REGISTRATION NO.333-32564
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
Amendment #8 to Form SB - 2
Amended Form SB - 2REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
XUNANTUNICH INC.
(Exact name of registrant as specified in its charter)
Nevada 0273 76-0602960
(State or other jurisdiction of (Primary Standard (IRS Employer
incorporation or organization) Industrial Identification No.)
Classification
Code Number)
3E - 2775 Fir Street, Vancouver, BC V6K 1P1 CANADA
(250) 537-5732
(Address, including zip code, and telephone number,
including area code,
of registrant's principal executive offices)
Agent for Service: With a Copy to:
David Young Christopher J. Moran, Jr.
XUNANTUNICH INC. Inc. Attorney at Law
3E - 2775 Fir Street 4625 Clary Lake Drive
Vancouver, BC V2X 4B4 Canada Roswell, Georgia 30075
(604) 734 3546 (770) 518-9542
(770) 518-9640 Fax
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale
to the public:
Approximate date of commencement of proposed sale
to the public:As soon as practicable after the
effective date of this registration statement.
As soon as practicable after the effective date of this
Registration Statement.
If any of the securities being registered on this
form are to be offered on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act, check the
following box. [x]
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities
Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective
Registration Statement for the same offering. [ ]
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act Registration
Statement number of the earlier effective Registration
Statement for the same offering. [ ]
If this Form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check the
following box and list the Securities Act Registration
Statement number of the earlier effective Registration
Statement for the same offering. [ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of Proposed Proposed
each Amount Maximum Maximum Amount of
to be Offering Aggregate Registration
Class Registered Price Offering
of per unit price Fee
Securities
to be
registered
common 1,510,000 $ .20 per $302,000.00 $ 84.56
stock shares share
No exchange or over-the-counter market exists for
XUNANTUNICH INC. common stock. The average price paid for
XUNANTUNICH INC. common stock was $.0004 per share.
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 Securities and Exchange Commission, acting pursuant
to such section 8(a), may determine.
SUBJECT TO COMPLETION
Prospectus
, 2001
XUNANTUNICH INC.
1,510,000 shares of common stock
to be sold by the registrant as issuer and by current
shareholders
This is the initial public offering of common stock of
Xunantunich Inc. and no public market currently exists for
these shares. Xunantunich Inc. is offering for sale up to
one million shares of its common stock on a "self-
underwritten" best efforts basis at a price of $0.20 per
share for a period of one hundred and eighty days from the
date of this prospectus.
____________________________________________________________
Price to Public Underwriting Proceeds to
Commissions Xunantunich Inc.
Per Share: $020 per share $0 $0.20 per share
Total Offering:$0.20 per share $0 $200,000
____________________________________________________________
The price for the common shares offered was set arbitrarily
by us and does not relate to earnings, book value or any
other established method of valuation; there are no
provisions for the return of funds if only a small number of
shares are sold and no minimum subscription amount has been
set and no commissions will be paid for the sale of the
1,000,000 shares offered by Xunantunich Inc.
Concurrently with this offering, selling shareholders are
selling 510,000 shares at $.20 per share.
This investment involves a high degree of risk. See "Risk
Factors" beginning on page 5.
Neither the SEC nor any state securities commission has
approved or disapproved of these securities or passed upon
the adequacy or accuracy of this prospectus. The SEC has not
made any recommendations that you buy or not buy the shares.
Any representation to the contrary is a criminal offense.
We will amend and complete the information in this
prospectus. Although we are permitted by US federal
securities law to offer these securities using this
prospectus, we may not sell them or accept your offer to buy
them until the documentation filed with the SEC relating to
these securities has been declared effective by the SEC.
This prospectus is not an offer to sell these securities or
our solicitation of your offer to buy these securities in
any jurisdiction where that would not be permitted or legal.
TABLE OF CONTENTS
XUNANTUNICH INC.
Summary Information and Risk Factors............................1
- We have had losses since inception and expect such
losses to continue for the foreseeable future..........5
- We do not have substantial assets and are totally
dependent on the proceeds of this offering.............6
- We do not have any additional sources of funding
for our proposed operations and we may be unable
to find any if needed..................................6
- We are dependent on our directors who will not devote
their full Time and attention to our affairs and this
could result in delays or business failure.............6
- Dependence on officers and directors who have no
experience in the marketing and brokering of vitamins
could result in delays or Business failure.............6
- We are totally dependent on one supplier and one
website and any difficulties with these could seriously
affect our chances of success..........................6
- We are totally dependant on one manufacturer...........7
- Risks related to the securities market................ 7
Use of Proceeds................................................ 7
Determination of Offering Price.................................7
Dilution........................................................8
Selling Security Holders........................................8
Plan of Distribution............................................9
Legal Proceedings..............................................10
Directors, Executive Officers, Promoters and Control
Persons........................................................10
Security Ownership of Certain Beneficial Owners and
Management.....................................................11
Description of Securities......................................12
Disclosure of the Commission Position on the Indemnification
for Securities Act Liabilities.................................14
Organization Within Last Five Years........................... 14
Description of Business........................................14
Management's Discussion and Analysis or Plan of
Operation......................................................24
Description of Property........................................25
Certain Relationships and Related
Transactions................................................. 25
Market for Common Equity and Related Shareholder Matters.......26
Executive Compensation.........................................26
Financial Statements.......................................... 27
Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure............................40
Prospectus Summary.
Xunantunich Inc. is a corporation formed under the laws of
the State of Nevada on April 2, 1999 whose principal
executive offices are located in Vancouver, British
Columbia, Canada.
The primary objective of the business is to market high-
quality, low-cost vitamins, minerals, nutritional
supplements, and other health and fitness products to
medical professionals, alternative health professionals,
martial arts studios and instructors, sports and fitness
trainers, other health and fitness professionals, school and
other fund raising programs and other similar types of
customers via the Internet for sale to their clients. Our
license covers the distribution rights for the Province of
Alberta, Canada. Xunantunich Inc. is in the development
stage and has had no revenues.
Name, Address, and Telephone Number of Registrant
Xunantunich Inc.
1775 Fir Street, Suite 3E
Vancouver, BC V2X 4B4, CANADA
(604) 913-8355
The Offering
- Price per share offered $0.20
- common stock offered by the company 1,000,000 shares
- common stock offered by selling
shareholders 510,000 shares
- common stock to be outstanding after
the offering 6,000,000 shares
(assuming all shares are sold)
- use of proceeds - To fund marketing and setting up of
dealers to handle a line of vitamins and mineral
supplements.
Risk Factors
We have had losses since inception and expect such losses to
continue for the foreseeable future.
Xunantunich Inc. has never had any revenues. Costs have
been incurred to set up the business plan and to get into
business. While the licensor, Vitamineralherb.com
('Vitamineralherb.com") has set up the master web page and
organized the processing of purchases, we must provide our
own accounting systems and sales planning including finding
and hiring good, reliable sales people. These efforts will
use our cash reserves. We will not have any substantial
cash reserves until this offering is complete. If this
offering is not completed, we will not be able to get into
business. This could have a serious affect on the price of
our stock.
Once we get into business and sales begin, we still expect
to lose money for a considerable period. We will record
losses until our profits from sales exceed our expenses. If
we do not accomplish this, any and all funds that we have in
reserve will be used up. You should consider these facts
carefully before you invest.
We do not have substantial assets and are totally dependent
upon the proceeds of this offering.
Xunantunich Inc. has had funding of only $100 as of June
30, 2001. We do not have sufficient capital to properly get
into business. Our success, if any, of establishing our
business, creation of sales and follow-up service depends
upon raising $200,000 of new capital through this offering.
Management estimates that our minimum expenses for the first
twelve months of operation will be $96,250. That figure
represents approximately 50% of the total proceeds from this
offering. Our inability to raise the entire proceeds of
this offering could result in a loss of your entire
investment.
We do not have any additional sources of funding for our
proposed operations and we may be unable to find any if
needed.
You should be aware of one fact:: if this offering is
unsuccessful we will be unable to implement our business
plan unless and until a new source of acceptable financing
is found. Such an alternative source of funding may never
be found.
No other source of capital has been approached and we do not
have any other sources readily available. If other sources
are available we have no idea whether capital can be
obtained on terms and conditions that are acceptable.
Further, any such financing may be upon terms that result in
dilution or considerable lessening of value of the shares
currently held by our shareholders.
Should this offering be unsuccessful we would be faced with
several options:
- cease operations and go out of business completely;
- begin looking for additional capital on terms that are
acceptable;
- bring in additional capital that involves a change of
control; or
- seek an acquisition candidate that seeks access to the
public marketplace and sources of financing, complete a
merge or reverse takeover and probably enter into a
completely different line of business.
In the event of any of the above you could lose all of
substantially all of your entire investment.
We are dependent on our directors who will not devote their
full time and attention to our affairs and this could result
in delays or business failure.
Our four officers and directors are all employed on a full
time basis with other companies. Loss of any of their
services may hamper our ability to implement our business
plan, and could cause our stock to become worthless. We
will be heavily dependent upon our four directors
entrepreneurial skills and experience to implement our
business plan. Their inability to devote full time and
attention to the our affairs could result in delays in
getting into our proposed business.
We do not have an employment agreement with any of our four
officers and directors and there is no assurance that they
will continue to manage our affairs in the future. We could
lose the services of any or all of our officers and
directors, or they could decide to join a competitor or
otherwise compete with us directly or indirectly. This
would have a negative affect on our proposed business and
could cause the price of the stock to be worthless. The
services of our officers and directors would be difficult to
replace. Because investors will not be able to evaluate the
merits of our business decisions, they should carefully and
critically assess the background of each director.
Dependence on officers and directors who have no experience
in the marketing and brokering of vitamins could result in
delays or business failure.
None of our directors or officers has any experience in
marketing and brokering of vitamins. We will likely need to
rely on others who understand that business. Because of
this lack of experience, we may overestimate the
marketability of our products and may underestimate the
costs and difficulties of selling or brokering these
products. These difficulties could prevent us from ever
becoming profitable..
We are totally dependent on one supplier and one website and
any difficulties with these could seriously affect our
chances of success.
Vitamineralherb.com, the licensor, is the supplier of all of
our products and maintains the website that gives our
potential customers, if any, access to those products. If
for any reason the licensor has a problem, whether it be
technical, financial or a default under the licensor's
agreement with it's supplier, it will have a direct impact
on our sales and revenues, if any. Any permanent disruption
of Vitamineralherb.com's ability to supply us with products
or with it's ordering method via the Internet would put us
out of business or, at the very least, cause us to undergo a
major reorganization to secure new products and a new
website. The effect on the value of our common stock would
be very negative. Some points of specific concern are:
- we have only one supplier;
- we have only one ordering facility: the
Vitamineralherb.com website;
- Vita mineralherb.com has only one supplier; and
- Vitamineralherb.com is dependent on many licensees
getting into business and being successful.
We are totally dependant on one manufacturer.
Alta Natural Herbs and Supplements, Ltd., a British
Columbian corporation organized in 1993, is the sole
proposed manufacturer of our proposed products. We are
totally dependant upon that company for the manufacture of
our products and the failure or inability of Alta Natural
Herbs and Supplements Ltd. to continue to manufacture our
products would leave us without product and cause us to
cease operations. According to the quarterly report of Alta
Natural Herbs and Supplements Ltd. as submitted to the
Canadian Venture Exchange on July 3, 2001, Alta Natural
Herbs and Supplements Ltd. had a net loss of ($270,566) for
the six month period ended April 30, 2001. This included a
loss of ($199,910) from operations. Alta Natural Herbs and
Supplements Ltd. has never operated at a profit and has
incurred losses from operations since inception..
Our management has no experience in negotiating contracts
with vitamin manufacturers or producers. In the event Alta
Natural Herbs and Supplements Ltd. is unable or unwilling to
supply our needs, it may be impossible for management to
acquire vitamins on acceptable terms or at acceptable price
and we may be unable to commence or continue our proposed
operations..
Risks Related to the Securities Market
There is no liquidity for our common stock.
There is presently no demand for the common stock of our
company. There is presently no public market in the
shares. While we intend to apply for a quotation on the Over
the Counter Bulletin Board, we cannot guarantee that our
application will be approved and our stock listed and
quoted for sale.
Our common stock has no prior market and resale of your
shares may be difficult.
There is no public market for our common stock and no
assurance can be
given that a market will develop or that any shareholder
will be able to liquidate their investment without
considerable delay, if at all.
The trading market price of our common stock may decline
below the price at which it was sold . If a market should
develop, the price may be highly volatile. In addition, an
active public market for our common stock may not develop or
be sustained. If selling stockholders sell all or
substantial amounts of their common stock in the public
market (see "Selling Stockholders"), the market price of our
common stock could fall.
Use of Proceeds
Table 1 - Sale of 100% of Table 2- Sale of 50% of
Issuer stock offered: Issuer stock offered:
Gross Proceeds $200,000 $100,000
Less expenses of
offering:
Legal Fees 30,000 30,000
Accounting 10,000 10,000
Electronic filing
and printing 5,000 5,000
Net Proceeds 155,000 55,000
Use of net proceeds:
Start up costs
(office equipment,
Telephone system,
computers and software) 60,000 40,000
Recruiting and salaries 45,000 15,000
Working Capital 50,000 0
Total Use of Proceeds 200,000 100,000
Table 3 - Sale of 25% of Table 4- Sale of 10% of
Issuer stock offered: Issuer stock offered:
Gross Proceeds $50,000 $20,000
Less expenses of offering:
Legal Fees 30,000 30,000
Accounting 10,000 10,000
Electronic filing
and printing 5,000 5,000
Net Proceeds 5,000 (25,000)
Use of net proceeds:
Start up costs (office equipment,
Telephone system, computers
and software) 5,000 0
Recruiting and salaries 0 0
Working Capital 0 0
Total Use of Proceeds 50,000 20,000
As the four tables above indicate:
- - We will not have sufficient funds to commence
operations unless substantially all of the 1,000,000 common
shares being offered by us are purchased. If we only sell
500,000 common shares, our start up costs will be reduced
from $60,000 to $40,000 and recruiting and salaries will be
reduced from $45,000 to $15,000. In addition, if we sell
only 500,000 of our common shares we would have no working
capital to deal with unanticipated expenses and
contingencies.
- - In the event we only sell 250,000 of our common shares
we would only be able to pay our attorneys, accountants,
electronic filing and printing expenses. The $5,000
remaining for start up costs would be totally inadequate and
we would not have any funds for hiring personnel.
- - If we only sold 100,000 of our common shares, we would
not have adequate funds to pay our attorneys, accountants,
electronic filing and printing costs and would owe $25,000
to such individuals and entities. In addition, there would
be absolutely no funds for start up costs, recruiting and
salaries and working capital.
We have estimated that we will have approximately
$50,000 working capital if all of the 1,000,000 common
shares being offered by us are sold. This money will be
used for contingency and/or additional unanticipated
expenses of getting the business started. This money may or
may not be enough to run the business until sales revenues
can take over. If it is not enough we will be forced to
look for more funding. No arrangements have been made for
this funding.
Determination of Offering Price
The offering price of this issue was set in a purely
arbitrary manner. We determined the amount of money needed
to start the business; added a contingency amount; allowed
for printing, legal and accounting costs and possible
commissions if a broker/dealer should become involved with
the sale to the public of this issue. We also took into
account the resultant number of shares in the "float", i.e.
the number of shares available to be traded. The final
consideration was the perceived market capitalization (the
theoretical total worth of the shares of Xunantunich Inc. if
they were all sold at a specific price at the same time).
Dilution
Xunantunich Inc., prior to this offering has 5,000,000
shares of stock issued and outstanding. 510,000 shares of
this amount are being qualified for sale by present
shareholders as part of this registration statement.
The following table illustrates the difference between the
price paid by present shareholders and the price to be paid
by subscribers to this offering.
Price Percentage Percentage Percentage Percentage
Paid of of of of
Consideration Consideration Shares Shares
(50% Held Held
Subscription) (100% (50% (100%
Subscription) Subscription) Subscription)
Present $0.001
Shareholders 02.48% 01.26% 90.91% 83.34%
Investors $0.20 97.52% 98.74% 09.09% 16.66%
In This
Offering
The following table will show the net tangible value of the
shares before and after shares are subscribed in this
offering.
Before After 50% After 100%
Offering of Offering of Offering
- - Net tangible book value .0005 $.0010 $.033
- - Increase in net NA $.0005 $.033
tangible book value
- Dilution factor NA $.1995 $.167
The above table indicates that the net tangible book value
of Xunantunich is 1/20 of one cent. If half of this
offering is subscribed to, you would lose 19.95 cents value
of the 20 cents you paid. If all of the offering were
completed you would still lose 16.7 cents of the 20 cents
you invested.
Selling security holders
The following are the shareholders for whose accounts the
shares are being offered; the amount of securities owned by
such shareholder prior to this offering; the amount to be
offered for such shareholder's account; and the amount to be
owned by such shareholder following completion of the
offering:
Number No.
Number of of Percentage
Position of Shares Shares of
Name with Shares Offered After shares after
Company Owned Sale Sale
Rod Albers None -0- -0-
1,000 1,000
Allison Flechl None 251,000 251,000 -0- -0-
Kodi Flechl None 1,000 1,000 -0- -0-
Michael Flynn None -0- -0-
1,000 1,000
James Fortin None -0- -0-
1,000 1,000
Peter James None -0- -0-
1,000 1,000
Sharon None -0- -0-
Marcotte 1,000 1,000
Al Sanderson None -0- -0-
1,000 1,000
Jeremy None -0-- -0-
Yasenuik 1,000 1,000
Adrienne None -0- -0-
Yasenuik 1,000 1,000
David Young None 250,000 250,000 -0- -0-
Plan of Distribution
This is a self - underwritten offering. This prospectus is
part of a registration statement that permits the officers
and directors of Xunantunich Inc. to sell directly to the
public, with no commission or other remuneration payable.
At the discretion of our Board of Directors, an underwriting
contract may be entered into with one or more broker/dealers
on a "best efforts" or firm-commitment basis. In this case,
commissions and expenses within the guidelines of the NASD
would be negotiated. We will be required to halt sales and
file a post-effective amendment to this prospectus outlining
the payment to the broker/dealer(s).
Mark, Michael and Grant Cramer are all licensed to sell
securities in the Province of British Columbia, Canada and
as such will be ineligible to sell any of this offering
under Rule 3a4-1 of the Securities Exchange Act of 1934.
These securities will be sold by Florence Cramer.
This prospectus is also part of a registration statement
that enables selling shareholders to sell their shares on a
continuous or delayed basis in the future. Xunantunich Inc.
has not committed to keep the registration statement
effective for any set period of time past the 180 days
mentioned above.
While the registration statement is effective, selling
shareholders may sell their shares directly to the public,
without the aid of a broker or dealer, or they may sell
their shares through a broker or dealer. Any commission,
fee or other compensation of a broker or dealer would depend
on the brokers or dealers involved in the transaction.
No public market currently exists for shares of Xunantunich
Inc. common stock. Xunantunich Inc. intends to apply to
have its shares traded on the Over-the-Counter Bulletin
Board.
Legal Proceedings.
We are not aware of any legal proceedings that have been or
are currently being undertaken for or against Xunantunich
Inc. nor is any contemplated
Directors, executive officers, promoters and control
persons.
The directors and executive officers currently serving
Xunantunich Inc. are as follows:
Name Age Positions Held and Tenure
Mark Cramer 59 President and Director since
November, 1999
Florence Cramer 59 Secretary/
Treasurer and Director since
November/99
Michael Cramer 34 Vice President and
Director
since December, 1999
Grant Cramer 28 Director since
December/99
The directors named above will serve until the first annual
meeting of Xunantunich Inc. stockholders. Thereafter,
directors will be elected for one-year terms at the annual
stockholders' meeting. Officers will hold their positions
at the pleasure of the Board of Directors, absent any
employment agreement, of which none currently exists or is
contemplated. There is no arrangement or understanding
between the directors and officers of Xunantunich Inc. and
any other person pursuant to which any director or officer
was or is to be selected as a director or officer.
Biographical information
Mark Cramer. Mr. Cramer, Xunantunich Inc.'s President, has
served as an officer and director since November, 1999.
Since 1988, Mr. Cramer has been actively involved as a
Financial Consultant in the Province of British Columbia,
Canada. He holds a Masters Degree from Simon Fraser
University, holds life and mutual funds licenses. Mr.
Cramer is the principal shareholder in IDF Financial
Services, Inc., a securities dealer, through which he has
obtained registration to sell securities in the Province of
British Columbia, only. He has a Chartered Financial
Planning degree. He is President, Chairman and major
shareholder in Comprehensive Financial Services, Inc., a
full-service financial planning and consulting company. He
is also President and Chairman of River Ranch Resort Corp.,
a full service facility catering to hunters, fishermen,
snowmobilers and nature lovers.
In 1987, Mr. Cramer retired after a twenty-five year career
as teacher, principal and Administrative Assistant to the
Superintendent of Schools, District #57, British Columbia.
Florence Cramer. Mrs. Cramer, Xunantunich Inc.'s
Secretary/Treasurer has served as an officer and director
since November, 1999. She has a multi-year background as a
Life Underwriter and Financial Planner. She formed
Comprehensive Financial Services in 1987 and currently
serves as a director and Secretary/Treasurer of that
Company. Mrs. Cramer holds a diploma in Office
Administration .
Michael Cramer. Mr. Cramer, Xunantunich Inc.'s Vice
President has served as an officer and director since
December, 1999. Since 1985 he has been involved in the
financial services field holding Life Insurance and Mutual
Fund licenses as well as being registered to sell securities
in the Province of British Columbia through the family-owned
company, IDF Financial Services, Inc. He also has earned a
Professional Financial Planning designation and serves as
director and Vice President of Comprehensive Financial
Services Inc.
Grant Cramer. Mr. Cramer has served as a director of
Xunantunich Inc. since December, 1999. He is currently a
director of Comprehensive Financial Services Inc. and IDF
Financial Services Inc. He has a substantial background in
hiring and training Financial Planners and holds a
Professional Financial Planning designation and is
registered to sell securities in the Province of British
Columbia through the family-owned firm, IDF Financial
Services, Inc.
Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth, as of the date of this
registration statement, the number of shares of common stock
owned of record and beneficially by executive officers,
directors and persons who hold 5.0% or more of the
outstanding common stock of Xunantunich Inc.. Also included
are the shares held by all executive officers and directors
as a group.
Number of Percent of
Shares Owned
Name and Address Beneficially Class Owned
Mark Cramer*
6822 Valleyview Drive
Prince George, BC V2K 4C6 Canada 1,915,000 38.30
Michael Cramer*
2408 Panorama Place
Prince George, BC V2K 4T9 Canada 1,350,000 27.00
Florence Cramer*
6822 Valleyview Drive
Prince George, BC V2K 4C6 Canada 1,000,000 20.00
Grant Cramer*
#202 - 8636 Laurel Street
Vancouver, BC V6P 3V6 Canada 225,000 04.50
All directors and executive
Officers as a group (4 persons) 4,490,000 89.80%
* All of the officers and directors of Xunantunich
Inc. are related. Florence Cramer, Xunantunich Inc.'s
Secretary/Treasurer and a director is the wife of Mark
Cramer, Xunantunich Inc.'s President and a director. Both
Michael Cramer, Vice President and director and Grant
Cramer, director are the adult sons of Mark and Florence
Cramer. All of the officers and directors of Xunantunich
Inc. have independent means and incomes and state
categorically that they are not holding any shares
beneficially for any other person.
The persons listed are the sole officers and directors of
Xunantunich Inc.
Conflicts of Interest
The officers and directors will only devote a small portion
of their time to the affairs of Xunantunich Inc., currently
estimated to be no more than two to three hours per week..
There will be occasions when the time requirements of the
business conflict with the demands of their other business
and investment activities. We may need to employ additional
personnel. If this happens, we cannot be sure that good
people will be available and if they are available, we can
get them at a price we can afford.
There is no procedure in place, which would allow any of the
Cramers to resolve potential conflicts in an arms-length
fashion. We must rely on them to use their discretion to
resolve these conflicts.
Description of securities
Common stock.
The Articles of Incorporation of Xunantunich Inc. authorize
the issuance of 100,000,000 shares of common stock. Each
holder of record of common stock is entitled to 1 vote for
each share held on all matters properly submitted to the
stockholders for their vote. The Articles of Incorporation
do not permit cumulative voting for the election of
directors.
Holders of common stock are entitled to such dividends as
may be declared from time to time by the Board of Directors
out of legally available funds. In the event of
liquidation, dissolution or winding up of our affairs,
holders are entitled to receive, ratably, the net assets
available to stockholders after distribution is made to the
preferred shareholders, if any.
Holders of common stock have no preemptive, conversion or
redemptive rights. All of the issued and outstanding shares
of common stock are, and all unissued shares when issued
will be duly authorized, validly issued, fully paid, and non
assessable. If additional shares of Xunantunich Inc. common
stock are issued, the relative interests of then existing
stockholders may be diluted.
Preferred Stock
The Articles of Incorporation of Xunantunich Inc. authorize
the issuance of 10,000,000 shares of preferred stock. The
Board of Directors is authorized to issue preferred shares
from time to time in series and is further authorized to
establish such series, to fix and determine the variations
in the relative rights and preferences as common stock. No
preferred stock has been issued by Xunantunich Inc.
Transfer Agent
Xunantunich Inc. is currently serving as its own transfer
agent, and plans to continue to serve in that capacity until
such time as management believes it is necessary or
appropriate to employ an independent transfer agent in order
to facilitate the creation of a public trading market for
its securities. Should Xunantunich Inc. securities be
quoted on any exchange or OTC quotation system or
application is made to have the securities quoted, an
independent transfer agent will be appointed.
Indemnification of Officers and Directors
As permitted by Nevada law, Xunantunich Inc.'s Articles of
Incorporation provide that Xunantunich Inc. will indemnify
its directors and officers against expenses and liabilities
they incur to defend, settle or satisfy any civil or
criminal action brought against them on account of their
being or having been Company directors or officers, unless,
in any such action, they are adjudged to have acted with
gross negligence or willful misconduct.
Exclusion of Liabilities
Pursuant to the laws of the State of Nevada, Xunantunich
Inc.'s Articles of Incorporation exclude personal liability
for its directors for monetary damages based upon any
violation of their fiduciary duties as directors, except as
to liability for any breach of the duty of loyalty, acts or
omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, acts in violation
of Section 7-106-401 of the Nevada Business Corporation Act,
or any transaction from which a director receives an
improper personal benefit. This exclusion of liability does
not limit any right, which a director may have to be
indemnified, and does not affect any director's liability
under federal or applicable state securities laws.
Disclosure of Commission position on indemnification for
Securities Act liabilities
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers or persons controlling Xunantunich Inc. pursuant to
provisions of the State of Nevada, Xunantunich Inc. has been
informed that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as
expressed in that Act and is, therefore, unenforceable.
Organization within the last five years
Xunantunich Inc. was incorporated in the State of Nevada on
April 2, 1999 and is in the early stages of development.
From inception the only activities of Xunantunich Inc. have
been the development of its business plan and the
preparation for this registration statement. It has no
revenues nor does it have any expectation of revenues until
the completion of this offering and the commencement of
business.
Description of business
On April 5, 1999 Xunantunich Inc. received from David R.
Mortenson & Associates of Alvin, Texas, the rights to
distribute and produce, in the states of Arizona and Nevada,
an oxygen enriched water product for fish farming,
aquaculture, mariculture, poultry raising, and for treating
animal waste from dairies, feedlots of all kinds, and for
other similar uses. These production and distribution
rights were received from Mortenson in exchange for
2,000,000 shares of common stock. Mortenson acquired these
rights from the inventors of the product, N. W.
Technologies, Inc. under a distribution agreement. Several
months later the contract granting David R. Mortenson &
Associates rights to the technology was withdrawn.
Mortenson sued N.W. Technologies Inc. in Harris County
Court, Houston Texas.
To compensate for the possibility that we could lose our
principal asset and the obvious delay that this dispute and
court action has caused, David R. Mortenson & Associates has
agreed to suspend all financial requirements that are due or
will be due in the future until the dispute with NW is
resolved. They have also agreed to grant an alternative
license to Xunantunich Inc. for the distribution of vitamin
and herbal supplements for the Province of Alberta, Canada.
This license will enable us to create a business plan and
start the process of getting into business.
The License.
Xunantunich Inc. has a three year license to market and sell
vitamins, minerals, nutritional supplements, and other
health and fitness products to medical professionals,
alternative health professionals, martial arts studios and
instructors, sports and fitness trainers, other health and
fitness professionals, school and other fund raising
programs and other similar types of customers. All of
these individuals and organizations will order their
products via the Internet for sale to their clients. The
license will be automatically renewed unless Xunantunich
Inc. or Vitamineralherb.com gives the other notice of its
intent not to renew.
Vitamineralherb.com Inc. is a Nevada corporation formed on
April 2,1999. It is a privately held company that was
formed specifically to act as a clearing facility that would
distribute health and nutrition products through
distributors in exclusive, defined territories. The
President of Vitamineralherb.com is David R. Mortenson.
Vitamineralherb.com entered into an agreement with Alta
Natural Herbs and Supplements Ltd. on July 10, 2001 to
manufacture and distribute products produced by Alta Natural
Herbs and Supplements Ltd. Vitamineralherb.com Inc. will
have no inventory and will drop ship all orders via the
manufacturer(s).
As a licensee of Vitamineralherb.com, Xunantunich Inc.
eliminates the need to develop products, store inventory,
build and maintain a website, establish banking liaisons,
and develop a fulfillment system, thereby enabling us to
focus strictly on marketing and sales. Xunantunich Inc.
plans to target health and fitness professionals in Alberta
who wish to offer health and fitness products to their
customers.
Xunantunich Inc. (and its customers) will have access to all
products offered on the Vitamineralherb.com website, as well
as the ability to order custom-formulated and custom-labeled
products. Vitamineralherb.com sets the price for products
based on the manufacturer's price, plus a markup which
provides a 10% commission to Vitamineralherb.com and a
profit for Xunantunich Inc.
Three different labeling options are available to customers:
- products may be ordered with the manufacturer's
standard label with no customization.
- the fitness or health professional may customize the
labels by adding its name, address, and phone number to the
standard label. In most cases, these labels would be a
standardized label with product information and a place on
the label for the wording "Distributed by." This gives these
health and fitness professionals a competitive edge.
- labels may be completely customized for the health or
fitness professional.
When a fitness or health professional becomes a client,
Xunantunich Inc.'s salesperson will show the client how to
access the Vitamineralherb.com website. The client is
assigned an identification number that identifies it by
territory, salesperson, and business name, address, and
other pertinent information. The health or fitness
professional may then order the products it desires directly
through the Vitamineralherb.com website, paying for the
purchase with a credit card, electronic check ("e-check"),
or debit card. All products will be shipped by the
manufacturer directly to the professional or its clients.
Xunantunich Inc. is not obliged to purchase and maintain a
large inventory, an order desk or shipping department. This
method of doing business, which only a short time ago would
be unthinkable is now a preferred way of shopping (whether
wholesale or retail) for a large segment of the population
of North America.
The website is maintained by Vitamineralherb.com and each
licensee pays an annual website maintenance fee of $500. All
financial transactions will be handled by
Vitamineralherb.com's Internet clearing bank. The
Vitamineralherb.com webmaster will download e-mail orders
several times a day, check with the clearing bank for
payment and then submit the product order and electronic
payment to Alta Natural Herbs and Supplements Ltd.
Vitamineralherb.com then forwards the money due Xunantunich
Inc. via electronic funds transfer.
Vitamineralherb.com's software tracks all sales through the
customer's identification number, and at month end, e-mails
to Xunantunich Inc. a detailed report including sales
commissions. Vitamineralherb.com has indicated that it will
use e-commerce advertising such as banner ads on major
servers and websites, as well as attempting to insure that
all major search engines pick Vitamineralherb.com first. All
sales originating from the website to customers located in
Alberta will automatically be assigned to Xunantunich Inc.
The Territory.
The Province of Alberta, Canada reached a population of
3,000,000 this year and is considered to be one of the most
prosperous jurisdictions in the country. The two major
cities, Calgary and Edmonton, the provincial capital have
populations of 950,000 and 850,000 respectively. The
Province of Alberta has had a balanced budget for several
years and recently a law was passed that required the
province to be debt free by the year 2005. They have also
announced that provincial income taxes will be eliminated in
the next several years.
The principal industries in Alberta are agriculture,
producing grain, oil seeds and cattle; oil and gas; coal
mining and tourism. Alberta produces a large majority of
fossil fuels in Canada and are large exporters to the USA of
oil and natural gas. High quality smelting coal is shipped
to Japan and Korea. The province is the home of two famous
national parks, Banff and Jasper.
Our research has indicated that there are nearly 6,000
health professionals, martial arts instructors, fitness
centers and personal trainers in Alberta
Background on the Manufacturer and Distributor.
On July 10, 2001, Vitamineralherb.com entered into a
manufacturing agreement with Alta Natural Herbs and
Supplements Ltd., a publicly held nutraceuticals
manufacturing firm, located in Richmond, British Columbia,
Canada listed on the Canadian Venture Exchange under the
symbol AHS. Alta Natural Herbs and Supplements Ltd. has been
a contract manufacturer of vitamin, mineral, nutritional
supplement, and alternative health products for various
marketing organizations for approximately eight years. Alta
Natural Herbs and Supplements Ltd. incurred a net loss of
$270,566 for the six month period ended April 30, 2001 and
incurred a loss of $244,536 over the same six month period
in 2000. Alta Natural Herbs and Supplements Ltd. has never
operated at a profit since its inception in 1993.
As of April 30, 2001, Alta Natural Herbs and Supplements
Ltd. had total assets of $1,019,204 and current assets of
$590,797, total liabilities and current liabilities of
$309,432 and a net worth of $709,672.
In addition to a line of standard products, Alta Natural
Herbs and Supplements Ltd. is able to manufacture custom
blended products for customers. Alta Natural Herbs and
Supplements Ltd. also has the capability to supply
privately labeled products for Xunantunich Inc. customers at
a minimal added cost. Vitamineralherb.com has just begun
developing its vitamin marketing and distributorship
business.
Implementation of the business plan.
Xunantunich Inc.'s business plan is to sell
Vitamineralherb.com products to targeted markets. If we
are unable to sell 1,000,000 shares we will not be able to
fully implement the business plan shown in the milestones
below and your investment may become worthless. Xunantunich
Inc. shall employ salespeople to call on medical
professionals, alternative health professionals, martial
arts studios and instructors, sports and fitness trainers,
other health and fitness professionals, school and other
fund raising programs and other similar types of customers
to interest these professionals in selling to their clients
high-quality, low-cost vitamins, minerals, nutritional
supplements, and other health and fitness products. These
professionals would sell the products to their clients and
order them through the Internet.
Milestones:
1. Establishment of an office. One administration office
is planned for the whole province. Sales people would
office in their own homes. The one office that we would
establish would act as a coordinating and business office,
looking after sales support, bookkeeping and payroll. We
estimate that office space will cost in the neighborhood of
$16 per square foot including taxes and insurance. We
estimate that we will require about 1,000 square feet
initially. We will be unable to obtain this milestone
unless we are able to sell at least half of the common
shares offered by us in this offering. If we are unable to
raise sufficient funds for office space, we will consider
other options such as having sales persons operating out of
their homes, but we currently have no contingency plan for
this.
2. Recruiting of sales people. We estimate that we will
require two sales people to cover the Province of Alberta;
one headquartered in the city of Calgary covering the south
half of the province and the other in Edmonton, the
Provincial Capitol. Sales people will be provided with a
basic draw against commissions of $1,000 per month. Our
plan is have them initially cover the two major cites,
thereby keeping expenses to a minimum. From Calgary and
Edmonton, the secondary cities of Red Deer, Lethbridge,
Peace River and Lloydminster will be covered. Potential
customers in rural Alberta, with its' hundreds of small
towns and villages will be pre-qualified by telephone and
then paid a sales call. Cost of recruiting is estimated at
$3,000. The sale of at least 500,000 common shares by us
would raise approximately enough money to obtain this
milestone.
3. Advertising. We envision advertising of our products
and services as a very low-keyed approach. We believe that
direct mail is the best and most cost effective method of
reaching our potential clients. Due to the fact that we are
targeting a fairly narrow segment of the population as
potential retailers, a well-designed mail piece and cover
letter with follow up by telephone should be adequate to
introduce us to our potential clients. Design and
production of a mailing piece is estimated at $7,000. If we
are unable to sell the 1,000,000 common shares offered by us
in this offering we would be unable to meet any advertising
costs.
4. Generation of Revenues. Management of Xunantunich
believes that a planned, slow-but-steady growth pattern
will serve the organization in the best fashion. By
keeping costs low and concentrating first on the major
centers, we believe that we can generate revenues in a
fairly short time but there can be no assurance of
this. We hope that each initial order will provide a
comparatively large purchase by the retailer. After
that the distributors will order product as they
require it. We hope that the initial surge of orders
will provide enough cash flow to keep from using our
working capital too rapidly and that we will be able to
reach a break-even point or a small profit position
before our capital is used up.
If the net proceeds received from this offering are not
enough to accomplish those things we will have to obtain
additional financing through an additional offering, bank
borrowing or through capital contributions by current
shareholders. No commitments to provide additional funds
have been made by management or shareholders. You cannot be
sure that any additional funds will be available on terms
acceptable to Xunantunich Inc. or at all. We expect to
begin earning revenues shortly after a sales force is in
place but there can be no assurance of this.
Growth of the Internet and electronic commerce.
The Internet has become an increasingly significant medium
for communication, information and commerce. According to
NUA Internet Surveys, as of February 2000, there were
approximately 275.5 million Internet users worldwide. At the
IDC Internet Executive Forum held on September 28-29, 1999,
IDC stated that in 1999 US $109 billion in purchases were
impacted by the Internet. IDC's vice president, Sean Kaldor,
indicated that figure is expected to increase more than ten-
fold over the next five years to US $1.3 trillion in 2003,
with $842 million completed directly over the Web.
Xunantunich Inc. believes that this dramatic growth presents
significant opportunities for online retailers.
We have assembled some of the available data regarding
Internet commerce:
Web Commerce: 1996 $2.6 billion
2000 $220 billion
Web Users: 1996 28 million
2000 175 million
(Source: Ziff Davis)
Nearly half of US Internet users have purchased a product or
service online.
(Source: A. C. Nielsen-May 11, 2000)
Consumers who have used the Internet since 1995 spend an
average of $ 388 per transaction while those who have been
online for a year only spend an average of $ 187 per
transaction. The equivalent figure for those who have been
using the Internet since 1997 is $ 298.
(Source: National Association of Business Economics)
An estimated 120 million Internet users, or 40 percent of
the total number online, have already made an online
purchase, according to a study from the Angus Reid Group.
Over 50 % of all online transactions were made in the USA.
US users made an average of 7 purchases in the three months
before the survey, spending an average of $828. The
worldwide average spent by an individual in the same period
was less than $500.
75% of online shoppers in the US and Canada pay for e-
commerce purchases by credit card. Direct bank drafts, bank
transfers and cash on delivery are the other most favored
payments methods. 93% of Internet shoppers around the world
said they were "somewhat satisfied" or "extremely satisfied"
with their online shopping experience.
(Source: Angus Reid Group)
Internet advertising revenue more than doubled in 1999,
coming to a year-end total of $ 4.62 billion.
(Source: Internet Advertising Bureau [IAB])
AS OF MARCH, 2000 THERE WERE A WORLD-WIDE TOTAL OF
304,360,000 INTERNET CONNECTIONS. THE BREAKDOWN IS AS
FOLLOWS:
Africa 2,589,000
Asia/Pacific 68,900,000
Europe 83,350,000
Middle East 1,900,000
USA & Canada 136,860,000
South Africa 10,740,000
(Source: Various; Methodology - Compiled by: Nua Internet
Surveys)
It is estimated that Global e-commerce will be worth 7.0
trillion dollars by 2004. 50% of global sales will come from
the US.
(Source: Forrester)
The vitamin, supplement, mineral and alternative health
product market.
In recent years, a growing awareness of vitamins, herbs, and
other dietary supplements by the general public has created
a whole new segment in the field of medicine and health care
products. According to Jupiter Communications, online sales
of such products are expected to be US $434 million in the
year 2003, up from $1 million in 1998. We believe that
several factors are driving this growth, including a rapidly
growing segment of the population that is concerned with
aging and disease, a growing interest in preventative health
care, favorable consumer attitudes toward alternative health
products and a favorable regulatory statute, the Dietary
Supplement Health and Education Act of 1994.
The removal of most, if not all import duties, under the
NAFTA accord enables Xunantunich Inc. to import its goods
without undue trouble or delay. Some of sources relied upon
for product will undoubtedly be located in Canada and will
be easily available to Canadian customers as well as being
exported to the United States.
The electronic commerce industry is new, rapidly evolving
and intensely competitive, and we expect competition to
intensify in the future. Barriers to entry are minimal and
current and new competitors can launch sites at a relatively
low cost. In addition, the vitamin supplement, mineral and
alternative health product market is very competitive and
highly fragmented, with no clear dominant leader and
increasing public and commercial attention.
Our competitors can be divided into several groups
including:
- traditional vitamins, supplements, minerals and
alternative health products retailers;
- the online retail initiatives of several traditional
vitamins, supplements, minerals and alternative health
products retailers;
- online retailers of pharmaceutical and other health-
related products that also carry vitamins, supplements,
minerals and alternative health products;
- independent online retailers specializing in vitamins,
supplements, minerals and alternative health products;
- mail-order and catalog retailers of vitamins,
supplements, minerals and alternative health products,
some of which have already developed online
retail outlets; and
- direct sales organizations, retail drugstore chains,
health food store merchants, mass market retail chains and
various manufacturers of alternative health products.
Many of our potential competitors have longer operating
histories, larger customer or user base, greater brand
recognition and significantly greater financial, marketing
and other resources than we have. Even if we sell all of
the 1,000,000 common shares being offered by us in this
offering, we would only have a maximum of $50,000 in working
capital and therefore would probably continue at a
competitive advantage with respect to established companies.
In addition, an online retailer may be acquired by, receive
investments from, or enter into other commercial
relationships with, larger, well-established and well-
financed companies as use of the Internet and other
electronic services increases.
Competitors have and may continue to have aggressive pricing
policies and devote substantially more resources to website
and systems development than Xunantunich Inc. does.
Increased competition may result in reduced operating
margins and loss of market share.
We believe that the principal competitive factors in its
market are:
- ability to attract and retain customers;
- breadth of product selection;
- product pricing;
- ability to customize products and labeling;
- quality and responsiveness of customer service.
Xunantunich Inc. believes that it can compete favorably on
these factors. However, we will have no control over how
successful our competitors are in addressing these factors.
In addition, our online competitors can duplicate many of
the products or services offered on the Vitamineralherb.com
site.
We believe that traditional retailers of vitamins,
supplements, minerals and other alternative health products
face several challenges in succeeding:
- Lack of convenience and personalized service.
Traditional retailers have
limited store hours and locations. Traditional
retailers are also unable to provide consumers with
product advice tailored to their particular
situation.
- Limited product assortment. The capital and real estate
intensive nature of store-based retailers limit the product
selection that can be economically offered in each store
location.
- Lack of Customer Loyalty. Although the larger
traditional retailers often attract customers, many of these
customers are only one-time users. People are often
attracted to the name brands, but find the products too
expensive.
- the multilevel structure of some marketing
organizations mandates high prices.
As a result of the foregoing limitations, Xunantunich Inc.
believes there is significant unmet demand for a shopping
channel like that of Vitamineralherb.com that can provide
consumers of vitamins, supplements, minerals and other
alternative health products with a broad array of products
and a convenient and private shopping experience.
We hope to attract and retain consumers through the
following key attributes of our business:
- Broad Expandable Product Assortment. Xunantunich Inc.'s
product selection is substantially larger than that offered
by store-based retailers.
- Low Product Prices. Product prices can be kept low due
to volume purchases through Xunantunich Inc.'s affiliation
with Vitamineralherb.com and other licensees. Our not
having an inventory, warehouse space and need for limited
administration will also help us to maintain lower prices.
All products are shipped from Alta Natural Herbs and
Supplements Ltd. inventory.
- Accessibility to Customized Products. At minimal cost,
health and fitness practitioners may offer their customers
customized products.
- Access to Personalized Programs. Health or fitness
professional can tailor vitamin and dietary supplement
regimes to their clients.
Regulatory Environment.
The manufacturing, processing, formulating, packaging,
labeling and advertising of the products we intend to sell
in Canada are or may be subject to regulation by Health
Canada which administers the Food and Drugs Act along with
relevant regulation thereto. Regulated products include
herbal remedies, natural health remedies, functional foods
and nutraceuticals. Health Canada regulates the Alta Natural
Herbs and Supplements Ltd., manufacture, labeling and
distribution of foods, including dietary supplements,
cosmetics and over-the-counter or homeopathic drugs. Under
the Food and Drugs Act, a variety of enforcement actions are
available to Health Canada against marketers of unapproved
drugs or "adulterated" or "misbranded" products. These
include: criminal prosecution; injunctions to stop the sale
of a company's products; seizure of products; adverse
publicity, "voluntary" recalls and labeling changes.
The Consumer Packaging and Labeling Act, as administered by
Industry Canada, requires that certain information labeling
be presented in a prescribed manner on all foods, drugs,
dietary supplements and cosmetics. A product may be deemed
an unapproved drug and "misbranded" if it bears improper
claims or improper labeling.
The manufacturing, processing, formulating, packaging,
labeling and advertising of the products Xunantunich Inc.
sells may also be subject to regulation by one or more U.S.
federal agencies, including the Food and Drug
Administration, the Federal Trade Commission, the United
States Department of Agriculture and the Environmental
Protection Agency. These activities also may be regulated by
various agencies of the states, localities and foreign
countries in which consumers reside.
The Food and Drug Administration, in particular, regulates
the Alta Natural Herbs and Supplements Ltd., manufacture,
labeling and distribution of foods, including dietary
supplements, cosmetics and over-the- counter or homeopathic
drugs.
Food and Drug Administration regulations require that
certain informational labeling be presented in a prescribed
manner on all foods, drugs, dietary supplements and
cosmetics.
The Food and Drug Administration has indicated that claims
or statements made on a company's website about dietary
supplements may constitute "labeling" and thus be subject to
regulation by the Food and Drug Administration.
It is possible that the statements presented in connection
with product descriptions on Xunantunich Inc.'s site may be
determined by the Food and Drug Administration to be drug
claims rather than nutritional statements. Some of
Xunantunich Inc.'s suppliers may incorporate objectionable
statements directly in their product names or on their
products' labels, or otherwise fail to comply with
applicable manufacturing, labeling and registration
requirements for over-the-counter or homeopathic drugs or
dietary supplements. As a result, Vitamineralherb.com may
have to remove or modify some statements, products or
labeling from its website.
Xunantunich Inc. cannot predict the nature of any future
Canadian or U.S. laws and regulations nor can it determine
what effect additional governmental regulations or
administrative orders would have on our business in the
future. Although the regulation of dietary supplements is
less restrictive than that of drugs and food additives
Xunantunich Inc. cannot assure you that the current
statutory scheme and regulations applicable to dietary
supplements will remain less restrictive.
Any laws, regulations, enforcement policies, interpretations
or applications applicable to Xunantunich Inc.'s business
could require the repackaging or reformulation of certain
products to meet new standards, the recall or dropping of
certain products, additional record keeping, expanded
documentation of the properties of certain products,
expanded or different labeling.
Regulation of the Internet.
In general, existing laws and regulations apply to the
Internet. The precise applicability of these laws and
regulations to the Internet is sometimes uncertain. The
vast majority of such laws were adopted prior to the
Internet and do not address the unique issues of the
Internet or electronic commerce.
Numerous federal and state government agencies have already
demonstrated significant activity in promoting consumer
protection on the Internet. Due to the increasing use of
the Internet as a medium for commerce and communication, it
is possible that new laws and regulations could be passed
with respect to the Internet. These new laws and
regulations could cover issues such as user privacy, freedom
of expression, advertising, pricing, content and quality of
products and services, taxation, intellectual property
rights and information security. The adoption of such laws
or regulations and the applicability of existing laws and
regulations to the Internet may slow the growth of Internet
use and result in a decline in Xunantunich Inc.'s sales.
A number of legislative proposals have been made at the
federal, state and local level, and by foreign governments,
that would impose additional taxes on the sale of goods and
services over the Internet, and some states have taken
measures to tax Internet-related activities. Although
Congress recently placed a three-year moratorium on new
state and local taxes on Internet access or on
discriminatory taxes on electronic commerce, existing state
or local laws were expressly excepted from this moratorium.
Once this moratorium is lifted, some type of federal and/or
state taxes may be imposed upon Internet commerce. Such
legislation or other attempts at regulating commerce over
the Internet may substantially impair growth and, as a
result have a negative affect on our business.
Employees.
Xunantunich Inc. is a development stage company and
currently has no employees. Xunantunich Inc. is currently
managed by Mark, Florence, Michael and Grant Cramer, its
officers and directors. Xunantunich Inc. looks to the
Cramers for their management and financial skills and
talents. For a complete discussion of the Cramer family's
experience, please see "Directors and Executive Officers."
Management plans to use consultants, attorneys and
accountants as necessary and does not plan to engage any
full-time employees in the near future other than sales
people to set up accounts.
Available Information and Reports to Securities Holders.
Xunantunich Inc. has filed with the Securities and Exchange
Commission a registration statement on Form SB-2 with
respect to the common stock offered by this prospectus. This
prospectus, which constitutes a part of the registration
statement, does not contain all of the information set forth
in the registration statement or the exhibits and schedules
which are part of the registration statement. For further
information with respect to Xunantunich Inc. and its common
stock, see the registration statement and the exhibits and
schedules thereto. Any document Xunantunich Inc. files may
be read and copied at the Commission's Public Reference Room
located at 450 Fifth Street N.W., Washington D.C. 20549.
Please call the Commission at 1-800-SEC-0330 for further
information about the public reference rooms. Xunantunich
Inc.'s filings with the Commission are also available to the
public from the Commission's website at http://www.sec.gov.
Upon completion of this offering, Xunantunich Inc. will
become subject to the information and periodic reporting
requirements of the Securities Exchange Act of 1934 and,
accordingly, will file periodic reports, proxy statements
and other information with the Commission. Such periodic
reports, proxy statements and other information will be
available for inspection and copying at the Commission's
public reference rooms, and the website of the Commission
referred to above.
Forward looking statements.
You should not rely on forward-looking statements in this
prospectus. This prospectus contains forward-looking
statements that involve risks and uncertainties. We use
words such as anticipates", "believes", "plans", "expects",
"future", "intends" and similar expressions to identify
these forward-looking statements. Actual results could
differ materially from those anticipated in these forward-
looking statements for many reasons.
Management's Discussion and Analysis Or Plan Of Operation.
Upon the completion of all or part of the sale of shares
contained in this offering, Xunantunich Inc. intends to
proceed as quickly as possible to hire one or more sales
representatives to present its service to potential
customers. Geography is an obstacle that must be dealt
with. The Province of Alberta is very large, making
adequate coverage by one salesperson virtually impossible.
A minimum of two representatives will be necessary. After
opening accounts, these representatives will be necessary to
service existing customers. Research has indicated that
this servicing or detailing of already established accounts
results in larger increases in reorders of product.
Estimated expenses for the next twelve months are as
follows:
US Dollars CN Dollars
Two sales persons (draw against
commissions) @ $1000 per month* $ 36,000 $54,000
Administration $ 12,000 $ 18,000
Employee benefits $ 16,000 $ 24,000
Office rent $ 12,000 $ 18,000
Office supplies
(including furniture) $ 10,000 $ 15,000
Development stage costs
(including recruiting costs) $ 1,000 $ 1,500
Website maintenance $ 500 $ 750
Contingency (10%) $ 8,750 $ 13,125
Total first year expenses $ 96,250 $144,375
* All figures shown are in United States and Canadian
dollars. A conversion rate of 1.5 was used.
If the maximum proposed offering proceeds are not received,
operations would be scaled down. One sales person would be
hired instead of two; administration would be handled by an
officer and director at no cost. The same officer and
director would supply office space during the start-up
process. Growth would be much slower and Xunantunich Inc.
would not be able to rent office space and hire
administrative help until sales volumes and gross profits
were large enough. If less than half of our anticipated net
proceeds are received from this offering, management would
be forced to decide whether or not to proceed with the
business and either delay starting or cancel the project
completely.
Description of property.
Xunantunich Inc. maintains a mailing address at the office
of one of its shareholders, but otherwise does not maintain
an office. We pay no rent and own no real estate.
Certain Relationships and Related Transactions
Prior to the date of this registration statement Xunantunich
issued to ten individuals a total of 2,000,000 shares of
common stock in consideration of acquiring the rights to
manufacture and market an oxygen-enhanced product for use in
aquaculture, fish and poultry farming and the bioremediation
of waste ponds and lagoons in the states of Arizona and
Nevada. Mortenson acquired these rights from the inventors
of the product, N.W. Technologies Inc. under a distribution
agreement.
In December, 1999 N.W. Technologies unilaterally canceled
its contract and distribution agreement with David R.
Mortenson and Associates. Mortenson and several of the
concerns that have an interest in the technology through
distribution agreements with Mortenson, have filed suit in
Harris County court, Texas against N.W. Technologies Inc,
its officers and directors and several other individuals
and concerns involved with the cancellation and withdrawal.
Xunantunich is not withdrawing from its from its agreement
with Mortenson for the distribution and manufacture of the
oxygen-enhanced products, nor has it any intention of doing
so at the present time. All obligations under that
agreement have been suspended until the lawsuit is resolved.
In order to avoid litigation with Xunantunich and to protect
our shareholders, Mortenson granted a distribution territory
for an Internet based vitamin and health supplement company.
The company, Vitamineralherb.com, is located San Diego,
California. There was no charge for this distribution
territory that is for the Province of Alberta, Canada.
Market for common equity and related stockholder matters.
Xunantunich Inc. is a development stage company that is
still in the beginning stages of implementing its business
plan. No market currently exists for the common stock.
Upon completion of all or part of the offering of common
shares contained in this registration statement, it is the
intention of Xunantunich Inc. to apply for a trading symbol
and a listing to have its shares quoted on the Over-the-
Counter Bulletin Board. There can be no assurance that any
part of this offering will be subscribed to and if all or
part of the offering is subscribed to, that the request of
Xunantunich Inc. to have the price of its stock quoted on
the Over-the-Counter Bulletin Board will be granted. You
should take all of the above facts into consideration before
making a decision to purchase any amount of Xunantunich Inc.
stock.
Executive compensation.
No officer or director of Xunantunich Inc. has received any
remuneration. Although there is no current plan in
existence, it is possible that Xunantunich Inc. will adopt a
plan to pay or accrue compensation to its officers and
directors for services related to the implementation of the
business plan. See "Certain Relationships and Related
Transactions". Xunantunich Inc. has no stock option,
retirement, pension or profit-sharing programs for the
benefit of directors, officers or other employees, but the
Board of Directors may recommend adoption of one or more
such programs in the future.
XUNANTUNICH INC.
FINANCIAL STATEMENTS FOR THE
FOUR MONTH PERIOD ENDING APRIL 30, 2001 AND THE
FOUR MONTH PERIOD ENDING APRIL 30, 2000
XUNANTUNICH INC.
UNAUDITED BALANCE SHEET
AS AT JUNE 30, 2001
ASSETS
CURRENT ASSETS $ 0
OTHER ASSETS
LICENSE RIGHTS 0
TOTAL ASSETS 0
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES 7,500
STOCKHOLDERS' EQUITY
COMMON STOCK $0.001 PAR VALUE
100,000,000 SHARES AUTHORIZED
5,250,000 SHARES ISSUED AND
OUTSTANDING 2,750
ADDITIONAL PAID-IN
CAPITAL 11,284
DEEMED DIVIDEND RE:
LICENSE RIGHTS ( 2,000)
DEFICIT ACCUMUILATED DURING
THE DEVELOPMENT STAGE (19,534)
TOTAL STOCKHOLDER'S EQUITY (DEFICIT) 0
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0
XUNANTUNICH INC.
UNAUDITED STATEMENT OF OPERATIONS
FOR THE SIX MONTH PERIODS
ENDING JUNE 30, 2001 AND 2000
JUNE 30 JUNE 30
2001 2000
REVENUES $ 0 $ 0
OPERATING EXPENSES
OFFICE EXPENSES
AND FILING FEES 800 383
LEGAL AND ACCOUNTING 6,700 9,500
CONSULTING FEES 0 1,500
TOTAL OPERATING EXPENSES 7,500 11,383
NET (LOSS) FOR THE PERIOD (7,500) (11,383)
NET (LOSS) PER SHARE $ 0.00 $ 0.00
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,250,000 5,100,000
XUNANTUNICH INC.
UNAUDITED STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIODS
ENDING JUNE 30, 2001 AND 2000
JUNE 30 JUNE 30
2001 2000
CASH FLOWS FROM (TO)
OPERATING ACTIVITIES
NET INCOME (LOSS) $ ( 7,500) $ ( 11,383)
NET INCREASE IN
ACCOUNTS PAYABLE 7,500 0
0 ( 11,383)
CASH FLOWS FROM (TO)
INVESTING ACTIVITIES 0 0
CASH FLOWS LFROM (TO)
FINANCING ACTIVITIES
ISSUANCE OF COMMON STOCK 0 12,000
NET INCREASE (DECREASE IN CASH 0 617
CASH BEGINNING OF PERIOD 0 0
CASH END OF PERIOD $ 0 $ 617
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in
accordance with US Securities and Exchange Commission
("SEC") requirements for interim financial statements.
Therefore, they do not include all of the information and
footnotes required by generally accepted accounting
principles for complete financial statements. The financial
statements should be read in conjunction with the financial
statements for the year ended December 31, 2000 financial
statements of Xunantunich Inc. included in this Prospectus.
The results of operations for the interim period shown in
this report are not necessarily indicative of the results to
be expected for the full year. In the opinion of
management, the information contained herein reflects all
adjustments necessary to make the results of operations for
the interim periods a fair statement of such operation. All
such adjustments are of a normal recurring nature.
XUNANTUNICH INC.
(A DEVELOPMENT STAGE ENTERPRISE)
AUDIT REPORT
DECEMBER 31, 2000
JANET LOSS, C.P.A., P.C.
CERTIFIED PUBLIC ACCOUNTANT
1780 SOUTH BELLAIRE STREET
SUITE 500
DENVER, COLORADO 80222
XUNANTUNICH INC.
(A DEVELOPMENT STAGE ENTERPRISE)
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS
ITEM PAGE
Report of; Certified Public Accountant 1
Balance Sheets as at December 31, 2000
And December 31, 1999 2
Statements of Operations for the Year Ended
December 31, 2000 and for the Period, April 2, 1999
(Inception) through December 31, 1999 3
Statements of Stockholders? Equity for the Year
Ended December 31, 2000 and the Period, April 2, 1999
(Inception) through December 31, 1999 4
Statements of Cash Flow for the Year Ended
December 31, 2000 and for the Period, April 2, 1999
Through December 31, 1999 5
Notes to Financial Statements 6&7
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1780 South Bellaire Street
Suite 500
Denver, Colorado 80222
INDEPENDENT AUDITOR'S REPORT
Board of Directors Xunantunich Inc.
21112 123rd Avenue
Maple Ridge, BC V2X 4B4
Canada
Sirs:
I have audited the accompanying balance sheets of Xunantunich Inc. (
a Development Stage Enterprise) as of December 31, 2000 and 1999 and
the statements of operations, changes in stockholders? equity and
cash flows for the year ended December 31, 2000 and for the period,
April 2, 1999 (Inception) through December 31, 1999. 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.
My audit was made in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the
audits to obtain reasonable assurance as to whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management as well as evaluating the overall financial
statement presentation. I believe that my audit provides a
reasonable basis for my opinion.
In my opinions, the financial statements referred to above present
fairly, in all material respects, the financial position of
Xunantunich Inc. (a Development Stage Enterprise) as of; December
31, 2000 and for the period, April 2, 1999 (Inception) through
December 31, 1999 in conformity with generally accepted accounting
principles.
/s/Janet Loss, C.P.A., P.C.
Janet Loss, C.P.A., P.C.
May 22, 2001
XUNANTUNICH INC.
( A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
DECEMBER 31, 2000 AND DECEMBER 31, 1999
ASSETS
December 31, 2000 December 31, 1999
CURRENT ASSETS $ 0 $ 0
OTHER ASSETS
LICENSE RIGHTS 0 0
TOTAL ASSETS 0 0
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES 0 0
STOCKHOLDER'S EQUITY
COMMON STOCK $0.001 PAR VALUE;
100,000,000 AUTHORIZED AND
5,250,000 AND 5,000,000 SHARES
ISSUED AND OUTSTANDING 2,750 2,500
ADDITIONAL PAID-IN CAPITAL 11,284 34
DEEMED DIVIDEND RE: PURCHASE
OF LICENSE RIGHTS (2,000) (2,000)
DEFICIT ACCUMULATED DURING
THE DEVELOPMENT STAGE (12,034) (534)
TOTAL STOCKHOLDER?S
EQUITY (DEFICIT) 0 0
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $0 $ 0
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
STATEMENTS
XUNANTUNICH INC.
( A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000 AND
THE PERIOD, APRIL 2, 1999 (INCEPTION) THROUGH DECEMBER 31, 1999
December 31, 2000 December 31, 1999
REVENUES $ 0 $ 0
OPERATING EXPENSES
FEES 9,665 165
TAXES AND LICENSES 320 320
OFFICE EXPENSES 2,049 54
TOTAL OPERATING EXPENSES 12,034 534
NET (LOSS) $( 12,034) $( 534)
NET (LOSS) PER SHARE $ (0.0022) $ 534
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,250,000 5,000,000
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
STATEMENTS
XUANTUNICH INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF STOCKHOLDERS? EQUITY (DEFICIT)
FOR THE YEAR ENDED DECEMBER 31, 2000
AND THE PERIOD APRIL 2, 1999 (INCEPTION)THROUGH DECEMBER 31, 1999
COMMON DEFICIT
STOCK ACCUMULATED
NUMBER COMMON ADDITIONAL DURING THE TOTAL
OF STOCK DEEMED DEVELOPMENT STOCKHOLDER
SHARES AMOUNT DIVIDEND STAGE EQUITY
PAID-IN
CAPITAL
APRIL 2,
1999
ISSUANCE
OF COMMON
STOCK FOR
CASH 500000 500 34 0 0 534
APRIL 2,
1999
ISSUANCE
OF COMMON
STOCK FOR
LICENSE 2000000 2,000 0 (2,000) 0 0
RIGHTS
NOVEMBER
24, 1999
ISSUANCE
OF COMMON
STOCK FO
2-1 split 2500000 0 0 0 0 0
DEFICIT
FOR THE
PERIOD
APRIL 2/99
(INCEPTION)
THRU 0 0 0 0 (534) (534)
DECEMBER
31, 1999
BALANCE
12/ 31/99 5000000 2,500 34 (2000) (534) 0
APRIL 30,
2000
ISSUANCE
OF COMMON
STOCK FOR 100,000 100 9,900 0 0 10,000
CASH
OCTOBER
10, 2000
ISSUANCE
OF COMMON 150,000 150 1,350 0 0 1,500
STOCK
DEFICIT
FOR THE
PERIOD
ENDED 0 0 0 0 (11,500) (11,500)
DECEMBER
31, 2000
BALANCE
12/31/00 5250000 2,750 11,284 (2000) (14,034) 0
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
STATEMENTS
XUNANTUNICH INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2000 AND
THE PERIOD APRIL 2. 1999 THROUGH DECEMBER 31, 1999
December 31, 2000 December 31,1999
CASH FLOWS FROM
OPERATING ACTIVITIES $ (11,500) $ (534)
CASH FLOWS FROM (TO)
FINANCING ACTIVITIES
ISSUANCE OF COMMON STOCK 11,500 2,534
DEEMED DIVIDEND RE:
LICENSE PURCHASE ______ (2,000)
INCREASE (DECREASE) IN CASH 0 0
CASH BEGINNING OF PERIOD 0 0
CASH END OF PERIOD $ 0 $ 0
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
STATEMENTS
XUNANTUNICH INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE I - ORGANIZATION AND HISTORY
The Company is a Nevada Corporation and the Company has been
in the development stage since its formation on April 2,
1999.
The Company`s only activities have been organizational,
directed at acquiring its principle assets, raising its
initial capital and developing its business plan.
NOTE II - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DEVELOPMENT STAGE ACTIVITIES
The Company has been in the development stage since
inception.
ACCOUNTING METHOD
The Company records income and expenses on the accrual
method.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash on hand, cash on
deposit, and highly liquid investments with maturities
generally of three months or less. At December 31, 1999,
there were no cash equivalents.
YEAR END
The Company has elected to have a fiscal year ended
December 31st.
USE OF ESTIMATES
The preparation of financial statements in accordance with
generally accepted accounting principles requires
management to make estimates and assumptions that effect
the reported amounts of assets and liabilities at the date
of financial statements, as well as revenues and expenses
reported for the periods presented. The Company regularly
assesses these estimates and, while actual results may
differ management believes that the estimates are
reasonable.
NOTE III - RELATED PARTY TRANSACTIONS
The Company has entered into an agreement made effective
July 1, 1999 with David R. Mortenson & Associates (Grantor)
to receive the rights to distribute the water treatment
products developed by NW Technologies, Inc. for the States
of Arizona and Nevada. Minimum purchase requirements were
$125,000 the first year and $175,000 the second year.
On July 6, 1999 the Company filed a Form D pursuant to
Section 3(b) of the Securities Act and Rule 504 promulgated
thereunder, with the Securities and Exchange Commission
registering the issuance of 200,000 shares of common stock
to each of the ten general partners of David R. Mortenson
and Associates, a Texas general Partnership. The shares
were issued at a price of $0.001 per share being the par
value per share for a total of $2,000 in exchange for the
water remediation license. The water remediation license is
recorded a cost of $NIL, being the original cost of the
license to David R. Mortenson and Associates. The
difference between the issue price of the shares and the
cost of the license is recorded as a deemed dividend.
The agreement with David R. Mortenson & Associates was
entered into by previous management.
In December, 1999 N.W. Technologies, Inc. unilaterally
cancelled its contract with David Mortenson & Associates.
Early in the year 2000 David Mortenson & Associates laid
suit against N.W. Technologies, Inc. in Harris County Court,
Texas.
In the opinion of management, the Company has no direct or
indirect interest in the Texas lawsuit
In a letter dated January 5, 2000 David Mortenson &
Associates suspended all present and future payments under
the License Agreement until their dispute with N.W.
Technologies is resolved.
Due to the dispute regarding the water remediation license,
David R. Mortenson and Associates gave and additional
license to the Company on January 20, 2000. The license is
to distribute vitamins, minerals, herbs and other health
products and supplements via the Internet. The license
calls for a 10% add-on for all products purchased and an
annual $500 website maintenance fee. The effective date of
the License Agreement was January 3, 2000. The license is
for an initial three years from the effective date and is
automatically renewable unless either party to the license
agreement gives ninety days written notice of non-renewal
prior to expiration date. No amounts have been recorded in
these financial statements regarding the granting of the
license.
Dorothy Mortenson is the wife of David R. Mortenson. She is
an original incorporator of the Company and served as
Corporate Secretary until January 17, 2000 when her shares
were purchased by present management. David R. Mortenson is
a principal in both David Mortenson & Associates and
VitaMineralHerb.com. Neither Mr. nor Mrs. Mortenson own or
have owned any of the Company?s securities since November
24, 1999. Outside of his association with
VitaMineralHerb.com, Mr. Mortenson has no connection with
Xunantunich. As a result, management considers that he is
at arms length with the Company.
Xunantunich Inc. has expended a total of $12,034 to date on
legal and accounting fees and office expenses to do with the
preparation and filing (Edgar) of this registration
statement and amendments.
PART II - Information Not Required in Prospectus
Item 24. Indemnification of directors and officers.
Pursuant to Nevada law, a corporation may indemnify a person
who is a party or threatened to be made a party to an
action, suit or proceeding by reason of the fact that he or
she is an officer, director, employee or agent of the
corporation, against such person's costs and expenses
incurred in connection with such action so long as he/she
has acted in good faith and in a manner which he/she
reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, in the case of criminal
actions, had no reasonable cause to believe his or her
conduct was unlawful. Nevada law requires a corporation to
indemnify any such person who is successful on the merits or
defense of such action against costs and expenses actually
and reasonably incurred in connection with the action.
The bylaws of Xunantunich Inc. filed as Exhibit 3.2, provide
that Xunantunich Inc. will indemnify its officers and
directors for costs and expenses incurred in connection with
the defense of actions, suits, or proceedings against them
on account of their being or having been directors or
officers of Xunantunich Inc., absent a finding of negligence
or misconduct in office. The Bylaws also permit Xunantunich
Inc. to maintain insurance on behalf of its officers,
directors, employees and agents against any liability
asserted against and incurred by that person whether or not
Xunantunich Inc. has the power to indemnify such person
against liability for any of those acts.
Item 25. Other expenses of issuance and distribution.
Expenses incurred or (expected) relating to this
Registration Statement and distribution are as follows:
Legal fees $ 14034.00
Accounting 1,500.00
(Edgar filing and Printing) 4,000.00
TOTAL $19534.00
To date Xunantunich Inc. has spent a total of $12,034 for
office expenses and legal and accounting fees.
Item 26. Recent sales of unregistered securities.
Set forth below is information regarding the issuance and
sales of Xunantunich Inc. securities without registration
since its formation. No such sales involved the use of an
underwriter, no advertising or public solicitation were
involved, the securities bear a restrictive legend and no
commissions were paid in connection with the sale of any
securities.
On April 2, 1999, Xunantunich Inc. issued 500,000 shares of
common stock to the officers and directors as founders'
shares in return for the time, effort and expenditures to
organize and form the corporation. On April 28, 1999
Xunantunich Inc. issued 200,000 shares of common stock each
to ten individuals for a total of 2,000,000 shares in return
for the water treatment rights for the states of Arizona and
Nevada and the development of the business plan. These
securities were issued in reliance upon the exemption
contained in Section 4(2) of the Securities Act of 1933 and
in reliance upon Regulation S. These securities were issued
to the promoters of the company, bear a restrictive legend
and were issued solely to citizens of Canada. In addition,
the 200,000 shares issued for the water treatment rights
were issued in reliance on Section 3(b) of the Securities
Act of 1933 and Rule 504 of regulation D promulgated
thereunder.
On August 17, 1999, the Board of Directors of Xunantunich
Inc. filed an amendment to its Articles of Incorporation
with the state of Nevada increasing the authorized capital
to 100,000,000 shares of common stock.
On November 24, 1999 all 2,500,000 shares of common stock of
Xunantunich Inc. were purchased by the present shareholders.
They immediately effected a two - to - one forward split for
a total of 5,000,000 issued and outstanding shares
On April 30, 2000 100,000 shares of common stock at a price
of $0.10 per share were issued for cash. This capital was
spent on preparation and amending this registrations
statement and updating of financial statements.
Item 27. Exhibits.
The following exhibits are filed as part of this
Registration Statement;
Exhibit
Number Description
3.1 Articles of Incorporation*
3.2 Bylaws*
5.1 Opinion re: Legality
10.1 License Agreement*
10.2 Assignment of License Agreement*
10.3 License Agreement-Water*
10.4 Manufacturing Agreement with Alta Natural Herbs and
Supplements Ltd..*
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (See Exhibit 5.1)
* Previously filed
Item 28. Undertakings
The undersigned registrant hereby undertakes:
1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement:
(a) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(b) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered
(c) To include any additional or changed material
information to 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 being registered,
which remain unsold at the end of the offering.
4) For determining any liability under the Securities Act,
to treat the information omitted from the form of prospectus
filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed
by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act as part of this registration
statement as of the time the Commission declared it
effective.
5) For determining any liability under the Securities Act
to treat each post-effective amendment that contains a
form of prospectus as a new registration statement for
the securities offered and the offering of the securities
at that time as the initial bona fide Offering of those
Securities.
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 Prince George,
Province of British Columbia, Canada
On August15, 2001
(Registrant) Xunantunich Inc.
By: /S/ Mark Cramer
Mark Cramer, President.
In accordance with the requirements of the Securities Act of
1933, this registration statement has been signed by the
following persons in the capacities and on the date stated.
By: /S/ Mark Cramer
Mark Cramer, President
Date: July 12, 2001
By: /S/ Florence Cramer
Florence Cramer, Secretary/Treasurer
Date: July 12, 2001
By: /S/ Michael Cramer
Michael Cramer, Vice President
Date: July 12, 2001
By: /S/ Grant Cramer
Grant Cramer, Director
Date: July 12, 2001
EXHIBIT 5.1
OPINION RE: LEGALITY
ARTHUR J. FROST, LTD.
Arthur J. Frost, Esq.
7549 W. Heatherbrae Drive
Phoenix, Arizona 85033
(623) 849-2050
(623) 873-1799 Facsimile
August 15, 2001
Xunantunich Inc.
3E - 2775 Fir Street,
Vancouver, BC V6K 1P1
Canada
Re: Xunanunich Inc. Registration Statement on Form SB-2
Ladies and Gentlemen:
I have acted as counsel for Xunantunich Inc., a Nevada
corporation (the "Company"), in connection with the
preparation of the registration statement on Form SB-2 (the
"Registration Statement") filed with the Securities and
Exchange Commission (the "Commission") pursuant to the
Securities Act of 1933, as amended (the "Act"), relating to
the public offering (the "Offering") of up to 1,510,000
shares (the "shares") of the Company's common stock, $.001
par value (the "common stock").
In rendering the opinion set forth below, I have reviewed
(a) the Registration Statement and the exhibits thereto; (b)
the Company's Articles of Incorporation; (c) the Company's
Bylaws; (d) certain records of the Company's corporate
proceedings as reflected in its minute books; and (e) such
statutes, records and other documents as we have deemed
relevant. In my examination, I have assumed the genuineness
of all signatures, the authenticity of all documents
submitted to us as originals, and conformity with the
originals of all documents submitted to us as copies
thereof. In addition, I have made such other examinations of
law and fact as we have deemed relevant in order to form a
basis for the opinion hereinafter expressed.
Based on the foregoing, we are of the opinion that all
issued shares are validly issued, fully paid and non-
assessable pursuant to the corporate law of the State of
Nevada. (Chapter 78A of the Nevada Revised Statutes)
We are also of the opinion that if and when the
registration statement should become effective, all shares
sold to the public through the use of the registration
statement and the prospectus contained therein, will be
validly issued, fully paid and non-assessable pursuant to
the corporate law of the State of Nevada. (Chapter 78A of
the Nevada Revised Statutes)
I hereby consent to the use of this opinion as an Exhibit to
the Registration Statement
Very truly yours,
/s/ Arthur J. Frost
Arthur J. Frost
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1780S. Bellaire
Suite 500
Denver, CO 80210
The Board of Directors
XUNANTUNICH, INC.
3E - 2775 Fir Street
Vancouver, BC V6K 1P1 Canada
Dear Sirs:
This letter will authorize you to include the Audit of
your company dated December 31,1999 and December 31,
2000 and the Audit Report dated May 22, 2001 in the
Registration Statement currently under review with the
Securities and Exchange Commission.
Yours Truly,
S/S Janet Loss, C.P.A., P.C.
Janet Loss, C.P.A., P.C.
August 15, 2001