UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Registration No. 333-102495
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FORM SB-2/A Amendment 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
Telephone: 949.660.9700
(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. [X]
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. [ ]
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.
CALCULATION OF REGISTRATION FEE
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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>
(i) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act.
</FN>
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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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 prospectus 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 prospectus 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, May 13, 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 3.
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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 for the
duration of the offering. 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
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Per Share $0.10 $0.00 $0.00
Total Maximum $662,500 $0.00 $0.00
The date of this prospectus is May 13, 2003
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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TABLE OF CONTENTS
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PROSPECTUS SUMMARY...........................................................2
THE COMPANY..................................................................2
THE OFFERING.................................................................3
RISK FACTORS.................................................................4
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
DESCRIPTION OF SECURITIES...................................................11
EXPERTS.....................................................................12
LIMITATION OF LIABILITY AND INDEMNIFICATION.................................13
DESCRIPTION OF BUSINESS.....................................................13
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.......................................................17
ADDITIONAL INFORMATION......................................................21
TRANSFER AGENT AND REGISTRAR................................................22
REPRESENTATIONS.............................................................22
MATERIAL CONTRACTS..........................................................22
FINANCIAL STATEMENTS........................................................23
QUAILU SERVICES SA, INC.....................................................23
CERTIFICATIONS..............................................................50
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REGISTRATION STATEMENT i
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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PROSPECTUS SUMMARY
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The following information is qualified in its entirety by the more detailed
information and financial statements appearing in this prospectus. You should
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review carefully the entire contents of this prospectus and the financial
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statements delivered herewith and consult legal and other professional advisors
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having relative expertise. Care should be taken to read each term in the context
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of the particular provisions of this prospectus in which such term appears.
Persons participating in the Offering should carefully consider the factors set
forth herein under the caption "Risk Factors"page 3.
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. This company
was formed with a view to creating a separate entity for our tire casing
business, as distinct from our re-grooving business. To date, this corporation
has no business activities. In November of 2001, a wholly owned subsidiary
called Mobile Tire Renew, Ltd. ("the Ontario Subsidiary") was incorporated under
the laws of the Province of Ontario, Canada. The Ontario Subsidiary currently
acts as the operating entity for all our business activities. Through the
Ontario 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. As of the date of this
prospectus, we have 6,625,000 common shares issued and outstanding.
Through our Ontario 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.
PRODUCTS AND SERVICES OFFERED
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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
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.
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REGISTRATION STATEMENT PAGE 2
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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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
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Revenues are generated through the Ontario 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
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Our principal executive offices and operations are located at 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, (905) 631-9795. 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
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The following table presents summary historical consolidated financial
information for the first fiscal year ended March 31, 2002 and the nine month
period ended December 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 December 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
December 31, 2002 - March 31, 2002
Total Revenue $195,559 $ 8,198
Net Income (Loss) 12,346 (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 PAGE 3
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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Summary of Consolidated Balance Sheet
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April 1, 2002 - November 8, 2001
December 31, 2002 - March 31, 2002
Cash and cash equivalents $11,188 $ 2,584
Total Current Assets 77,659 13,143
Total Assets $104,704 $39,567
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Total Current Liabilities $50,745 $15,106
Note Payable 14,522 12,569
Total Liabilities $65,267 $27,675
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Common Stock and Paid-in Capital 30,909 15,659
Accumulated Earnings (Deficit) 8,528 (3,778)
Total Stockholders' Equity $39,437 $11,892
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Total Liabilities & Stockholder's Equity $104,704 $39,567
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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.
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 have minimal operations and minimal working capital, we received a
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going concern comment from our auditors. As at the date of our audit, March 31,
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2002, we had no operations and minimal working capital. As such, in the report
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REGISTRATION STATEMENT PAGE 4
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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prepared by our auditors which accompanies our financial statements, substantial
doubt was raised about our ability to continue as a going concern. In the event
that no additional working capital is raised and no operations commenced from
which revenues could be derived, it would be likely that we would not be able to
continue as a going concern and investors would lose all of their investment.
All of the outstanding shares of the company, including all of the holdings of
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an officer and director of the company, are being offered for sale. We expect
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that a substantial number of our securities will be sold in the market by our
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other selling stockholders in the near future. This could cause our share price
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to decline significantly. The sale of substantial numbers of common shares in
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the public market, or the possibility of such a sale, could adversely affect
prevailing market prices for our common shares. The market price of our common
stock could decline significantly if our existing stockholders sell shares of
our common stock in the market after this offering, or as a result of the
perception that such sales could occur. Upon the effectiveness of the prospectus
our selling stockholders, including our principal shareholder/director/officer,
who owns 5,000,000 of the 6,625,000 issued and outstanding common shares, may
sell all or part of his 5,000,000 shares being registered in the offering. 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. The sale of substantial numbers of
ordinary shares in the public market, or the possibility of such a sale, could
adversely affect prevailing market prices for our ordinary shares. In addition,
if Mr. Drisdelle's share position is sold, Mr. Drisdelle would not have contol
over the company and the shareholders with more shares to vote than Mr.
Drisdelle may elect to, among other things, remove him from his positions with
the company and/or may elect to change the way the business is operated, either
or both of which may affect the price of the securities and investors may lose
some or all of their invested capital.
Because our director, Mr. Gary Drisdelle, is involved in several businesses in
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the tire industry, we cannot guarantee that some of these businesses may be
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direct competitors of our company's and subsidiaries'. Since Mr. Drisdelle is
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involved in several businesses in the tire industry his other tire related
businesses may from time-to-time be in direct competition with our business If
these other interests of Mr. Drisdelle directly compete with us, Mr. Drisdelle
may find himself in a conflict of interest position, which would require him to
remove himself from the decision making aspect of the specific transaction. In
this event, we may not receive the optimal benefit from said transaction,
thereby resulting in a decrease in revenues. Some or all of our investors may
lose some or all of their investment as a result.
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. Because all the shares
being sold in this prospectus have already been issued to the selling
stockholders, we are not raising any capital through this offering nor are we
receiving any proceeds from the sale of shares by the selling stockholders. 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,
in the future, 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.
The maintenance of our present operating subsidiary depends on it maintaining a
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relatively small number of clients who account for a significant percentage of
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its business. Our subsidiary has a relatively small number of clients and only
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one that contributes a significant percentage of our consolidated gross tire
sales income. Our top client is Total Casing Services, Inc., of which Mr.
Drisdelle is a 22% owner. Dealings with Total Casings, on a percentage basis is
as follows:
March 31, 2002 fiscal year end: 63% of tire sales
December 31, 2002 nine month period end: 17% of tire sales
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
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REGISTRATION STATEMENT PAGE 5
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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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 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 currently
maintain comprehensive liability and property insurance on our truck and
re-grooving machine 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 and/or a change in the relationships with these
suppliers could decrease out ability to obtain parts and service on our
re-grooving machine. If, for any extended period of time, we were unable to use
our re-grooving machine, then we would not need to buy tires to re-groove and
re-sell nor would we be able to re-groove tires for customers. Any lengthy
interruption would cause a decrease in revenues for the period and our customers
may seek alternative sources of supply. If this continued for any material
length of time, our investors may lose some or all of their invested capital.
RISKS RELATED TO THE INDUSTRY
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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 material compliance with 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. If the
fines exceed our ability to pay them, our investors may lose all of their
investments. Additionally, if the regulations change such that we are unable to
operate efficiently, or at all, our investors may lose some or all of their
investment.
RISKS RELATED TO THE SECURITIES MARKETS
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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. The market price of our stock
could also decline significantly if our existing stockholders sell shares of our
common stock in the market after the prospectus is effective. Upon the
effectiveness of the prospectus, our selling stockholders, including our
officers, directors and principal shareholders, may sell all or part of the
6,625,000 shares being registered in this prospectus. Such sales may make it
more difficult for us to raise capital in the future at a time and at a price
that we deem appropriate. In the event we are unable to raise capital at desired
levels, we may be forced to cease operations and our investors may lose all of
their invested capital.
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REGISTRATION STATEMENT PAGE 6
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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CAUTIONARY STATEMENT OR FORWARD-LOOKING STATEMENTS
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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
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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
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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
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Since all of the shares being registered are already issued and outstanding, no
dilution will result from this offering.
DIVIDEND POLICY
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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."
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.
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REGISTRATION STATEMENT PAGE 7
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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SELLING STOCKHOLDERS
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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 Ontario Subsidiary. 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 May 13, 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.
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NUMBER PERCENT NUMBER NUMBER PERCENT
Qualiu Services SA (3) 5,000,000 75.5% 5,000,000 0 0%
Pamela G. Yates (5) 300,000 4.5% 300,000 0 0%
Vernon Nichols (6) 300,000 4.5% 300,000 0 0%
Alvin Nichols (6) 300,000 4.5% 300,000 0 0%
Donnie Ray Yates (5) 100,000 1.5% 100,000 0 0%
Jonalou B. Moore 100,000 1.5% 100,000 0 0%
James Eric Dean (7) 100,000 1.5% 100,000 0 0%
Harris McLeod (8) 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%
Larry M. Bell 20,000 * 20,000 0 0%
Jody Shover 20,000 * 20,000 0 0%
Michael T. Dean (7) 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 (9) 15,000 * 15,000 0 0%
Donnie Jo Harb 15,000 * 15,000 0 0%
Frankie W. Barefoot (9) 15,000 * 15,000 0 0%
Clifford Leo Singleton 15,000 * 15,000 0 0%
Dennis C. Yates (5) 15,000 * 15,000 0 0%
Florence W. McLeod (8) 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) 10,000 * 10,000 0 0%
Wanda Nelson (10) 10,000 * 10,000 0 0%
Michelle Honeycutt 10,000 * 10,000 0 0%
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 8
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
Sue B. Thornton 10,000 * 10,000 0 0%
Connie Ann Hall 10,000 * 10,000 0 0%
Sandy Barefoot (9) 10,000 * 10,000 0 0%
TOTAL (4) 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. The named party beneficially owns and has sole voting and
investment power over all shares or rights to those shares. None of the selling
stockholders is a broker-dealer or an affiliate of a broker-dealer. With the
exception of Garry Drisdelle, President and Donnie Ray Yates, Director, none of
the selling shareholders or their beneficial owners:
- has had any material relationship with the company other than as a
shareholder at any time; or
- has ever been an officer or director of the company or any of its
predecessors or affiliates.
(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.
(4) As of the date of this prospectus, there are no outstanding options or
warrants to purchase, or securities convertible into, common equity of the
company.
(5) Donnie Ray Yates is the father of Dennis C. Yates and the husband of Pamela
G. Yates.
(6) Vernon Nichols and Alvin Nichols are father and son.
(7) James Eric Dean and Michael Dean are brothers.
(8) Harris McLeod and Florence McLeod are mother and son.
(9) Anne Nelson and Wanda Nelson are mother-in-law and daughter.
(10) Jessica Barefoot is Frankie Barefoot's daughter and Sandy Barefoot is
sister-in-law to Frankie Barefoot.
</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 at the price of $0.10 per share.
Prior to any involvement of any broker-dealer in the offering, such
broker-dealer we must seek and obtain clearance of the underwriting compensation
and arrangements form the NASD Corporate Finance Department. We intend to apply
to the National Association of Securities Dealers, Inc. (the "NASD") to have our
shares listed on the over-the-counter bulletin board within one month of our
prospectus 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 have our shares listed on the pink
sheets or on the over-the-counter bulletin board. Our common stock is not
currently listed on any national exchange or electronic quotation system. The
selling stockholders may use any one or more of the following methods when
selling shares at the fixed price of $0.10 per share:
- ordinary brokerage transactions in which the broker-dealer solicits
purchasers;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- privately negotiated sales at $0.10 per share;
- broker-dealer may agree with the selling stockholders to sell a
specified number of such shares at an offering price per share of
$0.10;
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 who are affiliates of the company 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
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 9
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
connection with such sales. In such event, any commissions received by such
selling stockholders, 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 which are estimated to be approximately $12,175.
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.
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 May 13,
2003.
Name Age Title Term
- --------------- ------- ----------- ----------
Garry Drisdelle 39 President, Chief 1 year
2076 Davebrook Road Executive Officer,
Mississauga, Ontario Chair of the Board,
Canada, L5J 3M6 Principal Financial Officer,
Principal Accounting Officer,
Secretary and Treasurer
Donnie Yates 52 Director 1 year
82 Harvest Ridge
Angier, North Carolina
USA, 27501
Note that our by-laws require a minimum of three directors and a suitable
candidate to fill the existing vacancy on the board is being sought.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 10
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
Garry Drisdelle
- ---------------
Mr. Drisdelle was born on October 31, 1962, in Ontario, Canada. He has lived at
2076 Davebrook Rd., Mississauga, 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.
Mr. Drisdelle was appointed to the positions of President, Chief Executive
Officer, Chair of the Board, Principal Financial Officer, Principal Accounting
Officer, Secretary and Treasurer on June 1, 2001.
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
based Full Service Tire shop. Mr. Yates graduated from Wake Technical College in
1975 with an associate degree in Civil Engineering.
Mr. Yates was appointed to the Board of Directors on August 1, 2002.
SECURITY OWNERSHIP OF DIRECTORS, OFFICERS AND MANAGEMENT
- --------------------------------------------------------
The following table sets forth, as of May 13, 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%
2076 Davebrook Road
Mississauga, Ontario
Canada, L5J 3M6
Donnie Yates 100,000 common shares 1.5%
82 Harvest Ridge
Angier, North Carolina
USA, 27501
(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.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 11
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
General
- -------
Holders of our common stock are entitled to cast one vote for each share held at
all shareholder meetings for all purposes. Currently, there are two members on
our Board of Directors and we are actively seeking to fill a vacancy on our
Board with a third member that has the appropriate qualifications. 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 May 13, 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.
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.
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 herein in reliance on Miller & McCollom's report, due to their
authority as experts in accounting and auditing.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 12
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
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
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.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
DESCRIPTION OF BUSINESS
- -----------------------
HISTORY AND BACKGROUND
- ----------------------
In November of 2001, a wholly owned subsidiary called Mobile Tire Renew, Ltd.
(the "Ontario Subsidiary") was incorporated under the laws of the Province of
Ontario, Canada. This Ontario 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 Ontario 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 Ontario Subsidiary
to, Quailu Services SA, Inc. ("Quailu"), a Nevada corporation for Canadian
$25,000 or $0.626 per share when converted into US dollars. Quailu is a personal
holding company for securities owned by Mr. Drisdelle. The 25,000 shares
represented all the shares issued and outstanding for the Ontario 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. From the
date of incorporation to March 15, 2002, this entity conducted no business
activities. 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 Ontario 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. This company
was formed with a view to separating our tire purchase and sale revenue from our
re-grooving" revenue. The goal is to have all the "tire sales" done through
Commercial Tire Casing Services (USA), Inc. and all the "re-grooving" sales done
through the Ontario Subsidiary. To date, this corporation has no business
activities and both the re-grooving and casing businesses are run through the
Ontario Subsidiary.
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 $0.01 per share, which inducement was valued at $1,000. The inducement was
negotiated at arm's length with Mr. Yates and the inducement was valued at
$1,000.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 13
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
The Ontario Subsidiary currently acts as the operating entity for all business
activities relating to us. Through the Ontario 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 Ontario 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
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.
- -----------
Upon the effectiveness of the prospectus of which this prospectus is a part, our
selling stockholders, including our principal shareholder/officer/ director, who
owns 5,000,000 of the 6.625,000 issued and outstanding common shares, may sell
all or part of his 5,000,000 shares being registered in the offering. 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. The sale of substantial numbers of
ordinary shares in the public market, or the possibility of such a sale, could
adversely affect prevailing market prices for our ordinary shares.
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 market 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., Mississauga 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. Total Casings competes
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 14
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
with us in respect of the used tire sales portion of our business. They, too,
buy and sell used tires. Please see our "Risk Factors" section above for the
risks associated with this competition.
We will continue to deliver tire renewal services and sales to the "Golden
Triangle" area until such 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
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 viable 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
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 15
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
be better for the environment. However, the process itself is quite involved,
and generally requires several steps to complete. The steps are the initial
inspection, buffing, casing preparation/repairing, tread application, curing and
final inspection. In the initial inspection, each tire is inspected to ensure it
has a sound structure, is free of manufacturer's defects, there is no
non-repairable damage and no excessive aging. Then the worn tread is removed
from the tire casing by buffing it on a machine similar to a lathe so that the
casing is the correct shape to receive the new tread. Then any damage that
remains after the buffing process is repaired or, if unrepairable, the casing is
rejected. Once the repairs are made, the new rubber tread is applied to the
casing through either the "mold cure" process (uncured rubber is cured in a
mold) or the "procure process" (procured rubber is premolded and cured prior to
application). The tire is then cured through either the use of a high heat
pressure mold or a highly preasurized heat chambers. Finally, the tire is
inspected, trimmed, painted, labeled and sold or returned to the owner.
The main difference between re-treading and re-grooving is that in the
re-grooving process, the old tread is not removed nor is new tread applied, but
rather, new tread is cut into the existing rubber. Although tire re-grooving
technology has been around for several years, it has yet to emerge as the third
principle option in tire replacement. 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 extends the life of the re-groovable tire. 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, we can gain a share of the existing
retread markets as a more economic and convenient alternative.
Approximately 24.2 million retreaded tires were sold in North America* in 2001,
-------------
with sales totaling more than $2 billion.
o 605,000 retreaded passenger car tires.
o 5.8+ million retreaded light truck tires
o 17.1+ million retreaded medium and heavy duty truck tires
o Over 646,000 other retreaded tires (aircraft, off-the-road vehicles,
industrial/lift trucks, motorcycles, farm equipment, specialty, etc.)
o In 2001 the total replacement medium truck tire market in North
-----
America* was approximately 32.9+ million tires. 17.1+ million were
-------
retreads and 15.8+ million were new tires.
o There are approximately 1175 retreading plants in North America*, many
-------------
of which are owned/operated by independent small businesses whose
collective investment is over one billion dollars. The remaining
plants are owned/operated by new tire manufacturers and a major tread
rubber supplier.
o All retreaded tires in the U.S.A. are identified on the sidewalls as
to manufacturer and date of production.
* U.S. & Canada only. Figures from Mexico not available.
===========================================================================
Source: "Tire Retreading/Repair Journal" and independent research by TRIB.
We add approximately 10% to available U.S. figures to account for Canada.
===========================================================================
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 for their own
purposes only and are not attempting to solicit business beyond their own needs.
There are a small number of independent tire re-groove services throughout North
America, but the practice is by no means widespread. Also, not all of these
re-groove providers have made their re-groove machine portable as we have done..
Our competitive advantage is that we intend to widely market our services to all
parties that currently use the re-treading process and/or those who simply
purchase new tires as old ones wear out. In addition, we intend to go "on
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 16
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
location" with our mobile re-groove machine to simplify the process for our
customers as opposed to the re-tread process where the used tires must be
shipped to the re-tread facility at additional cost to the customer. This
shipping of the tires not only increases the costs of the re-tread process but
also the time involved in being able to get the tires back on the vehicles from
which they came. 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 intend 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 BURGESSVILLE, ON CANADA
RECONDITIONING
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 prospectus 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 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 prospectus, our operating
activities have consisted of market research, acquiring equipment and a vehicle
with which to commence operations, hiring staff, and providing marketing tire
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 17
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
renew products and services throughout the "golden triangle". As of the date of
this prospectus, 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 16
months. Total revenues to March 31, 2002 and December 31, 2002 were $8,198 and
$195,559 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. As of September 2003 we determined the company had
achieved a significant level of revenues to warrant removing the previous
designation of 'Development Stage Company'.
Tire sales include revenues from the sale of used tires which have been
purchased from other tire suppliers and re-grooved.
Grooving service revenues include sales of re-grooving services to a variety of
transport related companies who utilize heavy equipment in their businesses.
Cost of goods sold are primarily composed of the wholesale cost of tires which
are purchased to be re-grooved and re-sold.
Grooving service costs are primarily composed of salary expenses for one full
time employee who performs re-grooving operations.
Office expense is comprised of costs such related to office supplies.
Depreciation relates to amortization of the equipment purchased to provide
re-grooving services.
Travel and selling expense is comprised of expenditures required to market the
company's products and services throughout its sales region.
Rent relates to prior rental of a storage space.
Advertising includes web-site maintenance expenses and other general promotional
expenditures.
Other administrative expenses include professional fees for accounting, audit
and legal services; payroll expenses; general operational expenses such as
postage; and management salaries. Some professional fees, directors'
compensation and management salaries included in this category have been paid by
way of stock compensation.
Interest expense relates to interest paid for the Small Business Loan ("SBL")
acquired through our Ontario operating subsidiary.
We cannot perform meaningful standard period-to-period comparisons of our
historical operating results because fiscal 2002 was our first year of operation
but have included interim versus fiscal year end comparisons to explain how the
company has developed during this period.. 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 $12,346 for the nine month
period ended December 31, 2002 versus a net loss of ($3,778) for the period from
inception (November 8, 2001) to the period ending March 31, 2002. The increase
in net income is attributable to increases in tire sales and re-grooving service
revenues from $5,689 and $2,509 to $169,640 and 25,919 respectively for the
period of inception to March 31, 2002 versus the nine month period ended
December 31, 2002. These increases in sales revenues have been attributable to
the marketing efforts of management, including the expansion of the company's
sales territory, and by the hiring of a full time employee to perform
re-grooving operations.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 18
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
The growth of our total revenues from inception to March 31, 2002 versus the
nine month period ended December 31, 2002 represents a percentage increase of
2286%. While we anticipate revenues will continue to grow steadily, we view our
initial period of revenue growth as uncharacteristic of the pattern we will
experience in the future.
In line with our increases in sales, we have incurred higher levels of
expenditures for cost of goods sold and for grooving service costs and these
expenses have respectively increased from $2,431 and $1,864 for the period of
inception to March 31, 2002 to $110,369 and $13,566 for the nine month period
ended December 31, 2002.
Other administrative expenses increased from $1,930 for the period from
inception to March 31, 2002 to $19,766 for the nine months ended December 31,
2002. The bulk of the increase in these expenses comprised fees for auditing,
accounting and legal services and for employer tax expenses.
Our advertising expenses increased from nil for the period from inception to
March 31, 2002 to $10,029 for the nine month period ended December 31, 2002
primarily due to expenditures for the establishment of a promotional website. We
anticipate we will expand our advertising efforts as our business grows, but do
not see significant increases in our promotional budget.
We have maintained our payments and requirements set out per the Small Business
Loan Agreement entered into by our Ontario operating subsidiary. The Covenants
states, that we will ensure that our Current Ratio is not at any time less than
1:1 and that we will ensure that our Debt to Effective Equity Ratio does not at
any time exceed 2: 1. Ms. Joy Sartolelli guaranteed the loan and is married to
the principal shareholder/officer/director, Mr. Gary Drisdelle.
We anticipate that cost of goods sold and grooving service costs will increase
only with volume of business, and, as such, will not increase without a
simultaneous increase in revenues.
We anticipate that our other administrative expenses 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 this
prospectus. We estimate that the professional fee component of this expense
category will be approximately $20,000 during the next 12 months.
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 (International), Inc. through the means described
above. Should demand for our services increase, we may access additional funds
through our loan facility agreement to acquire additional re-grooving machinery
as management deems appropriate.
In addition, we intend to separate our casing business from our re-grooving
business. In so doing we intend to leave the re-grooving business to be operated
from our Ontario Subsidiary and we intend to use Commercial Tire Casing Services
(USA), Inc. for the casing business.
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 established a loan facility
agreement that has allowed us to borrow up to $21,000 for the purchase of
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 19
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
equipment at an interest rate of prime + 3% (which totaled 6.75% at March 31,
2003). This facility is secured by our property and equipment and by a guarantee
provided by our president and his wife. The loan is subject to certain covenants
including the requirement of maintaining certain current and equity to debt
ratios.
Our operating activities have used cash resources of approximately ($3,925) for
the period from inception to March 31, 2002 and ($3,650) for the nine month
period ended December 31, 2002. Investment in equipment has totaled ($27,828)
and ($3,372) respectively over the same periods.
As at December 31, 2002, we had cash and cash equivalents of $11,188. When
combined with anticipated revenues we anticipate having sufficient funds to
successfully operate for the next twelve months.
For the nine month period ended December 31, 2002, the company had
administrative expenditures of $48,618 or an average of approximately $5,400 per
month. In the unlikely event that the company's revenue streams from operational
activities were interrupted, the company could sustain itself for approximately
two months at the average level of expenditures for the last nine month period
or for a longer period if expenditure reductions were made. The company
anticipates it could raise sufficient financing during such a period to
re-capitalize and continue operations into the foreseeable future.
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.
In the auditor's report for the company's audited statement to March 31, 2002,
our auditor states, "The accompanying consolidated financial statements have
been prepared assuming that the company will continue as a going concern. As
described in Note 7, 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."
Description of Property
- -----------------------
Our company's head office is at 2076 Davebrook Rd., Mississauga 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.
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. Mr. Drisdelle
does not receive a salary from the company.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 20
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
In November of 2001, a wholly owned subsidiary called Mobile Tire Renew, Ltd.
("the "Ontario Subsidiary") was incorporated under the laws of the Province of
Ontario, Canada. This Ontario 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 Ontario 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 Ontario 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 Ontario Subsidiary.
Mr. Drisdelle is the beneficial owner of Quailu.
The following table sets forth, as of December 31, 2002, certain transactions
deemed to be related:
2002 2003
to year end to 9 months ended
March 31/02 December 31/02
----------- -----------------
Tires sold by Mobile Tire Renew to Total Casing Service $3,589 $27,625
Services sold by Mobile Tire Renew to Total Casing Service - 178
Inter-office operating disbursements - -
TOTAL $3,589 $27,803
------ -------
Tires sold by Mobile Tire Renew to Total Casing Service $1,219 $30,938
Services sold by Mobile Tire Renew to Total Casing Service - 41
Inter-office operating disbursements - 1,942
TOTAL $1,219 $32,921
------ -------
Executive Compensation
- ----------------------
The following table sets forth the salaries and directors' fees we have paid to
our executives during the previous fiscal year, on an annual basis and for the
nine month period ended December 31, 2002 during the current fiscal year.
Directors' Stock-based Stock-based
Person Position Period Salary fees Inducements Compensation
- ----------------- ------------------ ------------ ------------ ---------- ------------ ------------
Garry Drisdelle President, Chief FY 2002 $ 0.00 $0.00 Nil Nil
Executive Officer 9 mths to Dec
And Chair 31/02 $3,202 $0.00 Nil Nil
Donnie Yates Director FY 2002 $ 0.00 $0.00 $1,000 (1) Nil
9 mths to Dec
31/02 $ 0.00 $0.00 Nil $1,000 (1)
- --------------------------------------------------------------------------------------------------------------
<FN>
(1) In August 2002, 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.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 21
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
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 prospectus, 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 prospectus, 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 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 prospectus 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.
Attached to this prospectus as exhibits are the Small Business Loan agreement as
between the company's Canadian operating Ontario 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 Ontario Subsidiary).
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 22
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------
QUAILU SERVICES SA, INC.
- ------------------------
INTERIM FINANCIAL STATEMENTS
Interim Financial Statements
for the 7 month period ending October 31, 2002.
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 23
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
QUAILU SERVICES SA, INC.
FINANCIAL STATEMENTS
Page
----
Financial Statements:
Balance Sheets F-2
Statements of Operations F-3
Statements of Cash Flows F-4
Notes to Financial Statements F-5
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 24
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
QUAILU SERVICES SA, INC
BALANCE SHEETS
(Unaudited)
ASSETS
October 31, March 31,
2002 2002
(Note 1)
---------------- ----------------
CURRENT ASSETS
Cash and cash equivalents $ 100 $ 100
---------------- ----------------
Total current assets 100 100
LONG TERM ASSETS
Investment in Mobile Tire Renew Ltd. (100%) 15,659 15,659
---------------- ----------------
Total assets $ 15,759 $ 15,759
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Due to related parties $ 0 $ 0
---------------- ----------------
Total current liabilities 0 0
Long Term Non-Interest Bearing Note payable to related party 15,659 15,659
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, $.001 par value; 100,000,000 shares
authorized, 100,000 shares issued and outstanding 100 100
Paid-in capital 0 0
Accumulated other comprehensive income 0 0
---------------- ----------------
Total stockholders' equity $ 15,759 $ 15,759
---------------- ----------------
Total liabilities and stockholders' equity $ 15,759 $ 15,759
================ ================
The accompanying notes are an integral part of the financial statements.
F-2
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 25
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
QUAILU SERVICES SA, INC
STATEMENTS OF OPERATIONS
(Unaudited)
Seven Months
Ending October 31,
2002
-------------------
Revenues:
Total revenues $ 0
-------------------
Expenses:
Total cost and expenses 0
-------------------
Net income $ 0
===================
Net income per common share $ *
* Less than $.01 per share
Common shares outstanding 100
Other comprehensive income:
Net income $ 0
Foreign currency translation adjustment 0
-------------------
Total comprehensive income $ 0
===================
The accompanying notes are an integral part of the financial statements.
F-3
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 26
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
QUAILU SERVICES SA, INC
STATEMENTS OF CASH FLOWS
(Unaudited)
Seven Months
Ending
October 31,
2002
----------------
Cash flows from operating activities: $ nil
----------------
Net cash provided (used) by operating activities 0
Cash flows from investing activities: $ nil
----------------
Cash (used) by investing activities 0
Cash flows from financing activities: $ nil
----------------
Cash provided by financing activities 0
Net change in cash and cash equivalents 0
Beginning cash balance 100
----------------
Ending cash balance $ 100
================
Supplemental disclosure of cash flow information:
Cash paid during the period for -
Interest $ --
Income taxes $ --
Supplemental disclosure of non-cash transaction
information:
Note issued to related party $ 15,659
Stock acquired in related party $ (15,659)
The accompanying notes are an integral part of the financial statements.
F-4
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 27
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
QUAILU SERVICES SA, INC
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Financial Statements
- -----------------------------
The accompanying consolidated financial statements included herein have been
prepared by Quailu Services SA, Inc. ("Quailu") 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. 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. In management's
opinion all adjustments necessary for a fair presentation of the Company's
financial statements are reflected in the interim periods included.
The Company has been a holding company since its inception (November 26, 2001)
through October 31, 2002.
Note 2 - Related Party Transaction
- ----------------------------------
On February 1, 2002 Quailu purchased 100% of the issued and outstanding common
shares of Mobile Tire Renew Ltd., an Ontario Corporation, which was owned by Mr.
Garry Drisdelle, the sole owner of Quailu. In exchange for 25,000 common shares
of Mobile Tire Renew Ltd., Quailu issued a note for US$15,659 to Mr. Drisdelle.
This note is non-interest bearing and has no specified maturity date.
F-5
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 28
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
INTERIM FINANCIAL STATEMENTS
Interim Financial Statements
for the 9 month period ending December 31, 2002
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 29
MOBILE TIRE RENEW (INTERNATIONAL), INC.
- --------------------------------------------------------------------------------
MOBILE TIRE RENEW (INTERNATIONAL), INC.
CONSOLIDATED FINANCIAL STATEMENTS
Page
----
Consolidated Financial Statements:
Consolidated Balance Sheets F-2
Consolidated Statements of Operations F-3
Consolidated Statements of Cash Flows F-5
Notes to Consolidated Financial Statements F-6
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 30
MOBILE TIRE RENEW (INTERNATIONAL), INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
December 31, March 31,
2002 2002
(Unaudited) (Note 1)
---------------- ----------------
CURRENT ASSETS
Cash $ 11,188 $ 2,584
Accounts receivable 46,521 10,559
Inventory 19,950 --
---------------- ----------------
Total current assets 77,659 13,143
Property and equipment, net of accumulated
depreciation of $10,137 and $1,561 24,031 26,267
Deposits 3,014 157
---------------- ----------------
Total assets $ 104,704 $ 39,567
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 42,154 $ 2,100
Due to related parties 2,250 6,751
Current portion of bank loan 6,341 6,255
---------------- ----------------
Total current liabilities 50,745 15,106
Note payable to bank net of current portion 14,522 12,569
---------------- ----------------
Total liabilities 65,267 27,675
---------------- ----------------
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, $.001 par value; 25,000,000 shares
authorized, 20,250,000 and 5,000,000 shares issued
and outstanding 20,250 5,000
Paid-in capital 10,659 10,659
Accumulated other comprehensive income (41) 11
Deficit accumulated during the development period (3,778) (3,778)
Retained earnings subsequent to the development period 12,347 --
---------------- ----------------
Total stockholders' equity $ 39,437 $ 11,892
---------------- ----------------
Total liabilities and stockholders' equity $ 104,704 $ 39,567
================ ================
The accompanying notes are an integral part of the financial statements.
F-2
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 31
MOBILE TIRE RENEW (INTERNATIONAL), INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
November 8,
Nine Months 2001 (Inception)
Ending Through
December 31, December 31,
2002 2001
---------------- ----------------
Revenues:
Tire sales $ 169,640 $ --
Grooving service revenue 25,919 --
---------------- ----------------
Total revenues 195,559 --
Cost of sales:
Cost of goods sold 110,369 --
Grooving service costs 13,566 --
---------------- ----------------
Total cost of sales 123,935 --
---------------- ----------------
Gross profit 71,624 --
Administrative expenses:
Office expense 1,274 --
Depreciation 8,639 --
Travel and selling expense 7,702 --
Rent 1,208 --
Advertising 10,029 --
Other administrative expenses 19,766 438
---------------- ----------------
Total cost and expenses 48,618 438
---------------- ----------------
Income from operations 23,006 (438)
Interest expense 1,464 --
---------------- ----------------
Net income before income taxes 21,542 (438)
Provision for income taxes 9,196 --
---------------- ----------------
Net income $ 12,346 $ (438)
================ ================
Net income per common share $ * $ --
* Less than $.01 per share
Weighted average common shares outstanding 20,250,000 --
Other comprehensive income:
Net income $ 12,346 $
(438)
Foreign currency translation adjustment (52) --
---------------- ----------------
Total comprehensive income $ 12,294 $ (438)
================ ================
The accompanying notes are an integral part of the financial statements.
F-3
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 32
MOBILE TIRE RENEW (INTERNATIONAL), INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months
Ending
December 31,
2002
----------------
Revenues:
Tire sales $ 72,041
Grooving service revenue 3,486
----------------
Total revenues 75,527
Cost of sales:
Cost of goods sold 41,952
Grooving service costs 5,462
----------------
Total cost of sales 47,414
----------------
Gross profit 28,113
Administrative expenses:
Office expense 424
Depreciation 4,535
Travel and selling expense 3,469
Rent
Advertising 33
Other administrative expenses 15,659
----------------
Total cost and expenses 24,120
----------------
Income from operations 3,993
Interest expense 433
----------------
Net income before income taxes 3,560
Provision for income taxes 1,500
----------------
Net income $ 2,060
================
Net income per common share $
* Less than $.01 per share
Common shares outstanding 20,250,000
Other comprehensive income:
Net income $ 2,060
Foreign currency translation adjustment (40)
----------------
Total comprehensive income $ 2,020
================
The accompanying notes are an integral part of the financial statements.
F-4
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 33
MOBILE TIRE RENEW (INTERNATIONAL), INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
November 8,
2001
Nine Months (Inception)
Ending Through
December 31, December 31,
2002 2001
---------------- ----------------
Cash flows from operating activities:
Net income (loss) $ 12,346 $ (438)
Reconciling adjustments:
Depreciation 8,639 --
Change in operating assets and liabilities:
Accounts receivable (36,981) --
Inventory (20,558) --
Accounts payable and accrued expenses 32,904 438
---------------- ----------------
Net cash provided (used) by operating activities (3,650) --
Cash flows from investing activities:
Cash flows from investing activities:
Acquisition of property and equipment (3,372) --
---------------- ----------------
Cash (used) by investing activities (3,372)
Cash flows from financing activities:
Issuance of common stock 13,650 --
Proceeds from bank loan 6,631 --
Repayment of bank loan (4,802) --
---------------- ----------------
Cash provided by financing activities 15,479 --
Foreign currency translation adjustment 147 --
---------------- ----------------
Net change in cash 8,604 --
Beginning cash balance 2,584 --
---------------- ----------------
Ending cash balance $ 11,188 --
================ ================
Supplemental disclosure of cash flow information:
Cash paid during the period for -
Interest $ 1,922 --
Income taxes $ -- --
The accompanying notes are an integral part of the financial statements.
F-5
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 34
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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.
The Company was in the development stage from inception (November 8, 2001)
through March 31, 2002. After March 31, 2002 the Company is considered an
operating company.
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. For the nine month period ended
December 31, 2002, the tires purchased totaled $32,760 and sales totaled
$27,506. The related party sales comprised 14% of the Company's total sales. At
December 31, 2002, the Company had a receivable of $1,696 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.
F-6
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 35
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 36
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 7, the
Company has accumulated operating losses since its inception, has minimum
working capital, and has insufficient 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 PAGE 37
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
================
The accompanying notes are an integral part of the financial statements
F-3
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 38
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 sales:
Tires purchased 2,431
Grooving service costs 1,864
----------------
Total cost of sales 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)
================
The accompanying notes are an integral part of the financial statements
F-4
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 39
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
The accompanying notes are an integral part of the financial statements
F-5
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 40
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 $ --
The accompanying notes are an integral part of the financial statements
F-6
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 41
MOBILE TIRE RENEW (INTERNATIONAL), INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
November 8, 2001 (Inception) Through March 31, 2002
---------------------------------------------------
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.
F-7
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 42
MOBILE TIRE RENEW (INTERNATIONAL), INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
November 8, 2001 (Inception) Through March 31, 2002
---------------------------------------------------
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.
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.
F-8
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 43
MOBILE TIRE RENEW (INTERNATIONAL), INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
November 8, 2001 (Inception) Through March 31, 2002
---------------------------------------------------
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.
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.
F-9
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 44
MOBILE TIRE RENEW (INTERNATIONAL), INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
November 8, 2001 (Inception) Through March 31, 2002
---------------------------------------------------
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.
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. ther 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.
F-10
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 45
MOBILE TIRE RENEW (INTERNATIONAL), INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
November 8, 2001 (Inception) Through March 31, 2002
---------------------------------------------------
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.
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.
F-11
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 46
MOBILE TIRE RENEW (INTERNATIONAL), INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
November 8, 2001 (Inception) Through March 31, 2002
---------------------------------------------------
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.
Note 7 - Basis of Presentation
- ------------------------------
Generally accepted accounting principles in the United States of America
contemplates the continuation of the Company as a going concern. However, the
Company has accumulated operating losses since its inception, has minimum
working capital, and has insufficient business operations, which raises
substantial doubt about the Company's ability to continue as a going concern.
The continuation of the Company is dependent upon the continuing financial
support of creditors and stockholders and upon obtaining the capital
requirements of the Company. Management believes actions planned and presently
being taken provide the opportunity for the Company to continue as a going
concern.
F-12
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT PAGE 47
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 $0.01 per share as an inducement to bring his expertise to
our Board of Directors, which inducement was valued at $1,000. 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
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REGISTRATION STATEMENT PAGE 48
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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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
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.
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REGISTRATION STATEMENT PAGE 49
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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CERTIFICATIONS
- --------------
I, Garry Drisdelle, certify that;
1. I have reviewed this Prospectus 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
Prospectus;
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 Prospectus;
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 Prospectus 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
Prospectus (the "Evaluation Date"); and
c) presented in this Prospectus 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
Prospectus 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.
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REGISTRATION STATEMENT PAGE 50
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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ITEM 27. 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
Prospectus)
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) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in
the Registration Statement; and notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected in the
form of prospects filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in the volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "calculation of Registration Fee"
table in the effective registration statement.
(iii) 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.
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
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REGISTRATION STATEMENT PAGE 51
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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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 Prospectus 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
SIGNATURES
- ----------
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Prospectus 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/ Donnie 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 Prospectus 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/ Donnie Yates Director
- -------------------------
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REGISTRATION STATEMENT PAGE 52
MOBILE TIRE RENEW (INTERNATIONAL), INC.
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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 40 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.
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REGISTRATION STATEMENT PAGE 53