Registration of Securities by a Small-Business Issuer — Form SB-2
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SB-2 Registration of Securities by a Small-Business 65 347K
Issuer -- formsb2
2: EX-3.(I) Articles of Incorporation 1 8K
3: EX-3.(II) Bylaws 8± 34K
4: EX-4 Specimen Common Stock Certificate 1 6K
5: EX-5 Legal Opinion 2± 9K
6: EX-10 Promissory Note 2± 8K
7: EX-10 Warrant Agreement 9± 37K
8: EX-23 Consent of Accountants 1 7K
9: EX-23 Consent of Councel 1 4K
SB-2 — Registration of Securities by a Small-Business Issuer — formsb2
Document Table of Contents
As filed with the Securities and Exchange Commission on
Registration No. ___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Wine Purveyors International, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Nevada 71-0928242
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
5990
(Primary Standard Industrial
(Classification Code Number)
15208 Jarrettsville Pike
Monkton, Maryland 21111
(410) 303-9879
(410) 321-1799 Fax
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
James Price
15208 Jarrettsville Pike
Monkton, Maryland 21111
(410) 303-9879
(410) 321-1799 Fax
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With a copy to:
Jonathan Dariyanani, Esq.
101 Hiller Street
Belmont, CA 94002
(310) 849-4576 Tel
(415) 358-5548Fax
2
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
Concluding date of the offering:
December 31, 2003
If this form is filed to register additional securities for an offering
under Rule 462(b) of 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 under Rule 462(c) of 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 under Rule 462(d) of 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 under Rule 434, please
check the following box [].
[Enlarge/Download Table]
Calculation of registration fee
Title of
each class
of Amount of
securities shares to Proposed maximum Proposed maximum Amount of
to be be offering price aggregate registration
registered registered per unit offering price fee (1)
--------------- ----------- ---------------- ----------------- ------------
Common shares 1,000,000 $ 1.00 $ 1,000,000 $ 80.90
to be sold by
company
Common shares 1,030,900 $ 1.00 $ 1,030,900 $ 83.40
to be sold by
selling
shareholders
(1) Estimated solely for the purpose of computing the amount of the
registration fee under Rule 457(o) of the Securities Act of 1933. The registrant
amends this registration statement on such date or dates as may be necessary to
delay its effective date until the registrant shall file a further amendment
which specifically states that this registration statement shall thereafter
become effective in accordance with Section 8(a) of the Securities Act of 1933
or until the registration statement shall become effective on such date as the
commission, acting according to such Section 8(a), may determine.
3
Prospectus (subject to completion)
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Issued [to be dated upon printing of prospectus] 2003
2,030,900 Shares of Common Stock
WINE PURVEYORS INTERNATIONAL, INC.
COMMON STOCK
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This prospectus relates to our offering of 1,000,000 shares of our common stock
at a price of $1.00 per share and the offering by certain selling shareholders
of 1,030,900 shares of our common stock at a price of $1.00 per share. We will
not receive any proceeds from the sale of any of the shares by selling
shareholders. We will be selling all of the 1,000,000 shares of common stock we
are offering in a direct participation offering and will not use an underwriter
or pay a commission for the sale of the shares. This is our initial public
offering, and no public market currently exists for any of our securities. No
arrangements have been made to place funds in escrow, trust or any similar
account. There is no minimum amount we are required to raise in this offering
and any funds received will be immediately available to us.
This is a highly risky investment.
WE HAVE DESCRIBED THESE RISKS UNDER THE CAPTION "RISK FACTORS" BEGINNING ON PAGE
8.
These securities are not listed on any national securities exchange or the
NASDAQ Stock Market.
4
Table of contents Page
Front of registration statement 2-3
Inside front and outside back cover pages of prospectus 4
Summary information risk factors 5
Risk Factors 7
Use of proceeds 14
Determination of offering price 15
Plan of distribution 16
Selling security holders 17
Legal proceedings 32
Directors, executive officers, promoters and control persons 33
Executive compensation 33
Security ownership of certain beneficial owners and management 35
Description of securities 37
Interest of named experts and counsel 38
Changes in and disagreements with accountants on accounting 38
and financial disclosure
Disclosure of commission position on indemnification for 39
securities act liabilities
Description of business 40
Management's discussion and analysis 44
Description of property 47
Certain relationships and related transactions 48
Market for common equity and related stockholder matters 49
Financial statements 51
Indemnification of directors and officers 52
Other expenses of issuance and distribution 52
Recent sales of unregistered securities 53
Undertakings 55
Exhibits index 57
5
Summary information and risk factors
Prospectus summary
You should read the following summary together with the more detailed
information regarding Wine Purveyors International and the common stock being
sold in this offering and our financial statements and notes appearing elsewhere
in this prospectus.
Wine Purveyors International, Inc.
Principal Executive Offices
15208 Jarrettsville Pike
Monkton, Maryland 21111
(410) 303-9879
www.winepurveyors.com
We are engaged in the business of providing fine wine and accessories to wine
enthusiasts and retail customers through our website and a chain of retail
stores. Neither the website nor the retail stores have yet to be fully
developed. To date, we have derived no revenue, have no customers and are not
yet offering our products and services for sale.
Key Terms of the Primary Offering
We are offering for sale 1,000,000 common shares to the public at a price of
$1.00 per share. This offering is being conducted without an underwriter on a
direct participation basis. There can be no assurance that we will be able to
sell any of the shares we are offering. We have determined the initial offering
price of the shares arbitrarily. The per share price bears no relationship to
our assets, earnings, book value or any other set of traditional valuation
criteria. If the offering is fully subscribed, we will raise $1,000,000, before
expenses of the offering.
The Primary offering:
Common stock offered............................................1,000,000 shares
Common stock to be outstanding after this offering.............11,000,000 shares
Use of proceeds............................................... For general
corporate purposes, including working capital, development of our website, the
opening of our first retail outlet, staffing, advertising, marketing and sales
expenses.
Key Terms of the Secondary Offering
We are also registering 1,030,900 shares for sale by certain selling
shareholders at a price of $1.00 per share. We will not receive any of the
proceeds of any of the sales of the shares by the selling shareholders. We are
paying the expenses for the registration of these shares on by the selling
shareholders.
The foregoing information is based on the number of shares of common stock
outstanding as of January 31, 2003.
6
Summary Financial Data
The following summary financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Financial Statements, including Notes, included elsewhere in
this Prospectus. The statement of operations data for the period inception to
January 31, 2003 and the balance sheet data at January 31, 2003 come from Wine
Purveyors International audited Financial Statements included elsewhere in this
Prospectus. The statement of operations data for the period inception to January
31, 2003 come from Wine Purveyors International audited financial statements for
that period, which are included in this Prospectus. These statements include all
adjustments that Wine Purveyors International considers necessary for a fair
presentation of the financial position and results of operations at that date
and for such periods. The operating results for the period ended January 31,
2003 do not necessarily indicate the results to be expected for the full year or
for any future period.
BALANCE SHEET DATA:
January 31,
2003
ASSETS
Current Assets
Cash $ 5,000
Inventory 51,298
-------------
Total Current Assets 56,298
Deferred Offering Costs 5,000
-------------
Total Assets $ 61,298
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ --
Long-Term Liabilities
Note payable to related party 51,298
-------------
Total Long-Term Liabilities 51,298
-------------
Stockholders' Equity
Common stock - $0.001 par value; 50,000,000 shares
authorized; 10,000,000 shares issued and outstanding 10,000
-------------
Total Stockholders' Equity 10,000
-------------
Total Liabilities and Stockholders' Equity $ 61,298
=============
7
STATEMENT OF OPERATIONS DATA: For the Period
January 17, 2003
(Date of Inception)
Through
January 31, 2003
Revenue $ --
General and administrative expenses --
------------------
Net Income $ --
==================
Basic and Diluted Income Per Share $ --
==================
Weighted Average Number of Shares
Outstanding 10,000,000
==================
8
Risk factors
You should carefully consider the following risk factors and all other
information contained in this prospectus before purchasing our common stock.
Investing in our common stock involves a high degree of risk. Risks and
uncertainties, in addition to those we describe below, that are not presently
known to us, or that we currently believe are immaterial may also impair our
business operations. If any of the following risks occur, our business could be
harmed, the price of our common stock could decline and you may lose all or part
of your investment.
Risks related to our business
Risk factors
You should carefully consider the following risk factors and all other
information contained in this prospectus before purchasing our common stock.
Investing in our common stock involves a high degree of risk. Risks and
uncertainties, in addition to those we describe below, that are not presently
known to us, or that we currently believe are immaterial may also impair our
business operations. If any of the following risks occur, our business could be
harmed, the price of our common stock could decline and you may lose all or part
of your investment.
Risks related to our business
We do not currently have any relationships with any vineyards, distillers,
wholesalers or distributors. We may never successfully contract with an
appropriate winery, wholesaler, importer or distributor to sell wines, ports,
champagnes or accessories. Our entire business model and product offering is
dependent on such contracts. Without them, we will not secure a sufficient
inventory and our business will fail.
Securing relationships with appropriate suppliers involves a number of important
steps:
o Establishing sufficient brand recognition to attract the attention of
desirable vineyards and suppliers;
o Offering sufficient financial incentives and marketing resources as to attract
appropriate suppliers;
o Maintaining a sufficient sales volume to justify continued interest on the
part of suppliers.
Identifying and contracting with appropriate suppliers involves the successful
execution of the above steps, which requires capital and human resources. We may
not have sufficient capital or human resources to successfully accomplish these
steps. If we fail to identify, contract with and retain appropriate suppliers,
we will not have a successful product offering and our business will fail.
9
We currently have no retail shops or completed website to offer any wines,
ports, champagnes or accessories to the public. We may never successfully
complete either project, causing our business to fail.
In order to establish these venues to market these products we must establish;
o An Internet website highlighting all of our featured brands, inventory and
products for sale;
o E-commerce capability on our Internet website so that we can facilitate the
sale and delivery of products directly to consumers;
o Retail stores in locations, which are appropriate for our customers.
All of these projects are in the very early stages of development and
require substantial time and resources to complete. We do not currently have the
resources or staff to complete the projects and may not develop the technical,
financial or human resources to complete these projects. Without completing
these projects successfully, we will not have a mechanism for revenue and we
will fail.
We have a limited operating history, are not currently profitable and may not
become profitable. If we never become profitable, our stock price would decline.
We have only been in business since January 17, 2003. There is no
meaningful historical data for an investor to evaluate. As of January 31, 2003
we had $61,298 in assets and $51,298 in liabilities. We had $5,000 available in
cash as of January 31, 2003. We have never derived any revenues or profits. The
revenue and income potential of our business and the market for on-line sales of
our products or retail sales of our products within the mall environment has to
be proven. We will encounter risks and difficulties commonly faced by
early-stage companies in new and rapidly evolving markets. We intend to make
significant investments in our infrastructure, website and retail shops. As a
result, we anticipate having a net loss from operations in fiscal 2003 and may
not be able to reach or sustain profitability in the future.
10
We must draw a diverse, qualified audience of purchasers to our website and to
our retail shops. This audience must purchase products from us. Failure to
develop the audience or to convert the audience to purchasers will result in
insufficient sales and revenue and our business will fail.
We expect that many of the same factors that will influence potential
purchasers to visit our retail or on-line shop will also control their
purchasing. We may not be successful in achieving either of these ends without
being able to:
o Drive consumers willing to spend more than $100 per purchase to our website or
retail stores;
o Develop distribution relationships with vendors that will appeal to our
customer demographic, both on-line customers and retail storefront customers;
o Establish and enhance our infrastructure to handle a large amount of brands,
vintners and products;
o Continue to research and develop precise locations for our retail stores;
o Diversify our product offerings to appeal to a more diverse range of wine,
port and champagne connoisseurs, investors and collectors.
Our investment in these programs will require substantial amounts of cash,
which may not be available. Such expenditures will affect adversely our
short-term profitability. Additionally, we may fail to successfully implement
these programs or otherwise fail to develop a qualified audience of purchasers.
Such a failure would impact revenues adversely, and cause our business to
suffer.
11
We may not be able to compete effectively against dominant companies in
the retail wine, port or champagne and accessories market or the on-line
business because we lack the equipment, staff, strategic alliances and
experience.
There are numerous, well-financed competitors who offer wine, port,
champagne and related accessories for sale through retail locations and/or web
sites which will directly compete with Wine Purveyors for new and high-demand
vineyards, distillers, wholesalers, and distributors, customers and collectors.
Several competitors have larger staffs, more resources, more strategic
alliances, more sophisticated equipment and more experience in the field of
providing wine, port, champagne and accessories to the public than Wine
Purveyors does. These competitors include:
o Pinehurst Fine Wines
o Mills Wine Shop
o Berry Bros. And Rudd
o Sokolin
o Wine.com
o ewine.com
We have not demonstrated that we can compete successfully against these
competitors and we may not be able to in the future. If we are unable to
effectively compete in the fine wine, port and champagne industry, our results
would be negatively affected, we may be unable to implement our plan and we
might ultimately fail.
James Price serves as sole officer, sole director and one of two employees
and may leave the company at any time. If Mr. Price leaves prior to securing a
replacement, the company will be left without the necessary management and its
business operations would cease.
Our sole director and chief executive officer, James Price, is entirely
responsible for the development and execution of our business. He is under no
contractual obligation to remain employed by us. If he should choose to leave us
for any reason before we have hired additional personnel, we will fail. Even if
we are able to find additional personnel, it is uncertain whether we could find
someone who could develop the inventory of represented brands, complete the
website and secure retail space for us. We will fail without Mr. Price or an
appropriate replacement.
12
Conflicts of interest exist between Mr. Price's role as CEO of Wine
Purveyors and other business interests which may result in self-dealing and
diminished corporate opportunities.
Although Mr. Price's outside business interests do not concern wine, port,
champagne or related accessories, there could arise a conflict with respect to
potential financing partners, employees or strategic partners of Wine Purveyors
and Mr. Price's outside business ventures. There can be no assurance that Mr.
Price will resolve this conflict in a way that is satisfactory for the
shareholders of Wine Purveyors. Mr. Price currently spends less than 50% of his
full-time efforts on business matters related to Wine Purveyors. It is not
anticipated that Mr. Price will materially increase his work hours at Wine
Purveyors. It is possible that Mr. Price's outside business interest and his
lack of full-time commitment to Wine Purveyors may materially damage our
financial prospects and prospects for commercial success with our product
offering.
Risks related to this offering
Our stock price may experience volatility because of competitive developments
and other factors beyond our control, and you may lose all or a part of your
investment.
The market prices of stock for companies, which provide artwork,
supplies or services particularly following an initial offering, often reach
levels that bear no relationship to the past or present operating performance of
those companies. These market prices may not be sustainable and may be subject
to wide variations. Our stock may be volatile because our shares have not been
traded publicly. Following this offering, the market price for our common stock
may experience a substantial decline. The price at which shares purchased in the
offering can be sold may be substantially lower than the offering price. No
public market may develop at all for the shares and you may therefore never be
able to sell your shares. The market price of our common stock may fluctuate
significantly in response to a number of factors, most of which we cannot
control, including:
o Fluctuations in stock market prices and volumes; particularly among securities
of companies that provide E-Commerce related services;
o Discussion of Wine Purveyors International or our stock price in online
investor communities such as chat rooms;
o Changes in market valuations of similar companies;
o Announcements by Wine Purveyors or our competitors of significant contracts,
new technologies, acquisitions, commercial relationships, joint ventures or
capital commitments;
o Variations in our quarterly operating results;
o Additions or departures of key personnel.
An active public market for our common stock may not develop or sustain
after the offering. We determined the offering price without negotiation and
with no reference to established valuation criteria, such as book value. This
price may not be indicative of prices that will prevail in the trading market.
As a result, you may not be able to sell your shares of common stock at or above
the offering price.
13
As a new investor, you will incur substantial dilution as a result of this
offering and future equity issuances, and as a result, our stock price could
decline.
The offering price is substantially higher than the pro forma, net
tangible book value per share of our outstanding common stock. As a result,
investors purchasing common stock in this offering will incur immediate dilution
of $0.91 per share. This dilution is due in large part to earlier investors in
our company having paid substantially less than the initial public offering
price when they purchased their shares. The exercise of outstanding options and
warrants and future equity issuances, will result in further dilution to
investors.
We do not plan to pay dividends in the foreseeable future.
We do not anticipate paying cash dividends to our stockholders in the
foreseeable future. Accordingly, investors must rely on sales of their common
stock after price appreciation, which may never occur, as the only way to
recover their investment. Investors seeking cash dividends should not purchase
our common stock.
Insiders who hold 99.7% of our outstanding stock have substantial control over
Wine Purveyors International that could delay or prevent a beneficial change in
corporate control.
We anticipate our executive officers, directors and entities affiliated with
them, in the aggregate, beneficially own approximately 99.7% of our outstanding
common stock. If these stockholders acted together, they would be able to
exercise significant control over all matters requiring approval by our
stockholders, including the election of directors and the approval of mergers or
other business combination transactions, which may have the effect of delaying
or preventing a third party from acquiring control over us, even if such a
transaction would be beneficial to the shareholders.
The report of our independent auditors expresses substantial doubt about our
ability to continue as a going concern.
The report of our independent auditors located in this filing indicates a
substantial doubt about our ability to continue as a going concern due to lack
of sufficient working capital and limited operating history. We may not have
enough working capital to survive or to sustain losses and our business might
fail as a result.
Special note regarding forward-looking statements
Some of the statements under "Prospectus summary," "Risk factors," "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 or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "continue" or the negative of these 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 these statements. We
are under no duty to update any of the forward-looking statements after the date
of this prospectus to conform these statements to actual results.
14
Use of proceeds
The proceeds from the sale of shares of our common stock by selling shareholders
will be received directly by the selling stockholders. We will receive no
proceeds from the sale of the common stock offered by selling shareholders under
this prospectus. We estimate our net proceeds from the sale of 1,000,000 shares
of common stock in this offering will total $975,000 based on an assumed
offering price of $1.00 per share and after deducting offering expenses, which
are payable by us. The principal purposes of this offering are to establish a
public market for our common stock, increase our visibility in the marketplace
and facilitate our future access to public capital markets. We intend to use the
net proceeds from this offering as follows:
o $100,000 to complete development of the Internet website;
o $250,000 for advertising and marketing of the product offering and
retail openings including the hiring of a full-time, sales person; and
o $625,000 for other general corporate purposes, including development
of distribution channels, supplier development and retention, wine,
port champagne and accessories for inventory.
Pending these uses, we will invest the net proceeds of this offering in
short-term money market and money market equivalent securities.
In the event that the proceeds of the offering are insufficient to pay
offering expenses, we will be forced to defer payment of offering expenses until
either:
o Revenues are derived from sales of existing inventory; or
o We are able to borrow sufficient amounts from our chief executive officer,
shareholders or others to pay the offering expenses; or
o We are able to conduct another offering with sufficient proceeds to pay the
expenses.
No proceeds of the offering will be used to pay any debts to related
parties.
15
Use of Proceeds Table
The following table presents the uses of proceeds assuming the sale of 25%,
50%, 75% and 100% of the securities offered for sale in this offering by the
company.
[Enlarge/Download Table]
------------- ------------- ----------- ------------- ------------- -----------------------------------------------------------
Percent Sold Shares Gross Offering Net Proceeds Principal Uses
Proceeds Expenses
------------- ------------- ----------- ------------- ------------- -----------------------------------------------------------
------------- ------------- ----------- ------------- ------------- -----------------------------------------------------------
100 1,000,000 1,000,000 25,000 975,000 $100,000 sales and marketing
$250,000 website, materials and advertising
$625,000 general corporate purposes
------------- ------------- ----------- ------------- ------------- -----------------------------------------------------------
------------- ------------- ----------- ------------- ------------- -----------------------------------------------------------
75 750,000 750,000 25,000 725,000 $100,000 sales and marketing
$100,000 website, materials and advertising
$525,000 general corporate purposes
------------- ------------- ----------- ------------- ------------- -----------------------------------------------------------
------------- ------------- ----------- ------------- ------------- -----------------------------------------------------------
50 500,000 500,000 25,000 475,000 $100,000 sales and marketing
$100,000 website, materials and advertising
$275,000 general corporate purposes
------------- ------------- ----------- ------------- ------------- -----------------------------------------------------------
------------- ------------- ----------- ------------- ------------- -----------------------------------------------------------
25 250,000 250,000 25,000 225,000 $50,000 sales and marketing
$100,000 website, materials advertising
$75,000 general corporate purposes
------------- ------------- ----------- ------------- ------------- -----------------------------------------------------------
Determination of the offering price
The selling shareholders may offer their stock through privately negotiated
transactions at a per share price of $1.00. After our shares are quoted on the
OTC Bulletin Board, selling shareholders may sell their shares on the OTC
Bulletin Board at prevailing market prices, or in private transactions at
privately negotiated prices. There can be no assurance that these prices will
bear any relation to traditionally recognized criteria of value, book value, or
other objective measure of the value of the shares. The company will offer
shares for sale at $1.00 per share directly to the public through the efforts of
its chief executive officer, James Price.
We have arbitrarily determined the offering price of $1.00 per share. This price
bears no relation to our assets, book value, or any other customary investment
criteria, including our prior operating history. The price per share in this
offering is substantially above its net tangible book value, and we cannot
assure you that the price will accurately reflect a market price for the shares.
Among factors considered by us in determining the offering price were:
o Estimates of our business potential;
o Our limited financial resources;
o The amount of equity desired to be retained by present stockholders;
o The amount of dilution to the public; and
o The general condition of the securities markets.
16
Transfer agent and registrar
The company currently acts as its own transfer agent and registrar.
Plan of distribution
This prospectus covers the sale of new shares issued by us directly to the
public and the resale by selling stockholders of shares of our common stock that
they have already purchased from us. Shares sold by the company will be offered
and sold directly by our director of retail operations David Grimm at a price
per share of $1.00 and will be sold to acquaintances of our director of retail
operations, David Grimm, who will receive no additional compensation from such
sales. These sales by David Grimm qualify for exemption from broker dealer
registration requirements as provided in Rule 3a4-1 of the Exchange Act. Under
the rule, David Grimm would not be considered a broker dealer in this case
because there would be no general solicitation for the shares and they would
only be sold to acquaintances of his with whom he already has a pre-existing
business relationship. David Grimm:
o is not subject to statutory disqualification or otherwise prohibited from
assisting us in the offer and sale of the shares;
o is not compensated based directly or indirectly on transactions in securities;
o is not an associated person of a broker dealer and has been such within the
last 12 months;
o performs and is expected to perform substantial duties for us not related to
transactions for securities;
o has not been involved the issuance of securities from any issuer during the
last 12 months under this rule.
Selling stockholders may sell their shares of common stock either directly or
through a broker-dealer in one or more of the following kinds of transactions:
o Transactions in the over-the-counter market;
o Transactions on a stock exchange that lists our common stock; or
o Transactions negotiated between selling stockholders and purchasers, or
otherwise.
The company intends to sell the shares in the states listed below,
relying on registration or an exemption from registration as listed below:
Florida - Exempt from registration under the limited offering exemption
517.061 (11)
Nevada - Exempt from registration under the limited offering exemption
NRS 90.530 (11)
Broker-dealers may purchase shares directly from a selling stockholder or
sell shares to someone else on behalf of a selling shareholder. Broker-dealers
may charge commissions to both selling stockholders selling common stock, and
purchasers buying shares sold by a selling stockholder. If a broker buys shares
directly from a selling stockholder, the broker may resell the shares through
another broker, and the other broker may receive compensation from the selling
stockholder for the resale. To the extent required by laws, regulations or
agreements we have made, we will file a prospectus supplement during the time
the selling stockholders are offering or selling shares covered by this
prospectus in order to add or correct important information about the plan of
distribution for the shares and in accordance with our obligation to file
post-effective amendments to the prospectus as required by Item 512 of
Regulation S-B. We will also file a post-effective amendment to the registration
statement to amend the prospectus to disclose pledges, donees, transferees and
other successors in interest. In addition to any other applicable laws or
regulations, selling stockholders must comply with regulations relating to
distributions by selling stockholders, including Regulation M under the
Securities Exchange Act of 1934. Regulation M prohibits selling stockholders
from offering to purchase and purchasing our common stock at certain periods of
time surrounding their sales of shares of our common stock under this
prospectus. Some states may require that registration, exemption from
registration or notification requirements be met before selling stockholders may
sell their common stock. Some states may also require selling stockholders to
sell their common stock only through broker-dealers.
17
[Enlarge/Download Table]
Selling shareholders
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
Jim Price 8,969,100 89.7 0 8,969,100 89.7
15208 Jarrettsville Pike
Monkton, Maryland
21111
Timothy Rieu 400,000 4.0 400,000 0 0
3325 Great Valley Drive
West Friendship, MD 21794
David Pieffer 400,000 4.0 400,000 0 0
919 Whispering Ridge
Lane
David Grimm 200,000 2.0 200,000 0 0
7 Snowberry Court
Cockeysville, MD 21030
Mohsen Abdoun 100 0.0 100 0 0
284 Longhurst Loop
Ocoee, FL 32761
Jennifer Allen 100 0.0 100 0 0
6340-B Yank Court
Arvada, CO 80004
Mark Allen 100 0.0 100 0 0
6340-B Yank Court
Arvada, CO 80004
Norma Amador 100 0.0 100 0 0
VUI, Inc.
213 Odham Drive
Sanford, FL 32773
American Management Group, Inc. 100 0.0 100 0 0
PO Box 1628
Broomfield, CO 80038
James Anstatt 100 0.0 100 0 0
103 River Road E-4
Nutley, NJ 07110
ARB Consulting, Inc. 100 0.0 100 0 0
115 E. Main Street Ste. 1
Florence, CO 81226
James Archuleta 100 0.0 100 0 0
26 Briargate Terrace
Pueblo, CO 81
James M. Archuleta 100 0.0 100 0 0
413 N. Petroleum Ave.
Florence, CO 81226
Joyce Archuletta 100 0.0 100 0 0
419 N. Petroleum Ave.
Florence, CO 81226
Rick Archuleta 100 0.0 100 0 0
419 N. Petroleum Ave.
Florence, CO 81226
Ricky Archuletta 100 0.0 100 0 0
419 N. Petroleum Ave.
Florence, CO 81226
Erin Arndt 100 0.0 100 0 0
4825 Tutelo Trail
Winston-Salem, NC 27127
James F. Arnold 100 0.0 100 0 0
5114 W. Saguaro Park Lane
Glendale, AZ 85310
Sandra Arnold 100 0.0 100 0 0
5114 W. Saguaro Park Lane
Glendale, AZ 85310
BAF Consulting, Inc. 100 0.0 100 0 0
412 Loma Drive
Florence, CO 81226
Orville Baldridge 100 0.0 100 0 0
VUI Inc.
213 Odham Drive
Sanford, FL 32773
18
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
Kenneth P. Barychko 100 0.0 100 0 0
891 Stapleton Ave.
Brick, NJ 08723
Tim Bass 100 0.0 100 0 0
5035 Sunrise Terrace
Winston-Salem, NC 27105
Tim Bass II 100 0.0 100 0 0
5035 Sunrise Terrace
Winston-Salem, NC 27105
Margaret L. Beattie 100 0.0 100 0 0
2339 S Balsam Street
Lakewood, CO 80276
John Beatty 100 0.0 100 0 0
VUI Inc.
213 Odham Drive
Sanford, FL 32773
Sharyn Benedetto 100 0.0 100 0 0
156 Washington Ave.
Amboy, NJ 08879
William Bender 100 0.0 100 0 0
8 South West Drive
Davidson, NC 28036
Barry Black 100 0.0 100 0 0
1090 Black Valley Farm Road
Walnut Cove, NC 27052
Denise Blankenship 100 0.0 100 0 0
7461 Calypso
Mesa, AZ 85208
Debra Bloch 100 0.0 100 0 0
2853 Front Royal Drive
Colorado Springs, CO 80919
Kathryne L. Bonar 100 0.0 100 0 0
536 Foxhunt Circle
Highland Ranch, CO 80161
Joe Bowers 100 0.0 100 0 0
1530 Cloverdale Ave.
Winston-Salem, NC 27104
Shawn Boyd 100 0.0 100 0 0
5182 S. Nepal Way
Centennial, CO 80015
Valerie Boyd 100 0.0 100 0 0
5182 S. Nepal Way
Centennial, CO 80015
Jeffrey Braga 100 0.0 100 0 0
109 Pier Point Court
Orlando, FL 32835
David Brookshire 100 0.0 100 0 0
198 Kinloch Court
Winston-Salem, NC 27104
Iona Brown 100 0.0 100 0 0
226 Krider Drive
Sanford, FL. 32773
Louis Bounocore 100 0.0 100 0 0
335 McLean Ave.
Staten Island, NY 10305
Frank Burchette 100 0.0 100 0 0
4631 Forest Manor Dr.
Winston-Salem, NC 27103
Lisa Canada 100 0.0 100 0 0
2025 Hwy. 66 South
Kernersville, NC 27284
19
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
Carolyn Carpenter 100 0.0 100 0 0
272 Carpenter Lane
Advance, NC 27006
Cindy Carpenter 100 0.0 100 0 0
272 Carpenter Lane
Advance, NC. 27006
Kevin Carpenter 100 0.0 100 0 0
704 First Street
Secaucus, NJ 07094
Jennifer Carpenter 100 0.0 100 0 0
1225 Irving
Winston-Salem, NC 27103
Tracey Carpenter 100 0.0 100 0 0
729 Meeker Ave.
Brooklyn, NY 11222
Jason Carr 100 0.0 100 0 0
4711 Randle Ave.
Winston-Salem, NC 27103
Dick Cattau 100 0.0 100 0 0
1225 Sunningdale Lane
Ormond Beach, FL 32174
Ken Chilton 100 0.0 100 0 0
932 Burke Street
Winston-Salem, NC 27101
Anthony Chirles 100 0.0 100 0 0
111 Cheshire Lane
Ringwood, NJ 07456
Ted Ciaccia 100 0.0 100 0 0
2050 N.E. 27th Ave.
Pompano Beach, FL 33062
Myron Cobb 100 0.0 100 0 0
2801 Youngfield Street # 325
Golden, CO 80401
Ericka Cogan 100 0.0 100 0 0
VUI, Inc.
213 Odham Drive
Sanford, FL 32773
Shawna Cogan 100 0.0 100 0 0
VUI, Inc.
213 Odham Drive
Sanford, FL 32773
Ronnie Conley 100 0.0 100 0 0
932 Burke Street
Winston-Salem, NC 27101
Andrew Contaldi 100 0.0 100 0 0
2125 Holland Ave. # 2-G
Bronx, NY 10462
Vivanne Cooney 100 0.0 100 0 0
1225 Sunningdale Lane
Ormond Beach, FL 32174
Ruth Copeland 100 0.0 100 0 0
120 W. Sterne Parkway
Littleton, CO 80120
Daniel Coyle 100 0.0 100 0 0
197 Columbia Ave.
Jersey City, NJ 07307
Kevin Crane 100 0.0 100 0 0
49 Finnegan Ave.
Saddlebrook, NJ 07663
20
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
Nicole Crimini 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
David Debenedictis 100 0.0 100 0 0
VUI, Inc.
213 Odham Drive
Sanford, FL 32773
Gerard Desmond 100 0.0 100 0 0
South West Drive
Davidson, NC 28036
Clorinda M. Del Duca 100 0.0 100 0 0
425 Railroad
P.O. Box 46
Rockvale, CO 81244
Patricia Dillon 100 0.0 100 0 0
2125 Wembleton, Drive
Loveland, CO 80535
Ernestine H. Doria 100 0.0 100 0 0
8672 Great Cove Drive
Orlando, FL 32819
Jenny Doria 100 0.0 100 0 0
8672 Great Cove Drive
Orlando, FL 32819
John Doria 100 0.0 100 0 0
8672 Great Cove Drive
Orlando, FL 32819
Mark C. Dorman 100 0.0 100 0 0
5450 S. Vivian Street
Littleton, CO 80127
Catherine Doud 100 0.0 100 0 0
3 South West Drive
Davidson, NC 28036
Christine Dovi 100 0.0 100 0 0
23 Chestnut Street
Englewood, NJ 07631
Jeff Dowell 100 0.0 100 0 0
123 Town Lane
Mt. Airy, NC 27030
Mary Anne Doyle 100 0.0 100 0 0
2050 N.E. 27th Ave.
Pompano Beach, FL 33062
Louise Drugan 100 0.0 100 0 0
213 Odham Drive
Sanford, FL 32773
Joseph M. Drugan 100 0.0 100 0 0
213 Odham Drive
Sanford, FL 32773
Duva Consulting, Inc. 100 0.0 100 0 0
6690 Fern St.
Margate, FL 33063
Ladonna Edgemon 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Stephanie Edgemon 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Willis Edgemon 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Eugene Espinosa 100 0.0 100 0 0
501 N Pikes Peak
Florence, CO 81226
Barbara Espinosa 100 0.0 100 0 0
501 N Pikes Peak
Florence, CO 81226
Jesus Espinoza 100 0.0 100 0 0
416 W. Crystal Drive
Sanford, FL 32773
21
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
David Evans 100 0.0 100 0 0
320 Darlington Road
Havre De Grace, MD 21078
Tracey Evans 100 0.0 100 0 0
320 Darlington Road
Havre De Grace, MD 21078
Dave Faulkner 100 0.0 100 0 0
6635 Skyhawk Court
Colorado Springs, CO 80919
Manfred J. Feibig 100 0.0 100 0 0
21640 N. 19th Ave. C-11
Phoenix, AZ 85027
Larry Franke 100 0.0 100 0 0
5643 Fulton Way
Greenwood Village, CO 80111
Lincoln Franke 100 0.0 100 0 0
19012 East Lake Drive
Aurora, CO 80016
Henry C. Furch 100 0.0 100 0 0
4901 Plum Run Court
Wilmington, DE 19808
John W. Furch 100 0.0 100 0 0
31 Park Ave.
Haziet, NJ 07730
Steven H. Furch 100 0.0 100 0 0
3 Lisa Court
Matawan, NJ 07747
Sharon Gathings 100 0.0 100 0 0
1020-2 Brookstown Ave.
Winston-Salem, NC 27023
Pasquale Gatti 100 0.0 100 0 0
1419 Perkins Road
Orlando, FL 32809
Ed Glenn 100 0.0 100 0 0
4149 E. Easter Ave.
Littleton, CO 80122
Geoffrey Glenn 100 0.0 100 0 0
4149 E. Easter Ave.
Littleton, CO 80122
Greg Glenn 100 0.0 100 0 0
4149 E. Easter Ave.
Littleton, CO 80122
Griff Glenn 100 0.0 100 0 0
4149 E. Easter Ave.
Littleton, CO 80122
William Godwin 100 0.0 100 0 0
5400 N. Sheridan Blvd. # 167
Arvada, CO 80002
Grand Slam Financial Consulting, Inc. 100 0.0 100 0 0
18021 Biscayne Blvd. # 504
Aventura, FL 33060
Gary Green 100 0.0 100 0 0
21205 Cimarron Place
Centennial, CO 80015
Ric Griffis 100 0.0 100 0 0
580 W Merritt Island Cswy.
Merritt Island, FL 32952
Bryan Grimm 100 0.0 100 0 0
102 Roselawn Court
Bel Air, MD 21014
22
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
Elizabeth Grimm 100 0.0 100 0 0
102 Roselawn Court
Bel Air, MD 21014
Lester Grimm 100 0.0 100 0 0
102 Roselawn Ct.
Bel Air, MD 21014
Robert Haas 100 0.0 100 0 0
82 Cliffwood Ave. # 49
Cliffwood, NJ 07721
Tony Hartman 100 0.0 100 0 0
3622 Millhaven Road
Winston-Salem, NC 27106
Barbara Haughie 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Daniel Haughie 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Sean Haughie 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
William Haughie 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Daniel L. Hebble 100 0.0 100 0 0
7437 S. Jackson, Street
Centennial, CO 80122
David Henderson 100 0.0 100 0 0
5234 W. Maui
Glendale, AZ 85306
Milre Henry 100 0.0 100 0 0
716 Apple Court
Windsor, CO 80550
Brian Hermenze 100 0.0 100 0 0
2279 Loring Place
Bronx, NY 10468
Kevin Holmes 100 0.0 100 0 0
2612 Colpepper Road
Abingdon, MD 29
Julie Holmes 100 0.0 100 0 0
2612 Colpepper Road
Abingdon, MD 29
Joseph Horschel 100 0.0 100 0 0
509 Bahama Drive
Indian Harbor, FL 32937
Barry Howard 100 0.0 100 0 0
4310 Clarksburg Road
Clemmons, NC 27012
Allen Hunter 100 0.0 100 0 0
VUI, Inc.
213 Odham Drive
Sanford, FL 32773
Mark Idol 100 0.0 100 0 0
386 Meadowlark Road
Thomasville, NC 27360
Sandra S Ignaszewski 100 0.0 100 0 0
10416 Bigtree Circle West
Jacksonville, FL 32257
23
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
Hale Jacobsen 100 0.0 100 0 0
619 Foxwood Blvd.
Englewood, FL 34223
Lyle E. Jacobsen 100 0.0 100 0 0
1805 N. 5th Street
Canon City, CO 81212
Rose Jacobsen 100 0.0 100 0 0
619 Foxwood Blvd.
Englewood, FL 34223
Gary Joehnk 100 0.0 100 0 0
697 2nd Street
Secaucus, NJ 07094
Jake Johnson 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Jay Johnson 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Joan Johnson 100 0.0 100 0 0
8574 S.W. 108th Place Road
Ocala, FL 34481
John Johnson 100 0.0 100 0 0
8574 S.W. 108th Place Road
Ocala, FL 34481
Richard Johnson 100 0.0 100 0 0
10630 Clarkeville Way
Parker, CO 80134
Robin Johnson 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
JVO Consulting, Inc. 100 0.0 100 0 0
1020-30 Brookstown Ave.
Winston-Salem, NC 27101
Catherine A. Kaier 100 0.0 100 0 0
5861 W Rowland Place
Littleton, CO 80128
Cathy Kaier 100 0.0 100 0 0
5861 W Rowland Place
Littleton, CO 80128
Harry Kaier 100 0.0 100 0 0
5855 S. Danube Circle
Aurora, CO. 80015
Michael Kaier 100 0.0 100 0 0
3310 Utica Street
Denver, CO 80212
Kord J. Kelley 100 0.0 100 0 0
5349 E. Manchester
Castle Rock, CO 80104
Erica Khosrowshahi 100 0.0 100 0 0
15 Heritage Court
Tarrytown, NY 10591
Farzad Khosrowshahi 100 0.0 100 0 0
15 Heritage Court
Tarrytown, NY 10591
Sean Khosrowshahi 100 0.0 100 0 0
15 Heritage Court
Tarrytown, NY 10591
Taraneh Khosrowshahi 100 0.0 100 0 0
15 Heritage Court
Tarrytown, NY 10591
24
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
Christine Kidwell 100 0.0 100 0 0
688 E. Myrtlewood Court
Highlands Ranch, CO. 80126
Gay L. Kidwell 100 0.0 100 0 0
688 E. Myrtlewood Court
Highlands Ranch, CO 80126
Jeffery Kidwell 100 0.0 100 0 0
688 E. Myrtlewood Court
Highlands Ranch, CO 80126
Mike Kidwell 100 0.0 100 0 0
688 E. Myrtlewood Court
Highlands Ranch, CO 80126
James King II 100 0.0 100 0 0
1901 N.W. 49th Ave.
Coconut Creek, FL 33063
Linda King 100 0.0 100 0 0
503 Green Ave.
Briel, NJ 08730
Sandy King 100 0.0 100 0 0
620 A1A Beach Blvd. # 16
St. Augustine, FL 32084
Cheryl Klasic 100 0.0 100 0 0
2720 Garces Circle
Pfafftown, NC 27040
Nancy Klingler 100 0.0 100 0 0
109 Oak Leaf Lane
Longwood, FL 32779
KLM Trust 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Marcella Lanza 100 0.0 100 0 0
18 Woodshore East
Cliffwood Beach, NJ 07735
Michael Lapato 100 0.0 100 0 0
1225 S. Gaylord Street
Denver, CO 80210
Levonda Leaman 100 0.0 100 0 0
P.O. Box 24204
Winston-Salem, NC 27114
Brandon Lee 100 0.0 100 0 0
40 North Albion Street
Colorado Springs, CO 80911
David A. Lee 100 0.0 100 0 0
40 North Albion Street
Colorado Springs, CO 80911
Justin Lee 100 0.0 100 0 0
125 Linden Drive
Colorado Springs, CO 521-59-4178
Dianne Leonard 100 0.0 100 0 0
107 Turnwood Lane
Winston-Salem, NC 27104
Terina Lineberry 100 0.0 100 0 0
2353 Summertime Road
Yadkinville, NC 27055
John Lucero 100 0.0 100 0 0
5681 West 24th Ave.
Edgewater, CO 80214
Martha MacReynolds 100 0.0 100 0 0
VUI Inc.
213 Odham Drive
Sanford, FL 32773
Stephen MacReynolds 100 0.0 100 0 0
VUI Inc.
213 Odham Drive
Sanford, FL 32773
Beatriz Maldonado 100 0.0 100 0 0
183 S Roslyn Street
Denver, CO 80230
Michael Maldonado 100 0.0 100 0 0
23 Somerset Place
Matawan, NJ 07747
Cynthia Mandel 100 0.0 100 0 0
2340 N.E. 13th Street
Pompano Beach, FL 33062
Donald Mandel 100 0.0 100 0 0
2340 N.E. 13th Street
Pompano Beach, FL 33062
25
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
J. Adolph Martinez 100 0.0 100 0 0
401 N. Pikes Peak Ave
Florence, CO 81226
Ashley Martinez 100 0.0 100 0 0
421 5th Terrace
Florence, CO 81226
Collin Martinez 100 0.0 100 0 0
421 5th Terrace
Florence, CO 81226
Dominic T. Martinez 100 0.0 100 0 0
421 5th Terrace
Florence, CO 81226
John Martinez 100 0.0 100 0 0
7128-C North Blue Ridge Parkway
Laurel Springs, NC 28644
Douglas Mason 100 0.0 100 0 0
132 Western Villa Drive
Clemmons, NC 27012
Steve Matthews 100 0.0 100 0 0
1020-30 Brookstown Ave.
Winston-Salem, NC 27101
Evelyn McCann 100 0.0 100 0 0
225 6th Street
Florence, CO 81226
Debbie McDole 100 0.0 100 0 0
VUI, Inc.
213 Odham Drive
Sanford, FL 32773
Steve McKus 100 0.0 100 0 0
VUI, Inc.
213 Odham Drive
Sanford, FL 32773
Craig McMullen 100 0.0 100 0 0
1634 Miner
Box 1989
Idaho Springs, CO 80452
Paul Melson 100 0.0 100 0 0
25 Oriole Terrace
Newton, NJ 07860
Cynthia Miller 100 0.0 100 0 0
11847 Maiden Way
Northglenn, CO 80233
Krysta Millstone 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Robert Millstone 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Ruthi Millstone 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Calvin Mitchell 100 0.0 100 0 0
525 N.W. 55th Terrace
Boca Raton, FL 33487
David Mitchem 100 0.0 100 0 0
996 Fenton Street
Lakewood, CO 80215
Robert C. Moore 100 0.0 100 0 0
423 Petroleum
P.O. Box 350
Florence, CO 81226
Austin Morelli 100 0.0 100 0 0
412 Loma Drive
Florence, CO 81226
Frankie Morelli 100 0.0 100 0 0
412 Loma Drive
Florence, CO 81226
Frank Morelli II 100 0.0 100 0 0
412 Loma Drive
Florence, CO 81226
Sherry Morgan 100 0.0 100 0 0
1020-30 Brookstown
Winston-Salem, NC 27101
Dan Motsinger 100 0.0 100 0 0
932 Burke Street
Winston-Salem, NC. 27101
26
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
Nathaly Muller 100 0.0 100 0 0
2501 East Commercial Blvd. # 212
Ft. Lauderdale, FL 33308
Richard M. Muller 100 0.0 100 0 0
2501 East Commercial Blvd. # 212
Ft. Lauderdale, FL 33308
Daniel Netz 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Jade Netz 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Mellisa Netz 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
New Age Sports, Inc. 100 0.0 100 0 0
115 East Main Street Ste. 1
Florence, CO 81226
Ludwig Niezgoda 100 0.0 100 0 0
8 Hibiscus Lane
Robbinsville, NJ 08691
Nancy Niezgoda 100 0.0 100 0 0
8 Hibiscus Lane
Robbinsville, NJ 08691
Alexandra Nunez 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
OB Services, Inc. 100 0.0 100 0 0
9305-C West 80th Place
Arvada, CO 80004
A. Wayne Okken Jr. 100 0.0 100 0 0
1170 2nd Street
Penrose, CO 81240
Barbara Oliver 100 0.0 100 0 0
5626 North Mesa Drive
Castle Rock, CO 80104
Craig Oliver 100 0.0 100 0 0
5626 North Mesa Drive
Castle Rock, CO 80104
Omacron Corp. 100 0.0 100 0 0
1901 N.W. 49th Ave.
Coconut Creek, FL 33063
Joshua Ontiveros 100 0.0 100 0 0
VUI, Inc.
213 Odham Drive
Sanford, FL 32773
Nicole Ontiveros 100 0.0 100 0 0
VUI, Inc.
213 Odham Drive
Sanford, FL 32773
Robin Ontiveros 100 0.0 100 0 0
VUI, Inc.
213 Odham Drive
Sanford, FL 32773
Donna Overcash 100 0.0 100 0 0
1530 Cloverdale Ave.
Winston-Salem, NC 27104
Joe Overcash 100 0.0 100 0 0
1020 -30 Brookstown Ave.
Winston-Salem, NC 27101
27
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
Bart Palumbo 100 0.0 100 0 0
102 Hague Street
Jersey City, NJ 07307
Anthony Parker 100 0.0 100 0 0
6710 S.W. 10th Court
Ft. Lauderdale, FL 33068
Dan Patterson 100 0.0 100 0 0
521 Paigebrook Drive
Winston-Salem, NC 27106
Michael Paulson 100 0.0 100 0 0
124 South Decatur
Denver, CO 80219
Ben Paulson 100 0.0 100 0 0
2208 Gray Street
Edgewater, CO 80214
Jayne Paulson 100 0.0 100 0 0
2208 Gray Street
Edgewater, CO 80214
Scott H. Phillips 100 0.0 100 0 0
2340 N.E. 13th Street
Pompano Beach, FL 33062
David Pieffer 100 0.0 100 0 0
919 Whispering Ridge Lane
Bel Air, MD 21014
Michelle Pieffer 100 0.0 100 0 0
919 Whispering Ridge Lane
Bel Air, MD 21014
Beatriz Pierson 100 0.0 100 0 0
1010 South Ocean Blvd. # 1105
Pompano Beach, FL 33062
Carli Ann Marie Pierson 100 0.0 100 0 0
460 Dexter Street
Denver, CO 80020
Thomas F. Pierson 100 0.0 100 0 0
4 Depot Hill Rd 1-E
Broomfield, CO 80020
John Pizzolato 100 0.0 100 0 0
503 Green Ave.
Briel, NJ 08730
Power Network, Inc. 100 0.0 100 0 0
932 Burke Street
Winston-Salem, NC 27101
Jim Price 100 0.0 100 0 0
15208 Jarrettsville Pike
Monkton, Maryland 21111
Timothy Purcell 100 0.0 100 0 0
28 Sherman Place
Jersey City, NJ 07307
Vincent Puzio 100 0.0 100 0 0
3530 F. Castleford Court
Winston-Salem, NC 27106
Michael Ransel 100 0.0 100 0 0
1559 South Elizabeth Street
Denver, CO 80210
Debra Ray 100 0.0 100 0 0
5722 Candlewood Drive
Winston-Salem, NC 27127
Keith Renee 100 0.0 100 0 0
416 West Crystal Drive
Sanford, FL 32773
28
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
Kimberly Rieu 100 0.0 100 0 0
3325 Great Valley Drive
West Friendship, MD 21794
Timothy Rieu 100 0.0 100 0 0
3325 Great Valley Drive
West Friendship, MD 21794
Greg Riggs 100 0.0 100 0 0
13611 West 54th Ave.
Arvada, CO 80002
Shontel Riggs 100 0.0 100 0 0
13611 West 54th Ave.
Arvada, CO 80002
Miguel Rivera 100 0.0 100 0 0
70 Barrington Place
Bel Air, MD 21014
Ruth Rivera 100 0.0 100 0 0
70 Barrington Place
Bel Air, MD 21014
RLM Trust 100 0.0 100 0 0
21640 N. 19th Ave. Ste. C-8
Phoenix, AZ 85027
Tani Roberts 100 0.0 100 0 0
619 McCandless
Florence, CO 81226
Dale Rogers 100 0.0 100 0 0
1645 Hart Road
Lawsonville, NC 27022
Tate Rogers 100 0.0 100 0 0
1645 Hart Road
Lawsonville, NC 27022
Jessica Rose 100 0.0 100 0 0
15208 Jarrettsville Pike
Monkton, MD 21111
Sara Rose 100 0.0 100 0 0
15208 Jarrettsville Pike
Monkton, MD 21111
Gary Rothwell 100 0.0 100 0 0
3299 E. Otero Circle
Littleton, CO 80122
Nan Samuel 100 0.0 100 0 0
810 S.E. 4th Ave
Pompano Beach, FL 33060
Roy Samuel 100 0.0 100 0 0
810 S.E. 4th Ave
Pompano Beach, FL 33060
Betty Schaeffer 100 0.0 100 0 0
17 W Jarrettsville Road
Forest Hill, MD 21015
Robert Schaeffer 100 0.0 100 0 0
17 W Jarrettsville Road
Forest Hill, MD 21015
Heather Schafer 100 0.0 100 0 0
4102 Chardel Road unit 3-G
Baltimore, MD 21236
Debbie Schindler 100 0.0 100 0 0
6242 Bellona Ave.
Baltimore, MD 21212
Robert Schindler 100 0.0 100 0 0
6242 Bellona Ave.
Baltimore, MD 21212
Richard Schreck 100 0.0 100 0 0
8239 Arrowhead Way
Lone Tree, CO 80124
Dodi Schwarz 100 0.0 100 0 0
58 Avery Ave.
West End, NJ 07740
Seville Consulting, Inc. 100 0.0 100 0 0
932 Burke Street
Winston-Salem, NC 27101
Elizabeth Sheehy 100 0.0 100 0 0
VUI, Inc.
213 Odham Drive
Sanford, FL 32773
Paula Sheehy 100 0.0 100 0 0
VUI, Inc.
213 Odham Drive
Sanford, FL 32773
29
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
Patricia Shoffner 100 0.0 100 0 0
171 Shoffner Lane
Mocksville, NC 27028
Calvin Silvius 100 0.0 100 0 0
6117 North Cantrell Way
Parker, CO 80134
Jackson Silvius 100 0.0 100 0 0
6117 North Cantrell Way
Parker, CO 80134
Mark Silvius 100 0.0 100 0 0
6117 North Cantrell Way
Parker, CO 80134
Sheli Silvius 100 0.0 100 0 0
6117 North Cantrell Way
Parker, CO 80134
Raymond Simpkiss 100 0.0 100 0 0
4844 Baux Mountain Road
Winston-Salem, NC 27105
Cathy Slack 100 0.0 100 0 0
616 E 4th Street
Florence, CO 81226
Joseph Slack 100 0.0 100 0 0
616 E 4th Street
Florence, CO 81226
Michael Slack 100 0.0 100 0 0
616 E 4th Street
Florence, CO 81226
William Slack 100 0.0 100 0 0
616 E 4th Street
Florence, CO 81226
Randy Small 100 0.0 100 0 0
3117 HWY 89 East
Walnut Cove, NC 27052
Lester Smith 100 0.0 100 0 0
2861 Deer Wood Drive
Winston-Salem, NC 27103
Myron F. Smith 100 0.0 100 0 0
3003 South Street
Canon City, CO 81212
Sharon J. Smith 100 0.0 100 0 0
6359 Walk Circle
Boca Raton, FL 33433
Becky Sober 100 0.0 100 0 0
101 Broadway Street
Penrose, CO 81240
Rexford Soety 100 0.0 100 0 0
434 Madison Ave.
Monroe Township, NJ 08831
Chris Sonafrank 100 0.0 100 0 0
4001 D-2 Country Club Road
Winston-Salem, NC 27104
Dan Starczewski 100 0.0 100 0 0
932 Burke Street
Winston-Salem, NC 27101
Debra Starczewski 100 0.0 100 0 0
932 Burke Street
Winston-Salem, NC 27101
Chester B. Starczewski 100 0.0 100 0 0
4554 Birkenhead Road
Jacksonville, FL 32210
Starr Consulting, Inc. 100 0.0 100 0 0
413 North Petroleum Ave.
Florence, CO 81226
Wesley J. Strich 100 0.0 100 0 0
1315 Burns Ave.
Toms River, NJ. 08753
Mathew Sturm 100 0.0 100 0 0
1901 N.W. 49th Ave.
Coconut Creek, FL 33063
Carole Sumption 100 0.0 100 0 0
4935 North Bayou Hills Road
Parker, CO 80134
Loren Sumption 100 0.0 100 0 0
4935 North Bayou Hills Road
Parker, CO 80134
30
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
Steve Sumption 100 0.0 100 0 0
4935 North Bayou Hills Road
Parker, CO 80134
Dave Swaney 100 0.0 100 0 0
2315 West Perry Park Ave.
Larkspur, CO 80118
Eileen Swaney 100 0.0 100 0 0
2315 West Perry Park Ave.
Larkspur, CO 80118
Steve Tafoya 100 0.0 100 0 0
1520 F Street
Salida, CO 81201
Gary Tice 100 0.0 100 0 0
4 Barrington Drive
Littleton, CO 80127
The Clarkson Trust 100 0.0 100 0 0
2011 N.E. 60th Street
Ft.Lauderdale, FL 33308
The Hawke Group, Inc. 100 0.0 100 0 0
50 N.E. 27th Ave. # 201
Pompano Beach, FL 33062
Cindy Throneburg 100 0.0 100 0 0
366 Brookedge Terrace
Sebastian, FL 32958
Tradeway Consulting, Inc. 100 0.0 100 0 0
21640 North 19th Ave. Ste. C-8
Phoenix, AZ 85027
Gavin Tuker 100 0.0 100 0 0
21640 North 19th Ave. Ste. C-8
Phoenix, AZ 85027
Aaron Urban 100 0.0 100 0 0
10232 South Jill Ave.
Highlands Ranch, CO 80130
Brenden J. Urban 100 0.0 100 0 0
10232 South Jill Ave.
Highlands Ranch, CO 80130
Sharon Urban 100 0.0 100 0 0
10232 South Jill Ave.
Highlands Ranch, CO 80130
Frederic Vagnini 100 0.0 100 0 0
1600 Stewart Ave.
Westbury, NY 11590
Dianne Vandenburg 100 0.0 100 0 0
30954 Highway 24
Simla, CO 80835
John Walker 100 0.0 100 0 0
204 Georgetown Drive
Elon College, NC 27244
Lawrence Wasti 100 0.0 100 0 0
7180 Hyperion Way
Parker, CO 80134
George Werner 100 0.0 100 0 0
128 Colts Neck Road
Farmingdale, NJ 07727
Nancy Werner 100 0.0 100 0 0
128 Colts Neck Road
Farmingdale, NJ 07727
Dianne Westman 100 0.0 100 0 0
693 Old Squaw Pass Road
Evergreen, CO 80439
31
Percentage
Name and address Number of of shares
of beneficial owner shares beneficially Number of Percentage of
beneficially owned shares shares
owned before Number of beneficially beneficially
before offering shares to owned after owned after
offering (%) be sold offering offering (%)
Roger Westman 100 0.0 100 0 0
693 Old Squaw Pass Road
Evergreen, CO 80439
Melissa Weyrick 100 0.0 100 0 0
3110 Chase Street # A
Wheatridge, CO 80214
Michael White 100 0.0 100 0 0
156 Washington Ave.
South Amboy, NJ 08879
Dorothy Wilcox 100 0.0 100 0 0
501 North Robinson
Florence, CO 81226
Thomas R. Wilcox 100 0.0 100 0 0
461 5th Terrace
Florence, CO 81226
Rosemary K. Wilkin 100 0.0 100 0 0
3950 Zephyr Drive
Wheatridge, CO 80033
Barbara Wilson 100 0.0 100 0 0
3083 West White Oak Street
Highlands Ranch, CO 80129
Deborah Wilson 100 0.0 100 0 0
3132 South Channing Circle
Mesa, AZ 85212
Vernon Wilson 100 0.0 100 0 0
3083 West White Oak Street
Highlands Ranch, CO 80129
William Wilson 100 0.0 100 0 0
3083 West White Oak Street
Highlands Ranch, CO 80129
Randy Wood 100 0.0 100 0 0
2670 Piney Mountain Road
Walnut Cove, NC 27052
David Woodruff 100 0.0 100 0 0
192 Sonata Drive
Lewisville, NC. 27023
Ronni Woodruff 100 0.0 100 0 0
2604 Night Wol Court
Pfafftown, NC 27040
John E. Wysong 100 0.0 100 0 0
440-5th Terrace
Florence, CO 81226
Robbi Yontz 100 0.0 100 0 0
P.O. Box 282
Wallburg, NC 27373
YT2K, LTD. Inc. 100 0.0 100 0 0
2501 East Commercial Blvd. # 212
Ft. Lauderdale, FL 33308
Mark Ziolkowski 100 0.0 100 0 0
2034 South Espana Court
Aurora, CO 80013
No selling shareholder has or has had a material relationship with Wine
Purveyors International.
32
Legal proceedings
We are not a party to any legal proceedings.
Executive officers and directors
Our executive officers and directors and their ages, as of January 31, 2003, are
as follows: Executive officer and director:
James Price 40 years old Executive officer and director:
James Price, chief executive officer, principal accounting officer and director.
Mr. Price currently serves as the president of Aero Financial, Inc. located in
Monkton, Maryland, through which he provides public relations consulting
services directly to executives and corporations. He has served in this capacity
at Aero Financial since February of 2002. From December of 1997 until February
of 2002, Mr. Price was chief executive officer of Columbia Financial Group, Inc.
of Lutherville, Maryland, an investor relations firm, where he was responsible
for developing an employee benefit plan and training program for Columbia's
employees and where he also developed and maintained corporate policies and
procedures. From February of 1995 until December of 1997, Mr. Price was a
stockbroker employed by Global Financial in Bel Air, Maryland. From September of
1980 until June of 1982, Mr. Price attended Eastern Washington University in
Cheney, Washington, where he took general studies courses with an interest in
art history. Mr. Price is a veteran of the U.S Army, serving from September of
1982 until September of 1985.
Mr. Price plans to spend less than 50% of his full time efforts on Wine
Purveyors International. It is possible that Mr. Price's outside business
interests and his lack of full-time commitment to Wine Purveyors International
may materially damage our financial prospects and prospects for commercial
success with our business model.
33
Board of directors
Our board of directors currently consists of 1 member, James Price. Each
director holds office until his or her term expires or until his or her
successor is duly elected and qualified.
Board committees
None.
Director compensation.
Our director does not currently receive any cash compensation for services on
the board of directors or any committee thereof, but as a matter of company
policy, directors may be reimbursed for expenses in connection with attendance
at board and committee meetings.
Executive compensation
The following table presents the compensation earned, awarded or paid for
services rendered to us in all capacities since the commencement of our
operations by our chief executive officer; there are no other executive officers
that earned more than $100,000 in salary and bonus since commencement of
operations.
[Enlarge/Download Table]
Summary compensation table for Inception through January 31, 2003
Annual compensation Long-term compensation awards
------------------------------ -----------------------------
Name, Other Restricted Securities
Principal annual stock underlying All other
Position Salary($) Bonus($) compensation($) award(s)($) options(#) compensation
James Price,
CEO/Director $0 * 0 0 0 0 0
*James Price has not yet drawn any salary from Wine Purveyors International.
It is anticipated that Mr. Price will begin taking a salary of $60,000 beginning
June 30, 2003. Mr. Price is not entitled to any reimbursement for the salary he
has elected to forego.
34
Option grants since inception and aggregate option exercises during last fiscal
year and fiscal year-end option values.
Since inception, we have not granted any stock options to any individual,
including our chief executive officer. We anticipate granting options to various
employees, directors and consultants. Any such grants will be made at an
exercise price equal to the fair market value of our common stock as determined
by our board of directors.
We have granted one million common stock purchase warrants with an exercise
price of $1.00 to XCL Partners of Lutherville, Maryland.
We have no employment agreements with any of our employees.
Employee benefit plans
We do not currently have any employee benefit plans.
35
Security ownership of certain beneficial owners and management
The following table sets forth information regarding the beneficial ownership of
our common stock as of January 31, 2003, by:
o each named executive officer;
o each of our directors;
o all current directors and executive officers as a group; and
o each person or group of affiliated persons who is known by us to own
beneficially 5% or more of our common stock;
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options held by that person that are currently
exercisable or exercisable within 60 days of January 31, 2003, are deemed
outstanding. These shares, however, are not deemed outstanding for purposes of
computing percentage ownership of each other person. As of January 31, 2003 no
individual listed in the table below owned any options or warrants purchasing
any of our common or preferred stock.
Except as indicated in the footnotes to this table and as required under
applicable community property laws, each stockholder named in the table has sole
voting and investment power with respect to the shares shown as beneficially
owned by them. Percentage of ownership is based on 10,000,000 shares of common
stock outstanding on January 31, 2003. Unless otherwise indicated, the address
of each of the individuals named below is 15208 Jarrettsville Pike, Monkton,
Maryland 21111.
The following table also includes information with respect to the common stock
beneficially owned by officers, directors and 5% or greater shareholders as of
January 31, 2003. The stockholders provided us the information included in the
table below. To our knowledge, each of the stockholders has sole voting and
investment power over the shares of common stock listed in the table below.
36
Name and address of beneficial owner
Executive Officers and Directors as a group as of January 31, 2003
Title of class Name and address of Amount and nature of Percent of class
beneficial owner beneficial owner
Common James Price (1) 8,969,100 89.7 %
(1) Mr. Price is the only officer, director and the sole person to own 5% or
more of the outstanding shares.
Executive Officers, Directors and 5% or greater shareholders as of
January 31, 2003
Title of class Name and address of Amount and nature of Percent of class
beneficial owner beneficial owner
Common James Price (1) 8,969,100 89.7 %
(1) Mr. Price is the only officer, director and the sole person to own 5% or
more of the outstanding shares.
37
Description of securities
Current capital structure
As of the date of this prospectus, we have authorized 50,000,000 shares of
common stock, par value $0.001, with 10,000,000 shares issued and outstanding
and held of record by 313 stockholders.
Description of capital stock
Upon the closing of this offering, we will be authorized to issue 50,000,000
shares of common stock, $0.001 par value. The following description of our
capital stock does not purport to be complete and is subject to and qualified by
our articles of incorporation and bylaws, which are included as exhibits to the
registration statement of which this prospectus forms a part.
Common stock
As of January 31, 2003, there were 10,000,000 shares of common stock
outstanding. The holders of common stock are entitled to one vote per share on
all matters to be voted upon by the stockholders. Subject to preferences that
may be applicable to any outstanding preferred stock, the holders of common
stock are entitled to receive ratably dividends, if any, as may be declared from
time to time by the board of directors out of funds legally available for that
purpose. See "Dividend policy." In the event of a liquidation, dissolution or
winding up of Wine Purveyors International, the holders of common stock are
entitled to share ratably in all assets remaining after payment of liabilities,
subject to prior distribution rights of preferred stock, if any, then
outstanding. There is no cumulative voting with respect to the election of
directors, with the result that the holders of more than 50 percent of the
shares voted for the election of directors can elect all of the directors. The
common stock has no preemptive or conversion rights or other subscription
rights. There are no redemption or sinking fund provisions applicable to the
common stock.
Preferred stock
Our articles of incorporation do not provide for the issuance of preferred
stock.
Registration rights
None.
Options
We currently have no options exercisable for our common stock available for
grant. We do presently have 1,000,000 warrants to purchase common stock
authorized and issued. Our board of directors may later determine to authorize
options and authorize additional warrants.
Dividend policy
We have not paid any cash dividends since our inception and do not intend to
pay any cash dividends in the foreseeable future.
38
Interest of named experts and counsel
Jonathan Ram Dariyanani Esq., of San Francisco, CA, will pass upon the
validity of the common stock offered in this registration statement for us.
Mr. Dariyanani has no direct or indirect interest in Wine Purveyors
International.
Hansen, Barnett & Maxwell, Certified Public Accountants have audited our
financial statements, for the period ending January 31, 2003 as set forth in
their report. We have included our financial statements in the prospectus and
elsewhere in the registration statement in reliance on their report, given upon
the authority of such firm as experts in accounting and auditing. Hansen,
Barnett & Maxwell, Certified Public Accountants, will not receive any direct or
indirect interest in Wine Purveyors International.
Changes in and disagreements with accounts on accounting and financial
disclosure
There are no disagreements with the accountants on accounting policies or
financial disclosure.
39
Disclosure of commission position on indemnification for securities act
Our bylaws provide that we shall indemnify our directors and executive
officers and may indemnify our other officers and employees to the fullest
extent permitted by law. We believe that indemnification under our bylaws covers
at least negligence and gross negligence on the part of indemnified parties. Our
bylaws also permit us to secure insurance on behalf of any officer, director,
employee or other agent for any liability arising out of his or her actions in
such capacity, regardless of whether our bylaws would permit indemnification.
We intend to enter into indemnification agreements with each of our
officers and directors containing provisions that require us to, among other
things, indemnify our officers and directors against liabilities that may arise
by reason of their status or service as directors or officers, other than
liabilities arising from willful misconduct of a culpable nature, to advance
their expenses incurred as a result of any proceeding against them for which
they could be indemnified, and to cover our directors and officers under any of
our liability insurance policies applicable to our directors and officers. We
believe that these provisions and agreements are necessary to attract and retain
qualified persons as directors and executive officers.
The limitation on liability and indemnification provisions in our articles
of incorporation and bylaws may discourage stockholders from bringing a lawsuit
against our directors for breach of their fiduciary duty and may reduce the
likelihood of derivative litigation against our directors and officers, even
though a derivative action, if successful, might otherwise benefit us and our
stockholders. A stockholder's investment in us may be adversely affected to the
extent we pay the costs of settlement or damage awards against our directors and
officers under these indemnification provisions.
At present, there is no pending litigation or proceeding involving any of
our directors, officers or employees in which indemnification is sought, nor are
we aware of any threatened litigation that may result in claims for
indemnification.
The limitation of our director's liability does not apply to liabilities
arising under the federal securities laws and does not affect the availability
of equitable remedies such as injunctive relief or rescission.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of Wine Purveyors pursuant to the foregoing provisions, or otherwise,
Wine Purveyors has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
40
Description of business
Overview
Wine Purveyors International, Inc. is a development stage Nevada
Corporation formed on January 17, 2003 for the purpose of offering wine, port,
champagne and related accessories through retail store locations and an
e-commerce enabled Internet site. We believe wine. port, champagne and related
items are well suited for e-commerce because of the desire of discriminating
purchasers to have access to a national inventory, the dispersed locations of
potential customers and the relatively low operating costs associated with
Internet retailing as compared to a retail store network with similar
demographic coverage.
To date, the wine, port and champagne offering remains incomplete, the
website is not yet operational, there are no stores and the company has no
customers. The only inventory of wine that we do have presently was sold from
the private collection of our chief executive officer, James price. It is our
intention to develop our offering of wine, port and champagne by means of
contracts with individual vineyards, distillers, wholesalers and distributors.
Wine Purveyors International plans to operate a fully interactive
e-commerce enabled web site and open retail store locations to distribute a
broad range of wine, port and champagne and accessories to retail customers,
collectors of fine wines and investors in rare vintages at strategic locations.
We have selected four retail store sites that would meet our demographic and
commercial criteria. We do not have a lease for any of these properties. The
first four sites where we would like to develop retail store stores are:
o King of Prussia Mall, Pennsylvania
o Montgomery Mall, Maryland
o Tyson's Corner Mall, Virginia
o Caesar's Forum Shops, Nevada
The wine, port and champagne that we will offer for sale on the Internet
and in our planned retail stores will come primarily from individual vineyards
and wholesale distributors. We intend to develop these vineyard and distributor
relationships, the website launch and store openings, through the efforts of our
chief executive officer, James Price, through materials that he has already
prepared and via the use of consultants. Our wine, port and champagne and
services will be offered to retail customers, collectors of fine wines and
investors in rare vintages directly through the Internet and stores. We intend
to charge retail prices on the wine, port and champagne for which we intend to
pay suppliers wholesale prices. We plan to advertise our wine, port and
champagne and services at industry trade shows, in trade publications and
on-line at various search engines.
We intend to address our competitive efforts to both the traditional retail
store wine market and the on-line wine market. We believe that developing a
presence in both the on-line and retail markets will give us certain business
advantages over retailers without a significant interactive e-commerce on-line
presence, for example wine stores whose websites serve as little more than
brochures or who have no web presence at all.
History and form of organization
Wine Purveyors International, Inc. is a development stage Nevada Corporation
formed on January 17, 2003 for the purpose of offering wine, port and champagne
and accessories through a chain of retail stores and an e-commerce enabled web
site. To date, the wine, port and champagne offering remains incomplete, the
website is not yet operational, we have no stores and we have no customers.
41
Wine Purveyors International principal products and services
Wine Purveyors International is not currently providing any products or
services. Wine Purveyors International plans to offer a variety of wine, port
and champagne, accessories and services for sale to retail customers, collectors
of fine wines and investors in rare vintages. The offering will consist of:
o Champagnes;
o Bordeauxs, Cabernet Sauvignons, Chardonnays, Burgundys, and other types of
wine;
o Port wines, Sauterne's, and other desert wines.
Provided that we derive sufficient financing proceeds, we intend to begin
offering our products in June of 2003.
Wine Purveyors International intends to price its entire product line on a
case-by-case basis. Prices will vary depending on several factors, such as:
relative rarity and demand of select vintage, overall market conditions, sales
volume, pricing policies of suppliers and seasonal promotions. We intend to
offer a discount program for repeat customers; however we have not yet
determined the specifics of the program.
Distribution and marketing methods
Presently, Wine Purveyors International has no salespeople or distributors
of its wine, port, champagne and accessories. We anticipate that our chief
executive officer, James Price, will use his network of professional and
business contacts in the wine industry to sign on our vineyards and wholesale
suppliers and reach our proposed customer base through traditional forms of
advertising and through a comprehensive launch of our website,
www.winepurveyors.com. We intend to market our wine, port, champagne and
accessories via industry trade shows, in trade publications and through on-line
search engines.
42
Status of products and services
Currently, we have not done any development on the Wine Purveyors
International website itself. We anticipate that 50% of the initial wine, port
and champagne that will be offered for viewing on the site has already been sold
by Mr. Price to the company from his private collection. We anticipate that we
will have at least an equivalent supply of wine, port, champagne and accessories
from wholesale distributors and vineyards whom we intend to identify and with
whom we intend to contract. We plan to have this additional supply in place by
June 1, 2003. We intend to have most of the technological and hosting aspects of
the site developed by consultants. While no final software product for use on
the site has been identified, Mr. Price is interviewing several website
designers and hosting companies. We do not currently have any other products or
services that we intend to offer.
Business Combination
We have no plans to seek a business combination of any kind.
Revenues
Wine Purveyors International has derived no revenue to date. It is
contemplated that the earliest revenues would be derived in June of 2003, when
the site launches and or a store is opened.
Competitive conditions, competitive position and methods of competition
The wine, port and champagne industry in which we compete contains an old
and established network of stores and promoters. Intense competition exists for
our stores and wine, port and champagne offerings. The number of companies with
which we compete is estimated in the hundreds and expanding. We expect
competition with our stores and website to increase over time as the market for
rare wine, port and champagne vintages grows. Competition may also increase as a
result of industry consolidation.
Our chief competition comes from large established stores and websites, such
as:
o Pinehurst Fine Wines
o Mills Wine Shop
o Berry Bros. And Rudd
o Sokolin
o Wine.com
o ewine.com
These companies tend to compete for clients by sales of services to
existing clients, via word of mouth referrals, advertising, trade show presence,
festivals, promotions and auctions. Our main method of competition is through
product differentiation based on inventory, pricing and store locations. We
intend to distinguish our service and wine, port and champagne offerings by
appealing to retail customers, collectors of fine wines and investors in rare
vintages at our specific store locations and via the Internet.
We believe that our competitive position is that of vulnerable, new entrant
and that the success of our wine, port and champagne offering will be largely
dependent on our ability to find supplies of rare or highly desirable wines,
ports and champagnes, primarily through vineyards and distributors who are not
currently affiliated with any other on-line wine, port and champagne website.
Dependence on one customer
While we currently have no customers, we do not contemplate a dependence on
one customer or one referral source for clients. We intend to utilize a wide
variety of mechanisms for securing suppliers and customers and intend to have a
diverse customer base.
43
Research and development
We have not spent any money on research and development to date. We
anticipate that we will spend $100,000 on the development of our website and
advertising materials. Much of the development of the wine, port and champagne
offering and the selection and securing of retail store sites will be undertaken
by James Price, our chief executive officer, without additional compensation.
Proprietary rights and licensing
We rely primarily on a combination of copyrights, licenses, trade secret
laws and restrictions on disclosure to protect any proprietary selling system,
collateral materials, e-commerce system and customer and supplier information .
We intend to enter into confidentiality agreements with our future employees,
consultants and suppliers and to generally control access to and distribution of
our internal documentation and other proprietary information.
Regulatory environment
There are two aspects of our business which face significant governmental
regulation or are likely to face such regulation; our sales offering via the
internet through our website and regulations which affect sales of retail
alcoholic beverages in general.
Within the United States, the legal landscape for Internet privacy is new
and rapidly evolving. Collectors and users of consumer information over the
internet face potential tort liability for public disclosure of private
information; and liability under federal and state fair trade acts when
information sharing practices do not mirror stated privacy policies. Due to the
increasing popularity and use of the internet, it is likely that a growing
number of laws and regulations will be adopted at the international, federal,
state and local levels relating to the internet covering issues such as user
privacy, pricing, content, copyrights, distribution, antitrust and
characteristics and quality of services. Further, the growth and development of
the market for activity on the internet may prompt calls for more stringent
consumer protection laws that may impose additional burdens on those companies
conducting business online. The adoption of any additional laws or regulations
may impair the growth of the internet, which could, in turn, decrease the demand
for our services and increase our cost of doing business. Moreover, the
applicability to the internet of existing laws in various jurisdictions
governing issues such as property ownership, sales and other taxes, libel and
personal privacy is uncertain and may take years to resolve. Any such new
legislation or regulation, the application of laws and regulations from
jurisdictions whose laws do not currently apply to our business or the
application of existing laws and regulations to the internet could harm our
business.
Sellers of retail alcoholic beverages are subject to a myriad of
interlocking local, state and federal regulations, including licensing, taxes,
prohibitions and labeling requirements. Many of these regulations can involve
significant civil and criminal penalties including fines, confiscation of
inventory, and possible incarceration. Although we will not attempt to fulfill
our own Internet based orders, but will instead rely on local distributors,
wholesalers and suppliers, we will still be subject to many complex local
regulations.
Employees and consultants
As of January 31, 2003 we had 2 employees. We do not have any written
employment agreement with our employees. We believe that our relations with our
employees are good.
Description of property
We are currently hosted out of the residence of our chief executive
officer in Monkton, Maryland. We believe that these existing facilities are
adequate to meet our current, foreseeable requirements or that suitable
additional or substitute space will be available on commercially reasonable
terms.
44
Management's discussion and analysis
The following discussion and analysis of our financial condition and
results of our operations should be read in conjunction with our financial
statements and related notes appearing elsewhere in this prospectus. This
discussion and analysis contains forward-looking statements that involve risks,
uncertainties and assumptions. The actual results may differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including, but not limited to, those set forth under "Risk factors" and
elsewhere in this prospectus.
Overview
We are engaged in the business of providing fine wine and accessories to
wine enthusiasts and retail customers through our website and a chain of retail
stores. Neither the website nor the retail stores have yet to be fully
developed. To date, we have derived no revenue, have no customers and are not
yet offering our products and services for sale.
We have primary areas of our business that we intend to develop over
the next 12 months:
o Relationships with several vineyards and wholesale distributors for a supply
of inventory for our retail store;
o A complete, fully interactive e-commerce enabled website located at
www.winepurveyors.com through which orders will be placed by customers to be
fulfilled by our distributor of vineyard partners;
o At least one store opening in a strategic location;
o A sales and marketing capability sufficient to handle all website inquiries
and retail outlet traffic.
We have targeted locations for potential store openings during the next
12 months. These locations are in Pennsylvania, Virginia, Nevada and Maryland.
The locations are in shopping malls that have been selected due to the number of
complementary luxury goods stores they contain. We have also focused on
properties that are highly selective with respect to their retail tenants. These
properties are amongst the most expensive retail locations per square foot in
the United States. It will be very difficult for us, as a development stage
company without a significant operating history and with very limited cash
reserves, to successfully secure a location in one or more of these malls. Mall
landlords may require lease guarantees from a credit worthy entity, which we may
not be able to provide. In addition, significant expenditures of capital can be
required to make a retail location operable as a wine shop, including liquor
licensing and related permits. While some of these expenses are often covered by
a tenant improvement allowance offered by the mall landlord, there can be no
assurance that we will receive such an allowance. Although we will seek out
space that requires as little improvement as possible, there can be no assurance
that such a space will be available to us on terms that we qualify for and would
be willing to accept. Expenses related to liquor permitting will not be covered
by any tenant allowance.
We intend to develop a website at www.winepurveyors.com .The website
will serve two primary functions for our company:
o increase customer awareness of our brand, inventory, preferred vineyards,
exclusive offerings, retail locations and featured selections to potential
purchasers who will then be more likely to visit our retail location; and
o provide an on-line opportunity to purchase wine, port, champagne or
accessories on our website or at one of our retail locations.
45
We believe that it will cost $100,000 to launch our website and to
develop adequate advertising materials. We intend to accomplish this by means of
use of outside consultants and by the efforts of James Price. We believe that
these materials will be completed within 90 days of our receipt of $100,000 in
financing proceeds. We have no present source for these funds other than the
proceeds of the offering. It is our hope that the materials be completed no
later than June 1, 2003.
We believe that we will be able to offer for sale our existing inventory
of wine through our first retail outlet opening, which we anticipate to occur by
June 1, 2003. Although our existing inventory of wine was sold to us by our
chief executive officer, James Price, from his private collection and does not
represent any continuing on-going relationship with a particular vineyard or
distributor, we believe that the inventory will be sufficiently interesting to
attract wine buyers to our retail store and website while we continue to
negotiate contracts with individual vineyards and distributors. We expect that
we will spend about $15,000 over 30 days on outside consultants to integrate our
wine inventory into our website presence. We have no present source for these
funds other than the proceeds of the offering. It is our hope that at least ten
new vineyards, one distributor and our current inventory will be available for
sale on our website no later than June 1, 2003.
Sales and marketing will be critical to the success of our business. Our
business model relies heavily on our ability to cause retail purchasers and
collectors of wine, port, champagne and accessories to visit our retail outlets
and our website. We intend to accomplish this goal through a combination of
methods. We intend to hire a full-time sales and marketing director as soon as
funding permits. We believe that we can obtain a suitable candidate for an
annual salary of $65,000, without having to offer insurance or other benefits.
We would need to support this individual with a marketing budget of
approximately $35,000. This budget would be used for travel to and attendance at
industry trade shows and for advertisements in trade publications and websites.
We believe that this combination of efforts together with the efforts of our
chief executive officer, James Price, in approaching colleagues and leaders in
the wine field will be sufficient. We intend to commence hiring the marketing
director and beginning sales and marketing activities as soon as funds are
available. We have no present source for these funds other than the proceeds of
the offering.
46
We believe it will take 3 months for us to identify and hire such an
individual. We believe it will take another 6 to 8 months for the sales and
marketing efforts to yield profits high enough to open our second retail outlet.
In the event that only a nominal amount of stock is sold during the offering
and there are insufficient proceeds to accomplish our plan of operation as noted
above, then we will seek alternative sources of funding, products, and
customers, including:
o Loans from our chief executive officer or other stockholders;
o Credit from consultants, suppliers, vendors and advertisers;
There can be no assurance that any of the above alternative strategies will
achieve our intended goals. If we are unsuccessful in securing resources by any
of the above outlined means, then our organization will cease to be able to
carry out any alternative plan of operation and we will cease operations,
resulting in a total loss of investment for all shareholders.
47
Certain relationships and related party transactions
There has not been, nor is there currently proposed, any transaction or
series of similar transactions to which we were or are to be a party in which
the amount involved exceeds $60,000, and in which any director, executive
officer, holder of more than 5% of our common stock or any member of the
immediate family of any of these people had or will have a direct or indirect
material interest, except as listed below:
On January 31, 2003, chief executive officer James Price sold a
quantity of wine to us for a purchase price of $51,298. We issued a note for the
amount of the purchase price, payable to Mr. Price. The note bears interest at
an annual rate of 5%. The principal and interest under the note are due and
payable on January 31, 2005. There is no penalty for prepayment. Pursuant to our
conflict of interest policy, Mr. Price sold the wine to us for no more than the
amount of its value as appraised by a professional, independent third party
appraiser.
48
Sales of our common stock
Common stock. The following table summarizes the private placement transactions
in which we sold common stock to our directors, executive officers, 5%
stockholders and persons and entities affiliated with them.
Price per Shares of common
Purchaser Dates of purchase share stock
------------------ ------------------ ---------- ----------------
James Price
director and
executive officer 01/18/2003 $0.001 8,969,100
Totals 8,969,100
Description of insider sales
Officer and director James Price purchased 8,969,100 shares on January 18,
2003 at a per share purchase price of $0.001.
Indemnification agreements
We intend to enter into indemnification agreements with each of our
directors and officers. Such indemnification agreements will require us to
indemnify our directors and officers to the fullest extent permitted by Nevada
law. For a description of the limitation of our directors' and officers'
liability and our indemnification of such directors and officers, see
"Limitation on directors' and officers' Liability and Indemnification."
Conflict of interest policy
We believe that all transactions with affiliates described above were made
on terms no less favorable to us than could have been obtained from unaffiliated
third parties. Our policy is to require that a majority of the independent and
disinterested outside directors on our board of directors approve all future
transactions between us and our officers, directors, principal stockholders and
their affiliates. In this instance, as Mr. Price is currently our sole director,
it is our policy to rely on recommendations from an outside appraiser or
independent third party to assess the fairness of the transaction. Such
transactions will continue to be on terms no less favorable to us than we could
obtain from unaffiliated third parties.
49
Market for common equity and related stockholder matters
There is no trading market for our common stock at present and there has
been no trading market to date. Management has not undertaken any discussions
with any prospective market maker concerning the participation in the
aftermarket for our securities and management does not intend to initiate any
discussions. We cannot guarantee that a trading market will ever develop or if a
market does develop, that it will continue. As January 31, 2003, there are no
options outstanding to purchase shares of our common stock and no options to
purchase our common stock that are authorized and available for grant. We have
no shares that are currently eligible for sale under Rule 144. We have 1,030,900
common shares, which we have agreed to register under the Securities Act in this
offering for sale by current security holders. There are approximately 313
shareholders of record of our shares of common stock. We have also issued a
warrant to purchase 1,000,000 shares of our common stock at an exercise price of
$1.00 to XCL Partners. This warrant and the common shares underlying the warrant
are required to be registered in any registration statement that we happen to
file a registration statement with the SEC subsequent to the effectiveness of
this registration statement. No dividends have been paid on our common stock to
date, and we have no plans to pay dividends on our common stock in the
foreseeable future.
50
The Securities and Exchange Commission has adopted a rule that established
the definition of a "penny stock," for purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules require: (i)
that a broker or dealer approve a person's account for transactions in penny
stocks; and (ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must (i) obtain financial
information and investment experience and objectives of the person; and (ii)
make a reasonable determination that the transactions in penny stocks are
suitable for that person and that person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the SEC relating to the
penny stock market, which, in highlight form, (i) sets forth the basis on which
the broker or dealer made the suitability determination; and (ii) that the
broker or dealer received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks of investing in
penny stock in both public offering and in secondary trading, and about
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny stocks.
As a result, if trading in our common stock is determined to be subject to the
above rules, a stockholder may find it more difficult to dispose of, or to
obtain accurate quotations as to the market value of, our securities.
Where you can find additional information
We filed with the Securities and Exchange Commission a registration
statement on Form SB-2 under the Securities Act for the shares of common stock
in this offering. This prospectus does not contain all of the information in the
registration statement and the exhibits and schedule that were filed with the
registration statement. For further information with respect to us and our
common stock, we refer you to the registration statement and the exhibits and
schedule that were filed with the registration statement. Statements contained
in this prospectus about the contents of any contract or any other document that
is filed as an exhibit to the registration statement are not necessarily
complete, and we refer you to the full text of the contract or other document
filed as an exhibit to the registration statement.
Upon effectiveness of our registration statement on Form SB-2, we will
become subject to the information and periodic reporting requirements of the
Securities Exchange Act of 1934, and, in accordance with the requirements of the
Securities Exchange Act of 1934, will file periodic reports, proxy statements
and other information with the Securities and Exchange Commission. These
periodic reports, proxy statements and other information will be available for
inspection and copying at the regional offices, public reference facilities and
website of the Securities and Exchange Commission referred to above, at
www.sec.gov.
You may read and copy all materials, which we file with the Securities and
Exchange Commission at the SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549. You may obtain information about the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC at http://www.sec.gov. You may also visit our website for further
information at www.winepurveyors.com, though such site is not currently
operational, we anticipate that it will be by June of 2003.
51
Financial Statements
WINE PURVEYORS INTERNATIONAL, INC.
(A Development Stage Enterprise)
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
AND
FINANCIAL STATEMENTS
January 31, 2003
WINE PURVEYORS INTERNATIOINAL, INC.
(A Development Stage Enterprise)
TABLE OF CONTENTS
Page
Report of Independent Certified Public Accountants F-1
Financial Statements:
Balance Sheet - January 31, 2003 F-2
Statement of Operations for the Period from January 17, 2003
(Date of Inception) Through January 31, 2003 F-3
Statement of Stockholders' Equity for the Period from
January 17, 2003 (Date of Inception) through January 31, 2003 F-4
Statement of Cash Flows for the Period from January 17, 2003
(Date of Inception) Through January 31, 2003 F-5
Notes to Financial Statements F-6
F-1
HANSEN, BARNETT & MAXWELL (801) 532-2200
A Professional Corporation Fax (801) 532-7944
CERTIFIED PUBLIC ACCOUNTANTS 5 Triad Center, Suite 750
Salt Lake City, Utah 84180-1128
www.hbmcpas.com
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
Wine Purveyors International, Inc.
We have audited the accompanying balance sheet of Wine Purveyors International,
Inc. (a development stage enterprise) as of January 31, 2003 and the related
statements of operations, stockholders' equity and cash flows for the period
from January 17, 2003 (date of inception) through January 31, 2003. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wine Purveyors International,
Inc. as of January 31, 2003 and the results of its operations and its cash flows
for the period from January 17, 2003 (date of inception) through January 31,
2003 in conformity with accounting principles generally accepted in the United
States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company's lack of operating history raises substantial
doubt about its ability to continue as a going concern. Management's plans
regarding those matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
March 6, 2003
F-2
WINE PURVEYORS INTERNATIONAL, INC.
(A Development Stage Enterprise)
BALANCE SHEET
January 31,
2003
ASSETS
Current Assets
Cash $ 5,000
Inventory 51,298
-------------
Total Current Assets 56,298
Deferred Offering Costs 5,000
-------------
Total Assets $ 61,298
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ --
Long-Term Liabilities
Note payable to related party 51,298
-------------
Total Long-Term Liabilities 51,298
-------------
Stockholders' Equity
Common stock - $0.001 par value; 50,000,000 shares
authorized; 10,000,000 shares issued and outstanding 10,000
-------------
Total Stockholders' Equity 10,000
-------------
Total Liabilities and Stockholders' Equity $ 61,298
=============
The accompanying notes are an integral part of these financial statements.
F-3
WINE PURVEYORS INTERNATIONAL, INC.
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
For the Period
January 17, 2003
(Date of Inception)
Through
January 31, 2003
Revenue $ --
General and administrative expenses --
------------------
Net Income $ --
==================
Basic and Diluted Income Per Share $ --
==================
Weighted Average Number of Shares
Outstanding 10,000,000
==================
The accompanying notes are an integral part of these financial statements.
F-4
WINE PURVEYORS INTERNATIONAL, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY
[Enlarge/Download Table]
Common Stock Stockholders'
--------------------------------------
Shares Amount Equity
------------- ------------ -------------
Balance - January 17, 2003 - $ - $ -
Shares issued for cash, January 2003
$0.001 per share 10,000,000 10,000 10,000
Balance - January 31, 2003 10,000,000 $ 10,000 $ 10,000
============= =========== ===========
The accompanying notes are an integral part of these financial statements.
F-5
WINE PURVEYORS INTERNATIONAL, INC.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
For the Period
January 17, 2003
(Date of Inception)
Through
January 31, 2003
Cash Flows from Operating Activities $ -
-------------
Cash Flows from Investing Activities -
-------------
Cash Flows Financing Activities
Increase in deferred offering costs (5,000)
Sale of common stock 10,000
-------------
Net Cash Flows From Financing Activities 5,000
-------------
Net Increase in Cash 5,000
Cash at Beginning of Period -
-------------
Cash at End of Period $ 5,000
=============
Non Cash Financing Activities
Acquisition of inventory by issuance of a note payable
to a related party $ 51,298
=============
The accompanying notes are an integral part of these financial statements.
F-6
WINE PURVEYORS INTERNATIONAL, INC.
(A Development Stage Enterprises)
NOTES TO FINANCIAL STATEMENTS
January 31, 2003
NOTE 1 - NATURE OF BUSINESS
Organization and Nature of Operations -- On January 17, 2003, Wine Purveyors
International, Inc. ("the Company") was organized under the laws of the State of
Nevada. The Company is considered a development stage enterprise and is in the
process of raising capital to fund operations. As such, the Company has since
inception spent most of its efforts in developing its business plan,
constructing core materials for eventual sale to customers and in raising
capital to fund its operations. The Company has relied upon cash flows from
equity issuances to sustain operations. The planned operations of the Company
consist of selling fine wine over the internet. The Company has had no revenues
from any source to date.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates -- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect certain
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Fair Value of Financial Instruments -- The carrying amounts reported in the
accompanying financial statements for current assets approximate fair values
because of the immediate or short-term maturities of these financial
instruments.
Business Condition -- The Company is new company with no operating history. It
has not yet been able to execute its business plan. This situation raises
substantial doubt about its ability to continue as a going concern. The Company
plans to fund its operations by any of the following: issue debt securities,
issue equity securities, or loans from related parties. Success in these efforts
is not assured. The financial statements do not include any adjustments relating
to the recoverability and classification of asset carrying amounts or the amount
and classification of liabilities that might result should the Company be unable
to continue as a going concern.
Deferred Offering Costs -- The Company deferred direct costs associated with the
proposed public offering of its common stock. The deferred costs will be
recognized as a reduction of the proceeds from the offering when the proceeds
are realized.
Income Taxes -- The Company recognizes an asset or liability for the deferred
tax consequences of all temporary differences between the tax bases of assets or
liabilities and their reported amounts in the financial statements that will
result in taxable or deductible amounts in future years when the reported
amounts of the asset or liabilities are recovered or settled. Deferred tax
assets or liabilities are measured using the enacted tax rates that will be in
effect when the differences are expected to reverse. Deferred tax assets are
reviewed periodically for recoverability and valuation allowances are provided
as necessary.
Inventories -- Inventories are stated at the lower of cost or market.
Net Income Per Share-Basic and Diluted -- Basic income (loss) per common share
is computed on the basis of the weighted-average number of common shares
outstanding during the period. Diluted income per share, is computed on the
basis of the weighted-average number of common shares and all potentially
issuable common shares outstanding during the year. As of January 31, 2003,
there were 1,000,000 warrants that will not be included in the computation of
diluted net loss per share as their effect would be anti-dilutive, thereby
decreasing the net loss per common share.
NOTE 3 - STOCKHOLDERS' EQUITY AND WARRANTS
Common Stock --In January 2003, the Company issued 10,000,000 shares of common
stock to various individuals, including officers of the Company, for cash
proceeds of $10,000 at $0.001 per share.
Warrants--In January 2003, the Company issued warrants to purchase 1,000,000
shares of common stock to an unaffiliated company. The following summarizes
outstanding warrants at January 31, 2003:
[Enlarge/Download Table]
Weighted-Average Weighted-Average
Exercise Remaining
Fixed Warrants Warrants Price Contractual Life
--------------------------------------- ------------- --------------- --------------------
Outstanding at January 17, 2003 -- $ -- --
Issuances 1,000,000 1.00 2.84 years
------------- ---------------
Outstanding at January 31, 2003 1,000,000 $ 1.00
============= ===============
NOTE 4 - RELATED PARTY TRANSACTIONS
In January 2003, the major shareholder sold certain of his wine collection to
the Company for $51,298 represented by an unsecured note payable. The note bears
interest at 5% and is due in full January 31, 2005 with no periodic payments
required. The purchase price represents the shareholder's original cost in the
wine which was acquired for cash. This inventory has been recorded at the lower
of original cost or market.
52
WINE PURVEYORS INTERNATIONAL, INC.
Wine Purveyors International, Inc.
Registration statement on form SB-2
Part II
Information not required in prospectus
Indemnification of directors and officers
Article V of our bylaws provides for the indemnification of officers,
directors and third parties acting on behalf of us if such person acted in good
faith and in a manner reasonably believed to be in and not opposed to our best
interest, and, with respect to any criminal action or proceeding, the
indemnified party had no reason to believe his or her conduct was unlawful.
We intend to enter into indemnification agreements with our directors and
executive officers, in addition to indemnification provided for in our bylaws,
and intend to enter into indemnification agreements with any new directors and
executive officers in the future. The indemnification agreements may require us,
among other things, to indemnify our directors and officers against certain
liability that may arise by reason of their status or service as directors and
officers, other than liabilities arising from willful misconduct of a culpable
nature, to advance their expenses incurred as a result of any proceeding against
them as to which they could be indemnified, and to obtain directors and
officers' insurance, if available on reasonable terms.
Other expenses of issuance and distribution
The following table sets forth the costs and expenses, other than commissions,
payable by us in connection with the sale of common stock being registered. All
amounts are estimates.
SEC registration fee................................................. $ 200
Printing and engraving costs......................................... 1,000
Legal fees and expenses.............................................. 15,000
Accounting fees and expenses......................................... 5,000
Blue sky fees and expenses........................................... 2,000
Transfer agent and registrar fees.................................... 1,000
Miscellaneous expenses............................................... 800
Total................................................................ $25,000
53
Recent sales of unregistered securities
Between January 17, 2003 and January 31, 2003, the registrant sold 10,000,000
shares of common stock. There was no public offering of the shares. The duration
of the offering period was January 17, 2003 to January 31, 2003 at a price per
share of par value of $0.001 per share, for total offering proceeds to the
company of $10,000. These issuances are exempt from registration under the
Securities Act in accordance with Section 4(2) of the Act. These shares were
issued to our chief executive officer and sole director and to acquaintances,
associates and consultants of our chief executive officer and sole director. A
total of 313 offers concerning the securities were made during the period of the
offering. There was no general solicitation, public announcement, advertisement
or general offering of the securities. All of the offers were made to
acquaintances and business associates of the officer and director of the
company. These 313 offers resulted in sales of 10,000,000 shares to 313
shareholders of record. Of the 313 sales that took place, 63 sales were made to
unaccredited, non-affiliate investors. All non-accredited investors were
sophisticated investors. The remaining 250 sales were made to accredited
investors.
Each individual investor, whether accredited, unaccredited, affiliated or
unaffiliated was provided with the following information:
o the information required to be furnished in Part I of Form SB-2 under the
Securities Act;
o the information required by Item 310 of Regulation S-B;
o the opportunity to ask questions and receive answers concerning the terms and
conditions of the offering and to obtain any additional information which the
issuer possesses or can acquire without unreasonable effort or expense that is
necessary to verify the accuracy of any information furnished in connection with
the offering; and
o written disclosure regarding the limitations and restrictions on resale of the
securities.
54
The company has relied on Section 4(2) of the Securities Act of 1933 for its
private placement exemption, such that the sales of the securities were
transactions by an issuer not involving any public offering. All of these
securities have been appropriately marked with a restricted legend and are
"restricted securities" as defined in Rule 144 of the rules and the regulations
of the Securities and Exchange Commission, Washington D.C. 20549. All of these
securities were issued for investment purposes only and not with a view to
redistribution, absent registration. All of the purchasers have been granted
access to the complete books, financial records, contracts, and other business
documents of Wine Purveyors International. Each has also had the opportunity to
ask questions of the management, employees, advisors, attorneys and accountants
for Wine Purveyors International. In addition, each was granted physical access
to Wine Purveyors International's facilities for inspection. Transactions by the
registrant involving the sales of these securities set forth above were issued
under the "private placement" exemptions under the Securities Act of 1933 as
transactions by an issuer not involving any public offering. The registrant has
made its own independent determination, based on its own investigation as to
whether each person is:
o a sophisticated investor capable of assessing the risks inherent in a private
offering;
o able to bear the economic risk of his investment; and
o aware that the securities were not registered under the Securities Act of 1933
and cannot be re-offered or re-sold until they have been so registered or until
the availability of an exemption therefrom.
The transfer agent and registrar of the registrant will be instructed to mark
"stop transfer" on its ledgers to assure that these securities will not be
transferred absent registration or until the availability of an applicable
exemption is determined.
For additional information concerning these equity investment transactions,
reference is made to the information contained under the caption "Related party
transactions" in the form of prospectus included herein.
55
Exhibits
Number description
3.1 Articles of incorporation of the registrant
3.2 Bylaws of the registrant.
4.1 Specimen common stock certificate.
5.1 Opinion of Jonathan Ram Dariyanani, Esq.
10.1 Note agreement between the registrant and James Price, dated
January 31, 2003.
10.2 Warrant agreement between the registrant and XCL partners, dated
January 31, 2003.
23.1 Consent of Hansen, Barnett & Maxwell, Certified Public Accountants
23.2 Consent of Jonathan Ram Dariyanani, Esq. (included in Exhibit 5.1).
Undertakings
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers and controlling persons
under the foregoing provisions, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by us of expenses incurred or paid by one or more of our directors,
officers or controlling persons in the successful defense of any action, suit or
proceeding) is asserted by one or more of our directors, officers or controlling
persons in connection with the securities being registered, we 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 such
indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
We hereby undertake:
(1) to file during any period in which we offer or sell securities, a
post-effective amendment to this registration statement: (a) to include any
prospectus required by Section 10(a)(3) of the Securities Act; (b) to reflect in
the prospectus any facts or events which, individually or together, represent a
fundamental change in the information in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in a form of prospectus filed
with the Securities and Exchange Commission under Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of the
Registration Fee" table in the effective registration statement; and (c) to
include any additional or changed material information on the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to the initial bona fide offering
thereof.
56
(3) To remove from registration by means of a post-effective amendment any of
the securities that remain unsold at the termination of the offering.
(4) For purposes of determining liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance on Rule 430A and contained in the form of
prospectus filed by the registrant under Rule 424(b)(1) or (4) or 497(h)under
the Securities Act shall be deemed to be a part of this registration statement
as of the time it was declared effective.
(5) For the purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to the initial bona
fide offering thereof.
Signatures
As required by the Securities Act, the registrant has caused this
registration statement to be signed on its behalf by the undersigned, who is
duly authorized, in Monkton, Maryland this 28th day of March, 2003.
By: /s/ James Price
James Price, chief executive officer
/s/ James Price
James Price, principal financial officer
/s/ James Price
James Price, principal accounting officer
/s/ James Price
James Price, director
57
EXHIBIT INDEX
Exhibits
Number description
3.1 Articles of incorporation of the registrant
3.2 Bylaws of the registrant.
4.1 Specimen common stock certificate.
5.1 Opinion of Jonathan Ram Dariyanani, Esq.
10.1 Note agreement between the registrant and James Price, dated
January 31, 2003.
10.2 Warrant agreement between the registrant and XCL partners, dated
January 31, 2003.
23.1 Consent of Hansen, Barnett & Maxwell, Certified Public Accountants
23.2 Consent of Jonathan Ram Dariyanani, Esq. (included in Exhibit 5.1).
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘SB-2’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 1/31/05 | | 47 | | 59 | | | None on these Dates |
| | 12/31/03 | | 2 |
| | 6/30/03 | | 33 |
| | 6/1/03 | | 42 | | 45 |
| Filed on: | | 3/28/03 |
| | 3/6/03 | | 53 |
| | 1/31/03 | | 5 | | 65 |
| | 1/18/03 | | 48 |
| | 1/17/03 | | 7 | | 61 |
| List all Filings |
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