UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(AMENDMENT NO. )
WRAP-N-ROLL USA, INC.
--------------------------------------------------------------
Name of Small Business Issuer in its Charter)
NEVADA 7312 84-1432450
--------------- ----------------- -------------------
(State or Jurisdiction (Primary Standard (I.R.S. Employer
of Incorporation or Industrial Classification Identification No.)
Organization) Code Number)
1056 EAST PLATINUM WAY, SANDY, UTAH 84094
(801) 576-8073
- ------------------------------------------------------------------
(Address and Telephone Number of Principal Executive Offices)
1056 EAST PLATINUM WAY, SANDY, UTAH 84094
- ------------------------------------------------------------------
(Address of Principal Place of Business or
Intended Principal Place of Business)
CLIFF HALLING
1056 EAST PLATINUM WAY, SANDY, UTAH 84094
(801) 576-8073
- ------------------------------------------------------------------
----------
(Name, Address and Telephone Number of Agent for Service)
Approximate date of commencement of
proposed sale to the public:
September 1, 2001
------------------------------
Copies of all communications, including communications to the
agent, should be sent to:
Mark E. Lehman, Esq.
Lehman Walstrand & Associates, LLC
8 East Broadway, Suite 620
Salt Lake City, UT 84111-2204
(801) 532-7858
(801) 363-1715 fax
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
check the following box and
list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. [ ] ________________________.
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
[ ] ________________________.
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
[ ] ________________________.
If delivery of the prospectus is expected to be made pursuant
to Rule 434, check the following box. [ ] ________________________.
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CALCULATION OF REGISTRATION FEE
- -------------------- ----------------- ------------ ---------------- ---------------- ----------------
TITLE OF EACH AMOUNT OF DOLLAR PROPOSED PROPOSED
CLASS OF SECURITIES AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
BE REGISTERED REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
- -------------------- ----------------- ------------ ---------------- ---------------- ----------------
common stock 2,010,000 shares $201,000 $ N/A $201,000 $51
($0.001 par value)
- -------------------- ----------------- ------------ ---------------- ---------------- ----------------
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that
this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
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Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission. These
securities may not be sold nor may offers to buy be accepted prior
to the time the registration statement becomes effective. This
prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation or
sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
SUBJECT TO COMPLETION: July 9, 2001
WRAP-N-ROLL USA, INC.
2,010,000 Common Shares
This prospectus covers 2,010,000 shares of our common stock.
The persons named herein under the caption "selling security
holders" are offering all of these shares for sale. We will not
receive any of the proceeds from the sale of shares by the selling
security holders. There is no established public trading market
for our common stock, and there can be no assurance that a market
will develop in the future.
Please read the risk factors beginning on page 3 of this
prospectus before making a decision to invest in our securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these securities
or passed on the adequacy of this prospectus. Any representation
to the contrary is a criminal offense.
The date of this prospectus is ______________, 2001
PROSPECTUS SUMMARY
This summary highlights certain information found in greater
detail elsewhere in this prospectus. In addition to this summary,
we urge you to read the entire prospectus carefully, especially
the risks of investing in the Company discussed under "Risk
Factors" before you decide to buy shares of our
common stock.
We currently file periodic reports pursuant to the Securities
and Exchange Act of 1934. All of our reports, such as annual and
quarterly reports, and other information are filed electronically
with the Securities and Exchange Commission ("SEC"). The SEC
maintains a web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding
issuers that file electronically. Our annual and quarterly
reports will not be sent to security holders but can be obtained
utilizing this web site.
We will provide without charge to each person who receives a
prospectus, upon written or oral request of such, a copy of any of
the information that was incorporated by reference in this
prospectus. Any person with such request should contact:
Wrap-N-Roll USA, Inc.
Attention: Investor Relations
1056 East Platinum Way
Sandy, Utah 84094
Telephone: (801) 576-8073
This prospectus contains certain forward-looking statements
that involve substantial risks and uncertainties. These forward-
looking statements can generally be identified because the context
of the statement includes words such as "may", "will", "should",
"except", "anticipate", "intend", "estimate", "continue",
"believe", "expects" or other similar words. Similarly,
statements that describe the Company's future plans, objectives
and goals are also forward-looking statements. Our factual
results, performance or achievements could differ materially from
those expressed or implied in these forward looking statements as
a result of certain factors, including those listed in "Risk
Factors" and elsewhere in this prospectus.
OUR COMPANY
Our Company was incorporated under the laws of the State of
Nevada September 26, 1997 under the name Oxy General Corporation.
On November 17, 2000, we changed our name to Wrap-N-Roll USA, Inc.
to better suit our new business plan. We have had limited operations
to date. We currently have one full-time employee, who is also our sole
officer and director. We don't own any real estate. We are
deemed to be a new or start-up venture with all of the unforeseen
costs, expenses, problems, and difficulties to which such ventures
are subject.
Our principal executive offices are located at 1056 East
Platinum Way, Sandy, Utah 84094. Our telephone number is (801) 576-
8073. We are authorized to issue common stock and preferred stock.
Our total authorized stock consists of 20,000,000 common shares
and 5,000,000 preferred shares.
BUSINESS
2
We provide specialized advertising services to businesses of
all sizes using large format digital printing on perforated and
non-perforated vinyl substrates. Through use of a special non-
corrosive, vinyl material with a patented adhesive made by 3M, we
offer businesses the ability to wrap the exterior of buildings,
windows and motor vehicles with an advertising message.
THE OFFERING
As of the date of this prospectus, we have 11,000,000 shares
of our common stock issued and outstanding. This offering is
comprised of securities offered by the selling security holders
only. The selling security holders are offering a total of
2,010,000 shares of our common stock to the public at a price to
be determined later. Although we have agreed to pay all offering
expenses, we will not receive any proceeds from the sale of the
securities. Because our current assets at March 31, 2001 were only
$6,476 and we have minimal revenue sources, we may borrow funds
from our management to pay the offering expenses.
RISK FACTORS
An investment in the shares of our common stock offered under
this prospectus involves a high degree of risk. Except for
historical information, the information contained in this
prospectus is "forward looking" statements about our expected
future business and performance. Our actual operating results and
financial performance may prove to be very different from what we
might have predicted as of the date of this prospectus.
Prior to making a decision to invest in the Shares,
prospective investors should carefully consider, together with
other matters referred to herein, each of the following risk
factors, which are illustrative of the substantial risks faced by
our Company.
Company and Industry Risks
EARLY DEVELOPMENT STAGE COMPANY; LIMITED OPERATING HISTORY.
We are considered a development stage company and have limited
earnings history. We were formed in September 1997. We have had
minimal revenues and there are no material financial results upon
which investors might base an assessment of our potential. As we
grow, we expect a substantial increase in operating expenses and
our results may be adversely affected if revenues do not increase
sufficiently, whether due to increased competition or otherwise.
There can be no assurance that we will be able to grow in the
future.
GENERAL RISKS TO WHICH MOST NEW BUSINESSES ARE SUBJECT. We
are subject to the general risks to which most new businesses are
subject to including, lack of capital, lack of name recognition,
high startup costs, difficulties in generating clients and
establishing revenue streams. Investments in start-up companies
are highly speculative with a high probability of failure. In the
event we fail to achieve our objectives, an investment in these
securities could result in a complete loss of investment.
LIMITED WORKING CAPITAL. We have very limited working
capital. In the event we face unforeseen circumstances in our
operations, we may experience a severe strain on our working
capital, thereby forcing management to focus additional time on
capital raising efforts and less time operating our Company. All
cash raised by our us to date, has come from (1) a limited amount of
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revenue; (2) the sale of 10,000,000 shares of our common stock
to our current president for $10,000; (3) an $812 loan to us; and
(4) a $10,000 loan to us. Our capital is extremely limited and
may not be adequate to pursue our business plan. In the event
funds are found to be inadequate, our opportunities for growth
will be severely restricted.
NEED FOR ADDITIONAL FUNDING. Our limited capital position
may force us to seek additional funding. We can be expected to
require additional funds in order to accomplish our goals, and no
assurance can be given that additional funds will become available
through subsequent stock offerings or otherwise. We have not
investigated the availability, source, or terms for additional
capital and will not do so until we determine such a need.
Additionally, there is no assurance that funds will be available
from any source or, if available, obtainable on terms acceptable
to us. If not available our operations will be limited to those
that can be financed through our revenues and current limited
capital. The lack of availability of adequate funds, or the lack
of availability of funds on terms acceptable to us, would have a
material adverse effect on our operations and financial results.
DEPENDENCE UPON KEY PERSONNEL / NO FULL-TIME EMPLOYEES. We
currently only have one full-time employee who is also our
president, secretary, treasurer and sole director. We will be
heavily dependent upon his skills, talents, and abilities to
implement our business plan, and may, from time to time, find that
the inability of this person to devote full time attention to our
business may result in a delay in progress toward implementing our
business plan. Additionally, conflicts of interest may arise that
may be resolved only through exercise of good judgment as is
consistent with fiduciary duties to us. Such conflicts may
require that we attempt to employ additional personnel. There is
no assurance that the services of such persons will be available
or that they can be obtained upon terms favorable to us. We have
no "key person" life insurance coverage on the life of any officer
and director, and have no present intention to purchase such
coverage, due to its prohibitive cost.
Our future success also depends on our ability to identify,
attract, hire, train and motivate skilled administrative,
technical, managerial, sales and marketing, customer service and
professional personnel. Competition for such employees is
intense. The inability to attract and retain other qualified
employees could have material adverse effect on our operations.
If we fail to retain and attract the necessary managerial, sales
and marketing and customer service personnel, we will not develop
a sufficient customer base to adequately fund our operations.
LIMITATIONS ON EXPERIENCE OF MANAGEMENT. Our sole officer /
director / employee has over ten years experience in management,
marketing and training. However, there are no assurances that
such experience will be adequate for the successful operation of
the Company.
COMPETITION. All aspects of our business are highly
competitive. We will be competing with many businesses in the
same fields as ours and it can be expected that most, if not all,
of such competing companies will have lengthier experience and
greater financial and other resources than we. The cost of entry
into our line of business is minimal. There are no substantial
barriers to entry of any kind. We hope to compete on the basis of
excellent service. However, there can be no assurance given that
we will be able to respond to competitive pressures, or that the
effect of competitive pressures will not change the demand for our
services, or that we will be able to develop a clientele
regardless of where and how we decide to advertise our services.
To
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the extent that there are competitive pressures, and we are
unable to respond to such pressures, our business, operations and
financial condition could be adversely affected.
CORPORATE ACTION POSSIBLE WITHOUT STOCKHOLDER VOTE. The
holders of a majority of our issued and outstanding common stock
shares may, pursuant to Nevada corporate statutes, authorize or
take corporate action without the notice, approval, consent or
vote of the stockholders. Our principal stockholder and
president, Cliff Halling, presently owns approximately 9,990,000
shares or 90.8% of our common stock. Mr. Halling will have
significant influence over all matters requiring approval by our
stockholders, but not requiring the approval of the minority
stockholders. In addition, Mr. Halling will be able to elect all
of the members of our Board of Directors, allowing him to exercise
significant control of our affairs and management. In addition,
Mr. Halling, may affect most corporate matters requiring
stockholder approval by written consent, without holding a meeting
of stockholders.
ACQUISITIONS. An element of our growth strategy may be to
pursue acquisitions that either expand or complement our business.
There can be no assurance that we will be able to identify
acceptable acquisition candidates on terms favorable to us or in a
timely manner. A portion of our capital resources, may be used
for these acquisitions. There can be no assurances of the impact
of such acquisitions on our financial condition. We may require
additional debt or equity financing for future acquisitions, which
additional financing may not be available on terms favorable to
us, if at all. There is also no assurance that we will be able to
successfully integrate an acquisition into our business or that
any acquired business will be profitable.
MANAGEMENT OF GROWTH / EXPANSION. We will seek to develop
and expand our operations. Expansion will place substantial
strains on our management, operational, accounting and information
resources and systems. Successful management of growth will
require us to first develop and then improve our financial
controls, operating procedures, and management information
systems, and to train, motivate and manage our employees. We
expect to grow both internally and through the acquisition of
other companies. There can be no assurances that our systems,
procedures, and controls will be adequate to support our
operations as we expand. If we fail to manage early growth
efficiently and effectively or fail to attract and retain
additional qualified management, there could be a material adverse
effect on our results of operations and ability to execute our
business plan.
NO DIVIDENDS ANTICIPATED. No dividends have been paid on the
shares and management does not intend to declare any cash
dividends on the shares in the foreseeable future, but instead
intends to retain all earnings, if any, for use in our business
operations. Since we may be required to obtain additional
financing, it is likely that there will be restrictions on our
ability to declare any dividends.
Offering and Securities Risks
LACK OF PUBLIC TRADING MARKET. We have not established a
public trading market or market maker for our securities. There
can be no assurance that a market for our common stock will be
established or that, if established, a market will be sustained.
Consequently, investors may not be able to liquidate an investment
in the shares in the event of an emergency or for any other
reason.
5
A market maker sponsoring a company's securities is required
to obtain a listing of the securities on any of the public trading
markets, including the NASD Over-the-Counter Bulletin Board
("OTCBB"). If we are unable to obtain a market maker for our
securities, we will be unable to develop a trading market for our
common stock. We may be unable to locate a market maker that will
agree to sponsor our securities. Even if we do locate a market
maker, there is no assurance that our securities will be able to
meet the requirements for a quotation or that the securities will
be accepted for listing on the NASD OTCBB. We anticipate applying
for a listing to have our stock trade on the NASD OTCBB, but there
can be no assurance that we will be able to obtain this listing.
The OTCBB securities are not listed and traded on the floor of an
organized national or regional stock exchange. Instead, OTCBB
securities transactions are conducted through a telephone and
computer network connecting dealers in stocks. Over-the-Counter
stocks are traditionally smaller companies that do not meet the
financial and other listing requirements of a regional or national
stock exchange.
NO PROCEEDS FOR USE BY US. We will not receive any proceeds
from the sale of the securities by the selling security holders.
The shares of common stock will be sold from time to time by the
selling security holders at a price to be determined later.
VOLATILITY OF STOCK PRICES. The per share offering price
will be determined later. Investors should not assume that any
offering price is necessarily indicative of the range of prices at
which shares may subsequently be sold in the event of the
development of an active trading market for the shares (as to
which no guarantee can be given). Any potential market price for
the stock may be volatile and subject to fluctuations resulting
from news announcements concerning our operating results, general
securities market conditions, and other factors. The stock market
in general, and the market for shares of small capitalization
stocks in particular, have experienced significant price and
volume fluctuations that often have been unrelated to the
operating performance of particular companies. These market
fluctuations may adversely affect the market price of our Common
Stock.
POTENTIAL DILUTION. We are authorized to issue 20,000,000
shares of common stock and 5,000,000 shares of $0.001 par value
preferred stock. As of the date of this prospectus, there were
11,000,000 shares of our common stock issued and outstanding and
no shares of preferred stock issued and outstanding. Our Board of
Directors has authority to issue stock without shareholder
consent, which may dilute the value of your stock. We have not
yet issued any shares of preferred stock. Our Board of Directors
may designate voting control, liquidation, dividend and other
preferred rights to preferred stock holders. Our Board of
Director's authority to issue this stock without shareholder
consent may have a depressive effect on the market value of our
common stock. The issuance of preferred stock could also delay or
prevent a change in control of our corporation or other take-over
attempt.
LIMITATION OF LIABILITY OF OFFICERS AND DIRECTORS;
INDEMNIFICATION. Our Articles of Incorporation provide that no
director or officer of our Company shall be personally liable to
us or any of our stockholders for damages for breach of fiduciary
duty as a director or officer involving any act or omission of any
such officer or director, except for acts or omissions involving
intentional misconduct or fraud. Our Bylaws provide that we shall
indemnify our directors and officers against expenses actually and
necessarily incurred by them in connection with the defense of any
action, suit or proceeding in which
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our directors or officers are
made parties, by reason of being or having been such officers or
directors, except in relation to matters as to which the director
or officer shall be adjudged in such action, suit or proceeding to
be liable for negligence or misconduct in the performance of their
duty.
"PENNY STOCK" REGULATIONS. Investors should note the
existence of Rule
15(c)2-6 (the "Rule") promulgated under the Exchange Act, setting
forth sales practice requirements for certain securities. In the
event that a trading market should develop for our securities, the
Rule may have the effect of hampering the ability of investors to
resell their shares in such market. The Rule imposes certain
additional requirements on sales practices utilized by broker-
dealers who may sell our securities to persons other than
established customers and "accredited investors." For transaction
covered by the Rule, the special "suitability determinations" for
the proposed purchaser must be made by the broker, and a written
agreement to the transaction must be furnished by the purchaser to
the broker prior to the sale. In addition, the Commission has
adopted rules that regulate broker-dealer practices in connection
with transactions in "penny stocks". Penny stocks generally are
equity securities with a price of less than $5.00(other than
securities registered on certain national securities exchanges or
quoted on the NASDAQ system, provided that current price and
volume information with respect to transactions in that security
is provided by the exchange or system). The 'penny stock rules'
require a broker-dealer, prior to a transaction in a penny stock
not otherwise exempt from the rules, to deliver a standardized
risk disclosure document prepared by the Commission that provides
information about penny stocks and the nature and level of risks
in the penny stock market. The broker-dealer also must provide
the customer with current bid and offer quotations for the penny
stock, the compensation of the broker-dealer and its salesperson
in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account.
The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the
customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the
customer's confirmation. The foregoing disclosure requirements
may have the effect of reducing the level of trading activity in
the secondary market for a stock that becomes subject to the penny
stock rules. If a trading market should develop in our securities
and should the shares become subject to the penny stock rules,
investors in the Offering may find it difficult to sell their
shares.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the
securities by the selling security holders.
DESCRIPTION OF BUSINESS
BACKGROUND
We were incorporated under the laws of the State of Nevada on
September 26, 1997 under the name Oxy General Corporation. On
November 17, 2000, we changed our name to Wrap-N-Roll USA, Inc. to
better suit our new business plan, as described herein. We have
had limited operations to date. We have one full-time employee,
who is also our sole officer and director. We currently own no
real estate.
BUSINESS
7
We provide specialized advertising services to businesses of
all sizes emphasizing on large format digital printing on
perforated and non-perforated vinyl substrates. Through use of a
special non-corrosive, vinyl material with a patented adhesive
made by 3M, we offer businesses the ability to wrap the exterior
of buildings, windows and motor vehicles with an advertising
message.
Our services are segmented into stationary or mobile
advertising services. Stationary advertising services are defined
as advertising services provided by us utilizing stationary
mediums for the display of the advertising message. Such mediums
include buildings, windows and storefronts. Mobile advertising
services are defined as advertising services provided by us
utilizing mobile mediums such as a motor vehicle, for the display
of the advertising message.
Currently, we sub-contract out the design, layout, printing
and installation services to third party providers. We charge
advertisers either a fixed fee on a project-by-project basis or
provide continuous services billed on a contract basis. We
coordinate the logistics of the printing and installation process
and when requested, negotiate contracts with third party building
or motor vehicle operators for the purposes of displaying an
advertiser's message on their properties or vehicles.
We currently use one printing company in Salt Lake City, Utah
to print our advertising projects. Each printing job is bid out
separately based on the size and complexity of the project. There
are only a couple of large format printing companies that can
provide the types of services that we need. As a result, our
operations could be substantially adversely affected by the loss
of our relationship with our printer. As we grow and obtain
capital, we may seek to minimize this dependence by acquiring our
own printing facilities. However, there can be no assurances that
we will obtain additional capital, or that we will be able to find
adequate facilities, or if so, on terms favorable to us.
We use the services of a local installation company who
currently provides us with our large format installation needs.
This particular company has over 25 years experience in
advertising installation projects and is also a 3M certified
installer. Each installation is bid out separately based on the
size and complexity of the project. We believe that there are
numerous installers available from which we can choose to provide
our installation services.
Payment by us for services to both the printing and
installation companies are made at completion of the project. As
our relationship with these companies grows, we anticipate that we
will enter into written contracts and seek more favorable payment
terms.
We determine our fees based on the size of the printing
project and the complexity of the design and installation.
Additional fees are billed for the rights to display the
advertising message on a third party building or motor vehicle
unrelated to the advertiser.
The advertiser is expected to pay an initial installment fee
to begin development of the wrap, which takes approximately two
weeks to design, develop and print. The advertiser provides its
advertising artwork to us and we sub-contract a local designer to
design, develop and print the large format digital advertisement
on a vinyl substrate. We then sub-contract a local 3M certified
installer to install the advertising message. An additional
payment is made at completion of the installation of the
advertising message. Contract services
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are based on one-month,
three-month, six-month, or one-year contracts to display an
advertiser's message on a third party building or motor vehicle
and are billed monthly.
MOBILE ADVERTISING SERVICES
American businesses spend substantial sums annually to
promote their advertising messages through a variety of media
including TV, radio, newspaper, magazine, direct mail,
telemarketing, billboards, signs and more recently, the Internet.
The goal of the advertiser is to utilize the media that reaches
the advertiser's target audience in the most cost-effective manner
and to repeatedly transmit its message to generate brand
recognition and stimulate a purchase.
More and more businesses are finding that they can gain
additional exposure and brand recognition by displaying their
company's logo or advertising message on vehicles driven by their
employees or others. The motor vehicle, which is wrapped with the
advertiser's message, is driven in high traffic areas where the
advertiser's message can be displayed to other motorists.
Occasionally the motor vehicle may also be parked in high traffic
areas where the permission has been granted or purchased for the
rights to park and display a vehicle.
We believe that this method of advertising can compete for
advertising dollars against methods that businesses typically
allocate to reach the mobile public, such as radio and billboard
advertising, because of the novel way in which this method
attracts attention. While we have not performed any market
studies, we believe that motorists are more likely to be attracted
by seeing and retaining an advertisement message on a mobile
vehicle as opposed to a billboard, park bench, poster, sign or
other stationary form of advertisement. Moreover, while a
motorist has the ability to change the channel during a radio-
advertising message, the motorist is less able to prevent seeing
an attractive, uniquely designed passing vehicle wrapped in an
attractive advertising message.
To reach the mobile public, we seek to have the vehicles we
wrap with advertisement driven in high traffic areas. As such, we
expect that wrapped vehicles will be driven primarily in
metropolitan markets that have populations in excess of 200,000
people.
The primary geographic market, in which we expect our wrapped
vehicles to be driven, includes various metropolitan areas in the
state of Utah, with a combined population of approximately
875,000. We seek to expand this market to include additional
states in the Mountain and Western regions of the United States.
The vehicles used for mobile advertising services are either
provided by the advertiser, its employees, private parties or, to
a limited extent, by us. When vehicles leased us are to be
utilized, our sales representatives and other employees are
expected to drive the vehicle to sales appointments or on company
errands traversing through high traffic areas to display the
advertiser's message to other motorists. From time to time, the
drivers of the wrapped vehicles are also expected to pass out the
advertiser's fliers and coupons.
As indicated, we may also sub-contract with private parties
to have their vehicles wrapped. We expect to pay these parties a
monthly fee to have the advertiser's logo wrapped on their car.
We seek to target individuals who
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drive newer model cars and whose
occupations demand frequent travel in high traffic areas. We
prefer utilizing vehicles owned by private parties that have a
unique design that stands out among other vehicles and provides
the greatest opportunity to attract attention. We currently lease
two Volkswagen Beetles fro advertising use. We have received
calls from private owners of other types of vehicles interested in
using their cars for advertising. We may use other models and
years of cars to display advertisements depending on various
factors including cleanliness of the vehicle, market demand,
availability of vehicles and the willingness of the contracted
private party to actively draw attention to the vehicle, and cost.
By calendar year end December 2000, we had two company-leased
vehicles. Currently we have wrapped an additional eight vehicles
owned or leased by advertisers.
The vehicles wrapped with an advertisement are in operation
primarily during the hours of 8:00 AM to 5:00 PM, five days a
week. However, because the wrap remains on the vehicle during the
entire terms of an advertiser's contract, the advertisement is
displayed anytime the vehicle is driven which may be at any hour
during any day of the week.
The vehicles are wrapped with a non-corrosive vinyl material,
which remains on the vehicle during the term of the advertisers
contract. The special material allows parties within the vehicle
the ability to see out of the windows, while parties on the
outside of the vehicle only see the advertising message. Upon
completion of the contract, the wrap is easily removed and
disposed of without any adverse effect on the vehicle or the
environment.
STATIONARY ADVERTISING SERVICES
We seek to target businesses for the purposes of providing
large format, high resolution, and digital printing advertisements
that the business can display on exterior windows of their
buildings. Until recently, advertisements displayed on windows of
certain businesses have been hand-painted, or have been large
format posters taped to the interior of an exterior window.
We provide what we believe to be a superior, cost-effective
alternative. The advertisements displayed by us are substantially
more attractive and last longer than traditional display methods.
The material used for our stationary advertising services is
the same as what is used for our mobile advertising services. The
exterior windows are covered with a non-corrosive, thin-film,
vinyl material that allows parties within the building the ability
to see out of the windows, while parties on the outside of the
building only see the advertising message. An advertising message
can be installed on a typical 4' x 5' window in approximately 15-
20 minutes. The material can withstand all types of weather
conditions and is expected to display a quality image for up to
three years. The material is not corrosive and is easily removed
and disposed of without any adverse effect to the window, building
or the environment.
Currently, we have eight customers for our stationary
advertising services.
10
We perform installation services for our clients on ground
level installations. For all other types of installations, we
expect to sub-contract with independent third party installers.
Prices on projects are expected to vary by size of the
advertisement, window height from ground level, timing of the
installation and overall complexity of the installation.
MARKETING
Initially, we seek to target businesses in the Salt Lake City
area to advertise utilizing our stationary or mobile advertising
programs. We seek to attract national advertisers as well.
According to the Utah Chamber of Commerce, there are
approximately 53,000 businesses along the Wasatch Front in the
state of Utah, with a majority residing in the greater Salt Lake
City metropolitan area.
For our mobile advertising services we seek to target
businesses with sizable fleets of vehicles such as delivery or
transportation companies. For our stationary advertising
services, we seek to target building owners and businesses with
window exposure.
To date, we have attracted a limited clientele through
telemarketing, canvassing and word-of-mouth advertising. We plan
to implement a regular routine of telemarketing and canvassing to
attract additional clientele and expect most of our clientele to
come from these methods of marketing. Additionally, we have been
advertising our services by wrapping a company-leased vehicle with
our own logo and implementing the advertising methods that we
offer to our clientele. We also expect to market our services at
trade shows and also seek to establish an Internet web site.
Additionally, we expect to attract a portion of our clientele
through publicity generated by radio, television and newspaper
because the uniqueness and novel way in which we provide
advertising services for businesses.
Our stationary advertising operations are affected by weather
to the extent adverse weather limits the abilities of our
installers from making installations. As such, we expect revenues
to fluctuate, to a limited extent and be greater during the spring
and summer seasons. We do not foresee seasonal factors affecting
our mobile advertising operations.
We expect our operations to be affected by economic
conditions only on a limited basis because businesses must
advertise during good times or bad. However, to the extent that
our customer's operations are affected by economic conditions, we
may be affected should our customers become delinquent in payments
to us.
GOVERNMENT REGULATION
Various aspects of our business are affected by local, state
and federal regulations. Local ordinances determine what business
owners can display on the outside of their businesses. We expect
businesses to check their local ordinances before requesting our
services. Additionally, our leased vehicles are required to be
compliant with local registration and emissions regulations. We
are also subject to various regulations applicable to all
businesses.
11
COMPETITION
We compete with several local advertisers who utilize large
format digital printing for automobile wraps or building
advertising, most of whom have substantially more resources than
we. We also compete, to a lesser extent, with printing companies
that provide large format usual printing services on vinyl
substrates.
It can be expected that the printers used by us may directly
compete with us. Because there are only a few large format
digital printers in our geographical area, such competition could
negatively affect our financial results. As we grow and obtain
additional capital, we seek to acquire our own printing facilities
to minimize this dependence. However, there are no assurances to
this effect.
Additionally, we compete with other advertising and marketing
companies who generate revenues utilizing a variety of advertising
and marketing methods. These marketers include, among other
types, television and radio stations, magazines, newspapers,
telemarketers, billboard companies and Internet marketers. Most
of these businesses and marketing methods have been around for
years and have proven successful for advertisers, whereas our
methods are relatively new and unproven. Also, it can be assumed
that most if not all of these companies have substantially more
resources than we.
OFFICES
We are currently operating from the home of our president who
provides office space, utilities and computer access. Through the
calendar year ending December 31, 2000, we were not charged for
these expenses due to our minimal operations. On January 1, 2001,
we entered into a Rental/Utilities Agreement with Cliff Halling
for use of office space in his home at a base rent of $100 per
month. We also agreed to pay a base utilities/miscellaneous
expense of $100 per month to cover phone, fax, Internet, computer
use, and other office items needed for the operations of the
Company. We have agreed to accrue the monthly rent and
utilities/miscellaneous expenses until we have sufficient net
income to pay the expenses.
INSURANCE
We maintain liability and collision insurance on our leased
vehicles in amounts required by the lessor. While there are no
assurances, we believe the amount of insurance we currently
maintain on these vehicles is adequate.
The private parties with whom we sub-contract to wrap and
drive their own vehicles are expected to sign a waiver with us
representing that they carry adequate insurance, and further
represent to indemnify and hold us harmless from any and all
claims arising from operation of their vehicles.
EMPLOYEES
At calendar year end December 31, 2000, we had one employee
who is also our president and sole officer and director. We will
be heavily dependent upon his skills, talents, and abilities to
implement our business plan, and may, from time to time, find that
the inability of this person to devote full time attention to our
business may result in a delay in progress toward implementing our
business plan. Currently we also have one commissioned sales
representative.
12
During the calendar year 2001, we anticipate hiring
additional administrative personnel in general administration and
accounting. We further anticipate hiring representatives in
marketing and automobile procurement. Finally, we anticipate sub-
contracting with numerous commissioned sales representatives and
private party drivers.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
LIQUIDITY AND CAPITAL RESOURCES
We remain in the development stage and, since inception
through March 31, 2001, have had $1,105 in revenues. At March 31,
2001, we had a working capital deficit of $9,671. We had cash in
the amount of $285. All cash to date has come from sales to
customers, sales of securities, and from two notes payable. The
first note payable is for $812, and the second note payable is for
$10,000. These notes are payable on April 1, 2002 and October 31,
2001 respectively and accrue interest at 10% per annum and were
executed to obtain capital to pay operating expenses. The shares
were sold to obtain capital to pay the costs of becoming a
reporting company under the Securities Exchange Act of 1934, as
amended, and also to pay general administrative expenses.
Management believes that we may not have sufficient cash to
meet our anticipated needs through the calendar year ending 2001
without additional funding or revenues. In the event we require
additional funds, we will have to seek loans or equity placements
to cover such cash needs. There is no assurance additional
capital will be available to us on acceptable terms.
We believe that by positioning our self as a publicly traded
and listed entity, we will secure a more appealing position in the
view of the investing public because of the theoretical increase
in the liquidity of an investment in our securities.
Additionally, management believes that should we need additional
capitalization, we would most likely obtain capital from investors
through private placements of our equity securities.
Notwithstanding such an evaluation, we are not presently aware of
any specific interest from potential investors, nor is management
certain that such capital will be available or that we will in
fact be successful in securing additional capital. If or when we
can establish a positive cash flow for a period of time and
therefore can demonstrate to potential private investors that we
can generate profits, then this factor, combined with a publicly
traded and listed status, is expected to be utilized to market us
as an attractive investment for private placement purposes.
Without additional capitalization our ability to survive as a
going concern is substantially in doubt.
RESULTS OF OPERATIONS
Three-Month Periods Ended March 31, 2001 and 2000
We had revenues of $1,105 from continuing operations for the
three month period ended March 31, 2001, $0 revenues from
continuing operations for the three month period ended March 31,
2000 and $1,105 in revenues from continuing operations from
inception on September 26, 1997 through March 31, 2001.
General and administrative expenses for all periods consisted
of general corporate administration, legal and professional
expenses, auto, rent and utilities expenses and accounting and
auditing costs. These expenses were $8,166 for the three month
period ended March 31, 2001, $1,225 for the three
13
month period
ended March 30, 2000, and $21,062 from inception on September 26,
1997 through March 31, 2001.
Interest expense for the three-month periods ended March 31,
2001 and 2000 were $270 and $14 respectively. Interest expense
from inception on September 26, 1997 through March 31, 2001 was
$598.
As a result of the foregoing factors, we realized a net loss
of $7,331 for the three month period ended March 31, 2001, $1,239
for the three month period ended March 30, 2000, and $20,671 from
inception on September 26, 1997 through March 31, 2001.
Years Ended December 31, 2000 and 1999
We had no revenues for the calendar years ended December 31,
2000 and 1999, and from inception on September 26, 1997 through
December 31, 2000. We incurred $10,942 in net operating losses
for the calendar year ended December 31, 2000 as compared to $884
in net operating losses for the calendar year ended December 31,
1999 and $13,340 from inception on September 26, 1997 through
December 31, 2000.
The net operating loss for all periods resulted primarily
from general and administrative expenses and interest expense.
The net loss per share for each period was $0.00 per share.
General and administrative expenses for all periods ended
consisted of general corporate administration, legal and
professional expenses, and accounting and auditing costs. These
expenses were $10,584 for the calendar year ended December 31,
2000, $835 for the calendar year ended December 31, 1999 and
$12,896 from inception on September 26, 1997 through December 31,
2000.
Selling expenses for the calendar year ended December 31,
2000 and 1999 and from inception on September 26, 1997 through
December 31, 2000 were $116, $0 and $116 respectively.
Interest expense for the calendar year ended December 31,
2000 and 1999 and from inception on September 26, 1997 through
December 31, 2000 was $242, $49, and $328 respectively.
For the current fiscal year, we anticipate incurring a loss
as a result of legal and accounting expenses, expenses associated
with registration under the Securities Exchange Act of 1934, as
amended, and expenses associated with implementing our business
plan, as described herein.
LEGAL PROCEEDINGS
We are not a party to any legal proceedings, and to the best
of our knowledge, no such proceedings by or against the Company
have been threatened.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers currently serving us are
as follows:
14
NAME AGE POSITION HELD SINCE
- ------ ----- --------------- -------
Cliff Halling 39 President, Secretary, 1999
Treasurer and Director
The directors named above will serve until our next annual
meeting of stockholders. Thereafter, directors will be elected
for one-year terms at the annual stockholders' meeting. Officers
will hold their positions at the pleasure of the board of
directors or in accordance with any employment agreement, the
terms of which may be further described in this prospectus. There
is no arrangement or understanding between our directors and
officers and any other person pursuant to which any director or
officer was or is to be selected as a director or officer.
Our directors and officers will devote such time to our
affairs on an "as needed" basis. As a result, the actual amount
of time, which they will devote to our affairs, is unknown and is
likely to vary substantially from month to month.
Biographical Information
Cliff Halling has over ten years experience in management,
marketing and training. Mr. Halling has been our president,
secretary and sole director since June 1999. Prior to this date
Mr. Halling had been operating DirectShop.Net - an Internet Web
Site he developed to provide consumer exposure for retail firms
since June 1998. From June 1997 through July 1998, Mr. Halling
was involved in marketing for Canton Financial, a real estate and
financial consulting firm in Salt Lake City, Utah. During this
time Mr. Halling also served on the Board of Directors of
Flexweight Corporation, a reporting issuer traded on the NASD
OTCBB. From November 1995 through May 1997, Mr. Halling was
involved in training and motivation for United Parcel Service,
West Valley City, Utah.
EXECUTIVE COMPENSATION
At December 31, 2000, we had not paid any compensation to
Cliff Halling, our current officer/director. No officer or
director had received any other remuneration in the two-year
period prior to this date.
On January 1, 2001, we entered into an Employment Agreement
with
Cliff Halling, our sole officer/director/employee. According to
the Employment Agreement, Mr. Halling is to receive a salary in
the amount of $1,000 per month for services related to the
operations of the Company. We have agreed to accrue the monthly
salary until we have sufficient net income to pay the expense. We
have no stock option, retirement, pension, or profit-sharing
programs for the benefit of directors, officers or other
employees, but the Board of Directors may recommend adoption of
one or more such programs in the future.
We have no "key person" life insurance coverage on the life
of our officers and directors, and have no present intention to
purchase such coverage, due to its prohibitive cost.
15
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the date of this
prospectus, the number of shares of common stock owned of record
and beneficially by executive officers, directors and persons who
hold five percent or more of our outstanding common stock. Also
included are the shares held by all executive officers and
directors as a group. The only person who holds more than five
percent of our stock is our sole officer and director.
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNER PERCENT OF CLASS
- ------------------------ -------------------- ----------------
Cliff Halling 9,990,000 90.8%
1056 East Platinum Way
Sandy, Utah 84094
All Executive Officers &
Directors as a Group
(One Person) 9,990,000 90.8%
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective June 1, 1999, we issued to Cliff Halling, an
officer and director, a total of 10,000,000 shares of common stock
for $10,000 cash.
Effective January 1, 2001, we entered into a Rental/Utilities
Agreement with Cliff Halling for use of office space in his home
at a base rent of $100 per month. We also agreed to pay a base
utilities/miscellaneous expense of $100 per month for phone, fax,
Internet, computer use, and any other office items needed for the
operations of the Company. We have agreed to accrue the monthly
rent and utilities/miscellaneous expenses we have sufficient net
income to pay the expenses.
SELLING SECURITY HOLDERS
The securities are being sold by the selling security holders
named in the following table. The table lists the names of the
selling security holders, the relationship which the named selling
security holders have had within the past three years with the
Company or any of its predecessors or affiliates, the number of
shares of common stock held by each Selling Security Holder before
this offering, the percentage of ownership held by each Selling
Security Holder before this offering, the number of shares to be
offered by each Selling Security Holder in this offering and the
amount of common stock owned by each such Selling Security Holder
after this offering is complete.
As shown, the table indicates that all the securities will be
available for resale after the offering. However, any or all of
the securities listed below may be retained by any of the selling
security holders, and therefore, no accurate forecast can be made
as to the number of securities that will be held by the selling
security holders upon termination of this offering. We believe
that the selling security holders 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.
16
NUMBER OF NUMBER OF NUMBER OF PERCENTAGE
SHARES HELD SHARES SHARES OF OWNERSHIP
NAME OF SELLING BEFORE OFFERED HELD AFTER AFTER
SECURITY HOLDER OFFERING IN OFFERING OFFERING OFFERING
- ---------------------- ----------- ------------- ------------ -----------
Jan Anderson 1,000 1,000 -0- -0-
Crown Properties, LC 2,000 2,000 -0- -0-
David J. Gunnell Trust
dated Oct. 14, 1994 2,000 2,000 -0- -0-
Vicki Dean 4,000 4,000 -0- -0-
Kevin Denos 1,000 1,000 -0- -0-
Steve Dunn 1,000 1,000 -0- -0-
Chad Eggett 2,000 2,000 -0- -0-
Clara Evans 1,000 1,000 -0- -0-
Faith Tabernacle of
Peace 1,000 1,000 -0- -0-
Financial Educators
of Salt Lake, LLC 10,000 10,000 -0- -0-
Timothy Finau 1,000 1,000 -0- -0-
Ian Frame 1,000 1,000 -0- -0-
LaVonne Frost 2,000 2,000 -0- -0-
Karen Garriga 3,000 3,000 -0- -0-
Christopher Gehring 1,000 1,000 -0- -0-
Dawn Gehring 1,000 1,000 -0- -0-
Frank Gehring 1,000 1,000 -0- -0-
Tammy Gehring 4,000 4,000 -0- -0-
Eugene Gellar 2,000 2,000 -0- -0-
Preston Gibbs 1,000 1,000 -0- -0-
Cliff Halling (1) 9,990,000 1,000,000 8,990,000 81.7
Jesse & Christina
Halling J/T 10,000 10,000 -0- -0-
Aimee Hill 12,000 12,000 -0- -0-
Harold Hill 10,000 10,000 -0- -0-
Donna Knaub 2,000 2,000 -0- -0-
Carrie Kurtz (2) 40,000 40,000 -0- -0-
Ken Kurtz (2) 500,000 500,000 -0- -0-
Michael Linsky 20,000 20,000 -0- -0-
Ed Maryon 10,000 10,000 -0- -0-
Judy Maryon 80,000 80,000 -0- -0-
Sam Mastrull 2,000 2,000 -0- -0-
Johnny Merrill 2,000 2,000 -0- -0-
Cary Nichols 40,000 40,000 -0- -0-
Kathy Nichols 222,000 222,000 -0- -0-
Becky Orr 1,000 1,000 -0- -0-
John Poulsen 1,000 1,000 -0- -0-
Steve Richards 2,000 2,000 -0- -0-
Cory Rosenbaum 2,000 2,000 -0- -0-
Mike Schlappi 2,000 2,000 -0- -0-
Janette Smith 1,000 1,000 -0- -0-
Kevin Strong 2,000 2,000 -0- -0-
Cyndi Tso 1,000 1,000 -0- -0-
Joey Wanner 1,000 1,000 -0- -0-
Christine Wilfahrt 2,000 2,000 -0- -0-
Howard Wilfahrt 2,000 2,000 -0- -0-
Stephen Wisely 1,000 1,000 -0- -0-
17
(1) Cliff Halling is the Company's president, secretary,
treasurer and director.
(2) Ken Kurtz was an officer and director of the Company through
June 1, 1999. Carrie Kurtz is the wife of Ken Kurtz.
PLAN OF DISTRIBUTION
The sale of the selling security holders' shares may be
effected from time to time in transactions, which may include
block transactions by or for the account of the selling security
holders, negotiated transactions, or through the writing of
options on the selling security holders' shares, a combination of
these methods of sale, or otherwise. Sales may be made at fixed
prices, which may be changed, at market prices prevailing at the
time of sale, or at negotiated prices.
The selling security holders may effect the transactions by
selling their shares directly to purchasers, through broker-
dealers acting as agents for the selling security holders, or to
broker-dealers who may purchase shares as principals and
thereafter sell the selling security holders' shares from time to
time in the over-the-counter market, in negotiated transactions,
or otherwise. In effecting sales, brokers and dealers engaged by
the selling security holders may arrange for other broker-dealers
to participate in sales. The selling stockholder may enter into
hedging transactions with broker-dealers, and in connection with
these transactions, broker-dealers may engage in short sales of
the shares. The selling security holders may also sell shares
short and deliver these shares to close out its short positions.
The selling security holders may also enter into option or other
transactions with broker-dealers that involve the delivery of
these shares to the broker-dealers, who may then resell or
otherwise transfer such shares. The selling security holders may
also pledge these shares to a broker-dealer who, upon a default,
may sell or otherwise transfer these shares.
These broker-dealers, if any, may receive compensation in the
form of discounts, concessions or commissions from the selling
security holders and/or the purchaser for whom such broker-dealers
may act as agents or to whom they may sell as principals or both,
which compensation as to a particular broker-dealer may be in
excess of customary commissions.
The selling security holders and broker-dealers, if any,
acting in connection with these sales might be deemed to be
"underwriters" within the meaning of section 2(11) of the
Securities Act of 1933. Any commission they receive and any
profit upon the resale of the securities might be deemed to be
underwriting discounts and commissions under the Securities Act of
1933.
If we are notified by selling security holders that any
material arrangement has been entered into with a broker-dealer
for the sale of securities through a block trade, special
offering, exchange distribution or secondary distribution, or a
purchase by a broker or dealer, we will file a supplement to this
prospectus, if required, pursuant to Rule 424(b) under the
Securities Act of 1933. The supplement will disclose
* the name of each such selling stockholder and of the
participating broker-dealer(s),
* the number of securities involved,
18
* the price at which such securities will be sold,
* the commissions to be paid or discounts or concessions
to be allowed to such broker-dealer(s), where applicable,
* that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by
reference in this prospectus, and
* other facts material to the transaction.
We have advised the selling security holders that during such
time as they may be engaged in a distribution of the common stock
covered by this prospectus they are required to comply with
Regulation M promulgated under the Securities Exchange Act of
1934. With certain exceptions, Regulation M precludes any selling
security holders, any affiliated purchasers, and any broker-dealer
or other person who participates in such distribution from bidding
for or purchasing, or attempting to induce any person to bid for
or purchase any security that is the subject of the distribution
until the entire distribution is complete. Regulation M also
prohibits any bids or purchases made in order to stabilize the
price of a security in connection with the distribution of that
security. All of the foregoing may affect the marketability of
our common stock.
Sales of any shares of common stock by the selling security
holders may depress the price of the common stock in any market
that may exist for the common stock.
Any securities covered by this prospectus that qualify for
sale pursuant to SEC Rule 144 under the Securities Act may be sold
under that Rule rather than pursuant to this prospectus.
There can be no assurance that the selling security holders
will sell any or all of the shares of common stock covered by this
prospectus.
DESCRIPTION OF SECURITIES
COMMON STOCK
Our Articles of Incorporation authorize the issuance of
20,000,000 shares of $0.001 par value common stock. Each record
holder of common stock is entitled to one vote for each share held
on all matters properly submitted to the stockholders for their
vote. Cumulative voting for the election of directors is not
permitted by the Articles of Incorporation.
Holders of outstanding shares of common stock are entitled to
such dividends as may be declared from time to time by the Board
of Directors out of legally available funds; and, in the event of
liquidation, dissolution or winding up of the affairs of the
Company, holders are entitled to receive, ratably, the net assets
of the Company available to stockholders after distribution is
made to the preferred stockholders, if any, who are given
preferred rights upon liquidation. Holders of outstanding shares
of common stock have no preemptive, conversion or redemptive
rights. All of the issued and outstanding shares of common stock
are duly authorized, validly issued, fully paid, and non-
assessable. To the extent that additional shares of the Company's
common stock are issued, the relative interests of then existing
stockholders may be diluted.
19
As of the date of this prospectus, there were 11,000,000
shares of common stock issued and outstanding.
PREFERRED STOCK
Our Articles of Incorporation authorize the issuance of
5,000,000 shares of $0.001 par value preferred stock. Our Board
of Directors are authorized to issue the preferred stock from time
to time in classes and series and are further authorized to
establish such classes and series, to fix and determine the
variations in the relative rights and preferences as between
series, to fix voting rights, if any, for each class or series,
and to allow for the conversion of preferred stock into common
stock. Preferred stock may be utilized in making acquisitions.
As of the date of this prospectus, there were no shares of
$0.001 par value common stock issued and outstanding.
SHARES ELIGIBLE FOR FUTURE SALE
As of the date of this prospectus, there were 11,000,000
shares of our common stock issued and outstanding. Upon the
effectiveness of this registration statement, 2,010,000 shares of
common stock may be resold pursuant to this prospectus without
further restriction under the Securities Act. The remaining
8,990,000 shares of common stock are currently restricted but may
be resold subject to resale limitations of Rule 144 under the
Securities Act.
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 year, may be entitled to sell in the open market within
any three-month period a number of shares of common stock that
does not exceed the greater of (i) one percent 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 sales. Sales under 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 two years 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 months preceding such sale.
Prior to the offering, there has been no market for our
common stock. No predictions can be made of the effect, if any,
that market sales of shares of common stock or the availability of
such shares for sale will have on the market price prevailing from
time to time. Nevertheless, sales of significant amounts of our
common stock could adversely affect the prevailing market price of
the common stock, as well as impair our ability to raise capital
through the issuance of additional equity securities.
MARKET FOR COMMON STOCK
MARKET INFORMATION
No public trading market exists for our securities. We plan
to eventually seek listing on the OTCBB. We cannot guarantee that
we will obtain a listing, and there can be no assurance that a
regular trading market for our common stock will ever be
developed.
20
HOLDERS
As of the date of this prospectus, there were forty-six
holders of record of our common stock.
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 towards our business plan. 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.
LEGAL MATTERS
The validity of the shares of our common stock covered by
this prospectus has been passed upon by Lehman Walstrand &
Associates, LLC, of Salt Lake City, Utah.
EXPERTS
The financial statements of Wrap-N-Roll as of December 31,
2000, appearing in this prospectus have been audited by Pritchett,
Siler & Hardy as set forth in their report appearing elsewhere
herein, and are included in reliance upon such report given upon
the authority of said firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
We have filed a registration statement on Form SB-2 under the
Securities Act of 1933 with respect to the shares offered hereby.
This prospectus does not contain all of the information set forth
in the registration statement and exhibits and schedules thereto.
For further information with respect to Wrap-N-Roll and the shares
offered hereby, reference is made to the registration statement
and the exhibits and schedules filed therewith. Statements
contained in this prospectus as to the contents of any contract or
any other document referred to are not necessarily complete, and
in each instance reference is made to the copy of such contract or
other document filed as an exhibit to the registration statement,
each such statement being qualified in all respects by such
reference. A copy of the registration statement, and the exhibits
and schedules thereto, may be inspected without charge at the
public reference facilities maintained by the Securities and
Exchange Commission in Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the
Commission located at Seven World Trade Center, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and copies of all or any part of the
registration statement may be obtained from the Commission upon
payment of a prescribed fee. This information is also available
from the Commission's Internet website, http://www.sec.gov.
21
INDEX TO FINANCIAL STATEMENTS
WRAP-N-ROLL USA, INC.
[Formerly Oxy General Corporation]
[A Development Stage Company]
Unaudited Statements at March 31, 2001
PAGE
- Unaudited Condensed Balance Sheets, March 31,
2001 and December 31, 2000 23
- Unaudited Condensed Statements of Operations,
for the three months ended March 31, 2001 and
2000 and for the period from inception on September 26,
1997 through March 31, 2001 24
- Unaudited Condensed Statements of Cash Flows,
for the three months ended March 31, 2001 and
2000 and for the period from inception on September 26,
1997 through March 31, 2001 25
- Notes to Unaudited Condensed Financial Statements 26
Audited Statements at December 31, 2000
- Independent Auditors' Report 31
- Balance Sheet, December 31, 2000 32
- Statements of Operations, for the years ended
December 31, 2000 and 1999 and for the period
from inception on September 26, 1997 through
December 31, 2000 33
- Statement of Stockholders' Equity (Deficit), from
Inception on September 26, 1997 through
December 31, 2000 34
- Statements of Cash Flows, for the years ended
December 31, 2000 and 1999 and for the period
from inception on September 26, 1997 through
December 31, 2000 35
- Notes to Financial Statements 37
22
WRAP-N-ROLL USA, INC.
[Formerly Oxy General Corporation]
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
March 31, December 31,
2001 2000
___________ ___________
CURRENT ASSETS:
Cash in bank $ 285 3,059
Accounts receivable 221 -
Related party receivable 5,970 7,230
___________ ___________
Total Current Assets 6,476 10,289
___________ ___________
$ 6,476 $ 10,289
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 998 1,440
Accounts payable-related party 168 149
Notes payable - related party 10,812 10,812
Accrued expenses - related party 4,098 228
Sales tax payable 71 -
___________ ___________
Total Current Liabilities 16,147 12,629
___________ ___________
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.001 par value,
5,000,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.001 par value,
20,000,000 shares authorized,
11,000,000 shares issued and
outstanding 11,000 11,000
Capital in excess of par value - -
Deficit accumulated during the
development stage (20,671) (13,340)
___________ ___________
Total Stockholders' Equity (Deficit) (9,671) (2,340)
___________ ___________
$ 6,476 $ 10,289
___________ ___________
Note: The Balance Sheet of December 31, 2000, was taken from the
audited financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited
condensed financial statements.
23
WRAP-N-ROLL USA, INC.
[Formerly Oxy General Corporation]
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three From Inception
Months Ended on September 26,
March 31, 1997 Through
___________________ March 31,
2001 2000 2001
______________________________
REVENUE $ 1,105 $ - $ 1,105
EXPENSES:
General and Administrative 8,166 1,225 21,062
Selling - - 116
______________________________
LOSS BEFORE OTHER
EXPENSES (7,061) (1,225) (20,073)
OTHER EXPENSES:
Interest Expense 270 14 598
______________________________
LOSS BEFORE INCOME TAXES (7,331) (1,239) (20,671)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
______________________________
NET LOSS $ (7,331) $ (1,239) $ (20,671)
______________________________
LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.00)
______________________________
The accompanying notes are an integral part of these unaudited
condensed financial statements.
24
WRAP-N-ROLL USA, INC.
[Formerly Oxy General Corporation]
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
For the Three From Inception
Months Ended on September 26,
March 31, 1997 Through
___________________ March 31,
2001 2000 2001
______________________________
Cash Flows From Operating Activities:
Net loss $ (7,331) $ (1,239) $ (20,671)
Adjustments to reconcile net loss to
net cash used by operating activities:
Stock issued for services - - 1,000
Changes in assets and liabilities:
Decrease (increase) in accounts receivable (221) - (221)
Additional accrued interest - related party 270 14 598
Increase (decrease) in accounts payable (352) - 1,237
Increase (decrease) in accrued expenses - related
party 3,600 - 3,600
Decrease (increase) in related party receivable 1,260 - (5,970)
Increase (decrease) in loan payable - - 712
__________ ________ _________
Net Cash Provided (Used) by Operating Activities (2,774) (1,225) (19,715)
__________ ________ _________
Cash Flows From Investing Activities: - - -
__________ ________ _________
Net Cash Provided by Investing Activities - - -
__________ ________ _________
Cash Flows From Financing Activities:
Proceeds from notes payable - related party - - 10,000
Proceeds from issuance of common stock - - 10,000
__________ ________ _________
Net Cash Provided by Financing Activities - - 20,000
__________ ________ _________
Net Increase (decrease) in Cash (2,774) (1,225) 285
Cash at Beginning of Period 3,059 9,400 -
_________ _________ ___________
Cash at End of Period $ 285 $ 8,175 $ 285
______________________________
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing Activities:
For the periods ended March 31, 2001 and 2000:
None
For the period from inception on September 26, 1997 through March
31, 2001:
The Company extended a loan payable of $712 and its accrued
interest of $100 into a new note payable of $812.
The Company issued 1,000,000 shares of its common stock for
services valued at $1,000.
The accompanying notes are an integral part of these unaudited
condensed financial statements.
25
WRAP-N-ROLL USA, INC.
[Formerly Oxy General Corporation]
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Wrap-N-Roll USA, Inc. (the Company) was organized
under the laws of the State of Nevada on September 26, 1997 as Oxy
General Corporation. Effective November 17, 2000, the Company
changed its name from Oxy General Corporation to Wrap-N-Roll USA,
Inc. The primary plan of operations of the Company is providing
specialized advertising services to businesses of all sizes
emphasizing on large format digital printing on perforated and non-
perforated vinyl substrates. Through use of a special non-
corrosive, vinyl material with a patented adhesive made by 3M, the
Company offers businesses the ability to wrap the exterior of
buildings, windows and motor vehicles with an advertising message.
The Company's services are segmented into stationary or mobile
advertising services. Stationary advertising services are defined
as advertising services provided by the company utilizing
stationary mediums for the display of the advertising message.
Such mediums include buildings, windows and storefronts. Mobile
advertising services are defined as advertising services provided
by the Company utilizing mobile mediums such as a motor vehicle,
for the display of the advertising message.
Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at March
31, 2001 and 2000 and for the periods then ended have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It
is suggested that these condensed financial statements be read in
conjunction with the financial statements and notes thereto
included in the Company's December 31, 2000 audited financial
statements. The results of operations for the periods ended March
31, 2001 and 2000 are not necessarily indicative of the operating
results for the full year.
Organization Costs - Organization costs, which reflect amounts
expended to organize the Company, amounted to $1,000 and were
expensed during the period ended December 31, 1997.
Operating Expenses - The Company leases two vehicles that are
available for clients to wrap their advertising on and the
vehicles are then driven in high traffic areas. To initially wrap
the vehicles to promote this service, the Company incurred and
expensed in December 2000 $116. The Company has decided to
include the expenses associated with this service in its operating
expenses. Thus, operating expenses now consist of all costs
associated with the goods and services sold. The financial
statements for all periods presented have been restated to reflect
this change in policy. The restatement had no effect on net
income or retained earnings.
Advertising Costs - Advertising costs, except for costs associated
with direct-response advertising, are charged to operations when
incurred. The costs of direct-response advertising are
capitalized and amortized over the period during which future
benefits are expected to be received.
Loss Per Share - The computation of loss per share is based on the
weighted average number of shares outstanding during the period
presented in accordance with Statement of Financial Accounting
Standards No. 128, "Earnings Per Share". [See Note 7]
26
WRAP-N-ROLL USA, INC.
[Formerly Oxy General Corporation]
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from
those estimated.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 136, "Transfers of Assets to a not
for profit organization or charitable trust that raises or holds
contributions for others", SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB Statement No. 133 (an amendment of FASB
Statement No. 133)", SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities - and
Amendment of SFAS No. 133", SFAS No. 139, "Recission of SFAS No.
53 and Amendment to SFAS No. 63, 89 and 21", and SFAS No. 140,
"Accounting to Transfer and Servicing of Financial Assets and
Extinguishment of Liabilities", were recently issued. SFAS No.
136, 137, 138, 139 and 140 have no current applicability to the
Company or their effect on the financial statements would not have
been significant.
NOTE 2 - CAPITAL STOCK
Common Stock - During September 1997, in connection with its
organization, the Company issued 1,000,000 shares of its
previously authorized, but unissued common stock. The shares were
issued for services rendered valued at $1,000 (or $.001 per
share).
During June 1999, the Company issued 10,000,000 shares of its
previously authorized, but unissued common stock for cash of
$10,000 (or $.001 per share).
NOTE 3 - OPERATING LEASES
The Company leases two vehicles under operating leases expiring in
2003.
Minimum future rental payments under non-cancelable operating
leases having remaining terms in excess of one year as of March
31, 2001 in aggregate are $17,060 through 2003.
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement
of Financial Accounting Standards No. 109 "Accounting for Income
Taxes". FASB 109 requires the Company to provide a net deferred
tax asset/liability equal to the expected future tax
benefit/expense of temporary reporting differences between book
and tax accounting methods and any available operating loss or tax
credit carryforwards. At March 31, 2001, the Company has
available unused operating loss carryforwards of approximately
$21,000, which may be applied against future taxable income and
which expire in various years through 2021.
27
WRAP-N-ROLL USA, INC.
[Formerly Oxy General Corporation]
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 4 - INCOME TAXES [Continued]
The amount of and ultimate realization of the benefits from the
operating loss carryforwards for income tax purposes is dependent,
in part, upon the tax laws in effect, the future earnings of the
Company, and other future events, the effects of which cannot be
determined. Because of the uncertainty surrounding the
realization of the loss carryforwards the Company has established
a valuation allowance equal to the tax effect of the loss
carryforwards and, therefore, no deferred tax asset has been
recognized for the loss carryforwards. The net deferred tax
assets are approximately $7,000 and $4,500 as of March 31, 2001
and December 31, 2000, respectively, with an offsetting valuation
allowance of the same amount resulting in a change in the
valuation allowance of approximately $2,500 during the three
months ended March 31, 2001.
NOTE 5 - RELATED PARTY TRANSACTIONS
Management Compensation - For the year ended December 31, 2000,
the Company did not pay any compensation to any officer/director
of the Company. On January 1, 2001, the Company entered into a
employment agreement with an officer/director/employee of the
Company to pay $1,000 per month. As of March 31, 2001, the
Company had accrued $3,000 in salary expense.
Office Space/Utilities - During the year ended December 31, 2000,
the Company did not have a need to rent office space. On January
1, 2001, the Company entered into a rental/utilities agreement
with an officer/director/employee of the Company allowing the
Company to use office space in his home for the operations of the
Company at a base rent of $100 per month. The Company also agreed
to pay the officer/director/employee of the Company a base
utilities/miscellaneous expense of $100 per month designated for
but not limited to heat, power, water, sewer, garbage collection,
recycling, phone, fax, Internet, computer, printer and any other
office items needed for the operations of the Company, not
currently being paid by the Company. As of March 31, 2001, the
Company had accrued $300 in rent expense and $300 in
utilities/miscellaneous expense.
Receivable - As of March 31, 2001, an officer/shareholder of the
Company had been advanced $5,970 by the Company as a no interest
loan.
Accounts Payable - As of March 31, 2001, an officer/shareholder of
the Company was due $168 from the Company for reimbursable
expenses.
Notes Payable - As of March 31, 2001, the Company had two notes
payable to a shareholder in the total amount of $10,812. One note
for $812 is due April 1, 2002. The other note for $10,000 is due
October 31, 2001. Both notes accrue interest at 10% per annum.
Accrued interest amounted to $498 at March 31, 2001.
28
WRAP-N-ROLL USA, INC.
[Formerly Oxy General Corporation]
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company has incurred losses since its inception and
has not yet been successful in establishing profitable operations.
Further, the Company has current liabilities in excess of current
assets. These factors raise substantial doubt about the ability
of the Company to continue as a going concern. In this regard,
management is proposing to raise any necessary additional funds
not provided by operations through loans or through additional
sales of its common stock. There is no assurance that the Company
will be successful in raising this additional capital or achieving
profitable operations. The financial statements do not include
any adjustments that might result from the outcome of these
uncertainties.
NOTE 7 - LOSS PER SHARE
The following data show the amounts used in computing loss per
share for the periods presented:
From Inception on
For the September 26,
Year Ended 1997 Through
March 31, March 31,
_______________________ ____________
2001 2000 2001
____________________________________
Loss from continuing operations
available to common shareholders
(numerator) $ (7,331) $ (1,239) $ (20,671)
____________________________________
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 11,000,000 11,000,000 6,218,409
____________________________________
Dilutive loss per share was not presented, as the Company had no
common stock equivalent shares for all periods presented that
would affect the computation of diluted loss per share.
NOTE 8 - COMMITMENTS AND AGREEMENTS
Employment Agreement - The Company has entered into an employment
agreement with its sole officer and director ("employee"). The
agreement provides for a $1,000 per month salary for a period of
three years commencing January 1, 2001. The salary shall accrue
until the Company has achieved net income of $50,000 at which time
the Company will pay 50% of its net income before tax towards
reducing the accrued salary liability.
29
WRAP-N-ROLL USA, INC.
[Formerly Oxy General Corporation]
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 8 - COMMITMENTS AND AGREEMENTS [Continued]
Rental/Utilities Agreement - The Company has entered into a
rental/utilities agreement with its sole officer and director
("landlord"). The agreement provides for payment of $100 per
month for rent and $100 per month for utilities and other
incidentals on a month-to-month basis starting January 1, 2001.
The rent shall accrue until the Company has achieved net income of
$50,000 at which time the Company will pay 10% of its net income
before tax towards reducing the accrued rent liability. The
utilities portion shall accrue until the Company elects to make
payment.
NOTE 9 - SIGNIFICANT CUSTOMERS
The Company has just recently commenced operations and all of the
revenues received by the Company are from a limited number of
clients, the loss of which could have a material impact on the
operations of the Company.
30
INDEPENDENT AUDITORS' REPORT
Board of Directors
WRAP-N-ROLL USA, INC.
(Formerly Oxy General Corporation)
Salt Lake City, Utah
We have audited the accompanying balance sheet of Wrap-N-Roll USA,
Inc. (formerly known as Oxy General Corporation) [a development
stage company] at December 31, 2000, and the related statements of
operations, stockholders' equity (deficit) and cash flows for the
years ended December 31, 2000 and 1999 and for the period from
inception on September 26, 1997 through December 31, 2000. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements audited by us present
fairly, in all material respects, the financial position of Wrap-N-
Roll USA, Inc. (formerly known as Oxy General Corporation) [a
development stage company] as of December 31, 2000, and the
results of its operations and its cash flows for the years ended
December 31, 2000 and 1999 and for the period from inception on
September 26, 1997 through December 31, 2000, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note 6 to the financial statements, the Company has incurred
losses since its inception and has not yet been successful in
establishing profitable operations. Further, the Company has
current liabilities in excess of current assets. These factors
raise substantial doubt about the ability of the Company to
continue as a going concern. Management's plans in regards to
these matters are also described in Note 6. The financial
statements do not include any adjustments that might result from
the outcome of these uncertainties.
PRITCHETT, SILER & HARDY, P.C.
February 16, 2001
Salt Lake City, Utah
31
WRAP-N-ROLL USA, INC.
(Formerly Oxy General Corporation)
[A Development Stage Company]
BALANCE SHEETS
ASSETS
December 31,
2000
__________
CURRENT ASSETS:
Cash in bank $ 3,059
Related party receivable 7,230
__________
Total Current Assets 10,289
__________
$ 10,289
__________
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 1,440
Accounts payable - related party 149
Notes payable - related party 10,812
Accrued interest payable - related party 228
__________
Total Current Liabilities 12,629
__________
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.001 par value,
5,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
20,000,000 shares authorized,
11,000,000 shares issued and outstanding 11,000
Capital in excess of par value -
(Deficit) accumulated during the
development stage (13,340)
__________
Total Stockholders' Equity (Deficit) (2,340)
__________
$ 10,289
__________
The accompanying notes are an integral part of these financial
statements.
32
WRAP-N-ROLL USA, INC.
(Formerly Oxy General Corporation)
[A Development Stage Company]
STATEMENTS OF OPERATIONS
For the From Inception on
Year Ended September 26,
December 31, 1997 Through
_______________________December 31,
2000 1999 2000
______________________________
REVENUE $ - $ - $ -
EXPENSES:
Selling 116 - 116
General and Administrative 10,584 835 12,896
______________________________
LOSS BEFORE OTHER
EXPENSES (10,700) (835) (13,012)
OTHER EXPENSES:
Interest Expense 242 49 328
______________________________
LOSS BEFORE INCOME TAXES (10,942) (884) (13,340)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
______________________________
NET LOSS $(10,942) $ (884) $ (13,340)
______________________________
LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.00)
_________________________________
The accompanying notes are an integral part of these financial
statements.
33
WRAP-N-ROLL USA, INC.
(Formerly Oxy General Corporation)
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON SEPTEMBER 26, 1997
THROUGH DECEMBER 31, 2000
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
__________________________________________ Excess of Development
Shares Amount Shares Amount Par Value Stage
___________________________________________________________________
BALANCE, September 26,
1997 - $ - - $ - $ - $ -
Issuance of 1,000,000
shares of common stock for
services at $.001 per share,
September, 1997 - - 1,000,000 1,000 - -
Net loss for the period ended
December 31, 1997 - - - - - (1,336)
_______ _______ ___________ ___________ _______ _________
BALANCE, December 31,
1997 - - 1,000,000 1,000 - (1,336)
Net loss for the year ended
December 31, 1998 - - - - - (178)
_______ ________ ___________ ____________ _______ __________
BALANCE, December 31,
1998 - - 1,000,000 1,000 - (1,514)
Issuance of 10,000,000
shares of common stock for
cash at $.001 per share,
June, 1999 - - 10,000,000 10,000 - -
Net loss for the year ended
December 31, 1999 - - - - - (884)
________ _______ ____________ ____________ ________ _________
BALANCE, December 31,
1999 - - 11,000,000 11,000 - (2,398)
Net loss for the year ended
December 31, 2000 - - - - - (10,942)
________ ________ ___________ ____________ _________ _________
BALANCE, December 31,
2000 - $ - 11,000,000 $ 11,000 $ - $ (13,340)
________ ________ ____________ ____________ _________ _________
The accompanying notes are an integral part of this financial
statement.
34
WRAP-N-ROLL USA, INC.
(Formerly Oxy General Corporation)
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
For the From Inception on
Year Ended September 26,
December 31, 1997 Through
___________________ December 31,
2000 1999 2000
______________________________
Cash Flows Provided by Operating Activities:
Net loss $ (10,942) $ (884) $ (13,340)
Adjustments to reconcile net loss to
net cash used by operating activities:
Stock issued for services - - 1,000
Changes in assets and liabilities:
Increase (decrease) in accounts payable 1,589 49 1,589
Increase (decrease) in loan payable - - 712
Decrease (increase) in related party receivable (7,230) - (7,230)
Additional accrued interest - related
party 242 - 328
_______ ________ _________
Net Cash Provided (Used) by
Operating Activities (16,341) (835) (16,941)
_______ ________ _________
Cash Flows Provided by Investing
Activities - - -
_______ ________ _________
Net Cash Provided by Investing
Activities - - -
_______ ________ _________
Cash Flows Provided by Financing
Activities:
Proceeds from notes payable - related party 10,000 235 10,000
Proceeds from issuance of common stock - 10,000 10,000
_______ ________ _________
Net Cash Provided by Financing
Activities 10,000 10,235 20,000
_______ ________ _________
Net Increase (Decrease) in Cash (6,341) 9,400 3,059
Cash at Beginning of Period 9,400 - -
________ ________ _________
Cash at End of Period $ 3,059 $ 9,400 $ 3,059
________ ________ _________
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
[Continued]
35
WRAP-N-ROLL USA, INC.
(Formerly Oxy General Corporation)
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
[CONTINUED]
Supplemental Schedule of Noncash Investing and Financing Activities:
For the year ended December 31, 2000:
The Company extended a loan payable of $712 and its accrued
interest of $100 into a new note payable of $812.
For the period from inception on September 26, 1997 through
December 31, 1999:
The Company issued 1,000,000 shares of its common stock for
services valued at $1,000.
The accompanying notes are an integral part of these financial
statements.
36
WRAP-N-ROLL USA, INC.
(Formerly Oxy General Corporation)
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Wrap-N-Roll USA, Inc. (the Company) was organized
under the laws of the State of Nevada on September 26, 1997 as Oxy
General Corporation. Effective November 17, 2000, the Company
changed its name from Oxy General Corporation to Wrap-N-Roll USA,
Inc. The primary plan of operations of the Company is providing
specialized advertising services to businesses of all sizes
emphasizing on large format digital printing on perforated and non-
perforated vinyl substrates. Through use of a special non-
corrosive, vinyl material with a patented adhesive made by 3M, the
Company offers businesses the ability to wrap the exterior of
buildings, windows and motor vehicles with an advertising message.
The Company's services are segmented into stationary or mobile
advertising services. Stationary advertising services are defined
as advertising services provided by the company utilizing
stationary mediums for the display of the advertising message.
Such mediums include buildings, windows and storefronts. Mobile
advertising services are defined as advertising services provided
by the Company utilizing mobile mediums such as a motor vehicle,
for the display of the advertising message.
Organization Costs - Organization costs, which reflect amounts
expended to organize the Company, amounted to $1,000 and were
expensed during the period ended December 31, 1997.
Advertising Costs - Advertising costs, except for costs associated
with direct-response advertising, are charged to operations when
incurred. The costs of direct-response advertising are
capitalized and amortized over the period during which future
benefits are expected to be received.
Loss Per Share - The computation of loss per share is based on the
weighted average number of shares outstanding during the period
presented in accordance with Statement of Financial Accounting
Standards No. 128, "Earnings Per Share". [See Note 7]
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from
those estimated.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 136, "Transfers of Assets to a not
for profit organization or charitable trust that raises or holds
contributions for others", SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB Statement No. 133 (an amendment of FASB
Statement No. 133.),", SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities - and
Amendment of SFAS No. 133", SFAS No. 139, "Recission of SFAS No.
53 and Amendment to SFAS No. 63, 89 and 21", and SFAS No. 140,
"Accounting to Transfer and Servicing of Financial Assets and
Extinguishment of Liabilities", were recently issued. SFAS No.
136, 137, 138, 139 and 140 have no current applicability to the
Company or their effect on the financial statements would not have
been significant.
37
WRAP-N-ROLL USA, INC.
(Formerly Oxy General Corporation)
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK
Common Stock - During September 1997, in connection with its
organization, the Company issued 1,000,000 shares of its
previously authorized, but unissued common stock. The shares were
issued for services rendered valued at $1,000 (or $.001 per
share).
During June 1999, the Company issued 10,000,000 shares of its
previously authorized, but unissued common stock for cash of
$10,000 (or $.001 per share).
NOTE 3 - OPERATING LEASES
The company leases two vehicles under operating leases expiring in
2003.
Minimum future rental payments under non-cancelable operating
leases having remaining terms in excess of one year as of
December 31, 2000 for each of the next five years and in the
aggregate are:
Year Ended December 31, Amount
2001 $ 6,824
2002 6,824
2003 4,549
2004 -
2005 -
______
Total minimum future rental payments: $18,197
______
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement
of Financial Accounting Standards No. 109 "Accounting for Income
Taxes". FASB 109 requires the Company to provide a net deferred
tax asset/liability equal to the expected future tax
benefit/expense of temporary reporting differences between book
and tax accounting methods and any available operating loss or tax
credit carryforwards. At December 31, 2000, the Company has
available unused operating loss carryforwards of approximately
$13,000, which may be applied against future taxable income and
which expire in various years through 2020.
The amount of and ultimate realization of the benefits from the
operating loss carryforwards for income tax purposes is dependent,
in part, upon the tax laws in effect, the future earnings of the
Company, and other future events, the effects of which cannot be
determined. Because of the uncertainty surrounding the
realization of the loss carryforwards the Company has established
a valuation allowance equal to the tax effect of the loss
carryforwards and, therefore, no deferred tax asset has been
recognized for the loss carryforwards. The net deferred tax
assets are approximately $4,500 as of December 31, 2000 with an
offsetting valuation allowance of the same amount resulting in a
change in the valuation allowance of approximately $3,700 during
2000.
38
WRAP-N-ROLL USA, INC.
(Formerly Oxy General Corporation)
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - RELATED PARTY TRANSACTIONS
Management Compensation - As of December 31, 2000, the Company has
not paid any compensation to any officer/director of the Company.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his/her home as a mailing address, as needed, at no
expense to the Company.
Receivable - As of December 31, 2000, an officer/shareholder of
the Company had been advanced $7,230 by the Company as a no
interest loan.
Accounts Payable - As of December 31, 2000 an officer/shareholder
of the Company was due $149 from the Company for reimbursable
expenses.
Notes Payable - As of December 31, 2000, the Company had two notes
payable to a shareholder in the total amount of $10,812. One note
for $812 is due April 1, 2001. The other note for $10,000 is due
October 31, 2001. Both notes accrue interest at 10% per annum.
Accrued interest amounted to $228 at December 31, 2000.
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company has incurred losses since its inception and
has not yet been successful in establishing profitable operations.
Further, the Company has current liabilities in excess of current
assets. These factors raise substantial doubt about the ability
of the Company to continue as a going concern. In this regard,
management is proposing to raise any necessary additional funds
not provided by operations through loans or through additional
sales of its common stock. There is no assurance that the Company
will be successful in raising this additional capital or achieving
profitable operations. The financial statements do not include
any adjustments that might result from the outcome of these
uncertainties.
39
WRAP-N-ROLL USA, INC.
(Formerly Oxy General Corporation)
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - LOSS PER SHARE
The following data shows the amounts used in computing loss per
share:
For the From Inception on
Year Ended September 26,
December 31, 1997 Through
___________________ December 31,
2000 1999 2000
______________________________
Loss from continuing operations
available to common shareholders
(numerator) $ (10,942) $ (884) $ (13,340)
______________________________
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 11,000,000 6,835,616 5,857,383
______________________________
Dilutive loss per share was not presented, as the Company had no
common stock equivalent shares for all periods presented that
would affect the computation of diluted loss per share.
40
================================== ==================================
Until _____________, 2001, all
dealers that effect transactions
in these securities, whether or
not participating in this 2,010,000 Common Shares
offering, may be required to
deliver a prospectus. This is in
addition to the dealers'
obligation to deliver a prospectus
when acting as underwriters and WRAP-N-ROLL USA, INC.
with respect to their unsold
allotments or subscriptions.
- ---------------------------------------
TABLE OF CONTENTS
- ---------------------------------------
Prospectus Summary 2
Risk Factors 3
Use of Proceeds 7 ---------------------
Description of Business 7 PROSPECTUS
Management's Discussion and ---------------------
Analysis or Plan of Operation 13
Legal Proceedings 14
Management 14
Executive Compensation 15
Principal Stockholders 16
Certain Relationships and Related
Transactions 16
Selling Security Holders 16 _________, 2001
Plan of Distribution 18
Description of the Securities 19
Market for Common Stock 20
Legal Matters 21
Experts 21
Additional Information 21
Index to Financial Statements 22
No dealer, salesperson or other person
has been authorized to give any
information or to make any
representations other than those
contained in this Prospectus and, if
given or made, such information or
representations must not be relied upon
as having been authorized by the Company.
This Prospectus does not
constitute an offer to sell or a solicitation
of an =================================
offer to buy any of the securities
offered hereby to whom it is
unlawful to make such offer in any
jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall,
under any circumstances, create any
implication that information contained
herein is correct as of any time
subsequent to the date hereof or
that there has been no change in the
affairs of the Company since such date.
========================================
41
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Articles of Incorporation provide that no officer or
director shall be personally liable to the corporation or its
shareholders for money damages except as provided pursuant to the
Nevada Revised Statutes. Our Bylaws provide that we will
indemnify and hold harmless, to the full extent allowed by the
laws of the State of Nevada, each person who was, or is threatened
to be made a party to, or is otherwise involved in any threatened
proceedings by reason of the fact that he or she is or was a
director or officer of the Company or is or was serving at the
request of the Company as a director, officer, partner, trustee,
employee, or agent of another entity, against all losses, claims,
damages, liabilities and expenses actually and reasonably incurred
or suffered in connection with such proceedings.
Chapter 78, Sections 78.7502 and 78.751, of the Nevada
Revised Statutes state the following:
NRS 78.7502 Discretionary and mandatory indemnification of
officers, directors, employees and agents: General provisions.
1. A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, except an action by or in the
right of the corporation, by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses,
including attorneys' fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection
with the action, suit or proceeding if he acted in good faith and
in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, does not, of itself,
create a presumption that the person did not act in good faith and
in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation, and that, with respect
to any criminal action or proceeding, he had reasonable cause to
believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against
expenses, including amounts paid in settlement and attorneys' fees
actually and reasonably incurred by him in connection with the
defense or settlement of the action or suit if he acted in good
faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation. Indemnification
may not be made for any claim, issue or matter as to which such a
person has been adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable to the
corporation or for amounts paid in settlement to the
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corporation,
unless and only to the extent that the court in which the action
or suit was brought or other court of competent jurisdiction
determines upon application that in view of all the circumstances
of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in
subsections 1 and 2, or in defense of any claim, issue or matter
therein, the corporation shall indemnify him against expenses,
including attorneys' fees, actually and reasonably incurred by him
in connection with the defense.
NRS 78.751 Authorization required for discretionary
indemnification; advancement of expenses; limitation on
indemnification and advancement of expenses.
1. Any discretionary indemnification under NRS 78.7502 unless
ordered by a court or advanced pursuant to subsection 2, may be
made by the corporation only as authorized in the specific case
upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances. The
determination must be made: (a) By the stockholders; (b) By the
board of directors by majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who
were not parties to the action, suit or proceeding so orders, by
independent legal counsel in a written opinion; or (d) If a quorum
consisting of directors who were not parties to the action, suit
or proceeding cannot be obtained, by independent legal counsel in
a written opinion.
2. The articles of incorporation, the bylaws or an agreement made
by the corporation may provide that the expenses of officers and
directors incurred in defending a civil or criminal action, suit
or proceeding must be paid by the corporation as they are incurred
and in advance of the final disposition of the action, suit or
proceeding, upon receipt of an undertaking by or on
behalf of the director or officer to repay the amount if it is
ultimately determined by a court of competent jurisdiction that he
is not entitled to be indemnified by the corporation. The provisions
of this subsection do not affect any rights to advancement of expenses
to which corporate personnel other than directors or officers may be
entitled under any contract or otherwise by law.
3. The indemnification and advancement of expenses authorized in
or ordered by a court pursuant to this section: (a) Does not exclude
any other rights to which a person seeking indemnification or advancement
of expenses may be entitled under the articles of incorporation or
any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, for either an action in his official
capacity or an action in another capacity while holding his
office, except that indemnification, unless ordered by a court
pursuant to NRS 78.7502 or for the advancement of expenses made
pursuant to subsection 2, may not be made to or on behalf of any
director or officer if a final adjudication establishes that his
acts or omissions involved intentional misconduct, fraud or a
knowing violation of the law and was material to the cause of
action. (b) Continues for a person who has ceased to be a
director, officer, employee or agent and inures to the benefit of
the heirs, executors and administrators of such a person.
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ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated costs and
expenses to be paid by us in connection with the securities being
offering by this prospectus and registration statement. No
expenses will be paid by the selling security holders.
Item Amount
---------------------------------- ------
SEC Registration Fees $ 51
Blue Sky Fees and Expenses* $ 500
Transfer Agent Fees and Expenses* $ 500
Printing and Engraving Expenses* $ 500
Legal Fees and Expenses* $5,000
Accounting Fees and Expenses* $5,000
Miscellaneous Fees and Expenses* $1,000
* Estimated Figure
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
Set forth below is information regarding the issuance and
sales of our securities without registration since its formation.
Effective June 1, 1999, we issued to Cliff Halling, our sole
officer and director, a total of 10,000,000 shares of common stock
for $10,000 cash.
All of the listed sales were made in reliance upon the
exemption from registration offered by Section 4(2) of the
Securities Act of 1933, as amended. We had reasonable grounds to
believe immediately prior to making an offer to the private
investors, and did in fact believe, that such purchasers (1) were
purchasing for investment and not with a view to distribution, and
(2) had such knowledge and experience in financial and business
matters that they were capable of evaluating the merits and risks
of their investment and were able to bear those risks. The
purchasers had access to pertinent information enabling them to
ask informed questions. The shares were issued without the
benefit of registration. No such sales involved the use of an
underwriter and no commissions were paid in connection with the
sale of any securities.
ITEM 27. EXHIBITS
Exhibits required to be attached by Item 601 of Regulation S-
B are listed below:
SEC Ref Page
No. No. Description
- ------- ---- -----------
3.1 *1* Articles of Incorporation of the Company, filed
with the State of Nevada on September 26, 1997.
3.2 *2* Certificate of Amendment of Articles of
Incorporation, filed with the State of Nevada on
October 19, 2000, but effective November 17,
2000.
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3.3 *1* Bylaws of the Company.
5.1 E-1 Opinion and consent of Lehman Walstrand &
Associates, LLC
10.1 *3* Promissory Note dated April 1, 2000 executed by
the Company.
10.2 *4* Promissory Note dated November 1, 2000 executed
by the Company.
10.3 *5* Employment Agreement by and between the Company
and Cliff Halling dated January 1, 2001.
10.4 *5* Rental/Utilities Agreement by and between the
Company and Cliff Halling dated January 1, 2001.
23.1 E-2 Consent of Pritchett, Siler & Hardy
*1* The listed exhibits are incorporated herein by this reference to
the Registration Statement on Form 10-SB, filed by the Company
with the Securities and Exchange Commission on February 10, 2000.
*2* The listed exhibit is incorporated herein by this reference to
the Annual Report on Form 10-KSB for the calendar year ended
December 31, 2000, filed by the Company with the Securities and
Exchange Commission on April 12, 2001.
*3* The listed exhibit is incorporated herein by this reference to
the Quarterly Report on Form 10-QSB for the quarter ended June
30, 2000, filed by the Company with the Securities and Exchange
Commission on August 14, 2000.
*4* The listed exhibits are incorporated herein by this reference to
the Quarterly Report on Form 10-QSB for the quarter ended
September 30, 2000, filed by the Company with the Securities and
Exchange Commission on November 9, 2000.
*5* The listed exhibits are incorporated herein by this reference to
the Quarterly Report on Form 10-QSB for the quarter ended
March 31, 2001, filed by the Company with the Securities and
Exchange Commission on May 16, 2001.
ITEM 28. UNDERTAKINGS
The undersigned Registrant undertakes:
1. To file, during any period in which it offers or sells
securities, a post- effective amendment to this registration
statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act.
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement.
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(iii) Include any additional or changed information on the plan
of distribution.
2. That, for determining liability under the Securities Act, to
treat each post-effective amendment as a new registration
statement of the securities offered, and the offering of the
securities at the time to be the initial bona fide offering.
3. To file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the
foregoing provisions, or otherwise, the small business issuer has
been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the small business issuer
of expenses incurred or paid by a director, officer or controlling
person of the small business issuer 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, the small business issuer 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 and will be governed by
the final adjudication of such issue.
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 for filing on Form
SB-2 and authorized this registration statement to be signed on
its behalf by the undersigned, in the City of Salt Lake City,
State of Utah, on July 6, 2001.
WRAP-N-ROLL USA, INC.
By: /s/ Cliff Halling
President, Secretary,Treasurer & Director
In accordance with the requirements of the Securities Act of
1933, this registration statement has been signed by the following
persons in the capacities and on the dates indicated.
July 6, 2001 /s/ Cliff Halling
President, Secretary, Treasurer & Director
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