UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
AMAZING NUTRITIONALS, INC.
(Name of Small Business Issuer in its charter)
Delaware 74-3046548
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation Organization) Identification No.)
AMAZING NUTRITIONALS, INC.
43 West 33rd Street
Suite 405
New York, NY 10001
(212) 695-3334
(Address and Telephone Number of Principal Executive Offices)
C.J. Lieberman
43 West 33rd Street
Suite 405
New York, N.Y. 10001
(212) 695-3334
(Name, address and telephone number for agent for service)
Copies to:
Michael S. Krome, Esq.
8 Teak Court
Lake Grove, New York, 11755
(631) 737-8381
(631) 737-8382 (fax)
Securities to be registered under Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Act:
Common Stock, $.0001 Par Value Per Share
AMAZING NUTRITIONALS, INC.
INDEX TO REGISTRATION STATEMENT ON FORM 10-SB
Items in Form 10-SB
PART I
Item 1. Description of Business 3
Item 2. Management's Plan of Operation 4
Item 3. Description of Property 5
Item 4. Security Ownership of Certain Beneficial Owners and Management 5
Item 5. Directors, Executive Officers, Promoters and Control Persons 6
Item 6. Executive Compensation 7
Item 7. Certain Relationships and Related Transactions 8
Item 8. Description of Securities 8
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters 9
Item 2. Legal Proceedings 9
Item 3. Changes in and Disagreements with Accountants 10
Item 4. Recent Sales of Unregistered Securities 10
Item 5. Indemnification of Directors and Officers 10
PART F/S
Financial Statements 13
PART III
Item 1. Index to Exhibits 23
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-SB contains certain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. For this purpose any
statements contained in this Form 10-SB that are not statements of historical
fact may be deemed to be forward looking statements. Without limiting the
foregoing, words such as "may," "will," "expect," "believe," "anticipate,"
"estimate," or "continue" or comparable terminology are intended to identify
forward-looking statements. The Company believes that the assumptions and
expectations reflected in such forward-looking statements are reasonable based
on information available to the Company on the date of this report. The Company
cannot give any assurances that these assumptions and expectations will prove to
have been correct or that the Company will take any action that its management
may be presently planning. These statements by their nature involve substantial
risks and uncertainties and actual results may differ materially depending on a
variety of factors, many of which are not within the Company's control.
2
PART I
Item 1. Description of Business
(a) Business development. Amazing Nutritionals, Inc. (the "Company") was
incorporated in the State of Delaware on May 8, 2002. On January 2, 2003
The Company entered into an Asset Purchase Agreement with Advanced Plant
Pharmaceuticals, Inc., to purchase all rights and LMH 123 in exchange for
shares of Common Stock of the Company.
(b) Business of the Company; principal products and services. The Company is a
development stage company that intends to manufacturer, market and
distribute dietary supplements. The Company will utilize a unique
thirteen-step process (the "Process") to manufacture its products. The
Process was developed by parent company Advanced Plant Pharmaceuticals,
Inc. The first dietary supplement the Company plans to manufacturer,
market and distribute is LHM 123. On January 2, 2004 the Company entered
into an Agreement and acquired all formulations, trade secrets, rights,
patents and trademarks pertaining to Advanced Plant Pharmaceuticals,
Inc.'s dietary supplement LHM 123. This supplement was developed through
the use of the Process and the Company believes it to be a benefit to
those with Alzheimer's disease.
The Company has what it believes is a unique Process utilizing whole
plants for the production of dietary supplements. The Company believes
that its Process will (i) preserve, in the dietary supplements produced
with such Process, virtually all of the phyto-chemicals and trace elements
found in the plant and (ii) will result in all of the dietary supplements
produced with such Process using the same plants in the same proportions,
having near identical ingredient formulations, standardization. The
Company believes that the current processing technologies used by other
producers of dietary supplements, extraction with the use of alcohol,
changes the chemical formation of the plant and destroys many of the
phyto-chemicals and trace elements the plant has to offer. The Company's
Process, however, utilizes the whole plant without extracting active
ingredients thus leaving virtually in tact all of the phyto-chemicals and
trace elements available from the plant.
The Company intends to market LHM 123 as a whole plant dietary supplement
that is believed to be a benefit to those with Alzheimer's disease. Second
to this, the Company plans to seek out and develop other new and
innovative products in the dietary supplement marketplace.
Distribution of products. The Company's market research indicates that
most of the successful nutritional supplements were initially marketed
through some form of direct response advertising, be it television, radio,
print media or Internet direct response campaigns. It is the intention of
the Company to utilize various forms of direct response marketing for its
products. Direct marketing will allow the Company to test market products
on a small scale. Then the Company can determine the feasibility of
further marketing once as small-scale test has been performed within a
demographically specific market.
3
Competitive business conditions. In the mainstream business (wholesale),
channels are critical to volume. The manufacturers with impact in the
national sales are going to win display space in the store, and most
buyers seem content to pick their product off the store floor. Price is
critical, because the channels take significant margins. Buyers are
willing to settle for laminated quality. In direct sales to customers,
price isn't as critical. The Company's target customer is not making his
purchase based on price alone; rather he or she is purchasing our product
for effectiveness, trouble free buying at a fair price. Reliable delivery
is as important as an effective product.
Sources of material. The Company uses a raw material supplier located in
Brooklyn, New York, as its main supplier and source for the specific
plants and other ingredients used for manufacturing its dietary
supplements. The Company believes that there are many other suppliers from
which it can purchase the plants and other ingredients it needs.
Patents and trademarks. The Company is currently seeking to patent LHM 123
as an all-natural, fully standardized, dietary supplement comprised of
specific botanical components that act synergistically.
Government regulations. In accordance with the Federal Food, Drug and
Cosmetic Act, as amended by the Dietary Supplement Health and Education
Act of 1994 ("FD&C Act"), the Company will comply with specific
requirements in labeling their products. Specifically, the statute
requires that dietary supplements be labeled as such, that the dietary
support claim be submitted to the FDA within thirty days after its first
use, that the labeling bear a statutorily-prescribed disclaimer stating
that the claim has not been evaluated by the FDA and that the product is
not intended to diagnose, treat, cure, or prevent diseases, and that the
labeling does not contain a claim that the product will diagnose,
mitigate, treat, cure, or prevent a specific disease or class of disease.
Number of employees. The Company currently employs four (4) full time
employees and no part time consultants.
(c) Reports to Security Holders. The Company is not currently subject to the
reporting requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended. However, upon effectiveness of this Form
10 S-B and in accordance with NASDAQ Rule 6530 the Company intends
hereafter to file annual and quarterly reports with the Securities and
Exchange Commission ("SEC"). The public may read and copy any materials
filed by the Company with the SEC at the SEC's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain
information on the operation of the SEC's Public Reference Room by calling
the SEC at 1-800-SEC-0330.
4
Item 2. Management's Plan of Operation
(a) Plan of Operation.
(i) Over the next twelve months, the Company will require additional
funds to pay for the costs of setting up the manufacturing and
research facility envisioned. The minor administrative costs for the
Company have been and will in all likelihood continue to be borne by
the Company's President during 2005, or until such time when the
Company makes a more active effort to implement its manufacturing,
marketing and distribution plans.
The Company believes it will require an estimated $1,200,000 to
develop and execute its business plan. These funds are intended to
cover the expenses associated with opening and maintaining the
Company's offices for the next eighteen months, salaries,
manufacturing, patent application, trademark processes, research &
development, marketing, legal and accounting. The Company plans to
fund this financial need through equity private placements of its
common stock.
(ii) While the Company will always continue to seek to refine and perfect
its products through continued research and development, it believes
that LHM 123 is currently "Market-Ready" and is seeking mass-market
deployment over the next twelve months. As suitable dietary
supplements become available for the Company to research and
develop, the Company will seek to add them to their product line.
(iii) The Company does not expect to purchase or sell any significant
equipment over the next twelve months.
(iv) The Company does not foresee any significant changes in the number
of employees it will employ over the next twelve months.
Item 3. Description of Property
Amazing Nutritionals, Inc.'s president provides the Company with limited
office space in his offices at no charge located at 43 West 33rd Street,
Suite 405, New York, N.Y. 10001. The space is currently sufficient for the
needs of the Company. The Company does not pay rent at this point in time.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of December 22,
2004, of each officer or director of the Company, by each person or firm
who owns more than 5% of the Company's outstanding shares and by all
officers and directors of the Company as a group.
5
Title of Name and Address Amount and Nature Percent of
Class of Beneficial Owner of Beneficial Owner Class
-----------------------------------------------------------------------------------------------------------
Common Advanced Plant Pharmaceuticals 3,300,000 (a) 43.5%
43 West 33rd Street, Suite 405
New York, NY 10001
Common C.J. Lieberman 2,500,000 (b) 33.0%
43 West 33rd Street, Suite 405
New York, N.Y. 10001
Common Barry Clare 1,200,000 (c) 15.8%
43 West 33rd Street, Suite 405
New York, N.Y. 10001
Common Samuel Berkowitz 250,000 (d) 3.3%
43 West 33rd Street, Suite 405
New York, N.Y. 10001
Common David Lieberman 250,000 (e) 3.3%
43 West 33rd Street, Suite 405
New York, N.Y. 10001
Common Joel Appel 50,000 (f) *
43 West 33rd Street, Suite 405
New York, N.Y. 10001
Common Michael S. Krome 25,000 (g) *
8 Teak Court
Lake Grove, NY 11755
Common Officers and Directors 3,950,000 (h) 52.1%
as a Group (3 persons)
- ---------------------------
* Ownership is less than 1%
(a) Advanced Plant Pharmaceuticals is the seller of the Assets of the Company
(b) C. J. Lieberman is the sole member of the Board of Directors of the
Company.
(c) Barry Clare is the President of the Company.
(d) Samuel Berkowitz is the Chief Financial Officer of the Company.
(e) David Lieberman is President of APPI
(f) Joel Appel is the Sales & Marketing Director of the Company.
(g) Michael S. Krome is the attorney handling SEC matters for the Company
Item 5. Directors, Executive Officers, Promoters and Control Persons
Name Age Position
--------------------------------------------------------------
C.J. Lieberman 41 Chairman
Barry Clare 46 President
Samuel Berkowitz 48 CFO/Secretary
Joel Appel 65 Sales & Marketing Director
6
C.J. Lieberman. Mr. Lieberman has been the Chairman of Amazing
Nutritionals, Inc. since inception. Mr. Lieberman has over 10 years of
varied business experience in the Whole Plant Pharmaceutical industry.
Barry Clare. Mr. Clare has been the President of Amazing Nutritionals,
Inc. since inception. He will serve until the next annual meeting, or
until his successor is elected and qualified. Mr. Clare brings to Amazing
Nutritionals, Inc. many years of varied business experience. Prior to
joining Amazing, Mr. Clare was President of Sales & Marketing for Advanced
Plant Pharmaceuticals, Inc. "APPI". Amongst many sales and marketing
duties Mr. Clare was responsible for bringing APPI's cholesterol reducing
dietary supplement Lo-Chol from the laboratory to the market. Mr. Clare
was founder and President of American Breaktime Industries, Inc., an
institutional in-plant feeding company with annual sales exceeding
$7,000,000. Mr. Clare was the Vice President and President of
Intermediaries Inc., and Venture Capital Stage, Inc. respectively.
Intermediaries and Venture Capital Stage specialized in raising seed
capital for emerging growth companies with patented or proprietary
technologies, arranged reverse mergers and conducted mergers and
acquisitions.
Samuel Berkowitz. Mr. Berkowitz has served as Chief Financial Officer for
Amazing Nutritionals, Inc. since inception, and will continue to serve
until his successor is elected and qualified. Mr. Berkowitz joined the
Company in May of 1996. Mr. Berkowitz has more than 20 years experience in
purchasing and inventory control. Mr. Berkowitz was the former Director of
purchasing for EZ International a notions and crafts company. His duties
included handling all domestic purchasing, sourcing, importing, printing,
packaging and warehouse management for the Company. Prior to EZ
International Mr. Berkowitz was Assistant Director of Purchasing for
Pentapco, Inc. also involved in the notion and crafts industry. In 1978
Mr. Berkowitz received his BA in economics from Yeshiva University.
Joel Appel. Mr. Appel has been the President of Sales & Marketing for
Amazing Nutritionals, Inc. since inception. He will serve until the next
annual meeting scheduled for May, or until his successor is elected and
qualified. Mr. Appel began his career at Proctor & Gamble serving in the
position of Territory Manager, Unit Manager and District Manager. While at
Proctor & Gamble, Mr. Appel introduced Pampers Disposable Diapers and won
an award for selling the most disposable diapers in the United States.
During the 70's, 80's and 90's Mr. Appel was involved in sales and
marketing of some very familiar brands, Oxy 5, Tums, Aqua Net and Orajel,
just to name a few. During the early 80's he was Senior Executive VP at
Jeffrey Martin where he served on the Board of Directors. In the late 80's
Mr. Appel held the position of Senior VP of Sales with Thompson Medical
where he was part of the team that introduced Ultra Slim Fast. More
recently Mr. Appel held the position of Senior VP of Sales with GenDerm
Health Care. While at GenDerm he helped reposition ZOSTRIX and ZOSTRIX -HP
from ethically promoted and positioned products to consumer (OTC)
products. The brand grew from 6 million to over 20 million dollars in
sales in less than two years.
7
Item 6. Executive Compensation
No cash compensation was paid to any officer or director of the Company
and the Company has not paid compensation to any employee since inception
other than in the issuance of Common Stock. The following table sets forth
the Company's contemplated compensation to its officers and directors for
fiscal year ending 2005.
Annual Compensation Stock Awards
------------------- ----------------------
Restricted
Stock
Name and Salary Awards Options
Principle Position Year ($) (1) (shares) (#)
-----------------------------------------------------------------------
C.J. Lieberman 2005 75,000 2,500,000 00,000
Barry Clare 2005 90,000 1,200,000 00,000
Samuel Berkowitz 2005 50,000 250,000 00,000
Joel Appel 2005 75,000 50,000 00,000
- ----------
(1) All cash payments for compensation has been deferred until the company
is able to pay.
Employment Agreements.
We have an Employment Agreement with our President, Barry Clare. Pursuant
to this Agreement, we will pay an annual salary of NINETY THOUSAND DOLLARS
per annum. The Agreement expires December 31, 2005 and is renewable by
either party for an additional yearly term.
Director's Compensation.
We do not provide any Director's Compensation at this time.
Item 7. Certain Relationships and Related Transactions
On January 2, 2004, the Registrant acquired, via Asset Purchase Agreement,
certain assets of APPI, specifically all formulations, trade secrets,
rights, patents and trademarks pertaining to a dietary supplement LHM 123,
from Advanced Plant Pharmaceuticals, Inc., a publicly traded Delaware
corporation, in exchange for 3,300,000 shares of the Registrant's common
stock. The primary assets are for all formulations, trade secrets, rights,
patents and trademarks pertaining to Advanced Plant Pharmaceuticals,
Inc.'s dietary supplement LHM 123.
8
Item 8. Description of Securities
The Company is authorized to issue 20,000,000 shares of its Common Stock,
par value $.0001 per share, of which 7,575,000 shares are outstanding as
of December 22, 2004. The holders of Common Stock are entitled to one vote
for each share held of record on all matters to be voted on by
stockholders. The Company's common stock does not have cumulative voting
rights, which means that the holders of a majority of the outstanding
shares of our common stock voting for the election of directors can elect
all members of the Board of Directors. A majority vote is also sufficient
for other actions that require the vote or concurrence of stockholders
except in cases in which more than a simple majority is required by law.
Holders of the Company's common stock are entitled to receive dividends,
when, as and if declared by the Board of Directors, in its discretion,
from funds legally available therefore. Holders of shares of the Company's
common stock are entitled to share, on a ratable basis, such dividends as
may be declared by the Board of Directors out of funds, legally available
therefore. Upon the Company's liquidation, dissolution or winding up,
after payment to creditors, the holders of the Company's common stock are
entitled to share ratably in the assets of the Company, if any, legally
available of distribution to the Company's common stockholders. The
Company's bylaws require that only a majority of the issued and
outstanding shares of our common stock need be represented to constitute a
quorum and to transact business at a stockholders' meeting. The
stockholders do not have any preemptive rights or conversion rights.
The Transfer Agent for the Company's Common Stock is Stock Transfer.com,
33 North Avenue, Suite 12, Burlington, VT (802) 862-8360.
A Delaware statute prevents an "interested stockholder" (defined generally
as a person owning more than 15% or more of a corporation's voting stock)
from engaging in a "business combination" with the Delaware corporation
for three years following the date the person became an interested
stockholder unless, generally speaking, the transaction is approved by the
Company's Board of Directors and the vote of two thirds of the outstanding
shares not owned by such interested stockholder. This statute could have
the effect of discouraging, delaying or preventing hostile takeovers,
including those that might result in the payment of a premium over market
price or changes in control or management of the Company.
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters
(a) Market Information. The Company's Common Stock has never traded.
(b) Holders. As of December 17, 2004, there were approximately six (6) holders
of the Company's common stock.
(c) Dividends. No dividends were paid during the fiscal year ending December
31, 2003. We do not expect to declare dividends for the immediate future.
9
Item 2. Legal Proceedings
There are no pending or threatened legal proceedings against the Company.
Item 3. Changes in and Disagreements with Accountants
The Company did not change accountants for the fiscal year ending 2003.
Item 4. Recent Sales of Unregistered Securities
None
Item 5. Indemnification of Directors and Officers
The Company's Certificate of Incorporation includes provisions to
eliminate, to the full extent permitted by Delaware General Corporation
Law as in effect from time to time, the personal liability of directors of
the Company for monetary damages arising from a breach of their fiduciary
duties as directors. The Certificate of Incorporation also includes
provisions to the effect that the Company shall, to the maximum extent
permitted from time to time under the law of the State of Delaware,
indemnify any director or officer. In addition, the Company's By-laws
require the Company to indemnify, to the fullest extent permitted by law,
any director, officer, employee or agent of the Company for acts which
such person reasonably believes are not in violation of the Company's
corporate purposes as set forth in the Certificate of Incorporation.
Section 145(a) of the Delaware Law provides that a corporation may
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an
action by or in the right of the corporation) by reason of the fact that
he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of non-contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interest
of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
10
Section 145(b) of the Delaware Law states that a corporation may indemnify
any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suite by or in the right of
the corporation to procure a judgment in its favor by reason of the fact
that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or
the court in which such action or suit is brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
Section 145(c) of the Delaware Law provides that to the extent that a
director, officer, employee or agent of a corporation has been successful
on the merits or otherwise in defense of any action, suit or proceeding
referred to in subsections (a) and (b) of section 145, or in defense of
any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
Section 145(d) of the Delaware Law states that any indemnification under
subsections (a) and (b) of section 145 (unless ordered by a court) shall
be made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or
agent is proper in the circumstances because he has met the applicable
standard of conduct set forth in subsections (a) and (b). Such
determination shall be made (i) by the board of directors by a majority
vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (ii) if such a quorum is not obtainable,
or, even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (iii) by the
stockholders.
Section 145(e) of the Delaware Law provides that expenses (including
attorneys' fees) incurred by an officer or director in defending any
civil, criminal, administrative or investigative action, suit or
proceeding may be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in section 145. Such expenses
(including attorneys' fees) incurred by other employees and agents may be
so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
Section 145(f) of the Delaware Law states that the indemnification and
advancement of expenses provided by, or granted pursuant to, the other
subsections of section 145 shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses
may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
11
Section 145(g) of the Delaware Law provides that a corporation shall have
the power to purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liability under the provisions of section 145.
Section 145(j) of the Delaware Law states that the indemnification and
advancement of expenses provided by, or granted pursuant to, section 145
shall, unless otherwise provided when authorized or ratified, continue as
to a person who has ceased to be a director, officer, employee or agent,
and shall inure to the benefit of the heirs, executors and administrators
of such a person.
12
PART F/S
Financial Statements
AMAZING NUTRITIONALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
November 15, 2004
13
AMAZING NUTRITIONALS, INC.
(A Development Stage Enterprise)
1
September 30, 2004
I N D E X
Page No.
--------
INDEPENDENT ACCOUNTANT'S REVIEW REPORT 15
BALANCE SHEETS 16
STATEMENTS OF OPERATIONS 17
STATEMENTS OF CASH FLOWS 18
NOTES TO FINANCIAL STATEMENTS 19-23
14
LIVINGSTON, WACHTELL & CO., LLP
Certified Public Accountants
29 Broadway, 25th Floor
New York, NY 10006-3208
(212) 480-0200
To the Board of Directors
Amazing Nutritionals, Inc.
New York, NY
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have reviewed the accompanying balance sheets of Amazing Nutritionals, Inc.
(a development stage enterprise) as of September 30, 2004 and 2003, and the
related statements of operations and cash flows for the nine months and the
three months then ended, and for the period from Inception (May 8 2002) to
September 30, 2004. These interim financial statements are the responsibility of
the management of Amazing Nutritionals, Inc.
We conducted our reviews in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying interim financial statements for them to be in
conformity with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from operations
and has an accumulated deficit that raised substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Livingston, Wachtell & Co., LLP
- -----------------------------------
New York, NY
November 15, 2004
15
AMAZING NUTRITIONALS, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
The accompanying notes are an integral part
of the financial statements.
September 30,
-------------
2004 2003
------------- -------------
Assets
Current assets
Cash and cash equivalents $ 839 $ --
Subscription receivable -- 4,275
------------- -------------
Total current assets 839 4,275
Other assets
Investment in product rights 3,330 --
------------- -------------
Total assets $ 4,139 $ 4,275
============= =============
Liabilities and Stockholders' Deficiency
Current liabilities
Bank overdraft $ -- $ 890
Accounts payable and accrued expenses 6,110 2,000
Due to related company 7,120 5,920
Due to shareholders 62,797 --
------------- -------------
Total liabilities 76,027 8,810
------------- -------------
Stockholders' deficiency
Common stock, $.0001 par value;
20,000,000 shares authorized;
7,575,000 shares issued and outstanding 757 --
Additional paid in capital 6,818 --
Common stock subscribed -- 4,275
Deficit accumulated during development stage (79,463) (8,810)
------------- -------------
Total stockholders' deficiency (71,888) (4,535)
------------- -------------
Total liabilities and stockholders' deficiency $ 4,139 $ 4,275
============= =============
The accompanying notes are an integral part of the financial statements.
16
AMAZING NUTRITIONALS, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
September 30,
------------- From
Nine Months Three Months Inception
Ended Ended May 8 2002 to
----------- ----------- September 30,
2004 2003 2004 2003 2004
----------- ----------- ----------- ----------- -----------
Revenues $ -- $ -- $ -- $ -- $ --
Cost of sales -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Gross profit -- -- -- -- --
General and
administrative
expenses 66,147 2,000 62,557 2,000 79,463
----------- ----------- ----------- ----------- -----------
Net loss (66,147) (2,000) (62,557) (2,000) (79,463)
Deficit - beginning of period
(13,316) (6,810) (16,906) (6,810) --
----------- ----------- ----------- ----------- -----------
Deficit - end of period $ (79,463) $ (8,810) $ (79,463) $ (8,810) $ (79,463)
=========== =========== =========== =========== ===========
Net loss per share - basic
$ .00 $ (.00) $ .00 .00
=========== =========== =========== ===========
Weighted average number of
shares outstanding - basic
7,562,956 0 7,575,000 0
=========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
17
AMAZING NUTRITIONALS, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
For the
Nine Months Cumulative Amounts
Ended Since Inception
September 30, May 8, 2002 to
------------- September 30,
2004 2003 2004
-------- -------- --------
Cash flows from operating activities
Net loss $(66,147) $ (2,000) $(79,463)
Adjustments to reconcile net loss from operations
to net cash used by operating activities:
Common stock issued for services -- -- 4,275
Changes in assets and liabilities:
Accounts payable & accrued expenses 3,886 2,000 6,110
-------- -------- --------
Net cash used in operations (62,261) -- (69,078)
-------- -------- --------
Cash flows from financing activities:
Due to shareholders 61,907 -- 62,797
Due to related company - APPI 1,093 -- 7,120
-------- -------- --------
Net cash provided by financing
activities 63,000 -- 69,917
-------- -------- --------
Net increase in cash and cash equivalents 739 -- 839
Cash and cash equivalents - beginning of period 100 -- --
-------- -------- --------
Cash and cash equivalents - end of period $ 839 $ -- $ 839
======== ======== ========
Supplemental cash flow information: Cash paid during the period for:
Interest $ -- $ -- $ --
======== ======== ========
Income taxes $ -- $ -- $ --
======== ======== ========
The accompanying notes are an integral part of the financial statements.
18
AMAZING NUTRITIONALS, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Amazing Nutritionals, Inc. ("the Company" or "ANI") focuses on the sale
of dietary health supplements. The Company is a development stage
enterprise that will focus on the selling and marketing of
nutritional supplements dedicated to improving health and well being
through the use of natural products. The Company intends to achieve
this goal through the acquisition of existing products.
TheCompany will also test market its own products in demographically
acceptable areas, and upon successful introduction of a product in
the marketplace, will distribute its products from distribution
outlets already established by Advanced Plant Pharmaceuticals, Inc,
("APPI"), a related entity owning 43.6% of the outstanding common
stock of the Company. ANI was incorporated in May 2002 and had
devoted all of its efforts since inception on acquiring agreements
and rights to various nutritional supplements and on raising capital.
The Company's operations are located in New York City.
CAPITAL RESOURCES AND BUSINESS RISKS
TheCompany has been primarily involved in organizational activities and
raising capital and is therefore in the development stage at
September 30, 2004. All future operations are subject to all of the
risks inherent in the establishment of a new business enterprise.
Additional capital resources through new offerings of securities will
be needed in order to achieve the Company's present objectives. The
Company plans on making the following expenditures: i) acquiring the
rights to market all natural dietary supplements; ii) applying for
patents for its line of proprietary nutritional supplements, iii)
performing research and development studies on new and existing
supplements, and iv) developing and implementing an extensive
marketing campaign to promote its line of proprietary nutritional
supplements.
LIQUIDITY AND FINANCIAL CONDITION
Theaccompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company has
suffered recurring losses from operations and has a net capital
deficiency that raises substantial doubt about its ability to
continue as a going concern.
As of September 30, 2004, current liabilities exceed current assets by
$75,188.
In order to commence operations it will be necessary for the Company to
raise adequate funds to make acquisitions and obtain working capital.
There can be no assurances that the Company will be successful in
acquiring the working capital required to bring its nutritional
supplements to the commercial market.
19
AMAZING NUTRITIONALS, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
(Continued)
CONTROL BY PRINCIPAL STOCKHOLDERS
TheCompany's director, executive officers and other related parties own
beneficially and in the aggregate, the majority of the voting power
of the outstanding shares of the common stock of Amazing
Nutritionals, Inc. Accordingly, the director, executive officers and
related parties, if they vote their shares uniformly, would have the
ability to control the approval of most corporate actions, including
increasing the authorized capital stock. as well as the dissolution,
merger or sale of all of the Company's assets.
CASH AND CASH EQUIVALENTS
TheCompany considers all highly liquid debt securities purchased with
original or remaining maturities of three months or less to be cash
equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Thecarrying amounts of cash and cash equivalents, accounts receivable,
accounts payable and accrued liabilities approximate fair market
value because of the short maturity of those instruments. It is not
practicable to estimate the fair value of loans payable to
stockholders due to the fact that they are related party
transactions.
REVENUE RECOGNITION
Upon commencement of revenue producing activities, revenue will be
recognized upon shipment to customers. The Company will adopt
Securities and Exchange Commission Staff Accounting Bulletin (SAB)
No. 101, which provided guidance on the recognition, presentation
and disclosure of revenue in financial statements.
COMMON STOCK ISSUED FOR SERVICES
The Company, which remains a development stage enterprise, anticipates
that shares of its common stock will be issued for services
rendered. The value of the stocks, issued for the services will be
based upon management's estimate of the fair value of the Company's
stock at the date of issuance or the fair value of the services
rendered, whichever is more reliably measurable.
RESEARCH AND DEVELOPMENT COSTS
Research and development costs will be expensed as incurred. Internal
research and development services that the Company contracts out are
expensed as incurred by the Company.
20
AMAZING NUTRITIONALS, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
(Continued)
INCOME TAXES
The Company will utilize the asset and liability method of accounting
for income taxes as required by Statement of Financial Accounting
Standards No. 109 ("SFAS 109"), Accounting For Income Taxes. sfas
109 requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of temporary differences
between the carrying amounts and the tax basis of certain assets and
liabilities.
USE OF ESTIMATES
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.
SIGNIFICANT ESTIMATES
Several areas require significant management estimates relating to
uncertainties for which it is reasonably possible that there will be
a material change in the near term. The more significant areas
requiring the use of management estimates related to the valuation
of inventory, intangible assets, all accrued liabilities and the
valuation of the stock options and stock issued for debt and
services provided by related parties.
2. RELATED PARTY TRANSACTIONS
Included in "Due to related company" are general and administrative
expenses paid by Advanced Plant Pharmaceuticals, Inc. ("APPI") on
behalf of the Company. The amount due for these expenses is $7,120
and $5,920 at September 30, 2004 and 2003, respectively.
Included in "Due to shareholders" are general and administrative
expenses paid by the Company's director. The amount due for these
expenses was $2,797 and $-0- at September 30, 2004 and 2003,
respectively.
3. COMMON STOCK
The Company is authorized to issue 20 million shares of its common
stock, par value $.0001 per share. The holders of common stock are
entitled to one vote per each share held on all matters to be voted
on by stockholders. As of September 30, 2004 the Company has
7,575,000 common shares, issued and outstanding.
21
AMAZING NUTRITIONALS, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
3. COMMON STOCK (Continued)
COMMON STOCK ISSUED FOR SERVICES
The Company issued 4,275,000 shares of common stock (including 4,200,000
shares to related parties) on December 17, 2003 for consulting
services rendered. The value of the stocks issued was recorded at
the fair value of the services rendered at the date of issuance, or
$4,275.
4. PURCHASE OF PRODUCT RIGHTS
On January 2, 2004, the Company acquired from APPI, all developmental
and distribution rights to an all natural dietary supplement to
help improve the lives of those afflicted with Alzheimer's disease.
As consideration for receiving the rights, the Company issued to
APPI a total of 3,300,000 shares of its common stock. Due to the
fact that the formulation has not undergone clinical testing and
development, this purchase transaction was recorded at the market
value of the shares issued on that date, or $3,300. There were no
direct expenses incurred by APPI, assigned specifically to this
product prior to the date of purchase. Since January 2, 2004
neither ANI nor APPI have incurred any expenses with respect to the
rights.
5. NET LOSS PER SHARE
The Company computed basic loss per share amounts for September 30, 2004
and 2003 pursuant to the Statement of Financial Accounting Standard
(SFAS) No. 128, "Earnings Per Share." Basic loss per common share
("LPS") is calculated by dividing net loss by the weighted average
of common shares outstanding during the period. Diluted earnings per
common share are calculated by adjusting the weighted average
outstanding shares, assuming conversion of all potentially dilutive
stock options. The Company has received stock subscriptions for
4,275,000 shares at September 30, 2003, which were converted into
common stock in December, 2003. The Company has not presented the
calculations for diluted LPS since the loss per share at September,
2003 would be anti-dilutive. There are no potentially dilutive
common shares at September 30, 2004.
September 30,
-------------
2004 2003
---- ----
Numerator for Basic
Net loss to common shareholders $ (66,147) $ (2,000)
=============== ==============
Denominator for Basic
Weighted average shares of common stock
outstanding 7,575,000 0
=============== ==============
LPS -- Basic $ (.01) $ (.00)
=============== ==============
22
AMAZING NUTRITIONALS, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
6. COMMITMENTS AND CONTINGENCIES
In February 2004, the Company entered into an employment agreement
with its President and Chief Executive Officer that calls for
annual compensation of $90,000 payable in monthly payments of
$7,500 through December 31, 2005. The agreement contains incentives
if certain sales levels are obtained by the Company up to
$2,000,000 of sales. The balance due as of September 30, 2004,
included in Due to Shareholders, is $60,000, and will be paid as
cash flow becomes available.
23
PART III
Item 1. Index to Exhibits
2.1 Asset Purchase Agreement with Advanced Plant Pharmaceuticals, Inc.
3.1 Certificate of Incorporation of AMAZING NUTRITIONALS, INC.
3.2 By-Laws of AMAZING NUTRITIONALS, INC.
10.1 Employment Agreement with Barry Clare
SIGNATURES
The undersigned directors and officers of Amazing Nutritionals, Inc. hereby
constitute and appoint Barry Clare, and each of them, with full power to act
without the other and with full power of substitution and re-substitution, our
true and lawful attorneys-in-fact with full power to execute in our name and
behalf in the capacities indicated below any and all amendments (including
post-effective amendments and amendments thereto) to this registration statement
under the Securities Act of 1933 and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission and hereby ratify and confirm each and every act and thing that such
attorneys-in-fact, or any them, or their substitutes, shall lawfully do or cause
to be done by virtue thereof.
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMAZING NUTRITIONALS, INC.
December 22, 2004 By: /s/ Barry Clare
-------------------------------
Barry Clare, President
24