As filed with the Securities and Exchange Commission File
No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A
AMENDMENT No.1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMNOR BOOKS, INC.
(Exact name of registrant as specified in its charter)
Utah 20-1382872
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
6337 South Highland Drive, #3052
Salt Lake City, Utah 84121
801-523-6063
(Address and telephone number of registrant's principal
offices)
Andrew Gallup
1744 East Jane Circle
Sandy, Utah 84092
801-523-6063
801-576-0583 fax
(Name, address and telephone number of agent for service)
David G. Wood
Riddle & Associates, PC
11778 South Election Dr., Ste 240
Draper, Utah 84020
801-208-8415
801-569-8700 (facsimile)
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes
effective.
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, 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,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. [ ]
<page>
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 delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
<table>
<caption>
CALCULATION OF REGISTRATION FEE
<s> <c> <c> <c> <c>
Title of each Amount Proposed Proposed Amount of
class of to be offering maximum registration
securities registered price per aggregate fee
to be share(1) offering
registered price(2)
Common Stock 1,350,000 shares $4.00 per share $5,400,000 $684.18
</table>
(1) These shares are registered on behalf of the selling
stockholders and the offering price and gross offering proceeds
are estimated solely for the purpose of calculating the
registration fee in accordance with Rule 457 under the
Securities Act on the basis of the original offering price of
$4.00 on August 31, 2004.
(2) Estimated solely for the purpose of calculating the
registration fee in accordance with Rule 457 under the
Securities Act.
The number of shares to be registered is estimated solely for
the purpose of calculating the registration fee.
Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be
changed. We may not sell these securities until the
registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to
sell these securities and is not soliciting an offer to buy
these securities in any state where the offer or sale is not
permitted.
Subject to completion _____________, 2004
<page>
AMNOR BOOKS, INC.
COMMON STOCK
---------------
RESALE OF 1,350,000 SHARES OF COMMON STOCK
-------------------------------------------
The selling stockholders listed on page 10 may offer and
sell up to 1,350,000 shares of our common stock under this
prospectus for their own account. Our common stock is presently
not traded on any market or securities exchange. Shares offered
by the selling stockholders may be sold by one or more of the
following methods; ordinary brokerage transactions in which a
broker solicits purchases; and face to face transactions between
the selling stockholders and purchasers without a broker.
A current prospectus must be in effect at the time of the
sale of the shares of common stock discussed above. We will not
receive any proceeds from the resale of common stock by the
selling stockholders. The selling stockholders will be
responsible for any commissions or discounts due to brokers or
dealers. We will pay all of the other offering expenses.
Each selling stockholder or dealer selling the common stock
is required to deliver a current prospectus upon the sale. In
addition, for the purposes of the Securities Act of 1933,
selling stockholders may be deemed underwriters. Therefore, the
selling stockholders may be subject to statutory liabilities if
the registration statement, which includes this prospectus, is
defective by virtue of containing a material misstatement or
failing to disclose a statement of material fact. We have not
agreed to indemnify any of the selling stockholders
regarding such liability.
See "Risk Factors" beginning on page 5 for material risk
factors you should consider before you purchase the shares.
Neither the Securities and Exchange Commission nor any
state securities commission has approved or disapproved of the
securities or passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this Prospectus is , 2004
1
<page>
Table of Contents
Summary.............................................3
Risk Factors........................................5
Use of Proceeds.....................................8
Determination of Offering Price.....................9
Dilution............................................9
Selling Shareholders...............................10
Plan of Distribution...............................11
Legal Proceedings..................................14
Directors, Executive Officers, Promoters
and Control Persons................................14
Security Ownership of Certain Beneficial
Owners and Management..............................16
Description of Securities..........................17
Interest of Named Experts and Counsel..............21
Disclosure of Commission Position of
Indemnification for Securities Act Liabilities.....21
Organization Within Last Five Years................21
Description of Business............................22
Management's Discussion and Analysis
or Plan of Operations..............................25
Certain Relationships and Related Transactions.....28
Market for Common Equity and Related
Stockholder Matters................................28
Executive Compensation.............................28
Financial Statements...............................29
Available Information..............................43
2
<page>
ABOUT THIS PROSPECTUS
---------------------
You should only rely on the information contained in this
prospectus. We have not authorized anyone to provide you with
information different from that contained in this prospectus.
The selling security holders are offering to sell, and seeking
offers to buy, shares of common stock only in jurisdictions
where offers and sales are permitted. The information contained
in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this
prospectus or of any sale of common stock.
This summary highlights selected information contained
elsewhere in this prospectus. To understand this offering
fully, you should read the entire prospectus carefully,
including the risk factors and financial statements. All
references to "we," "our," or "us," refer to Amnor Books, Inc.,
a Utah corporation unless specifically stated otherwise.
PROSPECTUS SUMMARY
------------------
The following summary is qualified in its entirety
by the detailed information appearing elsewhere in this
Memorandum. The securities offered hereby are speculative and
involve a high degree of risk. See "Risk Factors."
ABOUT OUR COMPANY
- -----------------
Amnor Books, Inc was formed as a Utah corporation on July
20, 2004, to engage in the business of acquiring operating
companies in the retail religious book industry whose products
and customers fit the targeted area of Mormon or LDS (Church of
Jesus Christ of Latter-day Saints) readership.
We have not commenced operations and are considered a
development stage company. These factors raise substantial
doubts about our ability to continue as a going concern.
Our principal executive offices are located at 11444 South
1780 East, Sandy, UT 84092.Our telephone number is (801) 523-6063.
3
<page>
ABOUT OUR OFFERING
------------------
Securities offered by us:
- ------------------------
None.
Securities that may be sold by our shareholder:
- ----------------------------------------------
Offered 1,350,000 shares of common stock.
Offering Price:
- ---------------
We will not determine the offering price. The offering price will be
determined by market prices prevailing at the time of sale, at prices
related to the prevailing market price, at negotiated prices or at
fixed prices and the independent decisions of the selling shareholders.
Terms of the Offering:
- ----------------------
The selling shareholders will determine when and how they will sell
the common stock offered in this prospectus.
Termination of the Offering:
- ---------------------------
The offering will conclude when all of the 1,350,000 shares of common
stock have been sold, the shares no longer need to be registered to
be sold or we decide to terminate the registration of the shares
Securities Issued:
- -------------------
There are 1,552,500 shares of our common stock issued and outstanding
as of the date of this prospectus. Existing shareholders will sell
all of the shares of our common stock to be sold under this prospectus.
Use of Proceeds:
- ----------------
We will not receive any proceeds from the sale of the common stock
by the selling shareholders.
Transfer Agent:
- --------------
Action Stock Transfer, 7069 South Highland Drive,Suite 300, Salt Lake
City, Utah 84121, Telephone No.801-274-1088, serves as our transfer
agent and registrar for our outstanding securities.
We have agreed to pay all costs and expenses relating to the
registration of our common stock. The selling stockholders will
only be responsible for any commissions, taxes, attorney's fees
and other charges relating to the offer or sale of these
securities. The selling stockholders may sell their common
stock through one or more broker/dealers, and these
broker/dealers may receive customary compensation in the form of
underwriting discounts, concessions or commissions from the
selling stockholders as they shall agree.
4
<page>
RISK FACTORS
------------
An investment in our common stock involves a high degree
of risk.
- ------------------------------------
You should carefully consider the risks described below
and the other information in this prospectus future before
investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition
could be seriously harmed. Our present and intended business
operations are highly speculative and involve substantial risks.
Only investors who can bear the risk of losing their entire
investment should consider buying our shares. Among the risk
factors that you should consider are the following:
Amnor Books is a new business and investment in our company
is risky.
- ------------------------------------
We have no meaningful operating history so it will be
difficult for you to evaluate an investment in our stock. For
the period ended August 31, 2004, current management has no
experience with rollups or retail bookstores and as a result
could have a material negative effect on the operations and the
execution of the company's business strategy. Since we have not
proven the essential elements of profitable operations, you will
be furnishing venture capital to us and will bear the risk of
complete loss of your investment in the event we are not
successful.
Our auditor's have indicated that because we are a new
development stage company and have not generated any revenues
that they have substantial doubt we will be able to continue as
a going concern.
- ------------------------------------
Our lack of operating history indicates we may not be able to
continue our business. We have no experience with rollups or retail
bookstores and as a result could have a material negative effect
on the operations and the execution of the company's business
strategy. We have no assurance that even if we acquire other retail
book stores that we will be profitable.
If our startup costs exceed our estimates, it may impact
our ability to continue operations.
- ------------------------------------
We believe we have a reasonable basis in estimating our needs
for the next twelve months based on receiving both the minimum
and maximum amount of the offering. It is possible that our
startup costs will be higher than estimated. If this happens,
it may impact our ability to generate revenue and we would need
to seek additional funding.
5
<page>
We currently have no established marketing program.
- -------------------------------------
The success of our business will depend upon establishing our
marketing program to identify and target specific retail book
stores that would be reasonable candidates for acquisition. We
will not be able implement any of these marketing initiatives
until we complete the offering described in the prospectus and
have funds to pursue the initiatives. Consequently, there can
be no assurance that our marketing program will generate
sufficient sales to cover cost of goods and operating expenses,
and generate a profit.
We will be in Competition with a Number of Other Companies,
All of which are Better Financed than are we.
- --------------------------------------
The market for retail book stores is intensely competitive
and dominated by a number of large, well-established and
well-financed companies. Most of our competitors have longer
operating histories and greater financial, technical, sales
and marketing resources than do we. In addition, we also face
competition from potential new entrants due to the relatively
low cost of entry into this market. Management cannot guarantee
that we will be able to compete successfully against current
and future competitors or that competitive pressure will not
result in price reductions, reduced operating margins and loss
of market share, any one of which could seriously harm our business.
Expansion Strategy.
- --------------------------------------
The Company's growth strategy is dependent principally on its
ability to acquire retail stores and operate them profitably.
In general, the rate of the Company's expansion depends, among
other things, on general economic and business conditions affecting
consumer confidence and spending, the availability of qualified
management personneland the Company's ability to manage the
operational aspects of its growth. It also depends upon the
availability of adequate capital
We are in a Highly Competition Industry. The retail book
business is highly competitive.
- --------------------------------------
Competition within the retail book industry is fragmented, with
Amnor facing direct competition from other national superstore
operators, as well as regional chains and superstores. In addition,
there are specialty retail stores that offer books in a particular
area of specialty, independent single store operators, discount
stores,drug stores, warehouse clubs, mail order clubs and mass
merchandisers. The Internet has emerged as a significant channel
for retailing in all media categories that the Company carries.
In particular, the retailing of books and music over the
Internet is highly competitive. In addition, the Company faces
competition from companies engaged in the business of selling
books, music and movies via electronic means.
6
<page>
Inventory and Wholesale Accounts.
- --------------------------------------
At the present time the Company does not have any inventory
(books, CD's, audio tapes and pictures) to offer the public
and is the beginning stages of establishing accounts with wholesale
providers to obtain the required inventory.
Consumer Spending Patterns.
- --------------------------------------
Sales of books, music and movies have historically been dependent
upon discretionary consumer spending, which may be affected by general
economic conditions, consumer confidence and other factors beyond the
control of the Company. In addition, sales are dependent on a
hit-driven merchandising strategy. A decline in consumer spending on
books, music and movies, or in bestseller book,music and movie buying
could have a material adverse effect on the Company's financial
condition and results of operations and its ability to fund its
expansion strategy.
Because our common stock is "penny stock," you may have greater
difficulty selling your shares.
- ---------------------------------------
Our common stock is "penny stock" as defined in Rule 3a51-1 of the
Securities and Exchange Commission. Section 15(g) of the Exchange Act
and Rule 15g-2 of the Securities and Exchange Commission require
broker/dealers dealing in penny stocks to provide potential investors
with a document disclosing the risks of penny stocks and to obtain a
manually signed and dated written receipt of the document before making
any transaction in a penny stock for the investor's account.In addition,
Rule 15g-9 of the Securities and Exchange Commission requires
broker/dealers in penny stocks to approve the account of anyinvestor for
transactions in these stocks before selling any penny stock to that
investor. Compliance with these requirements may make it harder for our
selling stockholders and other stockholders to resell their shares.
For more information about "penny stocks," see the heading "Penny Stock"
under the caption "Description of Securities."
Shares of stock that are eligible for sale by our stockholders may
decrease the price of our stock.
- ----------------------------------------
Upon completion of the offering, we will have 1,552,500 shares
outstanding, including 1,350,000 shares that are freely tradable
and 202,500 shares that are restricted shares but may be sold
under Rule 144. Under Rule 144 unregistered resales of restricted
common stock cannot be made until it has been held for one year from
the later of its acquisition from Amnor Books or an affiliate of
Amnor Books. Thereafter, shares of common stock may be resold without
registration subject to Rule 144's volume limitation, aggregation,
broker transaction, notice filing requirements, and requirements
concerning publicly available information about Amnor Books. If the
holders sell substantial amounts of our stock pursuant to Rule 144,
then the market price of our stock could decrease.
7
<page>
FORWARD-LOOKING STATEMENTS
---------------------------
You should carefully consider the risk factors set forth
above, as well as the other information contained in this
prospectus. This prospectus contains forward-looking statements
regarding events, conditions, and financial trends that may
affect our plan of operation, business strategy, operating
results, and financial position. These statements relate to
future events or our future performance and include, but are not
limited to, statements concerning:
* Our ability to locate and acquire certain religious
retail book stores;
* The anticipated benefits and risks associated with
our business strategy;
* Our future operating ability and the future value of
our common stock;
* The anticipated size or trends of the market segments
in which we compete and the anticipated competition in
those markets;
* Potential government regulation; and
* Our future capital requirements and our ability to
satisfy our needs.
You are cautioned that any forward-looking statements are
not guarantees of future performance and are subject to risks
and uncertainties. Actual results may differ materially from
those included within the forward-looking statements as a result
of various factors. Cautionary statements in the risk factors
section and elsewhere in this prospectus identify important
risks and uncertainties affecting our future, which could cause
actual results to differ materially from the forward-looking
statements made in this prospectus. In some cases, you can
identify forward-looking statements by terminology such as may,
will, could, should, expect, plan, intend, anticipate, believe,
estimate, predict, potential or continue, the negative of such
terms or other comparable terminology.
Neither we nor any other person assumes responsibility for
the accurateness or the completeness of the forward looking
statements. We are under no duty to update any of the forward-
looking statements after the date of this prospectus to conform
such statements to actual results or to changes in our
expectations.
USE OF PROCEEDS
- ---------------
We will not receive any proceeds from the sale of the
common stock offered through this prospectus by the selling
shareholders.
8
<page>
DETERMINATION OF OFFERING PRICE AND DILUTION
--------------------------------------------
We will not receive any money from the selling
stockholders when they sell their shares of common stock. The
selling stockholders may sell all or any part of their shares in
private transactions or in the over-the-counter market at prices
related to the prevailing prices of our common stock at the time
of negotiation. Because we cannot accurately predict the prices
of these sales, we cannot accurately estimate the amount of any
dilution that may result from the purchase price of any of these
shares. Dilution is the difference between the price paid for
the shares and our net tangible book value. The net tangible
book value of our common stock on August 31, 2004, was
$5,511,263 or $3.55 per share, based upon 1,552,500 outstanding
shares. Net tangible book value per share is determined by
subtracting our total liabilities from our total tangible assets
and dividing the remainder by the number of shares of common
stock outstanding. These computations do not include the
estimated expenses of this offering of approximately $26,087.
The offer and sale by the selling stockholders of outstanding
common stock, will not affect the net tangible book value of our
common stock.
We can not assure you that any public market for our common
stock will equal or exceed the sales prices of the shares of
common stock that our stockholders sell. Purchasers of our
shares face the risk that their shares will not be worth what
they paid for them.
9
<page>
RESALE OF COMMON STOCK BY SELLING STOCKHOLDERS
SHARES CURRENTLY OUTSTANDING
-----------------------------------------------
This prospectus relates to the resale of 1,350,000 shares
of our common stock that the selling shareholders acquired from
us under Rule 506 of Regulation D of the Securities and Exchange
Commission Act and completed on August 31, 2004. The table below
sets forth information with respect to the resale of shares of
common stock by the selling stockholders. We will not receive
any proceeds from the resale of common stock by the selling
stockholders for shares currently outstanding.
The following table provides as of the date of this
prospectus, information regarding the beneficial ownership of
our common stock held by each of the selling shareholders,
including:
Amount Offered %Owned Shares Shares
Name of Selling Shares Owned Before Sold Owned After
Shareholder Before Resale Resale Immediately Resale
- -----------------------------------------------------------------
Potente Capital, Inc 73,533 4.73% 73,533 Nil
Ellenallhatatlan, Inc 73,532 4.73% 73,532 Nil
Nieodparty, Inc 73,529 4.73% 73,532 Nil
Bindes Holdings, Inc 73,529 4.73% 73,529 Nil
Krachtig, Inc 73,529 4.73% 73,529 Nil
Presvedcivy, Inc 73,529 4.73% 73,529 Nil
Puissant Capital, Inc 73,529 4.73% 73,529 Nil
Triftig Holdings, Inc 73,529 4.73% 73,529 Nil
Neapgazams, Inc 73,529 4.73% 73,529 Nil
Forte Capital, Inc 73,529 4.73% 73,529 Nil
Convingator, Inc 73,529 4.73% 73,529 Nil
Ubedljiv, Inc 73,529 4.73% 73,529 Nil
Convincente, Inc 73,529 4.73% 73,529 Nil
Tvingande, Inc 73,529 4.73% 73,529 Nil
In-Andirici, Inc 73,529 4.73% 73,529 Nil
Stichhaltig, Inc 73,529 4.73% 73,529 Nil
Uberzeugend, Inc 73,529 4.73% 73,529 Nil
Cogent Capital Corp 250,000 16.0% 100,000 150,000
Total 1,500,000 1,350,000 150,000
Except as otherwise noted in the above list, the named
party beneficially owns and has sole voting and investment power
over all shares or rights to these shares. The numbers in this
table assume that none of the selling shareholders sells shares
of common stock not being offered in this prospectus or
purchases additional shares of common stock, and assumes that
all shares offered are sold. The percentages are based on
1,552,500 shares of common stock outstanding on the date of this
prospectus.
None of the selling shareholders or their beneficial
owners has had a material relationship with us other than as a
shareholder at any time within the past three years; or has ever
been one of our officers or directors or an officer or director
of our predecessors or affiliates. Except our Director
John Chymboryk who also Vice President of Cogent Capital Corp.
No director, advisory director, executive officer or any
associate of any director, advisory director or executive
officer has any interest, direct or indirect, by security
holdings or otherwise, in any of these corporate selling
stockholders.Except our Director John Chymboryk who also
Vice President of Cogent Capital Corp.
10
<page>
PLAN OF DISTRUBUTION
----------------------
We are registering the shares of our common stock covered
by this prospectus.
We will pay the costs, expenses and fees of registering
our common stock. All of the selling stockholders will be
responsible for any commissions, taxes, attorney's fees and
other charges that each may incur in the offer or sale of these
securities.
The selling stockholders may sell our common stock at
market prices prevailing at the time of the sale, at prices
related to the prevailing market prices, at negotiated prices or
at fixed prices, any of which may change. They may sell some or
all of their common stock through:
* ordinary broker's transactions, which may include
long or short sales;
* purchases by brokers, dealers or underwriters
as principal and resale by those purchasers for their
own accounts under this prospectus;
* market makers or into an existing market for our
common stock;
* transactions in options, swaps or other derivatives;
* any combination of the selling options described in
this prospectus, or by any other legally available
means.
In addition, the selling stockholders may enter into
hedging transactions with broker/dealers, who may engage in
short sales of our common stock in the course of hedging the
positions they assume. Finally, they may enter into options or
other transactions with broker/dealers that require the delivery
of our common stock to those broker/dealers. Subsequently, the
shares may be resold under this prospectus.
The shares may also be sold in compliance with the
Securities and Exchange Commission's Rule 144. The selling
shareholders may also sell their shares directly to market
makers acting as principals or brokers or dealers, who may act
as agent or acquire the common stock as a principal. Any broker
or dealer participating in such transactions as agent may
receive a commission from the selling shareholders, or, if they
act as agent for the purchaser of such common stock, from such
purchaser.
11
<page>
The selling shareholders will likely pay the usual and
customary brokerage fees for such services. Brokers or dealers
may agree with the selling shareholders to sell a specified
number of shares at a stipulated price per share and, to the
extent such broker or dealer is unable to do so acting as agent
for the selling shareholders, to purchase, as principal, any
unsold shares at the price required to fulfill the respective
broker's or dealer's commitment to the selling shareholders.
Brokers or dealers who acquire shares as principals may
thereafter resell such shares from time to time in transactions
in a market or on an exchange, in negotiated transactions or
otherwise, at market prices prevailing at the time of sale or at
negotiated prices, and in connection with such re-sales may pay
or receive commissions to or from the purchasers of such shares.
These transactions may involve cross and block transactions
that may involve sales to and through other brokers or dealers.
If applicable, the selling shareholders may distribute shares to
one or more of their partners who are unaffiliated with us.
Such partners may, in turn, distribute such shares as described
above. We can provide no assurance that all or any of the common
stock offered will be sold by the selling shareholders.
We are bearing all costs relating to the registration of
the common stock. The selling shareholders, however, will pay
any commissions or other fees payable to brokers or dealers in
connection with any sale of the common stock. The selling
shareholders must comply with the requirements of the Securities
Act and the Securities Exchange Act in the offer and sale of the
common stock. In particular, during such times as the selling
shareholders may be deemed to be engaged in a distribution of
the common stock, and therefore be considered to be an
underwriter, they must comply with applicable law and may, among
other things:
1. Not engage in any stabilization activities in
connection with our common stock;
2. Furnish each broker or dealer through which common
stock may be offered, such copies of this prospectus,
as amended from time to time, as may be required by
such broker or dealer;and
3. Not bid for or purchase any of our securities or
attempt to induce any person to purchase any of our
securities other than as permitted under the
Securities Exchange Act.
12
<page>
The Securities Exchange Commission has adopted rules that
regulate broker-dealer practices in connection with transactions
in penny stocks. Penny stocks are generally 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). The penny stock rules
require a broker- dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, deliver a
standardized risk disclosure document prepared by the
Commission, which: (a) contains a description of the nature and
level of risk in the market for penny stocks in both public
offerings and secondary trading; (b) contains a description of
the broker's or dealer's duties to the customer and of the
rights and remedies available to the customer with respect to a
violation to such duties or other requirements of Securities'
laws; (c) contains a brief, clear, narrative description of a
dealer market, including "bid" and "ask" prices for penny
stocks and significance of the spread between the "bid" and
"ask" price; (d) contains a toll-free telephone number for
inquiries on disciplinary actions; (e) defines significant terms
in the disclosure document or in the conduct of trading in penny
stocks; and (f) contains such other information and is in such
form (including language, type, size and format), as the
Commission shall require by rule or regulation. The broker-
dealer also must provide, prior to effecting any transaction in
a penny stock, the customer: (a) with bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer
and its salesperson in the transaction; (c) the number of shares
to which such bid and ask prices apply, or other comparable
information relating to the depth and liquidity of the market
for such stock; and (d) monthly account statements showing 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 acknowledgment
of the receipt of a risk disclosure statement, a written
agreement to transactions involving penny stocks, and a signed
and dated copy of a written suitably statement. These
disclosure requirements may have the effect of reducing the
trading activity in the secondary market for our stock if it
becomes subject to these penny stock rules. Therefore, if our
common stock become subject to the penny stock rules,
stockholders may have difficulty selling those securities.
13
<page>
LEGAL PROCEEDINGS
-----------------
We are not a party to any pending material legal
proceeding. To the knowledge of management, no federal, state
or local governmental agency is presently contemplating any
proceeding against us. No director, executive officer or other
person who may be deemed to be our affiliate or who is the owner
of record or beneficially of more than five percent of our
common stock is a party adverse to us or has a material interest
adverse to us in any proceeding.
DIRECTORS, EXECUTIVE, OFFICERS, PROMOTERS AND CONTROL PERSONS
- -------------------------------------------------------------
Name Age Position Since
Andrew Gallup 28 President, Secretary,
Treasurer & Director July 2004
John Chymboryk 50 Director August 2004
ANDREW GALLUP has been the President of Amnor Books, Inc
since inception - July 20, 2004. Mr. Gallup has Bachelors in
Business Administration from the University of Utah. From 2002
to May of 2004, Mr. Gallup was the marketing and production
director for Greg Kofford Books, Inc., where he expanded the
business from one title to over 30 titles in production. From
1998 to 2001, Mr. Gallup was the general sales manager for
Mahfood Motors, Inc., where he assisted the company in reaching
sales of over $1,000,000 within three years.
JOHN CHYMBORYK has been a director of Amnor Books, Inc.,
since August 2004. Mr. Chymboryk received his bachelor's degree
with an emphasis in accounting and economics in 1982 from
Brigham Young University. Following graduation he worked for a
large international accounting firm until 1984. He then taught
courses in finance, marketing and management in the business
departments of a Community College from 1984 to 1992.
Concurrent with his teaching experience, Mr. Chymboryk operated
an accounting business that specialized in preparing financial
statements, tax returns and business plans for small businesses.
In 1992, Mr. Chymboryk co-founded a company that specialized in
marketing, customer retention and management training. Mr.
Chymboryk served as Vice President and was responsible for the
financial operations and in developing and delivering management
training. Mr. Chymboryk was instrumental in designing and
presenting the sales management workshop that was contracted
with Lexus, the Toyota Motor Corporation luxury car line. In
1997, Mr. Chymboryk was involved in designing, developing and
implementing a new application that assists companies in
following up and retaining their existing customer base.
In 1999, Mr. Chymboryk co-founded a company that specialized in
reverse merger acquisitions, corporate restructuring, debt
negotiations and consulting with private companies on strategic
planning for growth.
14
<page>
In 2004, Mr. Chymboryk became the Vice President of Cogent
Capital Corporation and is involved in advising both private and
public companies on acquisitions, mergers, corporate restructuring
and assisting with the Cogent Capital roll-up system.
FAMILY RELATIONSHIPS
- ---------------------
There are no family relationships between any of our
directors or executive officers.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS.
- ----------------------------------------
During the past five years none of our present or former
directors, executive officers or persons nominated to become
directors or executive officers:
* was a general partner or executive officer of any
business against which any bankruptcy petition
was filed, either at the time of the bankruptcy
or two years prior to that time;
* was convicted in a criminal proceeding or named
subject to a pending criminal proceeding, excluding
traffic violations and other minor offenses;
* was subject to any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of
business, securities or banking activities; or
* was found by a court of competent jurisdiction in
a civil action, the Commission or the Commodity
Futures Trading Commission to have violated a
federal or state securities or commodities law,
and the judgment has not been reversed, suspended
or vacated.
TERM OF OFFICE
- --------------
Our directors are appointed for a one-year term to hold
office until the next annual general meeting of our shareholders
or until removed from office in accordance with our bylaws. Our
officers are appointed by our board of directors and hold office
until removed by the board.
SIGNIFICANT EMPLOYEES
- ---------------------
We have no significant employees other than the officers
and directors described above.
15
<page>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ---------------------------------------------------------------
The following table provides the names and addresses of
each person known to us to own more than 5% of our outstanding
common stock as of the date of this prospectus, and by the
officers and directors, individually and as a group. Except as
otherwise indicated, all shares are owned directly and the
percentage shown is based on 1,552,500 shares of common stock
issued and outstanding on August 31, 2004.
DIRECTORS AND EXECUTIVE OFFICERS
--------------------------------
Name & Address Title # of Shares Percentage of
Beneficially Class(1)
Owned
Andrew Gallup
1744 E. Jane
Circle
Sandy, Utah
84092 Director,
President 7,500 .48%
Cogent Capital
Corp
11444 S. 1780 E.
Sandy, Utah
84092 Shareholder 250,000 16%
John Chymboryk
8714 S.Glider Ln
Sandy, Utah
84093 Director(2) -0- -0-
All directors
and executive
officers as a
group
(3 persons) 257,500 16.48%
(1) Calculations are based upon 1,552,500 outstanding
shares at August 31, 2004.
(2) Mr. Chymboryk is the Vice President of Cogent Capital
Corp.
16
<page>
FIVE PERCENT STOCKHOLDERS
--------------------------
Name & Address Title # of Shares Percentage of
Beneficially Class(1)
Owned
Cogent Capital
Corp
11444 S. 1780 E.
Sandy, Utah
84092 Shareholder 250,000 16%
Total 250,000 16%
(1) Calculations are based upon 1,552,500 outstanding
shares at August 31, 2004.
CHANGES IN CONTROL
- ------------------
To our knowledge, there are no present arrangements or
pledges of our securities which may result in a change in
control of our company.
DESCRIPTION OF THE SECURITIES
------------------------------
COMMON STOCK
- ------------
We are authorized to issue up to 50,000,000 shares of
common stock with a par value of $.001. As of the date of this
prospectus, there are 1,552,500 shares of common stock issued
and outstanding.
The holders of common stock are entitled to one vote per
share on each matter submitted to a vote of stockholders. In
the event of liquidation, holders of common stock are entitled
to share ratably in the distribution of assets remaining after
payment of liabilities, if any. Holders of common stock have no
cumulative voting rights, and, accordingly, the holders of a
majority of the outstanding shares have the ability to elect all
of the directors. Holders of common stock have no preemptive or
other rights to subscribe for shares. Holders of common stock
are entitled to such dividends as may be declared by the board
of directors out of funds legally available therefor. The
outstanding common stock is, and the common stock to be
outstanding upon completion of this offering will be, validly
issued, fully paid and non-assessable.
We anticipate that we will retain all of our future
earnings, if any, for use in the operation and expansion of our
business. We do not anticipate paying any cash dividends on our
common stock in the foreseeable future.
17
<page>
PENNY STOCK
- -----------
Our common stock is "penny stock" as defined in Rule 3a51-1
of the Securities and Exchange Commission. Penny stocks are
stocks:
* with a price of less than five dollars per
share;
* that are not traded on a "recognized"
national exchange;
* whose prices are not quoted on the NASDAQ automated
quotation system; or
* in issuers with net tangible assets less than
$2,000,000, if the issuer has been in continuous
operation for at least three years, or $5,000,000,
if in continuous operation for less than three years,
or with average revenues of less than $6,000,000
for the last three years.
Section 15(g) of the Exchange Act and Rule 15g-2 of the
Securities and Exchange Commission require broker/dealers
dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a
manually signed and dated written receipt of the document before
making any transaction in a penny stock for the investor's
account. You are urged to obtain and read this disclosure
carefully before purchasing any of our shares.
Rule 15g-9 of the Securities and Exchange Commission
requires broker/dealers in penny stocks to approve the account
of any investor for transactions in these stocks before selling
any penny stock to that investor. This procedure requires the
broker/dealer to:
* get information about the investor's financial
situation, investment experience and investment
goals;
* reasonably determine, based on that information,
that transactions in penny stocks are suitable for
the investor and that the investor can evaluate
the risks of penny stock transactions;
* provide the investor with a written statement
setting forth the basis on which the broker/dealer
made his or her determination; and
* receive a signed and dated copy of the statement
from the investor, confirming that it accurately
reflects the investor's financial situation,
investment experience and Compliance with these
requirements may make it harder for our selling
stockholders and other stockholders to resell
their shares.
18
<page>
PREFERRED STOCK
- ---------------
We are authorized to issue up to 500,000 shares of
preferred stock with a par value of $0.001. Our preferred stock
may be issued in series, with such designations, preferences,
stated values, rights, qualifications or limitations as
determined solely by our board of directors. The Board of
Directors is permitted to issue preferred stock in series with
differing preferences and rights. Our Articles of Incorporation
and Bylaws do not contain any provision that would specifically
delay, defer or prevent a change in the control of our company.
However, preferred stock of this type is often used to resist
unwanted takeovers, including takeovers that are favored by a
majority of the independent stockholders.
As of the date of this prospectus, we have issued no shares
of our preferred stock
DIVIDEND POLICY
- ---------------
We have never declared or paid any cash dividends on our
common stock. We currently intend to retain future earnings, if
any, to finance the expansion of our business. As a result, we
do not anticipate paying any cash dividends in the foreseeable
future.
WARRANTS
- --------
The Board of Directors is permitted to issue warrants with
differing preferences and rights. Our Articles of Incorporation
and Bylaws do not contain any provision that would specifically
delay, defer or prevent a change in the control of our company.
We have not issued and do not have outstanding any
warrants to purchase shares of our common stock.
OPTIONS
- -------
The Board of Directors is permitted to issue options with
differing preferences and rights. Our Articles of Incorporation
and Bylaws do not contain any provision that would specifically
delay, defer or prevent a change in the control of our company.
We have not issued and do not have outstanding any options
to purchase shares of our common stock.
19
<page>
CONVERTIBLE SECURITIES
- ----------------------
The Board of Directors is permitted to issue convertible
securities with differing preferences and rights. Our Articles
of Incorporation and Bylaws do not contain any provision that
would specifically delay, defer or prevent a change in the
control of our company.
We have not issued and do not have outstanding any
securities convertible into shares of our common stock or any
rights convertible or exchangeable into shares of our common
stock.
SHARES AVAILABLE FOR FUTURE SALE
- ---------------------------------
As of the date of this prospectus, there are 1,552,500
shares of our common stock issued and outstanding. Upon the
effectiveness of this registration statement, 1,350,000 shares
of common stock to be resold pursuant to this prospectus will be
eligible form immediate resale in the public market if and when
any market for the common stock develops. The remaining 202,500
shares of common stock will be subject to the resale provisions
of Rule 144. Sales of shares of common stock in the public
markets may have an adverse effect on prevailing market prices
for the common stock.
Rule 144 governs resale of 'restricted securities' for the
account of any person, other than an issuer, and restricted and
unrestricted securities for the account of an 'affiliate of the
issuer. Restricted securities generally include any securities
acquired directly or indirectly from an issuer or its affiliates
which were not issued or sold in connection with a public
offering registered under the Securities Act. An affiliate of
the issuer is any person who directly or indirectly controls, is
controlled by, or is under common control with the issuer.
Affiliates of Amnor Books may include its directors, executive
officers, and person directly or indirectly owning 10% or more
of the outstanding common stock. Under Rule 144 unregistered
resales of restricted common stock cannot be made until it has
been held for one year from the later of its acquisition from
Amnor Books or an affiliate of Amnor Books. Thereafter, shares
of common stock may be resold without registration subject to
Rule 144's volume limitation, aggregation, broker transaction,
notice filing requirements, and requirements concerning publicly
available information about Amnor Books ('Applicable
Requirements'). Resales by our affiliates of restricted and
unrestricted common stock are subject to the Applicable
Requirements. The volume limitations provide that a person (or
persons who must aggregate their sales) cannot, within any
three-month period, sell more that the greater of one percent of
the then outstanding shares, or the average weekly reported
trading volume during the four calendar weeks preceding each
such sale. A non-affiliate may resell restricted common stock
which has been held for two years free of the Applicable
Requirements.
20
<page>
INTERESTS OF NAMED EXPERTS AND COUNSEL
---------------------------------------
No expert or counsel named in this prospectus as having
prepared or certified any part of this prospectus or having
given an opinion upon the validity of the securities being
registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a
contingency basis,or had, or is to receive, in connection with
the offering, a substantial interest, direct or indirect, in
the registrant or any of its parents or subsidiaries. Nor was
any such person connected with the registrant or any of its
parents or subsidiaries as a promoter, managing or principal
underwriter,voting trustee,director, officer, or employee.
David G. Wood, our independent legal counsel, has provided an
opinion on the validity of our common stock.
The financial statements included in this prospectus and
the registration statement have been audited by Mantyla
McRenolds,LLC to the extent and for the periods set forth in
their report appearing elsewhere herein and in the registration
statement, and are included in reliance upon such report given
upon the authority of said firm as experts in auditing and
accounting.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
---------------------------------------------------------
Our directors and officers are indemnified as provided by
the Utah Statutes and our Bylaws. We have been advised that in
the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act
is against public policy as expressed in the Securities Act, and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities is asserted by one of
our directors, officers, or controlling persons in connection
with the securities being registered, we will, unless in the
opinion of our legal counsel the matter has been settled by
controlling precedent, submit the question of whether such
indemnification is against public policy to a court of
appropriate jurisdiction. We will then be governed by the
court's decision.
ORGANIZATION WITHIN THE LAST FIVE YEARS
---------------------------------------
We were incorporated on July 20, 2004 under the laws of
the state of Utah. On that date, Andrew Gallup, was appointed
as our director. On the same day, Mr. Gallup became our
president and chief executive officer, and secretary and
treasurer.
21
<page>
DESCRIPTION OF BUSINESS
-----------------------
GENERAL
- -------
Management has targeted within the western states several
established businesses involved in retail sales of Mormon or LDS
(Church of Jesus Christ of Latter-day Saints) books and
material, which are available for consolidation under the Amnor
umbrella. Each of these businesses falls into the unique
category of having established distribution of their own product
lines directly to their customer base. The performance of this
channel combined with the Amnor's management and concept of
exploiting synergies, cross marketing the various products and
eliminating the overlap and redundancies of the consolidated
businesses makes Amnor an exciting and profitable venture.
Proper structure and execution of the plan could position the
Company as an attractive buyout.
OUR BUSINESS
- -------------
Amnor, Inc was incorporated in July 2004 with the business
intent of acquiring operating companies in the retail book
industry whose products and customers fit the targeted area of
Mormon readership. With the membership of the Mormon (Church of
Jesus Christ of Latter-day Saints) Church growing at a
significant rate there appears to be reasonable opportunity to
provide the church members with books and literature. Recent
statistics have the Church membership approximating 12,000,000
with an average growth rate of approximately 3% per year.
Amnor will take advantage of this market opportunity by
engaging in a strategic consolidation of a number of small
retail book stores within the western states that focus on
members of the LDS Church. Once the western states has been
addressed the company will evaluate the opportunities that may
be available in the eastern and southern states
A consolidated company will be well positioned to help
direct and capitalize on the trends driving the marketplace. It
will also benefit from economies of scale in reducing costs,
enhanced sales growth through more effective marketing and
product development to meet the expected demand of this targeted
group.
Specifically the benefits of consolidation will include:
streamlining production; reducing overheads; creating more
targeted marketing; rationalizing product lines and establishing
more cost efficient means of distribution utilizing the
internet.
22
<page>
MARKET ANALYSIS
---------------
BizMiner US Marketing Research (the Brandow Company, Inc.),
a research company based in Camp Hill, PA uses a proprietary
research methodology that tracks and analyzes the experience of
over 18 million US business facilities, condensing millions of
data points into a profile series. This profile analyzes
survival rates, sales per employee, employment size, sales
growth, and market volume, concentrations of high growth firms,
industry consolidation trends, entrepreneurial activity rates
and new branch development. According to this research the
annual market volume for retail religious book stores in the
U.S. market is approximately $1,172,212,704 with close to 2,237
stores in the market.
This research report noted that the average annual sale for
religious retail stores is $609,599 with a small number of
stores accounting for the larger sales volumes. The following
tables illustrates the impact of the larger firms have on the
annual average sales and the breakdown of the facility
employment class which provides a better perspective on the
number and size of the stores in this industry.
AVERAGE ANNUAL SALES PER RELIGIOUS RETAIL STORE
-----------------------------------------------
Annual Sales Volume Number of Retail Stores
Less than $200K 1,102
$200K - $499K 423
$500K - $999K 160
$1M - $2.49M 68
$2.5M - $4.99M 20
$5M - $9.99M 8
$10M - $24.99M 6
$25M - $49.99M 1
FACILITY EMPLOYMENT CLASS
-------------------------
Number ofEmployees Number of Retail Stores
1 Employee 376
2 - 4 Employees 1,015
5 - 9 Employees 507
10 - 24 Employees 262
25 - 49 Employees 39
50 - 99 Employees 4
100 - 249 Employees 1
23
<page>
PRODUCTIVITY BY SALES PER EMPLOYEE
----------------------------------
The productivity in the industry indicated by the sales per
employee shows $80,636 for the industry and $52,194 for small
business with in the industry. The small business definition
used in this research report is any store with fewer than 25
employees.
EMERGING VITALITY TRENDS
------------------------
The current and future vitality analysis in this research
report is indicated by comparing entrepreneurial activity
(startups), new branch development and concentrations of high
growth firms measured by sales and employment. Industry indices
above 1.00 surpass economy-wide patterns by the margin
indicated, while indices below 1.00 fall behind overall trends.
Entrepreneurial Activity New Branch Development
------------------------ -----------------------
US All-Industry Startup US All-Industry New Branch
Rate 7.17% Rate 0.84%
Segment Startup Rate 5.59% Segment New Branch Rate 0.63%
Segment StartupIndex 0.78 Segment New Branch Index 0.74
High Growth Firms by Employment High Growth Firms by Sales
------------------------------- --------------------------
US All-Industry High Growth US All-Industry High
Emp Rate 0.79% Growth Sales Rate 1.24%
Segment High Growth Emp Rate 0.38% Segment HighGrowth Sales
Rate 0.63%
Segment High Growth Index 0.48 Segment High Growth Sales
Index 0.51
High Growth Jobs and High Growth Sales: The High Growth
Jobs Rate benchmarks concentrations of business establishments
with high job growth. Rates calculate the number of high job
growth establishments as a percentage of all firms which
reported fewer than 10,000 jobs at the start of the analysis
period. Ratings measure firms which: began with fewer than 5
jobs in 1998 and grew to more than 10; with fewer than 10 jobs
and grew to more than 25; with fewer than 25 jobs and grew to
more than 50; with fewer than 50 jobs and grew to more than 100;
with fewer than 100 jobs and grew to more than 250; and with
fewer than 250 jobs and grew to more than 500; fewer than 500
and grew to more than 1,000; fewer than 1,000 and grew to more
than 2,500; fewer than 2,500 and grew to more than 5,000; and
fewer than 5,000 and grew to more than 10,000.
24
<page>
The High Growth Sales Rate benchmarks concentrations of
firms with high sales growth. Rates calculate the number of high
growth firms as a percentage of all firms which reported less
than $500 million in annual sales at the start of the analysis
period. Ratings measure firms which: began with less than $200k
in annual sales and grew to more than $500k; with less than
$500k in annual sales and grew to more than $1m; with less than
$1m and grew to more than $2.5m; with less than $2.5m and grew
to more than $5m; with less than $5m in annual sales and grew to
more than $10m; with less than $10m and grew to more than $25m;
with less than $25m and grew to more than $50m; with less than
$50m and grew to more than $100m; with less than $100m and grew
to more than $250m; with less than $250m and grew to more than
$500m; and with less than $500m and grew to more than $1b.
CONSOLIDATION TRENDS
--------------------
The industry consolidation trend measures compare the
percentage of branch facilities relative to all industry firms
at two different points in time.
Consolidation Trends
--------------------
Industry Branch Concentration 18.86%
All US Branch Concentration 13.42%
Consolidation trends can suggest the extent to which
control is tightening over industry decision processes.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
---------------------------------------------------------
Our plan of operations for the twelve months following the
date of this registration statement basically a rollup strategy.
Our rollup strategy is predicated on our understanding that the
industry is highly fragmented and without a dominant player. The
largest chain controls less than 10% of the number of retail
outlets that focus on product of interest to members of the
Church of Jesus Christ of Latter-day Saints ('LDS'). The
opportunity exists to build a large, dominant franchise by
combining many smaller stores. Retailing is an industry where
big is better and where size gives operational or competitive
advantages. Bookstores have stable dynamics that aren't likely
to change from acquisition to acquisition. We do not anticipate
new and unforeseen competitors. Also, the companies in the
industry are similarly operated so that management's values and
methods can be easily transferred to newly acquired companies.
25
<page>
We plan to identify potential acquisition candidates, contact
the owners of the stores, enter into negotiations with
interested parties, conduct due diligence and in those instances
that management deems prudent, to acquire stores as part of the
overall strategy of consolidating the fragmented retail book
store market for stores focused on product of interest to
members of the Church of Jesus Christ of Latter-day Saints
('LDS'). It is anticipated that these acquisitions will be made
using the Company's stock. As we make acquisitions we will be
looking to expand our geographic coverage. This will allow us to
negotiate better terms from suppliers and maximize advertising.
Through continued acquisitions it is hoped that we bring about
increased name recognition that will further drive the business'
momentum and greater acceptance from the buying public.
As acquisitions are made we will be working to build our
infrastructure and at the same time leverage off of it to spread
fixed costs over a larger revenue base. Back office operations
such as accounting, marketing, and executive management will
need to be developed. By centralizing these functions it is
hoped that we can reduce the cumulative cost relative to
individual stores operating as stand alone entities and
eliminate any duplication of efforts.
GOVERNMENTAL REGULATION
- -----------------------
There is no significant or material governmental regulation
of our proposed business.
EMPLOYEES
- ---------
Andrew Gallup, our officer and director is our only
employee. We do not intend on hiring additional personnel
unless our operations grow to a point where we require help.
Mr. Gallup will devote the necessary time to ensure our
operations are implemented which is estimated to be
approximately 20 hours per week. We do not have a formal
employment agreement with Mr. Gallup and he has agreed to not
take any salary until our operations are generating sufficient
revenue to cover operating expenses.
Our success will be largely dependent upon the efforts and
active participation of Andrew Gallup. The loss of his services
may adversely affect our business operations. Mr. Gallup does
have other interests and it is uncertain whether these would
affect the amount of time spent operating our business. We do
not have key man insurance in place for any personnel and do not
anticipate purchasing key man insurance until such time as
revenues from operations allow.
26
<page>
FACILITIES
- ----------
The address is 11444 South 1780 East, Sandy, Utah 84092.
The office space is provided by a shareholder at no cost. The
space provided meets the current needs of Amnor Books. Should
we expand, additional space may be needed.
RESEARCH AND DEVELOPMENT EXPENDITURES
- -------------------------------------
We have not incurred any research or development
expenditures since our incorporation.
SUBSIDIARIES
- ------------
We do not have any subsidiaries.
PATENTS AND TRADEMARKS
- ----------------------
We do not own, either legally or beneficially, any patent
or trademark.
STOCK OPTION GRANTS
- -------------------
We have not granted any stock options to the executive
officers since our incorporation on July 20, 2004
EMPLOYMENT AND CONSULTING AGREEMENTS
- ------------------------------------
We do not have an employment or consultant agreement
with Mr. Andrew Gallup, our president, chief executive officer
and director. We do not pay any salary to Mr. Gallup. Mr.
Gallup spends 15% of his time working for us and will not be
compensated until such time as our operations are generating
sufficient revenue to cover operations. The Company signed a
consulting agreement with Cogent Capital to arrange for the
legal and accounting services that will be required to prepare
audited financial statements and the legal documents that
pertain to the equity swap transaction.
27
<page>
CERTAIN TRANSACTIONS AND RELATED TRANSACTIONS
---------------------------------------------
In July 2004, we issued 7,500 shares of common stock at
$.10 per share to Andrew Gallup for consideration in connection
with our formation.
In August 2004, we issued 15,000 shares of common stock at
$.10 per share under Rule 506 of Regulation D of the Securities
and Exchange Commission Act, for working capital purposes.
In August 2004, we issued 150,000 shares of common stock
at $.10 per share to Cogent Capital after signing a consultant
agreement to assist the Company with corporate strategy and the
structure of the private placement.
In August 2004, we issued 1,250,000 shares of common stock
at $4.00 per share under Rule 506 of Regulation D of the
Securities and Exchange Commission Act to purchase $5,000,000
worth of U.S. Treasury Strips which were used as collateral in
an equity swap transaction with a shareholder. These bonds will
remain in this collateral account for approximately two years
and can be used with a call option the company can exercise. At
the end of this two year period should the management elect,
these bonds would be released from the collateral account and
made available to the company for working capital purposes.
In August 2004, we issued 30,000 shares of common stock at
$4.00 per share for cash.
In August 2004, we issued 100,000 shares of common stock
at $4.00 per share to a shareholder for the initial entry amount
pertaining to the equity swap transaction.
MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
-------------------------------------------------------
We have 320 shareholders. Currently, there is no public
trading market for our securities and there can be no assurance
that any market will develop. If a market develops for our
securities, it will likely be limited, sporadic and highly
volatile. Currently, we do not have our shares listed.
EXECUTIVE COMPENSATION
- ----------------------
Our director has not received monetary compensation since
our incorporation to the date of this registration statement.
We currently do not pay any compensation to our director serving
on our board.
28
<page>
INDEX TO FINANCIAL STATEMENTS
AMNOR BOOKS, INC.
(A Development Stage Company)
Page
Report of Independent Registered Public Accounting Firm 21
Balance Sheet - August 31, 2004 22
Statements of Operations for the period from Inception [July 20,
2004] through
August 31, 2004 23
Statements of Stockholders' Equity for the period from Inception
[July 20, 2004]
Through August 31, 2004 24
Statements of Cash Flows for the period from Inception [July 20,
2004]
Through August 31, 2004 25
Notes to Financial Statements 26
29
<page>
Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Amnor Books, Inc. [a development stage company]
Salt Lake City, Utah
We have audited the accompanying balance sheet of Amnor Books,
Inc as of August 31, 2004, and the related statements of
operations, stockholders' equity, operations, and cash flows for
the period from inception [July 20, 2004] through August 31,
2004. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we 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. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Amnor Books, Inc. , as of August 31,2004 and the results of
operations and cash flows for the period from inception [July
20, 2004] through August 31,2004, in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared
assuming that the company will continue as a going concern. As
discussed in Note D to the financial statements, the Company has
accumulated losses from operations, no revenues, and has yet to
establish principal operations. Management's plans in regard to
these matters are also described in Note D. The financial
statements do not include any adjustment that might result from
the outcome of this uncertainty.
Mantyla McReynolds
Salt Lake City, Utah
September 21, 2004
30
<page>
Amnor Books, Inc.
[A Development Stage Company]
Balance Sheet
August 31, 2004
ASSETS
Assets
Current Assets
Cash $1,600
Prepaid Expenses 110,000
Current Portion Equity Swap Premium 200,000
Total current assets 311,600
Investments 5,000,000
Equity Swap Premium 200,000
Total Assets $5,511,600
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current Liabilities:
Accounts payable $ 37.00
Total current liabilities $ 37.00
Total Liabilities $ 37.00
Stockholders' Equity:
Preferred Stock - 500,000 shares
authorized,$0.001 par value per share,
none issued and outstanding -
Capital Stock - 50,000,000 shares
authorized having a par value
of $0.001 per share; 1,552,500
shares issued and outstanding - Note E 1,553
Additional paid-in capital 5,535,797
Equity accumulated during the
development stage (26,087)
Total Stockholders' Equity 5,511,263
Total Liabilities and Stockholders'
Equity $5,511,600
See accompanying note to financial statements
31
<page>
Amnor Books Inc.
[A Development Stage Company]
Statements of Operations
For the Period from Inception [July 20, 2004] through August 31,
2004
Inception through August 31, 2004
Revenues $ -
Consulting Expense 25,151
Office Expense 936
Operating loss $ (26,087)
Net Loss Before Income Taxes $ (26,087)
Current Year Provision for
Income Taxes 0
Net Loss $ (26,087)
Loss Per Share $ (0.02)
Weighted Average Shares
Outstanding 1,114,342
See accompanying note to financial statements
32
<page>
Amnor Books, Inc.
[A Development Stage Company]
Statements of Stockholders' Equity
For the Period from Inception [July 20, 2004]through August 31,2004
<table>
<caption>
Preferred Preferred Common Common Additional Accumulated Stockholders'
Shares Stock Shares Stock Paid-in Deficit Equity
Capital Balance
<s> <c> <c> <c> <c> <c> <c> <c>
0 $0 0 $0 $0 $0 $0
Balance,
July 20, 2004
(date of inception)
Cash to open bank
account,July 20,
2004 $100 $100
Issued stock for
services and cash;
$.10 per share,
July 20,2004 7,500 8 742 0 750
Issued stock for
services; $.10 per
share,July 26,
2004 150,000 150 14,850 0 15,000
Issued stock for
cash; $.10 per share,
August 1, 2004 15,000 15 1,485 0 1,500
Issued stock for
U.S.Bonds;$4.00 per
share,August 27,
2004 1,250,000 1,250 4,998,750 0 5,000,000
Issued stock for
cash; $4.00 per
share,August 27,
2004 30,000 30 119,970 0 120,000
Issued stock for
equity swap premium;
$4.00 per share,
August 27,2004 100,000 100 399,900 0 400,000
Net loss for the
period ended
August 31,2004 (26,087) (26,087)
Balance,August 31,
2004 0 0 1,552,500 $1,553 $5,535,797 $(26,087) $5,511,263
</table>
See accompanying note to financial statements
33
<page>
Amnor Books, Inc.
[A Development Stage Company]
Statements of Cash Flows
For the Period from Inception [July 20, 2004] through August 31,
2004
Inception through
August 31, 2004
Cash Flows from Operating Activities
Net Loss $(26,087)
Adjustments to reconcile net income to
net cash provided by operating
activities:
Stock issued for services 15,750
Increase in prepaid expenses (120,000)
Change in current assets 10,000
Increase in current liabilities 337
Net Cash Used for Operating Activities (120,000)
Cash Flows from Investing Activities 0
Cash Flows from Financing Activities
Proceeds from stock issuance 121,600
Net Increase/(Decrease) in Cash 1,600
Beginning Cash Balance 0
Ending Cash Balance $1,600
Supplemental Disclosure of Cash Flow
Information:
Cash paid during the year for interest 0
Cash paid during the year for income taxes 0
Stock issued for U.S. Treasury Bonds 5,000,000
Stock issued for Equity Swap Premium 400,000
See accompanying note to financial statements
34
<page>
Amnor Books Inc.
[A Development Stage Company]
Notes to Financial Statements
August 31, 2004
NOTE A ORGANIZATION SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Company Background
The Company incorporated under the laws of the State of
Utah on July 20, 2004 and was organized to engage in any
lawful activity for which corporations may be organized
under the laws of the State of Utah. Amnor Books, Inc.,
is in the development stage and still organizing its
planned principal operations through which it intends to
develop and market products and memorabilia.
The financial statements of the Company have been
prepared in accordance with U. S. generally accepted
accounting principles. The following summarizes the
more significant of such policies:
Statement of Cash Flows
Cash is comprised of cash on hand or on deposit in
banks. The Company has $1,600 as of August 31, 2004.
Income Taxes
The Company applies the provisions of Statement of
Financial Accounting Standards No. 109 [the Statement],
Accounting for Income Taxes. The Statement requires an
asset and liability approach for financial accounting
and reporting for income taxes, and the recognition of
deferred tax assets and liabilities for the temporary
differences between the financial reporting bases and
tax bases of the Company's assets and liabilities at
enacted tax rates expected to be in effect when such
amounts are realized or settled. The cumulative effect
of this change in accounting for income taxes as of
August 31, 2004 is $0 due to the valuation allowance
established as described in Note C.
Net Loss Per Common Share
Net loss per common share is based on the weighted-
average number of shares outstanding.
35
<page>
Amnor Books, Inc.
[A Development Stage Company]
Notes to Financial Statements
August 31, 2004
[Continued]
NOTE A ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES [continued]
Use of Estimates in Preparation of Financial
Statements
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the
date of the financial statements and the reported
amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Revenue Recognition
The Company recognizes revenues in accordance with the
Securities and Exchange Commission, Staff Accounting
Bulletin (SAB) number 104, 'Revenue Recognition in
Financial Statements.' SAB 104 clarifies application of
U. S. generally accepted accounting principles to
revenue transactions. Revenue is recognized as products
or projects are delivered or services are provided to
customers. Uncollected, earned revenue is recorded in
accounts receivable. Billed amounts deemed to be
uncollectible are charged to bad debt expense. Revenue
collected in advance is recorded as a liability until
the earnings process is complete.
Impairment of Long-Lived Assets
The Company reviews long-lived assets, at least
annually, to determine if impairment has occurred and
whether the economic benefit of the asset (fair value
for assets to be used and fair value less disposal costs
for assets to be disposed of) is expected to be less
than the carrying value. Triggering events, which signal
further analysis, consist of a significant decrease in
the asset's market value, a substantial change in the
use of an asset, a significant physical change in the
asset, a significant change in the legal or business
climate that could affect the asset, an accumulation of
costs significantly in excess of the amount originally
expected to acquire or construct the asset, or a history
of losses that imply continued losses associated with
assets used to generate revenue. The Company has no
long-lived assets as of August 31, 2004.
36
<page>
Amnor Books, Inc.
[A Development Stage Company]
Notes to Financial Statements
August 31, 2004
[Continued]
NOTE A ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES [continued]
Investments
The Company's investments comprise U.S. government
bonds. Investments with original or remaining
maturities of more than three months and less than one
year are considered to be short-term. These investments
are held in the custody of a major financial
institution. At August 31, 2004, the Company's
investments were classified as available-for-sale. These
investments are recorded in the Balance Sheets at fair
value. Unrealized gains and losses on these investments
are included as a separate component of accumulated
other comprehensive income, net of tax. [See Note G]
Fair Value of Financial Instruments
The fair value of certain of the Company's financial
instruments, including cash and cash equivalents,
accrued compensation, and other accrued liabilities,
approximate cost because of their short maturities. The
fair value of investments is determined using quoted
market prices for those securities or similar financial
instruments.
Derivative Instruments
The Company recognizes derivative instruments as either
assets or liabilities in the Balance Sheets and measures
those instruments at fair value. The accounting for
changes in the fair value of a derivative depends on the
intended use of the derivative and the resulting
designation.
For a derivative instrument designated as a fair value
hedge, the gain or loss is recognized in earnings in the
period of change together with the offsetting loss or
gain on the hedged item attributed to the risk being
hedged. For a derivative instrument designated as a cash
flow hedge, the effective portion of the derivative's
gain or loss is initially reported as a component of
accumulated other comprehensive income and subsequently
reclassified into earnings when the hedged exposure
affects earnings. The ineffective portion of the gain or
loss is reported in earnings immediately. For
derivative instruments not designated as a hedge, the
gain or loss is recognized in earnings in the period of
change. Currently, the company does not have any
derivative instruments designated as a hedge.
37
<page>
Amnor Books, Inc.
[A Development Stage Company]
Notes to Financial Statements
August 31, 2004
[Continued]
NOTE A ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES [continued]
Recent Pronouncements
In June 2002, SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, was issued.
SFAS No. 146 requires recording costs associated with
exit or disposal activities at their fair values when a
liability has been incurred. Under previous guidance,
certain exit costs were accrued upon management's
commitment to an exit plan, which is generally before a
liability has been incurred. The adoption of SFAS No.
146 did not materially impact the Company's consolidated
results of operations, financial position, or cash flow.
In December 2002, the FASB issued SFAS No. 148,
Accounting for Stock-Based Compensation-Transition and
Disclosure. SFAS No. 148 amends SFAS No. 123 to provide
alternative methods of transition for a voluntary change
to the fair value based method of accounting for stock-
based employee compensation. In addition, SFAS No. 148
amends the disclosure requirements of SFAS No. 123 to
require prominent disclosures in both annual and interim
financial statements about the method of accounting for
stock-based employee compensation and the effect of the
method used on reported results. The adoption of SFAS
No. 148 did not materially impact the Company's results
of operations, financial position, or cash flow.
SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liability and
Equity ("SFAS No. 150") was issued in May 2003. SFAS No.
150 establishes standards for how an issuer classifies
and measures certain financial instruments with
characteristics of both liability and equity in its
statement of financial position. SFAS No. 150 became
effective for the Company for new or modified financial
instruments beginning June 1, 2003, and for existing
instruments beginning June 28, 2003. The adoption of
SFAS No. 150 does not have a material impact on the
Company's Consolidated Financial Statements.
38
<page>
Amnor Books, Inc.
[A Development Stage Company]
Notes to Financial Statements
August 31, 2004
[Continued]
NOTE A ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES [continued]
In November 2002, the Financial Accounting Standards
Board ('FASB') issued Financial Accounting Standards
Board Interpretation No. ('FIN') 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others,
which requires the guarantor to recognize as a liability
the fair value of the obligation at the inception of the
guarantee. The disclosure requirements in FIN 45 are
effective for financial statements of interim or annual
periods ending after December 15, 2002. Management
believes the Company has no guarantees that are required
to be disclosed in the financial statements. The
recognition provisions are to be applied on a
prospective basis to guarantees issued after December
31, 2002. The adoption of the recognition provisions of
FIN 45 did not have a material impact on the Company's
financial statements.
In January 2003, the FASB issued FIN No. 46,
Consolidation of Variable Interest Entities, an
interpretation of Accounting Research Bulletin ("ARB")
No. 51. FIN No. 46, as revised in December 2003,
addresses consolidation by business enterprises of
variable interest entities. FIN No. 46 applies
immediately to variable interest entities created after
January 31, 2003, and to variable interest entities in
which an enterprise obtains an interest after that date.
FIN No. 46 applies in the first year or interim period
ending after December 15, 2003, to variable interest
entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. The
adoption of FIN No. 46 did not have a material impact on
the Company's financial statements.
39
<page>
Amnor Books, Inc.
[A Development Stage Company]
Notes to Financial Statements
August 31, 2004
[Continued]
NOTE B STOCKHOLDERS' EQUITY
On July 20, 2004, 7,500 restricted shares of common
stock were issued to the Company's president for $750 in
expenditures made on behalf of the Company, at $.10 per
share. In August 2004, the Company issued 15,000
restricted shares of common stock for $1,500 cash for
working capital needs, at $.10 per share. In August
2004, the Company issued 150,000 restricted shares of
common stock at $.10 per share for services. In August,
2004, the Company issued 1,250,000 restricted shares of
common stock for $5,000,000 in U.S. Treasury Bonds, at
$4 per share. In August 2004, the Company issued 30,000
shares of restricted common stock for cash, at $4 per
share. In August 2004, the Company issued 100,000
restricted shares of common stock at $4 per share for
the initial entry amount pertaining to the equity swap
transaction.
The Company has authorized 500,000 shares of preferred
stock with a par value of $0.001. As of August 31, 2004,
no preferred shares have been issued. The Company has
not established any preferences, limitations and
relative rights with regard to these shares.
NOTE C ACCOUNTING FOR INCOME TAXES
For the period from inception through August 31, 2004,
the Company had no income tax expense due to having an
operating loss for the period. Any deferred tax benefit
arising from the operating loss carried forward, the
benefits of which will expire in 2024, would be offset
entirely by a valuation allowance since it is not likely
that the Company will be sufficiently profitable in the
near future to take advantage of the losses. The
Company has no other timing differences.
Description NOL Balance Tax Rate
Federal Income Tax $26,087 $3,913 15%
Valuation allowance (3,913)
Deferred tax asset 8/31/04 $0
40
<page>
Amnor Books, Inc.
[A Development Stage Company]
Notes to Financial Statements
August 31, 2004
[Continued]
NOTE D LIQUIDITY/GOING CONCERN
The Company has accumulated losses since inception
totaling $26,087, and had no operations through August
31, 2004. Financing for the Company's activities to
date has been primarily provided by issuance of stock
and advances from a stockholder. The Company's
ability to achieve a level of profitable operations
and/or additional financing impacts the Company's
ability to continue as it is presently organized.
Management is continuing to develop its planned
principal operations. Should management be
unsuccessful in its operating activities, the Company
may experience material adverse effects.
NOTE E EQUITY SWAP AND OPTION CONTRACT
On August 27, 2004, the Company purchased a call
option that entitles the Company to purchase one
million shares of its common stock on August 27, 2006
at the then current market price. The objective of
this contract is to allow for the Company to retain
control of its stock.
Also on August 27, 2004, the Company entered into an
equity swap contract that entitles the Company to
receive the price return on one million shares of its
common stock on November 27, 2007, or the date on
which the Company's shares have been registered for
sale under the Securities Act of 1933, or on which all
restrictions imposed on the Company's shares have been
removed, but in no instance sooner than August 27,
2006. This contract entitles the Company to receive
or pay the price return on one million shares of the
Company's common stock based on the initial price of
$5 per share. The Company paid a premium of $400,000
to enter into this contract. The Company has secured
this transaction by placing $5 million worth of U.S.
treasury strips in a collateral account. These
securities are restricted from being used during the
contract period. The Company entered into this
contract as an inducement to obtain additional equity
financing. As of the balance sheet date, the Company
has recorded the contract at original cost which
approximates market value. The Company is exposed to
credit risk in that the counter party may not be able
to meet a potential liability.
NOTE F RELATED PARTY TRANSACTIONS
During the period ended August 31, 2004, the Company
entered into a series of contracts with a shareholder.
The Company has a consulting agreement with a
shareholder of the Company. The Company paid $120,000
for this agreement that extends until July 2005 and
will be amortized over this period. The Company also
entered into an Equity Swap Transaction and an Equity
Option transaction with a shareholder. [See Note E]
41
<page>
Amnor Books, Inc.
[A Development Stage Company]
Notes to Financial Statements
August 31, 2004
[Continued]
NOTE G INVESTMENTS
The following tables summarize the Company's
investments:
Unrealized Fair
Amortized Cost Gains /Losses Value
Fixed Income
Securities:
U.S.Government Bonds 5,000,000 0 5,000,000
Total
$5,000,000 $0 $5,000,000
42
<page>
ADDITIONAL INFORMATION
We have filed a Registration Statement on Form SB-2 under
the Securities Act of 1933, as amended (the 'Securities Act'),
with respect to the shares offered hereby. This Prospectus
does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto.
For further information with respect to Amnor Books, Inc. and
the shares offered hereby, reference is made to the
Registration Statement and the exhibits and schedules filed
therewith. Statements contained in this Prospectus as to the
contents of any contract or any other document referred to are
not necessarily complete, and in each instance reference is
made to the copy of such contract or other document filed as
an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference. A copy of
the Registration Statement, and the exhibits and schedules
thereto, may be inspected without charge at the public
reference facilities maintained by the Securities and Exchange
Commission in Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and copies of all or any part of the Registration
Statement may be obtained from the Commission upon payment of
a prescribed fee. This information is also available from the
Commission's Internet website, http://www.sec.gov.
43
<page>
Exhibits
--------
The following exhibits are filed as a part of this Registration
Statement:
Exhibit
Number Description
- ------ ------------
4 ISDA Master Agreement
5 Opinion of David G. Wood, Esq. regarding legality
23.1 Consent of David G. Wood, Esq.
23.2 Consent of Mantyla McReynolds,LLC
Item 28. Undertakings
Item 28. Undertakings
------------
Amnor hereby undertakes:
(1) To file, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement to:
(i) include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement; and, notwithstanding the foregoing, any increase
or decrease in volume of securities offered, if the total dollar value of
securities offered would not exceed that which was registered, and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in the volume and price
represent no more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) include any additional or changed material information
on the plan of distribution.
(2) For determining liability under the Securities Act, to treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering.
(3) To file a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
(4) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, executive officers
and controlling persons the foregoing provisions or otherwise, we have been
advised that in the opinion of the Securities and Exchange Commission that
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. If a claim for indemnification against
these liabilities, other than our payment of expenses incurred or paid by any
of our directors, executive officers or controlling persons in the successful
defense of any action, suit or proceeding, is asserted by the director,
executive 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 a controlling precedent, submit to a court of appropriate
jurisdiction the question whether indemnification by us is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of that issue.
SIGNATURES
----------
In accordance with the requirements of the Securities Act, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing of Form SB-2 and authorized this
registration statement to be signed on its behalf by the undersigned in the
City of Pittsburgh, State of Pennsylvania, on September 30, 2004.
Amnor Books, Inc
Date: 9/30/04 By: /s/ Andrew Gallup
------- ---------------------------
CEO and President
In accordance with the requirements of the Securities Act, this
registration statement was signed by the following persons in the
capacities and on the dates stated.
Date: 9/30/04 /s/ Andrew Gallup
------- ---------------------------
CEO, President, Treasurer
and Director
Date: 9/30/04 /s/ John Chymboryk
------ -----------------
Director