As filed with the Securities and Exchange Commission on November 19, 2004.
Registration No. 333-119010
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 2 to
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GETTING READY CORPORATION
(Name of small business issuer in its charter)
Delaware 5999 30-0132755
(State or other (Primary Standard (IRS Employer
jurisdiction of corporation Industrial Classification Identification
or organization) Code Number) Number)
8990 Wembley Court
Sarasota, Florida 34238
(941) 966-6955
(Address and telephone number of registrant's principal executive offices)
Sheldon R. Rose
Chief Executive Officer
8990 Wembley Court
Sarasota, Florida 34238
Ph. (941) 966-6955 Fax:(941) 966-0166 (Name,
address and telephone number of agent for service)
Copy of all communications to:
Arthur S. Marcus, Esq.
Gersten, Savage, Kaplowitz, Wolf & Marcus, LLP
101 E. 52nd Street
New York, NY 10022
Ph. (212) 752-9700
Fax: (212) 980-5192
Approximate date of commencement of proposed sale to the public: as soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box: |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462 (b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box: |_|
(i)
CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------
Title of Each Class of Amount to be Proposed Maximum Proposed Maximum Amount of
Securities To be Registered Offering Price Per Aggregate Offering Registration Fee
Registered Share Price (1)
- ---------------------------------------------------------------------------------------------------------------
Common Stock, par value 3,910,500 2.37 $9,267,885 $1,174.24*
$.0001 per share
(1) The shares included herein are being distributed to the stockholders of
Celerity Systems, Inc. No consideration will be received by Getting Ready
Corporation or Celerity in consideration of such distribution. Consistent with
Rule 457(f)(2), since there is no market for the shares being distributed, the
filing fee is based on 1/3 of the par value of the securities being registered.
*Previously paid.
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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is 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 November 19, 2004
Getting Ready Corporation
3,910,500 Shares of Common Stock
This prospectus relates to the distribution by dividend to all of the
stockholders of Celerity Systems, Inc. of 3,910,500 shares of Getting Ready
Corporation Common Stock. Getting Ready Corporation is not selling any shares of
Common Stock in this offering and therefore will not receive any proceeds from
this offering. All costs associated with this registration will be borne by
Getting Ready Corporation
Holders of Celerity's common stock, will receive one share of our Common
Stock for every 1,224.442 shares of Celerity's common stock that they hold.
Following the distribution, 5% of our outstanding Common Stock will be held By
shareholders of Celerity, 2.5% will be held by Celerity and 91.85% of our Common
Stock will be beneficially owned by our affiliates.
You will be required to pay income tax on the value of the shares of our
Common Stock received by you in connection with this distribution.
Currently, no public market exists for our Common Stock.
THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK.
PLEASE REFER TO "RISK FACTORS" BEGINNING ON PAGE 7.
Celerity is facilitating the distribution of shares of Common Stock in
this offering and is deemed to be an underwriter.
The Securities and Exchange Commission and state securities regulators
have not approved or disapproved of these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is November __, 2004.
TABLE OF CONTENTS
Prospectus Summary 3- 5
Risk Factors 7-10
Use of Proceeds 12
Management's Discussion and Analysis of Financial
Condition and Results of Operations 13-18
Business 19-24
Legal Proceedings 25
Management 26
Executive Compensation 27
Certain Relationships and Related Transactions 28
Principal Stockholders 29
Description of Securities 30-31
The Distribution 32-35
Plan of Distribution 35
Legal Matters 35
Experts 35
Where You Can Find Additional Information 35
Financial Statements F-1 - F-13
2
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the more
detailed information and financial statements appearing elsewhere in this
prospectus. You should read the entire prospectus carefully, including the more
detailed information regarding our company, the risks of purchasing our common
stock discussed under "risk factors," and our financial statements and the
accompanying notes. Unless otherwise indicated, (a) the term "year," "fiscal
year" or "fiscal" refers to our fiscal year ending September 30th, and (b) all
shares data gives effect to our 11.103125 for 1 stock split effective in July
2004.
Overview
Getting Ready Corporation was incorporated in Delaware on November 26,
2002. GRC intends to open Mother Supercare Centers in target areas across the
United States. The Mother Supercare Centers are centers that will provide women
who are planning to start a family, are pregnant or have recently had a baby,
with a one-stop destination offering educational classes, counseling services,
fitness training, spa facilities and retail shopping. Emphasis will be placed on
educating women on their overall health, fitness and emotional well being from
the time they decide to conceive through the postnatal period. Educational and
counseling services will be provided by expert licensed professionals, certified
childbirth educators and lactation consultants. We intend to offer franchise
opportunities for others to duplicate the Mothers Supercare Centers concept. Our
management believes that there is a strong need to combine physical health,
fitness and emotional well being with education, convenience and service
relating to a woman's pregnancy, childbirth and the postpartum experience. We
currently have no revenue generating operations and our financial statements
have been prepared assuming that we will continue as a going concern. For the
years ended September 30, 2003 and 2004, we had net losses of $ 33,185 and
$324,543, respectively.
On August 1, 2004, the Company entered into a Business Development
Agreement with Celerity Systems, Inc. pursuant to which it issued to Celerity
5,925,000 shares of its Common Stock in exchange for certain services to be
provided for us by Celerity. In September, 2004, Celerity announced its
intention to distribute 3,910,500 shares of our Common Stock to Celerity
shareholders upon the effectiveness of required Securities Exchange Commission
filings and final approval by the Board of Directors of the terms and conditions
of the distribution.
Why Celerity Sent This Document To You
Celerity sent you this document because you were an owner of Celerity's
common stock on the record date. This entitles you to receive a distribution of
one share of Common Stock of Getting Ready Corporation for every 1,224.442
shares of Celerity that you owned on that date. No action is required on your
part to participate in the distribution and you do not have to pay cash or other
consideration to receive your Getting Ready Shares. Celerity is acting as an
underwriter in connection with the distribution. Celerity is acting as an
underwriter in connection with the distribution.
This document describes Getting Ready business, the relationship between
Celerity and Getting Ready, and provides other information to assist you in
evaluating the benefits and risks of holding or disposing of Getting Ready
Shares that you will receive in the distribution. You should be aware of certain
risks relating to the distribution and our business, which are described in this
document beginning on page 8.
About Us
Our principal office is located at 8990 Wembley Court, Sarasota, Florida
34238. Our telephone number is (941) 966-6955.
3
SUMMARY OF THE DISTRIBUTION
Distribution
On the distribution date, the distribution agent identified below will begin
distributing certificates representing our Common Stock to Celerity
stockholders. You will not be required to make any payment or take any other
action to receive your shares of our Common Stock. The distributed shares of our
Common Stock will be freely transferable unless you are one of our affiliates or
you are issued shares in respect of restricted shares of Celerity common stock.
Distribution Ratio
Celerity will distribute to its stockholders an aggregate of 3,910,500 shares of
Common Stock. The number of shares that each Celerity shareholder receives is
based on dividing the total shares of Celerity outstanding on October 20, 2004
(4,788,180,403) by 3,910,500. For every 1,224.442 shares of Celerity common
stock that you owned of record on October 20, 2004, you will receive one share
of our Common Stock.
Our relationship with Celerity after the distribution
Prior to the distribution, Celerity and us have entered into a business
development agreement to provide certain services to us in exchange for
5,925,000 shares of our common stock. Celerity will provide us with, upon
request, assistance including significant guidance and counsel in management,
operations or business objectives and policies. Such assistance may include
strategic and financial planning, designing budgets and control systems.
Celerity is facilitating the distribution of the 3,910,500 shares and is an
underwriter in the distribution.
Stockholder Inquiries
Any persons having inquiries relating to the distribution should contact the
Shareholder Services department of Island Stock Transfer, the distribution
agent, at 100 First Avenue South, Suite 212, St. Petersburg, Florida, 33701 or
Getting Ready, in writing at Getting Ready Corporation 8990 Wembley Court,
Sarasota, Florida 34238 Attention: Sheldon R. Rose, CEO, or by email at
getting-ready@comcast.net, or by telephone at (941) 966-6955.
4
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
SUMMARY FINANCIAL DATA
The following summary financial and other data should be read in
conjunction with "Management's Discussion and Analysis or Plan of Operation,"
"Capitalization," the statistical information set forth under the heading
"Business," and the financial statements and related notes of Getting Ready
Corporation, appearing in this Prospectus beginning on page F-1. The selected
financial data for the fiscal year ended 2003, was derived from our audited
financial statements.
Selected Statements of Operations Data
Period Period
November 26, November 26,
2002 (Date of 2002 (Date of
Year Ended Inception) through Inception) through
September 30, September 30, September 30,
2004 2003 2004
(Unaudited)
Operating costs $ 31,285 313,004 $ 344,289
Net loss $ (33,185) 324,543 $(357,728)
Net loss per share $ (.00) (.01) $ (.01)
Selected Balance Sheet Data
September 30,
2004
Current Assets $307,355
Total Assets $326,374
Current Liablities $148,681
Total Stockholders' Equity (Deficit) $(40,645)
5
RISK FACTORS
You should carefully consider each of the following risk factors and all of the
other information in this information statement. The following risks relate
principally to the distribution and Getting Ready Corporation's business.
The risk factors below contain forward-looking statements regarding the
distribution and Getting Ready. Actual results could differ materially from
those set forth in the forward-looking statements. See Cautionary Statement
Regarding Forward-Looking Statements below.
Risks Related To Our Business
Since our financial statements have been prepared assuming that we will continue
as a going concern it may affect our ability to raise financing and/or obtain
credit from vendors.
We have received a report from our independent auditors for our fiscal
year ended September 30, 2004 containing an explanatory paragraph that describes
the uncertainty regarding our ability to continue as a going concern. The
reasons for the going concern qualification are our lack of revenues and history
of net losses, as well as the fact that at the time of the audit, we did not
have access to sufficient committed capital to meet our projected operating
needs for at least the next 12 months.
Management's plans may not be successful or other unforeseeable actions
may become necessary. Any inability to raise capital may require us to reduce
the level of our operations. In addition, the existence of the going concern
opinion may make it more difficult for us to obtain additional financing or
receive credit from vendors on acceptable terms.
It will take significant time from when you receive your shares until we
begin to generate revenues.
Following this offering, we intend to file an additional registration
Statement to register the shares of our common stock issuable in the event that
we draw down against the line of credit that Cornell has granted us. The
registration statement registering the shares underlying the equity line may
take significant time to go effective. In addition, we estimate that it will
take at least 9 months after the equity line is available to open our first
Mothers Supercare Center, thus there will be a significant delay from when you
receive your shares until we begin to generate revenues. This may have a
negative effect on the value of our shares that you receive.
The standby equity distribution agreement and convertible debentures contain
certain covenants prohibiting us from raising capital from others or pledging
assets to other lenders
The standby equity distribution agreement and convertible debentures
contain covenants that restrict the following activities:
o Raising capital from the sale of stock or other securities convertible
into stock from anyone other than the lender;
o Granting a security interest in our assets, which security interest may be
needed in order to obtain borrowings or capital from a lender.
The existence of these covenants may severely limit our ability to borrow
money or raise capital from the sale of stock of convertible securities because
any potential lender will likely require collateral in the form of a security
interest on our assets to secure a loan and other purchasers who may want to
lend us money may be precluded from doing so without Cornell's consent of our
stock or convertible securities may want to pay a discount to the market price
of our stock.
Existing shareholders will experience significant dilution from our sale of
shares under the standby equity distribution agreement
The sale of shares pursuant to the Standby Equity Distribution Agreement
will have a dilutive impact on our stockholders. As a result, our net income per
share could decrease in future periods, and the market price of our common stock
could decline. In addition, the lower the stock price is, the more shares of
common stock we will have to issue under the Standby Equity Distribution
Agreement to draw down the full amount. If our stock price is lower, then our
existing stockholders would experience greater dilution.
The sale of our stock under our standby equity distribution agreement could
encourage short sales by third parties, which could contribute to the future
decline of our stock price.
6
The significant downward pressure on the price of our common stock caused
by the sale of material amounts of common stock under the standby equity
distribution agreement could encourage short sales by third parties. In a short
sale, a prospective seller borrows stock from a shareholder or broker and sells
the borrowed stock. The prospective seller hopes that the stock price will
decline, at which time the seller can purchase shares at a lower price to repay
the lender. The seller profits when the stock price declines because it is
purchasing shares at a price lower than the sale price of the borrowed stock.
Such sales could place further downward pressure on the price of our common
stock by increasing the number of shares being sold.
There has been no market for our common stock and even when our shares begin to
be traded on the OTC bulletin board we cannot predict the extent to which a
trading market will develop.
Before the distribution, there has been no market for our common stock.
Even when our shares begin to trade on the OTC Bulletin Board it is likely that
our common stock will be thinly traded. Thinly traded common stock can be more
volatile than common stock trading in an active public market. We cannot predict
the extent to which an active public market for our common stock will develop or
be sustained after this offering.
We may not be able to access sufficient funds under the standby equity
distribution agreement when needed.
We are dependent on external financing to fund our operations. Our
financing needs are expected to be provided from the standby equity distribution
agreement, in large part. No assurance can be given that such financing will be
available in sufficient amounts or at all when needed, in part, because the
amount of financing available will fluctuate with the price and volume of our
common stock. As the price and volume decline, then the amount of financing
available under the standby equity distribution agreement will decline.
There are additional restrictions on our ability to request advances under
the standby equity distribution agreement. For example, our ability to request
an advance is conditioned upon us registering the shares of common stock with
the SEC. Further, we may not request advances if the shares to be issued in
connection with such advances would result in Cornell Capital partners owning
more than 9.9% of our outstanding common stock. Even if we request advances the
amount of each advance, (after the first advance), is limited to a maximum draw
down of $300,000 every 7 trading days.
Our common stock is deemed to be a "Penny Stock," which may make it more
difficult for investors to sell their shares due to suitability requirements.
Our common stock is deemed to be a "penny stock" as that term is defined
in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934. These
requirements may reduce the potential market of our common stock by reducing the
number of potential investors. This may make it more difficult for investors in
our common stock to sell shares to third parties or to otherwise dispose of
them. Broker-dealers seeking to effect transactions in penny stocks are required
to furnish customers with detailed information which among other things includes
a clear statement of the risk of an investor losing their entire investment, the
dealers' bid and offer price for the stock, the amount of compensation the
dealer or any associated person will receive in the transaction and a monthly
statement setting forth the identity and number of shares of stock held for the
customer's account and the market value of such securities. In addition, the
dealer must determine that the shares are suitable for the customer and receive
a written affirmation from the customer that he has the requisite knowledge and
financial experience to evaluate the risks of purchasing the shares. This could
cause our stock price to decline and discourage dealers from engaging in
transactions in our shares. Penny stocks are stocks:
o With a price of less than $5.00 per share;
o That are not traded on a "recognized" national exchange;
o Whose prices are not quoted on the NASDAQ automated quotation system
(NASDAQ listed stock must still have a price of not less than $5.00
per share); or
o In issuers with net tangible assets less than $2.0 million (if the
issuer has been in continuous operation for at least three years) or
$5.0 million (if in continuous operation for less than three years),
or with average revenues of less than $6.0 of less than $6.0 million
for the last three years.
It will take significant time from when you receive your shares until we
begin to generate revenues.
Following this offering, we intend to file an additional registration
Statement to register the shares of our common stock issuable in the event we
draw down against the line of credit that Cornell has granted us. The
registration statement registering the shares underlying the equity line may
significant time to go effective. In addition, we estimate that it will take at
least 9 months after the equity line is available to open our first Mothers
Supercare Center, thus there will be a significant delay from when you receive
your shares until we begin to generate revenues. This may have a negative effect
on the value of our shares that you receive.
7
We are relying on Celerity to provide us significant guidance and counsel in the
management of our company and Celerity has no significant experience in
providing such guidance to companies in our industry.
We have a relatively small management team (three members) and are relying
on the management of Celerity to assist us with respect to many aspects of our
duties and challenges of being a public company. Celerity has not performed such
service for other companies in the past nor do they have familiarity with
operating companies in our business. Celerity's previous business related to
set-top TV boxes which are unrelated to our business. In the event that Celerity
is unable to provide us the proper guidance, we will have to hire additional
employees which would increase our costs.
We face aggressive competition in many areas of the business and our business
will be harmed if we fail to compete effectively
We encounter aggressive competition from numerous competitors in many
areas of our business. In the fitness area, the Company believes that its two
primary competitors will be "Curves for Women" and "Shapes for Women". In the
retail area, the Company believes that its primary competitors will be "Babies R
Us", Walmart and Target. In the childbirth education area its primary competitor
is "Lamaze" which is a non-profit organization that teaches its own childbirth
method. With respect to spa services, there are many hotels that offer spa
services and there are many private spas. Many of our current and potential
competitors have longer operating histories, greater name recognition and
substantially greater financial, technical and marketing resources than we have.
We may not be able to compete effectively with these competitors. To remain
competitive, we must develop new products and services and periodically enhance
our existing products in a timely manner. We anticipate that our ability to
compete in the industry will depend on our ability to enhance existing products
and services and to offer successful new products and services on a timely
basis. We have limited resources and must restrict product development efforts
to a Relatively small number of projects.
Our Management team consists of only three people and may not be sufficient to
successfully operate our business.
We have only recently assembled our management team as a result of our
relatively limited activities to date. In addition, we have only three
management members which may be insufficient to run our operations. As a result,
we may be unable to effectively develop and manage our business and we may fail.
Our CEO filed for personal bankruptcy in 2001 which may cause vendors to be
reluctant to give us favorable credit terms. Sheldon Rose, our CEO filed for
personal bankruptcy in 2001. He had guaranteed obligations of his company and
infused much of his personal wealth in the business which was in the dot com
industry. As a result of his bankruptcy certain vendors (especially those who
would require a personal guarantee) may be reluctant to give us credit on
favorable terms.
We will incur increased expenses if the business development agreement with
Celerity is terminated
We entered into a Business Development Agreement with Celerity pursuant to which
Celerity will, upon request, assist us in managerial assistance, including
significant guidance and counsel in management, operations or business
objectives and policies. Such assistance may include strategic and financial
planning, designing budgets and control systems. In the event that Celerity is
unsuccessful in performing such services, we will be required to seek other
third parties to assist us in this process, which will increase our costs.
We are subject to government regulation and failure to comply with these
regulations could result in our inability to offer some of the services that we
intend to provide an in certain circumstances fines or penalties.
Our operations and business practices will be subject to federal, state
and local government regulations in the various jurisdictions in which our
Mothers Supercare Centers will be located, including:
o general rules and regulations of the Federal Trade Commission (the
"FTC"), state and local consumer protection agencies and state
statutes that prescribe provisions of membership contracts and that
govern the advertising, sale, financing and collection of membership
fees and dues; and
o state and local health regulations;
Our failure to comply with these statutes, rules and regulations may result in
our inability to offer some of the services that we intend to provide and in
certain circumstances fines or penalties.
The Company could face lawsuits in its business.
The Company may be subject to claims and lawsuits from time to time arising from
the operation of its business, including claims arising from accidents or from
the allegedly negligent provision of massage therapy services. Damages resulting
from and the costs of defending any such actions could be substantial. Although
8
The Company may face personal injury claims, professional liability claims and
other business-related claims including, but not limited to, claims related to
the allegedly negligent provision of massage therapy services. There can be no
assurance that the Company will be able to obtain and maintain proper insurance
coverage, or that it will ultimately prove to be adequate.
Risks Relating to the Distribution
The distribution of our shares will result in substantial tax liability
You will be required to pay income tax on the value of your shares of our
Common Stock received as a dividend. The dividend will be taxed as ordinary
income to the extent of the value of the shares you receive. In addition, you
may have to pay taxes on any shares that you receive as a result of the rounding
up of fractional shares. You are advised to consult your own tax advisor as to
the specific tax consequences of the Distribution.
Substantial sales of our shares may have an adverse impact on the trading price
of our common stock
After the distribution, some of Celerity's stockholders may decide that
they do not want shares in a company engaged in our business, and may sell their
shares of our common stock following the distribution.
Based on the number of shares of Celerity common stock anticipated to be
outstanding on the record date, Celerity will distribute to Celerity
stockholders a total of approximately 3,910,500 our shares. Under the United
States federal securities laws, substantially all of these shares may be resold
immediately in the public market, except for shares held by affiliates of ours
We cannot predict whether stockholders will resell large numbers of our Shares
in the public market following the distribution or how quickly they may resell
these our shares. If our stockholders sell large numbers of our shares over a
short period of time, or if investors anticipate large sales of our shares over
a short period of time, this could adversely affect the trading price of the our
shares.
There has not been any prior trading market for our shares and a trading Market
for our shares may not develop
There is no current trading market for our shares, although a when-issued
trading market may develop prior to completion of the distribution. We
anticipate that our shares will be traded on the Over The Counter Bulletin Board
under the proposed symbol "GRCI".
Our shares may not be actively traded or the prices at which our shares
will trade may be low. Some of the Celerity stockholders who receive our shares
may decide that they do not want shares in a company in a business like ours and
may sell their our shares following the distribution. This may delay the
development of an orderly trading market in our shares for a period of time
following the distribution. Until our shares are fully distributed and an
orderly market develops, the prices at which our shares trade may fluctuate
significantly and may be lower than the price that would be expected for a fully
distributed issue. Prices for our shares will be determined in the marketplace
and may be influenced by many factors, including the depth and liquidity of the
market for the shares, our results of operations, what investors think of us and
the desirability of our industry, changes in economic conditions in our
industry, and general economic and market conditions. Market fluctuations could
have a material adverse impact on the trading price of the our shares.
9
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Information included in this prospectus may contain forward-looking
statements. This information may involve known and unknown risks, uncertainties
and other factors which may cause our actual results, performance or
achievements to be materially different from the future results, performance or
achievements expressed or implied by any forward-looking statements.
Forward-looking statements, which involve assumptions and describe our future
plans, strategies and expectations, are generally identifiable by use of the
words "may," "will," "should," "expect," "anticipate," "estimate," "believe,"
"intend" or "project" or the negative of these words or other variations on
these words or comparable terminology.
This prospectus contains forward-looking statements, including statements
regarding, among other things, (a) our projected sales and profitability, (b)
our growth strategies, (c) anticipated trends in our industry, (d) our future
financing plans, and (e) our anticipated needs for working capital. These
statements may be found under "Management's Discussion and Analysis of Financial
Conditions and Results of Operations" and "Our Business," as well as in this
prospectus generally. Actual events or results may differ materially from those
discussed in forward-looking statements as a result of various factors,
including, without limitation, the risks outlined under "Risk Factors" and
matters described in this prospectus generally. In light of these risks and
uncertainties, there can be no assurance that the forward-looking statements
contained in this prospectus will in fact occur.
10
USE OF PROCEEDS
We will receive no proceeds from the distribution of securities in this
distribution.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our
consolidated financial statements and related notes included elsewhere in this
Prospectus.
This filing contains forward-looking statements. The words "anticipated,"
"believe," "expect," "plan," "intend," "seek," "estimate," "project," "could,"
"may," and similar expressions are intended to identify forward-looking
statements. These statements include, among others, information regarding future
operations, future capital expenditures, and future net cash flow. Such
statements reflect our management's current views with respect to future events
and financial performance and involve risks and uncertainties, including,
without limitation, general economic and business conditions, changes in
political, social, and economic conditions, regulatory initiatives and
compliance with governmental regulations, the ability to achieve market
penetration and customers, and various other matters, many of which are beyond
our control. Should one or more of these risks or uncertainties occur, or should
underlying assumptions prove to be incorrect, actual results may vary materially
and adversely from those anticipated, believed, estimated or otherwise
indicated. Consequently, all of the forward-looking statements made in this
filing are qualified by these cautionary statements and there can be no
assurance of the actual results or developments.
OVERVIEW
To date our operations have been limited to the development of our
business plan, the selection of the sites for our first two Mothers Supercare
Centers, research on the products and services that we intend to offer at the
centers and the formation of our management team. Although our operations have
been limited, we believe that there is a demand for the type of products and
services that we intend to offer. Our strategy is to capture and keep the female
customer from the time she decides to start a family through the early years of
her infant's life by selling related products and providing continued service
throughout that entire time period.
PLAN OF OPERATIONS
Because we have not recorded any revenues to date and we did not have any
access to Committed financing, we have prepared our financial statements with
the assumption that there is substantial doubt that we can continue as a going
concern. Our ability to continue as a going concern is dependent on our ability
to effect our Plan of Operations and thus derive revenues from operation and our
access to the financing under the equity line of credit.
During the next 12 months, we intend to establish one Mothers Supercare
Center and achieve 80% completion of the second center. The Center will be
developed to provide an environment that sparks customer interest, excitement
and loyalty. The Company will utilize consultants to create this retail brand
experience from strategy, design, branding and architecture. The Center will
consist of an education area, fitness area, spa services area, retail area and a
socialization area.
We intend to utilize funds from the equity line of credit to finance the
construction and initial staffing of the two centers. We believe that we will be
able to derive revenues from the following packages offered to our clients.
Educational classes in areas such as: childbirth education, prenatal and
postnatal programs; fitness training classes for prenatal and postnatal women;
spa services, the retail sale of products for expectant mothers and infants
offered in our centers via our catalog and on our web site.
11
We intend to charge new customers a registration fee to join a Mothers
Supercare Center, as well as a monthly fee to maintain their membership
privilege. Certain of our classes will require an additional fee to participate.
In addition, we expect to derive revenues by offering traditional spa services
such as massages and beauty treatments which services will specifically be
designed for the prenatal and postnatal woman.
Once our first two Mothers Supercare Centers are established, we intend to
offer others the opportunity to franchise our name and concept. In addition, to
paying an upfront franchise fee and a percentage of profits, franchisees will be
required to purchase our products and services creating an additional source of
revenue.
We intend to achieve a customer base by targeting hospitals, obstetricians
and gynecologists, pediatricians, lactation consultants, registered nurses and
mid-wives, birthing centers, doulas, infertility centers, pre-school centers,
childcare centers, religious institutions, corporations and retail
establishments within a 30 mile radius of our Centers. We intend to hire sales
representatives to visit such establishments and distribute advertising and
promotional literature at such places. We also intend to advertise through a
variety of mediums, including, but not limited to, local newspapers, local radio
and television stations, through trade journals, mass mailings and our web site.
A significant portion of our activities to date is centered around
determining the sites for our first two Mothers Supercare Centers. We have
chosen the two proposed sites by utilizing our marketing research databases. The
first two centers will be located in or around the town of Weston in Broward
County, Florida and the Monmouth/Ocean/ Middlesex County areas of New Jersey.
These two centers met our demographic criteria. We expect that the Centers will
occupy approximately 8,000 square feet.
We intend to sell products designed for the expecting or new mother, as
well as infant/toddler items. These products will be sold through three channels
- - at the Mother Supercare Center, in our catalogue or on our web site. Products
that we expect to offer at our store, as well as in our catalogue and web site
include maternity and infant products, nutritional, health and beauty products,
and items regarding fitness and physical and emotional well being.
Some products to be sold at our centers will be purchased directly from
vendors and will be held as inventory. Because we desire to reduce the need for
significant expenditures on inventory, other products will be available to us
and our customers on a drop-ship basis from selected manufactures. We intend to
publish a catalogue of all products that we offer in our Center and through our
web site. This catalogue will be distributed through our centers, doctors'
offices, hospitals, and direct mail. The catalogue will also provide articles
that would contribute to the educational process for the women and their
families.
To date our operations have been extremely limited and we have not yet
derived any revenues. Our primary costs have been for the purchase of equipment
and web site development, as well as professional fees and expenses. We have
developed approximately 40% of our educational curriculum. Our efforts continue
in developing prenatal and postnatal curriculum. We have established
approximately 20% of our retail program and continue to seek out products and
services that we believe will be desired. We have spent approximately $27,000 on
the development of our web site (mothersbaby.com). We believe that approximately
15% of the web site program has been completed. We estimate the planned website
to be completed in the 6th month, and will require an additional $50,000 plus
$10,000 for center #2 totaling $60,000. We also have taken certain steps in
developing our catalog. Approximately 10% of such program has been completed
under the name "New Life." Since inception, we have incurred a net loss of
approximately $357,728.
We believe that it will cost approximately $4.25 million to open the two
centers. These costs will include initial construction costs, rent, the purchase
of equipment and the limited purchase of inventory for sales at the Centers and
via our catalog and web site. We estimate that the first center will cost
approximately $2.5 million and the second center will cost $1.75 million. The
difference in the costs relate to the fact that the first center will absorb all
management compensation and other non-recurring expenses. We intend to devote
approximately $450,000 to marketing and branding activities. We also have
budgeted approximately $650,000 for wages and consultant's fees. We also expect
to obtain liability insurance once we begin the operations of our centers. This
will be part of the money allocated to working capital. We will not be obligated
to pay any wages and we will not incur any consulting expenses until the equity
line of credit is accessible.
Over the next 12 months we expect to expend approximately $3,800,000 on
our operations. The following table estimates our costs to open the two centers:
12
Center 1 Center 2
-------- --------
Marketing and branding activities ............ $ 450,000 $ 300,000
Wages and consulting fees .................... $ 650,000 $ 300,000
Rent ......................................... $ 300,000 $ 300,000
Computers/Network ............................ $ 60,000 $ 30,000
Web Design/Hosting ........................... $ 50,000 $ 10,000
Inventory .................................... $ 60,000 $ 60,000
Equipment .................................... $ 200,000 $ 200,000
Fixtures ..................................... $ 100,000 $ 100,000
Working Capital .............................. $ 630,000 $ 450,000
$2,500,000 $1,750,000
* Center #2 will require only $1,300,000 in the next 12 months and will only be
80% complete
Total 12 month requirement $3,800,000
Until we open the first center and begin to generate revenues our only source of
funds will be utilizing our equity line of credit. As discussed in the Liquidity
and Capital Resources section below, our ability to draw down funds under the
equity line will be limited by several factors.
Liquidity and Capital Resources
To date we have funded our operations from loans from the Company's Chief
Executive Officer and his family. These loans, which are unsecured total
approximately $132,310 and bear interest at 12% per annum and are due in January
2005. If the equity line is unavailable at the time such loans become due our
CEO and his family will wait until it is accessible to require repayment. We
intend to use proceeds from the Equity Line of Credit to repay these loans. Our
CEO has indicated that he will continue to make advances on behalf of the
Company but does not intend to make advances in an amount that will be
sufficient to develop the centers.
To date, we have incurred substantial losses, and will require financing
for working capital to meet our operating obligations. We anticipate that we
will require financing on an ongoing basis for the foreseeable future, which
will be provided by the equity line described immediately below.
In July 2004, we entered into an Equity Line of Credit Agreement. Under
this agreement, we may issue and sell to Cornell Capital Partners Common Stock
for a total purchase price of up to $10.0 million. We will be entitled to
commence drawing down on the Equity Line of Credit when the Common Stock under
the Equity Line of Credit is registered with the Securities and Exchange
Commission and the authorization for quotation on the National Association of
Securities Dealers Over the Counter Bulletin is obtained and will continue for
two years thereafter. The purchase price for the shares will be equal to 95% of
the market price, which is defined as the lowest closing bid price of the Common
Stock during the five trading days following the notice date. A cash fee equal
to six percent (6%) of the cash proceeds of the draw down is also payable at the
time of funding. To date, we have not drawn down on the Equity Line of Credit
and as a result of limitations on the amount of shares that Cornell may hold at
any one time, dollar and frequency limitations on our ability to draw down on
the line it may take a substantial period of time to be able to access
significant funds under the equity line.
We are dependent on external financing to fund our operations. Our
financing needs are expected to be provided from the Standby Equity Distribution
agreement, in large part. No assurance can be given that such financing will be
available in sufficient amounts or at all when needed, in part, because the
amount of financing available will fluctuate with the price and volume of our
common stock. As the price and volume decline, then the amount of financing
available under the standby equity distribution agreement will decline.
In addition, the standby equity distribution agreement and convertible
Debentures contain certain covenants prohibiting us from raising capital from
others or pledging assets to other lenders. The standby equity distribution
agreement and convertible debentures contain covenants that restrict the
following activities:
o Raising capital from the sale of stock or other securities
Convertible into stock from anyone other than the lender;
o Granting a security interest in our assets, which security interest
may be needed in order to obtain borrowings or capital from a
lender.
The existence of these covenants may severely limit our ability to borrow
money or raise capital from the sale of stock of convertible securities because
any potential lender will likely require collateral in the form of a security
interest on our assets to secure a loan and other purchasers who may want to
lend us money may be precluded from doing so without Cornell's consent.
13
The Company believes that funds from the equity line, coupled with revenues from
the operations of the first center and to a lesser extent, the second center
when opened will be sufficient to fund its operations for next 24 months.
Critical Accounting Policies
The critical accounting policies followed are:
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
We believe that the following critical policies affect our more
significant judgments and estimates used in preparation of our financial
statements.
The Company's financial instruments include cash, accounts payable and
notes payable. The carrying amounts of these financial instruments approximate
their fair value, due to the short-term nature of these items. The carrying
amount of the notes payable approximates their fair value due to the use of
market rates of interest.
Furniture and equipment are recorded at cost and depreciated on a
straight-line basis over their estimated useful lives, principally three to five
years. Accelerated methods are used for tax depreciation. Maintenance and
repairs are charged to operations when incurred. Betterments and account and
related accumulated depreciation account are relieved, and any gain or loss is
included in operations. When furniture and equipment are sold or otherwise
disposed of, the asset account and related accumulated depreciation account are
relieved, and any gain or loss is included in operations.
The Company has incurred deferred offering costs in connection with
raising additional capital through the sale of its common stock. These costs
have been capitalized and will be charged against additional paid-in capital
should common stock be issued for cash. As of September 30, 2004, no proceeds
had been realized from the current offering and the costs incurred were charged
to operations.
Effect on Recent Accounting Pronouncements
In May 2003, FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity." This statement
addresses the accounting for certain financial instruments that, under previous
guidance, could be accounted for as equity. SFAS No. 150 requires that those
instruments be classified as liabilities in the statement of financial position.
In addition, SFAS No. 150 also requires disclosure about alternative ways of
settling the instruments and the capital structure of certain entities. Most of
the guidance in SFAS No. 150 is effective for all financial instruments entered
into or modified after May 31, 2003, and otherwise is effective at the beginning
of the first interim period beginning after June 15, 2003. The adoption of this
statement has had no material effect on the Company's financial statements.
In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities, an Interpretation of Accounting Research Bulletin
No. 51" (the "Interpretation"). The Interpretation requires the consolidation of
variable interest entities in which an enterprise absorbs a majority of the
entity's expected losses, receives a majority of the entity's expected residual
returns, or both, as a result of ownership, contractual, or other financial
interests in the entity. Currently, entities are generally consolidated by an
enterprise that has controlling financial interest through ownership of a
majority voting interest in the entity. The Interpretation was originally
immediately effective for variable interest entities created after January 31,
2003, and effective in the first quarter of the Company's fiscal 2004 for those
created prior to February 1, 2003. However, in October 2003, the FASB deferred
the effective date for those variable interest entities created prior to
February 1, 2003, until the Company's second quarter of fiscal 2004. The
adoption of this statement has had no material effect on the Company's financial
statements.
14
BUSINESS
Background
Getting Ready Corporation, was incorporated in Delaware on November 26,
2002. We intend to open Mother Supercare Centers in target areas across the
United States. The Mother Supercare Centers will provide women who are planning
to start a family, are pregnant or have recently had a baby, with a one-stop
destination offering pregnancy, childbirth and parenting educational classes,
nutritional counseling health and fitness classes and training and spa services,
retail catalog and internet shopping for women's and infant's products related
to pregnancy through the infant's first year of life. Emphasis will be placed on
educating women about pregnancy, childbirth, and parenting, nutrition and the
overall health, fitness and emotional well- being of themselves and their
families from the time they decide to conceive through the infant's first year
of life. Pampering spa services such as massages, facials, pedicures and
manicures will be offered to enhance the woman's feeling of physical and
emotional well-being. Educational and counseling services will be provided by
expert licensed professionals, certified childbirth educators and lactation
consultants.
After the development and implementation of two model Centers, we intend
to franchise the Mothers Supercare Centers concept. Our management
("Management") believes that there is a strong need for a new and innovative
approach to providing the education, health needs, fitness training, emotional
well-being, spa services, and women's and infant's products related to a woman's
pregnancy, childbirth and the postpartum experience and the infant's first year
of life. We have not generated any revenues to date and our activities have been
limited to developing our plan of operations, including market research, and the
selection of the location for our first two facilities. We will not have the
necessary capital to develop our business plan until we are able to access funds
from our equity line of credit. See "Management's Discussion and Analysis Plan
of Operations" and "Liquidity and Capital Resources".
The following description of our business is intended to provide an
understanding of our company and the direction of our strategy.
Strategy and Products and Services
We believe that there is a strong need for a new and innovative approach
to providing the educating health needs, fitness training, emotional well-being,
spa services, and women's and infant's product related to a woman's pregnancy,
childbirth and the postpartum experience and the infant's first year of life.
Mothers Supercare Centers are intended to be a convenient one-stop center for
all of the needs of women from pregnancy through postpartum and the needs of
infants through the first year of life.
Through our planned Mother Supercare Centers, we intend to create a caring
and stress-free learning environment that combines education services, health
and fitness services, and emotional well-being spa services with the ability to
purchase products designed specially for women who are in any phase of the
childbearing process from planning a family through the newborn's first year of
life. The Mothers Supercare Centers will be safe, relaxing and convenient
facilities that pamper and cater to woman's physical, mental and emotional needs
from pregnancy through the infant's first year of life. There will also be the
convenience of shopping with the knowledge that only the safest and most highly
recommended products for her and her infant will be available for sale.
The first step in keeping a baby and its mother safe is careful selection
of products.We will make purchasing decisions while keeping safety in mind. The
Juvenile Products Manufacturers Association (JPMA) has developed a unique
Certification Program that has been guiding parents for more than 20 years. The
American Society for Testing Materials (ASTM), a highly regarded non-profit
Organization publishes the voluntary standards used in the JPMA Certification
Program. Industry members work together with the U.S. Consumer Product Safety
Commission, consumer groups and other interested parties to develop the
standards. We will offer products that are compliant with ASTM and JPMA
certification standards.
Mr. Rose, was previously on such a certification committee with the JPMA
in conjunction with ASTM and CPSC on the Certification of crib bumper string
(cord) lengths. Future plans will be to designate an executive of ours to be a
part of such a committee.
We will check daily product recalls and safety news from the Consumer
Product Safety Commission web site http://www.cpsc.gov and will react
accordingly.
We will check with Consumer Reports Magazine and other Journals to access
safety news and trends.
15
We will hire only the most qualified professional staff. All registered
nurses, physical therapists, massage therapists, and esthesticians will be
licensed by the State. All childbirth educators, lactations consultants and
pregnancy and postpartum fitness professionals will be certified. Hiring the
most qualified professional staff will increase safety and decrease risks for
the woman. In addition, special attention will be given to increasing the
woman's safety through the architectural design of the center, eg. no stairs and
installation of a well-padded floor in the concierge area.
We intend to engage certified childbirth educators and lactation
consultants to provide on-site instructional services and educational
expertise.Yoga Masters, licensed professional masseuses, nutritionists, licensed
etheticians, as well as licensed physical therapists and certified fitness
instructors will be engaged to provide their specific services. Our goal is to
capture the consumer from planning a family through birth and beyond for a
minimum of twelve (12) months. During a pregnancy and immediately after the
birth of a child, new parents spend substantial amounts of time with childbirth
educators and maternity nurses seeking information on healthcare issues, the
birth process and infant care. The Mothers Supercare Centers are intended to be
a place where new and expecting mothers can connect, communicate and share their
concerns and issues related to pregnancy, parenting and infant care with
professionals and their peers.
We intend to offer a wide variety of educational and fitness and spa
services with varying fees. We believe that these fees will be both affordable
and competitive in terms of the quality and variety of services provided at the
Centers. New customers will be charged a registration fee upon admission and a
monthly fee each month to maintain their membership privilege.
We intend to develop our reputation by placing heavy emphasis on our
licensed/certified professional staff, expert consultants, and to dispense
extensive and the most up-to-date information and pre-natal, post-natal and
infant care products available for women and their infants today.
We intend to offer the customer numerous options and choices for services
and products, as well as educational counseling. We will offer educational
information and counseling in areas ranging from achieving conception through
issues related to the expectations during the first year of a newborn's life. We
will advise mothers on exercise and proper fitness, prior to and during
pregnancy, childbirth and the postpartum periods, and proper nutrition and diet.
Areas of education will also include holistic and complementary health care
alternatives in additional to traditional healthcare, yoga and meditation as
well as traditional exercise, strength training, and pre and post natal exercise
classes.
Each Mother Supercare Center will have an area for fitness training and
spa services, designed specifically for the pregnant or postpartum woman. While
there are a few health clubs that provide some fitness training, with some
modifications, for women during pregnancy, this is not their main focus of
training. There are several large fitness centers that cater to fitness and
weight loss clients, but not specifically pregnant or postpartum women. Many
women are reluctant to work out at a regular fitness center because of their
changing bodies during pregnancy and their altered shape during the postpartum
period. Also, most regular fitness centers base their training for the pregnant
or postpartum woman on their usual training programs with only some
modifications. The Mother Supercare Center will offer safe and appropriate
fitness programs designed specifically for the pregnant and postpartum woman
taught by certified fitness educators who are experts in the pregnancy and
postpartum fitness area. Upon joining the Center, the woman will meet with a
fitness counselor who will develop a personalized fitness program for the woman
which emphasis the proper physical exercises for childbirth, as well as guidance
on the best way to lose weight after pregnancy and regain muscle tone. This
personalization may evolve into offering personal training services for an
additional fee.
We intend to sell products designed for the expecting or new mother, as
well as infant/toddler items. These products will be sold through three channels
- - at the Mother Supercare Center, in our catalogue or on our web site. Products
that we expect to offer at our store, as well as in our catalogue and website
include maternity and infant products, nutritional, health and beauty products,
and items regarding fitness and physical and emotional well-being.
Some products to be sold at our centers will be purchased directly from
vendors and will be held as inventory. Because we desire to reduce the need for
significant expenditures on inventory, other products will be available to us
and our customers on a drop-ship basis from selected manufacturers. We intend to
publish a catalogue of all products that we offer in our Center and through our
website. We currently have no material arrangements with third parties. This
catalogue will be distributed through our centers, doctors' offices, hospitals,
and direct mail. The catalogue will also provide articles that would contribute
to the educational process for the women and their families.
16
We intend to maintain an Internet web site. The "Getting Ready" website
will be intended to (a) provide a forum for offering educational information to
Mothers Supercare Center members, (b) offer a means of communication about our
Mother Supercare Center class schedules, class descriptions, and description of
fitness and spa services available and (c) generate revenue through retail
e-commerce services. The web site will offer the following sections:
Education - Members of the Mothers Supercare Center will be able to
use the Company's website to go online and access information and
articles that will support the educational programs taught at the
Mothers Supercare Center.
Ask an Expert - The members of the Mothers Supercare Centers will be
able to ask questions and receive information and advice from expert
physicians, registered nurses, certified childbirth educators and
lactation consultants, registered physical therapists, licensed
estheticians and a host of other specialists during the prenatal and
postpartum period through the infants first year of life.
On-line Communities (Chat Rooms) - There will be scheduled chats on
specific topics (such as "Discomforts of Pregnancy" or "Is there
Life after Childbirth: Coping during the Postpartum Period?" as well
as an Open Chat Room where members of the Mothers Supercare Centers
will be able to go online and discuss with other members (within the
center and other centers) personal experiences during the prenatal,
postnatal and parenting periods.
We intend to offer companies in the prenatal and postpartum market the
opportunity to advertise in our catalogue and on our website. We believe that we
will be a desired medium for these companies with our focused customer and built
in Mother Supercare Center membership list.
By obtaining, analyzing and using the information obtained from our
customer base, we will be able to refine program offerings and provide better
services to our customers. Also, our knowledge about a given customer will
enable us to provide timely and demographically targeted news and information.
For example, just prior to when a child is learning to walk, we can send an
e-mail to the parents offering educational and product offerings that will
enhance that child's ability to perform such a task. In addition, spa specials
and other promotions will also be included in the e-mail.
Our Planned Mothers Supercare Centers
We have identified the geographical areas for our first two Mother's
Supercare Centers. We utilized the GEO Marketing Research database to select
areas with the desired demographics. The search combined a variety of database,
including the U.S. census Bureau 2000 Database, the Fertility of American Women
June 2000 Database, The American Hospital Association Database and the Lamaze
Childbirth Educator Database. We targeted an area with a relatively high per
capita income, a young well educated population, which is within relative
proximity to busy obstetrical hospitals.
We intend to establish one of two Mothers Supercare Centers in or around
the Town of Weston in Broward County, Florida. Not only does the area meet our
demographic criteria, but it is within close proximity to our corporate office.
This close proximity will enable Management to provide hands on attention to
every detail of the development of the first center. It will also allow
Management to leverage off of their own reputations in the community.
In order to determine a specific site for the Center in the Weston area,
the following is needed: identify commercial areas that are easily accessible
within the area and that have plenty of parking, and evaluate traffic flow on
interstates and roads leading to site. This will be best accomplished working
with the Chamber of Commerce in the area and commercial real estate agent.
New Jersey was selected as an area for the second center. In 2002
according to the U.S. Department of Commerce, New Jersey had the second highest
per capital personal income in the United States. Also according to the U.S
National Vital Statistic data in 2002, New Jersey is one of the ten States that
have the highest number of births in the United States and it is densely
populated. Management Selected Middlesex/Monmouth/Ocean counties as the site for
the second center because these counties had several major obstetrical
hospitals, the largest numbers of births within a 30 mile radius, and it is one
of the wealthiest areas in the State
Management estimates that the cost of developing and/or opening its first
Mothers Supercare Center will be approximately $2,500,000. We believe that it
will take approximately nine months to open our first center.
17
The Market
According to the National Center for Health Services, there are slightly
more than four (4) million babies born each year in the United States, which
translates into approximately four (4) million mothers, Management estimates
that of the four (4) million new mothers each year, three (3) million attend
some type of childbirth education classes (prenatal/postpartum). Additional
information, which we believe would contribute to a strong need for our services
is that according to the International Health Racket & Sports club Association
Trend Report 52% of health club members are women. 18-34 year-olds Comprise 11.5
million members and are the traditional main stay of the health club industry.
In a 2003 survey of adults 18 years old or older about massage by the Opinion
Research Corporation, 99% of 18 - 24 year olds and 95% of 25 - 34 year olds
agreed that massage can be beneficial to health. Management believes that this
information supports our belief that pregnant and postpartum women will seek our
massage services.
According to the "Planning for Baby" document from Virgina Polytechnic
Institute, the minimum average expenditure for baby related items during
pregnancy is $6,200. The US Department of Agriculture estimated that the
expenditure for baby related items from birth to one year of age ranges from
$9,510 (middle income) to $14,100 (upper income). Based on these figures, the
average expenditures per family required from pregnancy to one year after birth
for baby related items ranges from $15,710 to $20,300 for our target market
(middle and upper income mothers). In addition, maternity apparel is a $1.2
Billion market, according to Mother's work. This averages to an expenditure of
$300 per women for maternity clothes.
Sales and Marketing
We intend to employ sales representative who will visit hospitals, private
offices of obstetricians, gynecologists, pediatricians, lactation consultants,
registered nurses, certified nurses, mid-wives, birthing centers, doulas,
infertility centers, pre-school centers, childcare centers, religious
institutions, corporations and retail establishments within a 30 mile radius of
the Mothers Supercare Center. They will distribute advertising and promotional
literature and enlist professional support in providing referrals to the
Centers.
We intend to advertise in local journals, media advertising through local
newspapers, radio and television stations, organize seminars at our center and
other locations, conduct mass mailings, contact corporate human resources
departments and utilize our website and catalog for marketing purposes. We will
also seek to become a key player in the community for worthwhile causes thus
increasing our reputation and visibility. We will also seek to enter into
strategic arrangements with businesses that we feel are complementary to our
mission and synergistic to our business.
We believe that with our unique all in one concept and the reputation of
Dr. Francine Nichols, our Executive Vice President of Education and Services, we
will also engender interest from the local press in areas where we are opening
centers.
Franchising
Once we have established consumer awareness of our Mothers Supercare
Centers, we intend to offer franchise opportunities for others to duplicate the
Mothers Supercare Concept. In exchange for a franchising fee and a percentage of
profits we will allow the franchises to utilize the Mothers Supercare Center
name and concept. We will assist the franchise in choosing a specific location
within their territory, the design of the center and in the hiring of employees
and retention of the appropriate consultants and therapists. We will also allow
their members to utilize our website and provide them access to our educational
bulletins. We believe that in addition to providing revenue, franchising will
increase the public's awareness of the Mothers Supercare Centers' concept.
The projected market for franchisees will be comprised of
Entrepreneur/Individuals who are currently already in one segment (such as
education, retail, fitness or spa area) of the prenatal and postpartum area.
These individuals are already knowledgeable about specific aspects of the
prenatal and postpartum areas and are also potential franchisees. This could be
hospital or other maternal-child agencies, healthcare, professionals, retail
stores who specializes in maternal and infant health products, or a spa or
fitness agency that already has prenatal and postpartum classes or training.
This approach will decrease risk because franchisees will already be successful
in providing resources and product to expectant and new parents in a specific
area. Training will be provided by us to increase franchisees knowledge and
skills.
We will implement the following controls to provide uniformity and
consistency of franchisees. These controls will also decrease risk. The controls
are:
18
o All educators (prenatal, postpartum, fitness) must have at least 2
years of experience and must be currently national certification by
a leading certification organization in their specialty area. For
example, Lamaze childbirth educators must be certified by the Lamaze
International Association.
o All spa treatment staff must have at least 2 years of experience and
must be currently certified by a leading national certification
organization in their specialty area and training in the pregnancy
and postpartum area.
o All fitness experts must have at least 2 years of experience and
must be currently certified by a leading national certification
organization in their specialty area and training in the pregnancy
and postpartum areas.
o Curriculum for each type of education classes will be developed by
Dr. Nichols and staff and franchisees must use the approved
curriculum for teaching classes. Only specific classes approved by
Getting Ready can be taught by franchisees.
o Four manuals with policies and procedures related to a specific area
will be developed:
Merchandising/Marketing
Operations
Personnel/Human Resources
Sales
o Franchisees must follow these manuals in developing, conducting and
evaluating business activities.
o Franchisees must have their site pre-approved by us
o Franchisees must follow design and appearance standards that were
developed by us
o Only certain services and product may be offered for sale by
franchisees
o Franchisees must follow certain methods of operation
o Franchisees must purchase products and services from us.
Competition
Almost all of competitors and potential competitors presently have
considerably greater financial and other resources, experience and market
penetration than us. Management believes that we may be able to distinguish GRC
by consolidating the fragmented industry and by providing a comprehensive center
that addresses the total needs of women and their families. We believe that no
company currently provides the scope of products and services that we intend to
offer. We will hire only the most qualified professional staff. All registered
nurses, physical therapists, massage therapists and esthesticians will be
licensed or registered by the State. All childbirth educators, lactation
consultants and pregnancy and postpartum fitness professionals will be
certified. This will increase the quality of the services provided and decrease
our risks related to competitors as their hiring standards vary widely.
Management believes that we will be the only company to provide all
services-education, fitness, spa services and products-at one location while our
competitors offer only certain aspects (usually one) such as education, fitness
or products.
Our competition may include, but not be limited to, the following:
Retail Stores: Retail stores include maternity shops and infant stores,
infant/juvenile stores, health food centers, sporting goods outlets, and
beauty/spa supply outlets. Maternity shops focus primarily on providing
maternity clothes and accessories for pregnant women. Infant stores such as
Babies R' Us, Toys R' Us, etc. provide only products for infants. Large stores
such as Walmart, Target and department stores provide products for pregnant
women and infants in separate departments. Management does not know of any
retail store that provides prenatal and parenting educational services and
counseling, and fitness center and spa services.
Prenatal and Parenting Education: Prenatal and parenting education is
provided primarily by hospitals and independent childbirth educators and
lactation consultants. A few hospitals provide limited lactation supplies
through their maternity units. Women usually attend the classes that are
recommended by their obstetrician because finding classes can be difficult.
Individual fee based counseling or educational services are not a part of the
typical prenatal and parenting education programs. The major competitor is
19
Lamaze, a non-profit organization that teaches only their own method and are not
opened to other methods which differentiates us from them. Their environment is
generally cold and sterile. They do not offer retail products and do not have a
fitness or spa services.
Counseling Centers: Psychological, prenatal through postpartum and
parenting counseling services are provided by licensed independent healthcare
professionals nurses, physicians, social workers and psychologists. Women and
their families depend on referrals from professionals, family and friends in
order to find licensed professionals that may meet their needs. Many do not get
help that is needed because of the difficulty in finding someone who can help
them with their specific problem.
Fitness Centers: The major competitors are two (2) womens fitness centers,
"Curves for Women" and "Shapes for Women". Both of these centers do not
specialize in the prenatal and postnatal period. They are not in the retailing
childbirth education or spa services industry. While there are a few health
clubs that provide some training for women during pregnancy, this is not the
main focus of any of these centers. Training during the postpartum period is
usually based on the usual fitness training with only some modifications. There
are several large fitness centers that cater to fitness and weight loss. Many
women are reluctant to work out at a regular fitness center because of their
changing bodies during pregnancy and their altered shape during the postpartum
period. Also, most regular fitness centers use their regular training programs
with only some modifications for pregnant and postpartum women rather than
programs designed specifically for the pregnant and postpartum woman.
Spa Services
There are no major competitors in this field. However, every major city
and town has some form of a Spa facility. None of these Facilities specialize in
the prenatal, postnatal arena and do not have the full services we do.
Intellectual Property Rights
We intend to file a trademark for "Mothers Supercare Centers." To our
knowledge there is no other party who has filed a trademark on the name "Mothers
Supercare Centers."
Employees
As of November 30, 2004, we had three full time employees. We have entered
into employment agreements with our Chief Executive Officer (Mr. Rose), our
Executive Vice President for Education and Services (Dr. Francine Nichols) and
our Executive Vice President for Marketing (Lori Majeski), which agreements are
effective upon the effectiveness of this Registration Statement. Each of these
three will be full time employees of ours. Our future success depends in
significant part upon obtaining and retaining highly qualified, key operational
and management personnel.
Competition for such personnel is intense, and there can be no assurance
that we can retain our future employees or that we can assimilate or retain
other highly qualified personnel in the future.
Government Regulation
Our operations and business practices will be subject to federal, state
and local government regulations in the various jurisdictions in which our
Mothers Supercare Centers will be located, including:
o general rules and regulations of the Federal Trade Commission (the
"FTC"), state and local consumer protection agencies and state
statutes that prescribe provisions of membership contracts and that
govern the advertising, sale, financing and collection of membership
fees and dues; and
o state and local health regulations;
The products marketed in our retail center require no governmental approvals by
us.
We will hire only the most qualified professional staff. All registered
nurses, physical therapists, massage therapists, and esthesticians will be
licensed or registered by the State. All childbirth educators lactation
consultants and pregnancy and postpartum fitness professionals will be
certified. these professionals have obtained their licenses and or
certifications prior to working for the company, therefore no waiting time is
required. Hiring the most qualified professional staff will increase safety and
decrease risks for the woman. In addition, special attention will be given to
increasing the woman's safety through the architectural design of the center,
e.g. no stairs and the installation of a well padded floor in the exercise room.
20
We believe we have structured our operations in a manner that they will be
in material compliance with all applicable statutes, rules and regulations. Our
failure to comply with these statutes, rules and regulations may result in fines
or penalties.
Legal Proceedings
We are not party to any material legal proceedings, nor to the knowledge
of GRC, is any such proceeding threatened against it. Our Chief Executive
Officer, Sheldon R. Rose filed for personal bankruptcy in 2001. The reasons that
necessitated Mr. Rose's filing were large amounts of capital that he infused
into his company, The Rose Group Corporation and his personal guarantee of
liabilities of the Rose Group Corporation.
Facilities
We do not own any real property. We maintain our principal offices at 8990
Wembley Court, Sarasota, Florida 34238. Such office space is on premises owned
by our CEO, Sheldon Rose, and is provided to us at no cost. Once we receive
funding under the Equity Line of Credit, we intend to lease an office in the
Sarasota area. We expect that rent will be approximately $1,500 per month. We do
not yet have any specific agreements for the development of our initial Mothers
Supercare Centers.
21
OUR MANAGEMENT
- --------------------------------------------------------------------------------
Name Age Position
- --------------------------------------------------------------------------------
Sheldon Rose 65 Chairman, CEO & President
- --------------------------------------------------------------------------------
Francine Nichols 67 Executive Vice President of Education & Services
and Director
- --------------------------------------------------------------------------------
Lori Majeski 50 Executive Vice President for Sales & Marketing
and Director
- --------------------------------------------------------------------------------
We have a board of directors consisting of three directors. Listed below
is certain information concerning those who will serve as directors and
executive officers of ours. Each of our executive officers is a full time
employee of ours.
Mr. Rose is a founder of GRC and has served as our Chief Executive Officer
since inception. Mr. Rose has had extensive business experience with American
Machine & Foundry Co. (1960-1964) where he completed his services as the Manager
of Long Range Planning for the Aerospace General Engineering Division. Mr. Rose
also worked for Cutler Hammer Corporation in Sales Management from 1964-1968.
From 1969-1972, he was Vice President of Marketing for Computer Solutions, Inc.,
a computer time-sharing company offering services to accountants, distributors
and small to medium size business organizations. From 1972-1975, he was
Corporate Acquisition Marketing Manager for Teleprocessing Industries, a
division of the Western Union Company. From 1975-1982, he was President of
Ambassador Corporation, a prenatal and postpartum product Services Company. From
1982 through March 1997, he was affiliated with Diplomat Corporation as its
founder, Chairman and Chief Executive Officer. Diplomat was a public company
traded on the Nasdaq Stock Market. From 1997 through 2001, he was the Chairman
and CEO of the Rose Group Corporation a public company providing
prenatal/postpartum products, through electronic e-commerce. Mr. Rose filed for
personal bankruptcy in 2001.
Dr. Nichols is a founder of GRC and is a director and has served as
Executive Vice President of Education and Services to us since inception. In
1984, Dr. Nichols received her Ph.D degree in nursing from the University Of
Texas in Austin, with an emphasis in parent child research and child health
issues. Her professional appointments include: Coordinator, Maternal-Child
Health Graduate Program, Wichita State University, Wichita, KS (1984-1991);
Clinical Assistant Professor, Pediatrics, University of Kansas School of
Medicine, Wichita, KS (1989-1991); and Visiting Professor (1998) and Professor
(1999-present), Georgetown University, Coordinator of Women's Health,
(1998-2001) and Coordinator, Summer Genetics Institutes (1999-present).
Dr. Nichols is President of MCH Consultants (from 1985-present) that
specializes in maternal and child health care. She has conducted many research
and development studies on maternal and child health products for corporations.
She is the author of five professional textbooks and numerous articles in the
area of maternal and child health. Dr. Nichols has developed consumer and health
professional perinatal education programs for private and government agencies
and internationally (China, Dominican Republic, and Mexico).
Dr. Nichols has served on numerous community and professional Boards in
the maternal and child health area. She was President and a board member of
LAMAZE International from 1984 through 1991, the National LAMAZE Childbirth
Organization headquartered in Washington, D.C. She currently serves On the
Executive Board of the Bay Clinic, Inc., a community health Agency for
underserved populations in Hawaii.
Ms. Majeski is a founder of GRC and has acted as our Executive Vice
President for Sales and Marketing since formation. She has been actively engaged
in the marketing and product development field for over twenty-three years, and
has spent the past four years operating her own consulting company. Prior
thereto, Ms. Majeski worked for the Rose Group Corporation, a public company
providing prenatal/postpartum products, for two years. Her consulting activities
focus upon retail, marketing, merchandising and product development services for
children's education toys, juvenile accessories and infant and children's
apparel. Prior to founding her own consulting company, Ms. Majeski worked for
various manufacturers where she was directly responsible for the design, product
development, production and merchandising of high-end children's wear apparel
lines for the Walt Disney company and affiliated entities thereof.
22
We intend to utilize Arnold L. Tanis, M.D., F.A.A.P. as our medical expert
on an as needed basis. There are no guarantees or minimums associated with the
arrangement. Mr. Tanis is a board certified pediatrician. He has received
numerous awards and recognitions and has appeared in multiple network media
productions and has published extensively on parenting and childcare topics.
Compensation of Executive Officers
No officers or directors of ours received any compensation for services to
us during any of the last three fiscal years.
Employment Agreements
We have entered into three-year employment agreement with each of our
three executive officers, which will be effective upon the effectiveness of the
registration statement pertaining to our equity line of credit. They each will
receive a salary of $100,000 per year. If our revenues, during year one of the
agreements exceed $1.1 million, each of the three employees will receive $25,000
bonuses. If our revenues during year two exceed $7.3 million, each of the three
employees will receive $75,000 bonuses. If our revenues during year three exceed
$17.6 million, each of the three employees will receive $100,000 bonuses. They
also are entitled to a car allowance of $700 per month and reimbursement for
business expenses incurred by them.
23
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We currently maintain our principal offices at the residence of our Chief
Executive Officer, Sheldon Rose. We do not pay any rent for such offices. In
connection with the formation of GRC, we issued 33,309,645 shares of our common
stock to our Chief Executive Officer, 16,654,822 shares to Lori Majeski, a
director and Executive Vice Prsident for Sales and Marketing our Executive Vice
President and 16,654,822 shares to Dr. Francine Nichols, a Director and
Executive Vice President of Education and Services. These shares were issued as
founder's shares.
Our Chief Executive Officer, Sheldon R. Rose has loaned us an aggregate of
$107,310 to date. Mr. Rose's brother, Steven H. Rose, has loaned us an aggregate
of $25,000. These loans bear interest at twelve (12%) percent per annum. The
loans are due in January 2005 but we intend to repay them out of draws made
against the Equity Line of Credit. We utilized the proceeds of such loans for
costs related to our developmental activities, including, but not limited, to
web site development fees, professional costs, computer costs and the initial
payment to Cornell Capital.
Effective July 2004, GRC entered into an Equity Line of Credit Agreement.
Under this agreement, we may issue and sell to Cornell Capital Partners Common
Stock for a total purchase price of up to $10.0 million. Subject to certain
conditions, we will be entitled to commence drawing down on the Equity Line of
Credit when the sale of the Common Stock under the Equity Line of Credit is
registered with the Securities and Exchange Commission and for two years
thereafter. The purchase price for the shares will be equal to 95% of the market
price, which is defined as the lowest closing bid price of the Common Stock
during the five trading days following the notice date. Since Cornell may
purchase the shares at a discount to the market price, the result is that the
lower the stock price at the time of conversion the more shares Cornell will
receive. There is no upper limit on the amount of shares that Cornell will
receive in connection the equity line. A cash fee equal to five percent (5%) of
the cash proceeds of the draw down is also payable at the time of funding. In
addition, Cornell Capital Partners will receive, a $50,000 as a structuring fee
($25,000 of which has been paid). To date, GRC has not drawn down on the Equity
Line of Credit. Other than the Equity Line of Credit, no other financing
agreement is currently available to GRC. The Equity Line of Credit Agreement
does not involve affiliated persons of GRC, natural, or corporate.
In July 2004, GRC issued $300,000 in convertible debentures to Cornell
Capital Partners, LP. The debentures were issued to satisfy the $300,000
commitment fee since we did not have the necessary cash available. These
debentures are convertible into shares of Common Stock at a price equal to the
lowest volume weighted average price of our common stock on the OTC Bulletin
Board during the five (5) trading days immediately preceding conversion. These
convertible debentures are non-interest bearing and are convertible at the
holder's option. These convertible debentures have a term of three years. At our
option, if not converted, these debentures may be paid in cash in three years.
In August 2004, we entered into a Business Development Agreement with
Celerity Systems, Inc. ("CSI"). Pursuant to the agreement, Celerity will, upon
request, provide us managerial assistance including significant guidance and
counsel in management, operations or business objectives and policies. Such
assistance may include strategic and financial planning, designing budgets and
control systems. In exchange for such services, GRC issued Celerity an aggregate
of 5,925,000 shares of our common stock. Celerity is an underwriter in the
distribution of the shares to its shareholders.
24
PRINCIPAL STOCKHOLDERS
Security Ownership of Certain Beneficial Owners and Management
The table below lists the beneficial ownership of our common stock, as of
November 30, 2004, by each person known by us to be the beneficial owner of more
than 5% of our common stock, by each of our directors and officers and by all of
our directors and officers (for purposes of this chart we have deemed Dr.
Francine Nichols as an executive officer) as a group.
- ---------------------------------- ------------------------------------ -------------------------------------
Stockholder Shares Beneficially Owned (1) Percentage Ownership
- ---------------------------------- ------------------------------------ -------------------------------------
(prior to offering) (after offering)
Sheldon R. Rose (2) 33,309,645 42.59% 42.59%
c/o Getting Ready Corporation
8990 Wembley Court
Sarasota, Florida 34238
Dr. Francine Nichols 16,654,822 21.30% 21.30%
c/o Getting Ready Corporation
8990 Wembley Court
Sarasota, Florida 34238
Lori Majeski 16,654,822 21.30% 21.30%
c/o Getting Ready Corporation
8990 Wembley Court
Sarasota, Florida 34238
Celerity Systems, Inc.(5) 5,925,000 7.5% 2.5%
122 Perimeter Park Drive
Knoxville, TN 37922
All officers and directors 66,619.290 85.18% 85.18%
as a group (3 persons)
- ----------
(1) Based on an aggregate of 78,206,919 shares outstanding as of the date
hereof.
(2) Includes 8,978,215 shares owned by Mr. Rose's wife, an aggregate of
4,000,000 shares owned by his children and 250,000 shares owned by his
brother-in-law.
(3) Includes an aggregate of 500,000 shares of common stock owned by Ms.
Majeski's children.
(4) Includes an aggregate of 4,000,000 shares of common stock owned by Dr.
Nichols' family.
(5) It is assumed that Celerity will distribute 3,910,500 of the shares owned
by them and that they will retain 2,014,500 shares.
* Pursuant to the rules and regulations of the Securities and Exchange
Commission, shares of common stock that an individual or group has a right to
acquire within 60 days pursuant to the exercise of options or warrants are
deemed to be outstanding for the purposes of computing the percentage ownership
of such individual or group, but are not deemed to be outstanding for the
purposes of computing the percentage ownership of any other person shown in the
table.
25
DESCRIPTION OF SECURITIES
COMMON STOCK
We are authorized to issue two classes of capital stock, consisting of
499,000,000 shares of common stock, $.0001 par value and 1,000,000 shares of
Preferred Stock, $.0001 par value. There are 78,206,919 shares of our common
stock issued and outstanding. The holders of shares of our common stock are
entitled to elect all of the directors and to one vote per share on all matters
submitted to shareholder vote. Holders of shares of our common stock do not have
preemptive or preferential rights to acquire any shares of our capital stock,
and any or all of such shares, wherever authorized, may be issued, or may be
reissued and transferred if such shares have been reacquired and have treasury
status, to any person, firm, corporation, trust, partnership, association or
other entity for consideration and on such terms as our board of directors
determines in its discretion without first offering the shares to any
shareholder of record. Holders of our common stock are entitled to receive
ratably dividends, subject to the rights of the holders of Preferred Stock (if
any), as may be declared by our Board of Directors out of funds legally
available therefore.
All of the shares of our authorized capital stock, when issued for such
consideration as our board of directors may determine, shall be fully paid and
non-assessable. Our board of directors has the discretion and may, by adoption
of a resolution, designate one or more series of preferred stock and has the
power to determine the conversion and/or redemption rights, preferences and
privileges of each such series of preferred stock provided that such conversion
and/or redemption rights, preferences and privileges of any series of preferred
stock does not subordinate or otherwise limit the conversion and/or redemption
rights, preferences and/or privileges of any previously issued series of
preferred stock.
Warrants
We have an aggregate of 793,081 warrants outstanding. Each warrant
entitles the holder to purchase one share of common stock at $.045 per share for
a period of three years commencing December 12, 2002. Holders of warrants have
no voting rights or other rights of shareholders.
Shares eligible for resale
Future sales of a substantial number of shares of our common stock in the
public market could adversely affect market prices prevailing from time to time.
Under the terms of this offering, the shares of common stock offered may be
resold without restriction or further registration under the Securities Act of
1933, except that any shares purchased by our "affiliates," as that term is
defined under the Securities Act, may generally only be sold in compliance with
Rule 144 under the Securities Act.
Sale of Restricted Shares
Certain shares of our outstanding common stock were issued and sold by us
in private transactions in reliance upon exemptions from registration under the
Securities Act and have not been registered for resale. Additional shares may be
issued pursuant to outstanding warrants and options. Such shares may be sold
only pursuant to an effective registration statement filed by us or an
applicable exemption, including the exemption contained in Rule 144 promulgated
under the Securities Act.
26
In general, under Rule 144 as currently in effect, a shareholder,
including one of our affiliates, may sell shares of common stock after at least
one year has elapsed since such shares were acquired from us or our affiliate.
The number of shares of common stock which may be sold within any three-month
period is limited to the greater of: (i) one percent of our then outstanding
common stock, or (ii) the average weekly trading volume in our common stock
during the four calendar weeks preceding the date on which notice of such sale
was filed under Rule 144. Certain other requirements of Rule 144 availability of
public information, manner of sale and notice of sale must also be satisfied. In
addition, a shareholder who is not our affiliate, who has not been our affiliate
for 90 days prior to the sale, and who has beneficially owned shares acquired
from us or our affiliate for over two years may resell the shares of common
stock without compliance with many of the foregoing requirements under Rule 144.
Market for Common Stock
There is no market public trading market for our shares. We have outstanding
options to purchase 793,081 shares of our stock. We have a $300,000 convertible
debenture outstanding which is convertible at a price equal to the lowest volume
weighted average price of our common stock during the five (5) trading days
preceding conversion. There is no upper limit on the amount of shares that they
may be issued upon conversion of the notes.
Transfer Agent
Our transfer agent is Island Stock Transfer. The address is 100 First
Avenue South, Suite 212, St. Petersburg, Florida, 33701.
Limitation of Liability: Indemnification
Our Certificate of Incorporation and by-laws include an indemnification
provision under which we have agreed to indemnify directors of GRC to the
fullest extent possible from and against any and all claims of any type arising
from or related to future acts or omissions as a director of GRC.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
GRC pursuant to the foregoing, or otherwise, GRC has been advised that in the
opinion of the SEC such indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable.
27
THE DISTRIBUTION
Introduction
In September 2004, Celerity's board of directors declared a distribution
payable to the holders of record of outstanding Celerity common stock at the
close of business on October 20, 2004. A record date has been set for October
20, 2004 Celerity will act as an underwriter and distribute the 3,910,500 shares
to its stockholders. We determined the ratio by dividing the 3,910,500 shares to
be distributed by the total number of shares outstanding on the record date
(4,788,180,403) Accordingly, the distribution will consist of one of our shares
for approximately every 1,224.442 share of Celerity common stock owned on the
record date. We currently anticipate that the distribution will be effected near
the effective date of the registration statement.
As a result of the distribution, 5% of our outstanding shares will be
distributed to Celerity stockholders. Immediately following the Distribution,
Celerity will own 2,014,500 of our shares and we will be an independent public
company. Our shares that are being issued to the Celerity shareholders will be
distributed by book entry. Instead of stock certificates, each Celerity
stockholder that is a record holder of Celerity shares on the record date will
receive a statement of such stockholder's book entry account for the Getting
Ready shares distributed to such stockholder. Account statements reflecting
ownership of our shares will be mailed shortly after the distribution date. Our
shares should be credited to accounts with stockbrokers, banks or nominees of
Celerity stockholders that are not record holders after the effective date of
the distribution.
Reasons for Distribution
The board of directors and management of Celerity believe that the
distribution is in the best interests of Celerity, Getting Ready and the
Celerity stockholders. Celerity believes that the distribution will enhance
value for Celerity stockholders and give us the financial and operational
flexibility to take advantage of its business plan.
Manner of Effecting the Distribution
The distribution will be made on the basis of one of our shares for
approximately every 1,224.442 shares of Celerity common stock outstanding on the
record date. An aggregate of 3,910,500 of our shares owned by Celerity will be
distributed to Celerity stockholders. The shares to be distributed will
constitute 5% of our outstanding shares. Immediately following the distribution,
Celerity will own 2,014,500 of our shares and we will be an independent public
company.
The shares of our stock being distributed will be fully paid and
non-assessable and the holders thereof will not be entitled to preemptive
rights. See "Description of Securities".
Celerity will use a book entry system to distribute our shares to
Celerity's shareholders in the distribution. Following the distribution, each
record holder of Celerity stock on the record date will receive from the
distribution agent a statement of our shares credited to the stockholder's
account. If you are not a record holder of Celerity stock because your shares
are held on your behalf by your stockbroker or other nominee, your Getting Ready
shares should be credited to your account with your stockbroker or nominee after
the effective date of the registration statement. After the distribution,
stockholders may request stock certificates from our transfer agent instead of
participating in the book entry system.
No fractional shares of our stock will be issued. If you own a fractional
share of Celerity common stock as of the record date or own a number of Celerity
shares that is not a multiple of 1,224.442 you will receive the next higher
whole number of our shares in the Distribution. If you own less than 1,224.442
shares you will receive one of our shares.
28
No Celerity stockholder will be required to pay any cash or other
consideration for the our shares received in the distribution, or to surrender
or exchange Celerity shares in order to receive our shares. The distribution
will not affect the number of, or the rights attaching to, outstanding shares.
No vote of Celerity stockholders is required or sought in connection with the
distribution, and Celerity stockholders will have no appraisal rights in
connection with the distribution.
In order to receive our shares in the distribution, Celerity stockholders
must be stockholders at the close of business on the record date. Celerity is
acting as an underwriter in the distribution of our shares.
Results of the Distribution
After the distribution, we will be a reporting public company. Immediately
after the distribution, we expect to have approximately 600 holders of record of
our shares, and 78,206,919 shares outstanding. The distribution will not affect
the number of outstanding Celerity shares or any rights of Celerity
stockholders.
Quotation and Trading of our shares
Neither us nor Celerity makes recommendations on the purchase, retention
or sale of shares of Celerity common stock or our common stock. You should
consult with your own financial advisors, such as your stockbroker, bank or tax
advisor.
If you do decide to purchase or sell any Celerity or our shares, you
should make sure your stockbroker, bank or other nominee understands whether you
want to purchase or sell Celerity common stock or our Shares, or both. The
following information may be helpful in discussions with your stockbroker, bank
or other nominee.
There is not currently a public market for our shares, although a
when-issued market may develop prior to completion of the distribution.
When-issued trading refers to a transaction made conditionally because the
security has been authorized but is not yet issued or available. Even though
when-issued trading may develop, none of these trades would settle prior to the
effective date of the distribution, and if the distribution does not occur, all
when-issued trading will be null and void. On the first trading day following
the date of the distribution, when-issued trading in respect of our shares will
end and regular-way trading will begin. Regular-way trading refers to trading
after a security has been issued and typically involves a transaction that
settles on the third full business day following the date of a transaction. We
anticipate that the our shares will trade on the Over The Counter Bulletin Board
under the proposed symbol GRCI.
Our shares distributed to Celerity stockholders will be freely
transferable, except for shares received by persons who may be deemed to be
affiliates of ours under the Securities Act of 1933, as amended (the Securities
Act). Persons who may be deemed to be affiliates of our after the distribution
generally include individuals or entities that control, are controlled by, or
are under common control with us and may include certain directors, officers and
significant stockholders of ours. Persons who are affiliates of ours will be
permitted to sell their shares only pursuant to an effective registration
statement under the Securities Act or an exemption from the registration
requirements of the Securities Act, such as the exemptions afforded by Section
4(1) of the Securities Act and the provisions of Rule 144 thereunder.
29
There can be no assurance as to whether our shares will be actively traded
or as to the prices at which our shares will trade. Some of the Celerity
stockholders who receive our shares may decide that they do not want the shares
and may sell our shares following the distribution. This may delay the
development of an orderly trading market in our shares for a period of time
following the distribution. Until our shares are fully distributed and an
orderly market develops, the prices at which our shares trade may fluctuate
significantly and may be lower than the price that would be expected for a fully
distributed issue. Prices for our shares will be determined in the marketplace
and may be influenced by many factors, including the depth and liquidity of the
market for the shares, our results of operations, what investors think of us and
our business, the amount of dividends that we pay, changes in economic
conditions in our industry and general economic and market conditions.
In addition, the stock market often experiences significant price
fluctuations that are unrelated to the operating performance of the specific
companies whose stock is traded. Market fluctuations could have a material
adverse impact on the trading price of our shares.
Federal Income Tax Consequences of the Distribution
The following discussion summarizes the material U.S. federal income tax
consequences resulting from the distribution. This discussion is based upon the
U.S. federal income tax laws and regulations now in effect and as currently
interpreted by courts or the Internal Revenue Service and does not take into
account possible changes in such tax laws or such interpretations, any of which
may be applied retroactively.
The following summary is for general information only and may not be
applicable to stockholders who received their shares of Celerity stock pursuant
to an employee benefit plan or who are not citizens or residents of the United
States or who are otherwise subject to special treatment under the Code. Each
stockholder's individual circumstances may affect the tax consequences of the
distribution to such stockholder. In addition, no information is provided with
respect to tax consequences under any applicable foreign, state or local laws.
Consequently, each Celerity stockholder is advised to consult his own tax
advisor as to the specific tax consequences of the distribution and the affect
of possible changes in tax laws.
General
This distribution does not qualify as a tax-free distribution under
Section 355 of the Code. The corporate-level tax would be based upon the excess
of the fair market value of our shares on the distribution date, over Celerity's
adjusted tax basis for such shares on such date. Each Celerity stockholder who
receives our shares in the distribution would generally be treated as receiving
a taxable distribution in an amount equal to the fair market value of such
shares on the distribution date. Stockholders which are corporations may be
subject to additional special provisions dealing with taxable distributions,
such as the dividends received deduction and the extraordinary dividend rules.
YOU SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO THE PARTICULAR CONSEQUENCES OF THE
DISTRIBUTION TO YOU, INCLUDING THE APPLICATION OF STATE, LOCAL AND FOREIGN TAX
LAWS.
30
Reasons for Furnishing this Document
This document is being furnished to provide information to Celerity
stockholders who will receive our shares in the distribution. It is not, and is
not to be construed as, an inducement or encouragement to buy or sell any
securities of Celerity or us. Neither Celerity nor us will update the
information contained in this document except in the normal course of their
respective public disclosure practices. However, this document will be amended
if there is any material change in the terms of the distribution.
RELATIONSHIP BETWEEN CELERITY AND US FOLLOWING THE DISTRIBUTION
For purposes of governing certain of the ongoing relationships between
Celerity and us after the distribution, Celerity and us have entered into the
Business Development Agreement described in this section.
The business development agreement with Celerity is effective as of August
2, 2004, as amended on August 9, 2004. This agreement states that Celerity will
in exchange for 5,925,000 shares of our common stock will provide GRC, upon
request, significant guidance and counsel in management, operations or business
objectives and policies. Such assistant may include strategic and financial
planning, designing budgets and control systems. We believe that the terms and
conditions of the business development agreement are as favorable to us as those
available from unrelated parties for a comparable arrangement.
Celerity is acting as an underwriter in connection with the distribution of the
3,910,500 shares being distributed to Celerity's shareholders.
LEGAL MATTERS
The validity of the common stock that we are offering will be passed upon
for us by Gersten, Savage, Kaplowitz, Wolf & Marcus, LLP, New York, New York.
EXPERTS
The audited financial statements as of September 30, 2003 and 2004,
included in this prospectus have been so included in reliance on the report of
Pender Newkirk & Company, independent registered public accountants, given on
the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission the Registration
Statement under the Securities Act of 1933, as amended, with respect to our
Common Stock. This document does not contain all of the information set forth in
the Registration Statement and the exhibits and schedules thereto, to which
reference is hereby made. Statements made in this document as to the contents of
any contract, agreement or other document referred to herein are not necessarily
complete. The Registration Statement and the exhibits thereto filed by us with
the Commission may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies of such information can be obtained by mail from the Public Reference
Branch of the Securities and Exchange Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Commission maintains a website
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The address
of the Commission's website is http://www.sec.gov. We are required to comply
with the reporting requirements of the Securities Exchange Act of 1934 and to
file with the Commission reports, proxy statements and other information as
required by the Exchange Act. Additionally, We are required to provide annual
reports containing audited financial statements to its stockholders in
connection with its annual meetings of stockholders. These reports, proxy
statements and other information will be available to be inspected and copied at
the public reference facilities of the Commission or obtained by mail or over
the Internet from the Commission, as described above.
GETTING READY CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
For the Year Ended September 30, 2004,
For the Period November 26, 2002
(Date of Inception) to September 30, 2003,
and the Period November 26, 2002 (Date of Inception)
through September 30, 2004 (unaudited)
Report of Independent Registered Public Accounting Firm
Getting Ready Corporation
(A Development Stage Enterprise)
Financial Statements
For the Year Ended September 30, 2004,
For the Period November 26, 2002
(Date of Inception) to September 30, 2003,
and the Period November 26, 2002 (Date of Inception)
through September 30, 2004 (unaudited)
CONTENTS
Report of Independent Registered Public Accounting Firm
on Financial Statements......................................................1
Financial Statements:
Balance Sheet...........................................................F-2
Statements of Operations................................................F-3
Statements of Changes in Stockholders' (Deficit) Equity...........F-4 - F-5
Statements of Cash Flows................................................F-6
Notes to Financial Statements....................................F-7 - F-14
Report of Independent Registered Public Accounting Firm
Board of Directors
Getting Ready Corporation
(A Development Stage Enterprise)
Sarasota, Florida
We have audited the accompanying balance sheet of Getting Ready Corporation (a
development stage enterprise) as of September 30, 2004 and the related
statements of operations, changes in stockholders' (deficit) equity, and cash
flows for the year ended September 30, 2004 and the periods November 26, 2002
(Date of Inception) through September 30, 2003 and 2004. These financial
statements are the responsibility of the management of Getting Ready
Corporation. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). These 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 financial statements referred to above present fairly, in
all material respects, the financial position of Getting Ready Corporation as of
September 30, 2004 and the results of its operations and its cash flows for the
year ended September 30, 2004 and the periods November 26, 2002 (Date of
Inception) through September 30, 2003 and 2004 in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2, the Company
incurred a net loss of $324,543 during the year ended September 30, 2004, has an
accumulated deficit of $357,728 at September 30, 2004 and has not realized any
revenue. These factors, among others, raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Pender Newkirk & Company
Certified Public Accountants
Tampa, Florida
November 16, 2004
F-1
Getting Ready Corporation
(A Development Stage Enterprise)
Balance Sheet
September 30, 2004
Assets
Current assets:
Cash $ 4,040
Prepaid expenses 250
Deferred offering costs 303,565
---------
Total current assets 307,855
Furniture and equipment, net of accumulated depreciation of $1,430 2,787
Web site development costs, net of accumulated amortization of 12,586 15,732
---------
$ 326,374
=========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 7,226
Accrued interest, related parties 8,635
Due to related party 510
Notes payable, related parties 132,310
---------
Total current liabilities 148,681
---------
Note payable, less unamortized discount based on imputed
interest rate of 12% of $81,662 218,338
Stockholders' deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares
authorized, none issued
Common stock; $.0001 par value; 499,000,000 shares
authorized; 78,206,919 shares issued and outstanding 7,821
Additional paid-in capital 338,429
Prepaid services paid with common stock (29,167)
Deficit accumulated during development stage (357,728)
---------
Total stockholders' deficit (40,645)
---------
$ 326,374
=========
The accompanying notes are an integral part of the financial statements.
F-2
Getting Ready Corporation
(A Development Stage Enterprise)
Statements of Operations
Period Period
November 26, November 26,
2002 (Date of 2002 (Date of
Year Ended Inception) through Inception) through
September 30, September 30, September 30,
2004 2003 2004
------------ ------------ ------------
Operating costs $ 7,637 $ 10,642 $ 18,279
Amortization and depreciation 10,323 3,693 14,016
Insurance 2,021 4,512 6,533
Travel 3,942 8,581 12,523
Printing fees 3,079 3,079
Office expenses 11,134 3,857 14,991
Consulting expenses 202,707 202,707
Professional fees 72,161 72,161
------------ ------------ ------------
313,004 31,285 344,289
Interest expense 11,539 1,900 13,439
------------ ------------ ------------
Net loss $ (324,543) $ (33,185) $ (357,728)
Net loss per share $ (.01) $ (.00) $ (.01)
Weighted average number
of common shares 62,277,701 57,019,838 59,867,319
------------ ------------ ------------
The accompanying notes are an integral part of the financial statements.
F-3
Getting Ready Corporation
(A Development Stage Enterprise)
Statements of Changes in Stockholders' (Deficit) Equity
For the Year Ended September 30, 2004, the
Period November 26, 2002
(Date of Inception) to September 30, 2003,
and the period November26, 2002 (Date of Inception) to
September 30, 2004
Common Stock
------------------------------------
Shares Amount
------------------------------------
Issuance of common stock to founders at par, November 2002 55,516,075 $ 5,552
Authorization of stock to founder at par, November 2002
Issuance of common stock for cash, December 2002* 1,586,161 159
Net loss
------------------------------------
Balance, September 30, 2003 57,102,236 5,711
Issuance of common stock for cash, January 2004* 634,471 63
Issuance of common stock for cash, May 2004 (.009 per share) 444,129 44
Issuance of common stock for cash, May 2004* 222,064 22
Issuance of common stock for services, June 2004* 2,775,804 278
Issuance of common stock for services, July 2004* 5,295,000 593
Issuance of common stock to founder at par, July 2004 11,103,215 1,110
Amortization of prepaid services paid with common stock
Net loss for the year
------------------------------------
Balance, September 30, 2004 78,206,919 7,821
====================================
*Common stock issued at $0.032 per share.
The accompanying notes are an integral part of the financial statements.
F-4
Deficit Prepaid
Accumulated Services
Additional During Paid With
Paid-In Development Common
Capital Stage Stock Stock Payable Total
- ------------------------------------------------------------------------------
$ (5,552)
(1,110) $ 1,110
49,841 $ 50,000
$ (33,185) (33,185)
- ------------------------------------------------------------------------------
$ 43,179 $ (33,185) $ 1,110 $ 16,815
19,937 20,000
3,956 4,000
6,978 7,000
87,222 $ (72,917) 14,583
177,157 177,750
(1,110)
43,750 43,750
(324,543) (324,543)
- ------------------------------------------------------------------------------
$ 338,429 $ (357,728) $ (29,167) $ $ (40,645)
- ------------------------------------------------------------------------------
F-5
Getting Ready Corporation
(A Development Stage Enterprise)
Statements of Cash Flows
Period Period
November 26, November 26,
2002 (Date of 2002 (Date of
Year Ended Inception) through Inception) through
September 30, September 30, September 30,
--------- --------- ---------
2004 2003 2004
--------- --------- ---------
Operating activities
Net loss $(324,543) $ (33,185) $(357,728)
Adjustments to reconcile net loss to net
cash used by operating activities:
Common stock issued for services 236,083 236,083
Amortization of discount on notes payable 4,804 4,804
Depreciation and amortization 10,323 3,693 14,016
Increase in prepaid expenses (250) (250)
Increase (decrease) in:
Accounts payable 7,226 7,226
Accrued interest 6,735 1,900 8,635
--------- --------- ---------
Total adjustments 264,921 5,593 270,514
--------- --------- ---------
Net cash used b operating activities (59,622) (27,592) (87,214)
--------- --------- ---------
INVESTING ACTIVITIES
Purchase of furniture and equipment (600) (3,618) (4,218)
--------- --------- ---------
Net cash used by investing activities (600) (3,618) (4,218)
--------- --------- ---------
FINANCING ACTIVITIES
Advances from a related party 510 510
Increase in deferred offering costs (56,573) (33,458) (90,031)
Proceeds from issuance of common stock 31,000 50,000 81,000
Proceeds from issuance of notes payable 89,810 14,183 103,993
--------- --------- ---------
Net cash provided by financing activities 64,237 31,235 95,472
--------- --------- ---------
NET INCREASE IN CASH 4,015 25 4,040
CASH AT BEGINNING OF YEAR/PERIOD 25
--------- --------- ---------
CASH AT END OF YEAR/PERIOD $ 4,040 $ 25 $ 4,040
--------- --------- ---------
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
During the period November 26, 2002 (Date of Inception) through September
30, 2003, a stockholder contributed web site development costs of $28,317
in exchanged for a note payable.
During the year ended September 30, 2004 and the period November 26, 2002
(Date of Inception) through September 30, 2004, the Company recognized
$72,917 of prepaid consulting expenses in exchange for common stock.
The accompanying notes are an integral part of the financial statements.
F-6
Getting Ready Corporation
(A Development Stage Enterprise)
Notes to Financial Statements
For the Year Ended September 30, 2004 and the
Period November 26, 2002 (Date of Inception) to September 30, 2003,
and the period November 26, 2002 (Date of Inception) to September 30, 2004
1. BACKGROUND INFORMATION
Getting Ready Corporation (the "Company") is a development stage enterprise that
was incorporated under the laws of the State of Delaware on November 26, 2002.
To date, the Company's activities have been limited to raising capital,
organizational matters, and the structuring of its business plan. The corporate
headquarters are located in Sarasota, Florida. The Company's planned line of
business will be to offer prenatal, childbirth, postpartum and parenting
services to women and their families via education, counseling, support services
and products for women and infants that promote a healthy pregnancy, birth,
postpartum and early parenting period.
The Company plans to accomplish these objectives by opening a "Mothers Supercare
Center" which provides the above services in a shopping mall environment and to
offer franchise opportunities for others to duplicate the concept.
2. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. For the year ended September 30, 2004,
the period November 30, 2002 (Date of Inception) through September 30, 2003 and
since November 26, 2002 (date of inception) through September 30, 2004, the
Company has had a net loss of $324,543, $33,185 and $357,728, respectively. As
of September 30, 2004, the Company has not emerged from the development stage.
In view of these matters, recoverability of recorded fixed assets, intangible
assets, and other asset amounts shown in the accompanying financial statements
is dependent upon the Company's ability to begin operations and to achieve a
level of profitability. Since inception, the Company has financed its activities
principally from the sale of equity securities. The Company intends on financing
its future development activities and its working capital needs largely from the
sale of public equity securities with some additional funding from other
traditional financing sources, including term notes, until such time that funds
provided by operations are sufficient to fund working capital requirements.
3. SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed are:
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Cash equivalents consist of all highly liquid debt instruments purchased
with a maturity of three months or less. All cash is maintained with a
major financial institution in the United States. Deposits with this bank
may exceed the amount of insurance provided on such deposits. Generally,
these deposits may be redeemed upon demand and, therefore, bear minimal
risk.
The Company's financial instruments include cash, accounts payable and
notes payable. The carrying amounts of these financial instruments
approximate their fair value, due to the short-term nature of these items.
The carrying amount of the notes payable approximates their fair value due
to the use of market rates of interest.
F-7
Getting Ready Corporation
(A Development Stage Enterprise)
Notes to Financial Statements
For the Year Ended September 30, 2004 and the
Period November 26, 2002 (Date of Inception) to September 30, 2003,
and the period November 26, 2002 (Date of Inception) to September 30, 2003
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Furniture and equipment are recorded at cost and depreciated on a
straight-line basis over their estimated useful lives, principally three
to five years. Accelerated methods are used for tax depreciation.
Maintenance and repairs are charged to operations when incurred.
Betterments and renewals are capitalized. When furniture and equipment are
sold or otherwise disposed of, the asset account and related accumulated
depreciaiotn account are relieved, and any gain or loss is included in
operations.
The Company has incurred deferred offering costs in connection with
raising additional capital through the sale of its common stock. These
costs have been capitalized and will be charged against additional paid-in
capital should common stock be issued for cash. If there is no issuance of
common stock, the costs incurred will be charged to operations.
The Company follows the provisions of SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which establishes accounting
standards for the impairment of long-lived assets such as property, plant
and equipment and intangible assets subject to amortization. The Company
reviews long-lived assets to be held-and-used for impairment whenever
events or changes in circumstances indicate that the carrying amount of
the assets may not be recoverable. If the sum of the undiscounted expected
future cash flows over the remaining useful life of a long-lived asset is
less than its carrying amount, the asset is considered to be impaired.
Impairment losses are measured as the amount by which the carrying amount
of the asset exceeds the fair value of the asset. When fair values are not
available, the Company estimates fair value using the expected future cash
flows discounted at a rate commensurate with the risks associated with the
recovery of the asset. For the period presented there was no impairment
recorded related to these long-lived assets.
The Company capitalized the purchase of a domain name and development of a
web-site according to EITF 00-2 and SOP 98-1. These costs were incurred
for the application, graphics and infrastructure development. Future costs
for the operation of the web-site will be expensed as incurred.
Deferred income tax assets and liabilities arise from temporary
differences associated with differences between the financial statements
and tax basis of assets and liabilities, as measured by the enacted tax
rates, which are expected to be in effect when these differences reverse.
Deferred tax assets and liabilities are classified as current or
non-current, depending on the classification of the assets or liabilities
to which they relate. Deferred tax assets and liabilities not related to
an asset or liability are classified as current or non-current depending
on the periods in which the temporary differences are expected to reverse.
The principal types of temporary differences between assets and
liabilities for financial statements and tax return purposes are set forth
in Note 11.
F-8
Getting Ready Corporation
(A Development Stage Enterprise)
Notes to Financial Statements
For the Year Ended September 30, 2004 and the
Period November 26, 2002 (Date of Inception) to September 30, 2003,
and the period November 26, 2002 (Date of Inception) to September 30, 2004
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basic and diluted earnings per share are computed based on the weighted
average number of common stock outstanding during the period. Common stock
equivalents are not considered in the calculation of diluted earnings per
share for the periods presented because their effect would be
anti-dilutive.
4. FURNITURE AND EQUIPMENT
Furniture and equipment consist of:
September 30, 2004
Furniture and Equipment $3,917
Software 300
------
$4,217
Less accumulated depreciation 1,430
------
$2,787
------
Depreciation expense for the year ended September 30, 2004, the period November
26, 2002 (date of inception) through September 30, 2003, the period November 26,
2002 (date of inception) through September 30, 2004 was $883, $547 and $1,430,
respectively.
F-9
Getting Ready Corporation
(A Development Stage Enterprise)
Notes to Financial Statements
For the Year Ended September 30, 2004 and the
Period November 26, 2002 (Date of Inception) to September 30, 2003,
and the period November 26, 2002 (Date of Inception) to September 30, 2004
5. WEB SITE DEVELOPMENT COSTS
Web site development costs consist of $28,318 capitalized costs and amortization
expense for the year ended September 30, 2004, the period November 26, 2002
(date of inception) through September 30, 2003, and the period November 26, 2002
(date of inception) through September 30, 2004 was $9,440, $3,146 and $12,586,
respectively.
6. NOTES PAYABLE
Notes payable at September 30, 2004 consist of the following:
Notes payable to a stockholder; 12% interest; interest only
payments due monthly; with principal and unpaid interest
due January 15, 2005; unsecured $ 107,310
Notes payable to a related party; 12% interest; interest only
payments due monthly; with principal and unpaid interest
due January 15, 2005; unsecured 25,000
Convertible note payable, imputed 12% interest,
both principal and interest are either due in full or
can be converted into the Company's registered common
stock at the lowest volume weighted average price
on the due date of July 30, 2007 at the option of the
lender, net of unamortized discount of $81,662 218,338
---------
$ 350,648
Less current portion (132,310)
---------
$ 218,338
=========
The aggregate principal maturing in subsequent years are as follows:
September 30,
- -------------
2005 $132,310
2006 0
2007 excluding unamortized
imputed interest of $81,662 218,338
--------
$350,648
========
The terms of the above notes payable to a stockholder and a related party are
not necessarily indicative of the terms that would have been incurred had
comparable agreements been made with independent parties.
F-10
Getting Ready Corporation
(A Development Stage Enterprise)
Notes to Financial Statements
For the Year Ended September 30, 2004 and the
Period November 26, 2002 (Date of Inception) to September 30, 2003,
and the period November 26, 2002 (Date of Inception) to September 30, 2004
7. COMMON STOCK ISSUED TO FOUNDER
In July 2004, the Company issued stock to the chief officer of the Company. This
stock had been authorized by the Board of Directors at the founding of the
Company in November 2002 but not issued at that time. The number of shares
authorized was 1,000,000 shares at $0.01 par value (pre-split) or 11,103,215
shares at $.0001 per share after the split.
8. PRIVATE PLACEMENT OFFERING
In December 2003, the Company authorized a private placement offering of its
common stock of up to 2,800,000 shares at $0.50 per share (the "Offering")
(pre-split amounts). The Company did not issue any shares of common stock
related to the Offering. Effective May 2004, the Company cancelled the Offering
in order to pursue the filing of Form SB-2 with the Securities and Exchange
Commission.
The Company issued 1,586,161 shares of common stock through September 30, 2003
to willing investors and realized proceeds of $50,000. For the year ended
September 30, 2004, the Company issued 1,300,664 shares of common stock to
willing investors and realized proceeds of $31,000.
9. WARRANTS
The following table summarizes information about warrants outstanding and
exercisable as of September 30, 2003:
OUTSTANDING WARRANTS EXERCISABLE WARRANTS
----------------------------------------------- ----------------------------------------------
NUMBER OF WEIGHTED WEIGHTED WEIGHTED NUMBER OF WEIGHTED
UNDERLYING AVERAGE AVERAGE AVERAGE SHARES AVERAGE
Exercise Price SHARES REMAINING LIFE PRICE REMAINING LIFE EXERCISABLE PRICE
- -------------- ---------- -------------- -------- -------------- ----------- --------
$0.045 793,081 2.13 years $ 0.045 2.13 years 793,081 $0.045
The following table summarizes information about warrants outstanding and
exercisable as of September 30, 2004:
OUTSTANDING WARRANTS EXERCISABLE WARRANTS
----------------------------------------------- ----------------------------------------------
NUMBER OF WEIGHTED WEIGHTED WEIGHTED NUMBER OF WEIGHTED
UNDERLYING AVERAGE AVERAGE AVERAGE SHARES AVERAGE
Exercise Price SHARES REMAINING LIFE PRICE REMAINING LIFE EXERCISABLE PRICE
- -------------- ---------- -------------- -------- -------------- ----------- --------
$0.045 793,081 1.13 years $0.045 1.13 years 793,081 $0.045
10. COMMITMENTS AND CONTINGENCIES
In June 2004, the Company entered into a six month agreement to be provided
legal consulting services in exchange for 2,775,804 shares of the Company's
restricted common stock. As of September 30, 2004, the Company had issued the
2,775,804 shares of restricted common stock valued at $87,500, of which the
Company has recognized $58,333 as expense for the year ended September 30, 2004.
The remainder has been shown as prepaid services paid with commont stock in the
stockholders' deficit section of the balance sheet.
F-11
Getting Ready Corporation
(A Development Stage Enterprise)
Notes to Financial Statements
For the Year Ended September 30, 2004 and the
Period November 26, 2002 (Date of Inception) to September 30, 2003,
and the period November 26, 2002 (Date of Inception) to September 30, 2004
10. COMMITMENTS AND CONTINGENCIES (CONTINUED)
On June 4, 2004, the Company entered into a consulting agreement with Cornell
Capital Partners, LP ("Cornell") whereby Cornell would provide general advisory
services to the Company for the purpose of strategic planning and assistance
with mergers and acquisitions. The Company paid Cornell an initial fee of
$25,000 upon the execution of the agreement with another $25,000 payment due
upon the filing of a Registration Statement with the Securities and Exchange
Commission. In addition, Cornell will receive $10,000 for structuring fees and
$2,500 in fees for due diligence for a commitment to purchase up to $10,000,000
of the Company's common stock over a period of two years. Cornell will also
receive compensation in the amount of five percent of the gross proceeds raised
by Cornell. In addition, upon closing the transaction, the Company issued
Cornell a debenture equal to $300,000 for fees, which is recorded net of imposed
interest discount as a note payable on the balance sheet. As of September 30,
2004, Cornell has not raised any funds nor located any merger or acquisition
targets for the Company.
The Company has an informal consulting arrangment with a physician to provide
medical advise on an as needed basis. There is no fee guarantee or minimums
associated with this agreement.
During July 2004, the Company entered into three-year employment agreements with
each of our three executive officers, which will be effective upon the
effectiveness of this Registration Statement. They each will receive a salary of
$100,000 per year. If our revenues, during year one of the agreements exceed
$1.1 million, each of the three employees will receive $25,000 bonuses. If our
revenues during year two exceed $7.3 million, each of the three employees will
receive $75,000 bonuses. If our revenues during year three exceed $17.6 million,
each of the three employees will receive $100,000 bonuses. They also are
entitled to a car allowance of $700 per month and reimbursement for business
expenses incurred by them.
During July 2004, the Company signed an agreement with Celerity Systems, Inc. to
provide managerial consulting services on a month to month basis. The Company
will provide compensation for these services via the issuance of common stock
equal to 7.5% of the Company's total outstanding common stock. During August
2004, the Company issued 5,925,000 shares of common stock as payment for these
services per the agreement.
11. INCOME TAXES
Deferred taxes are recorded for all existing temporary differences in the
Company's assets and liabilities for income tax and financial reporting
purposes. Due to the valuation allowance for deferred tax assets, as noted
below, there was no net deferred tax benefit or expense for the year ended
September 30, 2004 or for the period November 26, 2002 (date of inception)
through September 30, 2003.
Reconciliation of the federal statutory income tax rate of 34 percent to the
effective income tax rate is as follows:
Period
November 26,
2002 (Date of
Year Ended Inception) through
September 30, September 30,
------------- ------------------
2004 2004
------ ------
Federal statutory income tax rate (34.0)% (34.0)%
State income taxes, net of tax benefit (3.5) (3.5)
Deferred tax asset valuation allowance 37.5% 37.5%
------ ------
Effective rate 0.0% 0.0%
------ ------
F-12
Getting Ready Corporation
(A Development Stage Enterprise)
Notes to Financial Statements
For the Year Ended September 30, 2004 and the
Period November 26, 2002 (Date of Inception) to September 30, 2003,
and the period November 26, 2002 (Date of Inception) to September 30, 2004
11. INCOME TAXES (CONTINUED)
Deferred tax asset and liability components as of September 30, 2004 are as
follows:
Net deferred tax assets:
Other $ 7,809
Capitalized start up costs 125,834
---------
133,643
Valuation allowance (133,643)
---------
Net deferred income taxes $ 0
=========
Since management of the Company believes it is more likely than not that the net
deferred tax asset will not provide future benefit, the Company has established
a 100 percent valuation allowance on the net deferred tax asset as of September
30, 2004.
12. RELATED PARTY TRANSACTIONS
During the period November 26, 2002 (date of inception) to September 30, 2003,
the Company owed $510 to a related company for reimbursement for certain
expenses paid on behalf of the Company. This amount is unsecured and
non-interest bearing.
The Company's corporate offices are located within a stockholder's home and due
to the minimal amount of space necessary, the fair value of the rental
contribution has not been accrued.
The terms and amounts of the above transactions are not necessarily indicative
of the terms and amounts that would have been incurred had comparable
transactions been entered into with independent parties.
F-13
Getting Ready Corporation
(A Development Stage Enterprise)
Notes to Financial Statements
For the Year Ended September 30, 2004 and the
Period November 26, 2002 (Date of Inception) to September 30, 2003,
and the period November 26, 2002 (Date of Inception) to September 30, 2004
13. AUTHORIZED SHARES AND STOCK SPLIT
During July 2004, the Company's board of directors approved a proposal to amend
the Articles of Incorporation to increase the number of authorized shares of
common stock from 50,000,000 shares to 499,000,000 shares, change the par value
of the common stock $.001 to $.0001 per share and to authorize 1,000,000 shares
of blank check preferred stock, par value $.0001 per share. The Company's
directors also approved an 11.103215 to 1 stock split to holders of record on
July 30, 2004. Accordingly, all references to number of shares in these
financial statements have been adjusted to reflect the stock split on a
retroactive basis.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102(b)(7) of the Delaware General Corporation Law, which we refer
to as the "DGCL," permits a provision in the certificate of incorporation of
each corporation organized under the DGCL eliminating or limiting, with some
exceptions, the personal liability of a director to the corporation or its
stockholders for monetary damages for some breaches of fiduciary duty. Our
Certificate of Incorporation eliminates the personal liability of directors to
the fullest extent permitted by the DGCL.
Section 145 of the DGCL, which we refer to as "Section 145," in summary,
empowers a Delaware corporation to indemnify, within limits, its officers,
directors, employees and agents against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement that they actually and
reasonably incur in connection with any suit or proceeding, other than by or on
behalf of the corporation, if they acted in good faith and in a manner
reasonably believed to be in, or not opposed to, the best interest of the
corporation and, with respect to a criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful.
With respect to any action by or on behalf of the corporation, Section 145
permits a corporation to indemnify its officers, directors, employees and agents
against expenses (including attorneys' fees) they actually and reasonably incur
in connection with the defense or settlement of the action or suit, provided
that person meets the standard of conduct described in the preceding paragraph.
No indemnification is permitted, however, in respect of any claim where that
person has been found liable to the corporation, unless the Court of Chancery or
court in which the action or suit was brought approves the indemnification and
determines that the person is fairly and reasonably entitled to be indemnified.
Our Certificate of Incorporation contains a provision that eliminates the
personal liability of our directors to us and our stockholders for monetary
damages for breach of a director's fiduciary duty to us. This provision does not
permit any limitation on, or elimination of the liability of a director for,
disloyalty to us or our stockholders, for failing to acting good faith, for
engaging in intentional misconduct or a knowing violation of law, for obtaining
an improper personal benefit or for paying a dividend or approving a stock
repurchase that would be illegal under the DGCL.
Our Certificate of Incorporation requires us to indemnify our directors
and officers against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative, other
than an action by or in our right (a "derivative action"), if they acted in good
faith and in a manner they reasonably believed to be in or not opposed to our
best interests, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar standard of
care is applicable in the case of derivative actions, except that
indemnification only extends to expenses (including attorneys' fees) incurred in
connection with defense or settlement of such an action. Moreover, the DGCL
requires court approval before there can be any indemnification where the person
seeking indemnification has been found liable to the corporation.
Insofar as indemnification for liabilities under the Securities Act may be
permitted to our directors, officers and controlling persons pursuant to the
provisions described above, or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the 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 our
director, officer or controlling person in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
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in connection with the securities being registered, we will, unless in the
opinion of our counsel the matter as been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth an estimate of the costs and expenses,
other than the underwriting discounts and commissions, payable by the registrant
in connection with the issuance and distribution of the Common Stock being
registered.
SEC registration fee $1,173.15
Legal fees and expenses 45,000
Accountants' fees and expenses 15,000
Printing expenses 10,000
Miscellaneous 826.85
=========
Total $ 72,000
=========
All amounts except the SEC registration fee are estimated. All of the
expenses set forth above are being paid by us.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
The following is a list of our securities that have been sold or issued by
us during the past three years. Each of these securities were sold without
registration under the Securities Act in reliance on Section 4(2) of the
Securities Act. There were no underwriting discounts or commissions paid in
connection with the sale of these securities. Except as noted, all share numbers
and related information give effect to the Company's 11.103125 for 1 stock split
effective in July 2004.
In connection with our formation in November 2002 and in July 2004, we
issued our founders, Sheldon R. Rose, Dr. Francine Nichols and Lori Majeski
33,309,645, 16,654,822 and 16,654,822 shares respectively.
In December 2002, and January 2004, we issued John and Melanie Maute an
aggregate of 1,427,552 shares of common stock at $.03 per share. We also issued
them warrants to purchase an aggregate of 396,540 shares of our common stock.
In December 2002, we issued Robert Hyman 793,080 shares of common stock at
$.03 per share. We also issued him warrants to purchase an aggregate of 396,540
shares of our common stock.
In May 2004, we issued Perry and Nancy Gordon an aggregate of 666,193
shares of common stock at $.0495 per share.
In May 2004, we issued Seth Farbman 2,775,804 shares of common stock for
consulting services rendered.
In August 2004, we issued Celerity Systems, Inc. an aggregate of 5,925,000
shares of common stock for services rendered.
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ITEM 27. EXHIBITS
Exhibits Index
- --------------------------------------------------------------------------------
3 Certificate of Incorporation and By-Laws *
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3.1(a) Certificate of Incorporation of Getting Ready Corporation *
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3.1(b) Certificate of Amendment of Certificate of Incorporation of
Getting Ready Corporation *
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3.2 Bylaws of Getting Ready Corporation *
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5.1 Opinion of Gersten, Savage, Kaplowitz, Wolf &Marcus, LLP *
- --------------------------------------------------------------------------------
10 Material Contracts *
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10.1 Business Development Agreement by and between Getting Ready
Corporation and Celerity Systems, Inc.*
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10.2 Standby Equity Distribution Agreement by and between Getting
Ready Corporation and Cornell Capital Partners L.P.*
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10.3 Convertible Debenture dated July 30, 2004 *
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10.4 Employment Agreement with Sheldon R. Rose *
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10.5 Employment Agreement with Dr. Francine Nichols *
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10.6 Employment Agreement with Lori Majeski *
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10.7 Promissory Note in favor of Sheldon R. Rose
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10.8 Amendment to Business Development Agreement*
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23 Consents of Experts and Counsel *
- --------------------------------------------------------------------------------
23.1 Consent of Pender Newkirk &Company
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23.2 Consent of Gersten, Savage, Kaplowitz, Wolf &Marcus, LLP *
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All other Exhibit's called for by Rule 601 of Regulation S-B
are not applicable to this filing
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Financial Statement Schedules
- --------------------------------------------------------------------------------
All schedules are omitted because they are not applicable or
because the required information is included in the financial
statements or notes thereto.
- --------------------------------------------------------------------------------
* previously filed
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers and controlling
persons of the registrant pursuant to any provision of the certificate of
incorporation, bylaw, contract arrangements, statute, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933, as amended, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant issuer will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933, as amended, and will be governed by the final
adjudication of such issue.
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The undersigned registrant hereby undertakes that:
(1) It will file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement. 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 prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in 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; and
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, it will treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering; and
(3) It will file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
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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 for filing on Form SB-2 and authorized this
amended registration statement to be signed on its behalf by the undersigned, in
the City of Sarasota, State of Florida, on November 19, 2004.
GETTING READY CORPORATION
By: /s/ Sheldon R. Rose
----------------------
Sheldon R. Rose
Chief Executive Officer
and Principal Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amended registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
Name Title Date
- ----------------------- ------------------------------------------ ------------------
Sheldon R. Rose Chief Executive Officer and Principal Accounting. November 19, 2004
- ------------------------- Officer and Director
/s/ Sheldon R. Rose
Dr. Francine Nichols Director November 19, 2004
- -------------------------
/s/ Dr. Francine Nichols
Lori Majeski Director November 19, 2004
- -------------------------
/s/ Lori Majeski
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