UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MOBILE TIRE RENEW (INTERNATIONAL), INC.
(Name of small business issuer in its charter)
Nevada 7534 91-2138521
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Code Number) Identification No.)
5510 Harvestor Rd., Burlington Ontario, Canada, L7L 5V4, (905) 631-9795.
(Address and telephone number of principal executive offices)
Thomas E. Stepp, Jr., Stepp Law Group
1301 Dove Street, Suite 460
Newport Beach, California, 92660-9010
(Name, address and telephone number of agent for service)
Approximate date of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.
If any securities being registered on this form are to be offered on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act of 1933. [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act of 1933, please check the following box
and list the Securities Act 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 of 1933, 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 of 1933, 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 this Prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
(begin boldface)
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
(end boldface)
CALCULATION OF REGISTRATION FEE
-------------------------------
Title of each class Amount to be Proposed maximum Proposed maximum Amount of
of securities to be registered offering price per aggregate offering registration fee
registered share (1) price
Common Stock, no par 6,625,000 $ 0.10 $662,500 $60.95
value
<FN>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act.
</FN>
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REGISTRATION STATEMENT i
MOBILE TIRE RENEW (INTERNATIONAL), INC.
PROSPECTUS
MOBILE TIRE RENEW (INTERNATIONAL), INC.
A NEVADA CORPORATION
6,625,000 Shares of Common Stock of Mobile Tire Renew (International) Inc.
The information in this prospectus is not complete and may be changed. These
shares cannot be offered or sold, until the registration statement filed with
the Securities and Exchange Commission is declared effective by the Securities
and Exchange Commission. Common shares will be offered and sold as soon as the
registration statement is declared effective. This prospectus is not an offer to
sell these securities, and we are not soliciting offers to buy these securities,
in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION DATED, January 10, 2003
This prospectus relates to 6,625,000 common shares of Mobile Tire Renew
(International) Inc., a Nevada corporation, which may be resold from time to
time by certain of our selling stockholders. Our common stock is not currently
listed on any national exchange or electronic quotation system. In connection
with any sales, any broker or dealer participating in such sales may be deemed
to be an underwriter within the meaning of the Securities Act of 1933.
An Investment in the securities offered hereby involves a high degree of risk
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and should be considered only by persons who can afford the loss of their
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entire investment.
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Investing in the Common Shares Involves Risks, See "risk Factors"
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Beginning on page 2.
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Neither the Securities and Exchange Commission nor any state Securities
Commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
A registration statement relating to these securities has been filed with the
Securities and Exchange Commission. Our selling stockholders may not offer or
sell their shares of our common stock until the registrations statement filed
with the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
The selling stockholders will offer shares at the designated price until their
shares are quoted on the Over-The-Counter (OTC) Bulletin Board and thereafter at
prevailing market prices or privately negotiated prices. The offering price of
the shares offered herein will be set at $0.10 per share.
Estimated Underwriting discounts Proceeds to
Maximum Offering and commissions Issuer
Price to Public
----------------- ---------------------- -----------
Per Share $0.10 $0.00 $0.00
Total Maximum $662,500 $0.00 $0.00
The date of this prospectus is January 10, 2003
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REGISTRATION STATEMENT ii
MOBILE TIRE RENEW (INTERNATIONAL), INC.
TABLE OF CONTENTS
-----------------
PROSPECTUS SUMMARY...........................................................1
THE COMPANY..................................................................1
MARKETS...................................................................1
PRODUCTS AND SERVICES OFFERED.............................................1
REVENUES..................................................................2
THE COMPANY'S LOCATION....................................................2
THE OFFERING.................................................................2
RISK FACTORS.................................................................3
RISKS RELATED TO THE BUSINESS.............................................3
RISKS RELATED TO THE INDUSTRY.............................................5
RISKS RELATED TO THE SECURITIES MARKETS...................................6
CAUTIONARY STATEMENT OR FORWARD-LOOKING STATEMENTS...........................7
USE OF PROCEEDS..............................................................7
DETERMINATION OF OFFERING PRICE..............................................7
DILUTION.....................................................................7
DIVIDEND POLICY..............................................................7
SELLING STOCKHOLDERS.........................................................8
PLAN OF DISTRIBUTION.........................................................9
LEGAL PROCEEDINGS...........................................................10
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS................10
SECURITY OWNERSHIP OF DIRECTORS, OFFICERS AND MANAGEMENT.................11
DESCRIPTION OF SECURITIES...................................................11
EXPERTS.....................................................................12
LIMITATION OF LIABILITY AND INDEMNIFICATION.................................12
DESCRIPTION OF BUSINESS.....................................................13
HISTORY AND BACKGROUND...................................................13
BUSINESS AND MARKETING STRATEGIES........................................14
PRODUCTS AND SERVICES....................................................14
INDUSTRY OVERVIEW........................................................15
COMPETITION..............................................................16
REGULATORY BACKGROUND....................................................16
DISCLOSURE...............................................................16
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS......................................................17
ADDITIONAL INFORMATION......................................................19
TRANSFER AGENT AND REGISTRAR................................................20
REPRESENTATIONS.............................................................20
MATERIAL CONTRACTS..........................................................20
FINANCIAL STATEMENTS........................................................21
PART II.....................................................................38
CERTIFICATIONS..............................................................40
EXHIBITS....................................................................41
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REGISTRATION STATEMENT iii
MOBILE TIRE RENEW (INTERNATIONAL), INC.
PROSPECTUS SUMMARY
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The following information is qualified in its entirety by the more detailed
information and financial projections appearing in this prospectus or
incorporated by reference herein. You should review carefully the entire
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contents of this prospectus and the financial projections delivered herewith and
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consult legal and other professional advisors having relative expertise. Care
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should be taken to read each term in the context of the particular provisions of
this prospectus in which such term appears.
(begin boldface)
Information in this prospectus contains "forward looking statements" which can
be identified by the use of forward-looking words, such as "believes",
"estimates", "could", "possibly", "probably", "anticipates", "estimates",
"projects", "expects", "may", "will", or "should" or other variations thereon or
similar words. No assurances can be given that the future results anticipated by
the forward-looking statements will be achieved. The following matters
constitute cautionary statements identifying important factors with respect to
those forward-looking statements, including certain risks and uncertainties that
could cause actual results to vary materially from the future results
anticipated by those forward-looking statements. Among the key factors that have
a direct bearing on our results of operations are the effects of various
governmental regulations, the fluctuation of our direct costs and effectiveness
of our operating strategy. Other factors could also cause actual results to vary
materially from the future results anticipated by those forward-looking
statements. Persons participating in the Offering should carefully consider the
factors set forth herein under the caption "Risk Factors".
(end boldface)
THE COMPANY
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Mobile Tire Renew (International), Inc. was incorporated in March of 2001 under
the laws of the State of Nevada (hereinafter "the Company" and/or Tire Renew").
We were originally called Global Technical Outsource, Inc. On June 19, 2001, we
filed a certificate of amendment with the Nevada Secretary of State, changing
our name to Commercial Tire Casing Services, Inc. Again, in late April of 2002,
we filed a certificate of amendment with the Nevada Secretary of State, changing
our name to Mobile Tire Renew (International) Inc. In March 2001, a wholly owned
subsidiary was formed in Nevada with the name Global Technical Outsource, Inc.
The name was changed to Commercial Tire Casing Services (USA), Inc. To date,
this corporation has no business activities. In November of 2001, a wholly owned
subsidiary called Mobile Tire Renew, Ltd. ("the "Subsidiary") was incorporated
under the laws of the Province of Ontario, Canada. The Subsidiary currently acts
as the operating entity for all our business activities. Through the Subsidiary,
we acquired a truck and tire re-grooving machine, with which we offer a mobile
tire re-grooving service to industrial customers in the "Golden Triangle" (an
industrial area stretching from Toronto to Hamilton in Ontario, Canada). We also
acquire re-groovable used tires and re-groove them for subsequent sale. In time,
we expect to expand our mobile tire re-grooving services and sales to other
locations in North America.
Through our subsidiary, we currently employ one full-time person, and one
part-time person. Our full-time employee drives the truck/van and operates the
tire re-grooving machine. Our part-time employee acts as our day-to-day
bookkeeper, and performs limited secretarial services.
MARKETS
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We intend to capitalize on the evolving opportunities in the industrial tire
renewing sector by establishing and operating a mobile tire renewing service and
sales business to compete in the tire re-groove and retread markets, which has
been steadily increasing in North America.
PRODUCTS AND SERVICES OFFERED
- -----------------------------
We currently offer mobile tire re-grooving services to customers throughout the
"Golden Triangle" region of Lower Canada. The tire re-groove machine we use
extends the life and usability of certain tires by cutting into unused portions
of the tires' rubber. Some tires are originally manufactured specifically with
re-grooving in mind, and thus have extra layers of rubber under the existing
treads so that multiple layers can be used over the life of the tire. Such
re-grooving is typically only done with larger, industrial tires, such as those
used for larger transport trucks, rigs and tractors. Our tire re-groove machine
fits onto the back of our van, and the driver takes the van and the machine to
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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various tire and transport businesses. Once there, the driver operates the
machine, and re-grooves any tires ready for re-grooving for a base price per
tire. The cost of re-grooving, per tire, is dramatically less that the cost for
a replacement tire or even the cost of re-treading.
Further, we also acquire re-groovable used tires from depositories and business
without the machinery and/or expertise to re-groove tires, and re-grooves the
tires for subsequent re-sale.
Ultimately, we intend to offer its mobile tire re-grooving services and sales in
other parts of North America where we project positive new market opportunities
and feel we have the resources to expand.
REVENUES
- --------
Revenues are generated through the Subsidiary through the operation of the tire
renew service and the sale of re-grooved tires. Revenues are derived from a flat
rate charge per tire for re-grooving services, and from the mark up sale price
on sold re-grooved tires.
THE COMPANY'S LOCATION
- ----------------------
Our head office is at 2076 Davebrook Rd., Mississaga Ontario, which is also the
home of our President, Garry Drisdelle. We operate from an industrial space used
by another Company owned and operated by Mr. Drisdelle, Total Casing Service
Inc. (herinafter "Total Casing"), located at 5510 Harvestor Rd., Burlington
Ontario, Canada, L7L 5V4. We currently pay nominal rent for use of the space,
which serves as a storage facility for our truck, re-groove machine, and various
spare parts. We also currently use a portion of Total Casing's general office
space and equipment, which gives us access to phone, fax and
secretarial/book-keeping services at a nominal charge for the foreseeable
future.
THE OFFERING
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This prospectus relates to 6,625,000 shares of our common stock to be sold by
selling stockholders identified in this prospectus. (the "Shares")
SELECTED FINANCIAL INFORMATION
- ------------------------------
The following table presents summary historical consolidated financial
information for the first fiscal year ended March 31, 2002 and the seven month
period ended October 31, 2002 and certain balance sheet information. The
financial information disclosed is for the period of November 8, 2001 to March
31, 2002 and April 1, 2002 to October 31, 2002 respectively. The Selected
Financial Information should be read in conjunction with the Consolidated
Financial Statements and the Notes thereto appearing in this prospectus.
Summary of Consolidated Statement of Operations
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April 1, 2002 - November 8, 2001
October 31, 2002 - March 31, 2002
Total Revenue $142,566 $ 8,198
Net Income (Loss) 10,321 (3,778)
Net (Loss) per share - Basic 0.00 (0.00)
Number of Shares Outstanding 5,000,000 5,000,000
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REGISTRATION STATEMENT 2
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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Summary of Consolidated Balance Sheet
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April 1, 2002 - November 8, 2001
October 31, 2002 - March 31, 2002
Cash and cash equivalents $32,536 $ 2,584
Total Current Assets 69,826 13,143
Total Assets $96,134 $39,567
Total Current Liabilities $44,300 $15,106
Note Payable 15,685 12,569
Common Stock and Paid-in Capital 15,659 15,659
Accumulated Earnings (Deficit) 6,543 (3,778)
Total Liabilities & Stockholder's Equity $96,134 $39,567
RISK FACTORS
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Any investment in the Shares involves a lot of risks. You should carefully
consider the following information about these risks, together with the other
information contained in this Prospectus, before you decide whether to buy any
Shares. If any of the following risks occur, the business, and the results of
operations and financial condition would likely suffer. In any such case, the
market price of the Shares could decline, and you might lose all or part of the
money you paid to buy the Shares.
The risks and uncertainties described below are not the only ones we face.
Additional risks and uncertainties, including those not presently known to us or
that we presently deem immaterial, may also result in decreased revenue,
increased expenses or other events that could result in a decline in the price
of the Shares.
RISKS RELATED TO THE BUSINESS.
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Because we are a start up company with a limited operating history in an
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uncertain market, we cannot guarantee our profitability. We were recently formed
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and have a limited operating history. Since incorporation, we have developed the
plan for offering tire re-groove services and sales and have expended resources
on incorporation expenses, research and personnel. As a result, some losses have
been incurred since incorporation and management expects to experience operating
losses and negative cash flow for the near future.
There can be no assurance at this time that we will operate profitably or that
we will have adequate working capital to meet our obligations as they become
due. We believe that our success will depend in large part on our ability to (i)
offer an efficient and cost-effective mobile tire renewal and sales service,
(ii) attract new customers and continue to provide existing customers with
outstanding service, (iii) instill and maintain consumer confidence, (iv)
achieve name recognition, and (v) expand our existing service territory beyond
the "Golden Triangle" to other industrial centers throughout North America.
Accordingly, we intend to invest heavily in development and expansion of our
service, marketing and promotion. As a result, we expect to incur operating
losses in the initial stages of its business and for the near future.
Because we are a startup Company, we may never be Profitable. Our business is
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speculative and dependent upon the acceptance of our tire renewal service and
the effectiveness of our marketing/networking program. There can be no assurance
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REGISTRATION STATEMENT 3
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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that our service will be successful or result in profit. There is no assurance
that we will earn significant revenues or that investors will not lose their
entire investment.
If we fail to respond adequately to change, our clients may use our competitor's
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products and services. If we face material delays in obtaining leased space when
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we expand to new areas, in obtaining leased space if we expand to a size beyond
that which can be accommodated by our existing space, and/or if we delay in
introducing new tire renewal services, products and enhancements, customers may
forego our service and use those of our re-groove competitors, opt to retread
their tires, or buy their tires new. To remain competitive, we must continue to
enhance and improve our services. If competitors introduce new products and
services, or if new industry standards and practices emerge, the existing
services of ours may become obsolete. Failure to keep up with such changes may
cause us to fall behind our competitors and you may lose some or all of your
investment in the Shares.
We may be unable to meet future capital requirements. Since inception, we have
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experienced negative cash flow from operations and expect to experience
significant negative cash flow from operations for the foreseeable future. We
expect to require working capital to fund our operations. We cannot be certain
that additional financing will be available on favorable terms when required, or
at all. If we are unable to raise sufficient capital, or are unable to repay the
debt, then we may cease operations, become insolvent, declare bankruptcy or be
otherwise wound up, all of which may result in the loss of all or substantially
all of the investment capital of the shareholders. If we raise additional funds
through the issuance of equity, equity-related or debt securities, the
securities may have rights, preferences or privileges senior to those of the
rights of the Common Stock and those stockholders may experience additional
dilution.
Because we offer no Assurance that Dividends Will be Paid, investors seeking
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dividends should consider other investments. We do not currently anticipate
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declaring and paying dividends to shareholders in the near future. It is our
current intention to apply net earnings, if any, in the foreseeable future to
increasing the capital base and marketing. Prospective investors seeking or
needing dividend income or liquidity should therefore not purchase the Shares.
There can be no assurance that we will ever have sufficient earnings to declare
and pay dividends to the holders of the Shares, and in any event, a decision to
declare and pay dividends is at the sole discretion of our Board of Directors.
Because we depend on a small group of qualified people, if we cannot hire and
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retain qualified personnel, we might be forced to discontinue our operations.
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Our success is expected to be substantially dependent on the performance of its
executive officers and key employees. Given our early stage of development in
the tire renewal industry, any inability to attract, retain and motivate
qualified personnel for the planning and execution of our business plan could
materially adversely affect our ability to market, sell, and enhance our
services. The loss of one or more employees or an inability to hire and retain
other qualified employees could have a material adverse effect on us. Currently,
we are heavily dependant on Mr. Garry Drisdelle, President and CEO of the
Company. Mr. Drisdelle is solely responsible for the ongoing upper management of
the Company, including future expansion, solicitation of new clients and
management of our budget. We have not entered into any employment or management
contracts with the above nor do we currently maintain "key-person" insurance of
any kind. (See "MANAGEMENT")
Because our current or proposed insurance coverage may not be adequate, we may
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incur Uninsured Losses. There is no assurance that we will not incur uninsured
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liabilities and losses as a result of the conduct of our business. We intend to
maintain comprehensive liability and property insurance at customary levels. We
intend to evaluate the availability and cost of business interruption insurance.
However, should uninsured losses occur, our shareholders could lose their
invested capital.
Because we are dependent on third party suppliers, any interruption or
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termination of such a relationship could force us to cease operations. We do not
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intend to manufacture our own replacement parts for the tire re-grooving
machines (principally new cutting knives, which must be replaced regularly), nor
our own re-grooving machines, but instead intend to work closely with a number
of suppliers. Although we believe that there are a number of suppliers of tire
re-grooving equipment throughout North America, the loss of one or more of our
proposed major suppliers could have a material adverse effect on our operations
or financial condition. Moreover, any change in existing relationships could
have a material adverse effect on our operations or financial condition.
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REGISTRATION STATEMENT 4
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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Because we are dependent on Total Casing Services, Inc. for providing our
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infrastructure, any termination of this relationship could force us to cease
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operations. As we are initially using the offices of Total Casing Services Inc.
- -----------
(owned by the our president, Garry Drisdelle) to support part of our
infrastructure at little or no cost, we will partially rely on the continued
financial health of Total Casing for its own financial well being. Should the
offices of Total Casing be forced to close, be reduced in size or move, it may
have a material adverse impact on the financial well being of the Company.
RISKS RELATED TO THE INDUSTRY
- -----------------------------
Any downturn in the General Economic Conditions could cause our revenues to
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decrease. The success of our operations depends to a significant extent upon a
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number of factors relating to industry spending, including economic conditions
that affect disposable income such as: employment; wages and salaries; business
conditions; interest rates; availability of credit; and taxation for the economy
as a whole and in regional and local markets where we operate. There can be no
assurance that the spending habits of our customers will not be adversely
affected by general economic conditions and negatively impact our results of
operations or financial conditions. By the same token, because tire re-grooving
is a cheaper option of the three principal tire renewal methods (purchasing new,
re-treading and tire re-grooving), the impact of poor economic conditions may be
just the opposite. We may experience a tremendous growth in demand in the midst
of an economic downturn.
Competition may hinder our success. The tire replacement industry is highly
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competitive. There are three main methods for replacing an industrial tire,
those being re-purchase, re-treading, and re-grooving. Re-grooving is the
cheapest option, and thus the re-grooving industry may not be in direct
competition with the tire replacement (new tires) or re-treading (a more
involved recycling process) industries. Tire re-grooving itself is a relatively
new industry, and mobile tire re-grooving services are virtually unheard of in
North America. Regardless, we cannot guarantee that new re-grooving services
will not emerge at a rapid rate, nor that the price of tire re-tread services
will not come down such that it would be comparable with the cost of tire
re-grooving. Should either of the above happen, we cannot guarantee that it will
be able to compete. Emerging mobile tire re-groove services may have more access
to capital and better prospects for fast expansion, and may significantly impede
our ability to be profitable. Existing retread services are well established
with successful operating histories and have superior access to capital and tire
industry markets, and thus we would have difficulty competing if the cost of
re-treading ever became comparable to the cost of re-grooving.
Supply and Price Fluctuations may impair our ability to supply services to our
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customers and may reduce our profit margin on services provided. Tire re-groove
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machines typically sell for between $5,000 - $10,000. Moreover, there are a
number of spare parts and working accessories that must be replaced on a regular
basis (particularly the knives used to cut into the tire). At current market
prices, based on what we currently charge for re-grooving services, we are
confident we can remain competitive with the tire re-tread industry and still
remain profitable. However, should the cost of the tire re-groove machines and
their accessories significantly increase, there is no guarantee we can remain
price competitive and we may suffer financially as a result. Similarly, should
the price of fuel increase substantially, the cost of offering a "mobile" tire
re-grooving service may be come such that we are no longer competitive with
other similar non-mobile services.
Because we are subject to several Regulations, if we fail to operate within the
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boundaries of the same, we may be forced to pay fines or adjust the manner in
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which we operate to remain in compliance. Our operations may be affected by
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numerous provincial, state, and federal laws. As of yet, the tire re-grooving
industry is not regulated in Ontario, but the industry is regulated by state and
federal law in the United States, which will affect us should we choose to
expand to American markets. US laws typically outlaw the sale or use of a
re-grooved tire, unless the tire itself has been specifically designated as a
"re-groovable" tire by the manufacturer. Moreover, it is often a state offense
to sell or use a re-grooved tire on a non-commercial vehicle. We intend to
operate in the future with material compliance to all state and federal
regulations. However, there can be no assurance that a failure to comply with
applicable regulations will not cause us to be fined or to change the way in
which we operate.
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REGISTRATION STATEMENT 5
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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RISKS RELATED TO THE SECURITIES MARKETS
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The market price of our Common Stock is likely to be highly volatile and subject
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to wide fluctuations. The market price for our Shares is likely to be highly
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volatile and subject to wide fluctuations in response to factors including the
following, some of which are beyond our control, actual or anticipated
variations in the quarterly operating results; announcements of technological
innovations or new services by us or our competitors; changes in financial
estimates by securities analysts; conditions or trends in the tire industry;
changes in the economic performance or market valuations of other tire
companies; announcements by us or competitors of significant acquisitions,
strategic partnerships, joint ventures or capital commitments; additions or
departures of key personnel; release of lock-up or other transfer restrictions
on the outstanding Shares or sales of additional Shares; and potential
litigation.
In addition, the stock market has from time to time experienced extreme price
and volume fluctuations. These broad market fluctuations may adversely affect
the market price of the Shares.
Our Common Stock Will Be Subject to "Penny Stock" Rules which may hinder the
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liquidity or our common stock. Our securities will be subject to the low priced
- ------------------------------
security or so-called "penny stock" rules that impose additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established customers and accredited investors. For any transaction involving a
penny stock, unless exempt, the rule requires: (i) that a broker or dealer
approve a person's account for transactions in penny stocks; and (ii) the broker
or dealer receive from the investor a written agreement to the transaction,
setting forth the identity and quantity of the penny stock to be purchased. In
order to approve a person's account for transactions in penny stocks, the broker
or dealer must: (i) obtain financial information and investment experience and
objectives of the person; and (ii) make a reasonable determination that the
transactions in penny stocks are suitable for that person and that the person
has sufficient knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker or dealer must
also deliver, prior to any transaction in a penny stock, a disclosure schedule
prepared by the Securities and Exchange Commission relating to the penny stock
market, which, in highlighted form: (i) sets forth the basis on which the broker
or dealer made the suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to the transaction.
Disclosure also has to be made about the risks of investing in penny stocks in
both public offerings and in secondary trading, and about commissions payable to
both the broker-dealer and the investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks. The administration requirements imposed by these
rules may reduce the liquidity of our common shares.
Because many or all of our stockholders may sell, the market price of our common
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stock may decline. The market price of our stock could decline significantly if
- ------------------
our existing stockholders sell shares of our common stock in the market after
the Registration Statement is effective. Upon the effectiveness of the
Registration Statement of which this prospectus is a part, our selling
stockholders, including our officers, directors and principal shareholders, may
sell all or part of the 6,525,000 shares being registered in this Registration
Statement. Such sales also may make it more difficult for us to raise capital in
the future at a time and at a price that we deem appropriate.
Because there is No Active Trading Market for our Common Shares, it may be
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difficult to sell our common stock and sellers of our common stock may receive
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fewer proceeds than expected therefrom. There is currently no active trading
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market for our common shares, and as such a market may not develop or be
sustained. Therefore, it may be difficult to sell the shares or if sold, it may
adversely affect the market price for such shares.
We may become the subject of a securities class action lawsuit. In the past,
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following periods of volatility in the market price of their stock, many
companies have been the subject of securities class action litigation. If we are
sued in a securities class action, it may result in substantial costs and a
diversion of our attention and resources and would cause the market price of the
Shares to fall.
Shareholders may experience dilution of ownership. We are authorized to issue up
- --------------------------------------------------
to 50,000,000 Common Shares. We have the authority to issue more of the Shares,
and to determine the rights, preferences and privileges of such Shares, without
the consent of any of the shareholders. Consequently, the shareholders may
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 6
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
experience more dilution in their ownership in the future. Purchasers of Shares
will experience immediate and substantial dilution in the net tangible book
value per share of their investment in the Shares. See "Pro-Forma
Capitalization", and "Dividend Policy".
CAUTIONARY STATEMENT OR FORWARD-LOOKING STATEMENTS
- --------------------------------------------------
Certain of the statements contained in this prospectus, including, without
limitation, those described under the sections entitled "Risk Factors", "Use of
Proceeds" and "Management Discussion and Analysis of Financial Condition and
Results of Operations" constitute forward looking statements. These statements
can be identified by forward-looking words such as "believes", "estimates",
"could", "possibly", "probably", "anticipates", "estimates", "projects",
"expects", "may", "will", "should", "goal", "plan", "intend", or other
variations thereon or similar words are not historical facts but are statements
of future expectations and other forward-looking statements that are based on
our current views and assumptions and involve known and unknown risks that may
differ materially from those expressed or implied in such statements. Actual
results, performance or events may differ materially from those in such
statements due to various factors beyond our control which include, without
limitation:
(a) general economic conditions;
(b) performance of financial markets;
(c) changes in laws and regulations;
(d) changes in political environment; and
(e) competition;
USE OF PROCEEDS
- ---------------
The shares of common stock offered hereby are being registered hereby are being
registered for the account of the selling stockholders identified in this
prospectus. All net proceeds from the sale of the common stock will go to the
respective selling stockholders who offer and sell their shares of common stock.
We will not receive any part of the proceeds from such sales of common stock.
DETERMINATION OF OFFERING PRICE
- -------------------------------
The offering price of the 6,625,000 common shares being offered by the
shareholders has been determined arbitrarily and has no relationship to any
established criteria of value, such as book value or earnings per share.
Additionally, because we have no significant operating history and have not
generated significant revenues to date, the price of the common shares is not
based on past earnings, nor is the price of the common shares indicative of
current market value for the assets owned by us. No valuation or appraisal has
been prepared for our business.
DILUTION
- --------
Since all of the shares being registered are already issued and outstanding, no
dilution will result from this offering.
DIVIDEND POLICY
- ---------------
Purchasers of the shares will participate in dividends based upon the number of
shares held as of a dividend record date. See "Description of Capital Stock."
Our By-Laws provide that our Board of Directors may, from time to time, declare,
and we may pay, dividends on our outstanding shares in the manner and upon the
terms and conditions provided by law. See "Risk Factors."
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 7
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
We have never declared or paid any cash dividends on our common stock. Any
future payment of dividends will be made at the discretion of our Board of
Directors based upon conditions then existing, including earnings, financial
condition and capital requirements as well as such economic and other conditions
as our Board of Directors may deem relevant.
SELLING STOCKHOLDERS
- --------------------
The following list of selling stockholders includes: (i) the number of shares of
common stock currently beneficially owned by each selling stockholder; (ii) the
number of shares being offered for resale by each stockholder; and (iii) the
number and percentage of shares of common stock to be held by each selling
stockholder after completion of this offering. The registration of the shares
does not necessarily mean that the selling stockholders will sell all or any of
their shares.
The selling stockholders' table consists of shareholders that received shares by
purchase of our common stock pursuant to a private offering, which satisfies the
requirements of Rule 506 of Regulation D.
On or about March 15, 2002, we issued 5,000,000 shares of our common stock to
Qualiu Services SA, Inc., a Nevada corporation, in consideration for all 25,000
of the issued and outstanding shares in Mobile Tire Renew Ltd., an Ontario
corporation, our current operating subsidiary in Canada. The beneficial owner of
Qualiu Services SA, Inc. is Garry Drisdelle, our current president and director.
In August 2002, Mr. Donnie Ray Yates was issued 100,000 common shares at the
price of $0.01 per share for a total value of $1,000, as an inducement to bring
his expertise to our Board of Directors. Between August 2002 and November 2002,
we conducted an offering pursuant to Regulation D, Rule 506, in the State of
North Carolina. As a result of the offering, 1,525,000 common shares were sold
to 27 individuals at a price of $0.01 per share, raising a total of $15,250.
As of January 10, 2003, there were 6,625,000 shares of our common stock
outstanding.
Shares of Common Shares of Common
Amount of Beneficial Stock Being Stock Beneficially
Name of Beneficial Ownership Prior Sold Pursuant to Owned After This
Owner to This Offering(1) This Prospectus(2) Offering.
- ------------------------- -------------------- ------------------ ------------------
NUMBER PERCENT NUMBER NUMBER PERCENT
Qualiu Services SA (3) 5,000,000 75.5% 5,000,000 0 0%
Pamela G. Yates 300,000 4.5% 300,000 0 0%
Vernon Nichols 300,000 4.5% 300,000 0 0%
Alvin Nichols 300,000 4.5% 300,000 0 0%
Larry M. Bell 200,000 3.0% 200,000 0 0%
Donnie Ray Yates 100,000 1.5% 100,000 0 0%
Jonalou B. Moore 100,000 1.5% 100,000 0 0%
James Eric Dean 100,000 1.5% 100,000 0 0%
Harris McLeod 100,000 1.5% 100,000 0 0%
Danny Rae Lee 25,000 * 25,000 0 0%
Michael G. Walston 25,000 * 25,000 0 0%
Jody Shover 20,000 * 20,000 0 0%
Michael T. Dean 20,000 * 20,000 0 0%
Liston D. Gist 20,000 * 20,000 0 0%
Carolyn R. Grant 15,000 * 15,000 0 0%
Jessica Barefoot 15,000 * 15,000 0 0%
Donnie Jo Harb 15,000 * 15,000 0 0%
Frankie W. Barefoot 15,000 * 15,000 0 0%
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 8
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
Clifford Leo Singleton 15,000 * 15,000 0 0%
Dennis C. Yates 15,000 * 15,000 0 0%
Florence W. McLeod 15,000 * 15,000 0 0%
Lisa Stephenson 15,000 * 15,000 0 0%
Michael Revell 15,000 * 15,000 0 0%
Anne L. Nelson 10,000 * 10,000 0 0%
Wanda Nelson 10,000 * 10,000 0 0%
Michelle Honeycutt 10,000 * 10,000 0 0%
Sue B. Thornton 10,000 * 10,000 0 0%
Connie Ann Hall 10,000 * 10,000 0 0%
Sandy Barefoot 10,000 * 10,000 0 0%
TOTAL 6,625,000 100% 6,625,000 0 0%
- ---------------------------------------------------------------------------------------------
<FN>
* - Less than 1%
(1) Beneficial ownership is determined in accordance with Securities and
Exchange Commission rules and generally includes voting or investment power with
respect to securities.
(2) Assumes that all of the shares held by the selling stockholders and being
offered under this prospectus are sold and that the selling stockholders acquire
no additional shares of common stock before the completion of this offering. The
actual number of shares of common stock offered hereby is subject to change and
could be materially greater or lesser than the estimated amount indicated,
depending upon a number of factors, including whether the number of shares of
common stock outstanding have been adjusted to account for any stock dividend,
stock split and similar transactions or adjustment.
(3) Qualiu Services SA, Inc. is 100% owned by Garry Drisdelle.
</FN>
PLAN OF DISTRIBUTION
- --------------------
The selling stockholders may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. We intend to apply to the National
Association of Securities Dealers, Inc. (the "NASD") to have our shares listed
on the "pink sheets" within one month of our registration statement becoming
effective. Subsequently, we may apply to the BBX if and when it meets the
structural and administrative requirements of that exchange. To date, no actions
have been taken to apply to the NASD to have our shares listed on the pink
sheets. Our common stock is not currently listed on any national exchange or
electronic quotation system. These sales may be at fixed or negotiated prices.
The selling stockholders may use any one or more of the following methods when
selling shares:
- ordinary brokerage transactions in which the broker-dealer solicits
purchasers;
- block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- privately negotiated transactions;
- broker-dealer may agree with the selling stockholders to sell a
specified number of such shares at a maximum offering price per share
of $0.10;
- until a market develops, if any sales are completed at a price
different than our offering price range indicated above, we will
report each such sale on:
o a prospectus supplement, if within 20%; or
o a post-effective amendment, if more than 20%
Once the market develops, we will file a post effective amendment to revise the
cover page and plan of distribution to reflect current market prices.
- a combination of any such methods of sale; and
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 9
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
- any other method permitted pursuant to applicable law.
Broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary to the types of transactions involved.
The selling stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933 in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act of 1933.
We are required to pay all fees and expenses incident to the registration of the
shares.
LEGAL PROCEEDINGS
- -----------------
We are not aware of any material legal proceedings against us. We may however be
involved, from time to time, in various legal proceedings and claims incident to
the normal conduct of our business.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
- ------------------------------------------------------------
The following table sets forth certain information regarding the executive
officers and directors of Mobile Tire Renew (International) Inc. as of August
15, 2002.
Name Age Title Term
- --------------- ------- ----------- ----------
Garry Drisdelle 39 President, Chief 1 year
Executive Officer,
Chair of the Board,
Principal Financial Officer,
Principal Accounting Officer,
Secretary and Treasurer
Donnie Yates 52 Director 1 year
Garry Drisdelle
Mr. Drisdelle was born on October 31, 1962, in Ontario, Canada. He has lived at
2076 Davebrook Rd., Mississaga, Ontario for the past 5 years.
Mr. Drisdelle has been involved in the tire industry for the last 23 years,
owning an operating a number of businesses involved in the sale and regeneration
of used tires. Since 1997, Mr. Drisdelle has been the owner and general manager
of Total Tire Casing Services, a Company domiciled and operating in the Province
of Ontario, Canada. Total Casings buys and sells used tires. Total Casing is
located at 5510 Harvestor Rd., Burlington Ontario, Canada, L7L 5V4.
Donnie Ray Yates
Donnie Ray Yates was born October 17, 1950 in North Carolina. Mr. Yates has been
involved with all aspects of the truck tire business for over 22 years and
brings considerable business experience to us in this area. His experience
ranges from businesses involved in new and used tires sales to purchasing and
selling tire casings to re-grooving tires. From 1980 to 1990, Mr. Yates was the
owner of the following North Carolina based tire businesses: Stutts Tire, Inc.,
SY Enterprises Inc., a truck stop, Carolina Enterprises, Inc., a tire retailer
and Nichols Tires, Inc. From 1990 to the present, Mr. Yates has held the
positions of owner and sales manager of Nichols Tires, Inc., a North Carolina
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 10
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
based Full Service Tire shop. Mr. Yates graduated from Wake Technical College in
1975 with an associate degree in Civil Engineering.
SECURITY OWNERSHIP OF DIRECTORS, OFFICERS AND MANAGEMENT
- --------------------------------------------------------
The following table sets forth, as of January 10, 2003, certain information as
to shares of our common stock owned by (i) each person known by us to
beneficially own more than 5% of our outstanding common stock, (ii) each of our
directors, and (iii) all of our executive officers and directors as a group:
AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL SHARES OUTSTANDING
NAME OWNED OWNERSHIP
- -------------------------- ----------------------- ------------
Garry Drisdelle (1) 5,000,000 common shares 75.5%
Donny Yates 100,000 common shares 1.5%
(1) Garry Drisdelle owns these 5,000,000 common shares through Qualiu Services
SA, Inc., a Nevada corporation, of which he is the beneficial owner.
DESCRIPTION OF SECURITIES
- -------------------------
The following description of our authorized capital stock is subject to the
detailed provisions of our Articles of Incorporation, copies of which are
available upon request by contacting us at (905) 631-9795.
General
- -------
Holders of our common stock are entitled to cast one vote for each share held at
all shareholder meetings for all purposes, except that in the election of
Directors, each holder of common stock shall have as many votes for each share
held by him as there are directors to be elected and for whose election the
shareholder has a right to vote. Currently, there are four members on our Board
of Directors. There are no preemptive rights associated with the securities and
no cumulative voting is authorized by our Articles of Incorporation or our
By-Laws. The total amount of common shares authorized for issuance by our
Articles of Incorporation is 50,000,000. As of January 10, 2003, there were
6,625,000 shares of common stock issued and outstanding and 31 stockholders of
record. There has been no issuance of any preferred stock, dividend, voting,
conversion rights, liquidation rights and other rights of the preferred stock,
if any, will be established by our Board of Directors upon issuance.
Dividend Rights
- ---------------
Purchasers of the Shares offered hereby will participate in dividends based upon
the number of Shares held as of a dividend record date. See "Description of
Capital Stock."
Our By-Laws provide, that our Board of Directors may, from time to time declare,
and we may pay dividends on our outstanding shares in the manner and upon the
terms and conditions provided by law. See "Risk Factors."
We have never declared or paid any cash dividends on our voting ordinary shares.
Any future payment of dividends will be made at the discretion of our Board of
Directors based upon conditions then existing, including earnings, financial
condition and capital requirements as well as such economic and other conditions
as our Board of Directors may deem relevant.
Redemption
- ----------
Subject to the provisions of The Nevada Revised Statutes, Chapter 78, we may:
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 11
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
(a) issue shares on terms that they are to be redeemed or are liable to be
redeemed at our option on such terms and in such manner as our directors may,
before the issue of such shares, determine;
(b) purchase our own shares (including any redeemable shares) on such terms and
in such manner as our directors may determine and agree with the selling
shareholder; and
(c) make a payment in respect of the redemption or purchase of our own shares
otherwise than out of profits or the proceeds of a fresh issue of shares.
Liquidation Rights
- ------------------
If we shall be wound up (whether the liquidation be voluntary, under the
supervision of or by the Court, the liquidator may, with the required authority,
divide among the shareholders in specie or kind the whole or any part of our
assets, and whether or not the assets shall consist of property of one kind or
properties of different kinds, and may for such purpose set such value as he
deems fair upon one or more or classes of property, and may determine how such
different classes of shareholders. The liquidator may, with the like authority,
vest any part of the assets in trustees upon such trusts for the benefit of
shareholders as the liquidator with the like authority shall think fit, and our
liquidation may be closed and dissolved.
Certain Provisions of the Articles of Incorporation
- ---------------------------------------------------
Our Articles of Incorporation provide that we may indemnify any and all of our
directors, officers, employees or agents or former directors, officers,
employees or agents or any person or persons who may have served at our request
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise in which we own capital stock or of
which we are a creditor, to the full extent permitted by law; and such indemnity
shall include, but not be limited to, the expense, including the cost of any
judgments, fines, settlements and counsel's fees, actually and necessarily paid
or incurred in connection with any action, suit or proceeding, whether civil,
criminal, administrative or investigative, and any appeals thereof, to which any
such person or his legal representative may be made a party or may be threatened
to be made a party by reason of his being or having been a director, officer,
employee or agent as herein provided. The foregoing right of indemnity shall not
be exclusive of any other rights to which any directors, officer, employee or
agent may be entitled as a matter of law or which may be lawfully granted.
EXPERTS
- -------
Our auditor is Miller and McCollom of 4350 Wadsworth Boulevard Suite 300, Wheat
Ridge, CO. USA 80033. They can be contacted via phone at 303 424 2020.
Miller & McCollom, Certified public accountants, have audited our financial
statements included in this Prospectus. These financial statements are
incorporated by reference in reliance on Miller & McCollom's report, due to
their authority as experts in accounting and auditing.
Miller & McCollom (auditors) was not employed on a contingent basis in
connection with the registration or offering of our common stock.
LIMITATION OF LIABILITY AND INDEMNIFICATION
- -------------------------------------------
Our Articles of Incorporation provide that none of our officers or directors
shall be personally liable to us or any of our stockholders for damages for
breach of fiduciary duty as a director or officer involving any act or omission
of any such director or officer; provided however, that the foregoing provision
shall not eliminate or limit the liability of a director or officer for acts or
omissions which involve violation of criminal law or the payment of
distributions in violation of Section 78.300 of the Nevada Revised Statutes. Any
repeal or modification of the Articles of Incorporation shall be prospective
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 12
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
only as to this indemnification and shall not adversely affect any limitation on
personal liability of any director or officer of the company for acts or
omissions prior to such repeal or modification.
Our Bylaws state that we shall, to the maximum extent permitted by Nevada law,
have the power to indemnify each of our agents (which includes directors,
officers, employees and agents) against expenses and shall have the power to
advance to each such agent expenses incurred in defending any such proceeding to
the maximum extent permitted by Nevada General Corporation law.
DESCRIPTION OF BUSINESS
- -----------------------
HISTORY AND BACKGROUND
- ----------------------
In November of 2001, a wholly owned subsidiary called Mobile Tire Renew, Ltd.
("the "Subsidiary") was incorporated under the laws of the Province of Ontario,
Canada. This subsidiary was initially funded directly through Mr. Garry
Drisdelle, who purchased 25,000 shares in the Canadian Company at Canadian $1.00
per share, or $0.626 per share converted to US dollars for total proceeds to it
of $16,659. Our Subsidiary also secured a small business loan allowing access to
another $31,342. These funds were used to acquire our company truck, re-groove
machine, and mounting equipment, and provided us with general working capital
through our first several months of business.
On February 1, 2002, Mr. Drisdelle sold all his shares in the Canadian
subsidiary to, Quailu Services SA, Inc. ("Quailu"), a Nevada corporation for
Canadian $25,000 or $0.626 per share when converted into US dollars. The 25,000
shares represented all the shares issued and outstanding for the Canadian
subsidiary. Mr. Drisdelle is the beneficial owner of Quailu.
Mobile Tire Renew (International), Inc. was incorporated in March of 2001 under
the laws of the State of Nevada. The original Board of Directors consisted of
Mr. Garry Drisdelle, who also holds office as secretary and president. On March
15, 2002, we issued 5,000,000 shares of its common stock to Quailu in
consideration for all the shares (25,000) issued and outstanding in Mobile Tire
Renew, Ltd., the Canadian subsidiary. In March 2001, a wholly owned subsidiary
was formed in Nevada with the name Global Technical Outsource, Inc. The name was
changed to Commercial Tire Casing Services (USA), Inc. To date, this corporation
has no business activities.
In August, 2002, Mr. Donnie Ray Yates was asked to join our Board of Directors
and for so doing, he was offered an inducement of 100,000 of our common shares
at the price of $0.01 per share. The inducement was negotiated at arm's length
with Mr. Yates and the inducement was valued at $1,000.
The Subsidiary currently acts as the operating entity for all business
activities relating to us. Through the Subsidiary, we have acquired a van and
tire re-grooving machine, with which we offer a mobile tire re-grooving service
to industrial customers in the "Golden Triangle" (an industrial area stretching
from Toronto to Hamilton in Ontario, Canada). In addition, we acquire and
re-groove old tires, reselling them in the industrial market as "renewed" tires.
In time, we intend to expand our mobile tire re-grooving services and renewed
tire sales to other locations in North America.
Through the Subsidiary, we currently employ one full-time person and one
part-time person. The full-time employee drives the truck/van and operates the
tire re-grooving machine. The part-time employee acts as the day-to-day
bookkeeper for us, and performs limited secretarial services.
We have authorized capital of 50,000,000 common shares. Between August 2002 and
November 2002, we conducted a limited offering and sale of securities without
registration pursuant to Rule 506 of Regulation D of Section 4(2) of the
Securities Act of 1933, as amended. As a result of the offering, we sold
- -----------------------
1,525,000 shares at a price of $0.01 per share, raising a total of $15,250. At
the end of the offering, we had a total of 6,625,000 shares issued and
outstanding, and a total of 29 shareholders. A total of 5,000,000 shares have
been issued to Quailu Services SA, Inc., which is beneficially owned by our
president and director, Garry Drisdelle. A total of 100,000 common shares were
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 13
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
issued to Mr. Donnie Yates, one of our Directors. All of the shares issued and
outstanding are restricted shares under Rule 144 of the Securities Act of 1933,
-----------------------
as amended.
- -----------
BUSINESS AND MARKETING STRATEGIES
- ---------------------------------
We have two primary revenue streams. First, we operate a mobile tire re-grooving
service. Second, we acquire and re-groove used re-groovable tires, selling them
as "renewed". The re-grooving market is largely limited to the industrial
sector, as only heavier tires meant to be used for industrial and mass transport
purposes (tractors, heavy cargo trucks, farm equipment, etc.) are generally
re-groovable. Thus, we are principally engaged in used tire renewal and sales in
the industrial tire market.
Currently, we offer mobile tire re-grooving services and sells renewed tires to
customers throughout the "Golden Triangle" region of Lower Canada, which is an
industrial sector of lower Canada stretching from Toronto to Hamilton, in the
Province of Ontario. In time, we expect to expand our mobile tire re-grooving
services to other locations in North America. We currently markets ourself
through networking and word of mouth, which has been effective in the "Golden
Triangle" area because the Company's founder, Garry Drisdelle, has been involved
in the tire industry in that area for more than 20 years. As Mr. Drisdelle's
contacts extend beyond the "Golden Triangle" into the United States and other
parts of Canada, we plan to use similar marketing tactics in association with
new outlets, if and when the opportunity for expansion arrives. In addition, we
also plan to engage in various forms of advertising that will pinpoint our
target market, including mail out brochures, participation in tire and truck
trade shows throughout North America, and by conducting "cold call" visits to
tire and truck businesses outside our existing network.
Our head office is at 2076 Davebrook Rd., Mississaga Ontario, which is also the
home of our President, Garry Drisdelle. In order to reduce initial start up
costs, we will operate from an industrial space used by another company owned
and operated by Mr. Drisdelle, Total Casing Service Inc. (herinafter "Total
Casing"). We currently pay nominal rent for use of the space, which serves as a
storage facility for the Company's truck, re-groove machine, and various spare
parts. We also currently uses a portion of Total Casing's general office space
and equipment, which gives us access to phone, fax and secretarial/book-keeping
services at a nominal charge for the foreseeable future.
We will continue to deliver tire renewal services and sales to the "Golden
Triangle" area until such a time as management believes we are ready to expand.
Such expansion will depend on a number of factors including the prospects for
business in the new area under consideration (which in turn, will be a function
of market opportunity and existing contact / networking opportunity for us),
prospects for obtaining inventory for the tire renew sale business, prospects
for finding reasonable office and storage space for the our mobile tire renew
units and inventory, and how the existing mobile tire renewal and sales
businesses are performing.
We intend to undertake substantial efforts to safeguard our inventory and
equipment from loss and theft, including the use of a security alarm system, a
perimeter fence, and the taking of daily inventory of higher value items. Such
security measures are currently in place for our current office and storage yard
with Total Casing Services, Inc.
PRODUCTS AND SERVICES
- ---------------------
We currently offer mobile tire re-grooving services and sales to customers
throughout the "Golden Triangle" region of Lower Canada. The tire re-groove
machine used by us extends the life and usability of certain tires by cutting
into unused portions of the tires' rubber. Some tires are originally
manufactured specifically with re-grooving in mind, and thus have extra layers
of rubber under the existing treads so that multiple layers can be used over the
life of the tire. Such re-grooving is typically only done with larger,
industrial tires, such as those used for larger transport trucks, rigs, buses
and farming vehicles. Our tire re-groove machine fits into the back of our
company van, and the driver takes the machine to various tire and truck
businesses. Typically, the businesses in question would be expecting the mobile
service on the day in question, and would have any re-groovable tires ready or
will have placed an order for delivery of renewed tires sold by us. Once at the
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 14
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
site, the driver operates the machine, and re-grooves any tires ready for
re-grooving for a base price per tire. The cost of re-grooving, per tire, is
dramatically less that the cost for a replacement tire or even the cost of
re-treading.
In addition to its mobile re-grooving service, we will also acquire used tires
that are re-groovable, re-groove them, and the sell the tires as used (or
"renewed"). These re-groovable tires will be acquired from tire and truck
businesses without a re-grooving machine (thus being relatively useless to the
business), from tire depositories, and from recycling depots specifically
designated to receive and recycle used tires. The tires will be inspected to
ensure they comply with the minimum standards required by federal, state and/or
provincial law, and will be re-grooved by our re-groove machine when the mobile
re-grooving service is less busy. The renewed tires will then be sold to
customers from the truck. Again, we assume that a re-grooved tire, because the
process itself is much less time and resource consuming than re-treading, will
be saleable at a much lower price than either a new tire or a tire that has gone
through the more traditional re-tread process.
We believe we offer a superior tire renewal option on two main fronts. First, as
discussed, the cost for a tire renewed through the re-grooving process is less
than the cost of purchasing a tire new, or purchasing a tire that has been
through a re-tread process. Second, because the service is mobile, the renewed
tires go directly to the customer. The trucking industry is traditionally a time
sensitive business. Managers and drivers alike are often extremely busy, and may
not have time to consider all the tire renewal options at their disposal, if
they have time to think about tire replacement at all. We believe that the
convenience of our service will not only be a welcome time saver for people in
the tire, truck and transportation industries, but may also cause them to
consider tire renewal at an earlier stage than it might have been considered
before. In a nutshell, we will leapfrog tire stores and re-tread services by
physically going straight to the consumer.
INDUSTRY OVERVIEW
- -----------------
Generally, when a truck or heavy transportation vehicle is due for tire renewal
there are two main options. First, tires could be purchased new. While this
would generally be the most expensive option, new tires would likely be
dependable in terms of quality and durability, and there is typically some form
of warranty attached. Second, the tires could be re-treaded, or re-treaded tires
could be purchased. Using the re-tread process is generally considered to be
more cost efficient than purchasing new each time, and it is also considered to
be better for the environment. However, the process itself is quite involved,
and generally required several steps to complete.
Although tire re-grooving technology has been around for several years, it has
yet to emerge as the third principle option in tire replacement. However, the
tire re-grooving process is arguably even more efficient than tire re-treading.
Tire re-grooving can be done to any tire that is clearly marked as re-groovable.
Such markings will appear on the side of the tire, and mean that the tire has
been manufactured with enough extra rubber to allow for additional grooving or
cutting into the tires' tread area. A re-groove machine, such as the one
purchased by us, holds the tire by the casing and rotates it while special
re-grooving knives cut new treads into the tires tread area. This process is
estimated to extend the life of the re-groovable tire by approximately 50%.
Moreover, since the re-grooving process is so simple, the cost is remarkable low
as compared to purchasing new or re-treaded tires.
We feel that opportunities in the tire re-grooving market, which is relatively
new, are best reflected by examining numbers from the tire retread industry,
which has been around much longer. We believe that, with an effective networking
/ marketing campaign in place, it can gain a substantial share of the existing
retread markets as a more economic and convenient alternative.
Approximately 26.2 million re-treaded tires were sold in North America (not
including Mexico) in 2000, with sales totaling more than $2 billion. These
numbers include:
o 6.3 + million re-treaded light trucks tires
o 18.2 + million re-treaded medium and heavy duty truck tires
o Over 750,000 other re-treaded tires (aircraft, off-the-road vehicles,
industrial/lift trucks, motorcycles, farm equipment, specialty, etc.)
o 1.5 + million re-treaded passenger car tires
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 15
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
o In 2000 the total replacement medium truck tire market in North
America was approximately 33.8 million tires. 18.1 + million were
retreads and 15.6 + million were new tires.
Virtually all industrial tires manufactured today are manufactured as
"re-groovable" tires.
COMPETITION
- -----------
Re-groove machines, such as the one owned by us, can be purchased from various
manufacturers throughout North America for between $5,000-$10,000. Some
independent tire and truck companies use re-grooving machines, and there are a
small number of independent tire re-groove services throughout North America,
but the practice is by no means widespread. As a result, we feel that our main
competition exists in the tire re-tread sector, from which we expect to obtain
the majority of our market. We will have to market our product as a more
efficient and cost effective alternative to re-treading.
There are approximately 1200 re-treading plants in North America, a large
percentage of which are owned/operated by independent small business.
The retread market in North America is highly competitive. The following tables
display some of our more established competitors from the re-tread market in the
"Golden Triangle" of Ontario:
Ontario:
TOWN AND COUNTRY TIRE AND WHEEL RECONDITIONING BURGESSVILLE, ON CANADA
ANDERSON TIRE & TREADS INC HAMILTON, ON CANADA
MISSISSAUGA RETREAD INC MISSISSAUGA, ON CANADA
J & M TIRE INTERNATIONAL OSHAWA, ON CANADA
BRIDGESTONE/FIRESTONE RETREAD SERVICES RENFREW , ON CANADA
ATTERSLEY TIRE SCARBOROUGH, ON CANADA
REGULATORY BACKGROUND
- ---------------------
Our operations are currently affected by numerous Canadian provincial and
federal laws, and, assuming our operations extend to the United States, will
also be affected by federal and state laws in the United States. We intend to
operate in material compliance with all applicable provincial, state and federal
regulations. However, there can be no assurance that a failure to comply with
applicable regulations will not have a material adverse effect on us.
In Canada, where we currently conduct all of our business activities, tire
re-grooving is only permitted on tires marked "re-groovable" by the original
manufacturer. Moreover, in some provinces, there are restrictions in relation to
minimum quality standards that must exist before re-grooving (quality of the
tire's rim, for example) and there may be restrictions on where a re-grooved
tire may be used on an operating vehicle (for example, in Saskatchewan
re-grooved tires may not be used on the driving axel of the heavy truck). In
Ontario, there are no provincial regulations for the re-groove industry.
DISCLOSURE
- ----------
We have filed a registration statement with the Securities Exchange Commission
of the United States of America ("SEC"). The public may read and copy any
materials filed with the SEC at the SEC's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549 and/or obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition,
we are an electronic filer and as such, all items filed by us are available
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 16
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
through an Internet site maintained by the SEC which contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the SEC, which site is available at http://www.sec.gov.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
- --------------------------------------------------------------------------------
OPERATIONS
- ----------
From the date of our incorporation to the date of this registration statement,
our operating activities have consisted of market research, acquiring equipment
and a vehicle with which to commence operations, hiring staff, and marketing the
tire renew products and services throughout the "golden triangle". As of the
date of this registration statement, we have been producing revenues from the
sale of our re-grooved tires or the sale of its mobile tire re-grooving services
for approximately 13 months. Total revenues to March 31, 2002 and October 31,
2002 were $8,198 and $142,566 respectively.
Our financial statements are prepared in accordance with U.S. generally accepted
accounting principles. We have expensed all development expenses related to the
establishment of the company.
Administrative services consists of fees paid to employees, directors and
consultants either by way of money and or stock compensation.
Interest and bank charges consist primarily of charges by our bank for
processing transactions through our checking account and for interest paid for
the Small Business Loan ("SBL") acquired through our operating subsidiary.
Operational fees relate to costs associated with the ongoing maintenance and
operation of our machinery, which consists of the tire re-grooving machine and
our cub van, which transports the re-grooving machine from site to site.
Transfer fees relate primarily to the printing of stock certificates on our
behalf.
Professional fees consist primarily of our accounting, audit fees and legal
fees.
Office and sundry refers primarily to our office supplies and expenses and the
rental of our office space.
We cannot perform a period-to-period comparison of our historical operating
results as this is our first year of operation. Our prospects must be considered
highly speculative in light of the risks, expenses and difficulties frequently
experienced by companies in early stages of development.
Results of Operations
- ---------------------
Operations to date have resulted in Net Income of $10,321 since our
incorporation.
We do not expect our administrative fees to increase next year but expect them
to remain at the current level.
We anticipate that our bank charges will increase as we conduct more
transactions through our bank in carrying on our business. We also anticipate
our interest charges to increase as the balance outstanding on the loan facility
agreement continues to accrue on unpaid balances, from time to time.
We expect our transfer fees to increase in the next year as our transfer agent
will deliver new certificates for the stock under the offering herein described.
We anticipate our transfer fees to be approximately $1,000.
We anticipate that operational fees will increase only with volume of business,
and, as such, will not increase without a simultaneous increase in revenues.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 17
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
We anticipate that our professional fees will increase in the future for several
reasons. Our audit fees will increase in the future because we anticipate
becoming a reporting company and filing the requisite quarterly and annual
reports with the Securities and Exchange Commission. We are also optimistic that
our business activities will increase, which will require auditing procedures
over a greater transaction base. In addition, legal fees payable are expected to
increase next year as we incur expenses to prepare registration statements. We
estimate that our professional fees will be approximately $25,000.
Due to the foregoing factors, our operating results are difficult to forecast.
You should evaluate our prospects in light of the risks, expenses and
difficulties commonly encountered by comparable development-stage companies in
rapidly evolving and regulated markets. We cannot assure you that we will
successfully address such risks and challenges. We cannot assure you that our
revenues will increase or that we will become profitable in the future.
Plan of operations
- ------------------
During the next twelve months, we intend to continue to market and deliver
mobile tire re-grooving services and engage in the sale of re-grooved tires. We
believe that service delivery and sale volumes will continue to increase, as
will our customer base. We currently market our products through word of mouth,
pinpoint advertising and cold calling, and we will continue with this strategy.
We may hire an additional staff where volume requires it, and employees not
engaged in actual tire re-groove servicing and/or sales will spend their time
marketing Mobile Tire renew through the means described above.
Liquidity and Capital Resources
- -------------------------------
Since the date of our incorporation, we have raised $15,250 through private
placements of our common shares. In addition, we have established a loan
facility agreement that allows us to borrow up to $31,000 at an interest rate of
prime + 3% (which totaled 7.75% at March 31, 2002). This facility is secured by
our property and equipment and by a guarantee provided by our president. The
loan is subject to certain covenants including the requirement of maintaining
certain current and equity to debt ratios. To date, we owe approximately $19,000
on this agreement.
Our operating activities have produced cash resources of approximately $22,886
for the period from incorporation to October 31, 2002 and investment in
equipment has totaled $33,893 over the same period.
As at October 31, 2002, we had cash and cash equivalents of $22,886. When
combined with anticipated revenues and our ability to borrow an additional
$12,000 pursuant to the terms of the loan facility agreement, we anticipate
having sufficient funds to successfully operate for the next twelve months.
If cash generated from operations is insufficient to meet our long-term
liquidity needs, we may need to raise additional funds or seek other financing
arrangements. Additionally funding may not be available on favorable terms or at
all.
Description of Property
- -----------------------
Our company's head office is at 2076 Davebrook Rd., Mississaga Ontario, which is
also the home of its President, Garry Drisdelle. We operate from an industrial
space used by another Company owned and operated by Mr. Drisdelle, Total Casing
Service Inc. (herinafter "Total Casing"), located at 5510 Harvestor Rd.,
Burlington Ontario, Canada, L7L 5V4. We currently pay nominal rent for use of
the space, which serves as a storage facility for our company's truck, re-groove
machine, and various spare parts. We also currently use a portion of Total
Casing's general office space and equipment, which gives us access to phone, fax
and secretarial/book-keeping services at a nominal charge for the foreseeable
future.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 18
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
In addition, we rent a small storage space from Checkerboard Storage Inc. in
Burlington Ontario. The space is used for the storage of our inventory
(re-grooved tires) and costs us $160.00 per moth.
Certain Relationships and Related Transactions
- ----------------------------------------------
We intend that any transactions between us and our officers, directors,
principal stockholders, affiliates or advisors will be on terms no less
favorable to us than those reasonably obtainable from third parties.
Our head office is located at the home of our President, Garry Drisdelle. We
operate from an industrial space used by another Company owned and operated by
Mr. Drisdelle called Total Casing Service Inc. We currently pay nominal rent for
use of the space, which serves as a storage facility for our truck, re-groove
machine, and various spare parts (also see "Description of Property"). We also
currently use a portion of Total Casing's general office space and equipment,
which gives us access to phone, fax and secretarial/book-keeping services at a
nominal charge for the foreseeable future. Rents paid to Total Casing by Tire
renew, and employee salaries going to Tire Renew employees that also do work for
Total Casing, while benefiting us as highly economic arrangements, also directly
benefit Mr. Drisdelle in his capacity as owner of Total Casing.
Executive Compensation
- ----------------------
The following table sets forth the salaries and directors' fees we expect to pay
to our executives on an annual basis.
Directors' Stock-based Stock-based
Person Position Salary fees Inducements Compensation
- ----------------- ------------------ ------------ ---------- ------------ ------------
Garry Drisdelle President, Chief $0.00 $0.00 Nil Nil
Executive Officer
And Chair
Donny Yates Director $0.00 $0.00 $1,000 (1) Nil
- -----------------------------------------------------------------------------------------------
<FN>
(1) Our Board of Directors authorized the issuance to Mr. Yates of 100,000 of
our common shares at $0.01 per share as an inducement to act as one of our
Directors.
</FN>
We do not have an audit committee, nor do we have a compensation committee. We
anticipate forming these committees in the future, as our board of directors
expands and we grow.
ADDITIONAL INFORMATION
- ----------------------
We have filed with the Securities and Exchange Commission, 450 Fifth Street
N.W., Washington, D.C. 20549, a registration statement of Form SB-2 covering the
common shares being sold in this offering. We have not included in this
prospectus all of the information contained in the registration statement, and
you should refer to the registration statement and our exhibits for further
information.
Any statement in this prospectus about any of our contracts or other documents
is not necessarily complete. If the contract or document is filed as an exhibit
to the registration statement, the contract or document is deemed to modify the
description contained in this prospectus. You must review the exhibits
themselves for a complete description of the contract or document.
You may review a copy of the registration statement, including exhibits and
schedules filed with it, at the SEC's public reference facilities in Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You may also
obtain copies of such materials from the Public Reference Section of the SEC, at
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 19
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
prescribed rates. You may call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. The SEC maintains a website (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding registrants, such as the company, that file electronically with the
SEC.
You may read and copy any reports, statements or other information that we file
with the SEC at the address indicated above, and you may also access them
electronically at the web site set forth above. These SEC filings are also
available to the public from commercial document retrieval services.
TRANSFER AGENT AND REGISTRAR
- ----------------------------
The registrar and transfer agent for our common shares is Pacific Stock
Transfer. Its address is 500 E. Warm Springs, Suite 240, Las Vegas, Nevada,
89119 and its telephone number at this location is (702) 361-3033.
REPRESENTATIONS
- ---------------
(begin boldface)
No finder, dealer, sales person or other person has been authorized to give any
information or to make any representations in connection with this offering
other than those contained in this prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by us. This prospectus does not constitute an offer to sell or a solicitation of
an offer to buy any of the securities offered hereby by anyone in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not qualified to do so or to any
person to whom it is unlawful to make such an offer or solicitation. Neither the
delivery of this prospectus not any sale made hereunder shall, under any
circumstances, create any implication that the information contained herein is
correct as of any time subsequent to the date of this prospectus.
(end boldface)
MATERIAL CONTRACTS
- ------------------
Our Articles of Incorporation and By-Laws are included in this Registration
Statement as Exhibits 3.1 and 3.2 respectively. All Agreements and documents
which are material to this Offering and are not confidential in nature, all of
which are or will be in effect by the closing date of the Offering, may be
obtained and/or reviewed by contacting Mr. Garry Drisdelle at (905) 631-9795. We
may require a prospective investor's prior execution of confidentiality and
non-disclosure agreements before accessing certain of our documents.
Attached to this prospectus as exhibits are the Small Business Loan agreement as
between the company's Canadian operating subsidiary and the Canadian Imperial
Bank of Commerce and the stock purchase agreement between the company and Qualiu
Services SA, Inc. (through which we acquired our Canadian subsidiary).
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 20
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------
INTERIM FINANCIAL STATEMENTS
Interim Financial Statements
for the 7 month period ending October 31, 2002.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 21
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
MOBILE TIRE RENEW (INTERNATIONAL), INC.
(A Development Stage Company)
Consolidated FINANCIAL STATEMENTS
Page
Consolidated Financial Statements:
Consolidated Balance Sheets F-2
Consolidated Statements of Operations F-3
Consolidated Statements of Cash Flows F-4
Notes to Consolidated Financial Statements F-5
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 22
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
- ---------------------------
ASSETS
October 31, 2002 March 31,
(Unaudited) 2002
(Note 1)
---------------- ----------------
CURRENT ASSETS
Cash and cash equivalents $ 32,536 $ 2,584
Accounts receivable 27,947 10,559
Accounts receivable, related parties 3,778 --
Inventory 5,565 --
---------------- ----------------
Total current assets 69,826 13,143
Property and equipment, net of accumulated
depreciation of $1,561 26,148 26,267
Deposit 160 157
---------------- ----------------
Total assets $ 96,134 $ 39,567
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 37,916 $ 2,100
Due to related parties -- 6,751
Current portion of bank loan 6,384 6,255
---------------- ----------------
Total current liabilities 44,300 15,106
Note payable to bank net of current portion 15,685 12,569
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, $.001 par value; 25,000,000 shares
authorized, 5,000,000 shares issued and outstanding 5,000 5,000
Paid-in capital 10,659 10,659
Stock subscribed, net of $1,200 subscriptions receivable 13,750 --
Accumulated other comprehensive income 197 11
Deficit accumulated during the development period 6,543 (3,778)
---------------- ----------------
Total stockholders' equity $ 36,149 $ 11,892
---------------- ----------------
Total liabilities and stockholders' equity $ 96,134 $ 39,567
================ ================
The accompanying notes are an integral part of the financial statements
F-2
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 23
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(Unaudited)
November 8,
2001
Seven Months (Inception)
Ending Through
October 31, October 31,
2002 2002
---------------- ----------------
Revenues:
Tire sales $ 121,645 $ 127,334
Grooving service revenue 20,921 23,430
---------------- ----------------
Total revenues 142,566 150,764
Cost of sales:
Cost of goods sold 82,785 85,216
Wages 9,917 11,781
---------------- ----------------
Total cost of sales 92,702 96,997
Gross profit 49,864 53,767
---------------- ----------------
Administrative expenses:
Office expense 936 2,642
Depreciation 6,683 8,243
Travel and selling expense 6,745 8,626
Rent 1,208 1,676
Advertising 9,976 9,976
Other administrative expenses 8,460 9,390
---------------- ----------------
Total cost and expenses 34,008 40,553
---------------- ----------------
Income from operations 15,856 13,214
Interest expense 1,168 1,304
---------------- ----------------
Net income before income taxes 14,688 11,910
Provision for income taxes 4,367 4,367
---------------- ----------------
Net income $ 10,321 $ 7,543
================ ================
Net income per common share $ * $ *
* Less than $.01 per share
Common shares outstanding 5,000,000 5,000,000
Other comprehensive income:
Net income $ 10,321 $ 7,543
Foreign currency translation adjustment 186 197
---------------- ----------------
Total comprehensive income $ 10,507 $ 7,740
================ ================
F - 3
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 24
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Unaudited)
November 8,
Seven 2001
Months (Inception)
Ending Through
October 31, October 31,
2002 2002
---------------- ----------------
Cash flows from operating activities:
Net income (loss) $ 10,321 $ 7,543
Reconciling adjustments:
Depreciation 6,683 8,244
Change in operating assets and liabilities:
Accounts receivable (21,038) (39,830)
Inventory (5,583) (5,583)
Accounts payable and accrued expenses 28,991 45,075
---------------- ----------------
Net cash provided (used) by operating activities 19,374 15,449
Cash flows from investing activities:
Cash flows from investing activities:
Acquisition of property and equipment (6,065) (33,893)
Security deposit -- (157)
-------------- ----------------
Cash (used) by investing activities (6,065) (34,050)
Cash flows from financing activities:
Issuance of common stock -- 15,659
Stock subscribed 13,750 4,100
Proceeds from bank loan 6,635 25,980
Repayment of bank loan (3,737) (4,258)
---------------- ----------------
Cash provided by financing activities 16,648 41,481
Foreign currency translation adjustment (5) 6
---------------- ----------------
Net change in cash and cash equivalents 29,952 22,886
Beginning cash balance 2,584 --
Ending cash balance $ 32,536 $ 22,886
================ ================
Supplemental disclosure of cash flow information:
Cash paid during the period for -
Interest $ 1,168 $ 1,247
Income taxes $ -- $ --
F - 4
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 25
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
(A Development Stage Company)
Notes to Unaudited Consolidated Financial Statements
Note 1 - Financial Statements
- -----------------------------
The accompanying consolidated financial statements included herein have been
prepared by Mobile Tire Renew (International), Inc. without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosure normally included in the financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted as allowed by such rules and regulations, and the
Company believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these financial statements be
read in conjunction with the March 31, 2002 audited financial statements and the
accompanying notes thereto. While management believes the procedures followed in
preparing these financial statements are reasonable, the accuracy of the amounts
are in some respects dependent upon the facts that will exist, and procedures
that will be accomplished by the Company later in the year. The results of
operations for the interim periods are not necessarily indicative of the results
of operations for the full year. In management's opinion all adjustments
necessary for a fair presentation of the Company's financial statements are
reflected in the interim periods included.
Amounts shown for March 31, 2002 were taken from the audited financial
statements of that date.
Note 2 - Related Party Transactions
- -----------------------------------
The Company has purchased tire casings and sold re-grooved tires to a company of
which the Company's president is an owner. The tires purchased totaled $22,675
and sales totaled $24,479. The related party sales comprised 17% of the
Company's total sales. At October 31, 2002, the Company had a receivable of
$3,778 from the related company.
Note 3 - Stock subscribed
- -------------------------
Between August 2002 and November 2002, the Company conducted a Rule 506
offering, in which subscriptions for 1,525,000 common shares were executed at a
price of $0.01 per share, for a total of $15,250. As of October 31, 2002, no
stock had been issued, subscriptions for 1,495,000 shares had been executed
totaling $14,950, of which payment of $13,750 had been received and $1,200 was
still receivable.
F - 5
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 26
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
AUDITED FINANCIAL STATEMENTS
----------------------------
Audited Financial Statements
for the period ending March 31, 2002.
MOBILE TIRE RENEW (INTERNATIONAL), INC.
(A Development Stage Company)
Consolidated FINANCIAL STATEMENTS
With
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Page
Report of Independent Certified Public Accountants F-2
Consolidated Financial Statements:
Consolidated Balance Sheets F-3
Consolidated Statements of Operations F-4
Consolidated Statement of Changes in Stockholders' Equity F-5
Consolidated Statements of Cash Flows F-6
Notes to Consolidated Financial Statements F-7 to F-11
F-1
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 27
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
--------------------------------------------------
The Board of Directors
Mobile Tire Renew (International), Inc.
We have audited the accompanying consolidated balance sheet of Mobile Tire Renew
(International), Inc. (A Development Stage Company) as of March 31, 2002 and the
related statements of operations, stockholders' equity and cash flows for the
period from November 8, 2001 (inception) through March 31, 2002. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements, referred to above,
present fairly, in all material respects, the financial position of Mobile Tire
Renew (International), Inc. as of March 31, 2002 and the results of its
operations, changes in its stockholders' equity and its cash flows for the
period ended March 31, 2002, in conformity with accounting principles generally
accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As described in Note 5, the
Company has minimal working capital and no business operations, which raise
substantial doubts about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Miller and McCollom
MILLER AND MCCOLLOM
Certified Public Accountants
4350 Wadsworth Boulevard, Suite 300
Wheat Ridge, Colorado 80033
July 15, 2002
F-2
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 28
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
- --------------------------
ASSETS
March 31,
2002
----------------
CURRENT ASSETS
Cash and cash equivalents $ 2,584
Accounts receivable 10,559
----------------
Total current assets 13,143
Property and equipment, net of accumulated
depreciation of $1,561 26,267
Deposit 157
----------------
Total assets $ 39,567
================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 2,100
Due to related parties 6,751
Current portion of bank loan 6,255
----------------
Total current liabilities 15,106
Note payable to a bank net of current portion 12,569
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, $.001 par value; 25,000,000 shares
authorized, 5,000,000 shares issued and outstanding 5,000
Paid-in capital 10,659
Accumulated other comprehensive income 11
Deficit accumulated during the development period (3,778)
----------------
Total stockholders' equity $ 11,892
----------------
Total liabilities and stockholders' equity $ 39,567
================
F-3
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 29
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
- ------------------------------------
November 8, 2001 (Inception) Through March 31, 2002
Revenues:
Tire sales $ 5,689
Grooving service revenue 2,509
----------------
Total revenue 8,198
Costs of goods sold:
Tires purchased 2,431
Wages 1,864
----------------
Total cost of goods sold 4,295
Gross profit 3,903
----------------
Administrative expenses:
Office expense 1,706
Depreciation 1,560
Travel and selling expense 1,881
Rent 468
Other administrative expenses 1,930
----------------
Total cost and expenses 11,840
----------------
(Loss) from operations (3,642)
Interest expense 136
----------------
Net (loss) before income taxes (3,778)
Provision for income taxes --
----------------
Net (loss) $ (3,778)
================
Net (Loss) per common share $ *
Common shares outstanding 5,000,000
* Less than $.01 per share
Other comprehensive income (loss)
Net earnings (loss) $ (3,778)
Foreign currency translation gain (loss) 11
----------------
Total comprehensive income (loss) $ (3,769)
================
F-4
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 30
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
- ----------------------------------------------
November 8, 2001 (Inception) Through March 31, 2002
Accumulated
Other
Common Stock Paid-in Comprehensive Accumulated
Shares Amount Capital Income Deficit Total
------------ ------------ ----------- ------------- ----------- -----------
Common stock issued,
January 14, 2002 25,000 $ 15,659 $ -- $ -- $ -- $ 15,659
Re-capitalization on
reverse acquisition
February 1, 2002 4,975,000 (10,659) 10,659 -- -- --
Net (loss) for the period
from inception
(November 8, 2001)
through
March 31, 2001 -- -- -- -- (3,778) (3,778)
Foreign currency
translation adjustment -- -- -- 11 -- 11
------------ ------------ ----------- ------------- ----------- -----------
Balance,
March 31, 2002 5,000,000 $ 5,000 $ 10,659 $ 11 $ (3,778) $ 11,892
F-5
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 31
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
- ------------------------------------
November 8, 2001 (Inception) Through March 31, 2002
Cash flows from operating activities:
Net loss $ (3,778)
Reconciling adjustments:
Depreciation 1,561
Change in current assets and liabilities:
Accounts receivable (10,559)
Accounts payable 8,851
----------------
Net cash (used for) operating activities (3,925)
Cash flows from investing activities:
Net cash (used) by investing activities:
Acquisition of property and equipment (27,828)
Security deposit (157)
----------------
Cash (used for) investing activities (27,985)
Cash flows from financing activities:
Issuance of common stock 15,659
Proceeds from bank loan 19,345
Repayment of bank loan (521)
----------------
Cash provided by financing activities 34,483
Gain on foreign currency translation 11
----------------
Net change in cash and cash equivalents 2,584
Beginning cash balance --
Ending cash balance $ 2,584
================
Supplemental disclosure of cash flow information:
Cash paid during the period for -
Interest $ 79
Income taxes $ --
F-6
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 32
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
(A Development Stage Company)
Note 1 - Summary of Significant Accounting Policies
- ---------------------------------------------------
This summary of significant accounting policies of Mobile Tire Renew
(International) Inc. (the "Company") is presented to assist in understanding the
Company's financial statements. The financial statements and notes are
representations of the Company's management, who is responsible for their
integrity and objectivity. These accounting policies conform to generally
accepted accounting principles in the United States of America and have been
consistently applied in the preparation of the financial statements, which are
stated in U.S. Dollars.
Organization
- ------------
The Company was incorporated in the State of Nevada on March 16, 2001 as Global
Technical Outsource, Inc. The Company changed its name to Commercial Tire Casing
Services, Inc. on June 19, 2001 and changed its name again to its present name,
Mobile Tire Renew (International), Inc. on June 4, 2002. On February 1, 2002,
the Company acquired the outstanding stock of Mobile Tire Renew, Ltd., a
Canadian corporation, which had been incorporated on November 22, 2001. The
Company issued 5,000,000 share of its common stock, having a par value of $0.001
per share, for the acquisition of Mobile Tire Renew, Ltd. Prior to the
acquisition, the Company had nominal assets and liabilities. The transaction was
treated as a reverse acquisition for accounting purposes, which is a capital
transaction and not a business combination. The financial statements of the
acquired subsidiary are presented for the period prior to the acquisition.
Description of Business
- -----------------------
The Company is in the business of "re-grooving" commercial (heavy duty) truck
tires. This is done with a machine that cuts into the existing treads of a used
tire, making them deeper, which extends the life of the tire. The tire
re-grooving machine used by the Company is mounted on the back of a truck, and
the truck goes to various industrial tire yards throughout the Toronto-Hamilton
area. The Company charges for re-grooving services on a per tire basis.
Principles of Consolidation
- ---------------------------
The accompanying consolidated financial statements include the financial
statements of the Company and its wholly-owned subsidiary, Mobile Tire Renew,
Ltd. All inter-company accounts have been eliminated.
Development Stage Enterprise
- ----------------------------
Based upon the Company's business plan, it is a development stage enterprise as
of the year ending March 31, 2002. Accordingly, the Company presents its
financial statements in conformity with the accounting principles generally
accepted in the United States of America that apply in establishing operating
enterprises.
As a development stage enterprise, the Company discloses the deficit accumulated
during the development stage and the cumulative statements of operations and
cash flows from inception to the current balance sheet date.
Per Share Information
- ---------------------
Per share information is computed by dividing the net income or loss by the
weighted average number of shares outstanding during the period.
F-7
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 33
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
(A Development Stage Company)
Use of Estimates in the Preparation of Financial Statements
- -----------------------------------------------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Currency
- --------
The functional currency for the Canadian operations is the Canadian dollar.
Assets and liabilities of the Company's Canadian operation are translated into
United States dollars at the rate of exchange in effect at the balance sheet
date. Shareholders equity items are translated into United States dollars at
their historical rates. Income and expense items are translated at the average
exchange rate prevailing during the reporting period. Gains and losses resulting
from foreign currency transactions are included in the statement of operations.
Gains and losses from translating the functional into the reporting currency are
included in other comprehensive income.
Risks and Uncertainties
- -----------------------
The Company is subject to substantial business risks and uncertainties inherent
in starting a new business. There is no assurance that the Company will be able
to generate sufficient revenues or obtain sufficient funds necessary for
launching a new business venture.
Concentrations
- --------------
The Company currently intends to concentrate its business within the
Hamilton-Toronto Canada area. Tire sales prior to March 31, 2002, was comprised
of 63% of total sales to a related party.
Revenue Recognition
- -------------------
The Company derives revenues from fees charged for its tire re-grooving services
and from the sale of used tires that have been re-grooved. Revenue is recognized
on the completion of the service and delivery to the customer unless it is not
considered collectible.
Cash and Cash Equivalents
- -------------------------
Cash and cash equivalents consist of cash on hand and demand deposits in banks
with an initial maturity of 90 days or less.
Accounts Receivable
- -------------------
Accounts receivable consists of trade receivables resulting from re-grooving
tires and the sale of re-grooved tires and are considered past due after 30
days. The Company intends to provide a reserve for doubtful accounts whenever it
believes that an account receivable may not be collectible.
F-8
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 34
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
(A Development Stage Company)
Fair Value of Financial Instruments
- -----------------------------------
Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards No. 107 ("SFAS 107"), "Disclosures About Fair Value of
Financial Instruments."
SFAS 107 requires disclosure of fair value information about financial
instruments when it is practicable to estimate that value. The carrying amount
of the Company's cash, cash equivalents, accounts receivable, accounts payable
and accrued expenses, and current portion of notes payable approximate their
estimated fair values due to their short-term maturities.
Accounting Pronouncements
- -------------------------
The Company adopted Statement of Position No. 98-5 ("SOP 98-5"), "Reporting the
Costs of Start-Up Activities." SOP 98-5 requires that all non-governmental
entities expense the cost of start-up activities, including organizational costs
as those costs are incurred.
In June of 1998, the FASB issued Statement of Accounting Standards No. 133
("SFAS 133"), "Accounting for Derivative Instruments and Hedging Activities."
SFAS 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities on the balance sheet at their fair
value. This statement, as amended by SFAS 137, is effective for financial
statements for all fiscal quarters to all fiscal years beginning after June 15,
2000.
The Company does not expect the adoption of this standard to have a material
impact on its results of operation, financial position or cash flows, as it
currently does not engage in any derivative or hedging activities.
The Company adopted Statement of Financial Accounting Standards ("FAS") No. 130,
"Reporting Comprehensive Income". FAS No.130 requires that the components and
total amounts of comprehensive income be displayed in the financial statements
beginning in 1998.
Comprehensive income includes net income and all changes in equity during a
period that arises from non-owner sources, such as foreign currency items and
unrealized gains and losses on certain investments in equity securities. The
Company's components of comprehensive income (loss) consists currency
translation gain and net loss.
In December 1999, The United States Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
Financial Statements." SAB 101 summarized certain of the SEC's views regarding
the application of generally accepted accounting principles to revenue
recognition in financial statements.
In June 2000, the SEC amended SAB 101 to require companies with fiscal years
beginning after December 15, 1999 to implement the provisions of SAB 101 no
later than the fourth fiscal quarter. The Company adopted the provisions of SAB
101 at its inception. The Company does not expect the adoption to have any
material effect on its financial statements.
F-9
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 35
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
(A Development Stage Company)
Income Taxes
- ------------
The Company records deferred taxes in accordance with Statement of Financial
Accounting Standards (SFAS) 109, "Accounting for Income Taxes." The statement
requires recognition of deferred tax assets and liabilities for temporary
differences between the tax bases of assets and liabilities and the amounts at
which they are carried in the financial statements, based upon the enacted tax
rates in effect for the year in which the differences are expected to reverse. A
valuation allowance is established when necessary to reduce deferred tax assets
to the amount expected to be realized. The transactions incurred through March
31, 2002 are subject only to Canadian income taxes.
Valuation of Long-Lived Assets
- ------------------------------
The Company periodically analyzes its long-lived assets for potential
impairment, assessing the appropriateness of lives and recoverability of
unamortized balances through measurement of undiscounted operating cash flows on
a basis consistent with accounting principles generally accepted in the United
States of America.
Other
- -----
The Company has selected March 31 as its fiscal year end. The company has paid
no dividends. Advertising is expensed as it is incurred.
The Company consists of one reportable business segment. All revenue reported is
from external customers in Canada. All of the Company's assets are located in
Canada.
Note 2 - Property and Equipment
- -------------------------------
Property and equipment is recorded at cost, net of accumulated depreciation, and
is depreciated on a straight-line basis over the estimated useful lives of the
assets. Management has estimated the useful life of tire grooving and related
equipment to be seven years and the life of vehicles to be five years. The
following schedule shows cost and accumulated depreciation for the significant
components of property and equipment at March 31, 2002:
Equipment $ 9,549
Vehicles 18,279
-------------------
Total 27,828
Less accumulated depreciation 1,561
-------------------
Net property and equipment $ 26,267
===================
Note 3 -Bank Note Payable
- -------------------------
The Company owes a note payable to a bank under the Canada Small Business
Financing Act. The note interest rate is prime rate plus 3%, which totaled 7.75%
at March 31, 2002. The principal payment is amortized in equal monthly
installments, plus interest, over the life of the loan (60 months) and is based
upon the full-authorized loan amount. The authorized amount is $31,342, and the
amount outstanding at March 31, 2002 is $18,824. A total of $ 11,997 of the
authorized amount has not been borrowed as of March 31, 2002.
The loan is secured by the Company's property and equipment, which were
purchased utilizing the loan proceeds. In addition, the Company's president has
guaranteed an amount which is limited to $7,836. The loan is subject to certain
covenants during the period the loan is outstanding including the requirement of
maintaining certain current and equity to debt ratios.
F-10
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 36
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
(A Development Stage Company)
Note 4 - Capital Stock
- ----------------------
The common stock was issued to the Company president and sole director and is
currently owned by a company under his control.
Note 5 - Income Taxes
- ---------------------
As of March 31, 2002, the Company had approximately $4,981 of Canadian net
operating loss carryover that expires in 2008. The Company had an estimated
deferred tax asset of $1,473 related to the net operating loss carryover, and an
annual increase of the same amount. A valuation allowance has been provided for
the total amount of the deferred tax asset, since the amounts, if any, of future
revenues necessary to be able to utilize the carryover, are uncertain.
Canadian income taxes at the statutory rate are reconciled to the Company's
actual income taxes as follows:
Canadian Federal Income taxes benefit at statutory rate
(36.8%) resulting from net operation loss carryforwards $ 1,473
Deferred income tax allowance (1,473)
--------------
0
==============
Note 6 - Related Party Transactions
- -----------------------------------
The Company has purchased tire casings and sold re-grooved tires to a company
owned by the Company's president. The tires purchased totaled $1,219 and sales
totaled $3,589. The tire sales comprised a total of 63% of the Company's total
tire sales. At March 31, 2002, the Company owed $3,045 to the related company.
In addition, the Company owed its president $3,706 for expenses incurred on
behalf of the Company including $468 incurred for rent.
F-11
The accompanying notes are an integral part of the financial statements
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 37
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
PART II
- -------
INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------------------------
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
- ---------------------------------------------------
Our Articles of Incorporation provide that none of our officers or directors
shall be personally liable to us or any of our stockholders for damages for
breach of fiduciary duty as a director or officer involving any act or omission
of any such director or officer; provided however, that the foregoing provision
shall not eliminate or limit the liability of a director or officer for acts or
omissions which involve violation of criminal law or the payment of
distributions in violation of Section 78.300 of The Nevada Revised Statutes. Any
repeal or modification of our Articles of Incorporation shall be prospective
only as to this indemnification and shall not adversely affect any limitation on
personal liability of any of our directors or officers for acts or omissions
prior to such repeal or modification.
Our Bylaws state that we shall, to the maximum extent permitted by Nevada law,
have the power to indemnify each of our agents (which includes directors,
officers, employees and agents) against expenses and shall have the power to
advance to each such agent expenses incurred in defending any such proceeding to
the maximum extent permitted by Nevada General Corporation law.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
- -----------------------------------------------------
The following table sets forth the various expenses to be paid by us in
connection with the issuance and distribution of the securities being
registered, other than sales commissions. All amounts shown are estimates except
for amounts of filing and listing fees.
SEC Filing Fee $ 60.95
Printing Engraving Expenses $ 1,000.00
Legal Fees and Expenses $ 5,000.00
Accounting and Audit Fees $ 6,000,00
Total $ 12,060.95
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
- -------------------------------------------------
(a) Securities issued and sold:
1. On or about March 15, 2002, we issued 5,000,000 shares of its common stock
to Qualiu Services SA, Inc., a Nevada corporation, in consideration of all
25,000 of the issued and outstanding shares in Mobile Tire Renew Ltd. (of
Ontario), our operating subsidiary in Canada. The beneficial owner of Qualiu
Services SA, Inc. is Garry Drisdelle, the company's current president and
director. This issuance was made pursuant to Rule 506 of Regulation D of the
Securities Act of 1933, as amended.
2. In August, 2002, we authorized the issuance of 100,000 common shares to
Donnie Ray Yates at the price of $0.01 per share as an inducement to bring his
expertise to our Board of Directors. This issuance was negotiated at arm's
length with Mr. Yates and was valued at $1,000. This issuance was authorized
pursuant to Rule 506 of Regulation D of the Securities Act of 1933, as amended.
3. Between August 2002 and November 2002, we conducted a Rule 506 offering,
under Regulation D, in the State of North Carolina. As a result of the offering,
1,525,000 common shares were sold to 27 individuals at a price of $0.01 per
share, raising a total of $15,250. We accepted and executed subscription
agreements that sold the following shares, having $0.001 par value per share, to
the following persons, at an offering price of $0.01 per share for gross
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 38
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
offering proceeds of $15,250, pursuant to Rule 506 of Regulation D of the
Securities Act of 1933, as amended.
Name Residency Shares Proceeds
- --------------------------------------------------------------------------------
Pamela G. Yates Angier, North Carolina 300,000 $ 3,000
Vernon Nichols Farmville, North Carolina 300,000 $ 3,000
Alvin Nichols Farmville, North Carolina 300,000 $ 3,000
Larry M. Bell Advance, North Carolina 200,000 $ 2,000
Jonalou B. Moore Fountain, North Carolina 100,000 $ 1,000
James Eric Dean Raliegh, North Carolina 100,000 $ 1,000
Harris McLeod Raliegh, North Carolina 100,000 $ 1,000
Danny Rae Lee Clinton, North Carolina 25,000 $ 250
Michael G. Walston Farmville, North Carolina 25,000 $ 250
Jody Shover Raleigh, North Carolina 20,000 $ 200
Michael T. Dean Raliegh, North Carolina 20,000 $ 200
Liston D. Gist Wade, North Carolina 20,000 $ 200
Carolyn R. Grant Linden, North Carolina 15,000 $ 150
Jessica Barefoot Benson, North Carolina 15,000 $ 150
Donnie Jo Harb Raliegh, North Carolina 15,000 $ 150
Frankie W. Barefoot Benson, North Carolina 15,000 $ 150
Clifford Leo Singleton Kannapolis, North Carolina 15,000 $ 150
Dennis C. Yates Kannapolis, North Carolina 15,000 $ 150
Florence W. McLeod Kenly, North Carolina 15,000 $ 150
Lisa Stephenson Raliegh, North Carolina 15,000 $ 150
Michael Revell Smithfield, North Carolina 15,000 $ 150
Anne L. Nelson Dunn, North Carolina 10,000 $ 100
Wanda Nelson Dunn, North Carolina 10,000 $ 100
Michelle Honeycutt Dunn, North Carolina 10,000 $ 100
Julian Lee Thornton Dunn, North Carolina 10,000 $ 100
Connie Ann Hall Benson, North Carolina 10,000 $ 100
Sandy Barefoot Benson, North Carolina 10,000 $ 100
TOTAL 1,525,000 $ 15,250
(b) Underwriters and Other Purchasers.
Not Applicable
(c) Consideration
See (a) Above
(d) Exemption from Registration Claimed.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 39
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
CERTIFICATIONS
- --------------
I, Garry Drisdelle, certify that;
1. I have reviewed this registration statement on Form SB-2 of Mobile Tire
Renew (International), Inc.
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
registration statement;
3. Based on my knowledge, the financial statements, and other financial
information included in this registration statement, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this registration
statement;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this registration statement is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
registration statement (the "Evaluation Date"); and
c) presented in this registration statement our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
registration statement whether or not there were significant changes in internal
controls or in other facts that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: January 10, 2003
/s/ Garry Drisdelle
- -------------------
Garry Drisdelle, Chief Executive Officer, Chief Financial Officer, President &
Director
*Provide a separate certification for each principal executive officer and
principal financial officer of the registrant. See Rules 13a-14 and 15d-14. The
required certification must be in the exact form set forth above.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 40
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
ITEM 27. EXHIBITS
- ------------------
EXHIBITS
- --------
A. EXHIBITS
- -------------
The following exhibits are attached hereto:
Exhibit
Number Title
- ---------------------------------
3.1 Articles of Incorporation of Mobile Tire Renew (International) Inc.
3.2 Bylaws of Mobile Tire Renew (International) Inc.
4.1 Specimen of ordinary share certificate
5.1 Opinion of Stepp Law Group as to the validity of the securities
offered herby
10.1 Material Contract - Small Business Loan Agreement - CIBC
10.2 Material contract - Stock Purchase Agreement - Qualiu Services
23.1 Consent of Miller & McCollom, Chartered Accountants
23.2 Consent of Stepp Law Group (specified in Exhibit 5.1)
24.1 Power of Attorney (Contained on the signature page of this
Registration Statement)
99.1 Certification of Chief Executive Officer and Chief Financial Officer
B. FINANCIAL STATEMENT SCHEDULES
- ----------------------------------
All schedules are omitted because they are not applicable or the required
information is shown in out consolidated financial statements and related notes
attached to this prospectus.
ITEM 28. UNDERTAKINGS
- ----------------------
The undersigned small business issuer hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any Prospectus required by section 10(a)(3) of the
Act;
(ii) To reflect in this 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;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to suit information in the
registration statement.
(2) That, for the purpose of determining any liability under the Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(4) For determining any liability under the Act, 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
small business issuer under Rule 424(b)(1), or (4) or 497(h), under the Act
as part of this registration statement as of the time the Securities and
Exchange Commission declared it effective.
(5) For determining any liability under the Act, treat each post-effective
amendment that contains a form of Prospectus as a new registration
statement at that time as the initial bona fide offering of those
securities.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 41
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons, we have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act, and
is therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred or
paid by one of our directors, officers or controlling persons in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, we
will, unless in the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by us is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
POWER OF ATTORNEY
- -----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Garry Drisdelle his true and lawful attorney-in-fact
and agent with full power of substitution and resubstitution for him and in his
name, place and stead, in any and all capacities, to sign and all amendments
(including post-effective amendments) of and supplements to this Registration
Statement and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto such attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, to all intents and purposes and as fully as they might or could do in
person, hereby ratifying and confirming all that such attorney-in-fact and
agent, or his substitute, may lawfully do or cause to be done by virtue hereof
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 42
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
SIGNATURES
- ----------
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 10th day of January, 2003.
SIGNATURE TITLE
/s/ Garry Drisdelle President, Principle Executive
- ------------------------- Officer, Principal Accounting
Officer, Principal Financial
Officer Secretary, Treasurer
and Director
/s/ Donny Yates Director
- -------------------------
SIGNATURES
- ----------
In accordance with the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of
Mississauga, Ontario, Canada on January 10, 2003.
MOBILE TIRE RENEW (INTERNATIONAL) INC.
/s/ Garry Drisdelle President, Principal Executive
- ------------------------- Officer, Principal Accounting
Officer, Principle Financial
Officer, Secretary, Treasurer
and Director
/s/ Donny Yates Director
- -------------------------
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 43
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that
contained in this prospectus. The selling shareholders are offering to sell, and
seeking offers to buy, their common shares, only in jurisdictions where offers
and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of our common shares.
Until a date, which is 25 days after the date of this prospectus, all dealers
that buy, sell or trade our common shares, whether or not participating in this
offering, may be required to deliver a prospectus. This requirement is in
addition to the dealers' obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT 44