REGISTRATION NO.
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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Form SB - 2
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REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
12 To 20 PLUS, INCORPORATED
(Exact name of registrant as specified in its charter)
Nevada 9995 86-0955239
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(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) identification No.)
3485 Sacramento Drive
Suite F
San Luis Obispo, California 93401
(805) 543-7228
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Maralyn Shane
1317 Pauline Way
Las Vegas, Nevada 89104
(702) 382-9648
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this registration
statement.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. [ ]
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.[X]
1
CALCULATION OF REGISTRATION FEE
<table>
- --------------------- ----------------------- ------------------------- ------------------------- --------------------
Title of each Proposed Proposed
Class of Maximum Maximum Amount of
Securities to Amount to be Offering Price Aggregate Registration
be registered Registered per unit Offering price Fee
- --------------------- ----------------------- ------------------------- ------------------------- --------------------
Common stock 29,700,000 $0.25 per share (1) $7,425,000 $683.10
- --------------------- ----------------------- ------------------------- ------------------------- --------------------
</table>
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said section 8(a), may determine.
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.(1)
PROSPECTUS
29,700,000 shares of common stock
12 TO 20 PLUS, INCORPORTED
29,700,000 shares of common stock of12 to 20 Plus, Incorporated. ($ 0.25
per share)
This is an offering of 29,700,000 shares of common stock by the selling
shareholders. The shares are being registered to permit public secondary trading
of the shares that are being offered by the selling shareholders named in this
prospectus. We will not receive any of the proceeds from the sale of the shares.
There is currently no public market for our shares and the selling shareholders
may, but are not obligated to, offer all or part of their shares for resale from
time to time through public or private transactions, at either prevailing market
prices or at privately negotiated prices.
This investment involves a high degree of risk. See "Risk Factors," which begins
on page 7.
Neither the SEC nor any state securities commission has approved or disapproved
these securities, passed upon the adequacy or accuracy of this prospectus, or
made any recommendation that you buy or not buy the shares. Any representation
to the contrary is a criminal offense.
This prospectus is not an offer to sell or our solicitation of your offer to buy
these securities in any jurisdiction where such would not be legal.
The date of this prospectus is April 9, 2003.
We intend to furnish our stockholders with annual reports containing audited
financial statements.
2
This prospectus contains certain "forward-looking statements" which involve
substantial risks and uncertainties. When used in this prospectus the
forward-looking statements are often identified by the use of such terms and
phrases as "anticipates," "believes," "intends," "estimates," "plans,"
"expects," "seeks," "scheduled," "foreseeable future" and similar expressions.
Although we believe the understandings and assumptions on which the
forward-looking statements in this prospectus are based are reasonable, our
actual results, performances and achievements could differ materially from the
results in, or implied by, these forward-looking statements, including those
discussed under the caption "Risk Factors."
3
TABLE OF CONTENTS
Page
PART I - Summary Information and Risk Factors ............................... 5
Prospectus Summary .................................................... 5
The Offering .......................................................... 5
Summary of Financial Information ...................................... 5
Risk Factors .......................................................... 5
Forward-Looking Statements ............................................ 10
Use of Proceeds ....................................................... 10
Determination of Offering Price ....................................... 10
Dilution .............................................................. 10
Selling Security Holders .............................................. 11
Plan of Distribution .................................................. 14
Legal Proceedings ..................................................... 15
Directors, Executive Officers, Promoters and Control Persons .......... 15
Security Ownership of Certain Beneficial Owners and Management ........ 15
Description of Securities ............................................. 16
Interests of Named Experts and Counsel ................................ 17
Description of Business ............................................... 17
Management's Discussion and Analysis or Plan of Operation ............. 19
Description of Property ............................................... 21
Certain Relationships and Related Transactions ........................ 21
Market for Common Equity and Related Shareholder Matters .............. 21
Dividend Policy ....................................................... 21
Executive Compensation ................................................ 22
Shares Eligible For Future Sale ....................................... 22
Legal Matters ......................................................... 22
Experts ............................................................... 22
Additional Information ................................................ 23
Transfer Agent ........................................................ 23
Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures .......................................... 23
PART II - Financial Statements .............................................. 24
PART III - Information Not Required in Prospectus ........................... 36
Recent Sales of Unregistered Securities ............................... 36
Exhibits .............................................................. 37
Undertakings .......................................................... 38
Signatures ............................................................ 38
4
PART I
SUMMARY INFORMATION AND RISK FACTORS.
PROSPECTUS SUMMARY
Unless the context indicates otherwise, all references in this prospectus to
"we," or the "Company," refer to 12 to 20 Plus, Incorporated, a corporation
formed under the laws of the State of Nevada on April 29, 1996.
12 to 20 Plus, Incorporated, a Nevada corporation, is a development stage
company engaged in the research, development and marketing of medicated skin
care and dietary supplement products.
Our executive offices are located at 3485 Sacramento Drive, Suite F, San Luis
Obispo, California 93401. Our telephone number is (805) 543-7228.
THE OFFERING
Price per share offered $0.25*
Common stock offered by selling shareholders 29,700,000 shares
Common stock outstanding prior to this offering 29,700,000 shares
Common stock to be outstanding after the offering 29,700,000 shares
* Estimated solely for the purpose of calculating the registration fee pursuant
to Rule 457.
SUMMARY OF FINANCIAL INFORMATION
The following summary financial information for the periods stated summarizes
certain information from our financial statements included elsewhere in this
prospectus. You should read this information in conjunction with Management's
Plan of Operations and the financial statements and the related notes thereto
included elsewhere in this prospectus.
Income Statement For the period from January 1, 2002 to
December 31, 2002 (audited)
---------------------------
Revenues $ 0
Net Income (Loss) $(20,916)
Net Income (Loss) per Share $*
Balance Sheet As of December 31, 2002 (audited)
Total Assets $ 30,779
Total Liabilities $ 61,051
Shareholders' Equity (Deficit) $(30,272)
* Less than 0.001 per share
RISK FACTORS
Limited operating history; anticipation of losses.
The Company was incorporated on April 29, 1996. The Company is a development
stage business with a limited operating history. Companies in an early stage of
development frequently encounter many risks, expenses and difficulties,
especially if they operate in new and rapidly evolving markets such as the
healthcare services sectors that the Company has targeted. The risks faced by
the Company include, but are not limited to, the need to continue to raise debt
5
and/or equity capital, a new and evolving business model and the management of
growth. To address these risks, the Company must, among other things, continue
to develop the strength and quality of its operations, maximize the value
delivered to clients, respond to competitive developments and continue to
attract, retain and motivate qualified employees and managers. If the Company is
not successful, its business, results of operations and financial condition will
be materially and adversely affected.
The Company cannot be sure that it will be successful in implementing the
Company's business model or that its business model will not require further
changes as its business and target markets mature. In addition, the Company
intends to continue to invest heavily in infrastructure development and
marketing. The Company will need to raise substantial amounts of debt and/or
additional equity capital to fund these operations. As a result, the Company
expects to incur operating losses for the foreseeable future and will need to
raise capital to fund these losses. The Company may not be able to achieve or
sustain profitability.
The Company will require significant future capital and its ability to raise
additional capital is uncertain.
The expansion and development of the Company's business will require significant
additional capital. The Company will need to secure financing in order to fund
its operations. The Company may be unable to raise additional capital on
acceptable terms, or at all. If the Company is unable to raise additional
capital, its business will be significantly harmed, including its ability to
meet its operating capital requirements and to compete successfully.
Furthermore, any debt financing, if available, may involve restrictive
covenants, which may limit the Company's operating flexibility with respect to
certain business matters. If additional funds are raised through the issuance of
equity securities, the percentage ownership of the Company's existing
stockholders will be reduced, its stockholders may experience additional
dilution in net book value per share, and such equity securities may have
rights, preferences or privileges senior to those of the Company's existing
stockholders.
To succeed the Company will need to secure and fill new orders from its
customers because it is not likely to have long-term agreements or exclusive
contracts with them.
The Company does not anticipate that it will be able to enter into long-term
agreements or exclusive guaranteed order contracts with many or any customers
that it may acquire. Its success will depend on its ability to continually
secure new orders from existing and new customers and to fill such orders in a
timely fashion. In most or all cases, the Company's customers will be free to
place orders or do business with our competitors, and in most if not all cases,
our retail customers have a right to return 100% of unsold product. Therefore,
the Company must maintain positive relationships with its customers. If it fails
to maintain positive relationships with its customers, it may be unable to
generate new orders and its business may be adversely affected.
The sale our products involves product liability and other risks.
Like any other distributor or manufacturer of medicated skin care and dietary
supplement products, we face an inherent risk of exposure to product liability
claims if the use of our products results in illness or injury. If we do not
have adequate insurance or contractual indemnification, product liability claims
could have a material adverse effect on our business. Manufacturers and
distributors of medicated skin care products and dietary supplements have been
6
named as defendants in product liability lawsuits from time to time. While the
Company maintains liability insurance, the successful assertion or settlement of
claim may exceed the limits of our policy and/or result in higher premium costs
in the future. Such events would harm us by adding further costs to our business
and by diverting the attention of our senior management from the operation of
our business.
Some of our products contain innovative ingredients or combinations of
ingredients, and there is little long-term experience with human exposure to,
and consumption of, these ingredients or combinations in concentrated form. In
addition, interactions of these products with other similar products,
prescription medicines and over-the-counter drugs have not been fully explored.
There are no conclusive clinical studies regarding many of our products. We
depend upon customer perceptions about the safety and quality of our products
and of similar products distributed by our competitors. The mere publication of
reports asserting that a particular product may be harmful may substantially
reduce or eliminate sales of the product, regardless of whether the reports are
scientifically supported and regardless of whether the harmful effects would be
present at recommended dosages.
We depend on third party shippers to deliver our products in a timely manner.
Our product distribution relies on third-party delivery services, including the
United States Postal Service and United Parcel Service. Strikes and other
interruptions may delay the timely delivery of customer orders, and customers
may refuse to purchase our products because of this loss of convenience.
Extensive governmental regulation could limit our sales or add significant
additional costs to our business.
Governmental regulation may limit our sales or add significant additional costs
to our business. The two principal federal agencies that regulate our products
are the Food and Drug Administration and the Federal Trade Commission. Among
other matters, FDA regulations govern claims that assert the health and
nutritional value of a product. Many FDA and FTC remedies and processes,
including imposing civil penalties in the millions of dollars and commencing
criminal prosecution, are available under federal statutes and regulations if
product claims violate the law. Similar enforcement action may also result from
noncompliance with other regulatory requirements, such as FDA labeling rules.
The FDA also reviews some product claims that companies must submit for agency
evaluation and may find them unacceptable. State, local and foreign authorities
may also bring enforcement actions for violations of these laws. In addition,
because we sell products outside the United States, our business is also subject
to the risks associated with United States and foreign legislation and
regulations relating to exports.
Failure to properly manage growth could adversely affect the Company's business.
The Company intends to grow its business internally. Any such growth will
increase the demands on the Company's management, operating systems and internal
controls. The Company's existing management resources and operational,
financial, human and management information systems and controls may be
inadequate to support existing or expanded operations. The Company may be unable
to manage growth successfully. If the Company grows but is unable to
successfully manage such growth, its business will suffer and its capacity for
future growth will be significantly impaired. Because of these factors, the
Company may be unable to predict with any degree of accuracy its future ability
to grow or rate of growth.
7
Failure to attract, train and retain skilled managers and other personnel could
increase costs or limit growth.
The Company believes that its future success will depend in large part upon its
ability to attract, train and retain additional highly skilled executive-level
management and creative, technical, financial and marketing personnel.
Competition for such personnel is intense, and no assurance can be given that
the Company will be successful in attracting, training and retaining such
personnel. The Company's need for executive-level management will increase if it
grows. Most of the Company's employees have joined the Company recently. If the
Company fails to attract, train and retain key personnel, its business,
operating results and financial condition will be materially and adversely
affected.
The Company operates in a developing market.
The medicated skincare and dietary supplement markets have experienced
occasional slowdowns. The market for the Company's products may not develop, and
therefore, consumers may not adopt the Company's products. If the market for the
Company's products fail to develop, or develops more slowly than expected, or if
its services do not achieve market acceptance, the Company's business, operating
results and financial condition will be materially and adversely affected.
The Company's business is subject to continuous change.
The market for the products the Company intends to provide is characterized by
rapid changes in the competitive landscape, changing consumer requirements and
preferences, new service and product introductions and evolving industry
standards that could render the Company's products obsolete. The Company's
success will depend, in large part, on its ability to improve such products,
develop new products that address the increasingly sophisticated and varied
needs of the Company's customers, and respond to technological advances,
emerging industry standards and practices, and competitive product offerings.
The Company may not be successful in responding quickly, cost-effectively and
sufficiently to these developments. If the Company is unable, for technical,
financial or other reasons, to adapt in a timely manner in response to changing
market conditions or requirements, its business, results of operations and
financial condition would be materially adversely affected.
The Company is dependent on its management team.
The Company's success depends largely on the skills of certain key management.
The Company does not have employment agreements with its executive officers, key
management or other employees and, therefore, they could terminate their
employment at any time without penalty. The Company does not maintain key person
life insurance policies on any of its employees. The loss of one or more of its
key employees could seriously harm its business. The Company may not be able to
recruit personnel to replace these individuals in a timely manner, or at all, on
acceptable terms. In addition, since the Company has a limited operating
history, all of its officers are relatively new to the Company and their ability
to effectively work together as a team is unproven. The Company's success
depends on their ability to work together effectively. If the management team
fails to work together effectively, the Company's business will be harmed.
The Company operates in a highly competitive market.
The markets for over-the-counter medicated skin products and dietary supplements
are highly competitive. The Company believes that competition will intensify and
increase in the future. The Company's competitors include other providers of
8
over-the-counter medicated skin product remedies and dietary supplements. Since
the Company is recently formed, has a limited history of business operations and
has not previously raised significant capital, virtually all of these
competitors enjoy substantial competitive advantages, such as:
o existing products and services and experience in the marketplace;
o greater name recognition and larger marketing budgets and resources;
o established marketing and customer relationships; and
o substantially greater financial, technical and other resources.
As a result, these competitors may be able to respond more quickly and
effectively than the Company to new or changing opportunities, technologies or
customer requirements. Existing or future competitors may develop or offer
products that provide price, service, number or type of providers or other
advantages over those the Company intends to offer. If the Company fails to
compete successfully against current or future competitors with respect to these
or other factors, its business, financial condition, and results of operations
may be materially and adversely affected.
Government regulation and legal uncertainties could adversely affect the
Company's business.
Licensing laws and regulations often differ materially between states and within
individual states such laws and regulations are subject to amendment and
reinterpretation by the agencies charged with their enforcement. If the Company
becomes subject to any licensing or regulatory requirements, the failure to
comply with any such requirements could lead to a revocation, suspension or loss
of licensing status, termination of contracts and legal and administrative
enforcement actions. The Company cannot be sure that a review of its current and
proposed operations will not result in a determination that could materially and
adversely affect its business, results of operations and financial condition.
Moreover, regulatory requirements are subject to change from time to time and
may in the future become more restrictive, thereby making compliance more
difficult or expensive or otherwise affecting or restricting the Company's
ability to conduct its business as proposed to be conducted.
Shareholders could experience substantial dilution.
The Company intends to issue additional shares of its equity securities to raise
additional cash for working capital. If the Company issues additional shares of
its capital stock, shareholders will experience dilution in their respective
percentage ownership in the Company.
There can be no assurance that the Company's common stock will ever be publicly
traded or appreciate significantly in value.
The Company, in conjunction with certain broker-dealers, intends to apply to the
National Association of Securities Dealers to have its stock publicly traded on
the Nasdaq Over-the-Counter Electronic Bulletin Board. No assurance can be given
that such regulatory approval will ever be received. If the Company's common
stock becomes publicly traded, no assurance can be given that the Company's
common stock will ever be traded on an established national securities exchange
or that the Company's business strategy will be well received by the investment
community.
No present intention to pay dividends.
The Company has never paid dividends or made other cash distributions on the
common stock, and does not expect to declare or pay any dividends in the
foreseeable future. The Company intends to retain future earnings, if any, for
working capital and to finance current operations and expansion of its business.
9
Penny stock regulation.
The Securities and Exchange Commission (the "SEC") has adopted rules that
regulate broker-dealer practices in connection with transactions in "penny
stocks." Penny stocks generally are equity securities with a price of less than
$5.00 (other than securities registered on certain national securities exchanges
or quoted on the NASDAQ system, provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange or system). Penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from those rules, to deliver a
standardized risk disclosure document prepared by the SEC, which specifies
information about penny stocks and the nature and significance of risks of the
penny stock market. A broker-dealer must also provide the customer with bid and
offer quotations for the penny stock, the compensation of the broker-dealer, and
our sales person in the transaction, and monthly account statements indicating
the market value of each penny stock held in the customer's account. In
addition, the penny stock rules require that, prior to a transaction in a penny
stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for stock that becomes subject to those penny
stock rules. If any of our securities become subject to the penny stock rules,
holders of those securities may have difficulty in selling those securities.
FORWARD-LOOKING STATEMENTS
You should be aware that any forward-looking statements in this prospectus
involve risks and uncertainties as they are based on certain stated assumptions
which may apply only as of the date of this prospectus. We use words such as
"anticipates," "believes," "plans," "expects," "future," "intends" and similar
expressions to identify these forward-looking statements and the actual results
of our operations could differ materially from those anticipated in these
forward-looking statements.
USE OF PROCEEDS
We will not receive the proceeds from the sale of any of the 29,700,000 shares
offered by the selling shareholders. We will, however, pay the costs of
registering those shares.
DETERMINATION OF OFFERING PRICE
We arbitrarily determined the price of the shares in this offering solely for
the purpose of calculating the registration fee pursuant to Rule 457 and it is
not an indication of the actual value of the Company. Therefore, the offering
price bears no relationship to our book value, assets or earnings, or to any
other recognized measure of value and it should not be regarded as an indicator
of any future market price of the securities.
DILUTION
Since this offering is being made solely by the selling stockholders and none of
the proceeds will be paid to our Company, our net tangible book value will be
unaffected by this offering.
10
SELLING SECURITY HOLDERS
The following table sets forth the names of the selling shareholders and for
each selling shareholder the number of shares of common stock beneficially owned
as of March 31, 2003, and the number of shares being registered. All information
with respect to share ownership has been furnished by the selling shareholders.
The shares being offered are being registered to permit public secondary trading
of the shares and each selling shareholder may offer all or part of the shares
owned for resale from time to time. A selling shareholder is under no
obligation, however, to sell any shares immediately pursuant to this prospectus,
nor is a selling shareholder obligated to sell all or any portion of the shares
at any time. Therefore, no estimate can be given as to the number of shares of
common stock that will be sold pursuant to this prospectus or the number of
shares that will be owned by the selling shareholders upon termination of the
offering made hereby.
- ------------------------------------------ ---------------- --------------------
Selling Shareholders Shares of Common Shares of Common
Stock Owned Stock to be Sold
- ------------------------------------------ ---------------- --------------------
Chris Allen 6,000 6,000
- ------------------------------------------ ---------------- --------------------
Ascot Chase Co. 720,000 720,000
- ------------------------------------------ ---------------- --------------------
Robert Atwell 6,000 6,000
- ------------------------------------------ ---------------- --------------------
John J. Badger 6,000 6,000
- ------------------------------------------ ---------------- --------------------
Brunton Bauer & Hannah Bauer 51,462 51,462
- ------------------------------------------ ---------------- --------------------
Joseph Jay Binsfeld 90,000 90,000
- ------------------------------------------ ---------------- --------------------
Michael Grant Blanchard 90,000 90,000
- ------------------------------------------ ---------------- --------------------
Broadwalk Investment Corp. 3,760,000 3,760,000
- ------------------------------------------ ---------------- --------------------
Bryan Stone Trust 28,098 28,098
- ------------------------------------------ ---------------- --------------------
Robert L. Cashman 6,000 6,000
- ------------------------------------------ ---------------- --------------------
Andrew N. Cattano 44,460 44,460
- ------------------------------------------ ---------------- --------------------
Coslabs, Ltd. 4,518,738 4,518,738
- ------------------------------------------ ---------------- --------------------
Lynn G. Cranmer 30,402 30,402
- ------------------------------------------ ---------------- --------------------
Gary M. Dolan 33,894 33,894
- ------------------------------------------ ---------------- --------------------
Lawrence M. Field 87,462 87,462
- ------------------------------------------ ---------------- --------------------
David Fitzpatrick 36,234 36,234
- ------------------------------------------ ---------------- --------------------
John Folio 90,000 90,000
- ------------------------------------------ ---------------- --------------------
Marcie Jo Van Hemmel 90,000 90,000
- ------------------------------------------ ---------------- --------------------
Michael Frankenburger 6,000 6,000
- ------------------------------------------ ---------------- --------------------
11
H. Bana, Ltd. 900,000 900,000
- ------------------------------------------ ---------------- --------------------
R. Donald Hagerman 28,098 28,098
- ------------------------------------------ ---------------- --------------------
Doug Hamby 6,000 6,000
- ------------------------------------------ ---------------- --------------------
Linda Hannon 540,000 540,000
- ------------------------------------------ ---------------- --------------------
R. Jeffrey Herten 53,874 53,874
- ------------------------------------------ ---------------- --------------------
John Hickey 828,000 828,000
- ------------------------------------------ ---------------- --------------------
Cindy Jackson & Keven Jackson JT 90,000 90,000
- ------------------------------------------ ---------------- --------------------
Elizabeth Jaeger 540,000 540,000
- ------------------------------------------ ---------------- --------------------
David Kagel 90,000 90,000
- ------------------------------------------ ---------------- --------------------
Dale W. King 25,758 25,758
- ------------------------------------------ ---------------- --------------------
Martha Kreider 90,000 90,000
- ------------------------------------------ ---------------- --------------------
Kirk Kroloff 90,000 90,000
- ------------------------------------------ ---------------- --------------------
Chris Mackey 90,000 90,000
- ------------------------------------------ ---------------- --------------------
David Mackey 30,000 30,000
- ------------------------------------------ ---------------- --------------------
Pamela Mackey 90,000 90,000
- ------------------------------------------ ---------------- --------------------
John T. Mahnke 49,230 49,230
- ------------------------------------------ ---------------- --------------------
Salli Marinov 790,000 790,000
- ------------------------------------------ ---------------- --------------------
Brendan V. McAdams 72,630 72,630
- ------------------------------------------ ---------------- --------------------
Richard McAtee 30,402 30,402
- ------------------------------------------ ---------------- --------------------
Patrick McMullen 450,000 450,000
- ------------------------------------------ ---------------- --------------------
Merrill, Lynch, Pierce,Fenner & Smith Co. 60,000 60,000
- ------------------------------------------ ---------------- --------------------
Donald Miller 25,758 25,758
- ------------------------------------------ ---------------- --------------------
Dennis Mitchem 90,000 90,000
- ------------------------------------------ ---------------- --------------------
Donald R. Monaco 39,744 39,744
- ------------------------------------------ ---------------- --------------------
Robert Neal 28,098 28,098
- ------------------------------------------ ---------------- --------------------
North American Equities 4,500,000 4,500,000
- ------------------------------------------ ---------------- --------------------
Roice Norwood 90,000 90,000
- ------------------------------------------ ---------------- --------------------
Overland Food Company 900,000 900,000
- ------------------------------------------ ---------------- --------------------
Michael Paloma 6,000 6,000
- ------------------------------------------ ---------------- --------------------
Charles S. Putnam, Jr. 25,758 25,758
- ------------------------------------------ ---------------- --------------------
12
Theodore Roetken 90,000 90,000
- ------------------------------------------ ---------------- --------------------
Salli Marinov C/F Marissa Royle UGMA AZ 90,000 90,000
- ------------------------------------------ ---------------- --------------------
L. Robert Sattenspiel 450,000 450,000
- ------------------------------------------ ---------------- --------------------
Sedona Horizons Corporation 90,000 90,000
- ------------------------------------------ ---------------- --------------------
Carol Slavin 1,080,000 1,080,000
- ------------------------------------------ ---------------- --------------------
Rodger Spainhower 6,000 6,000
- ------------------------------------------ ---------------- --------------------
Michael Staudemeier 450,000 450,000
- ------------------------------------------ ---------------- --------------------
Robert Strahl 6,000 6,000
- ------------------------------------------ ---------------- --------------------
Brianna Tennant 100,000 100,000
- ------------------------------------------ ---------------- --------------------
Brianna Tennant & J.D. Tennant 720,000 720,000
- ------------------------------------------ ---------------- --------------------
J.D. Tennant 100,000 100,000
- ------------------------------------------ ---------------- --------------------
Nicolaas H. Vandenbrekel 6,000 6,000
- ------------------------------------------ ---------------- --------------------
Richard Vonstein 30,402 30,402
- ------------------------------------------ ---------------- --------------------
Dan Walters 6,000 6,000
- ------------------------------------------ ---------------- --------------------
John Warkentin 67,932 67,932
- ------------------------------------------ ---------------- --------------------
Wells Fargo Investments, L.L.C. 6,000 6,000
- ------------------------------------------ ---------------- --------------------
Werbel Family Trust 36,918 36,918
- ------------------------------------------ ---------------- --------------------
Richard C. Williams 54,648 54,648
- ------------------------------------------ ---------------- --------------------
David Young 1,280,000 1,280,000
- ------------------------------------------ ---------------- --------------------
Joann Young 90,000 90,000
- ------------------------------------------ ---------------- --------------------
Philip M. & Joann Young Family Trust 4,140,000 4,140,000
- ------------------------------------------ ---------------- --------------------
Zenac, Inc. 450,000 450,000
- ------------------------------------------ ---------------- --------------------
Total 29,700,000 29,700,000
- ------------------------------------------ ---------------- --------------------
13
PLAN OF DISTRIBUTION
The 29,700,000 shares being offered by the selling shareholders may be sold or
distributed from time-to-time by the selling shareholders or their transferees
directly to one or more purchasers or through brokers, dealers, or underwriters
who may act solely as agents or may acquire shares as principals. Such sales or
distributions may be made at prevailing market prices, at prices related to such
prevailing market prices, or at variable prices negotiated between the sellers
and purchasers that may vary. The distribution of the shares may be effected in
one or more of the following methods:
-- ordinary brokerage transactions, including long or short sales,
-- transactions involving cross or block trades, or otherwise on the OTC
Bulletin Board,
-- purchases by brokers, dealers, or underwriters as principals and
subsequent resales by the purchasers for their own accounts pursuant
to this prospectus,
-- sales "at the market" to, or through, market makers or into an
existing market for the shares,
-- sales not involving market makers or established trading markets,
including direct sales to purchasers or sales effected through agents,
-- transactions involving options, swaps, or other derivatives, whether
exchange-listed or otherwise, or
-- transactions involving any combination of the foregoing or any other
legally available means.
In addition, a selling shareholder may enter into hedging transactions with one
or more broker-dealers who may engage in short sales of shares in the course of
hedging the positions they assume with the selling shareholder. A selling
shareholder may also enter into option or other transactions with one or more
broker-dealers requiring the delivery of the shares by such broker-dealers with
the possibility that such shares may be resold thereafter pursuant to this
prospectus.
A broker, dealer, underwriter, or agent participating in the distribution of the
shares may receive compensation in the form of discounts, concessions, or
commissions from the selling shareholders and/or purchasers of the shares for
whom such person may act as an agent, to whom such person may sell as principal,
or both; and such compensation as to a particular person may be in excess of
customary commissions. The selling shareholders and any broker-dealers acting in
connection with the sale of the shares being registered may be deemed to be
underwriters within the meaning of Section 2(11) of the Securities Act of 1933
(the "Securities Act"), and any profit realized by them on the resale of shares
as principals may be deemed underwriting compensation under the Securities Act.
We know of no existing arrangements between any of the selling shareholders and
any other shareholder, broker, dealer, underwriter, or agent relating to the
sale or distribution of the shares, nor can we presently estimate the amount, if
any, of such compensation.
Although we will receive no proceeds from the sale of shares pursuant to this
prospectus, we have agreed to bear the costs and expenses of the registration of
the shares, including legal and accounting fees, and such costs and expenses are
estimated to be approximately $26,483.
14
We have informed the selling shareholders that while they are engaged in a
distribution of the shares included in this prospectus they will be required to
comply with certain anti-manipulative rules contained in Regulation M under the
Exchange Act. With certain exceptions, Regulation M prohibits any selling
shareholder, any affiliated purchaser, and any broker-dealer or other person who
participates in such distribution from bidding for or purchasing, or attempting
to induce any person to bid for or purchase any security that is the subject of
the distribution until the entire distribution is complete. Regulation M also
prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security.
LEGAL PROCEEDINGS
No legal proceedings have been or are currently being undertaken for or against
the Company, nor are we aware of any contemplated proceedings.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The directors and executive officers currently serving the Company are as
follows:
Name Age Positions Held and Tenure
- --------------------------------------------------------------------------------
Carol Slavin 60 Director, President April 12, 2002
Linda Hannon 60 Director, Secretary April 12, 2002
Elizabeth Yaeger 30 Director April 12, 2002
Carol Slavin, 60 , Director/President, has 26 years experience encompassing
every phase of consumer product development from labeling requirements to source
components and suppliers. In addition, Ms. Slavin has been involved in all
aspects of the nutritional supplement products business for over 10 years. A
former fashion editor, she also has an extensive public relations, promotion and
media writing background. Special assignments she created on a freelance basis
include initiating a liaison with the White House to obtain then First Lady
Betty Ford as honored guest for a City of Hope Medical Center fund raiser and
successful execution of extensive broadcast and print coverage for the National
Father's Day Council and the International Fashion Group programs, Los Angeles
chapter. Ms. Slavin has completed courses in Journalism and English at Cerritos
College, and was previously employed by Neurochemical Research Corporation for
the past 5 years.
Linda Hannon, 60, Director/Secretary, has served for the past 5 years as a
Customer Service Supervisor for AutoDoc Software, a producer of Palm Pilot
software for physicians. Previously, she worked in customer service for LabCo
Pharmaceuticals' hospital, clinical market segment and industrial accounting in
the nutritional supplement and energy industries, as well as with Eagle Energy,
a petroleum business. Ms Hannon has studied business and accounting at Cuesta
College.
Elizabeth Jaeger, 30, Director, is Vice President and Marketing Director for
Cannon Associates, a civil engineering and planning firm whose major client is
UNOCAL and has served in that capacity for the past 5 years. She is a graduate
of the University of Washington with a B.A. degree in communications.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 31, 2003, certain information with
respect to the beneficial ownership of our common stock by (i) each director and
15
officer of the Company, (ii) each person known to the Company to be the
beneficial owner of 5% or more of the outstanding shares of common stock, with
such person's address, and (iii) all of the directors and officers as a group.
Unless otherwise indicated, the person or entity listed in the table is the
beneficial owner of the shares and has sole voting and investment power with
respect to the shares indicated.
Name of Beneficial Owner Shares Beneficially
or Name of Officer or Director Owned Percent
Carol Slavin 1,080,000 3.6%
Director/President
P.O. Box 260
Santa Margarita, CA 93453
Linda Hannon 540,000 1.8%
Director/Secretary
33 Villa Santa Barbara
Paso Robles, CA 93446
Elizabeth Jaeger 540,000 1.8%
Director/Secretary
132 Broad Street
San Luis Obispo, CA 93405
Broadwalk Investment Corp 3,760,000 12.7%
P.O. Box 260
Santa Margarita, CA 93453
Coslabs, Ltd. 4,518,738 15.2%
1350 E. Flamingo #1091
Las Vegas, NV 89719
North American Equity 4,500,000 15.2%
P.O. Box 101
Santa Margarita, CA 93453
Philip M. Young & JoAnn Young 4,140,000 13.9%
FamilyTrust
18036 N. 15th Street
Phoenix, AZ 85022
________________________________________________________________________
Total Director/Officer/ 19,078,738 64.2%
5% Owners
DESCRIPTION OF SECURITIES
The following description is a summary of the material terms of our capital
stock. This summary is subject to and qualified in its entirety by our Articles
of Incorporation, as amended, and Bylaws, and by the applicable provisions of
Nevada law.
The authorized capital stock of the company consists of 100,000,000 shares of
common stock having a par value of $0.001 per share. Each outstanding share of
common stock entitles the holder thereof to one vote per share on all matters.
The Articles of Incorporation do not permit cumulative voting for the election
of directors which means that the holders of more than 50% of such outstanding
shares voting for the election of directors can elect all of the directors to be
elected, if they so choose; in such event, the holders of the remaining shares
will not be able to elect any of our directors. Shareholders do not have
preemptive rights to purchase shares in any future issuance of our common stock.
16
The holders of shares of common stock are entitled to dividends out of funds
legally available when and as declared by the Board of Directors. The Board of
Directors has never declared a dividend and does not anticipate declaring a
dividend in the foreseeable future. In the event of liquidation, dissolution or
winding up of the affairs of the company, holders are entitled to receive,
ratably, the net assets available to shareholders after payment of all
creditors.
All of the issued and outstanding shares of common stock are duly authorized,
validly issued, fully paid, and non-assessable. To the extent that additional
shares of our common stock are issued, the relative interests of existing
shareholders will be diluted.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No "Expert" or "Counsel" as defined by Item 509 of Regulation S-B promulgated
pursuant to the Securities Act of 1933, whose services were used in the
preparation of this Form SB-2 was hired on a contingent basis or will receive a
direct or indirect interest in the Company.
DESCRIPTION OF BUSINESS
The Company
The Company was originally incorporated in the State of Nevada on April 29, 1996
as "Loughran/Go Corporation" (See Exhibit 3.1.). On April 12, 2002, the Company
entered into an Agreement and Plan of Merger with 12 to 20 Plus, Incorporated
(12 to 20), a Delaware corporation, whereby 12 to 20 was merged into the
Company, and the Company was the surviving company. The Articles of Merger were
filed with the Secretary of State of Nevada on May 8, 2002 (See Exhibit 3.3).
The Company filed Articles of Amendment to Charter amending its Articles of
Incorporation with the Secretary of State of Nevada to change the Company's name
to "12 to 20 Plus, Incorporated" (See Exhibit 3.4).
Immediately prior to the effective date of the merger, the Company had 500,000
shares of its common stock issued and outstanding. Pursuant to the Plan of
Merger, the Company issued an additional 950,000 shares to the shareholders of
12 to 20. Thus, upon the consummation of the merger, the Company had 1,450,000
shares of its common stock issued and outstanding out of 25,000,000 shares
authorized.
On June 20, 2002, a majority of the shareholders of the Company authorized a
forward stock split of three (3) shares of the common stock of the Company for
every one (1) share of the common stock of the Company held by shareholders of
the Company at the date of the merger. Immediately prior to the stock split
there were 4,450,000 shares of the Company's common stock issued and
outstanding. Upon the date, and as a result, of the stock split, the Company had
13,350,000 shares of issued and outstanding common stock.
On October 28, 2002, a majority of the shareholders authorized an increase in
the authorized capital of the Company from 25,000,000 shares of common stock to
100,000,000 shares of common stock. A Certificate of Amendment to Articles of
Incorporation was filed with the Nevada Secretary of State on November 1, 2002
(See Exhibit 3.5).
On October 30, 2002, a majority of the shareholders of the Company authorized a
forward stock split of six (6) shares of common stock of the Company for every
one (1) share of the common stock of the Company held by shareholders as of that
date. Three (3) shareholders also returned 8,400,000 shares of common stock to
17
the treasury of the Company. Immediately prior to the stock split there were
4,950,000 shares of the Company's common stock issued and outstanding.
Immediately after the stock split the Company had 29,700,000 shares of its
common stock issued and outstanding.
The Business
12 to 20 Plus, Inc. has researched and developed an innovative Acne Therapy
System(TM), driven by the market void for effective over-the-counter products
that treat acne skin conditions without irritation. The 12 to 20 Plus concept is
counter to the acne treatment industry's marketing of harsh products which are
designed to "strip away" acne and while the acne is being stripped, the skin is
being robbed of its natural moisture and the acne condition is actually being
aggravated in the process.
12 to 20 Plus products offer the following benefits over typical acne treatment
products:
a. reduced irritation
b. moisture retention properties
c. maintenance of skin's natural pH balance
d. skin healing qualities
The complete system of product use is key to the marketing concept. The 12 to 20
Plus system is gentle enough for daily use and primarily designed to help
control and prevent acne conditions from taking over.
Acne treatment products are constantly in demand, and demand for less-irritating
products is skyrocketing. While teenagers are the primary demographic targets,
there has been a shift to develop remedies geared toward adults. Retailers say
adult acne is an area of increased interest and it is an increasing problem due
to environmental stress. Dermatologists report that since adults have more
sensitive skin, their acne needs to be treated differently than teenage
breakouts. The ingredients in the Company's products are gentle enough to treat
adult skin.
The product mix combines high purity drying and peeling agents (for the purpose
of exfoliation), chosen for their gentleness to skin along with biological and
botanical extracts and water-soluble humectants that gently, powerfully and
quickly treat acne conditions. Zit Stick, a handy carry-around remedy in a
pocket-size container is odorless, colorless and greaseless; a product developed
to treat skin blemishes any time of the day. Companion products include Pimple
Pencil(TM), a medicated cover stick in a pencil and soothing Blemish -Free Skin
Enhancer Lotion(TM) containing antioxidants, vitamins and enzymes plus silky
smooth amino acids for beautiful skin.
Acquisition and Overview of Operating Division
Because of its highly technical approach to advanced product development
technology, 12 to 20 Plus, Inc. seized the opportunity to acquire certain assets
of Nuerochemical Research Corporation, a Nevada corporation ("NRC"), in exchange
for an assumption of certain liabilities of NRC, a company with a shared
philosophy already operating in retail markets. The consummation of this asset
acquisition occurred on February 25, 2003 (See Exhibit 3.6).
Now known as Neurochemical Research Group, the division markets highly efficient
condition-specific dietary supplements containing the most sophisticated
combination of extensively researched nutritional elements available. These
products utilize potent pharmaceutical grade "amino acids", important protein
18
constituents that serve as neurotransmitter precursors, membrane stabilizers and
enzyme precursors. For energy production and other body functions, the
utilization of amino acids is improved by providing the proper nutrients, such
as antioxidants, to support their activities.
VisionKare(TM) contains advanced beneficial nutrients that are the first
effective treatment to slow the progression of the disease known as age-related
macular degeneration (AMD), according the results of a 9-year National Eye
Institute Study. ChemoKare(TM), containing grape extracts which possess
chemoprotective properties, slows onset and growth of new cancer cells while
promoting growth of healthy cells. NRG also markets QuitSystem(R) neuronutrient
supplementation substance abuse therapies formulated to compensate for
neurochemical imbalances in brain chemistry which are caused by genetics,
long-term abuse and lack of ability to absorb nutrients.
With Anaplex(TM), NRG has created a new class of antidepressants based on a
nutritive-designed therapy and a new category at retail - OTC depression. The
product is an alternative to prescription antidepressant drugs, based on a "no
side effects profile". A lack of specific nutrients, especially amino acids
which make the brain function smoothly, can result in confusion, personality
changes and stress-related depression, a problem which Anaplex addresses.
Retail sales in the mushrooming dietary supplement business are expected to hit
$21 billion by year 2007, according to Frost & Sullivan.
Neurochemical has begun to build the Anaplex(TM) brand with distribution in
Longs Drug Stores, a recognized leader in the chain drug industry trading on the
NYSE since 1971 and one of the top ten chains in the Western States with over
400 stores. The division has run full page, full color consumer ads advertising
Anaplex in Alternative Medicine magazine and Psychology Today and has planned
insertions in T Magazine, Newsweek HealthShowcase editions and People Magazine.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion is intended to provide an analysis of the Company's
financial condition and Plan of Operation and should be read in conjunction with
the Company's financial statements and the notes thereto set forth herein. The
matters discussed in this section that are not historical or current facts deal
with potential future circumstances and developments. The Company's actual
results could differ materially from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include those discussed below.
Plan of Operation
Acne Products
12 to 20 Plus, Inc. has researched and developed an innovative Acne Therapy
System(TM), driven by a market void of effective over-the-counter products that
treat acne skin conditions without irritation.
12 to 20 Plus will be taken to market as a complete Acne Therapy System for the
prevention, control and treatment of acne skin conditions. Dual purpose product
benefits will be promoted in advertising that will position the products as
medicated cosmetics which enhance and beautify skin while working to clear and
control acne related skin problems.
Renowned researchers are proclaiming the new technology ingredients in 12 to 20
Plus formulations as the "next generation in skin care". The Company will
19
capitalize on the incorporation of two super trends in skin care-high tech and
natural-positioning in its consumer advertising campaign.
Additionally, the Company will participate in e-commerce with Drug Store. Com
and Beauty Online where consumer spending on skin care, cosmetics and fragrances
is expected to jump to $553 million in 2003. The Company will launch a marketing
campaign to dermatologists via direct mail efforts and educational Web site.
Distribution will be accomplished through brokers and distributors in selected
U.S. markets.
According to A.C. Nielsen, sales of acne remedies in the drug, mass and
supermarket channels reached $343 million in the 52-week period ended May 19,
2001. The medicated skin care market increased 7.9% in food channels with sales
in excess of $88 million; 12.7% at drug stores bumping sales to about $95
million and experienced a 16.8% gain at mass merchants where sales exceed $120
million. The international market for acne remedies is estimated at another $400
million, bringing the total potential market to around $800 million worldwide.
The Company intends to capture a one percent (1%) share of the national market
over the next 24 months and is targeted to accomplish a four percent (4%) market
share within 36 months.
Neurochemical Research Group
Neurochemical has begun to build the Anaplex(TM) brand with distribution in
Longs Drug Stores, a recognized leader in the chain drug industry trading on the
NYSE since 1971 and one of the top ten chains in the Western States with over
400 stores. The division has run full page, full color consumer ads advertising
Anaplex in Alternative Medicine magazine and Psychology Today and has planned
insertions in T Magazine, Newsweek HealthShowcase editions and People Magazine.
The initial sell-in to Longs consisted of 232 cases at $279.60 per case of 12
for a total of $63,569.86, net of discounts and allowances. The Anaplex brand
was shipped to AmerisourceBergen Services Corporation for distribution to Longs
on August 27, 2002 and shelf placement was accomplished the first week of
October, 2002. Neurochemical Research executed a Vendor Agreement with Longs
Drug Stores of California, Inc. whereby the terms and conditions state that
products purchased by Longs are on a guaranteed sale basis and may be returned
to Vendor, for any reason and at the discretion of Longs for payment or credit.
These terms and conditions are the standard, industry-wide. The initial term of
the agreement is for one year from the effective date of September 19, 2002.
Neurochemical received a reorder from Bergen for a total of 70 cases on October
9, 2002 and net receipts were $17,536.52. Payment terms are 2% 30/net 31.
Normal turn at the chain drug level per stockkeeping unit (sku) is approximately
two and one-half times annually. Neurochemical is expecting a reorder for the
initial amount of 232 cases in the immediate future as Longs had anticipated
Anaplex would be a rapid replenishment sku.
Results of Operation for Year Ended December 31, 2002
The Company generated no revenue during the period covered by this Report. Net
losses for the year ending December 31, 2002, of $20,916 primarily attributable
to research, development and marketing costs. The Company had total assets of
$30,779 and total current liabilities of $61,051. The Company had $1,087 in
working capital. The Company expects to continue to incur losses at least
through fiscal year 2002, and there can be no assurance that the Company will
achieve or maintain profitability, generate revenue or sustain future growth.
20
Liquidity and Capital Resources
At December 31, 2002, the Company's total assets of $30,779 were exceeded by
current liabilities of $61,051. We had working capital of $1,087. We believe
that additional working capital in the amount of $350,000 will need to be raised
in the form of debt, equity or some other financing to meet our anticipated cash
needs for at least the next 12 months. In the event financing is needed in the
future, there can be no assurance that it will be available to the Company in an
amount and on terms acceptable to us.
DESCRIPTION OF PROPERTY
Office Facilities
The Company currently leases office space at 3485 Sacramento Drive, Suite F, San
Luis Obispo, California 93401. The monthly rent is $1969.88, and the lease
expires on November 30, 2003. We have an option to extend the lease for an
additional 3 years that we intend to exercise.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On June 10, 2002 the Company purchased the trademark registration "Zit Stick"
(#1,314,233), from Daniel Tennant for 750,000 shares of stock. Value was placed
at $18,750. Mr. Tennant is the husband of the Company's President, Carol Slavin.
On June 10, 2002 the Company issued 1,000,000 shares of common stock to Philip
M. Young in payment of a debt in the amount of $12,825.
On June 10, 2002 the Company issued 1,250,000 shares of common stock to North
American Equity dba Coslabs, Ltd. For a value of $40,902 in partial satisfaction
of a debt totaling 70,000 plus accrued interest. Natasha Tennant, the daughter
of the Company's President, Carol Slavin, is the President of North American
Equity dba Coslabs, Ltd.
On October 30, 2002, Daniel Tennant, Broadwalk Investment Corp and Philip M.
Young returned to the Company an aggregate amount of 8,400,000 shares of common
stock.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Principal Market or Markets
We are a development stage company that is still in the beginning stages of
implementing our business plan. Our common stock is not listed on any exchange
and there is no public trading market for the common stock, and there has been
no market.
Approximate Number of Common Stock Holders
As of March 31, 2003, we had 29,700,000 shares of common stock outstanding, held
by approximately 71 shareholders.
DIVIDEND POLICY
We have never declared or paid cash dividends on our common stock and anticipate
that future earnings, if any, will be retained for development of our business.
21
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the compensation
paid by the Company for services rendered in all capacities to the Company from
January 1, 2002 through the fiscal year ended December 31, 2002, of all officers
and directors of the Company.
Securities
Name and Principal Underlying
Positions at 12/31/01 Salary Bonus Compensation Options
Carol Slavin -0- -0- -0- -0-
Director/President
Linda Hannon -0- -0- -0- -0-
Director/Secretary
Elizabeth Jaeger -0- -0- -0- -0-
Director
SHARES ELIGIBLE FOR FUTURE SALE.
Upon completion of the offering, we will have 29,700,000 shares of common stock
outstanding. A current shareholder who is an "affiliate" of the company, defined
in Rule 144 as a person who directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Company, will be required to comply with the resale limitations of Rule 144.
Purchasers of shares in the offering, other than affiliates, may resell their
shares immediately. Sales by affiliates will be subject to the volume and other
limitations of Rule 144, including certain restrictions regarding the manner of
sale, notice requirements, and the availability of current public information
about the Company. The volume limitations generally permit an affiliate to sell,
within any three month period, a number of shares that does not exceed the
greater of one percent of the outstanding shares of common stock or the average
weekly trading volume during the four calendar weeks preceding his sale. A
person who ceases to be an affiliate at least three months before the sale of
restricted securities beneficially owned for at least two years may sell the
restricted securities under Rule 144 without regard to any of the Rule 144
limitations.
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for the Company by
The O'Neal Law Firm, P.C., 668 North 44th Street, Suite 233, Phoenix, Arizona
85008.
EXPERTS
The financial statements of the Company as of December 31, 2002, included in
this prospectus have been audited by Shelley Int'l, C.P.A., independent
certified public accountants, as stated in the opinion, which has been rendered
upon the authority of said firm as experts in accounting and auditing.
22
ADDITIONAL INFORMATION
12 to 20 Plus, Inc. has filed with the Securities and Exchange Commission a
registration statement on Form SB-2 under Securities Act of 1933, as amended,
with respect to the securities. This prospectus, which forms a part of the
registration statements, does not contain all of the information set forth in
the registration statement as permitted by applicable SEC rules and regulations.
Statements in this prospectus about any contract, agreement or other document
are not necessarily complete. With respect to each such contract, agreement, or
document filed as an exhibit to the registration statement, reference is made to
the exhibit for a more complete description of the matter involved, and each
such statement is qualified in its entirety by this reference.
The registration statement may be inspected without charge and copies may be
obtained at prescribed rates at the SEC's public reference facilities at
Judiciary Plaza, 450 Fifth Street NW, Room 1024, Washington, DC 20549, or on the
Internet at http://www.sec.gov.
The Company will furnish to its shareholders annual reports containing audited
financial statements reported on by independent public accountants for each
fiscal year and make available quarterly reports containing unaudited financial
information for the first three quarters of each fiscal year.
TRANSFER AGENT
Our transfer agent is First American Transfer Company, 1717 East Bell Road, #2,
Phoenix, Arizona 85022.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no changes in and/or disagreements with Shelley, Int'l, C.P.A.
on accounting and financial disclosure matters.
23
PART II
FINANCIAL STATEMENTS
FINANCIAL TABLE OF CONTENTS
Report of Independent Certified Public Accountant .................. F-1
Balance Sheets as of December 31, 2002 and 2001 .................... F-2
Statement of Operation for the years 2002, 2001 and 2000 ........... F-3
Statement of Stockholders' Equity for the period
December 31, 1999 to December 31, 2002 ............................. F-4
Statement of Cash Flows for the years 2002, 2001 and 2000 .......... F-5
Notes to Financial Statement ................................ F-6 - F-12
SHELLEY INTERNATIONAL CPA
161 E. 1st. St. #1
Mesa, AZ 85201
(480) 461-8301
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
-------------------------------------------------
To the Board of Directors/Audit Committee
12 TO 20 PLUS, INCORPORATED
I have audited the accompanying balance sheets of 12 TO 20 PLUS,
INCORPORATED as of December 31, 2002 and December 31, 2001 and the related
statements of operations, stockholders' equity, and cash flows for the years
ended December 31, 2002, 2001 and 2000. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with auditing standards generally
accepted in the United States. Those standards require that I plan and perform
the audit 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. I believe that my audit provides a reasonable basis for
my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of 12 TO 20 PLUS, INCORPORATED
as of December 31, 2002 and 2001 and the related statements of operations,
stockholders' equity, and cash flows for the years ended December 31, 2002, 2001
and 2000 in conformity with generally accepted accounting principles in the
United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has experienced losses
since inception. This factor raises substantial doubt about the Company's
ability to continue as a going concern. This factor and others are detailed in
notes. These financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result should the Company be unable to
continue as a going concern.
March 26, 2003 Shelley Intl., CPA
F-1
24
12 TO 20 Plus, Incorporated
Balance Sheets
as of December 31, 2002 and 2001
<table>
<caption>
12/31/2002 12/31/2001
Assets
Cash 1,087
Inventory 3,442 3,442
Prepaid Expenses -
--------------------------------
Total Current Assets 4,529 3,442
--------------------------------
Equipment net 2,500 3,500
--------------------------------
Other Assets
Trade Mark and Formulas 23,750 5,000
--------------------------------
Total Other Assets 23,750 5,000
--------------------------------
Total Assets 30,779 11,942
================================
Liabilities and Stockholders' Equity
Liabilities
Bank Overdraft 46
Accounts Payable 18,584 2,426
Notes Payable 42,467 79,333
--------------------------------
Total Current Liabilities 61,051 81,805
--------------------------------
Stockholders' Equity
Common Stock, authorized shares
100,000,000; outstanding shares 12/31/02
29,700,000, 12/31/01 6,073,483 shares,
par value $0.001 29,700 6,073
Additional Paid in Capital 40,317 6,437
Stock Subscribed 3,000
Retained Earnings (Loss) (103,289) (82,373)
--------------------------------
Total Stockholders' Equity (30,272) (69,863)
--------------------------------
Total Liabilities and Stockholders' Equity 30,779 11,942
================================
</table>
The accompanying notes are an intergral part of these statements
F-2
25
12 TO 20 Plus, Incorporated
Statement of Operation
for the years 2002, 2001 and 2000
<table>
<caption>
Year Year Year
2002 2001 2000
------------- ------------- -------------
Revenue
Product Sales - - -
-----------------------------------------
Expenses
Administrative Expenses 10,129 22,068 30,312
Consulting 5,752 - 18,250
Depreciation 1,000 1,000 1,000
Interest Expense 4,035 5,600 3,733
-----------------------------------------
Total Expenses 20,916 28,668 53,295
-----------------------------------------
Income before Taxes (20,916) (28,668) (53,295)
-----------------------------------------
Provision for Income Taxes - - -
Net Income (Loss) (20,916) (28,668) (53,295)
=========================================
Primary and Diluted Earnings per Share a a a
-----------------------------------------
Weighted Average Number of Shares 19,129,597 6,073,483 4,571,798
-----------------------------------------
</table>
a = less than $0.001
The foreward stock splits were applied retroactively to the earnings per share
The accompanying notes are an intergral part of these statements
F-3
26
12 TO 20 PLUS, INCORPORATED
Statement of Stockholders' Equity
for the period December 31, 1999 to December 31, 2002
<table>
<caption>
Common Stock Offering Warrants
Additional Stock Accumulated Total
Shares Amount Paid in Capital Subscribed Deficit Equity
-----------------------------------------------------------------------------------
Total as of December 31, 1999 3,070,112 3,070 (2,660) (410) -
Purchase of equipment 1,668,539 1,669 3,331 5,000
Stock for services 667,416 667 433 1,100
Purchase of stock 667,416 667 333 1,000
Total loss for year (53,295)
-----------------------------------------------------------------------------------
Total as of December 31, 2000 6,073,483 6,073 6,437 (53,705) (41,195)
Total loss for year (28,668) (28,668)
-----------------------------------------------------------------------------------
Total as of December 31, 2001 6,073,483 6,073 6,437 - (82,373) (69,863)
Stock exchanged for services 266,966 267 1,733 2,000
Trademark purchased with stock 5,005,618 5,006 13,744 18,750
Stock exchanged for debt 6,674,157 6,674 6,151 12,825
Stock exchanged for debt 8,342,697 8,343 32,559 40,902
recapitalization/reverse merger with
Loughran/Go Corporation 3,337,079 3,337 (20,307) (16,970)
-
Stock Subscribed 3,000 3,000
Total Loss for year (20,916) (20,916)
-----------------------------------------------------------------------------------
Balance, December 31, 2002 29,700,000 29,700 40,317 3,000 (103,289) (30,272)
===================================================================================
</table>
The above shares have been adjusted ratably and retroactively for two foreward
splits and one stock return
The accompanying notes are an intergral part of these statements
F-4
27
12 TO 20 PLUS, INCORPORATED
Statement of Cash Flows
for the years 2002, 2001 and 2000
<table>
<caption>
Year Year Year
2002 2001 2000
------------- ------------- -------------
Net Income (Loss) (20,916) (28,668) (53,295)
Prepaid Expenses 2,287 (2,287)
Inventory - 14,558 (18,000)
Depreciation net 1,000 1,000 500
Payables (5,003) 5,137 (2,665)
Stock for services
2,000 - 1,100
-----------------------------------------
Cash Provided by Operations (22,919) (5,686) (74,647)
-----------------------------------------
Investing Activities
Purchase of Equipment net 16,970 - -
-----------------------------------------
Cash Utilized for Investing 16,970 - -
-----------------------------------------
Financing Activities
Notes Payable net 4,036 5,600 73,733
Sale of Common Stock 3,000 - 1,000
-----------------------------------------
Cash Provided by Financing 7,036 5,600 74,733
-----------------------------------------
Net Cash 1,087 (86) 86
Beginning Cash - 86 -
-----------------------------------------
Ending Cash 1,087 - 86
=========================================
</table>
Supplemental Information
Year 2002, Taxes paid $0, Interest expense $3,733
Year 2001, Taxes paid $0, Interest expense $5,600
Year 2000, Taxes paid $0, Interest expense $4,035
Significant non cash transactions
See Note 4 for details of stock transactions
The accompanying notes are an intergral part of these statements
F-5
28
12 TO 20 PLUS, INCORPORATED
NOTES TO FINANCIAL STATEMENTS
NOTE 1. OVERVIEW OF OPERATIONS AND ACCOUNTING POLICIES
12 TO 20 PLUS INCORPORATED (originally Loughran/Go Corporation), was
incorporated in April 26, 1996. The Company was organized to manufacture and
market over-the-counter medical remedies and similar products through retail
establishments. During 1996 the Company purchased formulae for the remedies.
During the year 2000 inventory was purchased and additional promotion of
products was begun. Although no sales have taken place to date, management has
actively been distributing samples and expects sales to begin soon.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As reflected in the accompanying
financial statements, the Company had negative cash flow from operations and
incurred a net loss during the previous two years. The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded asset amounts or the amounts and classification of liabilities that
might be necessary should the Company be unable to achieve sufficient cash flow
from operations or secure adequate future financing and be therefore unable to
continue as a going concern.
Product Development
Currently the Company has rights to manufacture and market six products, namely
the Zit Stick Patch, Zit Stick, Pimple Pencil, Zit Stick Facial Wash, Body
Cleansing Bar and Blemish-Free Lotion. The Company also holds the rights the
trademark Zit Stick.
Marketing Strategy
The Company plans to market its products through an animated web site designed
by an illustrator who creates special effects for the movie industry. The
Company may also sell to Drugstore.com. Consumer advertising in magazines will
promote the web site experience. The Company had initially sought to sell into
large drug chains, however, the cost of doing business with these retailers is
prohibitive and in addition, each sale is guaranteed by the vendor.
Revenue Recognition
The Company will recognize revenue upon shipment to the web site purchaser
Research and Development
The Company expenses product research and development costs as they are
incurred. The Company does not expect to have much research and development
costs.
Advertising
Advertising costs are expensed as incurred. Advertising expense totaled $0 for
the year 2002, $0 for the year 2001 and $0 for the year 2000.
F-6
29
Inventory
The Company contracts with a third party to manufacture the units and is not
billed for nor obligated for any work-in-process. Inventory is all finished
goods and is stated at lower of cost or market on a FIFO basis. Reduction in
inventory during the year 2001 is attributable to passing out samples to
potential customers.
12/31/02 12/31/01 12/31/00
3,442 3,442 18,000
-------- -------- --------
Equipment
Equipment is depreciated using the straight-line method over the estimated
useful lives, which is five years.
Fixed assets consist of the following:
12/31/02 12/31/01 12/31/00
Office equipment 5,000 5,000 5,000
-------- -------- --------
Total fixed assets 5,000 5,000 5,000
-------- -------- --------
Less: Accumulated depreciation (2,500) (1,500) (500)
-------- -------- --------
Total 2,500 3,500 4,500
-------- -------- --------
Trademark and Formulae
Formulae 5,000 5,000 5,000
Trademark 18,750 0 0
Accumulated Amortization
or Impairment (0) (0) (0)
-------- -------- --------
Net Patents 23,750 5,000 5,000
-------- -------- --------
The Company purchased the rights to five formulae on July 23, 1996. These were
purchased with stock.
Pre-split Post-split
Name Value Shares Shares
Zit Stick trademark $1,000 10,000 66,742
Zit Stick formula 1,000 10,000 66,742
Facial Wash 1,000 10,000 66,742
Body Cleansing Bar 1,000 10,000 66,742
Blemish-Free Lotion 1,000 10,000 66,740
----- ------ -------
Total $5,000 50,000 333,708
----- ------ -------
On June 10, 2002 the Company purchased the trademark registration "Zit Stick"
(#1,314,233), from its owner, Daniel Tennant, for 750,000 pre-split, 5,005,618
post-split shares of stock. Value was placed at $18,750. The previous owner is a
company controlled by a major shareholder. No amortization or impairment has
been taken against this value during the year 2002.
F-7
30
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Earnings per Share
The basic earnings (loss) per share is calculated by dividing the Company's net
income available to common shareholders by the weighted average number of common
shares during the year. The diluted earnings (loss) per share is calculated by
dividing the Company's net income (loss) available to common shareholders by the
diluted weighted average number of shares outstanding during the year. The
diluted weighted average number of shares outstanding is the basic weighted
number of shares adjusted as of the first of the year for any potentially
dilutive debt or equity.
The Company has no potentially dilutive securities outstanding at the end of the
statement periods. Therefore, the basic and diluted earnings (loss) per share
are presented on the face of the statement of operations as the same number.
Stock Based Compensation
The Company accounts for its stock based compensation based upon provisions in
SFAS No. 123, Accounting for Stock-Based Compensation. In this statement stock
based compensation is divided into two general categories, based upon who the
stock receiver is, namely, employees/directors and non-employees/directors. The
employees/directors category is further divided based upon the particular stock
issuance plan, namely compensatory and non-compensatory. The employee/directors
non-compensatory securities are recorded when the stock is sold at the sales
price. The compensatory stock may be recorded in one of two different methods.
Compensation is calculated and recorded either at the securities' fair value or
intrinsic value. The Company has selected to utilize the fair value method for
valuing and recording options.
Warranty and Right of Return
The Company currently does not have a warranty or right of return policy. The
Company plans to secure product liability insurance as soon as it commences
shipment of goods.
NOTE 2. NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS:
Notes payable and capital lease obligations consist of the following:
12/31/02 12/31/01 12/31/00
Demand note from shareholder
Interest at 8% 35,000 70,000 70.000
Accrued Interest 7,467 9,333 3,733
-------- -------- --------
Total Notes Payable 42,467 79,333 73,733
-------- -------- --------
F-8
31
NOTE 3. STOCKHOLDERS' EQUITY
Authorized Capital Stock
The Company (Loughran/Go Corporation) was incorporated April 29, 1996 in the
state of Nevada. The Company is authorized to issue 100,000,000 shares of common
stock. The two forward stock splits and one stock retirement have been
retroactively and ratably applied to all share amounts listed below unless
otherwise stated.
The Company founders were issued 410,000 pre-split, 2,736,406 post-split shares
of common stock to cover the costs of incorporation, which was $410.
The Company purchased the rights to use five formulae on July 23, 1996. These
were purchased with stock.
Pre-split Post-split
Name Value Shares Shares
Zit Stick trademark $1,000 10,000 66,742
Zit Stick formula 1,000 10,000 66,742
Facial Wash 1,000 10,000 66,742
Body Cleansing Bar 1,000 10,000 66,742
Blemish-Free Lotion 1,000 10,000 66,740
----- ------ -------
Total $5,000 50,000 333,708
----- ------ -------
Year 2000
The Company sold 100,000 pre-split, 667,416 post-split shares of common stock
for $1,000 on March 5, 2000.
On March 31, 2000 the Company traded consulting valued at $500 for 50,000
pre-split, 333,708 post-split shares of common stock.
On March 31, 2000 the Company traded the rental of office equipment valued at
$600 for 50,000 pre-split, 333,708 post split shares of common stock.
On April 1, 2000 the Company purchased computer equipment valued at $5,000 with
250,000 pre-split, 1,668,539 post-split shares of common stock.
Year 2002
On June 10, 2002 the Company purchased the trademark registration "Zit Stick"
(#1,314,233), from its Daniel Tennant for 750,000 pre-split, 5,005,618
post-split shares of stock. Value was placed at $18,750. No amortization or
impairment has been taken against this value during the year 2002.
On June 10, 2002 the Company issued 1,000,000 pre-split, 6,674,157 post-split
shares of common stock to a shareholder in exchange for debt of $12,825 acquired
in the merger with Loughran/Go.
On June 10, 2002 the Company issued 1,250,000 pre-split, 8,342,697 post-split
shares of common stock in exchange for debt and accrued interest of $40,902.
On June 13, 2002 the Company approved a forward stock split of 3 shares for 1.
This increased the number of shares from 4,450,000 to 13,350,000.
On October 30, 2002 three of the major shareholders returned to the Company
8,400,000 shares of common stock. As part of this same transaction the Company
approved a second forward stock split of 6 to 1.
F-9
32
Shares at 9/30/02 13,350,000
Shares returned to Company (8,400,000)
----------
Shares remaining 4,970,000
Forward stock split 29,700,000
On December 19, 2003 the Company sold for $3,000 16,667 shares of common stock.
This stock has not been issued yet and is listed as stock subscribed as of
December 31, 2002. This stock is convertible into a note at 9% interest if it
has not been issued within 12 months.
The foregoing shares were issued in private transactions or private placements
intended to meet the requirements of one or more exemptions from registration.
NOTE 3. INCOME TAXES:
The Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect when these differences are expected to reverse.
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset. Accordingly, a
valuation allowance equal to the deferred tax asset has been recorded. The total
deferred tax asset is $22,724, which is calculated by multiplying a 22%
estimated tax rate by the cumulative NOL of $103,289. The total valuation
allowance is a comparable $22,724.
The provision for income taxes is comprised of the net change in deferred taxes
less the valuation account plus the current taxes payable as shown in the chart
below.
12/31/02 12/31/01 12/31/00
Net change in deferred taxes 0 0 0
Current taxes payable 0 0 0
Provision for Income Taxes 0 0 0
Below is a chart showing the estimated federal net operating losses and the
years in which they will expire.
Year Amount Expiration
1999 and prior 23,832 2011
2000 29,873 2020
2001 28,668 2021
2002 20,916 2022
-------
Total NOL 103,289
-------
The Company has filed no income tax returns since inception. Management is
planning to complete these during the first part of 2003.
F-10
33
NOTE 4. LEASES AND OTHER COMMITMENTS:
The office rent is month to month. The numbers shown below assume that the
Company will remain in its current office space.
Year 1 Year 2 Year 3 Year 4 Year 5
Office Lease 7,213 7,213 7,213 7,213 7,213
NOTE 5. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Below is a listing of the most recent accounting standards SFAS 142-147 and
their effect on the Company.
SFAS 142 Goodwill and Other Intangibles Assets
This Statement addresses financial accounting and reporting for acquired
goodwill and other intangible assets and supersedes APB 17. It addresses how
intangible assets that are acquired individually or with a group (but not those
acquired in a business combination) should be accounted for in financial
statements upon their acquisition. This Statement also addresses how goodwill
and other intangible assets should be accounted for after they have been
initially recognized in the financial statements. The effective date for this
Statement is December 15, 2001.
SFAS 143 Accounting for Asset Retirement Obligations
This Statement addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. This Statement applies to all entities. It applies to
legal obligations associated with the retirement of long-lived assets that
result from the acquisition, construction, development and (or) the normal
operation of a long-lived asset, except for certain obligations of leases. This
Statement amends SFAS 19. The effective date for this Statement is June 15,
2002.
SFAS 144 Accounting for the Impairment or Disposal of Long-Lived Assets
This Statement addresses financial accounting and reporting for the impairment
or disposal of long-lived assets. This statement supersedes SFAS 121, the
accounting and reporting provisions of APB 30 and amends ARB 51. The effective
date of this Statement is December 15, 2001.
SFAS 145 Extra-ordinary item classification, Sale-lease-back classification
This statement rescinds SFAS 4, 44 and 64 and reinstates APB 30 as the standard
for the classification of gains and losses of the extinguishment of debt as an
operating lease be accounted for under the sale-lease-back provisions of SFAS
98. The effective date of this statement is May 15, 2002.
SFAS 146 Accounting for Costs Associated with Exit or Disposal Activities
This statement requires companies to recognize costs associated with exit or
disposal activities, other than SFAS 143 costs, when they are incurred rather
than at the date of a commitment to an exit or disposal plan. Examples of these
costs are lease termination costs, employee severance costs associated with
restructuring, discontinued operation, plant closing, or other exit or disposal
activity. This statement is effective after December 15, 2002.
F-11
34
SFAS 147 Acquisitions of Certain Financial Institutions - an amendment of FASB
Statement No. 72 and 144 and FASB Interpretation No. 9
This statement makes the acquisition of financial institutions come under the
statements 141 and 142 instead of statement 72, 144 and FASB Interpretation No.
9. This statement is applicable for acquisition on or after October 1, 2002.
The adoption of these new Statements is not expected to have a material effect
on the Company's financial position, results or operations, or cash flows.
NOTE 6. SEGMENT INFORMATION
Segment information is presented in accordance with SFAS 131, Disclosures about
Segments of an Enterprise and Related Information. This standard is based on a
management approach, which requires segmentation based upon the Company's
internal organization and disclosure of revenue based upon internal accounting
methods. From inception through September 30, 2002 the Company has not generated
any sales and therefore has no segment information. It is expected that once
sale begin segment information will include sales by product and well as
geographic areas.
NOTE 7. COMPLIANCE WITH SARBANES-OXLEY ACT OF 2002
The Company does not currently comply with all of the provisions of the
Sarbanes-Oxley Act of 2002. It is the intention of the Company to comply with
the rules and structure mandated therein. To this end the Company is seeking
potential independent directors.
The new Act also requires an audit committee to consist of at least three
independent members, one of which needs to be a financial and accounting expert.
Currently, the Company has no separate audit committee and is also seeking
potential audit committee members to serve on its future audit committee.
It should be noted that the Company may experience trouble attracting
independent directors because, at this time, it does not have Directors and
Officers Liability Insurance in place.
NOTE 8. MERGER WITH LOUGHRAN/GO
On April 12, 2002 the Company merged with Loughran/Go Corporation which was a
Nevada corporation. Loughran/Go Corporation was the surviving corporation. The
merger was a recapitalization accounted for as a reverse acquisition. This means
that the historical numbers of 12 TO 20 PLUS, INCORPORATED are to be used for
comparative purposes. The Company name was then changed to 12 TO 20 PLUS,
INCORPORATED. The purpose of the merger was to make the Company more attractive
to investors. The raising of additional capital would enable the Company to
continue to promote its products.
The balance sheet of Loughran/Go prior to the merger was as follows.
Assets 0
Payables 16,970
Negative Net Worth (16,970)
-------
F-12
35
PART III
INFORMATION NOT REQUIRED IN PROSPECTUS
Indemnification of Directors and Officers.
The Company's Articles of Incorporation provide that it must indemnify its
directors and officers to the fullest extent permitted under Nevada law against
all liabilities incurred by reason of the fact that the person is or was a
director or officer or a fiduciary of the Company. The effect of these
provisions is potentially to indemnify the Company's directors and officers from
all costs and expenses of liability incurred by them in connection with any
action, suit or proceeding in which they are involved by reason of their
affiliation with the Company. Pursuant to Nevada law, a corporation may
indemnify a director, provided that such indemnity shall not apply on account
of:
(a) acts or omissions of the director finally adjudged to be intentional
misconduct or a knowing violation of law;
(b) unlawful distributions; or
(c) any transaction with respect to which it was finally adjudged that
such director personally received a benefit in money, property, or
services to which the director was not legally entitled.
The Bylaws of the Company, filed as Exhibit 3.2, provide that we will indemnify
our officers and directors for costs and expenses incurred in connection with
the defense of actions, suits, or proceedings against them on account of their
being or having been directors or officers of the Company, absent a finding of
negligence or misconduct in office.
The Company's Bylaws also permit us to maintain insurance on behalf of our
officers, directors, employees and agents against any liability asserted against
and incurred by that person whether or not we have the power to indemnify such
person against liability for any of those acts.
Other Expenses of Issuance and Distribution.
Expenses incurred or (expected) relating to this Registration Statement and
distribution are as follows: The amounts set forth are estimates except for the
SEC registration fee:
Amount
SEC registration fee $ 683
Printing and engraving expenses $ 500
Registration Statement fees and expenses $ 15,000
Accountants' fees and expenses $ 9,000
Transfer agent's and registrar's fees $ 800
and expenses
Miscellaneous $ 500
__________
Total $ 26,483
The Registrant will bear all of the expenses shown above.
RECENT SALES OF UNREGISTERED SECURITIES
Set forth below is information regarding the issuance and sales of 12 to 20
Plus, Inc. securities without registration for the past three (3) years. No such
36
sales involved the use of an underwriter, no advertising or public solicitation
were involved, the securities bear a restrictive legend and no commissions were
paid in connection with the sale of any securities.
In May, 2002, the Company issued 950,000 shares of its common stock to the
shareholders of 12 to 20 pursuant to the Plan of Merger.
On June 10, 2002 the Company purchased the trademark registration "Zit Stick"
(#1,314,233), from Daniel Tennant for 750,000 shares of stock at a value of
$18,750.
On June 10, 2002 the Company issued 1,000,000 shares of common stock to Philip
M. Young in satisfaction of a debt in the amount of $12,825.
On June 10, 2002 the Company issued 1,250,000 shares of common stock to North
American Equity dba Coslabs,Ltd. at a value of $40,902 in partial satisfaction
of a debt totaling $70,000, plus accrued interest.
The foregoing shares were issued in private transactions or private placements
intending to meet the requirements of one or more exemptions from registration.
In addition to any noted exemption below, we relied upon Section 4(2) of the
Securities Act of 1933, as amended ("Act"), given the transactions did not
involve public solicitation or advertising, and the securities issued bore a
restricted legend thereon as "restricted securities." As to the Section 4(2)
transactions, we relied upon Section 4(2) of the Securities Act of 1933, as
amended. The investors were not solicited through any form of general
solicitation or advertising, the transactions being non-public offerings, and
the sales were conducted in private transactions where the investor identified
an investment intent as to the transaction without a view to an immediate resale
of the securities; the shares were "restricted securities" in that they were
both legended with reference to Rule 144 as such and the investors identified
they were sophisticated as to the investment decision and in most cases we
reasonably believed the investors were "accredited investors" as such term is
defined under Regulation D based upon statements and information supplied to us
in writing and verbally in connection with the transactions. We never utilized
an underwriter for an offering of our securities. Other than the securities
mentioned above, we have not issued or sold any securities.
EXHIBITS
The following exhibits are filed as part of this Registration Statement:
Exhibit
Number Description
3.1 Articles of Incorporation (1)
3.2 Bylaws (1)
3.3 Articles and Plan of Merger (1)
3.4 Amendment to Articles of Incorporation (1)
3.5 Amendment to Articles of Incorporation
3.6 Asset Purchase Agreement
5.1 Opinion re: Legality/Consent of Counsel
23.1 Consent of Independent Auditors
---------------------------------------------------------------------------
(1) Incorporated by reference to Form 8-K filed June 20, 2002.
37
UNDERTAKINGS
The undersigned registrant hereby undertakes:
1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which is
being registered) any deviation from the high or low end of the
estimated maximum 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
(c) To include any additional or changed material information on the plan
of distribution.
2) For determining liability under the Securities Act, treat each post-effective
amendment as a new registration statement of the securities offered and the
offering of the securities at that time to be the initial bona fide offering.
3) File a post-effective amendment to remove from registration any of the
securities being registered, which remain unsold at the end of the offering.
4) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling 12 to 20
Plus, Inc. pursuant to provisions of the State of Nevada or otherwise, 12 to 20
Plus, Inc. has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in that
Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by us of expenses incurred or paid by a director, officer or
controlling person of us in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
us is against public policy as expressed in the Securities Act and we will be
governed by the final adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Phoenix, Arizona, United States of America.
Date: April 9, 2003
38
12 to 20 Plus, Incorporated
By: /s/ Carol Slavin
- --------------------------------
Carol Slavin, President
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date stated.
Date: April 9, 2003
By: /s/Carol Slavin
- ----------------------------------
Carol Slavin, Director
By: /s/Linda Hannon
- ---------------------------------
Linda Hannon, Director
By: /s/Elizabeth Yeager
- ---------------------------------
Elizabeth Yeager, Director
39