Road, Suite 225
San Diego, Ca 92123
Phone:(858) 571-8431
Fax: (858) 571-8497
(Address and telephone number of principal executive offices and place
of business)
Kennan E. Kaeder
Attorney at Law
110 West C Street, Suite 1904
San Diego, Ca 92101
Phone: (619)232-6545
Fax: (619) 236-8182
Email: [email protected]
(Name, address and telephone number of agent for service)
Approximate date of commencement of proposed sale to the public: as soon as
practicable after this registration becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Page
<S> <C>
Prospectus Summary.........................................................................1
Risk Factors...............................................................................2
Our Company Is Only Recently Organized With No Operating History
Which Makes An Evaluation Of Us Difficult.........................................2
Because Of Our Lack Of Funds And Past Losses, Our Independent Certified
Public Accountants' Audit Report Indicates There Is Substantial Doubt
About Our Ability To Continue As A Going Concern.................................2
The Success Of Our Company Is Dependent On Our Management Who Has
Limited Experience And Will Not Spend Full Time Working For Our
Company Which Makes Our Future Even More Uncertain................................2
Our Business Is Capital Intensive And We Have No Significant Operating
Capital So We Are Dependent Upon This Offering To Be Able To Implement
Our Business Plan And Our Lack Of Revenues And Profits May Make Our
Obtaining Additional Capital More Difficult.......................................2
Use Of Proceeds............................................................................3
Determination Of Offering Price............................................................4
Dilution...................................................................................4
Plan Of Distribution.......................................................................6
Special Note Regarding Forward Looking Statements..........................................8
Legal Proceedings..........................................................................8
Directors, Executive Officers, Promoters And Control Persons...............................8
Security Ownership Of Certain Beneficial Owners And Management.............................9
Description Of Securities..................................................................10
Shares Eligible For Future Sale............................................................12
Certain Transactions.......................................................................14
Business...................................................................................16
Management Discussion And Analysis Or Plan Of Operation....................................35
Legal Matters..............................................................................36
Experts....................................................................................36
Available Information......................................................................36
Financial Statements......................................................................F-1
</TABLE>
Until ___________________________, 2000, all dealers that effect
transactions in our shares, whether or not participating in this offering, may
be required to deliver a prospectus. This is in addition to the dealer's
obligation to deliver a prospectus when acting as underwriters and with respect
to their unsold allotments or subscriptions.
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SUBJECT TO COMPLETION DATED NOVEMBER 13, 2000 PROSPECTUS
[LOGO TRICKORTREAT.WS, INC.]
TRICKORTREAT.WS, INC.
5,000,000 Shares
Common Stock
Offering Price $0.10 per share
This is our initial public offering so there is currently no public
market for our shares.
An investment in our company is risky, especially given the young age of
our company. Only people who can afford to lose the money they invest in our
company should invest in our shares. A full discussion of the risks of owning
our shares begins at page 7 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of our shares or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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<TABLE>
<CAPTION>
Price to Public Payable Commissions & Proceeds to
In Cash On Subscription Discounts Prior to Company Prior to
Legal and Accounting Legal and
Fees Accounting Fees
<S> <C> <C> <C>
Per Share $0.10 $.00 $.010
Total $500,000 $.00 $500,000
</TABLE>
We will offer the shares ourselves and do not plan to use underwriters
or pay any commissions. We will be selling our shares in a direct participation
offering and no one has agreed to buy any of our shares. There is no minimum
amount of shares we must sell so no money raised from the sale of our stock will
go into escrow, trust or another similar arrangement. The offering will remain
open until September 1, 2001, unless we decide to cease selling efforts prior to
this date. The minimum purchase is 50,000 shares at $.10 per share or $5,000.00.
The information in this prospectus is not complete and may be changed.
We may not sell our shares until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell our shares and it is not soliciting an offer to buy our shares in any
state where the offer or sale is not permitted.
TRICKORTREAT.WS, INC.
The date of this prospectus is November 13, 2000
<PAGE>
PROSPECTUS SUMMARY
TRICKORTREAT.WS, INC. was incorporated under the laws of the State of
California on April 13, 2000. We have not commenced active business operations
and are considered a development stage enterprise.
We intend to design, produce and market the largest worldwide Internet
lottery. The Company's lottery will be marketed through traditional as well as
Internet marketing channels. The Company's web site will be marketed as
potentially the single largest lottery, with the ability to draw massive player
interest and produce weekly jackpots previously unimaginable.
The web site will also have the ability to interface and be viewed by all
of the players/members through the Company's weekly lottery show, to be seen
live through the web site, via video teleconferencing. The Company's revenue
will be derived directly from a portion of the proceeds of its weekly pools.
Our principal office is currently located at 3665 Ruffin Road, Suite 225,
San Diego, California 92123. Our telephone number at that location is (858)
571-8431 and our facsimile number is (858) 571-8497. We are currently
constructing a web site on the world wide web at www.Trickortreat.ws (textual
reference only).
The Offering
Securities Offered...................... 5,000,000 shares of common stock.
Offering Price.......................... The shares are offered at $0.10
per share for total gross
offering proceeds of $500,000.
The minimum purchase is 50,000
shares or $5,000.00. However, as
many as 1,500,000 shares, also
valued at $.10 per share, may be
issued for services at the fair
market value of the services
rendered.
Terms Of The Offering................... There is no minimum offering.
Accordingly, as shares are sold, we
will use the money raised for our
activities. The offering will remain
open until September 1, 2001, or an
additional 60 days at the sole
discretion of our management, unless
the total proceeds are earlier received
or we determine, in our sole discretion
to cease selling efforts.
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RISK FACTORS
Our Company Is Only Recently Organized With No Operating History Which
Makes An Evaluation Of Us Difficult. Our company was recently organized on April
13, 2000 and is a start-up company. We have no operating history and we do not
have any business prior to our organization. There is nothing at this time on
which to base an assumption that our business plans will prove successful, and
there is no assurance that we will be able to operate profitably. You should not
invest in this offering unless you can afford to lose your entire investment.
Because Of Our Lack Of Funds And Past Losses, Our Independent Accountants'
Audit Report Indicates There Is Substantial Doubt About Our Ability To Continue
As A Going Concern. Our independent certified public accountants have pointed
out that we have incurred losses since our inception and have not yet been
successful in establishing profitable operations, raising substantial doubt
about our ability to continue as a going concern. Therefore, our ability to
continue as a going concern is highly dependent upon obtaining additional
financing for our planned operations. If we are unable to raise additional
capital then you may lose your entire investment.
The Success Of Our Company Is Dependent On Our Management Who Has Limited
Experience And Will Not Spend Full Time Working For Our Company Which Makes Our
Future Even More Uncertain. As compared to many other public companies, our
company does not presently have a depth of managerial and technical personnel.
Our management has only limited experience with the business proposed to be
engaged in by us. Furthermore, Kristin Brin, our sole officer and director, will
not be employed full time, at least initially, as he is involved with other
businesses and have other interests which could give rise to conflicts of
interest with respect to the business of and the amount of time devoted to our
company.
Our Business Is Capital Intensive And We Have No Significant Operating
Capital So We Are Dependent Upon This Offering To Be Able To Implement Our
Business Plan And Our Lack Of Revenues And Profits May Make Our Obtaining
Additional Capital More Difficult. We presently have no significant operating
capital and we are totally dependent upon receipt of the proceeds of this
offering to provide the capital necessary to commence our proposed business.
Upon completion of the offering, the amount of capital available to us will
still be extremely limited, especially if less than the total amount of the
offering is raised since this is not an underwritten offering. We have no
commitments for additional cash funding beyond the proceeds expected to be
received from this offering. In the event that the proceeds from this offering
are not sufficient given the capital-intensive nature of our business, we may
need to seek additional financing from commercial lenders or other sources, for
which we presently have no commitments or arrangements.
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USE OF PROCEEDS
The net proceeds to us from the sale of the 5,000,000 shares offered hereby
at a public offering price of $0.10 per share will vary depending upon the total
number of shares sold. Regardless of the number of shares sold, we expect to
incur offering expenses estimated at $25,000 for legal, accounting, printing and
other costs in connection with the offering.
The table below shows how proceeds from this offering would be used for
scenarios where our company sells various amounts of the shares and the priority
of the use of net proceeds in the event actual proceeds are not sufficient to
accomplish the uses set forth. Pending use, we will invest the net proceeds in
investment-grade, short-term, interest bearing securities.
<TABLE>
<CAPTION>
Percent of total shares offered 25% 50% 75% 100%
($) ($) ($) ($)
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Shares sold 1,250,000 2,500,000 3,750,000 5,000,000
Gross proceeds from offering $125,000 $250,000 $375,000 $500,000
Less: Offering Expenses $25,000 $25,000 $25,000 $25,000
Use of Net Proceeds
Accounting & legal fees $25,000 $25,000 $25,000 $25,000
Web site development $10,000 $50,000 $75,000 $100,000
Computer & office equipment $10,000 $20,000 $40,000 $60,000
Internet access $10,000 $20,000 $25,000 $30,000
Sales & marketing $15,000 $35,000 $50,000 $75,000
Consulting fees $5,000 $10,000 $17,500 $25,000
Management Compensation $10,000 $30,000 $35,000 $40,000
Operating & working capital $10,000 $25,000 $35,000 $40,000
Marketing $5,000 $10,000 $47,500 $80,000
----------- ----------- ----------- -----------
Total Use of Proceeds $125,000 $250,000 $375,000 $500,000
========= ========= ========= =========
</TABLE>
It is possible that no proceeds may be raised from this offering. It is
also possible that some, but not all, of the 5,000,000 shares offered will be
sold. If fewer than all of the shares are sold, we will have to delay or modify
our plan. There can be no assurance that any delay or modification will not
adversely affect our development. If we require additional funds to develop our
plan, such funds may not be available on terms acceptable to us.
Possible working capital uses include advertising and other ongoing
selling, general and administrative expenses, to be determined by our executive
officers based upon their assessment of our company's needs.
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Any funds not used for the purposes indicated will be used for general
working capital. If less than the entire offering is received, funds will be
applied according to the priorities outlined above. For example, if $125,000 is
received, $25,000 will be used to pay for accounting and legal fees, $10,000
will be used to develop and maintain the web sites and the remaining $75,000
will be spent on purchasing computer and office equipment. If less than $25,000
is received, the entire amount will be applied toward legal and accounting fees
for state blue sky registrations and quarterly and annual reports required under
the Securities Exchange Act of 1934.
Some of the web site development, sales and marketing services we require
may be paid through the issuance of shares.
DETERMINATION OF OFFERING PRICE
There is no established public market for the shares of common stock being
registered. As a result, the offering price and other terms and conditions
relative to the shares of common stock offered hereby have been arbitrarily
determined by us and do not necessarily bear any relationship to assets,
earnings, book value or any other objective criteria of value. In addition, no
investment banker, appraiser or other independent, third party has been
consulted concerning the offering price for the shares or the fairness of the
price used for the shares.
DILUTION
You will suffer substantial dilution in the purchase price of your
stock compared to the net tangible book value per share immediately after the
purchase.
Dilution is the difference between the public offering price of $0.10
per share for the common stock offered herein, and the net tangible book value
per share of the common stock immediately after its purchase. Our net tangible
book value per share is calculated by subtracting our total liabilities from our
total assets less any intangible assets, and then dividing by the number of
shares then outstanding.
Our net book value prior to the offering, based on the September 30,
2000 financial statements, was ($21,923) or approximately ($0.0022) per common
share. Prior to selling any shares in this offering, we had 10,000,000 shares of
common stock outstanding, which were purchased by the founding shareholder on
July 1, 2000 for $5,000 in cash and $22,000 in a stock subscription receivable
or $.0027 per share. We are now offering up to 5,000,000 shares at $0.10 per
share. If all shares* offered herein are sold, we will have 15,000,000 shares
outstanding upon completion of the offering. Our post offering pro forma net
book value, which gives effect to receipt of the net proceeds from the offering
on all shares sold and payment and issuance of the additional shares of common
stock in the offering, but does not take into consideration any other changes in
our net book value, will be $478,077.00 or approximately $0.032 per share. This
would result in dilution to investors in this offering of $0.068 per share, or
53% from the public offering price of $0.10 per share. Net book value per share
would increase to the benefit of our present stockholders from ($0.0022) prior
to the offering to $0.032 after the offering, or an increase of $0.034 per share
attributable to purchase of the shares by investors in this offering.
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Dilution Table
The following table sets forth the estimated net book value ("NBV") per
share after the offering and the dilution to persons purchasing shares based
upon various levels of sales achieved:
<TABLE>
1,250,000 2,500,000 3,750,000 5,000,000
shares sold shares sold shares sold shares sold
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Public offering price/share $ 0.10 $ 0.10 $ 0.10 $ 0.10
NBV/share prior to offering $(0.0022) $(0.0022) $(0.0022) $(0.0022)
Increase attributable to new investors $ 0.011 $ 0.02 $ 0.028 $ 0.034
Post offering pro forma NBV/share $ 0.009 $ 0.018 $ 0.026 $ 0.032
Dilution to new investors $ 0.091 $ 0.082 $ 0.074 $ 0.068
</TABLE>
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PLAN OF DISTRIBUTION
General
The following discussion addresses the material terms of the plan of
distribution.
We are offering up to 5,000,000 shares of our common stock at a price
of $0.10 per share with a minimum purchase of 50,000 shares for $5,000.00 to be
sold by our principal executive officer and director. This will be the only
method of distribution. The Company does not intend to make any distribution
through an underwriter or on the Internet. The shares will be sold through our
principal executive officer and director, so no compensation will be paid with
respect to those sales, except for reimbursement of expenses actually incurred
on behalf of our company in connection with such activities. Since this offering
is conducted as a direct participation offering, there can be no assurance that
any of the shares will be sold. A subscription agreement, the form of which is
attached to this prospectus, will be required to be submitted by all purchasers
of the shares.
There is currently no market for any of our shares and no assurances
are given that a public market for such securities will develop after the
closing of this offering or be sustained if developed. While we plan following
the closing of this offering to take affirmative steps to request or encourage
one or more broker/dealers to act as a market maker for our securities, no such
efforts have yet been undertaken and no assurances are given that any such
efforts will prove successful. As such, investors may not be able to readily
dispose of any shares purchased hereby.
Our president, Kristin Brin, shall conduct the offering. Although Ms.
Brin is an associated person of us as that term is defined in Rule 3a4-1 under
the Exchange Act, Ms. Brin is deemed not to be a broker for the following
reasons:
*She is not subject to a statutory disqualification as that term is
defined in Section 3(a)(39) of the Exchange Act at the time of her
participation in the sale of our securities.
*She will not be compensated for her participation in the sale of our
securities by the payment of commission or other remuneration based
either directly or indirectly on transactions in securities.
*She is not an associated person of a broker or dealers at the time of
her participation in the sale of our securities.
*She will restrict her participation to the following activities:
A. Preparing any written communication or delivering any
communication through the mails or other means that does
not involve oral solicitation by him of a potential
purchaser;
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B. Responding to inquiries of potential purchasers in a
communication initiated by the potential purchasers, provided
however, that the content of responses are limited to
information contained in a registration statement filed under
the Securities Act or other offering document;
C. Performing ministerial and clerical work involved in
effecting any transaction.
As of the date of this prospectus, no broker has been retained by us for
the sale of securities being offered. In the event a broker who may be deemed an
underwriter is retained by us, an amendment to our registration statement will
be filed.
The offering will remain open for a period until September 1, 2001 or an
additional 60 days in our sole discretion, unless the entire gross proceeds are
earlier received or we decide, in our sole discretion, to cease selling efforts.
Our officers, directors and stockholders and their affiliates may purchase
shares in this offering.
No Escrow Of Proceeds
There is no escrow of any of the proceeds of this offering. Accordingly, we
will have use of such funds once we accept a subscription and funds have
cleared. Such funds shall be non-refundable to subscribers except as may be
required by applicable law.
Shares Issued For Services
As many as 1,500,000 shares may be issued for services. Any shares that are
issued for services will be valued at $0.10 per share, which is the amount we
could have received if we sold the shares instead of issuing it for services.
We do not currently have any agreements with others to issue shares for
services. However, we do anticipate that in the future, we may issue shares for
web site development, sales and marketing, Internet access and other services.
When we issue shares for services, the value of the services must be a fair
market value. The fair market value of the service provided will be determined
by our president and will be based upon a reasonable evaluation of market rates
and values for specific services.
Penny Stock Reform Act Of 1990
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure for trades in any stock defined as a penny stock. The
Securities And Exchange Commission ("SEC") has adopted regulations that
generally define a penny stock to be any equity security that has a market price
of less than $5.00 per share, subject to exceptions. Under this rule,
broker/dealers who recommend these securities to persons other than established
customers and accredited investors must make a special written suitability
determination for the purchaser and receive the purchaser's written
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agreement to a transaction before sale. Our shares will probably be subject to
the Penny Stock Reform Act, thus potentially decreasing the ability to easily
transfer our shares.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under the "Prospectus Summary," "Risk Factors,"
"Management Discussion and Analysis or Plan of Operation," "Business" and
elsewhere in this prospectus constitute forward-looking statements. These
statements involve known and unknown risks, uncertainties and other factors that
may cause our actual results, levels of activity, performance, or achievements
to be materially different from any future results, levels of activity,
performance, or achievement expressed or implied by such forward-looking
statements. Such factors include, among other things, those listed under "Risk
Factors" and elsewhere in this prospectus.
In some cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "could," "intend", "expects," "plan,"
"anticipates," "believes," "estimates," "predicts," "potential," or "continue"
or the negative of such terms or other comparable terminology.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements. Moreover, neither we nor any other
person assumes responsibility for the accuracy and completeness of such
statements. We are under no duty to update any of the forward-looking statements
after the date of this prospectus.
LEGAL PROCEEDINGS
We are not a party to or aware of any threatened litigation of a material
nature.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Executive Officers And Directors
The following table sets forth the directors and executive officers of our
company, their ages, term served and all officers and positions with our
company. A director is elected for a period of one year and thereafter serves
until her or her successor is duly elected by the stockholders and qualifies.
Officers and other employees serve at the will of the Board of Directors.
There are no arrangements or understandings regarding the length of time a
director of our company is to serve in such a capacity. Our director holds no
directorships in any other company subject to the reporting requirements of the
Securities Exchange Act of 1934.
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<TABLE>
<CAPTION>
Name of Director Age Term Served Positions with Company
-------------------- ---- --------------- -----------------------
<S> <C> <C> <C>
Kristin Brin 37 Since inception President, Secretary-
Treasurer & Director
</TABLE>
Ms. Brin will serve as management of our company. A brief description of
her background and business experience is as follows:
Ms. Brin has extensive experience in business. She has created a
wholesale wallboard business that supplies hanging coat racks made from vintage
panel doors of her own design to 23 boutiques in Chicago, Illinois. This product
is now being prototyped for mass production due to its commercial success. She
is also the founder of the Brin Enterprises Pet Carrier and the inventor of the
patented Kristin Brin Pet Carrier which will be mass marketed to pet care
retailers and distributors. Ms. Brin has also worked as a graphic design artist,
including freelance graphic design, web site design and business presentations.
Kristin Brin, the founder of our company, Ms. Brin initially will devote up
to approximately 10 hours per week of her time to the affairs of our company. If
and when the business operations of our company increase and a more extensive
time commitment is needed, she is prepared to devote more time to our company
even on a full-time basis.
Executive Compensation
Our sole director does not currently receive and has never receive any
compensation for serving as a director to date. In addition, at present, there
are no ongoing plans or arrangements for compensation of any of our officers.
However, we expect to adopt a plan of reasonable compensation to our officers
and employees when and if we become operational and profitable.
The following table sets forth all compensation awarded to, earned by,
or paid for services rendered to us in all capacities during the period ended
September 30, 2000, by Mr. Kristin Brin, our sole executive officer.
Summary Compensation Table
Long-Term Compensation Awards
<TABLE>
<CAPTION>
Name and Principal Compensation-2000 ($)Number of shares
Position Salary ($)Bonus Underlying Options (#)
------------------------ -------- ----------- -----------------------
<S> <C> <C> <C>
Kristin Brin, None None None
President
</TABLE>
We do not presently have a stock option plan but intend to develop an
incentive based stock option plan for our officers and directors in the future
and may reserve up to ten percent of our outstanding shares of common stock for
that purpose.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of our company's common stock with respect to each named
director and executive officer of our company, each person known to our company
to be the beneficial
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owner of more than five percent (5%) of said securities,
and all directors and executive officers of our company as a group:
<TABLE>
<CAPTION>
----------------------------- ------------------- ------------------- ------------------- -------------------
Title Amount and Nature of Percent % After
Name and Address of Class Beneficial Ownership of Class Offering
----------------------- ---------- --------------------------- ---------- ----------
<S> <C> <C> <C> <C>
Kristin Brin Common 10,000,000 shares 100% 66%
3665 Ruffin Road, Suite 225
San Diego, Ca 92123
All officers & directors as Common 10,000,000 shares 100% 66%
a group (1 person)
</TABLE>
Prior to the sale of any shares in this offering, this individual is the
only shareholders of our company. After offering percentages are calculated
assuming sale of all shares in this offering there will be additional
shareholders. The foregoing amounts include all shares these persons are deemed
to beneficially own regardless of the form of ownership.
DESCRIPTION OF SECURITIES
The following statements are qualified in their entirety by reference to
the detailed provisions of our Articles of Incorporation and Bylaws. The shares
registered pursuant to the registration statement of which this prospectus is a
part are shares of common stock, all of the same class and entitled to the same
rights and privileges as all other shares of common stock.
Common Stock
Our company is presently authorized to issue 100,000,000 shares of $.001
par value common stock. The holders of common stock, including the shares
offered hereby, are entitled to equal dividends and distributions, per share,
with respect to the common stock when, as and if declared by the Board of
Directors from funds legally available therefore. No holder of any shares of
common stock has a pre-emptive right to subscribe for any securities of our
company nor are any common shares subject to redemption or convertible into
other securities of our company. Upon liquidation, dissolution or winding up of
our company, and after payment of creditors and preferred stockholders, if any,
the assets will be divided pro-rata on a share-for-share basis among the holders
of the shares of common stock. All shares of common stock now outstanding are
fully paid, validly issued and non-assessable. Each share of common stock is
entitled to one vote with respect to the election of any director or any other
matter upon which shareholders are required or permitted to vote. Holders of our
company's common stock do not have
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cumulative voting rights, so that the holders of more than 50% of the combined
shares voting for the election of directors may elect all of the directors, if
they choose to do so and, in that event, the holders of the remaining shares
will not be able to elect any members to the Board of Directors.
Our company has reserved from its authorized but unissued shares a
sufficient number of shares of common stock for issuance of the shares offered
hereby. The shares of common stock issuable on completion of the offering will
be, when issued in accordance with the terms of the offering, fully paid and
non-assessable. During the pendency of the offering, subscribers will have no
rights as stockholders of our company until the offering has been completed and
the shares have been issued to them.
Preferred Stock
Our company is also presently authorized to issue 10,000,000 shares of
$.001 par value preferred stock. No preferred stock has been issued as of this
date and Management has no current plans to issue preferred stock to any
investor. Under our company's Articles of Incorporation, as amended, the Board
of Directors has the power, without further action by the holders of the common
stock, to designate the relative rights and preferences of the preferred stock,
and issue the preferred stock in such one or more series as designated by the
Board of Directors. The designation of rights and preferences could include
preferences as to liquidation, redemption and conversion rights, voting rights,
dividends or other preferences, any of which may be dilutive of the interest of
the holders of the common stock or the preferred stock of any other series. The
issuance of preferred stock may have the effect of delaying or preventing a
change in control of our company without further shareholder action and may
adversely effect the rights and powers, including voting rights, of the holders
of common stock. In certain circumstances, the issuance of preferred stock could
depress the market price of the common stock. The Board of Directors effects a
designation of each series of preferred stock by filing with the California
Secretary of State a Certificate of Designation defining the rights and
preferences of each such series. Documents so filed are matters of public record
and may be examined in accordance with procedures of the California Secretary of
State, or copies thereof may be obtained from our company.
Options and Warrants
We do not presently have any options or warrants authorized or any
securities that may be convertible into common stock. However, our board of
directors may later determine to authorize options and warrants for our company.
Dividend Policy
We have not previously paid any cash dividends on our common stock and
do not anticipate or contemplate paying dividends on our common stock in the
foreseeable future. Our present intention is to utilize all available funds for
the development of our business. There is no assurance that we will ever have
excess funds available for the
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payment of dividends. The only legal restrictions that limit the ability to pay
dividends on common equity or that are likely to do so in the future, are those
restrictions imposed by State laws. Under California corporate law, no dividends
or other distributions may be made which would render our company insolvent or
reduce assets to less than the sum of its liabilities plus the amount needed to
satisfy any outstanding liquidation preferences.
Transfer Agent
We intend to use Corporate Stock Transfer of 370 17th Street, Suite 2350,
Denver, CO 80202-4614 as our transfer agent and registrar for the common stock
upon completion of the offering.
Shares Eligible For Future Sale
Upon completion of this offering, we will have 15,000,000 shares of common
stock outstanding, if we sell all of the shares in this offering. Of these
shares, the 5,000,000 shares to be sold in this offering will be freely tradable
without restriction or further registration under the Securities Act of 1933,
except that any shares purchased by our affiliates, as that term is defined in
Rule 144 under the Securities Act, may generally only be sold in compliance with
the limitations of Rule 144 described below.
The remaining 10,000,000 of common stock held by the existing stockholder
were issued and sold by us in reliance on exemptions from the registration
requirements of the Securities Act. These shares will become eligible for sale
on June 1, 20001 subject to the limitations of either Rule 144 or Rule 701. We
cannot predict the effect, if any, that offers or sales of these shares would
have on the market price. Nevertheless, sales of significant amounts of
restricted securities in the public markets could adversely affect the fair
market price of the shares, as well as impair our ability to raise capital
through the issuance of additional equity shares.
In general, under Rule 144, a person who has beneficially owned shares for
at least one year is entitled to sell, within any three-month period, a number
of shares that does not exceed the greater of (1) one percent of the then
outstanding shares of common stock or (2) the average weekly trading volume in
the common stock in the over-the-counter market during the four calendar weeks
preceding the date on which notice of the sale is filed, provided several
requirements concerning availability of public information, manner of sale and
notice of sale are satisfied. In addition, our affiliates must comply with the
restrictions and requirements of Rule 144, other than the one-year holding
period requirement, in order to sell shares of common stock which are not
restricted securities.
Under Rule 144(k), a person who is not an affiliate and has not been an
affiliate for at least three months prior to the sale and who has beneficially
owned shares for at least two years may resell their shares without compliance
with the foregoing requirements. In meeting the one-and two-year holding periods
described above, a holder of shares can include the holding periods of a prior
owner who was not an affiliate. The one-and two-year holding periods described
above do not begin to run until the full purchase price or
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other consideration is paid by the person acquiring the shares from the issuer
or an affiliate. Rule 701 provides that currently outstanding shares of common
stock acquired under our employee compensation plans, and shares of common stock
acquired upon exercise of presently outstanding options granted under these
plans, may be resold beginning 90 days after the date of this prospectus:
- by persons, other than affiliates, subject only to the manner of sale
provisions of Rule 144, and
- by affiliates under Rule 144 without compliance with its one-year minimum
holding period, subject to some limitations.
There is presently no agreement by any holder, including our "affiliates",
of "restricted" shares not to sell their shares.
Penny Stock Regulation
Broker-dealer practices in connection with transactions in "penny stocks"
are regulated by certain penny stock rules adopted by the Commission. Penny
stocks generally are equity securities with a price of less than $5.00. The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document that provides information about penny stocks and the risks
in the penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, and monthly account
statements showing the market value of each penny stock held in the customer's
account. In addition, the penny stock rules generally require that prior to a
transaction in a penny stock, the broker-dealer make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject to the penny
stock rules. As our shares immediately following this offering will likely be
subject to such penny stock rules, investors in this offering will in all
likelihood find it more difficult to sell their securities.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our articles of incorporation contains provisions permitted under the
California Corporations Code relating to the liability of directors. The
provisions eliminate a director's liability to stockholders for monetary damages
for a breach of fiduciary duty, except in circumstances involving wrongful acts,
including the breach of a director's duty of loyalty or acts or omissions which
involve intentional misconduct or a knowing violation of law. Our certificate of
incorporation also contains provisions obligating us to indemnify our directors
and officers to the fullest extent permitted by the General Corporation Law of
California. We believe that these provisions will assist us in attracting and
retaining qualified individuals to serve as directors.
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Following the close of this offering, we will be subject to the State of
California's business combination statute. In general, the statute prohibits a
publicly held California corporation from engaging in a business combination
with a person who is an interested stockholder for a period of three years after
the date of the transaction in which that person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
A business combination includes a merger, asset sale or other transaction
resulting in a financial benefit to the interested stockholder. An interested
stockholder is a person who, together with affiliates, owns, or, within three
years prior to the proposed business combination, did own 15% or more of our
voting stock. The statute could prohibit or delay mergers or other takeovers or
change in control attempts and accordingly, may discourage attempts to acquire
us.
As permitted by California law under Section 317 of the California
Corporations Code, we intend to eliminate the personal liability of our
directors for monetary damages for breach or alleged breach of their fiduciary
duties as directors, subject to exceptions. In addition, our bylaws provide that
we are required to indemnify our officers and directors, employees and agents
under circumstances, including those circumstances in which indemnification
would otherwise be discretionary, and we would be required to advance expenses
to our officers and directors as incurred in proceedings against them for which
they may be indemnified. The bylaws provide that we, among other things, will
indemnify officers and directors, employees and agents against liabilities that
may arise by reason of their status or service as directors, officers, or
employees, other than liabilities arising from willful misconduct, and to
advance their expenses incurred as a result of any proceeding against them as to
which they could be indemnified. At present, we are not aware of any pending or
threatened litigation or proceeding involving a director, officer, employee or
agent of ours in which indemnification would be required or permitted. We
believe that our charter provisions and indemnification agreements are necessary
to attract and retain qualified persons as directors and officers.
We have agreed to the fullest extent permitted by applicable law, to
indemnify all our officers and directors. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 (the "Act") may be
permitted to our directors, officers and controlling persons pursuant to the
foregoing provisions, or otherwise, we have 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.
CERTAIN TRANSACTIONS
In connection with the organization of our company, Kristin Brin, the
founding shareholder, President, Secretary-Treasurer and Director of our
company, paid an aggregate of $27,000.00 cash to purchase 10,000,000 shares of
common stock of our company.
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It is contemplated that we may enter into certain transactions with
officers, directors or affiliates of our company which may involve conflicts of
interest in that they will not be arms' length transactions. These transactions
include the following:
Our company presently has no office facilities but for the time being will
use as its business address the office of Ms. Brin on a rent free basis, until
such time as the business operations of our company may require more extensive
facilities and our company has the financial ability to rent commercial office
space. There is presently no formal written agreement for the use of such
facilities, and no assurance that such facilities will be available to our
company on such a basis for any specific length of time.
We have no formal written employment agreement or other contracts with our
officers, and there is no assurance that the services to be provided by them,
and facilities to be provided by Ms. Brin, will be available for any specific
length of time in the future. Ms. Brin anticipates initially devoting up to
approximately 20% of her time to the affairs of our company. If and when the
business operations of our company increase and a more extensive time commitment
is needed, Ms. Brin is prepared to devote more time to our company, in the event
that becomes necessary. The amounts of compensation and other terms of any full
time employment arrangements with our company would be determined if and when
such arrangements become necessary.
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BUSINESS
History And Organization
TRICKORTREAT.WS, INC. ("TRICKORTREAT.WS") was recently incorporated
under the laws of the State of California on April 13, 2000 as
Trickortreat.ws, Inc. On December 4, 2000 the Company changed its name to
Trickortreat.ws, Inc. by amending its Articles of Incorporation. We have not
commenced business operations and we are considered a development stage
enterprise. To date, our activities have been limited to organizational
matters, designing of our web sites and the preparation and filing of the
registration statement of which this prospectus is a part. In connection with
the organization of our company, the founding shareholder of our company
contributed an aggregate of $27,000.00 capitalize our company in exchange for
10,000,000 shares of common stock. We have no significant assets, and we are
totally dependent upon the successful completion of this offering and receipt
of the proceeds there from, of which there is no assurance, for the ability
to commence our proposed business operations.
Our principal executive offices are currently located at 3665 Ruffin Road,
Suite 225, San Diego, California, 92123. The telephone number is (858) 571-8431.
The facsimile number is (858) 571-8497.
Proposed Business
The Company intends to design, produce and market the largest worldwide
Internet lottery. The Company intends to combine all of the exciting aspects of
a state, regional or national lottery into a global lottery by use of the latest
technological breakthrough, the Internet. Management believes that now any
interested individual will be able to play the lottery from anywhere in the
world. Since 1993, the Internet has seen a hyper-growth of worldwide interest,
as well as a dramatic increase in Internet traffic. Through the creation of an
Internet lottery, the company believes that it can develop this specialized,
narrow market into a massive Internet web site and lottery that will rival even
the largest of web sites.
There are no borders on the Internet, and even language barriers will
become of little importance as new Internet software now in development allows
customers around the world to view products and receive product information in
their native language. Even before that advanced technology is in place, we hope
to be able to offer a full range of products to domestic and international
customers in urban or rural locations where local availability and wide
selections are hard to find.
If successfully implemented, we will have effectively:
- been recognized as a leader in one-stop Internet destinations;
- minimized our exposure and risk to the down cycles which occur
in specific industries; and
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- increased web site traffic and revenue-generating opportunities by
referring potential customers to different parts of the Trickortreat.ws
web site or storefronts owned and operated by us rather than by a
third-party.
Growth Of The Internet And Online Commerce
The Internet is an increasingly significant global medium for
communications, content and online commerce, enabling millions of people to
share information and conduct business electronically. Growth in Internet usage
in recent years has been fueled by a number of factors, including:
- the large and growing installed base of personal computers in the
workplace and home,
- advances in the performance and speed of personal computers, local
area networks or "LANS" and modems,
- improvements in network infrastructure and bandwidth;
- easier and cheaper access to the Internet; and
- increased awareness of the Internet among businesses and consumers and
the rapidly expanding availability of online commerce which increases
the value to users of being connected.
The resulting growth of the Internet and online commerce has created
substantial opportunity for companies to conduct business online. It is believed
that Internet retailers are able to communicate more effectively with customers
by providing the following:
- visual product presentations;
- up-to-date pricing and product information;
- better customer support, including opportunities for customer
feedback;
- product offerings tailored to customer preferences; and
- electronic billing and payment systems.
Contrast To Traditional Retail Methods
The Company believes that by use of the Internet, its lottery could, in
effect, combine many of the current state, regional and national lotteries today
and create the largest jackpot payouts in the history of the world of lotteries.
The Company will also offer smaller and more specialized games to attract
additional consumer interest. The Company's web site, Trickortreat.ws, will be
marketed world wide as the largest lottery, with the ability to draw massive
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player interest and produce weekly jackpots previously unimaginable. The web
site will have the ability to be viewed live by all of the players/members
through our weekly lottery show, to be seen live through the web site, via video
teleconferencing. The Company's web site will be mass marketed through
traditional as well as Internet marketing channels. Revenue is intended to be
derived directly from a portion of the proceeds of its weekly pools. A
substantial anticipated amount of advertising revenue will also derive from the
weekly "Trickortreat show" as well as advertising banner space on the Company's
web site.
Additionally, traditional lotteries face other challenges in competing
against the new e-commerce company:
- They often incur large fixed costs of operation (building, store personnel,
and inventory holding);
- Fixed costs often prevent quick expansion into new geographic regions;
- Large, more established lotteries that compete for traditional players
incur a significant expense to gain this access, resulting in higher costs;
- The store-based retail sales process limits the speed at which they can
change their contests and mix and offer new products. Put simply, they must
physically obtain, set up, and display the product before they can sell it;
- Personnel costs limit the number of hours during which retail store-based
lotteries may operate, thereby limiting customer access and convenience;
- Store-based retailers face challenges in hiring, training and retaining
knowledgeable sales staff conversant and up-to-date on the broad array of
products they expect to sell;
- The entire traditional lottery experience is, in general, neither
interactive nor personalized, yet requires extensive personnel support and
manual intervention on behalf of the retailer to take and process orders.
We believe that the traditional lottery business model creates
inefficiencies which are exacerbated by, for example, the large quantity of
merchandise they carry and the rapidly changing world in which they operate. It
is our belief that Internet-based lotteries are in an excellent position to
capitalize on these limitations by operating a more efficient business model.
It should be noted that many of these traditional lotteries are aware of
the advantages of an Internet storefront as outlined previously, and are
establishing or have established their Internet presence such state sanctioned
lotteries, gaming casinos and many others. As more established traditional
lotteries expand onto the Internet, we will
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face greater competition which may result in reduced operating margins, loss of
market share and a diminished brand franchise.
Internet Solution
Within the United States, there are currently 38 states which sponsor a
traditional lottery system. State lottery systems are operated through entities,
which produce, maintain and operate the state lottery and the state, in return,
the company receives a percentage of the lottery revenue. The California lottery
was introduced to the State of California in 1984. In return for the "California
Lottery Act" which gave it the exclusive California market, the lottery company
agreed to contribute 34% of the weekly jackpots to California's public
education. Other lottery states have similar agreements with various lottery
corporations in order to operate exclusively within their respective state.
Globally, among the roughly 120 additional countries which have a traditional
lottery system, unless the lottery is maintained by the government itself, each
of these nations have similar agreements with their lottery companies whereby
the lottery company agrees to share in the profits in return for market
exclusivity.
It is estimated that the annual revenue within the United States ranges
between $10 billion to $16 billion. Revenue for the State of California alone in
1997 reached $2.3 billion. Worldwide annual estimates place the total amount of
lottery revenue annually at $40 billion. One of the unique aspects of the
lottery market, both in the United States and world wide, is that there has been
no competition. Due to the fact that a traditional lottery ticket must be
purchased within the state or host nation in order to play the lottery, the
market exclusivity has, until today, remained in effect.
The Internet has created a wide variety of opportunities including the
development of Internet gaming. The simple concept that defines the Internet,
has now opened up a variety of sporting and casino-style gaming. This concept
equips the end-user with the ability to travel to any country in the world, via
the Internet. This emergence has now resulted in Internet gaming worldwide. For
the last two years, Internet gaming companies have successfully profited while
hosting gaming enthusiasts from around the world. Caribbean Cyber Casino, for
example, is one of the many companies that have currently developed an on-line
casino, CCASINO.COM to take advantage of this new channel of revenue.
Other virtual gaming companies, such as WORLDGAMING.NET,
GRANDDONINICIAN.COM, GAMINGCLUB.COM, CASINOLAND.COM, have all followed suit.
Although lotteries are not associated with the gaming industry, with respect to
similarities in local, and/or national regulations it is crucial to point out
that with respect to the industry, lotteries are legal in the majority of the
countries around the world, whereas the Gaming industry is not. The company
believes that any future Internet gaming regulations will inevitably contain
provisions to allow state and/or nationally sponsored lottery companies to
continue to successfully operate via the Internet.
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The "lottery advertising phenomenon" is one of the many unique benefits
within the lottery industry. The goal of a lottery company is for a weekly
jackpot to have no 6 out of 6 winners and the jackpot will then roll over into
the following week's game. The increase in the prize amount fuels an increase in
player interest that increases the jackpot dramatically. For example, The
California Lottery's July 1, 1998 jackpot was estimated at $4 million dollars,
the jackpot rolled over due to the lack of 6 out of 6 winners and ballooned into
a $14 million dollar payout for the July 4, 1998 jackpot. The $14 million dollar
payout claimed no winners and the jackpot again rolled over into the July 8,
1998 jackpot of $37.5 million dollars. The July 8, 1998 jackpot also failed to
provide a winner and the jackpot again doubled into a July 11, 1998 $70 million
dollar Jackpot, which drew interest nationally and internationally and produced
4 winners. The rollover phenomenon clearly illustrates how an 11-day span
without a winner can result in a $70 million dollar jackpot and a free
advertising bonanza.
The "weekly rollover" provides for a dramatically increased payout and in
turn, draws massive player interest and public interest, via radio and
television publicity, which will inevitably increase the jackpot amounts. The
July "Powerball Jackpot", a multi-state lottery escalated into a $290 Million
dollar pay out. People from around the world flew into the United States to
purchase tickets. Lines at Powerball outlets extended through hundreds of people
with an average wait time of 6 hours long. There were massive delays due to the
jammed Powerball phone system and lack of ability to print the lottery tickets.
Articles regarding the $290 Million Dollar Powerball jackpot were in every major
newspaper worldwide, while CNN news interviewed those waiting in line. The
demand created by a lottery's "weekly rollover" creates a system for continuous
free advertising at every print, publishing and news media outlet. The interest
becomes magnified as the Jackpots rollover and the rewards to the lottery
industry are priceless.
We have a good grasp of the main challenges facing the lottery industry and
we hope to be able to address those and future challenges by adapting to the
environment offered by the Internet. We believe that the main advantages of an
Internet storefront, which we currently do not have in operation but is being
developed, and of e-commerce in general, are:
Attractive economics of the Internet storefront -- As an Internet-only
lottery, we are not constrained by the inherent limitations of store-based
lotteries. Internet lotteries enjoy structural economic advantages relative to
traditional retailers, including:
- low-cost and essentially unlimited gaming space;
- flexible advertising and affordable playing opportunities;
- ability to hire fewer workers;
- ability to keep pace with a fast-growing customer base by
employing scaleable technology and systems; and
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- ability to serve customers around the world from a single, domestic
location.
Customer Convenience and Satisfaction -- We believe that greater customer
convenience will result in increased sales. Online customers will be able to
purchase products 24 hours a day, seven days a week from their homes or offices.
This convenience will, we believe, encourage consumers to purchase more items,
enable them to act on impulse and to easily find lotteries and games that they
have found unattainable through traditional retailers.
Comprehensive Product Selections -- We hope to be able to offer a broad
range of products due to the low-cost and virtually limitless space of an
Internet storefront. This we believe will give us a significant advantage over
traditional lotteries, which may find it economically and physically impractical
to offer a large product range.
Trickortreat.ws Product Description
The Company's business is composed of the following products and services.
- Web Site- The Company's core product will be the operation and
marketing of the Trickortreat.ws web site. The Company's web site will
incorporate all of the traditional as well as the new Internet functions
of a lottery system. Consumers will first be greeted by a state of the
art web site display with a large continuous "Trickortreat ticker" which
will accurately display the ever-increasing current weekly jackpot. The
jackpot ticker will fluctuate between one million to as high as a
multi-billion dollar payout. As customers choose to enter into the
weekly jackpot, they will be instructed to join our free membership. The
free membership prompts will ask the new members to answer a few simple
questions, screen name, country of origin, etc, followed by the company
disclaimers, then they will then be given a member password. Members may
enter any weekly jackpot by simply purchasing a $2.00 US dollar entry
fee and selecting their personal numbers or by selecting the "Quick
Trickortreat Pick" a random number picking program. The transaction will
be secured through an established online credit card transaction
company, such as Cyber Cash. The member will then be given a
confirmation e-mail, complete with a Trickortreat confirmation number.
The web site will also include amazing visual displays and an archive
video collection of past winners, as well as a "Trickortreat Chat Room"
for members interested in discussing lottery related topics. Future
plans will include a Trickortreat gift shop, where members can purchase
various company tee shirts, hats and jackets as well as other related
accessories.
- The Trickortreat Show- Today's technology has created a medium whereby
live, real time video can be viewed via the Internet. The Company
strongly believes that this opportunity has yet to be capitalized on the
Internet, and therefore the
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"Trickortreat Show" will be the first Internet based live video show.
The Trickortreat Show will be a weekly one-half hour show which will
have a regular weekly program time and day schedule. Every Sunday at
6:00PM Pacific standard Time, members from around the world, as well
as any internet browser may tune into the "Trickortreat Show." The
company's Internet show will have a two-fold segment. The first
segment will focus on the past winner's two-week travel to the Host
nation. This Company sponsored event will allow the Trickortreat
winner and 7 additional guests the opportunity to travel first class
from their country of origin into the host nation's Trickortreat
corporation while enjoying all of the luxuries of an
instant-millionaire. The second segment of the Trickortreat Show will
build on the excitement of the first segment and incorporate all of
the excitement of a Hollywood based game show. The company's game
show host will play various "money for fun" games with the audience
members until the grand production of the "Trickortreat" six picks.
The Randomly selected lottery balls will be selected as the climax of
the show. The Company believes that the Trickortreat show has the
potential to rival television and cable based programming worldwide
for that particular time slot, and emerge as the founding leader of
the Internet based, live video programming.
- Web site Advertising space- The Company believes that the Trickortreat
web site will emerge as one of the most visited web sites on the
Internet today. As a result of the massive amounts of visitors who will
regularly visit the site, the Company intends to sell advertising banner
space at rates competitive with each of the major search engine web
sites.
- The Trickortreat Show- Advertising space- There are currently no
Internet video programming with which to gauge interest regarding
advertising time. However, through the company's weekly video show, the
company will create massive amounts of worldwide weekly viewers and
generate significant advertising revenue by selling advertising time
during its weekly shows. Future plans will include advertising rates
comparable to popular daytime game shows.
Part of the Company's business plan involves continuing upgrades of its
products with emerging hardware, software, equipment and program development to
insure and maintain state of-the-art status. Thus, research and development will
continue to play a vital role in providing top quality weekly shows, as well as,
top quality Trickortreat games and ensuring that the company remains on the
leading edge of the lottery and Internet industries. This strategy will
translate into a strong market presence.
Building Brand Recognition -- We believe that building brand
recognition of our proposed Internet storefronts is critical to attracting
our customer base. Brand recognition starts with the simplicity of our
Internet domain name Trickortreat.ws. The consumer need make only one stop.
Trickortreat.ws. The consumer need remember only one name when
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logging on to the Internet. Trickortreat.ws. The various marketing methods to
accomplish this will include:
- developing strategic alliances with various Internet content providers
and web sites of interest;
- the use of general and direct marketing campaigns through the Internet;
- the creation of a significant number of general and specific "links" from
other web sites to our proposed Internet storefronts;
- the use of targeted non-Internet marketing programs with the aim of
generating sales from consumers and businesses; and
- the creation of repeat business from customers through the use of
specialized programs, including "personalization" features.
Promoting Repeat Business -- We intend to use a variety of techniques to
build customer loyalty and promote repeat buying. These include providing
comprehensive information about the products we intend to sell, ensuring
navigation of our proposed web sites is efficient and includes the ability to
search the entire product range, the creation of personalized services and
targeted communications and promotions, and the immediate availability of
products.
Trickortreat.ws, Inc. intends to incrementally release a variety of new and
unique lottery based products in the near future, which also currently have no
or little direct competition. Although competitors may attempt to enter the
Internet market, the mere fact that Trickortreat.ws, Inc. will be the among the
first to successfully market and introduce these products into the Internet
market will be sufficient to give the company recognition as an industry leader.
Development of Strategic Relationships -- We intend to seek strategic
relationships and strategic marketing alliances with popular portals, Internet
access providers, search engines, high traffic sites of interest, manufacturers,
and technology providers to enhance our proposed Internet storefronts'
technology and product assortment, build brand recognition and increase site
traffic, and consequently to gain access to online customers and subsequent
customer sales. In pursuing these relationships, we intend to seek exclusive or
semi-exclusive positioning for the sales of our products on key screens of major
Internet sites. The alliances will include the creation of affiliate networks
and linking programs.
Technology Focus and Expertise -- The Internet's ability to make
instant and low-cost changes to product lines and content should enable us to:
- increase the effectiveness of our merchandising;
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- personalize our customers' experiences; and
- increase the efficiency of our proposed operations.
We will develop systems and technologies with the aim of personalizing the
experience of visitors, both before and after purchase. We will aim to develop
compelling promotion through the use of e-mail, newsletter and store
advertising. We also intend to use technology to reduce transaction costs and
improve the shopping experience of our customers. This will be achieved in the
following ways:
- customer service will be automated using e-mail responses and online
indicators of stock availability;
- improved product management will be achieved using automation to update
the merchandise databases, promote particular product lines and provide
links to product reviews; and
- improving communications with suppliers through the automation of
purchasing, payment methods and accounting.
The Trickortreat.ws Plan
Host Nation: Precedent has already been set by other Internet gaming and
lottery entities for utilizing a host nation for Internet server service. There
are currently a large number of countries interested in hosting a variety of
Internet based gaming companies worldwide in return for market exclusivity and
legislative protection. Among the most prominent countries to have granted
licenses to permit private companies to accept Internet wagering include,
Sweden, Germany, South Africa, Costa Rica, Antigua, The Marshall Islands,
Curacao, Mexico and Venezuela.
The allocation of a portion of the weekly jackpots to the host nation will
create a competition among selected hosts to provide a capable infrastructure
with the ability to successfully accommodate a large influx of Internet based
visitors. The company feels that it must be very selective in choosing the most
suitable nation to provide the Company's state of the art Internet service. The
Company will also develop contingency plans to provide mirror sites capable of
maintaining web site service in addition to the host nation, which will better
insulate against infrastructure inadequacies.
The Company is currently in preliminary discussions with the governments of
Mexico and Honduras to be the host nation provider.
Jackpot Allocation: The jackpot allocation will be based on the traditional
lottery models. Fifty percent of the prize pool will be allocated to the
grand-prize winner. The Company plans to offer the jackpot prize in two options.
The first option is a total payout of fifty percent of the jackpot, payable two
weeks after the jackpot is verified. The second option is for the player to
receive the jackpot in twenty yearly installments. For
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example, on a $100 million dollar jackpot prize, there is $50 million
immediate cash available for the purchase of U.S. Treasury bonds zero-coupon
bonds (government securities). The first payment to the winner is $5 million.
Trickortreat.ws, Inc. will purchase bonds with the remaining $45 million. A
portion of the principal plus the interest accrued over the next 19 years will
make up the annual installments to the winner. After the 20th payment, the full
prize amount of $100 million has been paid and no funds remain in the account.
The portion of the remaining weekly jackpot will be allocated as
follows:
10% will be allocated to the Host Nation.
9% will be allocated to a Worldwide Charity.
6% will be allocated to a Charity chosen by the Company.
The remaining 25% of the proceeds will be distributed to the Company.
Odds Of Winning Formula: The process of choosing the amount of total balls
to be offered, will determine the odds of winning. For example, the California
lottery determined that due to the population of California, a 6/51 system
should be utilized. A total of 51 balls are placed into an air-filtered
plexi-glass display machine and six balls are randomly selected. This 6/51
format has an odds of winning estimated at 1 in 18 million.
The odds of winning formula has translated successfully into an average
weekly payout of 23 million dollars for California during the 1997 fiscal year.
The Company believes that by increasing their lottery system to a 6/70 system of
balls, it will increase the odds of winning to 1 in 118 million and still
maintain player interest worldwide. The Company also intends to double the
average weekly jackpot by increasing the purchase price per ticket to $2.00 US
dollars. These company changes from the current traditional lottery system will
inevitably produce "weekly rollovers" previously unrecorded in the history of
the lottery industry.
Traditional vs. Internet Lottery -Operations: Traditional lotteries are
bound by the limits of their respective state lottery machinery and systems.
Although the goal of any lottery company is to continuously have large
"rollover" jackpots, Management believes that there is a fundamental flaw within
their systems. As the interest for a particular weekly lottery grows, their
ability to handle the massive amounts of computer generated quick picks,
combined with the limitations of the phone system and the limited amount of
authorized outlets, creates a reoccurring bottleneck that prohibits additional
revenue. These bottlenecks prevent the jackpots from realizing the potential
jackpots and limits
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customer loyalty, due to long lines at the retail outlets and player
frustration. Another problem associated with traditional lotteries is in the
constant maintenance and up keep of their respective lottery machinery and
battles regarding ticket printing and forgery.
In contrast, Internet based lottery will not be bound by the limitations of
retailer outlets, defective company machinery or problems associated with ticket
forgery. The Internet will allow interested players the ability to casually
purchase tickets over the Internet in the comfort of their homes, without the
hassles of long lines or telephone breakdowns. Management believes that by
including e-mail confirmation combined with the player's credit card transaction
will be sufficient in proving ownership of the magic lottery jackpot ticket.
Trickortreat - Draw Security: The Company intends utilize today's current
lottery methodologies to insure draw security on a weekly basis. On the evening
of the Trickortreat draw, through a random drawing of capsules, two independent
observers and two lottery security staff will determine which machine and ball
set to use and which set will be the alternate. The selected ball set will then
be loaded on the draw machine by security personnel and one of the independent
observers. One observer and at least one security staff person will have the
ball sets in view at all times. Six pre-tests will be conducted.
Security cameras will then record the pre-tests results. Security staff
and the independent observers will then review the results of the pretest. If
any one number is drawn more than a certain specified number of times,
additional testing will take place or the ball set will be rejected prior tom
the actual draw. The balls will then be reloaded after the final test to
prepare for the live Trickortreat show. A checklist of mechanical and
reporting the security staff and the online computer staff will review
procedures center staff where wagers are to be recorded and processed. The
jackpot pool closure will occur on Sunday 6:15PM Pacific Standard Time, at
which time no more wagers will be allowed for that night's draw. The
Company's security staff will carefully verify that the Internet pool has
closed prior to performing the live draw.
Internet Security/Transactions: The Company is also considering the use of
SSL and SET encryption technology to transport credit card numbers through the
Internet. To prevent hackers from acquiring credit card numbers from the
company's servers, hackers must come through a Linux-based firewall. Sensitive
credit card numbers are not stored on the Company's web site servers, however.
With the exception of the last five digits of each number, the number is moved
onto a Linux machine, which is not physically connected to the Internet. On that
machine, which has a secure file system, credit card numbers are re-encrypted
using IDEA (a security algorithm) and stored there. They can only be accessed by
customers who know the correct password. If machines were physically stolen from
the company the information would still be protected due to the fact that these
credit card numbers are never present anywhere in the system in non-encrypted
form. The company intends on processing financial transactions through companies
such as CYBERCASH and MAPP.
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Trickortreat - Draw Randomness: The Company will go to great lengths to
ensure the randomness of the of the Trickortreat draws and eliminate any
possibility of a breach of security that could jeopardize the integrity of the
Company. Management will maintain two separate draw machines and four sets of
balls. One machine, one primary ball set and one alternative ball set will be
randomly selected prior to each Trickortreat draw. All draw related activities
will be recorded on both video and audiotape. An independent statistician will
review all results of pre-test draws and actual draws to further ensure ongoing
randomness. The statistician and the Company's internal audits office will keep
track of draw results to make sure no number comes up more often than it should.
An independent observer will monitor all draw activities to make absolutely
sure that all procedures approved by the company are followed. Any breach of
procedures will be reported to the director of security. At least once a month,
each solid rubber ball in all four sets will be weighed and measured down to
1/1000 of a gram to ensure consistency in weight and measures. When not in use,
the lottery draw equipment will be locked and sealed in a room which will be
monitored by video surveillance equipment, motion detectors and door alarms 24
hours a day. Access to the draw room will also require two keys, one of which
will be in the possession of the independent observer.
Research and Development: Prior to incorporating, officers of the Company
devoted a great deal of time and effort researching, developing and perfecting
computer oriented products, graphic designs, as well as focusing on lottery
systems and current marketing approaches. These research and development efforts
have blossomed into new and exciting Internet applications for Trickortreat.ws,
Inc. The Company will continue chartering this course, with planned expenditures
for research and development currently targeted at approximately 10% of company
revenue.
Management committed to regularly examining and redefining new roles for
video and gaming production, including new ways of marketing, advertising and
distributing products and services, developing new software and consistently
upgrading and improving lottery equipment to remain the leader in the
marketplace. Another essential focus for the Company will be in attracting the
highest-caliber gaming experts, international banking and financial advisors,
e-commerce experts, Internet marketers and advertisers, as well as in house
graphic artists, programmers and technicians in order to maintain the highest
quality standards.
Strategic Alliances: The Company will actively pursue an exclusive
arrangement with a major credit card corporation in order to provide a secure
online ticket purchasing method. The Company will endeavor to trade Internet
banner space and video show advertising time slots in return for waiving any
company charges for player credit card usage.
The Company will also aggressively pursue a number of strategic alliances
and joint marketing agreements with established companies in the
telecommunications, gaming and banking industries. These include relationships
with developers and
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distributors of the gaming industry and agreements with companies in the field
of corporate and international banking and law. The Company will also pursue
agreements with major banking institutions with a focus on e-commerce and
Internet credit-card transactions. Additionally, the company will also establish
strong relationships with each of the major Internet search engine providers.
Several additional contracts will be negotiated in the future with large,
multi-national corporations.
Marketing Plan: The Company will market their Trickortreat products and
services through established traditional, as well as Internet channels. Future
co-marketing agreements with established Internet web sites will also open a new
world of marketing opportunities. Tentative plans currently include brand
recognition through Internet banner advertisements, search engine cataloging,
e-mail database marketing as well as corporate sponsorship of the worldwide
"Trickortreat" Show. The Company believes it can achieve 5% market share of the
entire lottery industry within approximately three to five years.
Trickortreat.ws Revenue Streams
Management currently anticipates that separate revenue streams for the
Company can be created from the following products and services that will be
offered in our various storefronts:
- Jackpot allocations to the Company;
- Revenues will be derived from a percentage for each transactions, leads
generations, advertising display, etc.;
- Volume discount specials;
- A percentage of sales from related web sites and strategic partners that
are looking to broaden their appeal;.
- Corporate gifts, background wallpapers screensavers, banner advertising,
public relations and publicity;
- Commission taken from any referrals or corporate linkage from the
registered users to the prospect and or clients;
- A Lottery Discount Card;
- The Trickortreat show;
- Search engine for special games;
- Lottery newsletter e-mailed weekly to registered users;
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- Lottery Special Reports; and
- Corporate Sponsorships.
Marketing And Promotion
The Company recognizes that the key to success is in extensive promotion,
aggressively done on a wide scale. To accomplish these marketing goals, the
Company requires an extremely capable advertising agency and public relations
firm. An agency will be selected when the Company is funded and with its
assistance, a comprehensive advertising and promotion plan will be drafted.
Advertising will be done independently and cooperatively with other advertising
and other various companies with whom the Company will have joint marketing
relationships.
The Company also intends to position itself as the leader of the
Internet Lottery industry and the provider of the highest traffic web site in
the world. By increasing Company awareness and brand-name recognition among
businesses, advertising and marketing firms and clients, the Company will
generate new and potential new customers worldwide. Information generated
through market research will create immediate and long-term marketing plans,
and advertising programs will reflect the excitement and ongoing development
of the company's Trickortreat web site.
Coordinated lottery sales literature, game demonstration materials, and
telemarketing programs will gain awareness of the Company among industry groups
and companies, engineers, buyers, and customers as well as other owners of
computers. The Company plans to establish its image as an organization which is
professional, completely reliable and well positioned in the lottery
marketplace. Through maximum efficiency in selecting and scheduling its
published ads, the Company intends to cover all markets. The Company also plans
to select primary business publications with high specific market penetration.
Advertising must be sufficiently frequent to influence the market with Company's
corporate image and product messages. Where possible, advertising should be
placed in or near product reviews, front cover, center spread, and appropriate
editorials.
The Company also plans to create a system of research and response to
insure the maximum benefit from advertising dollars. Trickortreat.ws and the
"Trickortreat Show" are so unique, their promotional campaigns must be
consistent and easy to understand. The company will measure publication
effectiveness by counting the number of inquires and or purchases per 1,000
readers given a particular ad. By varying the advertisements' size messages,
then measuring these differences the Company can calculate the number of
response per investment in advertising.
Given the growing potential for the Internet, the Company also intends to
build capabilities in database marketing, The Company will develop membership
list in-house for the first phase as it develops database sophistication. The
Company's memberships and periodic customer service program will help it to
understand its customers and to
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measure the success of its marketing, sales, product activities and profile
overlays. The company will use these lists to fill in the Company's awareness
gaps. The in-house presence will provide the Company's marketing and technical
support teams with tools that streamline the Company's operations while updating
the Company's customer knowledge. The Company plans to develop a customer
information system that will help it to make sound decisions by providing
historical answers to marketing questions.
Our marketing strategy is to promote, advertise and increase our brand
visibility with the aim of attracting more customers. Multiple channels will be
used, including:
- the development of strategic alliances with major portal sites;
- advertising on leading Internet sites and other media worldwide;
- developing our affiliate network and linking programs; and
- direct marketing.
We will use multiple marketing channels with the aim of reducing reliance
on any one source of customers, lowering customer acquisition costs, and
maximizing brand recognition.
Strategic Alliances -- We intend to pursue strategic relationships in order
to build our presence on the Internet, increase our access to online customers,
expand brand awareness, and enhance the underlying technology of our proposed
Internet storefronts. In pursuing these relationships, we intend to seek
exclusive or semi-exclusive positioning for the sales of computer related
products on key pages of major Internet sites. As of the date of this
prospectus, we have not selected or contracted with any strategic partners.
Online Advertising -- We intend to utilize numerous online sales and
marketing techniques to build brand recognition and drive traffic to our
proposed Internet storefronts. These techniques will include banner advertising
on various high-traffic Internet sites. Such banner advertisements can be
permanently displayed for designated periods of time or displayed when a user
searches for information relating to certain keywords (e.g. "chardonnay" or
"champagne" or "merlot").
Direct Marketing -- We believe that the Internet provides additional
opportunities for direct marketing to our customers through a variety of
mechanisms, and we will explore direct marketing opportunities to target
customers with customized offers such as an e-mail newsletter, special product
offers and preferred customer offers.
Internet Linking -- We believe it is important to create as many Internet
"links" as possible to our proposed Internet storefronts. We intend to use an
aggressive linking program from search engines, manufacturers' web sites,
community, affinity and personal home pages.
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Customer Service -- We believe the strength of our customer support and
service will play an important role in our ability to establish long-term
relationships with customers, encouraging repeat visits and purchases. Customer
support and service personnel are responsible for handling general customer
inquiries, answering questions about the ordering process, and investigating the
status of orders, shipments and payments.
Marketing Methods: By linking the Company's core product with current industry
advertising leaders, the Company intends to establish instant market
recognition by the customer. Management believes that this can be accomplished
by exchanging advertising space on Trickortreat web site and the "Trickortreat
show" for print and television space within ads and promotions created by name
brands. The Company also intends to institute an aggressive print, television,
and Internet advertising campaign to attract both target markets and penetrate
new markets in order to lead customers to its web site full of products and
services. Print media will include a variety of publications and television
markets such as NBC, Fox Cable, and CBS, as well as international Markets such
as Televisa and the BBC.
By donating a portion of each weekly sales revenues to 4 selected worldwide
charities, the Company intends to establish and maintain a positive world wide
corporate image. This activity is also projected to generate both customer
loyalty and provide free exposure for the Company's Trickortreat products and
services on an international level.
The Company also plans to expand through aggressive promotion on the
Internet and the Company expects to be listed on all major World Wide Web site
directories. Through the lack of competing World Wide Web content, the Company
feels this may be its strongest promotional position per dollar. The Company
also plans to link its pages with any existing World Wide Web site related to
lotteries and worldwide charities. This alliance helps both parties increase
their World Wide Web traffic.
The Company's marketing department intends promote its Trickortreat core
product and The Trickortreat Show service through several channels. Print
channels may include People, Entertainment Weekly, Time, Sports Illustrated,
ESPN Sports, Barnes & Noble, etc. A minority of the Company's promotions will
be handled internally through our staff. The Company anticipates hiring
twenty-four additional marketing representatives to cover international
territories and zones.
The Company will also be exploring the benefits of incremental,
coordinated, direct e-mail programs and the Company anticipates a strong profit
potential as it strengthens its direct response capabilities. The Company will
be approaching this scientifically, as it improves the customer targeting
ability. The Company proposes ten 300,000-message campaigns, each proceeded by a
30,000-message test. The Company may also use an in house Internet marketing
service to provide marketing support, e-mail literature, respond to e-mail
inquiries, perform marketing research, and increase the company's customer base
appointments.
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Because the Company's core product falls within the global lottery market,
the Company intends to establish links with advertising and marketing companies
that will represent their products and services in Canada, Japan, France, China,
Australia, New Zealand, Germany, Italy, Finland, Norway, Austria, and
Switzerland. Addressing new international lottery markets is critical to the
Company's sustained growth plan. The Company plans to train marketing managers
to constantly research new promotional methodologies in all regions of the world
in order to secure a solid customer base outside the US.
As of the date of this prospectus, we have not selected or contracted with
any advertisers for our proposed Internet Web site.. However, we have narrowed
down several large advertisers but we do not intend to contract with any single
advertiser until we are able to complete this offering.
Competition
The electronic commerce industry is new, rapidly evolving and intensely
competitive. Competition will likely intensify in the future. Barriers to entry
are minimal; current and new competitors can launch sites at a relatively low
cost. Each Internet storefront will compete based upon its ability to:
- establish and maintain brand recognition and trust-worthiness;
- attract and retain customers;
- maintain depth and breadth in product selection;
- accomplish low or competitive product pricing;
- provide educational and authoritative information; and
- provide responsive customer service.
Many of our current and potential competitors have longer operating
histories, larger customer or user bases, greater brand recognition and
significantly greater financial, marketing and other resources. As the use of
the Internet and other electronic services grows, online retailers may be
acquired by, receive investments from, or enter into other commercial
relationships with, larger, well-established and well-financed companies.
Competitors have and may continue to adopt aggressive polices with regard to
pricing or inventory availability. They also may devote substantially more
resources to web site and systems development than us. Increased competition may
result in reduced operating margins, loss of market share and a diminished brand
franchise. Industry consolidation may also increase competition.
The Company also believes that the market exclusivity enjoyed by
traditional lottery companies has created an industry wide complacency. The lack
of competition
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for market share within each lottery, state and nation has provided an
opportunity for a market penetration and direct competition of the traditional
lottery structure. The majority of the current Internet market competitors have
been ineffective in properly foreseeing the possibilities of a combined
worldwide lottery system.
Although there a few up-start lottery companies with global Internet
intentions, the narrow-minded focus on Internet advertising without
incorporating traditional marketing methods will invariably result in emergence
of one market leader. PLUSLOTTO.COM, for example has been operating since 1996.
That company is hosted by the Liechtenstein government and operated by the
International Lottery in Liechtenstein foundation, PLUSLOTTO.COM endeavors to be
able to provide jackpots well into the millions and produced the first Internet
millionaire through its July 1998 jackpot draw, however the company's Internet
presence is merely an extension of their traditional lottery and the company
does not transmit the lottery draw via the Internet. Another Internet lottery
has emerged, CyberGames is also developing an Internet based lottery out of
Costa Rica called, SUPERSIX.NET, however they have yet to produce an initial
jackpot. The countries of Australia and Canada have also currently developed an
on-line addition to there current traditional lottery system, however their
limits in appeal and lack of global vision will limit their marketing efforts
and handicap their ability to capture increased market share. The future
competition therefore, will be in constantly adapting and developing new
marketing techniques to remain above the market industry.
By any comparison, the business plan of Trickortreat.ws, Inc. should
provide more features and have superior marketing, production and performance
than its competitors. In most cases, the number of differences is
substantial. The Internet lottery market segments are not shared with any
significant competitors and the enormous magnitude of this lottery market
will enable the company the opportunity to generate significant revenues from
even a fractional market share. The Company is confident that it can capture
a significant share of several of these market segments.
Management believes that the Company will hold a unique position in the
customer's minds. Internet gaming enthusiasts will desire both new and exciting
developments along with past references of "how and who." In addition, The
Company's unique Internet game show and web site advantages, both timely and
technical, can be exploited to arrive at a winning position in the business
consumers' minds. The focus within the company's marketing department will be in
positioning the company as the leader of lottery based gaming by continuing to
affiliating and co-market with established fortune 500 corporations.
Intellectual Property
We claim common law trademark for our logo, corporate name, and Internet
storefronts - www.Trickortreat.ws.
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Regulation Of Our Business
We currently face direct regulation by state and federal governmental
agencies, including gaming laws and other laws and regulations generally
applicable to businesses. We may be subject to compliance with these laws and be
required to obtain a gaming license in the event our business model is not
deemed to be compliant with federal and state gaming controls and regulations.
In all cases, participants will be limited to someone at least 21 years of age.
Due to the increasing popularity and use of the Internet, it is possible
that a number of laws and regulations may be adopted in the U.S. and abroad with
particular applicability to the Internet. It is possible that governments will
enact legislation that may be applicable to us in areas including content,
network security, encryption, data and privacy protection, electronic
authentication or "digital" signatures, illegal and harmful content, access
charges and retransmission activities. Moreover, the applicability to the
Internet of existing laws governing issues including property ownership,
content, taxation, defamation and personal privacy is uncertain.
The majority of laws that currently regulate the Internet were adopted
before the widespread use and commercialization of the Internet and, as a
result, do not contemplate or address the unique issues of the Internet and
related technologies. Any export or import restrictions, new legislation or
regulation or governmental enforcement of existing regulations may limit the
growth of the Internet, increase our cost of doing business or increase our
legal exposure. Any of these factors could have a material adverse effect on our
business, financial condition and results of operations.
Violations of local laws may be alleged or charged by state or foreign
governments and we may unintentionally violate local laws and local laws may be
modified, or new laws enacted, in the future. Any of these developments could
have a material adverse effect on our business, results of operations and
financial condition.
Physical Facilities And Employees
Our company, for the time being, uses the office facilities of Kristin
Brin, our President, in San Diego, California, on a rent-free basis as its place
of business. The office consists of one room with approximately 300 square feet
and a telephone, and access to other common areas which include the use of a fax
machine and personal computer. Our management does not intend to seek other
office arrangements unless and until our business requires more extensive
facilities, which is not anticipated in the foreseeable future.
Initially, our only employee will be Kristin Brin, our President, who
anticipates spending approximately 10 hours per week of her time to the affairs
of our company.
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MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis should be read in conjunction with
our financial statements and the notes associated with them contained elsewhere
in this prospectus. This discussion should not be construed to imply that the
results discussed in this prospectus will necessarily continue into the future
or that any conclusion reached in this prospectus will necessarily be indicative
of actual operating results in the future. The discussion represents only the
best present assessment of management.
Plan Of Operations
Our Company was only recently incorporated as Trickortreat.ws, Inc. on
April 13, 2000. We have not commenced planned principal operations and we are
considered a development stage enterprise. We have no significant assets, no
active business operations and no results there from. To date, our activities
have been limited to organizational matters and the preparation and filing of
the registration statement of which this prospectus is a part.
Our management's plan of operation for the next twelve months is first to
raise funds from this offering. If the offering is successful, we intend to use
the proceeds primarily to develop a fully functional, interactive web site,
acquiring computer and office equipment, and provide operating capital during
the start up period of operations. Also during this time, we expect to hire
several employees in the areas of web designing, Windows NT network
administration and a computer programmer proficient in Microsoft's VisualBasic,
ASP and SiteServer Commerce technologies.
Inasmuch as there is no assurance that this offering will be successful and
that we will receive any net proceeds there from, we have not entered into any
contractual commitments and will not do so unless and until the offering is
completed. Therefore there is absolutely no assurance that we will be able, with
the proceeds of this offering, to successfully commence proposed business
operations. At this time, no assurances can be given with respect to the timing
of commencement of operations or the length of time after commencement that it
will be necessary to fund operations from proceeds of this offering.
Depending on the total amount raised in the offering, we believe that the
net proceeds from the offering will provide working capital for one year after
commencement of operations. However, there is no assurance of this. If we are
unsuccessful, investors will have lost their money and we will not attempt to
pursue further efforts with respect to such business, and it is unlikely we
would have the financial ability to do so in any event. Instead management will
call a shareholders meeting to decide whether to liquidate the company or what
direction our company will pursue, if any. However, we presently have no plans,
commitments or arrangements with respect to any other potential business venture
and there is no assurance we could become involved with any other business
venture, especially any business venture requiring significant capital.
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Liquidity and Capital Resources
Presently our liquid resources are not sufficient to pay all of the costs
of this offering. We are dependent on completing this offering successfully in
order to obtain the funding necessary to implement our business plan described
above. Our auditors have issued a "going concern" opinion in Note 6 of our
audited financial statements which forms a part of this prospectus, indicating
that we were recently organized, have incurred losses since inception and have
not yet been successful in establishing profitable operations. We have
accumulated $27,000.00 in losses since inception through September 30, 2000, as
indicated in our financial statements. These factors raise substantial doubt in
our ability to continue as a going concern. If we are unable to raise the funds
in this offering during the next twelve months, we will not remain as a viable
going concern and investors may lose their entire investment.
LEGAL MATTERS
The validity of the shares offered under this prospectus is being passed
upon for us by Kennan E. Kaeder, Attorney at Law, Suite 1904, 110 West C Street,
San Diego, California 92101.
EXPERTS
The financial statements of Trickortreat.ws, Inc. for the period from
inception on April 13, 2000 through September 30, 2000, included in this
prospectus have been examined Siegel Smith & Garber, 400 South Sierra Avenue,
Suite 100, Solana Beach California 92075, independent certified public
accountants, as indicated in their report, and are included in this prospectus
in reliance on the report given upon the authority of that firm as experts in
accounting and auditing.
AVAILABLE INFORMATION
We are filing a registration statement on Form SB-2 with the United
States Securities and Exchange Commission, under the Securities Act of 1933,
covering the securities in this offering. As permitted by rules and
regulations of the Commission, this prospectus does not contain all of the
information in the registration statement. For further information regarding
both Trickortreat.ws and the securities in this offering, we refer you to the
registration statement, including all exhibits and schedules, which may be
inspected without charge at the public reference facilities of the
Commission's Washington, D.C. office, 450 Fifth Street, N.W., Washington,
D.C. 20549. Copies may be obtained upon request and payment of prescribed
fees.
As of the effective date of this prospectus, we will become subject to the
information requirements of the Securities Exchange Act of 1934. Accordingly, we
will file reports and other information with the Commission. These materials
will be available for inspection and copying at the public reference facilities
maintained by the
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Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following regional offices of the Commission: Pacific
Regional Office 5670 Wilshire Boulevard, 11th Floor Los Angeles, CA 90036-3648.
Copies of the material may be obtained from the public reference section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission maintains an Internet Web site located at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding issuers that file reports electronically with the
Commission. The site is accessible by the public through any Internet access
service provider.
Copies of our Annual, Quarterly and other Reports filed with the
Commission, starting with the Quarterly Report for the first quarter ended after
the date of this prospectus (due 45 days after the end of the quarter) will also
be available upon request, without charge, by writing Trickortreat.ws, Inc. 3665
Ruffin Road, Suite 225, San Diego, California 92123.
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TRICKORTREAT.WS, INC.
[A Development Stage Company]
FINANCIAL STATEMENTS
CONTENTS
Independent Auditors' Report...................................F-2
Balance Sheet..................................................F-3
Statement of Operations, for the period from inception
on April 13, 2000 through September 30, 2000...................F-4
Statement of Stockholders' Equity, from inception
on April 13, 2000 through September 30, 2000...................F-5
Statement of Cash Flows, for the period from inception
April 13, 2000 through September 30, 2000......................F-6
Notes to Financial Statements..................................F-7
F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Shareholder
Trickortreat.ws, Inc.
We have audited the accompanying balance sheet of Trickortreat.ws, Inc. (a
development stage company) as of September 30, 2000, and the related statement
of operations, shareholders' equity (deficit) and cash flows for the period from
inception (April 13, 2000) to September 30, 2000. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes, on a test basis, examination of evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Trickortreat.ws, Inc. as of
September 30, 2000, and the results of operations and their cash flows for the
period from inception (April 13, 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 discussed in Note 6 to the
financial statements, the Company has incurred losses and an accumulated
deficit, and the Company cannot successfully implement its operating plan
without raising additional capital. This raises substantial doubt about its
ability to continue as a going concern. Management's plans regarding those
matters are described in Notes 6 and 7. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
SIEGEL, SMITH & GARBER, LLP
Certified Public Accountants
Solana Beach, California
October 31, 2000
F-2
<PAGE>
TRICKORTREAT.WS INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 2000
<TABLE>
ASSETS
<S> <C>
CURRENT ASSETS:
Cash $ 4,857
------------------
TOTAL CURRENT ASSETS 4,857
------------------
$ 4,857
==================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued liabilities $ 26,780
------------------
TOTAL CURRENT LIABILITIES 26,780
------------------
COMMITMENTS AND CONTINGENCIES -
SHAREHOLDERS' EQUITY:
Common Stock, no par value, 100,000,000 shares authorized, 27,000
10,000,000 shares issued and outstanding
Common stock subscription receivable (22,000)
Accumulated deficit (26,923)
------------------
TOTAL SHAREHOLDERS' EQUITY (21,923)
------------------
$ 4,857
==================
</TABLE>
The accompanying notes are an integral part of these financial statements
F-3
<PAGE>
TRICKORTREAT.WS INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
INCEPTION (APRIL 13, 2000) TO SEPTEMBER 30, 2000
<TABLE>
<S> <C>
REVENUE $ -
EXPENSES:
General and administrative 26,923
------------------
TOTAL EXPENSES 26,923
------------------
NET LOSS $ (26,923)
==================
BASIC AND DILUTED NET LOSS PER SHARE $ (0.005)
==================
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING 5,411,765
==================
</TABLE>
The accompanying notes are an integral part of these financial statements
F-4
<PAGE>
TRICKORTREAT.WS INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
FROM INCEPTION (APRIL 13, 2000) TO SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
DEFICIT
COMMON STOCK ACCUMULATED
----------------------------------- COMMON STOCK DURING THE TOTAL
NUMBER AMOUNT SUBSCRIPTIONS DEVELOPMENT SHAREHOLDERS'
OF SHARES PER SHARE TOTAL RECEIVABLE STAGE EQUITY (DEFICIT)
----------------------------------- ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Beginning balance, April 13, 2000 - $ - $ - $ - $ - $ -
Issuance of common shares for cash
and subscriptions receivable (July 1, 2000) 10,000,000 0.0027 27,000 (22,000) - 5,000
Net loss - - - - (26,923) (26,923)
----------- ----------- ------------- ------------- -----------------
BALANCE, SEPTEMBER 30, 2000 10,000,000 $ 27,000 $ (22,000) $ (26,923) $ (21,923)
=========== =========== ============= ============= =================
</TABLE>
The accompanying notes are an integral part of these financial statements
F-5
<PAGE>
TRICKORTREAT.WS INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
INCEPTION (APRIL 13, 2000) TO SEPTEMBER 30, 2000
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (26,923)
Adjustments to reconcile net income to net cash
provided by operating activities:
Increase in accrued liabilities 26,780
----------------
Net cash used by operating activities (143)
----------------
CASH FLOWS FROM INVESTING ACTIVITIES -
----------------
CASH FLOWS FROM FINANCING ACTIVITES:
Common stock issued for cash 5,000
----------------
Net cash provided by financing activities 5,000
----------------
Net increase in cash 4,857
CASH, BEGINNING OF THE PERIOD (INCEPTION) -
----------------
CASH, END OF THE PERIOD $ 4,857
================
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock for
subscriptions receivable $ 22,000
================
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ -
================
Taxes paid $ -
================
</TABLE>
The accompanying notes are an integral part of these financial statements
F-6
<PAGE>
TRICKORTREAT.WS, INC.
(A DEVELOPMENTAL STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Trickortreat.ws, Inc., a California corporation, was formed on April
13, 2000 to construct a world-wide lottery web site on the Internet.
The Company has not commenced planned principal operations and,
therefore, is considered to be in the development stage.
FISCAL YEAR END
The Company's fiscal year end is December 31.
ACCOUNTING METHOD
The Company records income and expenses on the accrual method.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of expenses
during the reporting period. Actual results could differ from those
estimates.
INCOME TAXES
The Company reports certain expenses differently for financial and tax
reporting purposes and, accordingly, provides for the related deferred
taxes. Income taxes are accounted for under the liability method in
accordance with SFAS 109, ACCOUNTING FOR INCOME TAXES. The Company has
no material deferred tax assets or liabilities, current or deferred tax
expense, or net operating loss carryforwards for the period reported.
CASH AND CASH EQUIVALENTS
The Company considers all liquid investments with the maturity of three
months or less from the date of purchase that are readily convertible
into cash to be cash equivalents.
RESEARCH AND DEVELOPMENT COSTS
Costs and expenses that can be clearly identified as research and
development are charged to expense as incurred in accordance with SFAS
2, ACCOUNTING FOR RESEARCH AND DEVELOPMENT COSTS. The Company has no
research and development costs for the period reported.
F-7
<PAGE>
LONG-LIVED ASSETS
The Company will record potential impairments to its long-lived assets
when there is evidence that events or changes in circumstances have
made recovery of the asset's carrying value unlikely. An impairment
loss would be recognized when the sum of the expected future
undiscounted net cash flows is less than the carrying amount of the
asset. The Company has identified no such impairment losses. All of the
Company's long-lived assets reside in the United States.
ADVERTISING COSTS
Advertising costs will be expensed as incurred. There was no
advertising expense incurred for the period from inception through
September 30, 2000.
BASIC AND DILUTED NET LOSS PER SHARE
Net loss per share is calculated in accordance with SFAS 128, EARNINGS
PER SHARE for the period presented. Basic net loss per share is based
upon the weighted average number of common shares outstanding. Diluted
net loss per share is based on the assumption that all dilative
convertible shares and stock options were converted or exercised.
Dilution is computed by applying the treasury stock method. Under this
method, options and warrants are assumed to be exercised at the
beginning of the period (or at the time of issuance, if later), and as
if funds obtained thereby wee used to purchase common stock at the
average market price during the period.
The Company has no potentially dilative securities, options, warrants
or other rights outstanding. Therefore, basic and diluted net loss per
share is the same.
REPORTABLE OPERATING SEGMENTS
SFAS 131, SEGMENT INFORMATION, amends the requirements for companies to
report financial and descriptive information about their reportable
operating segments. Operating segments, as defined in SFAS 131, are
components of an enterprise for which separate financial information is
available and is evaluated regularly by a company in deciding how to
allocate resources and in assessing performance. The financial
information is required to be reported on the basis that is used
internally for evaluating segment performance. The Company intends to
operate one business and operating segment.
NEW ACCOUNTING PRONOUNCEMENTS
In February 1998, the Financial Accounting Standards Board issued SFAS
132, EMPLOYERS DISCLOSURES ABOUT PENSION AND OTHER POST RETIREMENT
BENEFITS. This pronouncement revised and standardized, as much as
possible, the disclosure requirements of SFAS 87, EMPLOYERS ACCOUNTING
FOR PENSIONS, SFAS 88, EMPLOYERS ACCOUNTING FOR SETTLEMENTS AND
CURTAILMENTS OF DEFINED BENEFIT PLANS AND FOR TERMINATION BENEFITS and
SFAS 106, EMPLOYERS ACCOUNTING FOR POST
F-8
<PAGE>
RETIREMENT BENEFITS OTHER THAN PENSIONS. Because the Company has not
commenced operations, adoption of SFAS 132 will have no effect on the
calculation of pension expense, the results of operations or financial
position of the Company. The Company has no post-retirement benefit
plans and, therefore, is not subject to the provisions of SFAS 132.
In June 1998, the Financial Accounting Standards Board issued SFAS 133,
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. This
statement requires companies to record derivatives on the balance sheet
as assets or liabilities, measured at fair value. Gains or losses
resulting from changes in the values of those derivatives would be
accounted for depending on the use of the derivative and whether it
qualifies for hedge accounting. SFAS 133 will be effective for the
Company's year ending December 31, 2001. The Company does not expect
any impact from the adoption of this statement on the Company's
financial position, results of operations or cash flows.
In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1 (SOP 98-1), ACCOUNTING FOR THE COSTS
OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL USE. SOP 98-1
is effective for financial statements for years beginning after
December 15, 1998. SOP 98-1 provides guidance over accounting for
computer software developed or obtained for internal use including the
requirement to capitalize specific costs and amortization of such
costs. The company intends to implement SOP 98-1 effective at inception
(April 13, 2000) and, therefore, anticipates no impact on the Company's
financial position or results of operations.
In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5 (SOP 98-5), REPORTING ON THE COSTS OF
START-UP ACTIVITIES. SOP 98-5, which is effective for fiscal years
beginning after December 15, 1998, provides guidance on the financial
reporting of start-up costs and organization costs. It requires costs
of start-up activities and organization costs to be expensed as
incurred. As the Company has not yet began operations, all costs
associated with start-up activities will be expensed as incurred.
In December 1998, the Accounting Standards Executive Committee, or
AcSEC, issued SOP 98-9, MODIFICATION OF SOP 97-2, SOFTWARE REVENUE
RECOGNITION, WITH RESPECT TO CERTAIN TRANSACTIONS. SOP 98-9 amends
SOP-97-2 to require that an entity recognize revenues for multiple
element arrangements by means of the "residual method" when (1) there
is vendor-specific objective evidence, or VSOE, of the fair values of
all the undelivered elements that are not accounted for by means of
long-term contract accounting, and (2) VSOE of fair value does not
exist for one or more of the delivered elements, and (3) all revenue
F-9
<PAGE>
recognition criteria of SOP 97-2 and SOP 98-9 will be effective from
the Company's inception. We do not expect SOP 98-9 to have any effect
on our results of operations.
In December 1999, the Staff of the Securities and Exchange Commission
released Staff Accounting Bulletin (SAB) No. 101, REVENUE RECOGNITION,
to provide guidance on the recognition, presentation and disclosure of
revenues in financial statements. Upon commencement of operations, the
Company intends to adopt the revenue recognition practices to conform
to SAB No. 101.
2. SHAREHOLDERS' EQUITY
COMMON STOCK
In July 2000, the Company issued 10,000,000 shares of common stock to a
single shareholder for $ 5,000 in cash and $ 22,000 in a stock
subscription receivable.
3. COMMITMENTS
The Company has made no material commitments.
4. RELATED PARTY
The Company uses the mailing address of the sole shareholder and
director, without charge, as its address of record.
In the near future, the sole shareholder and director intends to
contribute her services to the Company. The Company intends to account
for this by computing the market value of these services and including
them in additional paid in capital.
Through September 30, 2000 there were no significant contributed
services.
5. LOSS PER SHARE
As discussed in Note 1, historical net loss per share is calculated in
accordance with SFAS No. 128. The following table reconciles the
numerator and denominator for the calculation:
<TABLE>
<CAPTION>
---------------------------------------------------------------------- -----------------------------
INCEPTION
(APRIL 13, 2000)
TO SEPTEMBER 30, 2000
---------------------------------------------------------------------- -----------------------------
---------------------------------------------------------------------- -----------------------------
<S> <C>
BASIC AND DILUTED LOSS PER SHARE:
---------------------------------------------------------------------- -----------------------------
---------------------------------------------------------------------- -----------------------------
Numerator
---------------------------------------------------------------------- -----------------------------
---------------------------------------------------------------------- -----------------------------
x Net loss $ ( 26,923)
---------------------------------------------------------------------- -----------------------------
---------------------------------------------------------------------- -----------------------------
Denominator
---------------------------------------------------------------------- -----------------------------
---------------------------------------------------------------------- -----------------------------
Basic and diluted weighted average number of
F-10
<PAGE>
common shares outstanding during the period 5,411,765
---------------------------------------------------------------------- -----------------------------
---------------------------------------------------------------------- -----------------------------
---------------------------------------------------------------------- -----------------------------
---------------------------------------------------------------------- -----------------------------
Basic and diluted loss per share $ (0.005)
---------------------------------------------------------------------- -----------------------------
</TABLE>
6. GOING CONCERN
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. This basis of accounting
contemplates the recovery of the Company's assets and the satisfaction
of its liabilities in the normal course of business. Since inception,
the Company has not been engaged in any organizational activities and
has not begun operations. Through September 30, 2000, the Company had
incurred losses of $ 26,923. Successful completion of the Company's
business plan is dependent upon obtaining financing in order to have
the necessary resources to design, develop and launch the web portal.
Management believes that if the financing is not successful, the
business plan will be seriously inhibited.
7. SUBSEQUENT EVENTS
The Company is proposing to make a public offering 5,000,000 shares of
its previously authorized but unissued common stock. The Company plans
to file a registration statement with the United States Securities and
Exchange Commission on Form SB-2 under the Securities Act of 1933. The
anticipated proceeds from the offering will be used to initiate and
implement the Company's business plan.
In October 2000, the Company collected $ 22,000 for the common stock
subscription receivable.
F-11
<PAGE>
[LOGO TRICKORTREAT.WS, INC.]
TRICKORTREAT.WS, INC.
[A Development Stage Company]
5,000,000 Shares
Common Stock
$0.10 Per Share
--------------
PROSPECTUS
--------------
TRICKORTREAT.WS, INC.
3665 Ruffin Road, Suite 225
San Diego, California 92123
December 1, 2000
<PAGE>
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The statutes, charter provisions, bylaws, contracts or other arrangements
under which controlling persons, directors or officers of the issuer are insured
or indemnified in any manner against any liability which they may incur in such
capacity are as follows:
1. Section 317 of the California General Corporation Law provides that each
corporation shall have the following powers:
(a) For the purposes of this section, "agent" means any person who is or was a
director, officer, employee or other agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another foreign or domestic corporation, partnership, joint venture,
trust or other enterprise, or was a director, officer, employee or agent of a
foreign or domestic corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of the predecessor
corporation; "proceeding" means any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative; and
"expenses" includes without limitation attorneys' fees and any expenses of
establishing a right to indemnification under subdivision (d) or paragraph (4)
of subdivision (e).
(b) A corporation shall have power to indemnify any person who was or is a party
or is threatened to be made a party to any proceeding (other than an action by
or in the right of the corporation to procure a judgment in its favor) by reason
of the fact that the person is or was an agent of the corporation, against
expenses, judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with the proceeding if that person acted in
good faith and in a manner the person reasonably believed to be in the best
interests of the corporation and, in the case of a criminal proceeding, had no
reasonable cause to believe the conduct of the person was unlawful. The
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which the
person reasonably believed to be in the best interests of the corporation or
that the person had reasonable cause to believe that the person's conduct was
unlawful.
(c) A corporation shall have power to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending, or completed
action by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that the person is or was an agent of the corporation,
against expenses actually and reasonably incurred by that person in connection
with the defense or settlement of the action if the person acted in good faith,
in a manner the person believed to be in the best interests of the corporation
and its shareholders. No indemnification shall be made under this subdivision
for any of the following:
(1) In respect of any claim, issue or matter as to which the person shall have
been adjudged to be liable to the corporation in the performance of that
person's duty to the corporation and its shareholders, unless and only to the
extent that the court in which the proceeding is or was pending shall determine
upon application that, in view of all the circumstances of the case, the person
is fairly and reasonably entitled to indemnity for expenses and then only to the
extent that the court shall determine.
(2) Of amounts paid in settling or otherwise disposing of a pending action
without court approval.
(3) Of expenses incurred in defending a pending action which is settled or
otherwise disposed of without court approval.
(d) To the extent that an agent of a corporation has been successful on the
merits in defense of any proceeding referred to in subdivision (b) or (c) or in
defense of any claim, issue, or matter therein, the agent shall be indemnified
against expenses actually and reasonably incurred by the agent in connection
therewith.
II-1
<PAGE>
(e) Except as provided in subdivision (d), any indemnification under this
section shall be made by the corporation only if authorized in the specific
case, upon a determination that indemnification of the agent is proper in the
circumstances because the agent has met the applicable standard of conduct set
forth in subdivision (b) or (c), by any of the following:
(1) A majority vote of a quorum consisting of directors who are not parties to
such proceeding.
(2) If such a quorum of directors is not obtainable, by independent legal
counsel in a written opinion.
(3) Approval of the shareholders (Section 153), with the shares owned by the
person to be indemnified not being entitled to vote thereon.
(4) The court in which the proceeding is or was pending upon application made by
the corporation or the agent or the attorney or other person rendering services
in connection with the defense, whether or not the application by the agent,
attorney or other person is opposed by the corporation.
(f) Expenses incurred in defending any proceeding may be advanced by the
corporation prior to the final disposition of the proceeding upon receipt of an
undertaking by or on behalf of the agent to repay that amount if it shall be
determined ultimately that the agent is not entitled to be indemnified as
authorized in this section. The provisions of subdivision (a) of Section 315 do
not apply to advances made pursuant to this subdivision.
(g) The indemnification authorized by this section shall not be deemed exclusive
of any additional rights to indemnification for breach of duty to the
corporation and its shareholders while acting in the capacity of a director or
officer of the corporation to the extent the additional rights to
indemnification are authorized in an article provision adopted pursuant to
paragraph (11) of subdivision (a) of Section 204. The indemnification provided
by this section for acts, omissions, or transactions while acting in the
capacity of, or while serving as, a director or officer of the corporation but
not involving breach of duty to the corporation and its shareholders shall not
be deemed exclusive of any other rights to which those seeking indemnification
may be entitled under any bylaw, agreement, vote of shareholders or
disinterested directors, or otherwise, to the extent the additional rights to
indemnification are authorized in the articles of the corporation. An article
provision authorizing indemnification "in excess of that otherwise permitted by
Section 317" or "to the fullest extent permissible under California law" or the
substantial equivalent thereof shall be construed to be both a provision for
additional indemnification for breach of duty to the corporation and its
shareholders as referred to in, and with the limitations required by, paragraph
(11) of subdivision (a) of Section 204 and a provision for additional
indemnification as referred to in the second sentence of this subdivision. The
rights to indemnity hereunder shall continue as to a person who has ceased to be
a director, officer, employee, or agent and shall inure to the benefit of the
heirs, executors, and administrators of the person. Nothing contained in
II-2
<PAGE>
this section shall affect any right to indemnification to which persons
other than the directors and officers may be entitled by contract or otherwise.
(h) No indemnification or advance shall be made under this section, except as
provided in subdivision (d) or paragraph (4) of subdivision (e), in any
circumstance where it appears:
(1) That it would be inconsistent with a provision of the articles, bylaws, a
resolution of the shareholders, or an agreement in effect at the time of the
accrual of the alleged cause of action asserted in the proceeding in which the
expenses were incurred or other amounts were paid, which prohibits or otherwise
limits indemnification.
(2) That it would be inconsistent with any condition expressly imposed by a
court in approving a settlement.
(i) A corporation shall have power to purchase and maintain insurance on behalf
of any agent of the corporation against any liability asserted against or
incurred by the agent in that capacity or arising out of the agent's status as
such whether or not the corporation would have the power to indemnify the agent
against that liability under this section. The fact that a corporation owns all
or a portion of the shares of the company issuing a policy of insurance shall
not render this subdivision inapplicable if either of the following conditions
are satisfied: (1) if the articles authorize indemnification in excess of that
authorized in this section and the insurance provided by this subdivision is
limited as indemnification is required to be limited by paragraph (11) of
subdivision (a) of Section 204; or (2) (A) the company issuing the insurance
policy is organized, licensed, and operated in a manner that complies with the
insurance laws and regulations applicable to its jurisdiction of organization,
(B) the company issuing the policy provides procedures for processing claims
that do not permit that company to be subject to the direct control of the
corporation that purchased that policy, and (C) the policy issued provides for
some manner of risk sharing between the issuer and purchaser of the policy, on
one hand, and some unaffiliated person or persons, on the other, such as by
providing for more than one unaffiliated owner of the company issuing the policy
or by providing that a portion of the coverage furnished will be obtained from
some unaffiliated insurer or reinsurer.
(j) This section does not apply to any proceeding against any trustee,
investment manager, or other fiduciary of an employee benefit plan in that
person's capacity as such, even though the person may also be an agent as
defined in subdivision (a) of the employer corporation. A corporation shall have
power to indemnify such a trustee, investment manager, or other fiduciary to the
extent permitted by subdivision (f) of Section 207.
2. The Issuer's Articles of Incorporation limit liability of its Officers and
Directors to the full extent permitted by the California General Corporation
Law. The bylaws provide for indemnification in accordance with the foregoing
statutory provisions.
II-3
<PAGE>
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
The following table sets forth all estimated costs and expenses, other than
underwriting discounts, commissions and expense allowances, payable by the
issuer in connection with the maximum offering for the securities included in
this registration statement:
<TABLE>
<CAPTION>
Amount
<S> <C>
SEC Registration fee $132.00
Blue sky fees and expenses $6,000.00
Legal fees and expenses $20,000.00
Printing and shipping expenses $4,000.00
Accounting fees and expenses $5,000.00
Transfer and Miscellaneous expenses $4,000.00
Total $39,132.00
</TABLE>
* All expenses are estimated except the Commission filing fee.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
The following sets forth information relating to all previous sales of
Common stock by the Registrant which sales were not registered under the
Securities Act of 1933.
In connection with the organization of our company, our founding
shareholder, Kristin Brin, paid an aggregate of $27,000 cash to purchase
10,000,000 shares of common stock of our company on July 1, 2000. This
transactions were not registered under the Securities Act of 1933 (the "Act") in
reliance on the exemption from registration in Section 4(2) of the Act. The
securities were offered and sold without any general solicitation to persons
affiliated with the Issuer as founding shareholders, are subject to the resale
provisions of Rule 144 and may not be sold or transferred without registration
except in accordance with Rule 144. Certificates representing the securities
bear such a legend.
ITEM 27. EXHIBITS INDEX.
Number Exhibit Name
------ ------------
1.1* Subscription Agreement
3.1* Articles of Incorporation
3.2* Bylaws
5.0* Consetnt of Kennan E. Kaeder
23.1* Consent of Seigel-Smith, CPA
27.1* Financial Data Schedule
All other Exhibits called for by Rule 601 of Regulation S-B are not applicable
to this filing. Information pertaining to our common stock is contained in our
Articles of Incorporation and Bylaws.
* Previously Filed.
II-4
<PAGE>
ITEM 28. UNDERTAKINGS.
The undersigned registrant undertakes:
(1) To file, during any period in which offer or sales are being made, a
post-effective amendment to this registration statement:
I. To include any prospectus required by section 10(a)(3) of the Securities Act
of 1933;
II. To reflect in the prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent post effective amendment)
which, individually or in the aggregate, represent a fundamental change in the
information in the registration statement;
III. To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to the information in the Registration Statement.
(2) That, 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 securities at that time shall be deemed to be the
initial bona fide offering.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission any supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
to that section.
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 our certificate of incorporation or provisions of
California law, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission the indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. If a
claim for indemnification against liabilities (other than the payment by the
Registrant)of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding is asserted by a director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether the
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of the issue.
II-5
<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 all of the
requirements for filing on Form SB-2 and has duly caused this registration
statement to be signed on our behalf by the undersigned, in the City of San
Diego, State of California, on December 12, 2000.
(Registrant) Trickortreat.ws, Inc.
By (signature and title) /s/ Kristin Brin
----------------------------------
President, Treasurer, and Director
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
(signature) /s/ Kristin Brin
----------------------------------
(title) President, Chief Executive Officer,
Secretary, Chairman of the Board
(date) December 12, 2000
(signature) /s/ Kristin Brin
----------------------------------
(title) Chief Accounting Officer
(date) December 12, 2000
II-6
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
REGISTRATION STATEMENT
ON FORM SB-2A
UNDER
THE SECURITIES ACT OF 1933
TRICKORTREAT.WS, INC.
INDEX TO EXHIBITS
-------------------------------------------------------------------------------
SEC REFERENCE TITLE OF DOCUMENT
NUMBER
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1.1* Subscription Agreement
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3.1* Articles of Incorporation
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3.2* Bylaws
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5* Consent of Kennan E. Kaeder
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23* Consent of Seigel-Smith, CPA
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27* Financial Data Schedule
* Previously Filed.
