U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM SB-2 REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
ROYAL PHOENIX
---------------------------------------------
(Name of small business issuer in its charter)
Nevada 5400 88-0475757
(State or other (Primary Standard (IRS Employer
jurisdiction of Industrial Classification Identification
incorporation or Code Number) Number)
organization)
4180 S. Sandhill Rd., Suite B-9
Las Vegas, NV 89121
(702) 866-5835
(Address and telephone number of principal executive offices)
---------------------
4180 S. Sandhill Rd., Suite B-9
Las Vegas, NV 89121
(Address of principal place of business or intended principal place of
business)
Joseph Scott Wilson, President
ROYAL PHOENIX
4180 S. Sandhill Rd., Suite B-9
Las Vegas, NV 89121
(702) 866-5835
(Name, address and telephone number of agent for service)
--------------------
Copies of Communications to:
Donald J. Stoecklein, Esq.
Stoecklein Law Group
Emerald Plaza
402 West Broadway, Suite 400
San Diego, CA 92101
(619) 595-4882
Approximate date of commencement of proposed sale to public:
As soon as practicable after the registration statement becomes effective
--------------------------
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please 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, please check the following box.[ ]
Calculation of Registration Fee
Proposed
Title of Each Proposed Maximum
Class of Amount to be Offering Aggregate Amount of
Securities to be Registered Price Per Offering Registration
Registered Share (1) Price(1) Fee
Common Stock, 250,000 $0.10 $25,000 $6.25
$.001 par value
TOTAL 250,000 N/A $25,000 $6.25
(1) The proposed maximum offering price is estimated solely for the purpose
of determining the registration fee and calculated pursuant to Rule 457(c).
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.
Subject to Completion, dated _______ __, 2001
Initial Public Offering
PROSPECTUS
ROYAL PHOENIX
250,000 Shares of Common Stock
$0.10 per share
The Offering
Per share Total
Public Price. $0.10 $25,000
Commissions. $0 $0
Proceeds to
ROYAL PHOENIX. $0.10 $25,000
We are offering to the public 250,000 shares of common stock on a "best
efforts" basis through our sole officer and director. If we do not sell all
250,000 shares within 180 days after commencement of this offering, the
offering will terminate and all money paid for shares will be promptly
returned to the purchasers, without interest and without deduction.
This is our initial public offering, and no public market currently exists
for our shares. The offering price may not reflect the market price of our
shares after the offering. There is no minimum purchase requirement and no
arrangement to place funds in an escrow, trust, or similar account.
________________________
An investment in our common stock involves a high degree of risk. You should
purchase our common stock only if you can afford a complete loss of your
purchase. See "Risk Factors" beginning on page 4 for a discussion of certain
matters that you should consider prior to purchasing any of our common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
________________________
The information contained in this prospectus is subject to completion or
amendment. We have filed a registration statement with the Securities and
Exchange Commission relating to the securities offered in this prospectus.
We may not sell these securities nor may we accept any offers to buy the
securities prior to the time the registration statement becomes effective.
This prospectus is not an offer to sell or a solicitation of an offer to buy
any securities. We shall not sell these securities in any state where such
offer, solicitation or sale would be unlawful before we register or qualify
the securities for sale in any such State.
THE DATE OF THIS PROSPECTUS IS _________________, 2001.
Prospectus Summary
Royal Phoenix is a Development Stage Company, incorporated in the State
of Nevada in October of 2000. Royal Phoenix was initially a wholly owned
subsidiary of Desert Health Products, Inc. ("Desert Health Products");
however it was decided by Desert Health Products to spin off Royal Phoenix
from Desert Health Products. Under the terms and conditions of the Separation
and Distribution Agreement entered into between Royal Phoenix and Desert
Health Products on October 18, 2000, as amended June 22, 2001, Royal Phoenix
agreed to issue 10,000 shares of common stock of Royal Phoenix to Desert
Health Products. Royal Phoenix is a provider of herbal products via internet
sales. Under the terms and conditions of a "License, Manufacture and
Distribution Agreement," executed between Desert Health Products and Royal
Phoenix on October 18, 2000, Desert Health Products will continue to
manufacture, package, ship, and handle credit card processing of Royal
Phoenix products. This relationship will allow Royal Phoenix to concentrate
on the marketing of herbal products. In addition Royal Phoenix may pursue
and market other vitamin products which will be private labeled specifically
for Royal Phoenix by companies other than Desert Health Products.
ROYAL PHOENIX's address and phone number is:
ROYAL PHOENIX
4180 S. Sandhill Rd.
Suite 18-A
Las Vegas, Nevada 89121
(702) 866-5835
The Offering
Securities Offered. 250,000 shares of common stock
Price Per Share. $0.10
Minimum Purchase. NONE
Common Stock Outstanding
before Offering. 710,000 shares of common stock
Common Stock Outstanding
after Offering. 960,000 shares of common stock
Estimated Total Proceeds. $25,000
Net Proceeds After Offering
Expenses. $19,000
Proposed OTCBB Symbol. RPHX
Use of Proceeds. The proceeds of the offering will be
used for website development, product branding
& analysis and general working capital.
SUMMARY FINANCIAL INFORMATION
The following table sets forth summary financial data derived from our
financial statements. The data should be read in conjunction with the
financial statements, related notes and other financial information included
in this prospectus.
228:
Operating Statement Data:
Nine Months For the Period
ending October 17, 2000
September (Inception) to
30, 2001 September 30, 2001
(audited) (audited)
Income Statement Data:
Revenues: $ 0 $ 0
Expenses: 6,390 12,303$
Net (Loss) from Operations $ (6,390) $ (18,393)
Loss per share $ (0.10) $ (0.03)
Balance Sheet Data: At September 30, 2001
(audited)
Total Assets. $ 2,907
Liabilities. 0
Stockholders' Equity. $ 2,907
CAPITALIZATION
The following table sets forth our capitalization at September 30, 2001,
after giving effect to and as adjusted to give effect to the sale of the
250,000 shares offered in this prospectus.
ACTUAL
At September AS
30, 2001 ADJUSTED
(audited)
Current Liabilities: $ 0 $ 0
Stockholders' Equity:
Common Stock, $0.001 par value;
20,000,000 shares authorized;
710,000 shares issued and outstanding 710
960,000 shares issued and outstanding
as adjusted following 250,000 share offering
0 960
Preferred Stock, $0.001 par value;
5,000,000 shares
authorized: no shares issued 0 0
Additional paid-in capital 20,590 45,340
Deficit accumulated during development stage
(18,393) (24,393)
Stockholders' Equity 2,907 21,907
Total Capitalization $ 2,907 $ 21,907
Risk Factors
Investors in Royal Phoenix should be particularly aware of the inherent
risks associated with our business. As of the date of this filing our
management is aware of the following material risks.
We are a development stage company organized in October 2000 and have no
operating history, which makes an evaluation of us extremely difficult. At
this stage of our business operations, even with our good faith efforts,
potential investors have a high probability of losing their investment.
We were incorporated in October of 2000 as a wholly owned subsidiary of
Desert Health Products. Concurrent with formation it was determined to spin
off Royal Phoenix. As a result of our recent start up Royal Phoenix has yet
to generate revenues from operations and has been focused on organizational,
start-up, and market analysis activities since we incorporated. Although we
have product to market as a result of our license with Desert Health
Products, there is nothing at this time on which to base an assumption that
our business operations will prove to be successful or that we will ever be
able to operate profitably. Our future operating results will depend on many
factors, including our ability to raise adequate working capital, demand for
our products, the level of our competition and our ability to attract and
maintain key management and employees. You should not invest in this
offering unless you can afford to lose your entire investment.
We are significantly dependent on our sole officer and director, who has
limited experience and will not spend full time working for us.
As compared to many other public companies, we do not have the depth of
managerial or technical personnel. Our business plan is significantly
dependent upon the abilities and continued participation of Joseph Scott
Wilson, our sole officer and director. Mr. Wilson is involved with other
businesses and there can be no assurance that he will continue to provide
services to us. Mr. Wilson will devote only a portion, less than 10 hours per
month, of his time to our activities. As our sole officer and director,
decisions are made at his sole discretion and not as a result of compromise
or vote by members of a board. The loss by or unavailability to the Company
of Mr. Wilson's services would have an adverse effect on our business,
operations and prospects. There can be no assurance that we would be able to
locate or employ personnel to replace Mr. Wilson, should his services be
discontinued.
We are highly dependent on Desert Health Products for our product.
We have entered into a license, manufacture, and distribution agreement
with Desert Health Products that provides us with our product. If Desert
Health Products were to become insolvent or choose to discontinue the supply
of our products, it may have a material adverse effect on our business and
plan of operations. Without the manufacture and distribution of our products,
we would be forced to seek alternative production and shipping facilities.
We have located alternative production and distribution facilities for
production and shipping facilities of the same or similar products; however,
there is no assurance that the products and services would be available on
the same price margins or quantities as those products and services provided
by Desert Health Products.
We will require additional financing in order to implement our marketing
plan.
Due to our start-up nature, we will have to incur the costs of
developing professional marketing materials, hiring new employees and
commencing marketing activities for our herbal products. To fully implement
our business plan we will require substantial additional funding. This
offering, if successful, will only enable us to maintain minimum operations
and working capital requirements and will assist us in further developing our
initial business operations.
Following this offering we will need to raise additional funds to
maintain and expand our operations. We plan to raise additional funds through
a private placement, registered offering, debt financing or other sources to
maintain and expand our operations. Adequate funds for this purpose on terms
favorable to us may not be available, and if available, on terms
significantly more adverse to us than are manageable. Without new funding, we
may be only partially successful or completely unsuccessful in implementing
our business plan, and our stockholders may lose part or all of their
investment.
We may never become profitable or sell any of our herbal products.
We have had no revenue since our incorporation in October 2000. We have
yet to undertake the sale of our herbal products or develop our website. Even
after we commence distribution of our product there is no guarantee that we
will become profitable. Our industry is highly competitive and there is no
guarantee that we will be able to secure the business of our target buyers.
Our auditor's report reflects the fact that without realization of additional
capital, it would be unlikely for us to continue as a going concern.
As a result of our deficiency in working capital at September 30, 2001
and other factors, our auditors have included a paragraph in their report
regarding substantial doubt about our ability to continue as a going concern.
Our plans in this regard are to seek additional funding through this offering
and future equity private placements or debt facilities.
We may not compete successfully in our industry.
There are a number of companies that compete directly and indirectly
with us. Many of these companies have financial, technical, marketing, sales,
manufacturing, distribution, and other resources that are significantly
greater than ours. In addition, some of these companies have name
recognition, established positions in the market, and long-standing
relationships with customers who purchase vitamins and nutritional products.
Accordingly, there is no assurance that we will be able to compete
successfully or that our competitors or future competitors will not develop
products that render our products less marketable.
There is no current public market for our common stock; therefore you may be
unable to sell your securities at any time, for any reason, and at any price.
As of the date of this prospectus, there is no public market for our
common stock. Although we plan to apply for listing our common stock on the
Over-the-Counter Bulletin Board, there can be no assurance that our attempts
to do so will be successful. Furthermore, if we do become listed with respect
to our common stock on the OTC Bulletin Board or elsewhere, there can be no
assurance that a market will develop for the common stock or that a market in
the common stock will be maintained. As a result of the foregoing, investors
may be unable to liquidate their investment for any reason.
About this Prospectus
You should only rely on the information contained in this prospectus.
We have not authorized anyone to provide information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of our common stock only in jurisdictions where offers and sales
are permitted.
Available Information
We are not subject to the informational requirements of the Securities
Exchange Act of 1934, as amended. Once our securities are registered under
the Securities Exchange Act of 1934, we will file reports and other
information with the Securities and Exchange Commission. We intend to
register our securities under Section 12(g) of the Exchange Act. Once our
registration statement becomes effective we shall file supplementary and
periodic information, documents and reports that are required under section
13 of the Securities Act of 1933, as amended.
All of our reports can be reviewed through the SEC's Electronic Data
Gathering Analysis and Retrieval System which is publicly available through
the SEC's web site (http://www.sec.gov).
We intend to furnish to our stockholders annual reports containing
financial statements audited by our independent certified public accountants
and quarterly reports containing reviewed unaudited interim financial
statements for the first three-quarters of each fiscal year.
We have filed with the Commission a registration statement on Form SB-2
under the Securities Act of 1933, as amended with respect to the securities
offered in this prospectus. This prospectus does not contain all the
information set forth in the registration statement, certain parts of which
are omitted in accordance with the rules and regulations of the SEC. For
further information with respect to us and the common stock offered in this
prospectus, reference is made to such registration statement, exhibits and
schedules. Statements contained in this prospectus as to the contents of any
contract or 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, including the exhibits and schedules can be reviewed
through EDGAR.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under "Prospectus Summary", "Risk Factors",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", "Our Business", and elsewhere in this prospectus constitute
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may", "will", "should", "expects",
"plans", "anticipates", "believes", "estimated", "predicts", "potential", or
"continue" or the negative of such terms or other comparable terminology.
These statements are only predictions and involve known and unknown risks,
uncertainties, and other factors that may cause our actual results, levels of
activity, performance, or achievements to be materially different from any
future results, levels of activity, performance, or achievements expressed or
implied by such forward-looking statements. These factors include, among
other things, those listed under "Risk Factors" and elsewhere in this
prospectus. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future
results, levels of activity, performance, or achievements. We are under no
duty to update any of the forward-looking statements after the date of this
prospectus to conform forward-looking statements to actual results.
USE OF PROCEEDS
The amounts and timing of expenditures described in the table for each
purpose may vary significantly depending on numerous factors, including,
without limitation, the progress of our marketing, distribution and further
development of our product packaging, our ability to establish collaborative
arrangements, the initiation of commercialization activities, and the
availability of other financing. We anticipate, based on currently proposed
plans and assumptions relating to our operations, that our available cash,
the maximum proceeds of this offering and cash flow from operations, if any,
will be adequate to satisfy our capital needs for approximately 12 months
following consummation of this offering.
The proceeds from the sale of the shares of common stock offered hereby
are estimated to be approximately $25,000. We intend to utilize the
estimated net proceeds following the offering for the following purposes:
Offering Proceeds
Total Proceeds $25,000
Less: Offering Expenses
Legal $5,000
Copying, Printing & Advertising $500
Other expenses $500
Net Proceeds from Offering $19,000
Use of Net Proceeds
Website Development $6,000
Product Branding & Analysis (1) $9,000
Working Capital $4,000
Total Use of Proceeds $25,000
(1) Product Branding and Analysis includes labels, printing of product sales
materials and design & production of product.
We intend to apply the balance of the proceeds of the offering to
working capital. Our management will have broad discretion with respect to
the use of proceeds retained as working capital. Such proceeds may be used to
defray overhead expenses, purchase capital equipment, fund expansion and
negative cash flow positions and for future opportunities and contingencies
that may arise.
DETERMINATION OF OFFERING PRICE
We have arbitrarily determined the initial public offering price of the
shares. We considered several factors in such determination. Including the
following:
* our start up status;
* prevailing market conditions, including the history and prospects
for the industry in which we compete;
* our future prospects; and
* our capital structure.
Therefore, the public offering price of the shares does not necessarily
bear any relationship to established valuation criteria and may not be
indicative of prices that may prevail at any time or from time to time in the
public market for the common stock. You cannot be sure that a public market
for any of our securities will develop and continue or that the securities
will ever trade at a price at or higher than the offering price in this
offering.
DILUTION
The difference between our initial public offering price per share of
common stock and the pro forma net tangible book value per share of common
stock after this offering constitutes the dilution to investors in this
offering. Our net tangible book value per share is determined by dividing
our net tangible book value (total tangible assets less total liabilities) by
the number of outstanding shares of common stock.
At September 30, 2001 our common stock had a pro forma net tangible book
value of approximately $2,907 or $0.0041 per share. After giving effect to
the receipt of the net proceeds from this offering offered in this prospectus
at an assumed initial offering price of $0.10 per share, our pro forma net
tangible book value at September 30, 2001, would have been $21,907 or $0.02
per share, representing an immediate increase in net tangible book value of
$0.0187 per share to our present stockholders, and immediate dilution of
$0.08 per share to investors, or 77.18%. The following table illustrates
dilution to investors on a per share basis:
Offering price per share... $0.10
Net tangible book value per share before offering $0.0041
Increase per share attributable to investors $0.0187
Pro forma net tangible book value per share after offering $0.02
Dilution per share to investors $0.08
The following table summarizes, as of September 30, 2001, the difference
between the number of shares of common stock purchased from us, the total
cash consideration paid and the average price per share paid by existing
stockholders of common stock and by the new investors purchasing shares in
this offering. The table assumes the sale of the 250,000 shares offered in
this prospectus at an assumed initial public offering price of $0.10 per
share and before any deduction of estimated offering expenses.
Average
Total Cash Price
Shares Purchased Consideration Per Share
Amount Percent Amount Percent
Original Stockholders 710,000 74% $21,300 46% $0.03
Public Stockholders 250,000 26% $25,000 54% $0.10
Total 960,000 100% $46,300 100%
PLAN OF DISTRIBUTION AND TERMS OF THE OFFERING
This is a "direct public" offering. We will not receive any proceeds of
the offering unless we sell all of the 250,000 shares offered in this
prospectus. If all of the shares are not sold, subscribers will lose the use
of their funds for the offering period of up to 180 days; the funds invested
by them will be promptly returned to the subscribers at the end of the
offering without interest and without deduction.
We are offering Two hundred Fifty thousand (250,000) shares at ten cents
($0.10) per share. We can give no assurance that the shares will be sold.
If subscriptions are received for fewer than 250,000 shares, no shares will
be sold.
Funds received prior to reaching the 250,000 shares will be held in a
non-interest bearing impound account and will not be used until the offering
is completed. If we do not sell 250,000 shares within 180 days after
commencement of this offering, the offering will terminate and all money paid
for shares will be promptly returned to the purchasers, without interest and
without deduction. Our sole officer and director will have sole authority
over the funds raised, including the funds prior to completion of the
offering.
If we were to be unsuccessful in achieving the offering, funds will be
redistributed to all investors who have purchased the shares offered in this
prospectus. Upon achieving the offering and the acceptance of a subscription
for shares, our transfer agent will issue the shares to the purchasers. We
may continue to offer shares for a period of 180 days after commencement of
this offering or until we have sold all of the shares offered in this
prospectus. During the offering period, no subscriber will be entitled to any
refund of any subscription.
We will sell the shares on a "best efforts basis" through our sole
officer and director, Joseph Scott Wilson, who will not receive any
compensation in connection with the sale of shares, although we will
reimburse him for expenses incurred in connection with the offer and sale of
the shares. Mr. Wilson will be relying on Rule 3a4-1 of the Exchange Act as a
"safe harbor" from registration as a broker-dealer in connection with the
offer and sales of the shares. In order to rely on such "safe harbor"
provisions provided by Rule 3a4-1, he must be in compliance with all of the
following:
* he must not be subject to a statutory disqualification;
* he must not be compensated in connection with such selling
participation by payment of commissions or other payments based
either directly or indirectly on such transactions;
* he must not be an associated person of a broker-dealer;
* he must restrict participation to transactions involving offers
and sale of the shares;
* he must perform substantial duties for the issuer after the close
of the offering not connected with transactions in securities,
and not have been associated with a broker or dealer for the
preceding 12 months, and not participate in selling an offering
of securities for any issuer more than once every 12 months; and
* he must restrict participation to written communications or
responses to inquiries of potential purchasers.
Mr. Wilson intends to comply with the guidelines enumerated in Rule 3a4-
1. Mr. Wilson has no current plans to purchase shares in the offering.
You may purchase shares by completing and manually executing a
subscription agreement and delivering it with your payment in full for all
shares, which you wish to purchase to our offices. Your subscription shall
not become effective until accepted by us and approved by our counsel.
LITIGATION
We may from time to time be involved in routine legal matters incidental
to our business; however, at this point in time we are currently not involved
in any litigation, nor are we aware of any threatened or impending
litigation.
MANAGEMENT
The members of our Board of Directors serve until the next annual
meeting of stockholders, or until their successors have been elected. The
officers serve at the pleasure of the Board of Directors. At present, Joseph
Scott Wilson is our sole officer and director. Information as to the director
and executive officer is as follows:
Name Age Title
Joseph Scott Wilson 32 President, Secretary/Treasurer, Director
Duties, Responsibilities and Experience
Joseph Scott Wilson is the President, Secretary/Treasurer and Director of
Royal Phoenix. Mr. Wilson has been self employed in various building trades
in Las Vegas, Nevada since 1994. While working in the building trades Mr.
Wilson acquired a usefulness and education on herbal products. Mr. Wilson's
knowledge of the herbal products created his interest in developing a method
of marketing herbal products through the Internet and other retail channels.
PRINCIPAL STOCKHOLDERS
The following table sets forth information as of the date of this
prospectus, and as adjusted giving effect to the sale of 250,000 shares of
common stock in this offering, relating to the beneficial ownership of our
common stock by those persons known to us to beneficially own more than 5% of
our capital stock and Joseph Scott Wilson, our sole officer and director. The
address of each person is care of Royal Phoenix.
Percent Percent
Name of Beneficial Owner Number Before After
Of Shares Offering Offering
Joseph Scott Wilson 450,000 63% 47%
Shearson Barney Equity Fund 250,000 35% 26%
All Directors, Officers and
Principle Stockholders as a Group 450,000 63% 47%
"Beneficial ownership" means the sole or shared power to vote or to
direct the voting of, a security, or the sole or shared investment power with
respect to a security (i.e., the power to dispose of or to direct the
disposition of, a security). In addition, for purposes of this table, a
person is deemed, as of any date, to have "beneficial ownership" of any
security that such person has the right to acquire within 60 days from the
date of this prospectus.
DESCRIPTION OF SECURITIES
Common Stock
Our Articles of Incorporation authorizes the issuance of 20,000,000
shares of common stock, $0.001 par value per share, of which 710,000 shares
were outstanding as of the date of this prospectus. Upon sale of the 250,000
shares, we will have outstanding 960,000 shares of common stock. Holders of
shares of common stock are entitled to one vote for each share on all matters
to be voted on by the stockholders. Holders of common stock have no
cumulative voting rights. Holders of shares of common stock are entitled to
share ratably in dividends, if any, as may be declared, from time to time by
the Board of Directors in its discretion, from funds legally available to be
distributed. In the event of a liquidation, dissolution or winding up of
Royal Phoenix, the holders of shares of common stock are entitled to share
pro rata all assets remaining after payment in full of all liabilities and
the prior payment to the preferred stockholders. Holders of common stock
have no preemptive rights to purchase our common stock. There are no
conversion rights or redemption or sinking fund provisions with respect to
the common stock. All of the outstanding shares of common stock are validly
issued, fully paid and non-assessable.
Preferred Stock
Our Articles of Incorporation authorizes the issuance of 5,000,000
shares of preferred stock, $.001 par value per share, of which no shares were
outstanding as of the date of this prospectus. The preferred stock may be
issued from time to time by the Board of Directors as shares of one or more
classes or series. Our board of directors, subject to the provisions of our
Articles of Incorporation and limitations imposed by law, is authorized to:
* adopt resolutions;
* to issue the shares;
* to fix the number of shares;
* to change the number of shares constituting any series; and
* to provide for or change the following:
- the voting powers;
- designations;
- preferences; and
- relative, participating, optional or other special rights,
qualifications, limitations or restrictions, including the
following:
- dividend rights (including whether dividends are
cumulative);
- dividend rates;
- terms of redemption (including sinking fund provisions);
- redemption prices;
- conversion rights; and
- liquidation preferences of the shares constituting any
class or series of the preferred stock.
In each of the listed cases, we will not need any further action or vote
by the stockholders.
One of the effects of undesignated preferred stock may be to enable the
Board of Directors to render more difficult or to discourage an attempt to
obtain control of us by means of a tender offer, proxy contest, merger or
otherwise, and thereby to protect the continuity of our management. The
issuance of shares of preferred stock pursuant to the Board of Director's
authority described above may adversely affect the rights of holders of
common stock. For example, preferred stock issued by us may rank prior to the
common stock as to dividend rights, liquidation preference or both, may have
full or limited voting rights and may be convertible into shares of common
stock. Accordingly, the issuance of shares of preferred stock may discourage
bids for the common stock at a premium or may otherwise adversely affect the
market price of the common stock.
Nevada Laws
The Nevada Business Corporation Law contains a provision governing
"Acquisition of Controlling Interest." This law provides generally that any
person or entity that acquires 20% or more of the outstanding voting shares
of a publicly-held Nevada corporation in the secondary public or private
market may be denied voting rights with respect to the acquired shares,
unless a majority of the disinterested stockholders of the corporation elects
to restore such voting rights in whole or in part. The control share
acquisition act provides that a person or entity acquires "control shares"
whenever it acquires shares that, but for the operation of the control share
acquisition act, would bring its voting power within any of the following
three ranges:
* 20 to 33?%
* 33?% to 50%
* more than 50%.
A "control share acquisition" is generally defined as the direct or
indirect acquisition of either ownership or voting power associated with
issued and outstanding control shares. The stockholders or board of
directors of a corporation may elect to exempt the stock of the corporation
from the provisions of the control share acquisition act through adoption of
a provision to that effect in the articles of incorporation or bylaws of the
corporation. Our articles of incorporation and bylaws do not exempt our
common stock from the control share acquisition act.
The control share acquisition act is applicable only to shares of
"Issuing Corporations" as defined by the act. An Issuing Corporation is a
Nevada corporation, which;
* has 200 or more stockholders, with at least 100 of such
stockholders being both stockholders of record and residents of
Nevada; and
* does business in Nevada directly or through an affiliated
corporation. At this time, we do not have 100 stockholders of
record resident of Nevada. Therefore, the provisions of the
control share acquisition act do not apply to acquisitions of our
shares and will not until such time as these requirements have been
met. At such time as they may apply to us, the provisions of the
control share acquisition act may discourage companies or persons
interested in acquiring a significant interest in or control of
Royal Phoenix, regardless of whether such acquisition may be in the
interest of our stockholders.
The Nevada "Combination with Interested Stockholders Statute" may also
have an effect of delaying or making it more difficult to effect a change in
control of Royal Phoenix. This Statute prevents an "interested stockholder"
and a resident domestic Nevada corporation from entering into a
"combination," unless certain conditions are met. The Statute defines
"combination" to include any merger or consolidation with an "interested
stockholder," or any sale, lease, exchange, mortgage, pledge, transfer or
other disposition, in one transaction or a series of transactions with an
"interested stockholder" having;
* an aggregate market value equal to 5 percent or more of the
aggregate market value of the assets of the corporation;
* an aggregate market value equal to 5 percent or more of the
aggregate market value of all outstanding shares of the
corporation; or
* representing 10 percent or more of the earning power or net income
of the corporation.
An "interested stockholder" means the beneficial owner of 10 percent or
more of the voting shares of a resident domestic corporation, or an affiliate
or associate thereof. A corporation affected by the statute may not engage
in a "combination" within three years after the interested stockholder
acquires its shares unless the combination or purchase is approved by the
board of directors before the interested stockholder acquired such shares. If
approval is not obtained, then after the expiration of the three-year period,
the business combination may be consummated with the approval of the board of
directors or a majority of the voting power held by disinterested
stockholders, or if the consideration to be paid by the interested
stockholder is at least equal to the highest of;
* the highest price per share paid by the interested stockholder
within the three years immediately preceding the date of the
announcement of the combination or in the transaction in which he
became an interested stockholder, whichever is higher;
* the market value per common share on the date of announcement of
the combination or the date the interested stockholder acquired the
shares, whichever is higher; or
* if higher for the holders of Preferred Stock, the highest
liquidation value of the Preferred Stock.
LEGAL MATTERS
The legality of the shares offered hereby will be passed upon for Royal
Phoenix by Stoecklein Law Group, 402 West Broadway, Suite 400, San Diego,
California 92101.
EXPERTS
The financial statements of Royal Phoenix as of September 30, 2001 are
included in this prospectus and have been audited by Beckstead & Associates,
an independent auditor, as set forth in his report thereon appearing
elsewhere herein and are included in reliance upon such reports given upon
the authority of such individual as an expert in accounting and auditing.
DISCLOSURE OF COMMISSION'S
POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
No director of Royal Phoenix will have personal liability to us or any
of our stockholders for monetary damages for breach of fiduciary duty as a
director involving any act or omission of any such director since provisions
have been made in the Articles of Incorporation limiting such liability. The
foregoing provisions shall not eliminate or limit the liability of a director
for:
* any breach of the director's duty of loyalty to us or our
stockholders
* acts or omissions not in good faith or, which involve intentional
misconduct or a knowing violation of law
* or under applicable Sections of the Nevada Revised Statutes
* the payment of dividends in violation of Section 78.300 of the
Nevada Revised Statutes or,
* for any transaction from which the director derived an improper
personal benefit.
The Bylaws provide for indemnification of our directors, officers, and
employees in most cases for any liability suffered by them or arising out of
their activities as directors, officers, and employees if they were not
engaged in willful misfeasance or malfeasance in the performance of his or
her duties; provided that in the event of a settlement the indemnification
will apply only when the Board of Directors approves such settlement and
reimbursement as being for our best interests. The Bylaws, therefore, limit
the liability of directors to the maximum extent permitted by Nevada law
(Section 78.751).
Our officers and directors are accountable to us as fiduciaries, which
means they are required to exercise good faith and fairness in all dealings
affecting Royal Phoenix. In the event that a stockholder believes the
officers and/or directors have violated their fiduciary duties, the
stockholder may, subject to applicable rules of civil procedure, be able to
bring a class action or derivative suit to enforce the stockholder's rights,
including rights under certain federal and state securities laws and
regulations to recover damages from and require an accounting by management.
Stockholders who have suffered losses in connection with the purchase or sale
of their interest in Royal Phoenix in connection with such sale or purchase,
including the misapplication by any such officer or director of the proceeds
from the sale of these securities, may be able to recover such losses from
us.
We undertake the following:
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to our directors, officers and
controlling persons pursuant to the foregoing provisions, or otherwise, we
have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable.
OUR BUSINESS
Overview
Royal Phoenix is a Development Stage Company, incorporated in the State
of Nevada in October of 2000. Royal Phoenix was initially a wholly owned
subsidiary of Desert Health Products, Inc.; however its was determined in the
best interest of Desert Health Products to spin off Royal Phoenix from Desert
Health Products concurrent with the incorporation of Royal Phoenix in October
of 2000. As set forth in the amended Separation and Distribution Agreement
entered into between Royal Phoenix and Desert Health Products, Desert Health
Products retained 10,000 shares of Royal Phoenix stock in the spin off. Royal
Phoenix intends to provide herbal products via internet sales. Under the
terms and conditions of a "License, Manufacture and Distribution Agreement,"
executed between Desert Health Products and Royal Phoenix, Desert Health
Products will continue to manufacture, package, ship, and handle credit card
processing of Royal Phoenix products. This relationship will allow Royal
Phoenix to concentrate on the marketing of herbal products. To date, our only
activities have been organizational, directed at acquiring our License,
Manufacture and Distribution Agreement with Desert Health Products, raising
initial capital and developing our business plan. We have not commenced any
commercial or other operations. We have no full time employees and own no
real estate.
Acquisition of the License, Manufacture and Distribution Agreement
On October 18, 2000, we acquired an exclusive License, Manufacture and
Distribution Agreement from Desert Health Products. The License, Manufacture
and Distribution Agreement grants us an exclusive right to use the Royal
Phoenix herbal products developed by Desert Health Products and further
provides the manufacture, packaging, shipping, and handling of credit card
processing. The consideration for Desert Health Products providing the
license was Desert Health Products ability to sell more product through a
different distribution channel in addition to retaining 10,000 shares of
Royal Phoenix common stock.
The License
We have an exclusive non transferable license to make, have made, use,
market, import, have imported, lease, sell, distribute, offer for sale, or
otherwise dispose of the Royal Phoenix line of vitamins. Additionally, the
agreement with Desert Health Products provides that Desert Health Products
shall be responsible for the manufacture, shipment, distribution, labeling,
and collection of payments. The license shall continue until December 31,
2010 and does not contain any renewable option periods. The agreement with
Desert Health Products does not provide for any minimal shipment amounts. The
price we will pay Desert Health Products for products and shipping will
include the cost of production, including a reasonable allowance for
overhead, plus 30% of such cost and overhead. Nothing in the agreement
prevents Royal Phoenix from purchasing product from any other vendor or
development, marketing or producing other vitamin and herbal products.
Our Product
The following products are currently produced by Desert Health Products
under their own label. Desert Health Products, under the license between
Desert Health Products and Royal Phoenix will package and ship these products
under the brand name Royal Phoenix.
Vitamins
* Antioxidant - Royal Phoenixs' antioxidant is formulated to achieve
optimum results and is designed to work synergistically with our
multi-vitamin and multi-mineral tablets. Antioxidants neutralize
free radicals that can cause damage to cells, impairing the immune
system.
* Multi Vitamin Tablets - Our multi vitamin tablets are
synergistically blended to give maximum benefits.
Minerals
* Multi Mineral Tablets - Our multi mineral tablets contain a
complete balance of easy-to-absorb minerals.
* Chromium Picolinate - Chromium Picolinate is a mineral that helps
to increase lean body mass, lower blood cholesterol levels,
increase endurance, and regulate blood sugar. It enhances
metabolism and promotes permanent fat loss.
* Selenium Plus - Selenium is an essential trace element in
humans.
* Super Minerals w/Aloe Vera - Super Minerals w/Aloe Vera provides
the benefit of easily absorbed minerals and the health promoting
qualities of Aloe Vera.
Speciality Supplements
* Alcotrol - Kudzu extract, the main ingredient in Alcotrol, has been
used widely in China and Japan to treat alcoholism.
* AsthmaCalm - The combination of natural ingredients can aid in
desensitizing a person to allergies.
* Brain Boost - The cutting edge product incorporates Phosphatidyl
Serine and Ginkgo Biloba and other items that enable people to cope
with today's fast pace.
* Desert Boost - Bee pollen, (the caviar of the plant world),
Propolis, Royal Jelly and Aloe Vera increase energy and immune
systems.
* Enhanced Performance II - The low levels of testosterone in many
men today can be enhanced with this product.
* Enercoffee - This product, using whole bean coffee, can vitalize
energy levels.
* Euro Fiber - Euro Fiber wafers help fill the need for fiber in
today's diet.
* Ginkgo Biloba - Ginkgo Biloba has been used in Oriental medicine
since ancient times for brain function.
* Glucosamine Complex - Glucosamine with Boswellin can aid in the
construction of connective tissue and help suppress pain in joints.
* Liver p.s. Tablets - This product helps support liver health and
promote detoxification. *
* Lyco/Men - This supplement is designed with a synergistic blend of
selected phytonutrients, which include tomato extract and saw
palmetto that have been shown to support prostate health.
* Migrasafe-N - This supplement contains the herb Feverfew. Studies
show this herb can lower the incidence of migraine headache.
* OsteoDense Plus - Ipriflavone has shown clinically to support
increase in bone mineral density. Osteoporosis is a decrease of
bone density.
* Pain & Joint Support Cream - Two of the ingredients in this product
-Boswellin and Capsaicin - are known to lower pain and increase
circulation.
* Shark Cartilage - This is a non-toxic product from 100% shark
cartilage. Research shows this product may increase mobility and
reduce pain.
* Time-Released Melatonin - As we grow older the body produces less
of this needed substance. Desert Health's Time-Released Melatonin
can aid in sleep and better health.
Cost and Availability of Raw Materials
Many of the ingredients contained in our products are not commodities,
so price risk cannot be hedged with traditional futures contracts. In
addition, some of these plants are picked in the wild, rather than farm
cultivated, resulting in a highly unstable supply. This uncertain supply, in
combination with the possibility of continued increases in demand, could
result in significant increases in the price of the raw materials used in our
products. In addition, if due to supply shortages Royal Phoenix is unable to
meet the demand of its customers, even if for a short time, the result could
be a long-term decrease in sales of our Products. Our ability to increase the
price of our licensed products to adjust for increases in raw material costs
is limited and there can be no assurance that an adequate supply of
ingredients will be available to us and on terms commercially viable to us in
order for it to meet its supply obligations to customers. There can be no
assurance that raw materials will continue to be available on terms
commercially reasonable to us.
Risk Management Insurance
We do not maintain a liability insurance program as we have not
commenced the distribution of products to the general public or others except
by way of sample products. Our proposed insurance program, once implemented,
will include property, casualty, comprehensive general liability and products
liability coverage. Management believes that the proposed insurance program
is adequate. The testing, marketing and sale of health care products entail
an inherent risk of product liability. There can be no assurance that product
liability claims, relating to dietary supplement products, will not be
asserted against us, Desert Health Products, its collaborators or its
licensees. There can be no assurance that we will be able to maintain such
product liability insurance in assignments from various manufacturers or
obtain additional insurance, during clinical trials or upon commercialization
of any product, on acceptable terms, if at all, or that such insurance will
provide adequate coverage against any potential dietary supplement claims. A
product liability claim or product recall, relating to dietary supplement
products, could and most likely would have a material adverse effect on our
business, financial condition or results of operations.
Industry Overview
The worldwide market for natural dietary supplements is substantial.
According to NUTRITION BUSINESS JOURNAL, approximately 30 Billion dollars
were spent in the United States for non-prescription, plant-derived dietary
supplements, with sales, according to the BOSTON GLOBE, having increased over
20% annually in the last few years
Source and Availability of Raw Materials
The principal raw materials used by Desert Health Products in the
manufacturing process of the products distributed by Royal Phoenix are
natural ingredients purchased from distributors primarily in the United
States, with certain materials imported from other countries. Royal Phoenix
believes that the materials purchased by Desert Health Products from its
suppliers are readily available from numerous sources and that the loss of
these suppliers would not adversely affect its operations.
Quality Control
Finished production capsules are purchased from manufacturing
operations, which include modern quality control laboratories and testing
facilities. When products are ready for bottling automated equipment counts
the tablets or capsules, inserts them into bottles, applies a cap, which
includes a tamper-resistant inner seal, affixes a label and adds a tamper-
resistant outer safety seal. All of this is done according to Good
Manufacturing Practice regulations (GMP) for dietary supplements.
Competition
The market for vitamins and other nutritional supplements is highly
competitive in all of our channels of potential distribution. The marketplace
for private label business is extremely price sensitive with service levels,
quality, innovative packaging, marketing and promotional programs and
uniqueness of products being the key factors influencing competitiveness.
We believe that there are also numerous companies competing for
nutritional product lines on the internet. As most companies are privately
held, we are unable to precisely assess the size of competitors. Since we
have recently established operations, most competitors are substantially
larger than us and have greater financial resources
Government Regulation
The processing, formulation, packaging, labeling and advertising of our
products are subject to regulation by one or more federal agencies, including
the FDA, the Federal Trade Commission, the Consumer Product Safety
Commission, the United States Department of Agriculture and the United States
Environmental Protection Agency. These activities are also regulated by
various agencies of the states, localities, and countries in which the
Company's products are sold. In addition, Desert Health Products manufactures
certain of the Royal Phoenix products in compliance with the guidelines
promulgated by the United States Pharmacopoeia Convention, Inc. ("USP") and
other voluntary standard organizations.
The Dietary Supplemental Health and Education Act ("DSHEA") recognizes
the importance of good nutrition and the availability of safe dietary
supplements in preventive health care. DSHEA amends the Federal Food, Drug
and Cosmetic Act by defining dietary supplements, which include vitamins,
minerals, nutritional supplements and herbs, as a new category of food,
separate from conventional food. Under DSHEA, the FDA is generally prohibited
from regulating such dietary supplements as food additives or drugs. It
requires the FDA to regulate dietary supplements so as to guarantee consumer
access to beneficial dietary supplements, allowing truthful and proven
claims. Generally, dietary ingredients that were on the market before October
15, 1994 may be sold without FDA pre-approval and without notifying the FDA.
However, new dietary ingredients (those not used in dietary supplements
marketed before October 15, 1994) require premarket submission to the FDA of
evidence of a history of their safe use, or other evidence establishing that
they are reasonably expected to be safe. There can be no assurance that the
FDA will accept the evidence of safety for any new dietary ingredient that we
may decide to use, and the FDA's refusal to accept such evidence could result
in regulation of such dietary ingredients as food additives, requiring the
FDA pre-approval based on newly conducted, costly safety testing. Also, while
DSHEA authorizes the use of statements of nutritional support in the labeling
of dietary supplements, the FDA is required to be notified of such
statements, and there can be no assurance that the FDA will not consider
particular labeling statements used by Royal Phoenix to be drug claims rather
than acceptable statements of nutritional support, necessitating approval of
a costly new drug application, or relabeling to delete such statements.
DSHEA also authorizes the FDA to promulgate good manufacturing practice
regulations ("GMP") for dietary supplements, which would require special
quality controls for the manufacture, packaging, storage and distribution of
supplements. We believe that the Desert Health Products facilities and those
of independent third party manufacturers have completed significant facility
renovations that should allow the Company to comply with the new regulations.
DSHEA further authorizes the FDA to promulgate regulations governing the
labeling of dietary supplements, including claims for supplements pursuant to
recommendations made by the Presidential Commission on Dietary Supplement
Labels. Such rules, which were issued on September 23, 1997, entail specific
requirements relative to the labeling of the Company's dietary supplements.
The rules also require additional record keeping and claim substantiation,
reformulation, or discontinuance of certain products, which could have a
material expense to us.
In addition, we cannot predict whether new legislation or regulations
governing the Royal Phoenix's activities will be enacted by legislative
bodies or promulgated by agencies regulating our activities, or what the
effect of any such legislation or regulations on our business would be.
Research and Development
Royal Phoenix, being a start up operation, does not conduct primary
research for the development of new ingredients. Instead, Royal Phoenix
research efforts are focused on relying on new products developed by Desert
Health Products, and will in the future develop new products and packaging in
response to market trends and consumer demands. We intend to continually
reformulate existing Royal Phoenix products in response to changes in
nationally advertised brand formulas in order to maintain product
comparability.
We believe that flexibility and innovation with respect to new products
will be crucial factors in competing for market share in the field of
nutritional supplements. By monitoring market trends and by avoiding short-
lived "fad" items, we believe we will be able to anticipate significant
consumer demand for certain types of products.
Employees
We are a development stage company and currently have no employees. We
are currently managed by Joseph Scott Wilson, our sole officer and director.
We look to Mr. Wilson for his entrepreneurial skills and talents. For a
discussion of Mr. Wilson's experience, please see "Directors and Executive
Officers." We plan to use consultants, attorneys and accountants as necessary
and do not plan to engage any full-time employees in the near future. We may
hire marketing employees based on the projected size of the market and the
compensation necessary to retain qualified sales employees. A portion of any
employee compensation likely would include the right to acquire our stock
which would dilute the ownership interest of holders of existing shares of
our common stock.
REPORTS TO STOCKHOLDERS
We are not subject to the informational requirements of the Securities
Exchange Act of 1934, as amended. Once our registration statement is
effective and our securities are registered under the exchange act, we will
file supplementary and periodic information, documents and reports that are
required under section 13 of the Securities Act of 1933, as amended, with the
Securities and Exchange Commission. We intend to register our securities
under Section 12(g) of the Exchange Act. Such reports, proxy statements and
other information will be available through the Commission's Electronic Data
Gathering Analysis and Retrieval System which is publicly available through
the Commission's web site (http://www.sec.gov).
We intend to furnish annual reports to stockholders, which will include
audited financial statements reported on by our Certified Public Accountants.
In addition, we will issue unaudited quarterly or other interim reports to
stockholders, as we deem appropriate.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with by the
financial statements section.
Overview
Royal Phoenix, which was incorporated in Nevada in October 2000, is a
Development Stage Company, engaged in the business of marketing and
distributing Royal Phoenix, a line of herbal products. The Royal Phoenix
herbal product line was developed by Desert Health Products several years
ago, however, the product line, after development, was not marketed.
We have a limited operating history and have not generated revenues from
the sale of any products. Our company and products are the result of an
agreement which was entered into between Royal Phoenix and Desert Health
Products, which resulted in the spin off from Desert Health Products of the
Royal Phoenix line of herbal products developed by Desert Health Products.
Our activities have been limited to the negotiation of a license agreement
and preliminary market analysis. Consequently, we have incurred the expenses
of start-up. Future operating results will depend on many factors, including
our ability to raise adequate working capital, demand for our products, the
level of competition and our ability to deliver products while maintaining
quality and controlling costs.
Plan of Operation
Since our incorporation on October 17, 2000, we have not been engaged in
any significant operations nor have we had any revenues, as we are in the
development stage. Our only recent activities through September 30, 2001
include organization of the Company, the negotiation and execution of the
license agreement, and research over the Internet to determine methods of
acquiring market share presence without significant start up expenses. Our
goal is to distribute our own product line of herbal products, primarily
through internet generated sales, at the most cost efficient method.
During the next 12 months we plan to focus our efforts on the
development of our marketing program and establishing our website,
royalphoenix.com, for secure retail purchases.
Until an infusion of capital from this offering, we will not be able to
commence operations. We currently have insufficient capital to commence
operations and are dependent on the proceeds of this offering to begin such
operations. We have suffered start up losses and have a working capital
deficiency which raises substantial concern regarding our ability to continue
as a going concern. We believe that the proceeds of this offering will enable
us to maintain our operations and working capital requirements approximately
for the next 12 months, without taking into account any internally generated
funds from operations. We will need to raise $25,000 to continue operations
for the next 12 months based on our capital expenditure requirements. Capital
will be raised pursuant to this offering.
After this offering, we will require additional funds to maintain and
expand our operations. These funds may be raised through equity financing,
debt financing, or other sources, which may result in further dilution in the
equity ownership of the shares being offered in this prospectus. There is
still no assurance that, even with the funds from this offering, we will be
able to maintain operations at a level sufficient for an investor to obtain a
return on their investment in our common stock. Further, we may continue to
be unprofitable.
Liquidity and Capital Resources
Cash will be increasing primarily due to the receipt of funds from this
offering to offset our near term cash equivalents. Since inception, we have
financed our cash flow requirements through issuance of common stock. As we
expand our activities, we may continue to experience net negative cash flows
from operations, pending receipt of sales revenues. Additionally we
anticipate obtaining additional financing to fund operations through common
stock offerings and bank borrowings, to the extent available, or to obtain
additional financing to the extent necessary to augment our working capital.
We anticipate that we will incur operating losses in the next twelve
months. Our lack of operating history makes predictions of future operating
results difficult to ascertain. Our prospects must be considered in light of
the risks, expenses and difficulties frequently encountered by companies in
their early stage of development, particularly companies in new and rapidly
evolving markets. Such risks for us include, but are not limited to, an
evolving and unpredictable business model and the management of growth. To
address these risks, we must, among other things, obtain a customer base,
implement and successfully execute our business and marketing strategy,
continually develop and upgrade our product packaging, provide order
fulfillment through the Internet, respond to competitive developments, and
attract, retain and motivate qualified personnel. There can be no assurance
that we will be successful in addressing such risks, and the failure to do so
can have a material adverse effect on our business prospects, financial
condition and results of operations.
FACILITIES
We currently maintain a mailing address 4180 S. Sandhill Rd, Suite B-9,
Las Vegas, NV 89121. Rent is paid on a yearly basis at $180. Additionally,
Mr. Wilson, our sole officer and director, occasionally will utilize his home
to conduct business on our behalf. Mr. Wilson does not receive any
remuneration for the use of his home or time spent on behalf of us. We do not
believe that we will need to obtain additional office space at any time in
the foreseeable future until our business plan is more fully implemented.
As a result of our agreement with Desert Health Products we do not
require warehouse or shipping facilities. In the future we anticipate
requiring additional office space; however it is unknown at this time how
much space will be required.
MARKET PRICE OF COMMON STOCK
We may file for inclusion of our common stock on the Over-the-Counter
Bulletin Board; however, there can be no assurance that NASD will approve the
inclusion of the common stock. Prior to the effective date of this offering,
our common stock was not traded.
As of September 30, 2001 there was 2 stockholders of our common stock.
DIVIDENDS
The payment of dividends is subject to the discretion of our Board of
Directors and will depend, among other things, upon our earnings, our capital
requirements, our financial condition, and other relevant factors. We have not
paid or declared any dividends upon our common stock since our inception and,
by reason of our present financial status and our contemplated financial
requirements, do not anticipate paying any dividends upon our common stock in
the foreseeable future.
We have never declared or paid any cash dividends. We currently do not
intend to pay cash dividends in the foreseeable future on the shares of
common stock. We intend to reinvest any earnings in the development and
expansion of our business. Any cash dividends in the future to common
stockholders will be payable when, as and if declared by our Board of
Directors, based upon the Board's assessment of:
* our financial condition;
* earnings;
* need for funds;
* capital requirements;
* prior claims of preferred stock to the extent issued and
outstanding; and
* other factors, including any applicable laws.
Therefore, there can be no assurance that any dividends on the common
stock will ever be paid.
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation of our sole officer
and director, Joseph Scott Wilson from inception (October 17, 2000) to
September 30, 2001.
Summary Compensation Table
Long Term
Annual Compensation Compensation
Name and Principal Other Annual Restricted
Position YTD Salary Bonus Compensation Stock Options
Joseph Scott Wilson,
President, Secretary
Treasurer 2001 $3,556 -0- -0- -0- -0-
2000 $2,434 -0- -0- 250,000 -0-
Board Committees
We do not currently have any committees of the Board of Directors.
Additionally, due to the nature of our intended business, the Board of
Directors does not foresee a need for any committees in the foreseeable
future.
Transfer Agent
The transfer agent for the common stock will be Pacific Stock Transfer,
500 E. Warm Springs, Suite 240, Las Vegas, Nevada 89119.
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no public market for our common
stock. Future sales of substantial amounts of common stock in the public
market could adversely affect market prices prevailing from time to time.
Furthermore, since only a limited number of shares will be available for sale
shortly after this offering because of certain restrictions on resale, sales
of substantial amounts of our common stock in the public market after the
restrictions lapse could adversely affect the prevailing market price and our
ability to raise equity capital in the future.
Upon completion of this offering, we will have outstanding an aggregate
of 960,000 shares of common stock, assuming all of the 250,000 shares are
sold.
Of these shares, the 250,000 shares of common stock sold in this
offering will be freely tradable without restriction or further registration
under the Securities Act, unless such shares are purchased by our
"affiliates" as that term is defined in Rule 144 under the Securities Act.
The remaining 710,000 shares of common stock held by our existing stockholder
are "restricted securities" as that term is defined in Rule 144 under the
Securities Act. Restricted shares may be sold in the public market only if
registered or if they qualify for an exemption from registration under Rule
144. As a result of the provisions of Rules 144, additional shares will be
available for sale in the public market as follows:
* no restricted shares will be eligible for immediate sale on
the date of this prospectus; and
* the remainder of the restricted shares will be eligible for
sale from time to time thereafter upon expiration of their
respective one-year holding periods, subject to restrictions
on such sales by affiliates.
In general, under Rule 144 as currently in effect, beginning 90 days
after the Effective Date, an affiliate of Royal Phoenix, or person (or
persons whose shares are aggregated) who has beneficially owned restricted
shares for at least one year will be entitled to sell in any three-month
period a number of shares that does not exceed the greater of:
* one percent of the then outstanding shares of our common
stock; or
* the average weekly trading volume of our common stock in the
Over-the-Counter Bulletin Board during the four calendar weeks
immediately preceding the date on which notice of the sale is
filed with the SEC.
Sales pursuant to Rule 144 are subject to certain requirements relating
to manner of sale, notice, and the availability of current public information
about us. A person (or persons whose shares are aggregated) who is not
deemed to have been an affiliate of Royal Phoenix at any time during the 90
days immediately preceding the sale and who has beneficially owned restricted
shares for at least two years is entitled to sell such shares under Rule
144(k) without regard to the resale limitations.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
In June 2001, we engaged the services of Beckstead & Associates, C.P.A. of
Las Vegas, Nevada, to provide an audit of our financial statements for the
period from October 17, 2000 (inception) to September 30, 2001. This was our
first auditor. We have no disagreements with our auditor through the date of
this prospectus.
ROYAL PHOENIX
INDEX TO FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REPORT F-1
BALANCE SHEET F-2
STATEMENT OF OPERATIONS F-3
STATEMENT OF STOCKHOLDERS' EQUITY F-4
STATEMENT OF CASH FLOWS F-5
NOTES TO FINANCIAL STATEMENTS F-6-F-9
G. BRAD BECKSTEAD
Certified Public Accountant
330 E. Warm Springs
Las Vegas, NV 89119
702.257.1984
702.362.0540 fax
INDEPENDENT AUDITOR'S REPORT
October 9, 2001
Board of Directors
Royal Phoenix
Las Vegas, NV
I have audited the Balance Sheets of Royal Phoenix (the "Company") (A
Development Stage Company), as of September 30, 2001 and December 31, 2000,
and the related Statements of Operations, Stockholders' Equity, and Cash
Flows for the nine months ended September 30, 2001, year ended December 31,
2000, and the period October 17, 2000 (Date of Inception) to September 30,
2001. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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 statement
presentation. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Royal Phoenix (A Development
Stage Company) as of September 30, 2001 and December 31, 2000, and the
results of its operations and cash flows for the nine months ended September
30, 2001, year ended December 31, 2000, and the period October 17, 2000 (Date
of Inception) to September 30, 2001, 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 4 to the financial
statements, the Company has had limited operations and have not commenced
planned principal operations. This raises substantial doubt about its
ability to continue as a going concern. Management's plan in regard to these
matters are also described in Note 4. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
G. Brad Beckstead, CPA
Royal Phoenix
(a Development Stage Company)
Balance Sheet
September 30, December 31,
2001 2000
Assets
Current assets:
Cash $ 2,907 $ 8,997
Total current assets 2,907 8,997
$ 2,907 $ 8,997
Liabilities and Stockholder's Equity
Current liabilities: $ - $ -
Total current liabilities - -
Stockholders' equity:
Preferred stock, $0.001 par value,
5,000,000 shares
authorized, no shares issued and - -
outstanding
Common stock, $0.001 par value,
20,000,000 shares
authorized, 710,000 shares issued 710 700
and outstanding
Additional paid-in capital 20,590 20,300
(Deficit) accumulated during (18,393) (12,003)
development stage
2,907 8,997
$ 2,907 $ 8,997
Royal Phoenix
(a Development Stage Company)
Statement of Operations
9 months October 17, October 17, 2000
ending 2000 (inception) to
September (inception) September 30,
30, to 2001
2001 December 31,
2000
Revenue $ - $ - $ -
Expenses:
General and 2,834 9,569 12,403
administrative expenses
Payroll - related 3,556 2,434 5,990
party
Total expenses 6,390 12,003 18,393
Net (loss) $ (6,390) $ (12,003) $ (18,393)
Weighted average number
of
common shares 710,000 581,579 674,212
outstanding
Net (loss) per share $ (0.01) $ (0.02) $ (0.03)
Royal Phoenix
(a Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period October 17, 2000 (Inception) to September 30, 2001
Common Stock Additiona (Deficit) Total
Shares Amount l Accumulated Stockholders'
Paid-in During Equity
Capital Development
Stage
Balance, October 17, - $ - $ - $ - $ -
2000
Shares issued for 250,00 250 7,250 7,500
services 0
Shares issued for 250,00 250 7,250 7,500
cash 0
Shares issued for 200,00 200 5,800 6,000
cash to founder 0
Net (loss)
period ended (12,003) (12,003)
December 31, 2000
Balance, December 31, 700,00 700 20,300 (12,003) 8,997
2000 0
Shares issued per 10,000 10 290 300
separation agreement
Net (loss)
period ended (6,390) (6,390)
September 30, 2001
Balance, September 710,000 $ 710 $ 20,590 $ (18,393) $ 2,907
30, 2001
Royal Phoenix
(a Development Stage Company)
Statement of Cash Flows
9 months October 17, October 17, 2000
ending 2000 (Inception) to
September (Inception) September 30,
30, to 2001
2001 December 31,
2000
Cash flows from operating
activities
Net (loss) $ (6,390) $ (12,003) $ (18,393)
Shares issued for services - 7,500 7,500
Shares issued per 300 - 300
separation agreement
Net cash used by operating (6,090) (4,503) (10,593)
activities
Cash flows from investing
activities
Net cash used by investing - - -
activities
Cash flows from financing
activities
Common stock issued - 13,500 13,500
Net cash provided by - 13,500 13,500
financing activities
Net increase (decrease) in (6,090) 8,997 2,907
cash
Cash - beginning 8,997 - -
Cash - ending $ 2,907 $ 8,997 $ 2,907
Supplemental disclosures:
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
Non-cash investing and
financing activities:
Number of shares issued for - 250,000 250,000
services and inventory
Number of shares issued for 10,000 10,000
separation agreement
Royal Phoenix
(a Development Stage Company)
Notes
Note 1 - Summary of significant accounting policies
Organization
The Company was organized October 17, 2000 (Date of Inception) under the laws
of the State of Nevada, as Royal Phoenix. The Company began activities to
license, manufacture and distribute vitamin formulations. The Company is
utilizing the offering proceeds to commence its marketing activities.
The Company has not commenced significant operations and, in accordance with
SFAS #7, the Company is considered a development stage company.
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period.
Actual results could differ significantly from those estimates.
Cash and cash equivalents
For the purpose of the statements of cash flows, all highly liquid
investments with the maturity of three months or less are considered to be
cash equivalents.
Revenue recognition
Sales and related cost of sales are generally recognized upon shipment of
products. Cost of goods sold generally represents the cost of items sold and
the related shipping and selling expenses.
Advertising Costs
The Company expenses all costs of advertising as incurred. There were no
advertising costs included in general and administrative expenses as of
September 30, 2001 or December 31, 2000.
Fair value of financial instruments
Fair value estimates discussed herein are based upon certain market
assumptions and pertinent information available to management as of September
30, 2001 and December 31, 2000. The respective carrying value of certain on-
balance-sheet financial instruments approximated their fair values. These
financial instruments include cash and accounts payable. Fair values were
assumed to approximate carrying values for cash and payables because they are
short term in nature and their carrying amounts approximate fair values or
they are payable on demand.
Impairment of long lived assets
Long lived assets held and used by the Company are reviewed for possible
impairment whenever events or circumstances indicate the carrying amount of
an asset may not be recoverable or is impaired. No such impairments have
been identified by management at September 30, 2001 or December 31, 2000.
Earnings per share
The Company follows Statement of Financial Accounting Standards No. 128.
"Earnings Per Share" ("SFAS No. 128"). Basic earning per common share
("EPS") calculations are determined by dividing net income by the weighted
average number of shares of common stock outstanding during the year.
Diluted earning per common share calculations are determined by dividing net
income by the weighted average number of common shares and dilutive common
share equivalents outstanding. During periods when common stock equivalents,
if any, are anti- dilutive they are not considered in the computation.
Segment reporting
The Company follows Statement of Financial Accounting Standards No. 130,
"Disclosures About Segments of an Enterprise and Related Information". The
Company operates as a single segment and will evaluate additional segment
disclosure requirements as it expands its operations.
Income taxes
The Company follows Statement of Financial Accounting Standard No. 109,
"Accounting for Income Taxes" ("SFAS No. 109") for recording the provision
for income taxes. Deferred tax assets and liabilities are computed based
upon the difference between the financial statement and income tax basis of
assets and liabilities using the enacted marginal tax rate applicable when
the related asset or liability is expected to be realized or settled.
Deferred income tax expenses or benefits are based on the changes in the
asset or liability each period. If available evidence suggests that it is
more likely than not that some portion or all of the deferred tax assets will
not be realized, a valuation allowance is required to reduce the deferred tax
assets to the amount that is more likely than not to be realized. Future
changes in such valuation allowance are included in the provision for
deferred income taxes in the period of change.
Deferred income taxes may arise from temporary differences resulting from
income and expense items reported for financial accounting and tax purposes
in different periods. Deferred taxes are classified as current or non-
current, depending on the classification of assets and liabilities to which
they relate. Deferred taxes arising from temporary differences that are not
related to an asset or liability are classified as current or non-current
depending on the periods in which the temporary differences are expected to
reverse.
Recent pronouncements
The FASB recently issued Statement No. 137, "Accounting for Derivative
Instruments and Hedging Activities-Deferral of Effective Date of FASB
Statement No. 133". The Statement defers for one year the effective date of
FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities". The rule now will apply to all fiscal quarters of all fiscal
years beginning after June 15, 2000. In June 1998, the FASB issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." The
Statement will require the company to recognize all derivatives on the
balance sheet at fair value. Derivatives that are not hedges must be
adjusted to fair value through income, if the derivative is a hedge,
depending on the nature of the hedge, changes in the fair value of
derivatives will either be offset against the change in fair value of the
hedged assets, liabilities, or firm commitments through earnings or
recognized in other comprehensive income until the hedged item is recognized
in earnings. The ineffective portion of a derivative's change in fair value
will be immediately recognized in earnings. The company does not expect SFAS
No. 133 to have a material impact on earning s and financial position.
In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements (SAB
No. 101), which provides guidance on the recognition, presentation and
disclosure of revenue in financial statements. SAB No. 101 did not impact
the company's revenue recognition policies.
Note 2 - Income taxes
The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"), which
requires use of the liability method. SFAS No. 109 provides that deferred
tax assets and liabilities are recorded based on the differences between the
tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes, referred to as temporary differences. Deferred tax
assets and liabilities at the end of each period are determined using the
currently enacted tax rates applied to taxable income in the periods in which
the deferred tax assets and liabilities are expected to be settled or
realized.
The provision for income taxes differs from the amount computed by applying
the statutory federal income tax rate to income before provision for income
taxes. The sources and tax effects of the differences are as follows:
U.S federal statutory rate (34.0%)
Valuation reserve 34.0%
Total -%
As of September 30, 2001, the Company has a net operating loss carryforward
of approximately $18,000 for tax purposes, which will be available to offset
future taxable income. If not used, this carryforward will expire in 2021.
The deferred tax asset relating to the operating loss carryforward of
approximately $6,000 has been fully reserved at September 30, 2001.
Note 3 - Stockholder's equity
The Company is authorized to issue 5,000,000 shares of it $0.001 par value
preferred stock and 20,000,000 shares of its $0.001 par value common stock.
During October 2000, the Company issued 250,000 of its $0.001 par value
common stock at $0.03 per share to its director in exchange for services
valued at $7,500.
During October 2000, the Company issued 250,000 of its $0.001 par value
common stock at $0.03 per share for total cash of $7,500.
During December 2000, the Company issued 200,000 of its $0.001 par value
common stock at $0.03 per share to its director in exchange for total cash of
$6,000.
During June 2001, the Company issued 10,000 of its $0.001 par value common
stock at $0.03 per share pursuant to a Mutual Separation Agreement.
There have been no other issuances of common stock.
Note 4 - Going concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern which contemplates the
recoverability of assets and the satisfaction of liabilities in the normal
course of business. As noted above, the Company is in the development stage
and, accordingly, has not yet generated revenues from operations. Since its
inception, the Company has been engaged substantially in financing activities
and developing its product line, incurring substantial costs and expenses. As
a result, the Company incurred accumulated net losses from October 17, 2000
(inception) through the period ended September 30, 2001 of $18,093. In
addition, the Company's development activities since inception have been
financially sustained by capital contributions.
The ability of the Company to continue as a going concern is dependent upon
its ability to raise additional capital from the sale of common stock and,
ultimately, the achievement of significant operating revenues. The
accompanying financial statements do not include any adjustments that might
be required should the Company be unable to recover the value of its assets
or satisfy its liabilities.
Note 5 - Warrants and options
There are no warrants or options outstanding to acquire any additional shares
of common stock.
Note 6 - Related party transactions
The Company issued a combined total of 450,000 shares of its $0.001 par value
common stock to its director in exchange for cash and services valued at
$13,500.
The Company does not lease or rent any property. Office services are
provided without charge by the Company's director. Such costs are immaterial
to the financial statements and, accordingly, have not been reflected
therein.
No dealer, salesman or any other
person has been authorized to give ROYAL PHOENIX
any information or to make any
representation other than those
contained in this prospectus and, $25,000
if given or made, such information
or representation must not be
relied upon as having been
authorized by us. This prospectus
does not constitute an offer to
sell or a solicitation of any
offer to buy any security other
than the shares of common stock
offered by this prospectus, nor
does it constitute an offer to
sell or a solicitation of any
offer to buy the shares of a
common stock by anyone in any
jurisdiction in which such offer
or solicitation is not authorized,
or in which the person making such
offer or solicitation is not
qualified to do so, or to any
person to whom it is unlawful to
make such offer or solicitation.
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.
_____________________ _____________
TABLE OF CONTENTS PROSPECTUS
Page
Prospectus Summary 1 DEALER PROSPECTUS DELIVERY OBLIGATION
Summary Financial Information 2
Capitalization 3 Until the offering termination date,
Risk Factors 4 all dealers that effect transactions in
Special Note Regarding these securities, whether or not
Forward-Looking Statement 6 participating in this offering, may be
Use of Proceeds 7 required to deliver a prospectus. This
Determination of Offering is in addition to the dealers'
Price 8 obligation to deliver a prospectus when
Dilution 8 acting as underwriters and with respect
Plan of Distribution 9 to their unsold allotments or
Litigation 10 subscriptions.
Management 10
Principal Stockholders 11
Description of Securities 11
Legal Matters 13
Experts 13
Disclosure of Commission
Position of Indemnification
of Securities Act Liabilities 14
Our Business 15
Reports to Stockholders 19
Management Discussion and
Analysis 20
Facilities 21
Market Price of Common Stock 21
Dividends 21
Executive Compensation 22
Shares Eligible for Future
Sale 22
Changes in and Disagreements
with Accountants 23
Audited Financials Statements
Independent Auditors Report F-1
Balance Sheet F-2
Statement of Operations F-3
Statement of Stockholders'
Equity F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6
PART II: Information not required in Prospectus
INDEMNIFICATION OF OFFICERS AND DIRECTORS
None of our directors will have personal liability to us or any of our
stockholders for monetary damages for breach of fiduciary duty as a director
involving any act or omission of any such director since provisions have been
made in the Articles of Incorporation limiting such liability. The foregoing
provisions shall not eliminate or limit the liability of a director (i) for
any breach of the director's duty of loyalty to us or our stockholders, (ii)
for acts or omissions not in good faith or, which involve intentional
misconduct or a knowing violation of law, (iii) under applicable Sections of
the Nevada Revised Statutes, (iv) the payment of dividends in violation of
Section 78.300 of the Nevada Revised Statutes or, (v) for any transaction
from which the director derived an improper personal benefit.
The Bylaws provide for indemnification of the directors, officers, and
employees of Royal Phoenix in most cases for any liability suffered by them
or arising out of their activities as directors, officers, and employees of
Royal Phoenix if they were not engaged in willful misfeasance or malfeasance
in the performance of his or her duties; provided that in the event of a
settlement the indemnification will apply only when the Board of Directors
approves such settlement and reimbursement as being for the best interests of
the Corporation. The Bylaws, therefore, limit the liability of directors to
the maximum extent permitted by Nevada law (Section 78.751).
Our officers and directors are accountable to us as fiduciaries, which
means they are required to exercise good faith and fairness in all dealings
affecting us. In the event that a stockholder believes the officers and/or
directors have violated their fiduciary duties to us, the stockholder may,
subject to applicable rules of civil procedure, be able to bring a class
action or derivative suit to enforce the stockholder's rights, including
rights under certain federal and state securities laws and regulations to
recover damages from and require an accounting by management. Stockholders
who have suffered losses in connection with the purchase or sale of their
interest in Royal Phoenix in connection with such sale or purchase, including
the misapplication by any such officer or director of the proceeds from the
sale of these securities, may be able to recover such losses from us.
RECENT SALES OF UNREGISTERED SECURITIES
The Company is authorized to issue 5,000,000 shares of it $0.001 par
value preferred stock and 20,000,000 shares of its $0.001 par value common
stock.
During October 2000, the Company issued 250,000 of its $0.001 par value
common stock at $0.03 per share to its director in exchange for services
valued at $7,500.
During October 2000, the Company issued 250,000 of its $0.001 par value
common stock at $0.03 per share for total cash of $7,500.
During December 2000, the Company issued 200,000 of its $0.001 par value
common stock at $0.03 per share to its director in exchange for total cash of
$6,000.
During June 2001, the Company issued 10,000 of its $0.001 par value
common stock at $0.03 per share pursuant to a Mutual Separation Agreement.
There have been no other issuances of common stock.
EXHIBITS
The Exhibits required by Item 601 of Regulation S-B, and an index
thereto, are attached.
UNDERTAKINGS
A. The undersigned registrant hereby undertakes to:
(1) 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; and Notwithstanding the
forgoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which
was registered) and any deviation From the low or high end of the
estimated maximum offering range may be reflected in the form of
prospects filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in the volume and price represent no more than a
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, treat each post-
effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
B.
(1) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") 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 Act and is,
therefore, unenforceable.
(2) 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,
thereunto duly authorized, in the City of Las Vegas, State of Nevada, on
October 25, 2001.
ROYAL PHOENIX
By: /s/ Joseph Scott Wilson
Joseph Scott Wilson, President
EXHIBIT INDEX
Financial Statements:
a) Royal Phoenix (Attached)
Report of Independent Auditor
Balance Sheet For The Period Ending September 30, 2001
Statement of Operations For The Period October 17, 2000 (Inception)
through September 30, 2001
Statement of Stockholders' Deficit For The Period October 17, 2000
(Inception) through September 30, 2001.
Statement of Cash Flows For The Period October 17, 2000 (Inception)
through September 30, 2001
Notes to Financial Statements
Exhibit Description
3i Articles of Incorporation of Royal Phoenix
filed on October 17, 2000 -
3ii Bylaws of Royal Phoenix
5 Opinion of Donald J. Stoecklein, Esquire
10.1 Separation and Distribution Agreement dated October 18, 2001,
between Desert Health Products, Inc. and Royal Phoenix
10.2 License, Manufacture and Distribution Agreement
10.3 Addendum to Separation and Distribution Agreement
23-1 Consent of Beckstead & Associates, C.P.A.
23-2 Consent of Donald J. Stoecklein, Esquire