UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Post-Effective Amendment No. 2
to
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
WORLD HEALTH ALTERNATIVES, INC.
Florida
(State or jurisdiction of incorporation or organization)
7375
(Primary Std. Industrial Classification Code Number)
04-3613924
(IRS Employer ID Number)
155 Lime Kiln Road
Darlington, Pennsylvania 16115
724 891-6618
(Address and telephone number of principal executive offices)
155 Lime Kiln Road
Darlington, Pennsylvania 16115
(Address of principal place of business or intended principal place of business)
Brenda Hamilton, Esq.
2 E. Camino Real, Suite 202
Boca Raton, Florida 33432
(561)416-8956
(Name, address and telephone number of agent for service)
(All communications to)
Brenda Hamilton, Esq.
Hamilton, Lehrer & Dargan, P.A.
2 E. Camino Real, Suite 202
Boca Raton, Florida 33432
(561)416-8956
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
If any of the Securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act of 1933 registration number of the
earlier effective registration statement for the same offering. [X] 333-84934
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act of 1933 Registration Statement number of the earlier effective
Registration Statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act of 1933, check the following box and list the
Securities Act of 1933 Registration Statement number of the earlier effective
Registration Statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of Proposed Proposed
Securities Amount Maximum Maximum Amount
to be to be Offering Price Aggregate of
Registered Registered per Share(1) Offering Price Fee(4)
Common Stock,
$0.001 par value: 1,743,700(2) $0.075(7) $130,777.50 $12.03(4)
Common Stock,
$0.001 par value: 1,743,700(5) $0.075(7) $130,777.50 $12.03(4)
TOTAL 3,487,400(6)(8) $0.075(7) $261,555.00 $24.06(4)
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
(2) Consists of shares previously registered for selling shareholders.
(3) We hereby amend this Registration Statement on such date or dates as may be
necessary to delay its effective date until we shall file a further amendment
which specifically states that this Registration Statement shall thereafter
become effective in accordance with Section 8(a) of the Securities Act of 1933
or until this Registration Statement shall become effective on such date as the
Commission, acting pursuant to Section 8(a) may determine.
(4) Previously paid.
(5) This amount reflects shares issued as a result of our two (2) share for
one (1) share forward stock split effective October 7, 2002.
(6) This total amount includes shares issued as a result of our two (2) share
for one (1) share forward stock split effective October 7, 2002. Selling
shareholders hold all of the shares being registered. Our shares are
quoted on the Over-the-Counter Bulletin Board under the symbol ("WHAI"). We will
not receive proceeds from the sale of shares from the selling shareholders.
(7) The Per Share price has been reduced in proportion to the two (2) share for
one (1) share forward stock split of our common stock effective October 7, 2002.
(8) This Registration Statement shall also cover any additional shares of Common
Stock which become issuable by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt of
consideration which results in an increase in the number of outstanding shares
of common stock.
1
PROSPECTUS COVER PAGE
WORLD HEALTH ALTERNATIVES, INC.
SHARES ARE BEING OFFERED BY SELLING SHAREHOLDERS
Our current shareholders are offering 3,487,400 shares of our common stock. As
of October 23, 2002, we are unaware of any selling shareholders who sold any
of the 3,487,400 shares of our common stock registered on our SB-2 Registration
Statement.
Our common stock is quoted on the Over-the-Counter Bulletin Board under the
symbol ("WHAI"). There is no trading market for our common stock.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY BY
PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS"
BEGINNING ON PAGE 7.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed. Our
selling shareholders 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 sell these securities in any state where the offer or sale is not
permitted.
The date of this Post Effective Amendment is October 23, 2002.
Underwriting Estimated
Price to Discounts and Offering Proceeds to
Public Commissions Expenses (1) Company (2)
- -----------------------------------------------------------------------------
Per Share(3) $0.075 N/A N/A N/A
- -----------------------------------------------------------------------------
Total $0.0 $0.0 $0.0 $0.0
- -----------------------------------------------------------------------------
(1) Does not include offering costs, including filing, legal, accounting and
miscellaneous fees incurred or expected to be incurred of approximately
$30,524.06. We have agreed to pay all the costs of this offering. Selling
shareholders will pay no offering expenses.
(2) We will not receive proceeds from the sale of shares from the selling
shareholders.
(3) The Per Share price has been reduced in proportion to the two (2) share
for one (1) share forward stock split of our common stock which was effective on
October 7, 2002.
The date of this Post Effective Amendment is October 23, 2002.
INSIDE FRONT COVER OF PROSPECTUS
Until 90 days after the date of this prospectus, or until ________, 2002, all
dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to the dealer's obligation to deliver a prospectus when acting as
underwriters and with respect to their sold allotments or subscriptions.
2
TABLE OF CONTENTS
Page
PART I - INFORMATION REQUIRED IN PROSPECTUS
ITEM 1. Front of Registration Statement and Outside Front Cover
of Prospectus....................................................... 1
ITEM 2. Inside Front and Outside Back Cover Pages of Prospectus..............2
ITEM 3. Summary Information and Risk Factors ................................5
Because we are a development state company with a limited
operating history and a poor financial condition, you will
be unable to evaluate our business prospects or determine
whether we will become profitable ...............................7
If we are unable to obtain funding, we may be unable to
implement our plan of operations and you may lost your
investment ......................................................7
Federal, state and local government regulations may lead to
increased costs and decreased revenues, both of which may
negatively affect our potential profitability ...................7
We may be unable to overcome the competitive advantages of
our Internet competitors with websites which would
negatively affect our revenues ..................................7
Our management has no experience in the selling vitamins,
minerals, herbs, spices, homeopathic, and aromatherapy
products. As such, we may be unsuccessful in generating
revenues.........................................................7
Our potential customers can purchase the same products from
our wholesale suppliers which may negatively affect our
sales............................................................8
Our failure to apply for trade protection of our name may
negatively affect our brand name reputation, revenues, and
financial condition..............................................8
We face brand name recognition risks which may adversely
affect our revenues................................. 8
The loss of any of our third party suppliers could lead to
increased costs and losses.......................................8
Management decisions are made by our President/Chief
executive Officer/Chairman of the Board, Edward G. Siceloff;
if we lose his services, our operations may be discontinued.
Our management has significant control over stockholder
matters, which may affect the ability of minority stockholders
to influence our activities......................................8
Our operations are subject to possible conflicts of interest;
there are no assurances that we will resolve these conflicts
in a manner favorable to our minority shareholders...............9
Our management currently devotes limited time to our business
and may continue to do so in future, which may negatively
impact upon our plan of operations, implementation of our
business plan and our potential profitability....................9
We may not meet the National Association of Security Dealer
exchange listing requirements which may be implemented as
early as January 1, 2003 which may lead to increased
investment risk and inability to sell your shares................9
Because our common stock is a penny stock, any investment in
our common stock is a high-risk investment and is subject to
restrictions on marketability; you may be unable to sell your
shares...........................................................9
ITEM 4. Use of Proceeds......................................................9
ITEM 5. Determination of Offering Price......................................9
ITEM 6. Dilution............................................................10
ITEM 7. Selling Shareholders................................................10
ITEM 8. Plan of Distribution................................................11
ITEM 9. Legal Proceedings...................................................13
ITEM 10. Directors, Executive Officers, Promoters and Control Persons........13
ITEM 11. Security Ownership of Certain Beneficial Owners.....................14
ITEM 12. Description of Securities...........................................15
ITEM 13. Interest of Named Experts and Counsel...............................16
ITEM 14. Disclosure of Commission Position on Indemnification................16
ITEM 15. Organization Within Last Five Years.................................16
ITEM 16. Description of Business.............................................17
ITEM 17. Management's Discussion and Analysis or Plan of Operation...........22
ITEM 18. Description of Property.............................................27
ITEM 19. Certain Relationships and Related Transactions......................27
ITEM 20. Market for Common Equity and Related Stockholder Matters............29
ITEM 21. Executive Compensation..............................................31
ITEM 22. Financial Statements................................................32
ITEM 23. Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure.................................33
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. Indemnification of Directors and Officers...........................33
ITEM 25. Other Expenses of Issuance and Distribution.........................34
ITEM 26. Recent Sales of Unregistered Securities.............................34
ITEM 27. Exhibits............................................................39
ITEM 28. Undertakings........................................................40
3
ITEM 3. SUMMARY INFORMATION AND RISK FACTORS
PROSPECTUS SUMMARY
This prospectus contains statements about our future business operations that
involve risks and uncertainties. Our actual results could differ significantly
from our anticipated future operations as a result of many factors, including
those identified under the "Risk Factors" section of this prospectus beginning
on page 7. The prospectus summary contains a summary of all material terms of
the prospectus. You should carefully read all information in the prospectus,
including the Financial Statements and their explanatory notes, under the
Financial Statements section beginning on page 32, prior to making an investment
decision.
HOW WE ARE ORGANIZED
We were incorporated in the State of Florida on February 13, 2002. We were
formed to sell vitamins, minerals, herbs, spices, homeopathic, and aromatherapy
products through our website located at www.worldhealthalternatives.com. We are
a development stage company. We are authorized to issue 200,000,000 shares of
common stock of which 51,487,400 shares are issued and outstanding, taking into
account our two (2) share for one (1) share forward stock split effective
October 7, 2002. We are authorized to issue $.0001 par value 100,000,000
shares of preferred stock, $.0001 par value, of which no shares are issued and
outstanding.
WHERE YOU CAN FIND US
Our principal executive offices are located at 155 Lime Kiln Road, Darlington,
Pennsylvania 16115. Our telephone number is 724-891-6618.
ABOUT OUR BUSINESS
We own and operate a website at www.worldhealthalternatives.com. We have had
limited operations, no revenues, and we have sustained losses since our
inception.
On March 25, 2002, we established our website at www.worldhealthalternatives.com
which consists of a shopping cart and searchable database of the products that
we offer. We offer approximately 1,500 products consisting of vitamins,
minerals, herbs, spices, homeopathic, and aromatherapy products. We plan to
order our products through third party suppliers who fill the orders placed on
our website.
4
Over the next twelve (12) months, we plan to update the design, graphics, and
functional aspects of our website, increase the quantity of products that we
sell by locating additional suppliers, establish an incentive program for our
repeat customers, conduct limited advertising, and establish a database of
articles about nutritional and homeopathic subjects. Certain aspects of our plan
of operations have been delayed due to our lack of financing. We may experience
additional delays in our plan of operations unless we obtain financing. The time
and cost involved to accomplish each of these milestones will vary. There are no
assurances that we will have sufficient funds to accomplish these objectives or
otherwise develop our business plans.
THE OFFERING:
This offering is comprised entirely of shares of our common stock held by our
selling shareholders. Our selling shareholders are offering 3,487,400 shares of
our common stock.
Although we have agreed to pay all offering expenses, we will not receive any
proceeds from the sale of the shares by the selling shareholders. We anticipate
offering expenses of approximately $30,524.06.
Our current shareholders are offering 3,487,400 shares of our common stock. As
of October 23, 2002, we are unaware of any selling shareholders who sold any
of the 3,487,400 shares of our common stock registered on our SB-2 Registration
Statement. Our common stock is quoted on the Over the Counter Bulletin Board
under the symbol ("WHAI").
OUR FINANCIAL SUMMARY:
Because this is only a financial summary, it does not contain all the financial
information that may be important to you. Therefore, you should also carefully
read all the information in this prospectus, including the Financial Statements
and their explanatory notes before making an investment decision.
BALANCE SHEET AT AUGUST 31, 2002
- -----------------------------------------------------------------------
ASSETS
- -----------------------------------------------------------------------
Current Assets
- -----------------------------------------------------------------------
Cash $ 81
- -----------------------------------------------------------------------
Total Current Assets $ 81
- -----------------------------------------------------------------------
Other Assets:
- -----------------------------------------------------------------------
Web Site $ 8,480
- -----------------------------------------------------------------------
$ 8,561
- -----------------------------------------------------------------------
5
LIABILITIES & STOCKHOLDER'S EQUITY AT AUGUST 31, 2002
- -----------------------------------------------------------------------
Current Liabilities:
- -----------------------------------------------------------------------
Total Current Liabilities $ 0
- -----------------------------------------------------------------------
Stockholders' Equity
- -----------------------------------------------------------------------
Common Stock $.0001 par value, 200,000,000 shares
authorized, 51,487,400 shares issued and
outstanding $ 5,149
- -----------------------------------------------------------------------
Additional Paid-In Capital $ 212,222
- -----------------------------------------------------------------------
Deferred compensation (75,000)
(Deficit) Accumulated During the
Development Stage $ (133,810)
- -----------------------------------------------------------------------
$ 8,561
- -----------------------------------------------------------------------
$ 8,561
- -----------------------------------------------------------------------
STATEMENT OF OPERATIONS
Period from Inception (February 13, 2002) to August 31, 2002
- -----------------------------------------------------------------------
Revenue $ 0
- -----------------------------------------------------------------------
Operating Costs and Expenses:
- -----------------------------------------------------------------------
Non cash stock compensation $ 77,410
- -----------------------------------------------------------------------
General and Administrative $ 56,400
- -----------------------------------------------------------------------
$ 133,810
- -----------------------------------------------------------------------
Net (loss) $ (133,810)
- -----------------------------------------------------------------------
Per Share Information - basic and fully diluted:
- -----------------------------------------------------------------------
Weighted Average Common Shares Outstanding 50,677,150
- -----------------------------------------------------------------------
(Loss) Per Share $ (0.00)
6
RISK FACTORS
Because we are a development stage company with a limited operating history and
a poor financial condition, you will be unable to evaluate our business
prospects or determine whether we will become profitable.
You will be unable to evaluate our business prospectus or determine if we will
become profitable. We are a development stage company with no operations or
revenues through August 31, 2002. Since our inception to August 31, 2002, we
have had losses of $133,810 ; future losses are likely before our operations will
become profitable, if ever. Our auditor expresses a substantial doubt about our
ability to continue as a going concern. Our ability to continue as a going
concern is dependent on our ability to obtain financing for our operations for
which there are no assurances.
If we are unable to obtain funding, we may be unable to implement our plan of
operations and you may lose your investment.
Our plan of operations is dependent upon receiving financing, which we may never
receive. If we are unable to obtain financing, we will have to curtail or cease
our operations. Our only possible source of funding is loans from our President,
Edward G. Siceloff; however, there are no assurances that he will be able or
willing to provide these loans. Accordingly, we may seek financing through
traditional bank financing or a debt or equity offering. However, financial
institutions may not provide us with financing or we may be unable to conduct a
debt or equity offering, in which case you may lose your entire investment.
Federal, state and local government regulations may lead to increased costs and
decreased revenues, both of which may negatively affect our potential
profitability.
The Federal Drug Administration and state or legal licensing authorities may
impose new government regulations that may impede the sale of vitamins,
minerals, herbs, and homeopathic products. This may increase our costs or expose
us to possible regulatory actions which may negatively affect our potential
profitability.
We may be unable to overcome the competitive advantages of our Internet
competitors with websites which would negatively affect our revenues.
Because many of our Internet website competitors have greater financial and
technical resources and larger customer bases than us, we will have difficulties
competing. We will compete against thousands of competitors in a highly
fragmented market in which cost barriers to entry are low. If we are unable to
overcome these competitive disadvantages, our potential revenues will be
negatively affected.
Our management has no experience in the selling of vitamins, minerals, herbs,
spices, homeopathic, and aromatherapy products. As such, we may be unsuccessful
in generating revenues.
Our President has no experience selling or marketing vitamins, minerals, herbs,
spices, homeopathic, and aromatherapy products. Accordingly, we may be
unsuccessful in marketing and distributing our products which will negatively
affect our ability to generate revenues.
7
Our potential customers can purchase the same products from our wholesale
suppliers which may negatively affect our sales.
Our potential customers can purchase the same products we offer from our
wholesale suppliers. If a substantial percentage of our prospective clientele
make arrangements with our suppliers, our product sales will be negatively
affected.
Our failure to apply for trade protection of our name may negatively affect our
brand name reputation, revenues and financial condition.
Development of our brand name reputation depends on our ability to develop and
protect our name, World Health Alternatives, Inc.; however, we have not applied
for trademark protection of our name with the United States Patent and Trademark
Office. The use of our name may violate the proprietary rights of others which
may subject us to damage awards or judgments prohibiting the use of our name. In
addition, our failure to apply for trademark protection may cause our
competitors to adopt company names, products or service names similar to ours.
If we fail to provide adequate proprietary protection our name, our brand name
reputation, revenues and financial condition may be negatively affected.
We face brand name recognition risks which may adversely affect our revenues.
Because we are a new company with a new website with limited operations and no
advertising, we have no name recognition. We face significant risks pertaining
to establishing our brand name reputation. We have only a limited amount of
financial resources devoted to developing recognition of our name. Accordingly,
we may be unable to develop our brand name to generate sufficient revenues to
make us profitable.
The loss of any of our third party suppliers could lead to increased costs and
losses.
We have three (3) suppliers which provide us with our products. We will be
forced to seek other suppliers with new product lines and possibly at greater
cost to us. In addition, we will have additional costs from having to
reconfigure the shopping cart describing the products on our website and
increased advertising costs from introducing new product lines. Should these
suppliers cease to provide us with products, our operations and financial
condition will be negatively affected.
Management decisions are made by our President/Chief Executive Officer/Chairman
of the Board, Edward G. Siceloff; if we lose his services, our operations may be
discontinued.
The success of our business is dependent upon our President/Chief Executive
Officer/Chairman of the Board, Edward G. Siceloff. Because Mr. Siceloff is
essential to our operations, you must rely on his management decisions. We have
not entered into any agreement with Mr. Siceloff that would prevent him from
leaving our company, nor have we obtained any "key man" life insurance relating
to him. There is no assurance that we would be able to hire and retain another
President/Chief Executive Officer/Chairman of the Board to replace Mr. Siceloff.
As a result, the loss of Mr. Siceloff's services would have a materially adverse
affect upon our business.
Our management has significant control over stockholder matters, which may
affect the ability of minority stockholders to influence our activities.
Our President/Chief Executive Officer/Chairman of the Board, Edward G. Siceloff,
owns approximately fifty-nine percent (59%) of our outstanding common stock. As
such, Mr. Siceloff controls the outcome of all matters submitted to a vote by
the holders of our common stock, including the election of our directors,
amendments to our certificate of incorporation and approval of significant
corporate transactions. Additionally, our Chief Executive Officer could delay,
deter or prevent a change in our control that might be beneficial to our other
stockholders.
8
Our operations are subject to possible conflicts of interest; there are no
assurances that we will resolve these conflicts in a manner favorable to our
minority shareholders.
One of our directors, Joseph L. Prugh, currently operates a sole proprietorship
retail gift and miscellaneous merchandise store and may be involved in other
future business activities. In addition, although our President is not now
involved in other business activities, he plans to do so in the future. If other
business opportunities become available, our officers/directors may face a
conflict in selecting between our business objectives and their own. We have not
formulated a policy for the resolution of such conflicts. Future transactions or
arrangements between or among our officers, directors and shareholders, and
companies they control, may result in conflicts of interest, which may have an
adverse affect on the rights of minority shareholders, our operations and our
financial condition.
Our management currently devotes limited time to our business and may continue
to do so in future, which may negatively impact upon our plan of operations,
implementation of our business plan and our potential profitability.
We currently have no full-time employees. Our President/Chairman of the Board,
Edward Siceloff, is employed elsewhere on a part-time basis and now spends only
approximately 20 hours per week to implement our plan of operations. Mr.
Siceloff may continue to spend limited time on our business in the future. Our
other Director, Joseph L. Prugh, is neither employed on a part-time or full-time
basis. The limited amount of time management currently devotes to our business
activities as well as in the future may be inadequate to implement our plan of
operations and develop a profitable business.
We may not meet the National Association of Security Dealer exchange listing
requirements which may be implemented as early as January 1, 2003 which may lead
to increased investment risk and inability to sell your shares.
Our common stock is quoted on the Over-the-Counter Bulletin Board under the
symbol "WHAI". The National Association of Security Dealers has proposed to the
Securities and Exchange Commission that the Over-the-Counter Bulletin Board be
phased out beginning on January 1, 2003 and eliminated as of June 1, 2003, to be
replaced with the Bulletin Board Exchange. If this occurs, we may not meet the
new exchange listing requirements, including the requirement to have one hundred
(100) round lot shareholders and a float of 200,000 shares. Should we fail to
meet the new exchange requirements, you will lose your entire investment.
Because our common stock is a penny stock, any investment in our common stock is
a high-risk investment and is subject to restrictions on marketability; you may
be unable to sell your shares.
If our common stock becomes tradable in the secondary market, we will be subject
to the penny stock rules adopted by the Securities and Exchange Commission that
require brokers to provide extensive disclosure to its customers prior to
executing trades in penny stocks. These disclosure requirements may cause a
reduction in the trading activity of our common stock and as a result you may be
subject to the risk of being unable to sell your shares. In addition, our
shareholders will, in all likelihood, find it difficult to sell their
securities. For additional details concerning the disclosure requirements under
the penny stock rules, please see our Penny Stock Considerations Section at
page 30.
ITEM 4. USE OF PROCEEDS
Not Applicable. We will not receive any proceeds from the sale of the
securities by the selling shareholders.
ITEM 5. DETERMINATION OF OFFERING PRICE
Our management has determined the offering price for the selling shareholders'
shares. The offering price has been arbitrarily determined and does not bear any
relationship to our assets, results of operations, or book value, or to any
other generally accepted criteria of valuation. Prior to this offering, there
has been no market for our common shares.
9
ITEM 6. DILUTION
Not Applicable. We are not offering any shares in this Registration Statement.
All shares are being registered on behalf of our selling shareholders.
ITEM 7. SELLING SHAREHOLDERS
The selling shareholders named below are selling the securities. The table
assumes that all of the securities will be sold in this offering. However, any
or all of the securities listed below may be retained by any of the selling
shareholders, and therefore, no accurate forecast can be made as to the number
of securities that will be held by the selling shareholders upon termination of
this offering. We believe that the selling shareholders listed in the table
have sole voting and investment powers with respect to the securities indicated.
We will not receive any proceeds from the sale of the securities by the selling
shareholders. None of the selling shareholders are broker-dealers or affiliates
of broker-dealers. All amounts listed below include shares to be issued
pursuant to our two (2) share for one (1) share forward stock split effective
October 7, 2002.
Beneficial Amount Amount Percentage Owned
Relationship Owned Prior to be Before/After
Name with Issuer to Offering Offered Offering
Asare, Beadros Edgar Filer 2,000 2,000 >1%/0%
Baker, Jason M. None 4,000 4,000 >1%/0%
Brown, Don None 4,000 4,000 >1%/0%
Clayton, Richard None 4,000 4,000 >1%/0%
Davidson, Juanita G. None 4,000 4,000 >1%/0%
Dell, Sandy L. None 4,000 4,000 >1%/0%
Dell, Christopher R. None 40,000 40,000 >1%/0%
Divich, Kurt None 10,000 10,000 >1%/0%
Ferguson, Dell None 2,400 2,200 >1%/0%
Ferguson, Rosemary None 8,000 8,000 >1%/0%
Ferguson, Tommi Consultant 1,500,000 1,500,000 2.9%/0%
Frye, Linc None 6,000 6,000 >1%/0%
Gabri, Hassan El None 2,000 2,000 >1%/0%
Gewin, Brian M. None 2,000 2,000 >1%/0%
Gewin, William E. None 4,000 4,000 >1%/0%
Gewin, Barry Consultant 1,500,000 1,500,000 2.9%/0%
Hagen, Cathy Edgar Filer 2,000 2,000 >1%/0%
Hall, Raymond None 4,000 4,000 >1%/0%
Law, Gary C. None 20,000 20,000 >1%/0%
Hamilton, Lehrer &
Dargan, P.A. Attorney 200,000 200,000 >1%/0%
Johnson, Jay F. None 2,000 2,000 >1%/0%
Jones, Alice None 2,000 2,000 >1%/0%
Kinnison, Clark B. None 2,000 2,000 >1%/0%
Lincoln, David None 6,000 6,000 >1%/0%
Malinowski, Cara Jo None 2,000 2,000 >1%/0%
Malits, Vivian L. None 1,000 1,000 >1%/0%
Martincic, Sharon J. None 10,000 10,000 >1%/0%
Martincic, Thomas None 40,000 40,000 >1%/0%
Miller, Geoffrey M. None 2,000 2,000 >1%/0%
10
One Stop Financial
Group, Inc. *** None 2,000 2,000 >1%/0%
Price, Rita S. None 20,000 20,000 >1%/0%
Prugh, Joseph L. Director 8,006,000 6,000 15.55%/15.53%
Siceloff, Edward G. President 40,003,000 3,000 77.75%/77.75%
Siceloff, Hubert P.* Relative to
President 1,000 1,000 >1%/0%
Siceloff, Hubert Relative to
P. Jr.** President 1,000 1,000 >1%/0%
Squyres, Shannon None 10,000 10,000 >1%/0%
Steele, Jan R. None 2,000 2,000 >1%/0%
Steil, Kevin Website
Designer 2,000 2,000 >1%/0%
Walker, Clinton F. None 4,000 4,000 >1%/0%
Walston, Norma Jean None 4,000 4,000 >1%/0%
White, Debra M. None 8,000 8,000 >1%/0%
Wood, David A. None 8,000 8,000 >1%/0%
Xilas, James G. None 5,000 5,000 >1%/0%
Zaffaroni, Phyllis None 2,000 2,000 >1%/0%
Zafran, Nathan None 20,000 20,000 >1%/0%
TOTAL 51,487,400 3,487,400
- -----------------------------------------------------------------------------
*Hubert P. Siceloff is our President's father who does not live in the same
household as our President.
**Hubert P. Siceloff Jr. is our President's brother who does not live in the
same household as our President.
***Kenneth Easton is the sole officer, director and shareholder of One Stop
Financial Group, Inc.
We intend to seek qualification for sale of the securities in those states where
the securities will be offered. That qualification is necessary to resell the
securities in the public market. The securities can only be offered if they are
qualified for sale or are exempt from qualification in the states in which the
selling shareholders or proposed purchasers reside. There is no assurance that
the states in which we seek qualification will approve of the security resales.
ITEM 8. PLAN OF DISTRIBUTION
Our selling shareholders are offering 3,487,400 shares of our common stock. We
will not receive proceeds from the sale of shares by the selling shareholders.
We are unaware of any selling shareholders who sold any of the 3,487,400
shares of our common stock which we registered on our SB-2 Registration
Statement.
The securities offered by this prospectus will be sold by the selling
shareholders or by those to whom such shares are transferred. We will file
post-effective amendments to this Registration Statement to identify transferees
to whom the selling shareholders transfer their securities. We are not aware of
any underwriting arrangements that have been entered into by the selling
shareholders. The distribution of the securities by the selling shareholders
may be affected in one or more transactions that may take place in the
over-the-counter market, including broker's transactions, privately negotiated
transactions or through sales to one or more dealers acting as principals in the
resale of these securities.
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The selling shareholders and any of their pledges, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are then traded or in private transactions. Our Common Shares are quoted
on the Over-the-Counter Bulletin Board under the symbol ("WHAI"). Selling
shareholders may use any one or more of the following methods to sell their
shares:
o Ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o Block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
of shares as principal to facilitate the transaction;
o Purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o An exchange distribution in accordance with the rules of the
applicable exchange;
o Privately negotiated transactions;
o A combination of any such methods of sale; and
o Any other method permitted pursuant to applicable law.
Any of the selling shareholders, acting alone or in concert with one another,
may be considered statutory underwriters under the Securities Act of 1933 if
they are directly or indirectly conducting an illegal distribution of the
securities on behalf of our corporation. For instance, an illegal distribution
may occur if any of the selling shareholders were to provide us with cash
proceeds from their sales of the securities. If any of the selling shareholders
are determined to be underwriters, they may be liable for securities violations
in connection with any material misrepresentations or omissions made in this
prospectus.
We intend to seek qualification for sale of the securities in those states where
the securities will be offered. That qualification is necessary to resell the
securities in the public market. The securities may only be resold if the
securities are qualified for sale or are exempt from qualification in the states
in which the selling shareholders or proposed purchasers reside. There is no
assurance that the states in which we seek qualification will approve of the
security resales.
In addition, the selling shareholders and any brokers and dealers through whom
sales of the securities are made may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, and the commissions or discounts and
other compensation paid to such persons may be regarded as underwriters'
compensation.
The selling shareholders may pledge all or a portion of their securities as
collateral for margin accounts or in loan transactions, and the securities may
be resold pursuant to the terms of such pledges, accounts or loan transactions.
Upon default by such selling shareholders, the pledgee in such loan transaction
would have the same rights of sale as the selling shareholders under this
prospectus. The selling shareholders may also enter into exchange traded listed
option transactions, which require the delivery of the securities listed under
this prospectus. The selling shareholders may also transfer securities owned in
other ways not involving market makers or established trading markets, including
directly by gift, distribution, or other transfer without consideration, and
upon any such transfer the transferee would have the same rights of sale as such
selling shareholders under this prospectus.
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In addition to the above, each of the selling shareholders and any other person
participating in a distribution will be affected by the applicable provisions of
the Securities Exchange Act of 1934, including, without limitation, Regulation
M, which may limit the timing of purchases and sales of any of the securities by
the selling shareholders or any such other person.
There can be no assurances that the selling shareholders will sell any or all of
the securities. In order to comply with state securities laws, if applicable,
the securities will be sold in jurisdictions only through registered or licensed
brokers or dealers. In various states, the securities may not be sold unless
these securities have been registered or qualified for sale in such state or an
exemption from registration or qualification is available and is complied with.
Under applicable rules and regulations of the Securities Exchange Act of 1934,
as amended, any person engaged in a distribution of the securities may not
simultaneously engage in market-making activities in these securities for a
period of one (1) or five (5) business days prior to the commencement of such
distribution.
All of the foregoing may affect the marketability of the securities. Pursuant to
the various agreements we have with the selling shareholders, we will pay all
the fees and expenses incident to the registration of the securities, other than
the selling shareholders' pro rata share of underwriting discounts and
commissions, if any, which is to be paid by the selling shareholders.
Should any substantial change occur regarding the status or other matters
concerning the selling shareholders, we will file a Rule 424(b) prospectus
disclosing such matters.
ITEM 9. LEGAL PROCEEDINGS
We are not aware of any pending or threatened legal proceedings in which we are
involved.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
DIRECTORS AND EXECUTIVE OFFICERS
Our executive officers are elected annually by our Board of Directors. A
majority vote of the directors who are in office is required to fill vacancies
on the Board. Each director shall be elected for the term of one (1) year and
until his successor is elected and qualified, or until his earlier resignation
or removal. There are no family relationships between any of the directors and
executive officers. Our directors and executive officers are as follows:
Name Age Position Term
Edward G. Siceloff 49 President/Chief Executive February 28, 2003
Officer/Chairman of the Board
Joseph L. Prugh 48 Director February 28, 2003
The directors named above will serve until the next annual meeting of our
shareholders which is held within sixty (60) days of our fiscal year end, or
until a successor is elected and accepted the position. Directors are elected
for one (1) year terms.
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Edward G. Siceloff has been our President, Chief Executive Officer and Chairman
of the Board since our inception of February 13, 2002. From October 1996 to
present, Mr. Siceloff has been employed as a bottle maker at Glenshaw Glass, a
glass manufacturing facility located in Glenshaw, Pennsylvania. Until we were
incorporated, Mr. Siceloff was employed full-time at Glenshaw Glass; however,
since that time he works part-time at Glenshaw Glass. Mr. Siceloff devotes
approximately 20 hours a week to our business. From September 1971 to June 1975,
Mr. Siceloff attended Geneva College located in Beaver Falls, Pennsylvania where
he majored in Bible and Philosophy.
Joseph L. Prugh has been a Director since February 28, 2002. We do not employ
Mr. Prugh on a part-time or full-time basis. In addition to fulfilling his
responsibilities as one of our directors, Mr. Prugh provides marketing advice to
our President on an as needed basis. From January 2001 to present, Mr. Prugh has
been developing JC Gifts International, a sole proprietorship retail gift and
miscellaneous merchandise store which operates from Mr. Prugh's home in
Stafford, Virginia and at flea markets in the Virginia area. From November 1996
to December 2000, Mr. Prugh was the President of CINJOS, Inc., a business
technical consulting firm located in Stafford, Virginia. At CINJOS, Inc. Mr.
Prugh provided consulting in the area of computer hardware and software design,
installation and enhancement to government agencies, including the Federal
Deposit Insurance Corporation, Resolution Trust Corporation, the Commonwealth of
Virginia, and private firms. In May 1975, Mr. Prugh received a Bachelor of Arts
Degree in Social Relations and Economics from Carnegie Mellon University located
in Pittsburg, Pennsylvania. Mr. Prugh has twenty-two (22) years of work
experience in the area of technical and management information systems and
developing financial applications.
SIGNIFICANT EMPLOYEES
Other than the aforementioned, we have no other employees.
FAMILY RELATIONSHIPS
There are no family relationships among our officers, directors, or persons
nominated for such positions.
LEGAL PROCEEDINGS
None of our officers, directors, or persons nominated for such position,
significant employees, or promoters, including Barry Gewin and Tommi Ferguson,
have been involved in legal proceedings that would be material to an evaluation
of their ability or integrity, including:
o involvement in any bankruptcy;
o involvement in any conviction in a criminal proceeding;
o being subject to a pending criminal proceeding;
o being subject to any order or judgment, decree permanently or
temporarily enjoining, barring, suspending or otherwise limiting
their involvement in any type of business, securities or banking
activities; and being found by a court of competent jurisdiction (in
a civil action), the Commission or the Commodity Futures Trading
Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended,
or vacated.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth the ownership, as of the date of this
Registration Statement, of our common stock (a) by each person known by us to be
the beneficial owner of more than five percent (5%) of our outstanding common
stock, and (b) by each of our directors, by all executive officers and our
directors as a group. There are no beneficial owners of more than five percent
(5%) of our outstanding common stock other than our officers and directors.
To the best of our knowledge, all persons named have sole voting and investment
power with respect to such shares, except as otherwise noted. There are not any
pending or anticipated arrangements that may cause a change in control of our
company.
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Security Ownership of Management:
Title
of Class Name & Address Amount Nature Percent
Common Edward G. Siceloff 40,003,000(1) Direct 77.76%
155 Lime Kiln Road
Darlington, Pennsylvania 16115
Common Joseph L. Prugh 8,006,000(1) Direct 15.55%
12304 Beaver Lodge Road
Stafford, Virginia 22554
Total 48,009,000(1) 93.24%
(1) Taking into account the two (2) share for one (1) share forward stock
split of our common stock effective October 7, 2002.
ITEM 12. DESCRIPTION OF SECURITIES
The following description is a summary of the material terms of the provisions
of our Articles of Incorporation and Bylaws and is qualified in its entirety.
The Articles of Incorporation and Bylaws have been filed as exhibits to the
Registration Statement of which this prospectus is a part.
COMMON STOCK
GENERAL:
We are authorized to issue 200,000,000 shares of common stock with a par value
of $.0001 per share. Effective October 7, 2002, we enacted a two (2) share for
one (1) share forward stock split of our common stock, so that each holder of
our common stock on October 7, 2002 received one additional share of our common
stock for each share of common stock held. As of October 23, 2002, taking into
effect the two for one forward stock split effective October 7, 2002, there were
51,487,400 shares of our common stock issued and outstanding held by 46
shareholders of record. All shares of common stock outstanding are validly
issued, fully paid and non-assessable.
We are authorized to issue 100,000,000 shares of preferred stock with a par
value of $.0001 per share. As of the date of this Registration Statement, there
were no preferred shares issued and outstanding.
VOTING RIGHTS:
Each share of our common stock entitles the holder to one (1) vote, either in
person or by proxy, at meetings of shareholders. The shareholders are not
permitted to vote their shares cumulatively. Accordingly, the holders of common
stock holding, in the aggregate, more than fifty percent (50%) of the total
voting rights can elect all of our directors and, in such event, the holders of
the remaining minority shares will not be able to elect any such directors. The
vote of the holders of a majority of the issued and outstanding shares of common
stock entitled to vote thereon is sufficient to authorize, affirm, ratify, or
consent to such act or action, except as otherwise provided by law.
DIVIDEND POLICY:
Holders of common stock are entitled to receive ratably such dividends, if any,
as may be declared by the Board of Directors out of funds legally available. We
have not paid any dividends since our inception and presently anticipate that
all earnings, if any, will be retained for development of our business. Any
future disposition of dividends will be at the discretion of our Board of
Directors and will depend upon, among other things, our future earnings,
operating and financial condition, capital requirements, and other factors.
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MISCELLANEOUS RIGHTS AND PROVISIONS:
Holders of our common stock have no preemptive rights. Upon our liquidation,
dissolution or winding up, the holders of our common stock will be entitled to
share ratably in the net assets legally available for distribution to
shareholders after the payment of all of our debts and other liabilities. All
outstanding shares of our common stock are, and the common stock to be
outstanding upon completion of this offering will be, fully paid and assessable.
There are not any provisions in our Articles of Incorporation or Bylaws that
would prevent or delay change in our control.
ITEM 13. INTEREST OF NAMED EXPERTS AND COUNSEL
Our Financial Statements have been included in this prospectus in reliance upon
Stark Winter Schenkein & Co., LLP, Certified Public Accountants, as experts in
accounting and auditing. Hamilton, Lehrer & Dargan, P.A. has rendered legal
services and assisted in the preparation of this Form SB-2 Registration
Statement. Members of the firm own 200,000 shares of our common stock.
ITEM 14. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
LIABILITIES
Our Bylaws, subject to the provisions of Florida Corporation Law, contain
provisions which allow us to indemnify any person against liabilities and other
expenses incurred as the result of defending or administering any pending or
anticipated legal issue in connection with service to us if it is determined
that person acted in good faith and in a manner which he reasonably believed was
in the best interest of the corporation. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to our
directors, officers and controlling persons, 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 of 1933 and is,
therefore, unenforceable.
ITEM 15. ORGANIZATION WITHIN LAST FIVE YEARS
All share amounts listed below include shares of our common stock issued
pursuant to the Company's two (2) share for one (1) share forward stock split
effective October 7, 2002.
On February 1, 2002, our President, Ed Siceloff, paid $16,200 for legal services
rendered to us and $3,800 for our website development. These funds were donated
by our President. We have no obligation to repay these funds and our President
does not intend to seek repayment of these funds. On March 21, 2002, our
President, Ed Siceloff, paid $14,000 for legal services rendered to us. These
funds were donated by our President. We have no obligation to repay these funds
and our President does not intend to seek repayment of these funds. Our
President Ed Siceloff received no consideration in exchange for the funds he
donated to us.
On February 14, 2002, we issued 40,000,000 (post October 7, 2002, two (2) share for
one (1) share forward stock split) shares of our common stock to our President,
Edward G. Siceloff, for services rendered in our corporate formation.
On February 14, we issued 8,000,000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to one of our
directors, Joseph L. Prugh, for services rendered in our corporate formation.
On March 11, 2002, we sold 6000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Joseph L. Prugh at a
price of $.05 per share or $300.
On March 24, 2002, we sold 3000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Edward G. Siceloff at a
price of $.05 per share or $150.
Other than the above transactions, we have not entered into any material
transactions with any director, executive officer, and nominee for director,
beneficial owner of five percent (5%) or more of our common stock, or family
members of such persons. We are not a subsidiary of any company.
Transactions with Promotors
On March 5, 2002, we entered into an agreement with Barry Gewin, our promoter,
to provide us with the following consulting services:
o Assistance with suppliers;
o Marketing of our products;
o Preparation of information regarding our business;
o Assistance in locating and hiring management and sales personnel;
and
o General assistance in the development of our website content.
Our agreement with Barry Gewin is for a term of one year and terminates on March
5, 2003. In exchange for the services rendered to us by Barry Gewin, we issued
Barry Gewin 1,500,000 (post October 7, 2002, two (2) share for one (1) share
forward stock split) shares of our common stock which we valued at $75,000.
On March 5, 2002, we entered into an agreement with Tommi Ferguson, our
promoter, to provide us with the following consulting services:
o Locating web site development personnel;
o Development of an incentive program for our customers;
o Advertising of our products; and
o Expansion of our product lines.
Our agreement with Tommi Ferguson is for a term of one year and terminates on
March 5, 2003. In exchange for the services rendered to us by Tommi Ferguson, we
issued Tommi Ferguson 1,500,000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock which we valued at
$75,000.
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ITEM 16. DESCRIPTION OF BUSINESS
BUSINESS DEVELOPMENT
We were incorporated in the State of Florida on February 13, 2002 to sell
vitamins, minerals, herbs, spices, homeopathic, and aromatherapy products on the
Internet. Effective October 7, 2002, we enacted a two (2) share for one (1)
share forward stock split of our common stock so that each holder of our common
stock on October 7, 2002, received an additional share of our common stock for
each share of common stock that they held. We are a development stage
company with no revenues. Since our formation, we have devoted our efforts to:
o Formulating our business plan;
o Designing and creating our website;
o Enhancing our website;
o Locating suppliers to furnish us with products; and
o Establishing agreements with suppliers.
Our website became operational on March 25, 2002. As of October 23, 2002, we
had no sales of the products offered on our website.
We have never been the subject of any bankruptcy or receivership action. We have
had no material reclassification, merger, consolidation, or purchase or sale of
a significant amount of assets outside the ordinary course of business.
We have no plans to seek a business combination with another entity in the near
future.
PRINCIPAL PRODUCTS
Our website is located at www.worldhealthalternatives.com. On our site we offer
over 1,500 products. Currently, we offer vitamins, minerals, herbs, spices,
homeopathic, and aromatherapy products on the Internet. These products are
manufactured, supplied and distributed by third parties.
Some of the following products are available on our website.
Vitamins
Vitamin C
Individual B vitamins
B complexes
Folic Acid
Multivitamins
Pantothenic Acid
Vitamin A
Vitamin E
Beta-Carotene
Bioflavanoids
Pynogenols
Minerals
Calcium
Chromium
Copper
Iron
Magnesium
Manganese
Potassium
Selenium
Sulphur
Various trace minerals
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Herbs
Alfalfa
Astragalus
Fennel
Feverfew
Garlic
Ginseng
Gingko Biloba
Kava Kava
Nettles
Peppermint
Spearmint
St John's Wort
Tarragon
Tansy
Kitchen Spices
Anise Seed
Black Peppers
Cardomom Seed
Caraway
Fennel Seed
Garlic
Horehound
Mace
Nutmeg
Onion Flakes
Rosemary
Sage
Tarragon
Aromatherapy
Camphor Oil
Cinnamon Oil
Jasmine Oil
Lavender Oil
Peppermint Oil
Rosemary Oil
Spearmint Oil
WEBSITE OPERATIONS
We used the services of Kevin Steil doing business as K & L Cyber Solutions to
assist us in developing our initial website. We had a verbal agreement with
Kevin Steil to assist us with our website development for a period of thirty
days beginning February 14, 2002 and ending March 14, 2002. We paid Kevin Steil
$4,300 and 1,000 shares of common stock for these services. We have no
affiliation with Kevin Steil or K & L Cybersolutions. In addition, we have no
other agreement with Kevin Steil or K & L Cybersolutions to provide any further
services.
Our website currently has the following user functions:
Searchable and Browsable Product Catalog - Our product catalog is organized into
various product categories. Within each category a user can search for the
product that he or she wishes to purchase. Currently we have the following
product categories in our catalog:
o Vitamins
o Minerals
o Herbs
o Kitchen Spices
o Aromatherapy
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Shopping Cart - Purchasers can securely purchase our products by providing the
product selections which will be recorded in the shopping cart. The shopping
cart will total product purchases and shipping charges. Products may be
purchased by Master Card and Visa credit card.
Member Services - Individuals wishing to purchase products on our website must
first log on to the website and create a customer account. Once logged in, he or
she can save their address, credit card information, and any orders they place.
By saving this information the person does not have to retype their address and
credit card information the next time the site is visited and purchases are
made. More than one address is capable of being saved per individual, as well as
more than one credit card account. Once a person has saved his or her previous
order, the next time he or she visits the site he or she has the ability to see
what was previously ordered and may reorder some or all of the products
previously purchased without going through the shopping cart process.
SUPPLIER ARRANGEMENTS and AGREEMENTS
We plan to purchase products at wholesale prices on an "as needed" basis from
Con Yeager Spice Company and Frontier Herb Co-Op. Con Yeager Spice Company sells
the kitchen spices and Frontier Herb Co-Op sells the herbs offered on our site.
We plan to obtain vitamins, minerals, herbs, spices, homeopathic, and
aromatherapy products from Global Health Trax, Inc. On October 10, 2001, prior
to our incorporation, our president entered into an agreement with Global Health
Trax, Inc. This agreement was transferred to us on April 25, 2002. On April 25,
2002, we became an Authorized Independent Representative for the sale of Global
Health Trax products and have a nonexclusive right to purchase Global Health
Trax products at wholesale prices and resell those products to the public. The
term of the agreement is one (1) year.
This agreement further provides that: (a) we must pay for all products when we
place an order; (b) we may pay by credit card or automatic bank draft; and (c)
we are required to renew our agreement annually and pay the annual membership
fee which may be deducted automatically when due using our payment information
on file with Global Health Trax. All Global Health Trax products are warranted
to be free from defects in material and workmanship under normal use for a
period for twelve (12) months from the date of delivery.
SHIPPING TO OUR CUSTOMERS
All shipping of products to our customers will be done by our suppliers which
will use United Parcel Service or Federal Express. Choice of shipment will be
chosen by our customer through our website shopping cart. Shipping costs will be
assumed by the customer.
INVENTORY
We will not maintain an inventory of products. Products will be ordered as
needed from third parties.
COMPETITIVE BUSINESS CONDITIONS AND OUR PLACE IN THE MARKET
The vitamins, minerals, herbs, spices, homeopathic, and aromatherapy product
markets are increasingly competitive with thousands of competitors on the
Internet alone. In addition, each of these product areas is highly fragmented
and the barriers to market entry are low. Because of the low cost of
establishing a website and variety of market available software, new competitors
can easily establish new websites similar to ours. Accordingly, we expect
competition to increase in the future. Our competitors also cover a wide
spectrum of retail establishments, including:
o Catalog/Mail Order;
o Food Stores and Supermarkets;
o Drug Stores;
o Mass merchandisers;
o Network marketing companies such as Amway and Shaklee;
o Health and natural specialty stores such as General Nutrition Center
and Vitamin World; and
o Wholesalers that sell their products directly such as Rexall Sundown.
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Some of our biggest direct Internet competitors are Mothernature.com,
GreenTree.com, Allhealth.com, Healthscout.com, and Healthandage.com. These
companies have substantially longer operating histories, greater name
recognition, larger customer bases and greater financial and technical resources
than us. Because we are financially and operationally smaller than our
competitors, we will encounter difficulties in capturing market share. These
companies are able to conduct extensive marketing campaigns and create more
attractive pricing of their target markets than we are able to. In addition, we
do not have an established brand name or reputation while our competitors have
significantly greater brand recognition, customer bases, operating histories,
and financial and other resources.
In addition to our Internet-based retailer competition, we will compete against
large retailers which generate hundreds of millions of dollars from the sale of
our type products, including General Nutrition, Wal-Mart, Target Stores, and
Walgreens. Our competition also includes membership companies such as Shaklee
and Amway that similarly generate revenues of hundreds of millions of dollars.
To meet these competitive conditions, we plan to:
o Conduct research into our competitors prices, especially our larger
more established retail and Internet competitors;
o Obtain low cost advertising through local publications and the
Internet;
o Offer discounts to customers if they order our products on a monthly
basis for an entire year;
o Promote certain products by offering a free bottle of vitamin or
herbal products with the purchase of each identical product;
o Conduct reciprocal marketing campaigns in which we advertise another
website's products or services in exchange for providing advertising
to us on their website; and
o Seek to obtain favorable supplier arrangements to reduce our cost of
sales.
There can be no assurance that we will be able to compete in the sale of our
products, which could have a negative impact upon our business.
CUSTOMER DEPENDENCY
We currently have no customers. We do not expect our business to be dependent on
one or a few customers.
INTELLECTUAL PROPERTY
We have not applied for trademark protection for our name with the United States
Patent and Trademark Office. There can be no assurance that our use of the name
World Health Alternatives, Inc. will not violate the proprietary rights of
others. If our use of the World Health Alternatives name is challenged, our use
of the name could be prohibited. Our competitors may adopt product or service
names similar to ours, which would impede our ability to build brand identity
and otherwise negatively affect our brand name reputation. Should we be unable
to protect our trade names, our business, results of operations, and financial
condition will be negatively affected.
GOVERNMENTAL APPROVAL REQUIREMENTS
Although we are not aware of the need for any government approval of our
principal products, we may be subject to such approvals in the future.
EFFECT OF EXISTING GOVERNMENTAL REGULATIONS
The product suppliers and manufacturers of our products, to the extent that they
are involved in the manufacturing, processing, formulating, packaging, labeling
and advertising of the products, may be subject to regulations by the Federal
Drug Administration, Federal Trade Commission, United States Department of
Agriculture, and Environmental Protection Agency. The Federal Drug
Administration administers the Federal, Food, and Cosmetic Act and may initiate
enforcement actions against companies that sell, supply, or manufacture
unapproved, adulterated, or misbranded products. The Federal Drug Administration
may bring injunctive action to terminate the sale of such products, impose civil
penalties, criminal prosecutions, product seizures, and voluntary recalls.
Should we or our suppliers become subject to any such orders or actions, our
brand name reputation and that of our suppliers and products will be adversely
affected and our business would be negatively affected.
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We are not aware of any governmental regulations that will affect the Internet
aspects of our business. However, due to increasing usage of the Internet, a
number of laws and regulations may be adopted relating to the Internet covering
user privacy, pricing, and characteristics and quality of products and services.
Furthermore, the growth and development of Internet commerce may prompt more
stringent consumer protection laws imposing additional burdens on those
companies conducting business over the Internet. The adoption of any additional
laws or regulations may decrease the growth of the Internet, which, in turn,
could decrease the demand for Internet services and increase the cost of doing
business on the Internet. These factors may have an adverse affect on our
business, results of operations, and financial condition.
Moreover, the interpretation of sales tax, libel, and personal privacy laws
applied to Internet commerce is uncertain and unresolved. We may be required to
qualify to do business as a foreign corporation in each such state or foreign
country. Our failure to qualify as a foreign corporation in a jurisdiction where
we are required to do so could subject us to taxes and penalties. Any such
existing or new legislation or regulation, including state sales tax, or the
application of laws or regulations from jurisdictions whose laws do not
currently apply to our business, could have a material adverse affect on our
business, results of operations and financial condition.
RESEARCH AND DEVELOPMENT
During the period from our inception to the date of this Registration Statement,
we have not spent any funds on research. Our President paid $4300 to Kevin
Steil, doing business as K&L Cyber Solutions, to assist us in developing our
initial website. These funds were donated to us for this purpose and there are
no agreements or arrangements obligating us to repay $4300 to our President, nor
does our President intend to seek repayment or other compensation for donating
these funds.
COSTS ASSOCIATED WITH ENVIRONMENTAL COMPLIANCE
We currently have no costs associated with compliance with environmental
regulations. We do not anticipate any costs associated with environmental
compliance because we are not involved in the manufacturing of our products.
Moreover, the delivery and distribution of our products will not involve
substantial discharge of environmental pollutants. However, there can be no
assurance that we will not incur such costs in the future.
REVENUE SOURCES
We estimate that all of our revenues will be from the sale of our products. We
will sell our products at prices above our original cost of purchase. Prices for
some of our products will be lower than our competitors, while others will be
higher. We expect our product prices to be lower than network marketing
companies, but higher compared with retail establishments that directly
manufacture their own products, such as Vitamin World. Based on our price
research of products offered by larger well known nationwide establishments,
including our Internet competitors, we will attempt to offer lower prices than
these competitors.
TARGET MARKETS
The target markets for sale of our products primarily consist of Internet users
between the ages of 18-80 years old, who are based in the United States and are
health conscious.
EMPLOYEES
We currently have only one (1) employee, our President, Edward G. Siceloff, who
now spends only 20 hours per week to implement our plan of operations. Our other
Director, Joseph L. Prugh, is neither employed on a part-time or full-time
basis. We have no collective bargaining agreements or employment agreements.
Over the next twelve (12) months, we do not plan to add any additional
employees.
21
REPORTS AND OTHER INFORMATION TO SHAREHOLDERS
We are subject to the information and reporting requirements of the Securities
Exchange Act of 1934 and we are required to file periodic reports and other
information with the Securities and Exchange Commission. We have filed a Form
SB-2 registration statement with the Securities and Exchange Commission. The
following documents may be inspected, without charge, and copies may be obtained
at prescribed rates, at the SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549: (a) this registration statement and exhibits
thereto; and (b) periodic reports and other information filed with the
Securities and Exchange Commission. The public may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The registration statement and other information filed with the SEC are also
available at the web site maintained by the SEC at http://www.sec.gov.
ITEM 17. PLAN OF OPERATIONS
The discussion contained in this prospectus contains "forward-looking
statements" that involve risk and uncertainties. These statements may be
identified by the use of terminology such as "believes," "expects," "may,"
"will," "should," or "anticipates," or expressing this terminology negatively or
similar expressions or by discussions of strategy. The cautionary statements
made in this prospectus should be read as being applicable to all related
forward-looking statements wherever they appear in this prospectus. Our actual
results could differ materially from those discussed in this prospectus.
Important factors that could cause or contribute to such differences include
those discussed under the caption entitled "Risk Factors," as well as those
discussed elsewhere in this prospectus.
We had offering costs of $30,524.06 which consist of legal services, edgarizing,
and accounting fees which were donated by our president. These costs have
already been paid. We do not have an agreement or arrangement for the repayment
of these funds. Our President will not seek repayment of these funds.
We cannot continue to satisfy our current cash requirements for a period of
twelve (12) months through our existing capital. We anticipate total estimated
capital expenditures of approximately $6,700 for our plan of operations, in the
following areas:
o Entering into agreements with suppliers;
o Updating design, graphics and function of website;
o Establishing database of products on website;
o Advertising;
o Offering incentives to customers to establish repeat business;
o Establishing a database of articles regarding products offered on
our website;
o Conducting viral marketing; and
o Introducing our homeopathic lines.
Our current cash of $81 will not satisfy our cash requirements pertaining to any
aspect of our plan of operations which requires cash expenditures, as
specifically noted below.
22
If our cash and/or revenues are insufficient to conduct our operations, our
President Edward G. Siceloff, plans to loan us funds through non-interest
bearing loans; however, we have no agreement with our President to do so and our
President is under no obligation to do so. Accordingly, there are no assurances
that we will receive loans from our President. As of August 31, 2002, we had
only $81 of cash assets, however, we will need an additional $6,619 ($6,700 -
$81 = $6,619) to accomplish the following operational goals at a total cost
of $6,700:
o $2,000 - Enter into agreements with additional suppliers for
products;
o $3,500 - Update the design, graphics, and functional aspects of our
website (other categories included as part of this estimated cost
include "Establish database of our products" and "Establish database
of articles"); and
o $1,200 - Advertising.
Accordingly, we will be unable to fund our expenses through our existing assets
or cash. If our President is unable or unwilling to make loans to us necessary
to implement our plan of operations, we will need additional financing through
traditional bank financing or a debt or equity offering; however, because we are
a development stage company with no operating history and a poor financial
condition, we may be unsuccessful in obtaining such financing or the amount of
the financing may be minimal and therefore inadequate to implement our plan of
operations. In addition, if we only have nominal funds by which to conduct our
operations, we may have to curtail advertising or be unable to conduct any
advertising, both of which will negatively impact development of our brand name
and reputation. We have no alternative plan of operations. In the event that we
do not receive financing, our financing is inadequate, or if we do not
adequately implement an alternative plan of operations that enables us to
conduct operations without having received adequate financing, we may have to
liquidate our business and undertake any or all of the following actions:
o Sell or dispose of our assets, if any;
o Pay our liabilities in order of priority, if we have available cash
to pay such liabilities;
o If any cash remains after we satisfy amounts due to our creditors,
distribute any remaining cash to our shareholders in an amount equal
to the net market value of our net assets;
o File a Certificate of Dissolution with the State of Florida to
dissolve our corporation and close our business;
o Make the appropriate filings with the Securities and Exchange
Commission so that we will no longer be required to file periodic
and other required reports with the Securities and Exchange
Commission, if, in fact, we are a reporting company at that time;
and
o Make the appropriate filings with the National Association of
Security Dealers to affect a delisting of our common stock, if, in
fact, our common stock is trading on the Over-the-Counter Bulletin
Board at that time.
Based upon our current assets, however, we will not have the ability to
distribute any cash to our shareholders.
23
If we have any liabilities that we are unable to satisfy and we qualify for
protection under the U.S. Bankruptcy Code, we may voluntarily file for
reorganization under Chapter 11 or liquidation under Chapter 7. Our creditors
may also file a Chapter 7 or Chapter 11 bankruptcy action against us. If our
creditors or we file for Chapter 7 or Chapter 11 bankruptcy, our creditors will
take priority over our shareholders. If we fail to file for bankruptcy under
Chapter 7 or Chapter 11 and we have creditors, such creditors may institute
proceedings against us seeking forfeiture of our assets, if any.
We do not know and cannot determine which, if any, of these actions we will be
forced to take. If any of these foregoing events occur, you could lose your
entire investment in our shares.
OUR PLAN OF OPERATIONS FROM OUR INCEPTION TO DATE
We were incorporated on February 13, 2002. Since our inception to August 31,
2002, we have accomplished the following in our plan of operations:
Raised Capital
We raised $14,070 for our operations through the sale of a private placement of
our securities.
Established Website
On March 25, 2002, our website, www.worldhealthalternatives.com, became
operational.
Agreement with Ecoquest
April 8, 2002 - We entered into an agreement with EcoQuest International which
allows us to become an authorized dealer of EcoQuest's home environmental
products.
Authorized Independent Representatives for Global Health Trax
April 25, 2002 - We became an Authorized Independent Representative for the
sale of Global Health Trax products.
Research
April 2002 through August 2002 - Our president, Edward Siceloff, has been
researching organizations that conduct research and publish articles pertaining
to vitamins, minerals and herbs and their effects. We intend to publish such
articles on our website; however, to date we have not done so. There is no cost
associated with this research; however, there will be costs if we enter into
agreements or arrangements with such research organizations. We have not yet
determined the specific amount or nature of such costs. In addition, our
president conducted research on price competition pertaining to the type of
products we sell to ensure that the products we offer are competitively priced.
There is no cost associated with this research.
OUR FUTURE PLAN OF OPERATIONS
We will attempt to accomplish the following aspects of our plan of operations
over the next twelve (12) months. As indicated below, certain aspects of our
plan of operations have been delayed due to our lack of financial resources.
24
Enter into Agreements with Suppliers for Products
Throughout our plan of operations, in order to select additional product
suppliers, our president will conduct Internet research and review various
nutritional wholesaler publications. Based on this research, our president will
contact various companies and make supplier selection based upon:
o cost;
o delivery requirements; and
o product selection.
Our president will also purchase wholesale catalogues and discuss with
company representatives pertinent factors such as product availability, quality,
selection, and delivery.
Update Design, Graphics and Functional Aspects of Website
We plan to update the design, graphics and functional aspects of our website on
an ongoing continuous basis. To accomplish this objective, our president plans to hire
website consultants. We will select website consultants based on:
o cost and available funds to pay for consultants;
o determining the quality of past website projects; and
o comparing such projects among website consultants.
We estimate that a $3,500 cost will be affiliated with hiring website
consultants. We do not anticipate completing this aspect of our plan of
operations until January 2003.
Advertise our Website
Throughout our plan of operations, we plan to advertise; however, due to our
limited cash resources, we plan to seek low cost advertising of $50 to $150 per
month through local publications such as local newspapers. To date, we have
not begun to advertise in any publications. We plan to begin advertising in
March 2003.
Incentives to Our Existing Customers
Originally we planned to commence this aspect of our plan of operations in
June 2002; however, this aspect of our plan of operations has been delayed
because we have not yet generated revenues. We now anticipate that beginning in
March 2003 if we have revenues at that time, we will provide the following
incentives to our customers:
o Customers that obligate themselves to order a monthly supply of a
product on an annual basis will receive discounts of up to ten
percent (10%); and
o Promote some of our products by offering a free bottle of
vitamins or herbs with the purchase of one such identical product.
25
Because we will provide free bottles of vitamins or herbs, our costs will
increase; however, at the present time the amount of that increased cost is
indeterminable. However, we plan to attempt to obtain samples of small
quantities of vitamins from suppliers at no charge or at a minimal cost to offer
our customers. At this time, we are unaware if we will be able to obtain these
samples.
Establish Database of Specific Product Ingredients, Benefits, and Harmful Effects
Beginning February 2003 and throughout our plan of operations, we plan to
establish and update a database of products and information about products on
our website, including information pertaining to: (a) a listing of the
ingredients of our products; (b) the potential health benefits of our products;
and (c) the potential harmful effects of our products. The cost affiliated with
this aspect of our plan of operations is related to the $3,500 cost for hiring
website consultants.
Establish Database of General Articles of Interest
Originally we planned to commence with this aspect of our plan of operations in
June 2002. This aspect of our plan of operations has been delayed because our
president has been unable to complete a sufficient database of articles, and our
president's search for these articles has been more time consuming than we
originally anticipated. We now anticipate that an initial database of articles
about our products will not be established on our website until February or
March of 2003. Thereafter, we anticipate the database will include general
subjects pertaining to:
o Vitamins;
o Minerals;
o Herbs;
o Spices;
o Homeopathy; and
o Aromatherapy.
Our president will conduct Internet searches for articles written on the
products we offer, as well as the above-mentioned general subject areas. Our
president will also seek permission from product suppliers that have written
articles on the products we offer to post such articles on our website at no
cost. The cost affiliated with this aspect of our plan of operations is part of
the expected $3,500 to hire website consultants.
Viral Marketing
Originally we planned to commence with this aspect of our plan of operations in
July 2002; however, this aspect of our plan of operations has been delayed due
to our inability to accomplish other aspects of our plan of operations. We now
anticipate that our president will not attempt to exchange advertising with
other websites until April 2003. Because we plan to pursue equal exchanges of
like advertising services between us and other websites, we do not anticipate
any costs affiliated with this aspect of our plan of operations.
Introduce our Homoeopathic Product Line
Our president will attempt to establish agreements with suppliers of homeopathic
products and to offer such products on our website. Originally, we planned to
commence this aspect of our plan of operations in July 2002. This aspect of our
plan of operations has been delayed until we complete the updating of our
website. We now anticipate these products will not be offered until May 2003. We
do not anticipate any costs affiliated with this aspect of our plan of
operations.
26
ITEM 18. DESCRIPTION OF PROPERTY
We maintain our office at the residence of our President, Edward G. Siceloff. We
do not pay rent or any other form of compensation for the use of this office.
The office comprises approximately 300 square feet. Our office is sufficient for
our operations at this time.
We do not own any property nor do we have any plans to own any property in the
future. We do not intend to renovate, improve, or develop properties. We are not
subject to competitive conditions for property and currently have no property to
insure. We have no policy with respect to investments in real estate or
interests in real estate and no policy with respect to investments in real
estate mortgages. Further, we have no policy with respect to investments in
securities of or interests in persons primarily engaged in real estate
activities.
ITEM 19. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We enacted a two (2) share for one (1) share forward stock split of our common
stock. All share amounts listed below include shares of our common stock issued
pursuant to the Company's two (2) share for one (1) share forward stock split
effective on October 7, 2002.
On February 1, 2002, our President, Ed Siceloff, paid $16,200 for legal services
rendered to us and $3,800 for our website development. These funds were donated
by our President. We have no obligation to repay these funds and our President
does not intend to seek repayment of these funds. On March 21, 2002, our
President, Ed Siceloff, paid $14,000 for legal services rendered to us. These
funds were donated by our President. We have no obligation to repay these funds
and our President does not intend to seek repayment of these funds. Our
President Ed Siceloff received no consideration in exchange for the funds he
donated to us.
On February 14, 2002, we issued 40,000,000 (post October 7, 2002, two (2) share
for one (1) share forward stock split) shares of our common stock to our
President, Edward G. Siceloff, for services rendered in our corporate formation.
On February 14, we issued 8,000,000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to one of our
directors, Joseph L. Prugh, for services rendered in our corporate formation.
On March 11, 2002, we sold 6000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Joseph L. Prugh at a
price of $.05 per share or $300.
On March 24, 2002, we sold 3000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Edward G. Siceloff at a
price of $.05 per share or $150.
27
Other than the above transactions, we have not entered into any material
transactions with any director, executive officer, and nominee for director,
beneficial owner of five percent (5%) or more of our common stock, or family
members of such persons. We are not a subsidiary of any company.
Transactions with Promotors
On March 5, 2002, we entered into an agreement with Barry Gewin, our promoter,
to provide us with the following consulting services:
o Assistance with suppliers;
o Marketing of our products;
o Preparation of information regarding our business;
o Assistance in locating and hiring management and sales personnel;
and
o General assistance in the development of our website content.
Our agreement with Barry Gewin is for a term of one year and terminates on March
5, 2003. In exchange for the services rendered to us by Barry Gewin, we issued
Barry Gewin 1,500,000 (post October 7, 2002, two (2) share for one (1) share
forward stock split) shares of our common stock which we valued at $75,000.
On March 5, 2002, we entered into an agreement with Tommi Ferguson, our
promoter, to provide us with the following consulting services:
o Locating web site development personnel;
o Development of an incentive program for our customers;
o Advertising of our products; and
o Expansion of our product lines.
Our agreement with Tommi Ferguson is for a term of one year and terminates on
March 5, 2003. In exchange for the services rendered to us by Tommi Ferguson, we
issued Tommi Ferguson 1,500,000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock which we valued at
$75,000.
28
ITEM 20. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is no established public trading market for our securities. Management has
not discussed market making with any market maker or broker-dealer. No market
exists for our securities and there is no assurance that a regular trading
market will develop, or if developed will be sustained. A shareholder in all
likelihood, therefore, will not be able to resell his or her securities should
he or she desire to do so when eligible for public resale. Furthermore, it is
unlikely that a lending institution will accept our securities as pledged
collateral for loans unless a regular trading market develops. Currently, we
have no plans, proposals, arrangements, or understandings with any person with
regard to the development of a trading market in any of our securities. Our
common stock is quoted on the Over-the-Counter Bulletin Board under the symbol
("WHAI"). Our stock was approved for quotation on September 26, 2002; however,
to date no shares have been traded in market transactions.
We currently have no shares of preferred stock outstanding.
There are 3,478,400 shares of our common stock held by non-affiliates and
48,009,000 shares of our common stock held by affiliates that Rule 144 of the
Securities Act of 1933 defines as restricted securities. (Taking into account
our two (2) share for one (1) share forward stock split effective on October 7,
2002.)
SHARES ELIGIBLE FOR FUTURE SALE
The 3,478,400 shares being offered by our selling shareholders are freely
tradable without restrictions under the Securities Act of 1933, except for any
shares held by our "affiliates," which will be restricted by the resale
limitations of Rule 144 under the Securities Act of 1933.
In general, under Rule 144 as currently in effect, any of our affiliates and any
person or persons whose sales are aggregated who has beneficially owned his or
her restricted shares for at least one (1) year, may be entitled to sell in the
open market within any three (3) month period a number of shares of common stock
that does not exceed the greater of (i) one percent (1%) of the then outstanding
shares of our common stock, or (ii) the average weekly trading volume in the
common stock during the four calendar weeks preceding such sale. Sales under
Rule 144 are also affected by limitations on manner of sale, notice
requirements, and availability of current public information about us.
Non-affiliates who have held their restricted shares for one year may be
entitled to sell their shares under Rule 144 without regard to any of the above
limitations, provided they have not been affiliates for the three (3) months
preceding such sale.
Further, Rule 144A as currently in effect, in general, permits unlimited resales
of restricted securities of any issuer provided that the purchaser is an
institution that owns and invests on a discretionary basis at least $100 million
in securities or is a registered broker-dealer that owns and invests $10 million
in securities. Rule 144A allows our existing stockholders to sell their shares
of common stock to such institutions and registered broker-dealers without
regard to any volume or other restrictions. Unlike under Rule 144, restricted
securities sold under Rule 144A to non-affiliates do not lose their status as
restricted securities.
29
As a result of the provisions of Rule 144, all of the restricted securities
could be available for sale in a public market, if developed, beginning ninety
(90) days after the date of this prospectus. The availability for sale of
substantial amounts of common stock under Rule 144 could adversely affect
prevailing market prices for our securities.
Options.
We have no shares of our common equity that are subject to outstanding options
to purchase.
Penny Stock Considerations.
Our shares are "penny stocks" as that term is generally defined in the
Securities Exchange Act of 1934 as equity securities with a price of less than
$5.00. Our shares may be subject to rules that impose sales practice and
disclosure requirements on broker-dealers who engage in certain transactions
involving a penny stock.
Under the penny stock regulations, a broker-dealer selling a penny stock to
anyone other than an established customer or "accredited investor" must make a
special suitability determination regarding the purchaser and must receive the
purchaser's written consent to the transaction prior to the sale, unless the
broker-dealer is otherwise exempt. Generally, an individual with a net worth in
excess of $1,000,000 or annual income exceeding $200,000 individually or
$300,000 together with his or her spouse is considered an accredited investor.
In addition, under the penny stock regulations the broker-dealer is required to:
Deliver, prior to any transaction involving a penny stock, a disclosure schedule
prepared by the Securities and Exchange Commission relating to the penny stock
market, unless the broker-dealer or the transaction is otherwise exempt;
Disclose commissions payable to the broker-dealer and its registered
representatives and current bid and offer quotations for the securities;
Send monthly statements disclosing recent price information pertaining to the
penny stock held in a customer's account, the account's value and information
regarding the limited market in penny stocks;
Make a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written agreement to
the transaction, prior to conducting any penny stock transaction in the
customer's account.
Because of these regulations, broker-dealers may encounter difficulties in their
attempt to sell shares of our common stock, which may affect the ability of
selling shareholders or other holders to sell their shares in the secondary
market and have the effect of reducing the level of trading activity in the
secondary market. These additional sales practice and disclosure requirements
could impede the sale of our securities if our securities become publicly
traded. In addition, the liquidity for our securities may be adversely affected,
with a corresponding decrease in the price of our securities. Our shares may
someday be subject to such penny stock rules and our shareholders will, in all
likelihood, find it difficult to sell their securities.
30
Holders.
As of October 23, 2002 we had 46 holders of record of our common stock. We have
one class of common stock outstanding.
Dividends.
We have not declared any cash dividends on our common stock since our inception
and do not anticipate paying such dividends in the foreseeable future. We plan
to retain any future earnings for use in our business. Any decisions as to
future payment of dividends will depend on our earnings and financial position
and such other factors as the Board of Directors deems relevant.
ITEM 21. EXECUTIVE COMPENSATION
The following Executive Compensation Chart highlights the terms of compensation
for our Executives.
Summary Compensation Chart
Annual Compensation Long-Term Compensation     Â
Restricted Stock Options L/TIP All
Name & Position Year Salary ($) Bonus ($) Other ($) Awards ($) ($) Other
Edward G. Siceloff - 2002 0 0 0 40,000,000(1) 0 0 0
President/
Chief Executive
Officer/
Chairman
Edward G. Siceloff - 2003 0 0 0 0 0 0 0
President/
Chief Executive
Officer/
Chairman
Joseph L. Prugh - 2002 0 0 0 8,000,000(1) 0 0 0
Director
Joseph L. Prugh - 2003 0 0 0 0 0 0 0
Director
Because our executive officers and directors both have other employment, they
can work without cash compensation for at least the next twelve (12) months.
(1) Includes shares issued pursuant to our two (2) share for one (1) share
forward stock split effective October 7, 2002.
31
ITEM 22. FINANCIAL STATEMENTS
World Health Alternatives, Inc.
(A Development Stage Company)
32
World Health Alternatives, Inc.
(A Development Stage Company)
Balance Sheet
August 31, 2002
(Unaudited)
Assets
Current assets
Cash $ 81
---------
Other assets:
Web site 8,480
---------
$ 8,561
=========
Liabilities and Stockholders' Equity
Current liabilities
Total current liabilities $ -
---------
Stockholders' equity
Preferred stock, $.0001 par value,
100,000,000 shares authorized -
Common stock, $.0001 par value, 200,000,000
shares authorized, 51,487,400 shares issued
and outstanding 5,149
Additional paid-in capital 212,222
Deferred compensation (75,000)
(Deficit) accumulated during the development stage (133,810)
---------
8,561
---------
$ 8,561
=========
F-1
See the accompanying notes to the financial statements.
World Health Alternatives, Inc.
(A Development Stage Company)
Statements of Operations
Three Months and Six Months Ended August 31, 2002 and
Period From Inception (February 13, 2002) to August 31, 2002
(Unaudited)
Three Months Six Months
Ended Ended Inception to
August 31, 2002 August 31, 2002 August 31, 2002
--------------- --------------- ---------------
Revenue $ -- $ -- $ --
---------- ---------- ----------
Operating Costs and Expenses:
Non cash stock compensation 37,500 75,000 77,410
General and administrative 14,854 40,194 56,400
---------- ---------- ----------
52,354 115,194 133,810
---------- ---------- ----------
Net (loss) $ (52,354) $ (115,194) $ (133,810)
========== ========== ==========
Per Share Information - basic
and fully diluted:
Weighted average common shares
outstanding 51,487,400 51,487,400 50,677,150
========== ========== ==========
(Loss) per share $ (0.00) $ (0.00) $ (0.00)
========== ========== ==========
F-2
See the accompanying notes to the financial statements.
World Health Alternatives, Inc.
(A Development Stage Company)
Statements of Cash Flows
Six Months Ended August 31, 2002 and
Period From Inception (February 13, 2002) to August 31, 2002
(Unaudited)
Six Months Inception
Ended to
August 31, August 31,
2002 2002
----------- -----------
Cash flows from operating activities:
Net cash (used in) operating activities $ (23,924) $ (23,930)
--------- ---------
Cash flows from investing activities:
Net cash (used in) investing activities (5,450) (5,450)
--------- ---------
Cash flows from financing activities:
Net cash provided by financing activities 28,411 29,461
--------- ---------
Increase (decrease) in cash and
cash equivalents (963) 81
Cash and cash equivalents,
beginning of period 1,044 --
--------- ---------
Cash and cash equivalents,
end of period $ 81 $ 81
========= =========
Supplemental cash flow information:
Cash paid for interest $ -- $ --
========= ========
Cash paid for income taxes $ -- $ --
========= ========
F-3
See the accompanying notes to the financial statements.
World Health Alternatives, Inc.
(A Development Stage Company)
Notes to Financial Statements
August 31, 2002
(Unaudited)
(1) Basis Of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
("GAAP") for interim financial information. They do not include all of the
information and footnotes required by GAAP for complete financial statements. In
the opinion of management, all adjustments (consisting only of normal recurring
adjustments) considered necessary for a fair presentation have been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. For further
information, refer to the financial statements of the Company as of February 28,
2002 and the period from inception to February 28, 2002 including notes thereto.
(2) Earnings Per Share
The Company calculates net income (loss) per share as required by SFAS No. 128,
"Earnings per Share." Basic earnings (loss) per share is calculated by dividing
net income (loss) by the weighted average number of common shares outstanding
for the period. Diluted earnings (loss) per share is calculated by dividing net
income (loss) by the weighted average number of common shares and dilutive
common stock equivalents outstanding. During the periods presented common stock
equivalents were not considered as their effect would be anti dilutive.
(3) Stockholders' Equity
During October 2002 the Company effected a 2 for 1 forward stock split. All
share and per share amounts have been restated to reflect this split.
During the period from March 1, 2002 through March 24, 2002 the Company issued
241,000 shares of common stock for cash aggregating $12,050 and collected
receivables for stock issued aggregating $970.
During March 2002 a shareholder directly paid certain obligations of the Company
aggregating $14,000 for legal fees. This amount was contributed to the capital
of the Company.
During the period ended August 31, 2002 a shareholder contributed $15,391 in
cash and $1,500 in services to the capital of the Company.
On March 5, 2002 the Company entered into two one year consulting agreements. As
compensation the consultants received a total of 3,000,000 shares of common
stock valued at the fair market value of the shares issued of $150,000. This
amount will be classified as deferred compensation and charged to operations
over the period in which the services are provided. During the period ended
August 31, 2002 the Company charged $75,000 to operations related to these
services.
(4) Going Concern
The Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business.
The Company has experienced a significant loss from operations as a result of
its investment necessary to achieve its operating plan, which is long-range in
nature. For the period ended August 31, 2002, the Company incurred a net loss of
$115,194 and has no revenue generating operations.
The Company's ability to continue as a going concern is contingent upon its
ability to attain profitable operations and secure financing. In addition, the
Company's ability to continue as a going concern must be considered in light of
the problems, expenses and complications frequently encountered by entrance into
established markets and the competitive environment in which the Company
operates.
The Company is pursuing equity financing for its operations. Failure to secure
such financing or to raise additional capital or borrow additional funds may
result in the Company depleting its available funds and not being able pay its
obligations.
The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.
World Health Alternatives, Inc.
(A Development Stage Company)
REPORT OF INDEPENDENT AUDITORS
Stockholders and Board of Directors
World Health Alternatives, Inc.
We have audited the accompanying balance sheet of World Health Alternatives,
Inc. (A Development Stage Company) as of February 28, 2002, and the related
statements of operations, stockholders' equity and cash flows for the period
from inception (February 13, 2002) to February 28, 2002. 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 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 World Health Alternatives, Inc.
(A Development Stage Company) as of February 28, 2002, and results of its
operations and its cash flows for the period from inception (February 13, 2002)
to February 28, 2002, 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 4 to the
financial statements, the Company has suffered a loss from operations and is in
the development stage. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to this
matter are also discussed in Note 4. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Stark Winter Schenkein & Co., LLP
Denver, Colorado
March 22, 2002, except for Note 5 as to which the date is October 7, 2002
World Health Alternatives, Inc.
(A Development Stage Company)
World Health Alternatives, Inc.
Table of Contents
Page
----
Report of Independent Auditors 1
Balance Sheet 2
Statement of Operations 3
Statement of Stockholders' Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6-9
World Health Alternatives, Inc.
(A Development Stage Company)
Balance Sheet
February 28, 2002
Assets
Current assets
Cash $ 1,044
Receivable for common shares issued 970
--------
Total current assets 2,014
--------
Other assets:
Web site 3,800
--------
$ 5,814
========
Liabilities and Stockholders' Equity
Current liabilities
Total current liabilities $ -
--------
Stockholders' equity
Preferred stock, $.0001 par value,
100,000,000 shares authorized -
Common stock, $.0001 par value, 200,000,000 shares authorized,
48,246,400 shares issued and outstanding 4,825
Additional paid-in capital 19,605
(Deficit) accumulated during the development stage (18,616)
--------
5,814
--------
$ 5,814
========
F-2
World Health Alternatives, Inc.
(A Development Stage Company)
Statement of Operations
Period From Inception (February 13, 2002) to February 28, 2002
Revenue $ -
-----------
Operating Costs and Expenses:
Non cash stock compensation 2,410
General and administrative 16,206
-----------
18,616
-----------
Net (loss) $ (18,616)
===========
Per Share Information - basic and fully diluted:
Weighted average common shares outstanding 48,246,400
===========
(Loss) per share $ (0.00)
===========
F-3
World Health Alternatives, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
Period From Inception (February 13, 2002) to February 28, 2002
(Deficit)
Accumulated
During the
Common Stock Additional Development
Shares Amount Paid in Capital Stage Total
Balance at inception - $ - $ - $ - $ -
Common shares issued for services
at inception at $.00005 per share 48,206,000 2,410 - - 2,410
Common shares issued for cash
at $.05 per share 21,000 1 1,049 - 1,050
Common shares issued for receivable
at $.05 per share 19,400 1 969 - 970
Reclassification of Paid in Capital - 2,413 (2,413) - -
Capital contribution by shareholder - - 20,000 - 20,000
Net (loss) for the period - - - (18,616) (18,616)
----------- ----------- ----------- ----------- -----------
Balance, February 28, 2002 48,246,400 $4,825 $ 19,605 $ (18,616) $ 5,814
=========== =========== =========== =========== ===========
F-4
World Health Alternatives, Inc.
(A Development Stage Company)
Statement of Cash Flows
Period From Inception (February 13, 2002) to February 28, 2002
Cash flows from operating activities:
Net (loss) $ (18,616)
Adjustments to reconcile net (loss) to net cash
(used in) operating activities:
Operating expenses paid by shareholder 16,200
Non cash stock compensation 2,410
---------
Net cash (used in) operating activities (6)
---------
Cash flows from investing activities:
Net cash provided by (used in) investing activities -
---------
Cash flows from financing activities:
Common shares issued for cash 1,050
---------
Net cash provided by financing activities 1,050
---------
Increase in cash and cash equivalents 1,044
Cash and cash equivalents, beginning of period -
---------
Cash and cash equivalents, end of period $ 1,044
=========
Supplemental cash flow information:
Cash paid for interest $ -
=========
Cash paid for income taxes $ -
=========
Non cash investing and financing activities:
Common shares issued for receivable $ 970
=========
Non cash capital contribution $ 20,000
=========
F-5
World Health Alternatives, Inc.
(A Development Stage Company)
Notes to Financial Statements
February 28, 2002
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Company was incorporated on February 13, 2002 in the State of Florida. The
Company is in the development stage and its intent is to conduct business as an
internet based provider of vitamins, minerals, herbs, spices homeopathic and
aromatherapy products. The Company has chosen February 28 as a year end and had
no significant activity from inception to February 28, 2002.
Revenue Recognition
The Company recognizes revenue when services are provided or products are
shipped.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.
Financial Instruments
Fair value estimates discussed herein are based upon certain market assumptions
and pertinent information available to management as of February 28, 2002. The
respective carrying value of certain on-balance-sheet financial instruments
approximated their fair values. These financial instruments include cash. Fair
values were assumed to approximate carrying values for these financial
instruments because they are short term in nature and their carrying amounts
approximate fair values.
Net Income (Loss) Per Common Share
The Company calculates net income (loss) per share as required by SFAS No. 128,
"Earnings per Share." Basic earnings (loss) per share is calculated by dividing
net income (loss) by the weighted average number of common shares outstanding
for the period. Diluted earnings (loss) per share is calculated by dividing net
income (loss) by the weighted average number of common shares and dilutive
common stock equivalents outstanding. During periods in which the Company incurs
losses common stock equivalents, if any, are not considered, as their effect
would be anti dilutive.
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 the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
Segment Information
The Company follows SFAS No. 131, Disclosures about Segments of an Enterprise
and Related Information." Certain information is disclosed, per SFAS No. 131,
based on the way management organizes financial information for making operating
decisions and assessing performance. The Company currently operates in a single
segment and will evaluate additional segment disclosure requirements as it
expands its operations.
F-6
World Health Alternatives, Inc.
(A Development Stage Company)
Notes to Financial Statements
February 28, 2002
Income Taxes
The Company follows Statement of Financial Accounting Standard No. 109,
"Accounting for Income Taxes" ("SFAS No. 109") for recording the provision for
income taxes. Deferred tax assets and liabilities are computed based upon the
difference between the financial statement and income tax basis of assets and
liabilities using the enacted marginal tax rate applicable when the related
asset or liability is expected to be realized or settled. Deferred income tax
expenses or benefits are based on the changes in the asset or liability each
period. If available evidence suggests that it is more likely than not that some
portion or all of the deferred tax assets will not be realized, a valuation
allowance is required to reduce the deferred tax assets to the amount that is
more likely than not to be realized. Future changes in such valuation allowance
are included in the provision for deferred income taxes in the period of change.
Web Site Development Costs
The Company's web site will comprise multiple features and offerings. It is
anticipated that the offerings will require future development and refinement.
In connection with the development of its site, the Company will incur external
costs for hardware, software, and consulting services, and internal costs for
payroll and related expenses of its technology employees directly involved in
the development. All hardware costs will be capitalized. Purchased software
costs will be capitalized in accordance with Statement of Position 98-1
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use". All other costs will be reviewed for determination of whether
capitalization or expense as product development cost is appropriate in
accordance with Statement of Position 98-1. The Company's web site will be
amortized over its estimated useful life of 2 years.
Stock-Based Compensation
The Company accounts for equity instruments issued to employees for services
based on the fair value of the equity instruments issued and accounts for equity
instruments issued to other than employees based on the fair value of the
consideration received or the fair value of the equity instruments, whichever is
more reliably measurable.
The Company accounts for stock based compensation in accordance with SFAS No.
123, "Accounting for Stock-Based Compensation." The provisions of SFAS No. 123
allow companies to either expense the estimated fair value of stock options or
to continue to follow the intrinsic value method set forth in APB Opinion 25,
"Accounting for Stock Issued to Employees" ("APB 25") but disclose the pro forma
effects on net income (loss) had the fair value of the options been expensed.
The Company has elected to continue to apply APB 25 in accounting for its stock
option incentive plans.
Recent Pronouncements
In December 1999, the Securities and Exchange Commission issued Bulletin No. 101
("SAB 101"). SAB 101 provides guidance on applying accounting principles
generally accepted in the United States of America to revenue recognition in
financial statements. The implementation of SAB 101 did not have an impact on
the Company's operating results.
F-7
World Health Alternatives, Inc.
(A Development Stage Company)
Notes to Financial Statements
February 28, 2002
In July, 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) 141, Business Combinations, and SFAS
142, Goodwill and Intangible Assets. SFAS 141 is effective for all business
combinations completed after June 30, 2001. SFAS 142 is effective for the year
beginning January 1, 2002; however certain provisions of that Statement apply to
goodwill and other intangible assets acquired between July 1, 2001, and the
effective date of SFAS 142. The Company does not believe the adoption of these
standards will have a material impact on the Company's financial statements.
In July 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset
Retirement Obligations. This statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. This Statement applies to all
entities. It applies to legal obligations associated with the retirement of
long-lived assets that result from the acquisition, construction, development
and (or) the normal operation of a long-lived asset, except for certain
obligations of lessees. This Statement is effective for financial statements
issued for fiscal years beginning after June 15, 2002. The Company is evaluating
the impact of the adoption of this standard and has not yet determined the
effect of adoption on its financial position and results of operations.
In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. This statement addresses financial accounting and
reporting for the impairment or disposal of long-lived assets and supersedes
FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of. The provisions of the statement are
effective for financial statements issued for fiscal years beginning after
December 15, 2001. The Company is evaluating the impact of the adoption of this
standard and has not yet determined the effect of adoption on its financial
position and results of operations.
Note 2. STOCKHOLDERS' EQUITY
At inception, the Company issued 48,206,000 shares of its common stock for
services provided to the Company of which 48,000,000 were issued to officers and
directors. These shares have been valued at $.00005 per share, which approximates
the fair market value of the services provided. Accordingly, the Company has
recorded a charge to operations of $2,410 during the period.
During February 2002 the Company issued 40,400 shares of common stock for cash
aggregating $1,050 and a receivable of $970 pursuant to a private placement.
This receivable was paid during March 2002 and has been recorded as a current
asset in the accompanying financial statements.
During February 2002 a shareholder directly paid certain obligations of the
Company aggregating $16,200 for legal fees and $3,800 for the development of the
web site. These amounts were contributed to the capital of the Company.
Note 3. INCOME TAXES
The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 (FAS 109), "Accounting for Income Taxes", which requires use
of the liability method. FAS 109 provides that deferred tax assets and
liabilities are recorded based on the differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting
purposes, referred to as temporary differences. Deferred tax assets and
liabilities at the end of each period are determined using the currently enacted
tax rates applied to taxable income in the periods in which the deferred tax
assets and liabilities are expected to be settled or realized.
F-8
World Health Alternatives, Inc.
(A Development Stage Company)
Notes to Financial Statements
February 28, 2002
The provision for income taxes differs from the amount computed by applying the
statutory federal income tax rate to income before provision for income taxes.
The sources and tax effects of the differences are as follows:
Income tax provision at
the federal statutory rate 34 %
Effect of operating losses (34)%
-----
As of February 28, 2002, the Company has a net operating loss carryforward. This
loss will be available to offset future taxable income. If not used, this
carryforward will expire in 2022. The deferred tax asset relating to the
operating loss carryforward has been fully reserved at February 28, 2002.
Note 4. BASIS OF REPORTING
The Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business.
The Company has experienced a loss from operations during its development stage
as a result of its investment necessary to achieve its operating plan, which is
long-range in nature. For the period from inception to February 28, 2002, the
Company incurred a net loss of $18,616 . In addition, the Company has no
significant assets or revenue generating operations.
The Company's ability to continue as a going concern is contingent upon its
ability to attain profitable operations by securing financing and implementing
its business plan. In addition, the Company's ability to continue as a going
concern must be considered in light of the problems, expenses and complications
frequently encountered by entrance into established markets and the competitive
environment in which the Company operates.
The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.
Note 5. SUBSEQUENT EVENTS
During the period from March 1, 2002 through March 24, 2002 the Company issued
120,500 shares of common stock for cash aggregating $12,050.
On March 5, 2002 the Company entered into two one year consulting agreements. As
compensation the consultants will receive a total of 1,500,000 shares of common
stock which will be valued at the fair market value of the shares issued.. This
amount will be classified as deferred compensation and charged to operations
over the period in which the services are provided.
During March 2002 a shareholder directly paid certain obligations of the Company
aggregating $14,000 for legal fees. This amount was contributed to the capital
of the Company.
On October 7, 2002, the Company effected a 2 for 1 forward stock split. All
share and per share amounts have been restated to give effect to the split.
F-9
ITEM 23. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 24. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Florida Law provides for indemnification of officers and directors as follows:
A corporation may indemnify any person who may be a party to any third party
(nonderivative) action if the person is or was a director, officer, employee or
agent of the corporation or is or was serving at the request of the corporation
in certain capacities, and acted in good faith and in a manner reasonably
believed to be in, or not opposed to, the best interests of the corporation.
With respect to any criminal action or proceeding, to be indemnified, the person
has to have had no reasonable cause to believe the conduct was unlawful. F.S.
607.0850(1).
A corporation may indemnify any person who may be a party to a derivative action
if the person is or was a director, officer, employee or agent of the
corporation or is or was serving at the request of the corporation in certain
capacities, and acted in good faith and in a manner reasonably believed to be
in, or not opposed to, the best interests of the corporation. However, no
indemnification may be made for any claim, issue or matter for which the person
was found to be liable unless a court determines that, despite adjudication of
liability but in view of all circumstances of the case, the person is fairly and
reasonably entitled to indemnity. F.S. 607.08509(2).
Any indemnification made under these subsections, unless under a court
determination, may be made only after a determination has met these standards of
conduct. This determination is to be made by a majority vote of a quorum
consisting of the disinterested directors of the board of directors, by
independent legal counsel, or by a majority vote of the disinterested
shareholders. The board of directors also may designate a special committee of
disinterested directors to make this determination. F.S. 607.0850(4).
With regard to the foregoing provisions, or otherwise, we have been advised that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Securities Act of 1933, as amended,
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 a director, officer or controlling person of the Corporation in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by a controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by us is against
public policy as expressed in the Securities Act of 1933, as amended, and will
be governed by the final adjudication of such case.
33
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table is an itemization of all expenses, without consideration to
future contingencies, incurred or expected to be incurred by us connection with
the issuance and distribution of the securities being offered by this
prospectus. Items marked with an asterisk (*) represent estimated expenses. We
have agreed to pay all the costs and expenses of this offering. Selling
shareholders have not and will not pay any offering expenses.
ITEM EXPENSE
---- ------
SEC Registration Fee $ 24.06
Legal Fees and Expenses $27,700.00
Accounting Fees and Expenses $ 2,300.00
Miscellaneous* $ 500.00
===============================================
Total* $30,524.06
* Estimated Figure
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
Effective October 7, 2002, we enacted a two (2) share for one (1) share forward
stock split of our common stock. All share amounts listed below include shares
of our common stock issued pursuant to our two (2) share for one (1) share
forward stock split.
On February 14, 2002, we issued 40,000,000 (post October 7, 2002, two (2) share
for one (1) share forward stock split) shares of our common stock to our
President/Chief Executive Officer/Chairman of the Board, Edward G. Siceloff, for
services rendered in connection with our corporate formation. We valued these
shares at $.05 per share or $2,000,000.
On February 14, 2002, we issued 8,000,000 (post October 7, 2002, two (2) share
for one (1) share forward stock split) shares of our common stock to our
Director, Joseph L. Prugh, for services rendered in connection with our
corporate formation. We valued these shares at $.05 per share or $400,000.
On February 14, 2002, we issued 200,000 (post October 7, 2002, two (2) share for
one (1) share forward stock split) shares of our common stock to our Hamilton,
Lehrer & Dargan, P.A. for legal services rendered to us. We valued these
shares at $.05 per share or $10,000.
34
On March 5, 2002, we issued 1,500,000 (post October 7, 2002, two (2) share for
one (1) share forward stock split) shares of our common stock to Barry Gewin for
rendering the following services to us from March 5, 2002 until March 5, 2003:
assistance with suppliers; marketing of our products; preparation of information
regarding our business; hiring of key management and sales personnel; and
general assistance in the development of our website content. We valued these
shares at $.05 per share of $75,000.
On March 5, 2002, we issued 1,500,000 (post October 7, 2002, two (2) share for
one (1) share forward stock split) shares of our common stock to Tommi Ferguson
for the following services rendered to us from March 5, 2002 until March 5,
2003: locating web site development personnel; development of an incentive
program for the our customers; advertising of our products; and expansion of our
product lines. We valued these shares at $.05 per share or $75,000.
On February 14, 2002, we issued 2000 (post October 7, 2002, two (2) share for
one (1) share forward stock split) shares of our common stock to Beadros Asare
for Edgarizing Services. We valued these shares at a price of $.05 per share or
$100.
On February 14, 2002, we issued 2000 (post October 7, 2002, two (2) share for
one (1) share forward stock split) shares of our common stock to Cathy Hagen for
Edgarizing Services. We valued these shares at a price of $.05 per share or
$100.
On February 14, 2002, we issued 2000 (post October 7, 2002, two (2) share for
one (1) share forward stock split) shares of our common stock to Kevin Steil for
Website Development Services. We valued these shares at a price of $.05 per
share or $100.
On February 19, 2002, we sold 5000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to James G. Xilas for
a price of $.05 per share or $250.
On February 21, 2002, we sold 1000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to Vivian L. Malits
for a price of $.05 per share or $50.
On February 21, 2002, we sold 20,000 (post October 7, 2002, two (2) share for
one (1) share forward stock split) shares of our common stock to Rita S. Price
for a price of $.05 per share or $1000.
On February 21, 2002, we sold 1000 (post October 7, 2002, two (2) share for one
(1) share forward stock split)shares of our common stock to Hubert P. Siceloff
for a price of $.05 per share or $50.
On February 21, 2002, we sold 1000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to Hubert P. Siceloff
Jr. for a price of $.05 per share or $50.
35
On February 25, 2002, we sold 6000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to Linc Frye, for a
price of $.05 per share or $300.
On February 25, 2002, we sold 2400 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to Dell Ferguson for a
price of $.05 per share or $120.
On February 26, 2002, we sold 2000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to Clark B. Kinnison
for a price of $.05 per share or $100.
On February 27, 2002, we sold 2000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to Alice Jones for a
price of $.05 per share or $100.
On March 4, 2002, we sold 8000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Rosemary Ferguson for a
price of $.05 per share or $400.
On March 4, 2002, we sold 20,000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to Gary C. Law for a
price of $.05 per share or $1000.
On March 4, 2002, we sold 4,000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to William E. Gewin for a
price of $.05 per share or $200.
On March 5, 2002, we sold 2000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Phyllis Zaffaroni for a
price of $.05 per share or $100.
On March 5, 2002, we sold 4000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Raymond Hall for a
price of $.05 per share or $200.
On March 5, 2002, we sold 2000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Jay F. Johnson for a
price of $.05 per share or $100.
On March 5, 2002, we issued 4000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to Richard Clayton at
a price of $.05 per share or $200.
On March 5, 2002, we sold 20,000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to Nathan Zafran for a
price of $.05 per share or $1000.
On March 6, 2002, we sold 2000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Brian M. Gewin for a
price of $.05 per share or $100.
36
On March 7, 2002, we sold 8000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Debra M. White at a
price of $.05 per share or $400.
On March 7, 2002, we sold 4000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Sandy L. Dell at a
price of $.05 per share or $200.
On March 7, 2002, we sold 40,000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to Christopher R. Dell
at a price of $.05 per share or $2000.
On March 11, 2002, we sold 8000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to David Wood for a price
of $.05 per share or $400.
On March 11, 2002, we sold 4000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Clinton F. Walker at a
price of $.05 per share or $200.
On March 11, 2002, we sold 4000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Juanita G. Davidson at
a price of $.05 per share or $200.
On March 11, 2002, we sold 4000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Jason M. Baker at a
price of $.05 per share or $200.
On March 11, 2002, we sold 6000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Joseph L. Prugh a price
of $.05 per share or $300.
On March 11, 2002, we sold 40,000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to Thomas J. Martinis
at a price of $.05 per share or $200.
On March 11, 2002, we sold 10,000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to Sharon J. Martincic
at a price of $.05 per share or $500.
On March 13, 2002, we sold 4000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Don Brown for a price
of $.05 per share or $200.
On March 15, 2002, we sold 4000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Norma Jean Walston at a
price of $.05 per share of $200.
On March 15, 2002, we sold 2000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Geoffrey M. Miller for
a price of $.05 per share or $100.
37
On March 19, 2002, we sold 10,000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to Shannon Squyres at
a price of $.05 per share or $500.
On March 19, 2002, we sold 10,000 (post October 7, 2002, two (2) share for one
(1) share forward stock split) shares of our common stock to Kurt Divich for a
price of $.05 per share or $500.
On March 20, 2002, we sold 2000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Hassan El Gabri for a
price of $.05 per share or $100.
On March 20, 2002, we sold 2000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Cara Jo Malinowski for
a price of $.05 per share or $100.
On March 20, 2002, we sold 6000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to David E. Lincoln for a
price of $.05 per share or $300.
On March 20, 2002, we sold 2000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to One Stop Financial
Group, Inc., a Florida corporation owned by Kenneth Easton, for a price of $.05
per share or $100.
On March 20, 2002, we sold 2000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Jan R. Steele for a
price of $.05 per share or $100.
On March 24, 2002, we sold 3000 (post October 7, 2002, two (2) share for one (1)
share forward stock split) shares of our common stock to Edward G. Siceloff, our
President, for a price of $.05 per share or $150.
None of the above issuances involved underwriters, underwriting discounts, or
commissions. We relied upon Sections 4(2) of the Securities Act of 1933, as
amended, and Rule 506 of Regulation D in offering these shares. We believed
these exemptions were available because:
o We are not a blank check company;
o Total sales did not exceed $1,000,000;
o We filed a Form D, Notice of Sales, with the Securities and
Exchange Commission;
o Sales were not made by general solicitation or advertising;
o All certificates had restrictive legends;
o Sales were made to persons with a pre-existing relationship to the
company, its officers and directors; and
o Sales were made to investors who were either accredited investors
or who represented that they were sophisticated enough to evaluate
the risks of the investment.
38
ITEM 27. EXHIBITS
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3.1 Articles of Incorporation*
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3.1(i) Amendment to Articles of Incorporation****
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3.2 Bylaws*
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4. Specimen Stock Certificate*
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5. Opinion of Hamilton, Lehrer & Dargan, P.A.*
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5.1 Opinion of Hamilton, Lehrer & Dargan, P.A.
- -----------------------------------------------------------------------
10.1 Agreement with Barry Gewin**
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10.2 Agreement with Tommi Ferguson**
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10.3 Agreement with Global Health Trax, Inc*
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10.4 Global Health Trax Correspondence dated April 25, 2002**
- -----------------------------------------------------------------------
10.5 Agreement with EcoQuest International***
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23 Consent of Stark Winter Schenkein & Co., LLP
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99.1 Form 8-K (filed September 3, 2002)*****
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99.2 Form 8-K (filed September 30, 2002)******
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* Denotes exhibits filed with our Registration Statement on Form SB-2 on March
28, 2002.
**Denotes exhibits filed with our Registration Statement on Form SB-2 on April
26, 2002.
***Denotes exhibits filed with our Registration Statement on Form SB-2 on May
24, 2002.
****Denotes exhibits filed with our Post Effective Amendment to our Registration
Statement on Form SB-2 on October 10, 2002.
*****Denotes previously filed Form 8-K. On September 3, 2002, we filed a Form
8-K regarding Item 9 of Form 8-K, "Regulation FD Disclosure". Specifically, in
that Form 8-K, and in connection with the new legislation that requires our
Chief Executive Officer to certify periodic reports that contain financial
statements, we attached as Exhibit 99.1 to the Form 8-K Current Report, the
Certification of Edward G. Siceloff, our President,Chief Executive Officer,
Chief Financial Officer, and Principal Accounting Officer. This Certification
pertained to our Form 10-QSB for the period ending May 31, 2002.
******Denotes previously filed Form 8-K. On September 30, 2002, we filed a Form
8-K regarding Item 5 of Form 8-K, "Other Events and Regulation FD Disclosure"
and Item 7 of Form 8-K, "Financial Statements, Pro Forma Financial Information
and Exhibits". Specifically, in that Form 8-K, we disclosed under Item 5 that
our common stock had been approved by the National Association of Securities
Dealers for quotation on the Over the Counter Bulletin Board under the symbol
"WHAI" and that our Board of Directors had unanimously approved a forward stock
split. In addition, under Item 7, we filed as an exhibit, an amendment to our
Articles of Incorporation regarding the forward stock split.
39
ITEM 28. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1. To file, during any period in which it offers or sells securities, a
post-effective amendment to their Registration Statement on Form SB-2 to:
a. Include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
b. Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the SB-2
Registration Statement and all amendments thereto. 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 the form of prospectus filed with the
Commission pursuant to Rule 424(f) if, in the aggregate, the changes in the
volume and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement;
c. Include any additional or changed material information on the plan of
distribution.
2. That, for determining liability under the Securities Act of 1933, to treat
each post-effective amendment as a new Registration Statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
3. To file a post-effective amendment to remove from registration any of the
securities that remains unsold at the end of the offering.
4. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
5. In the event that a claim for indemnification against such liabilities,
other than the payment by the Registrant of expenses incurred and paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding, is asserted by such director, officer
or controlling person in connection with the securities being registered hereby,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
40
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned, in the City of Boca
Raton, Florida on October 23, 2002.
By: /s/ Edward G. Siceloff, President, Chief Executive Officer, Principal
Financial Officer, Principal Accounting Officer
(Signatures and Title)
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated.
/s/ Edward G. Siceloff /s/ Joseph L. Prugh
Director Director
October 23, 2002 October 23, 2002
41
