SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, DC 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d)
Of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) January 9, 2003
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QT 5, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-25022 72-7148906
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation Or Organization) Identification No.)
5655 Lindero Canyon Road, Suite 120
Westlake Village, California 91362
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (818) 338-1510
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MoneyZone.com, Inc.
3260 North Hayden, Ste 209, Scottsdale, Arizona 85251
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(Former name or former address, if changed since last report)
Special Note Regarding Forward-Looking Statements
The federal securities laws provide for a safe harbor for certain
forward-looking statements. This safe harbor protects us from liability in a
private action arising under either the Securities Act of 1933 or the Securities
Exchange Act of 1934, as amended, for forward-looking statements that are
identified as such and accompanied by meaningful cautionary statements, or are
immaterial.
This report contains forward-looking statements that involve risks and
uncertainties, such as statements about our plans, objectives, expectations,
assumptions, or future events. In some cases, you can identify forward-looking
statements by terminology such as "anticipate," "estimate," "plan," "project,"
"predict," "potential," "continue," "ongoing," "expect," "believe," "intend,"
"may," "will," "should," "could," or the negative of these terms or other
comparable technology. These statements involve estimates, assumptions, known
and unknown risks, uncertainties and other factors that could cause actual
results to differ materially from any future results, performances, or
achievements expressed or implied by the forward-looking statements. Actual
future results and trends may differ materially from those made in or suggested
by any forward-looking statements due to a variety of factors, including for
example, our ability to compete with other products in our space; the risk of
unfavorable federal regulation; and the fact that our status as a development
stage company makes our future unclear. Consequently, you should not place undue
reliance on these forward-looking statements. We discuss many of these and other
risks and uncertainties in greater detail under the section entitled, "Risk
Factors That May Affect Future Result " in Item 1 and elsewhere in this Current
Report on Form 8-K.
The forward-looking statements speak only as of the date on which they
are made and, except as required by law, we undertake no obligation to update
any forward-looking statement to reflect events or circumstances after the date
on which the statement is made or to reflect the occurrence of unanticipated
events. In addition, we cannot assess the impact of each factor on our business
or the extent to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any forward-looking
statements.
Item 1. Change in Control of Registrant.
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Effective January 9, 2003, pursuant to the terms of the Merger and Plan
of Reorganization (the "Merger Agreement") between MoneyZone.com, Inc.
("MoneyZone"), and QuickTest 5, Inc. ("Quicktest") (the "Merger"), Quicktest
merged with and into MoneyZone, the separate corporate existence of Quicktest
ceased, and MoneyZone continued as the surviving entity and changed its name to
"QT 5, Inc." and its symbol on the Over the Counter Bulletin Board to "QTFV"
(the surviving entity shall hereinafter be referred to as "QT5" or the
"Company").
MoneyZone had 600,000 shares of Common Stock issued and outstanding as
of the year ended December 31, 2002. In connection with the Merger MoneyZone
will issue an aggregate of 25,000,000 shares of its Common Stock (on a post
forward split basis, see discussion below) to Quicktest shareholders resulting
in the Company having 28,000,000 shares of Common Stock issued and immediately
following the Merger and after taking into effect a five for one forward stock
split.
As a result of the Merger, the shareholders of Quicktest acquired
control of QT 5. The source of consideration used by the shareholders of
Quicktest for the Merger were shares of common stock of Quicktest owned or held
beneficially prior to the Merger that were acquired by the Registrant upon
consummation of the Merger in exchange for the same number of similar securities
issued by the Registrant.
Business.
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Quicktest was formed in 1999 to develop, distribute and market In Vitro
diagnostic tools and pharmaceutical products for the individual, home, and work
environments. In April 2002, the Company acquired Patent No. 6,268,386 dated
July 31, 2001 relating to a Nicotine Beverage (the "Nico Patent"). The Nico Patent,
abstract states, among other things, that it covers "A liquid composition
including a Nicotine or alkaloid having the same direction of activity, content
between 0.0001% and 0.1%."
While the Company plans to continue its small device and pharmaceutical
product development, since acquisition of the Nico Patent, the Company has
focused its efforts on developing and marketing nicotine beverage products.
Other than its nicotine beverage line of products, the Company has not developed
nor does it have the right to market any other products; however, the Company is
in negotiations to acquire certain intellectual property rights and their
associated research and development efforts and FDA approvals on an HIV test
kit, In Vetro drug test kit and a cardiac pulmonary test kit.
The Company's first nicotine beverage product is anticipated to be
Nico(R)Water, a water based nicotine product. In addition to Nico Water, to
date, Quicktest has been engaged in the research and development of proprietary
programs for business and government use to educate and limit liability of
employee drug use, sexual harassment and work place discrimination. The Company
is in negotiations to acquire products in this area.
Products
Nico Water. The Company's first nicotine beverage product is Nico Water.
Nico Water is an odorless and tasteless liquid based nicotine adult beverage to
be consumed "when you want to smoke but can't or can smoke but shouldn't."
The Company intends to sell and distribute Nico Water to adults over the
age of 18, wherever cigarettes are sold to provide an alternative to smoking.
Unlike other nicotine products, Nico Water is suitable for sale and consumption
in a wide venue of retail outlets (i.e. drug stores, markets, restaurants,
airlines, and convenience stores). Nico Water is not currently available for
sale. The Company is working with regulatory counsel to determine what
requirements, if any, must be satisfied prior to marketing Nico Water in the
U.S. and worldwide. See "Regulatory Matters" and "Risk Factors That May Affect
Future Results and Market Price of Stock-Government Regulation."
Market for Nicotine Beverages. While there is no current market for
Nicotine beverage products, there are approximately 47 million smokers in
the U.S. alone who spend approximately $200 Billion annually on cigarettes.
Management believes there is a significant worldwide market opportunity for
products that contain nicotine in a convenient and inexpensive vehicle such as
Nico Water.
The Know Now TM System. The Company has been conducting
research and development efforts in the Know Now system of products and has been
in negotiations to acquire rights to use certain products in this system. The
Company intends to market the Know Now system to businesses and professionals to
assist these entities with their human resource compliance as outlined by the
Department of Transportation. When developed, the Company intends the Know Now
system to include the following products:
1. QuickTest for drugs is a rapid immunochromatographic assay for the
simultaneous qualitative detection of Cocaine, Marijuana, Morphine,
P.C.P., Amphetamines and/ or their metabolites in urine. The Drug Cup
assay provides only the first step. A more specific alternate chemical
method must be used in order to obtain a confirmed analytical result.
Gas chromatography/mass spectrometry (GC/MC) is the preferred
confirmatory method.
2. On Site, 10 minute H.I.V. type I and type II Test Kit for the U.S.
professional and international over the counter market.
Competition.
While the Company is not aware of any direct competing nicotine beverage
sold in the U.S., the Company's nicotine beverage products compete in the adult
nutrasutical market which includes such products as Gatorade, Red Bull and
Propel. All of the companies that market these products have greater resources
than the Company. In addition, the Company competes with cigarettes as an
alternative source of nicotine. Most of the companies that distribute cigarettes
have much greater financial resources than the Company. In addition, these
companies may exert indirect or political pressure against the introduction of
nicotine water.
Regulatory Matters.
The manufacture, sale, promotion and marketing of the Company's current
product, Nico Water TM, and future products are subject to regulation by the U.S.
Food and Drug administration ("FDA") and similar government regulatory bodies in
other countries. The Company is in the process of determining what regulatory
requirements, if any, are required for it to market and sell the Nico Water
product in the U.S. and worldwide, including possible drug listing and obtaining
FDA approval prior to going to market; such listing and the FDA approval process
could take years and be very costly if approval could even be obtained at all.
Failure of the Company to comply with such a requirement could lead to an FDA
enforcement action, which could include a warning letter, injunction and
possible seizure of the Company's assets. On December 18, 2001, Tobacco Free
Kids, The American Heart Association and ten other entities filed a petition
with the FDA to regulate or stop the sale of Nico Water as a dietary supplement
by a previous owner of the patent. The Petition asserted that nicotine water
should be classified as a "drug" or in the alternative a food containing an
unapproved additive under the federal Food, Drug and Cosmetic Act (the "Act").
The FDA determined that nicotine water, as marketed, was a "drug" under the Act
and a "new drug" under Section 201(p) of the Act, because no person had shown
that the product was generally recognized among qualified experts as safe and
effective for its suggested uses. Under Section 505(a) and 301(d) of the Act, a
new drug may not be introduced or delivered for introduction into interstate
commerce unless an FDA approved New Drug Application is in effect for that drug.
The Company believes that, as the Company intends to label and market Nico
Water, it is not a new drug under the Act and the Company is currently
conducting tests to determine that the product is safe and effective for its
intended use; however, there can be no certainty that the FDA will not deem the
product a new drug or that it is safe and effective for its intended use. See
Risk Factors That May Affect Future Results and Market Price of Stock -
Government Regulation.
Intellectual Property
We protect our intellectual property rights through a combination of
trademark, copyright and trade secrets laws and through the domain name dispute
resolution system. In order to limit access to and disclosure of our proprietary
information, all of our employees have signed confidentiality and invention
assignment arrangements, and we enter into nondisclosure agreements with third
parties. We cannot provide assurance that the steps we have taken to protect our
intellectual property rights, however, will deter adequately infringement or
misappropriation of those rights. Particularly given the international nature of
the Internet, the rate of growth of the Internet and the ease of registering new
domain names, we may not be able to detect unauthorized use of our intellectual
property or take enforcement action.
The Company has registered the "Nico" service mark in the U.S. In
addition, the Company has registered the domain name "www.nicowater.com" and
various related domain names including "www.nicotinewater.com."
In April 2002, the Company acquired Patent No. 6,268,386, dated
July 31, 2001, for nicotine beverages (the "Nico Patent") from the inventor,
Marshall Anlauf Thompson, pursuant to the terms of that certain Agreement for
the Assignment of Patent Rights dated April 7, 2002 (the "Patent Agreement"). In
consideration thereof, the Company issued 133,000 shares of its Common Stock. In
addition, Quicktest agreed to pay the original patent holder and related third
parties royalties of $1.20 per case, quarterly, for every case sold (consisting
of 24 bottles per case) of the Company's products which utilize the Nico Patent,
for the remaining life of the patent. The royalty payments are due beginning on
the first day of the calendar quarter commencing at such time as Quicktest
distributes "First Distribution," as defined in the Patent Agreement, its first
product to third-parties in which the Nico Patent is utilized, and every quarter
thereafter during the term of the Nico Agreement (the life of the Nico Patent).
If any payment due under the Patent Agreement is not received within sixty (60)
days after the due date, the assignment shall be cancelled and terminated.
As a condition to the continuance of the Patent Agreement, the Company
also agreed to the following performance goals: (1) during the first year, the
Company must sell a minimum of 500,000 cases of the patented product, and (2)
during any year thereafter for the duration of this agreement, the Company must
sell a minimum of 1,000,000 cases of the patented product each year (the
"Performance Goals"). In addition, the Company agreed, as a material condition
of assignment, to provide sufficient funds and adequate personnel to market the
product line of the Company in order to meet the Performance Goals. Failure of
the Company to make the required royalty payments or meet the Performance Goals
could result in the loss of the Nico Patent and materially harm the Company's
prospects.
In June 2002, the Company and Thompson agreed to a prepayment of
royalties in the amount of $150,000 through the issuance of 399,000 shares of
its Common Stock.
Third parties may claim that we have infringed upon their patents or
misappropriated or infringed on other proprietary rights. These claims and any
resultant litigation could subject us to significant liability for damages. In
addition, even if we prevail, the litigation could be time consuming and
expensive to defend and could affect our business materially and adversely. Any
claims or litigation from third parties may also result in limitations on our
ability to use the service marks, trademarks, copyrights, trade secrets,
patents, and other intellectual property subject to these claims or litigation,
unless we enter into license agreements with the third parties. However, these
agreements may be unavailable on commercially reasonable terms, or not available
at all. In addition, these same costs and constraints apply to enforcing the
Nico Patent, which may not be possible or practical. Further, the Nico Patent
will not protect the Company's interests in foreign countries that do not
recognize U.S. Patents.
Change of Control
The Registrant is not aware of any arrangements, the operation of which
may at a subsequent date result in a change in control of the Registrant.
Management
As part of the Merger, the officers and directors of MoneyZone resigned
and new management was appointed. See Item 5. Directors are elected for a period
of one year and thereafter serve until the next annual meeting at which their
successors are duly selected by the stockholders. Officers and other employees
serve at the will of the Board Directors. The following sets forth the persons
who serve as the directors of QT5.
Timothy J. Owens, 48, is the Founder and Chief Executive Officer of the
Company since inception. From March 1994 to January 1999, Mr. Owens served as
CEO of Job Services, Inc., a privately held company. Mr. Owens received his
Masters of Science Degree in Finance from La Salle University, Louisiana. Mr.
Owens' also received letters of academic excellence in engineering from
President Gerald R. Ford and President James Carter in 1976 and 1978.
Steven Reder, 46, has been President and a member of the Board of
Directors since January 2002. From February 1994 to January 2002, Mr. Reder was
President, CEO and majority stockholder of Friends Industry, Inc., (dba Graphix
Press) a specialty printer, packaging and point of purchase display company.
Prior to Graphix Press, Mr. Reder was the CFO for Delta Lithograph Company, a
Bertelsmann company.
Principal Stockholders
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The following table sets forth information available to the Company, as
of January 9, 2003, with respect to the beneficial ownership of the outstanding
shares of the Company's Common Stock (on a post forward split basis) by (i) any
holder of more than five percent (5%) of the outstanding shares; (ii) the
Company's officers and directors; and (iii) the Company's officers and directors
as a group (the table has been prepared based on information provided to the
Company by each shareholder):
Name of Shares of Common Percentage (%) of
Beneficial Owner Stock Owned Common Stock (4)
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Steven Reder (1) 3,504,550 12.5
Timothy Owens (2) 5,358,570 19.1
Fred DeLuca (3) 3,399,480 12.1
Robert Pautsch 2,088,100 7.5
Federico Cabo 3,192,000 11.4
All officers and directors as a
group (three (3) persons) 12,262,600 43.8
(1) Steven Reder is the President and Chief Financial Officer of the Company and
a member of the Company's Board of Directors. The address for Mr. Reder is 5655
Lindero Canyon Road, Suite 120 Westlake Village, California 91362.
(2) Timothy Owens is the Chief Executive Officer of the Company and a member of
the Company's Board of Directors. The address for Mr. Reder is 5655 Lindero
Canyon Road, Suite 120 Westlake Village, California 91362.
(3) Fred DeLuca is the Secretary of the Company. The address for Mr. DeLuca is
5655 Lindero Canyon Road, Suite 120 Westlake Village, California 91362.
(4) The number of outstanding shares of common stock of the Company is based
upon 28,000,000
Risk Factors That May Affect Future Results and Market Price of Stock
Set forth below and elsewhere in this Current Report on Form 8-K and in
other documents we file with the Securities and Exchange Commission, are risks
and uncertainties that could cause actual results to differ materially from the
results contemplated by the forward-looking statements contained in this report.
Development Stage Company; Limited Operating History; Significant and
Continuing Operating Losses; Accumulated Deficit. Since its inception, the
Company has been engaged primarily in research and development and has had no
revenues to date. Accordingly, the Company has a limited operating history and
its operations are subject to all the risks inherent in a business enterprise
with such a limited operating history, including limited capital, possible
delays in the development and implementation of our business plan, uncertain
markets, and the absence of an operating history. The likelihood that the
Company will succeed must be considered in light of the problems, expenses, and
delays frequently encountered in connection with the development of new
businesses, as well as many other factors. The Company has not developed any
customers to date and must rely upon potential customers that the Company's
management may identify for generating revenues. There is no assurance that the
Company will be able to develop successfully the business it intends to pursue,
as described herein. We cannot be certain that our business will be successful
or that we will generate significant revenues. Specifically, companies such as
ours typically experience significant difficulties.
Significant Capital Requirements; Need for Additional Capital; Explanatory
Paragraph in Accountant's Report. The Company's capital requirements have
been and will continue to be significant. The Company has been dependent
primarily on private placements of equity securities and indebtedness. Over the
next 12 months, the Company intends to focus on increasing its marketing efforts
and research and development for new proposed products. The Company anticipates,
based on its current proposed growth plans and assumptions relating to its
growth and operations, that the proceeds from the private placements, borrowings
and planned revenues will not be sufficient to satisfy the Company's
contemplated cash requirements for the next 12 months and that the Company will
be required to raise additional funds immediately. In addition, in the event
that the Company's plans change or its assumptions prove to be inaccurate (due
to unanticipated expenses, delays, problems, or otherwise), the Company would be
required to seek additional funding sooner than anticipated. Any such additional
funding could be in the form of additional equity capital, debt or a combination
thereof. Further, in the event that the Company receives a larger than
anticipated number of purchase orders for its products, it may require resources
substantially greater than those that are currently available to the Company. In
such event the Company may be required to raise additional capital or to engage
third parties (as to which there can be no assurance) to assist the Company in
meeting such orders. The Company is currently pursuing several potential funding
opportunities; however, the Company has no current commitments for additional
funding. There can be no assurance that any of such opportunities will result in
actual funding or that additional financing will be available to the Company
when needed, on commercially reasonable terms, or at all. If the Company is
unable to obtain additional financing if needed, it will likely be required to
curtail its marketing and manufacturing plans and possibly cease its operations.
Any additional equity financing may involve substantial dilution to the
Company's then-existing shareholders. The Company's independent accountants have
included an explanatory paragraph in their report on the Company's financial
statements set forth in the Company's Information Statement on Schedule 14C
filed with the Securities and Exchange Commission on December 11, 2002, stating
that because of the Company's losses, uncertainty about profitability and its
need to raise additional funds among other factors, there is substantial doubt
that the Company can continue as a going concern.
Government Regulation. The manufacture, sale, promotion and marketing of
the Company's current product, Nico Water TM and future products are subject to
regulation by the U.S. Food and Drug administration ("FDA") and similar
government regulatory bodies in other countries. The Company is in the process
of determining what regulatory requirements, if any, are required for it to
market and sell the Nico Water product in the U.S. and worldwide, including
possible drug listing and obtaining FDA approval prior to going to market; such
listing and the FDA approval process could take years and be very costly, if
approval could even be obtained at all. Failure of the Company to comply with
such a requirement could lead to an FDA enforcement action which could include a
Warning Letter, injunction and possible seizure of the Company's assets. On
December 18, 2001, Tobacco Free Kids, The American Heart Association and ten
other entities filed a petition with the FDA to stop the sale of Nico Water by a
previous owner of the patent. The Petition asserted that nicotine water should
be classified as a "drug" or in the alternative a food containing an unapproved
additive under the federal Food, Drug and Cosmetic Act (the "Act"). The FDA
determined that nicotine water, as marketed, was a "drug" under the Act and a
"new drug" under Section 201(p) of the Act, because no person had shown that the
product was generally recognized among qualified experts as safe and effective
for its suggested uses. Under Section 505(a) and 301(d) of the Act, a new drug
may not be introduced or delivered for introduction into interstate commerce
unless an FDA approved New Drug Application is in effect for that drug. The
Company believes that, as the Company intends to label and market Nico Water, it
is not a new drug under the Act and the Company is currently conducting tests to
determine that the product is safe and effective for its intended use; however,
there can be no certainty that the FDA will not deem the product to be a new
drug or that it is safe and effective for its intended use. In addition, the
Over the Counter In Vitro Rapid Drug Testing Products are relatively new and may
be subject to extensive future regulation, F.D.A., and/or state and federal
government policy changes. Any one of these events may have a negative material
impact on our business.
We May Never become Profitable. The Company has incurred net operating
losses in each fiscal quarter since we have been in business. We expect to
continue to experience losses until the time, if ever, when our current products
are able to sell products sufficient to generate revenues adequate to support
our operations.
Intellectual Property; loss of patent. Our success is dependent, in
part, on the ability to protect the intellectual property rights associated with
the Nico Water. In order to retain the rights to the Nico Patent, the Company
must make certain loyalty payments and meet certain performance standards as set
forth above. See "Intellectual Property." Should the Company fail to make these
payments or meet the performance standards it could lose the rights to the Nico
Patent and, therefore, its business could be materially adversely affected. See
also "Need for Additional Capital" above. The inability to adequately protect
such rights could have a material adverse effect on operations. The failure to
adequately protect its proprietary products could have a material adverse effect
on our business and results of operations.
No Assurance of Successful Product Development. The Company's ability to
successfully develop any additional products is uncertain. The Company's
research and development programs with respect to certain of its potential
products are at an early stage. Potential new products will require additional
research, development, testing, regulatory approval and additional investment
prior to their commercialization, which may not be successful. There can be no
assurance that Quicktest's approach will result in the development of
commercially successful products.
We may have problems hiring sufficient staff to operate our business. If
we are able to expand our operations, we may need to hire additional staff.
Finding quality and competent staff could be difficult. We will compete with
other companies for qualified staff. In order to hire and retain staff, we will
likely need to offer certain benefits, such as, medical benefits, 401K Plans and
other retirement benefits. We have not made specific arrangements to offer such
benefits and have not yet investigated the costs associated with providing such
benefits. If we are not able to expand our operations, our ability to earn
additional revenue will be harmed.
Risks Associated with Dependence on Third Party Manufacturing and
Governmental Regulations. The Company intends to be engaged in the wholesale
distribution of private labeled proprietary (patented) In Vitro products
(regulated) to the general public via the retail over the counter market, the
Internet, to government agencies and to the business and professional community
through national distributors. As with any government-regulated products, there
is substantial risk that the marketplace may not be receptive to the Company's
products or services. Governmental regulations may change creating an adverse
affect on one or more of our products, and the manufacturing processes that are
governed by the government may become too restrictive to produce the product. We
expect to incur substantial expenses as we continue to build out our automated
national marketing infrastructure, our future product development and marketing
activities and, if we are successful, to penetrate the national markets for our
products. There can be no assurance that we will be able to market these
services and products successfully or that any of the Company's future services
and products based upon the consumer or business compliance with federal or
state laws will be accepted in the marketplace. The costs of building out
Quicktest's distribution channels, development and marketing efforts will be
substantial and will be recorded and expensed as they are incurred,
notwithstanding that the benefits, if any, from those marketing efforts (in the
form of revenues) may not be reflected, if at all, until subsequent periods.
Competition. The Company's first product expected to go into the retail
markets is the Company's nicotine beverage product, Nico Water. As of the date
hereof the Company is unaware of any competitive nicotine beverage products
marketed in the United States or Internationally. We also compete in the large
and rapidly growing and extremely competitive market place against other
companies involved in an In Vitro On Site Drug Testing, traditional Clinical
Drug Testing, and other services, many of which have resources, both financial
and other, far in excess of those Quicktest may possess or ever obtain. Many
entities have exerted and continue to exert extensive research and development
efforts, which have resulted in the introduction of a multitude of
sophisticated, commercially marketable products and services. In view of the
rapid changes taking place in our business, there is no assurance that its
products or services will gain or retain commercial acceptance for a sufficient
period to yield a profit commensurate with its cost of developing a national
automated distribution system.
No Independent Market Survey for the Services. The Company has not
undertaken an independent analysis or survey of the market for its products and
services although information gathered and forecasts produced by various trade
groups indicate the existence of a sizable potential market. Individuals,
businesses and government organizations are believed willing to expend large
sums for the purchase of our products and services; however, there can be no
assurance that The Company's products and services have the commercial potential
to succeed in these target markets.
Risks of Investing In the Drug Testing Industry, Markets Uncertain. The
Drug Testing industry is speculative and involves a high degree of risk. The
success of the Company will depend on a number of factors over which we will
have little or no control. Even if any of the Company's concepts are sound,
there can be no assurance that it will succeed financially. Success in the
Company's business is unpredictable and susceptible to change. The success of
the Company may also be materially affected by the popularity of other products
and companies offering similar goods and services as well as the state of the
national economy. The Company operates in a rapidly evolving field that is
likely to be affected by future product and service developments. Our ability to
anticipate changes in products, markets, industry trends and to develop and
introduce new and enhanced services on a timely basis will be a critical factor
in its ability to grow and remain competitive. There can be no assurance that
new services will be completed or that any new services can be marketed
successfully. In addition, the anticipated development schedules for new or
improved products are inherently difficult to predict and are subject to change
as a result of shifting priorities in response to customer's requirements and
competitors new product introductions. Moreover, we expect that it will devote
substantial resources to the build out of the Company's infrastructure. The
costs of those efforts will be expensed as they are incurred, notwithstanding
that the benefits, if any, from the Company's product development efforts (in
the form of increased revenues or decreased product costs) may not be reflected,
if at all, until subsequent periods.
Dependence on Trademarks for Current and Future Markets. The market for
certain of The Company's products and services will be, in part, dependent upon
the goodwill engendered by our trademarks and trade names. Trademark protection
will therefore be material to a portion of The Company's business. The Company
has applied for federal trademark and trade name protection, relying on
trademark law to protect brand names. The Company has applied for federally
registered trademarks or trade names, and the failure to obtain trademark
protection, or illegal use of any trademarks the Company may obtain, may have an
adverse effect on the Company's business, financial condition and operating
results.
We May Face Product Liability. Liability might result from claims made
directly by consumers or by others selling our products. We presently carry
product liability insurance in amounts that we believe to be adequate, but we
can give no assurance that such insurance will remain available at a reasonable
cost or that any insurance policy would offer coverage sufficient to meet any
liability arising as a result of a claim. We can give no assurance that we will
be able to obtain or maintain adequate insurance on reasonable terms or that, if
obtained, such insurance will be sufficient to protect us against such potential
liability or at a reasonable cost. The obligation to pay any product liability
claim or a recall of a product could have a material adverse affect on our
business, financial condition and future prospects.
Item 5. Other Events and Regulation FD Disclosure.
Effective January 9, 2003, MoneyZone effectuated a 5 for 1 forward
split of its outstanding shares of Common Stock. Pursuant to the Forward Stock
Split, the number of shares of our Common Stock issued and outstanding is
increased to a number that would be equal to the number of shares of our Common
Stock issued and outstanding immediately prior to the effectiveness of the
Forward Stock Split, multiplied by five. The actual number of authorized shares
of our Common Stock would not be changed. The Forward Stock Split alone will
increase the number of outstanding shares of Common Stock to approximately
28,000,000 shares (after the shares are issued in connection with the Merger).
The forward stock split was effectuated prior to the effectiveness of the
Merger.
The Board of Directors and holders of a majority of the outstanding
Common Stock of the Company authorized and approved by written consent an
amendment of the Certificate of Incorporation of the Company to increase the
total amount of the Company's authorized Common Stock, from 25,000,000 shares to
100,000,000 shares. This increase was effectuated pursuant to an amendment to
the Company's Certificate of Incorporation prior to the effectiveness of the
Merger.
Pursuant to the terms of the Merger Agreement, effective January 9,
2003, MoneyZone.com, Inc. changed its name to QT 5, Inc. and changed its symbol
on the Over the Counter Bulletin Board to "QTFV".
Upon the effectiveness of the Merger Fred DeLuca was named Secretary of
the Company until the next annual meeting of shareholders.
Financing Transaction. On December 31, 2002, the Quicktest borrowed
$150,000 and has agreed to borrow an additional $150,000 from NDMS Investments,
L.P., or its designee ("Lender"), an unrelated party pursuant to the terms of
that certain Issuance Agreement and Convertible Promissory Note (the "Note").
The Note is due on the earlier to occur of (i) April 30, 2003 or (ii) a
financing in which Quicktest receives net proceeds of $1.5 million (the
"Maturity Date"). The Note is convertible, at the election of the Lender, into
199,500 shares of Common Stock. In addition, in consideration of the Loan,
Quicktest issued the Lender 133,000 shares of Common Stock (the "Note Shares").
In the event that the 30 day average closing price of the Company's Common Stock
is $1.00 or lower at the one year anniversary of the Note (the "Trading Price"),
the Lender shall receive additional shares such that the effective Note Shares
are equal to the original loan divided by 70% of the Trading Price. Finally, the
Lender received piggy back registration rights for the Shares and the shares
issuable upon conversion of the Note. Quicktest reserved an additional 100,000
shares of Common Stock for issuance upon receipt of the second $150,000, of
which Lender is not obligated to lend.
Item 6. Resignations of Registrant's Directors.
Pursuant to the terms of the Merger Agreement, effective January 23,
2003, John Iannetta and Halla Moran tendered their resignations as both officers
and members of the board of directors. On January 6, 2003, Michael Kessler
declined his appointment to serve as a member of the Company's board of
directors.
Item 7. Financial Statements and Exhibits.
Exhibits
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99.1 Agreement for the Assignment of Patent Rights
99.2 Amendment to Agreement for the Assignment of Patent Rights
99.3 Press Release dated January 9, 2003
Item 8. Change in Fiscal Year.
Pursuant to the Merger the Company changed its fiscal year end to June
30. The Company will file a Form 10-K for the year ended June 30, 2003.
Signature:
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed by the undersigned duly
authorized.
QT 5, Inc.
(Registrant)
Date: January 24, 2003 /s/ Steven Reder
-----------------------
Steven Reder, President
