Pursuant to Rule 424(b)(3)
under the Securities Act of 1933
in connection with Registration No. 333-147111
PROSPECTUS
Dated April 11, 2008
Tone in Twenty
100,425,000 shares of common stock held by stockholders
This prospectus relates to the offer for sale of 100,425,000 shares of our
common stock by certain existing holders of the securities, referred to as
selling security holders throughout this document. The shares of common
stock to be sold by the selling security holders include: a) 425,000 shares
held by the selling security holders; and b) 100,000,000 shares issuable to
the selling security holders upon conversion of Series A Preferred stock.
Upon the effectiveness of this prospectus: the Selling Shareholders may sell
the shares as detailed in the section entitled "Plan of Distribution."
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. The prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Each of the selling stockholders may be deemed to be an "underwriter," as
such term is defined in the Securities Act of 1933.
There has been no market for our securities and a public market may not
develop, or, if any market does develop, it may not be sustained. As of
August 31, 2007, we have 2,625,000 common shares issued and outstanding
and 500,000 preferred shares issued and outstanding convertible to
100,000,000 common shares. Our common stock is not traded on any exchange or
in the over-the-counter market. After this Registration statement becomes
effective, we expect to have a broker dealer file an application with the
National Association of Securities Dealers, Inc. for our common stock to
eligible for trading on the OTC Bulletin Board. Selling shareholders will
sell at a price of $0.02 per share until their shares are quoted on the OTC
Bulletin Board and thereafter at prevailing market prices or privately
negotiated prices.
The purchase of the securities offered through this prospectus involves a
high degree of risk.
SEE SECTION TITLED "RISK FACTORS" ON PAGE 7.
--------------------------------------------
We may amend or supplement this prospectus from time to time by filing
amendments or supplements as required. You should read the entire prospectus
and any amendments or supplements carefully before you make your investment
decision.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is April 11, 2008
1
PAGE
----
Part I
PROSPECTUS SUMMARY...................................................... 3
OUR COMPANY............................................................. 3
ABOUT THIS OFFERING..................................................... 5
SELECTED FINANCIAL INFORMATION.......................................... 6
RISK FACTORS............................................................ 7
RISK FACTORS RELATING TO OUR FINANCIAL CONDITION........................ 7
RISK FACTORS RELATING TO OUR COMPANY.................................... 8
OTHER RISK FACTORS......................................................12
CAPITALIZATION .........................................................16
FORWARD-LOOKING STATEMENTS..............................................17
OFFERING INFORMATION....................................................17
USE OF PROCEEDS.........................................................17
DETERMINATION OF THE OFFERING PRICE.....................................18
DILUTION................................................................18
DIVIDEND POLICY.........................................................18
DESCRIPTION OF BUSINESS.................................................18
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION...............24
LEGAL PROCEEDINGS.......................................................26
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS............27
SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT...........30
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..........................31
SELLING SECURITY HOLDERS................................................33
PLAN OF DISTRIBUTION....................................................35
DIVIDEND POLICY.........................................................38
DESCRIPTION OF SECURITIES ..............................................39
LEGAL MATTERS...........................................................41
EXPERTS.................................................................41
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES..........................42
WHERE YOU CAN FIND MORE INFORMATION.....................................42
FINANCIAL STATEMENTS....................................................43
We have not authorized anyone to provide you with information different from
that contained in this prospectus. The Selling Stockholders are offering to
sell, and seeking offers to buy, shares of our 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.
2
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus
and may not contain all of the information that you should consider before
investing in the shares. You are urged to read this prospectus in its
entirety, including the information under "Risk Factors" and our financial
statements and related notes included elsewhere in this prospectus.
Our Company
Tone in Twenty ("Tone" or "the Company") was incorporated in the State of
Nevada on August 4, 2006, under the name Tone in Twenty (File Number
E0580752006-0). We are in the business of providing personal fitness
training using isometric techniques. It is management's belief that
isometric training is an intense form of training which requires less hours
of work for the same results. It is a form of exercise where muscle exertion
is used to strengthen and tone the muscle without changing the length of the
muscle fibers. Isometric training involves the exertion of muscle force that
must overcome and a counter-balancing force that increases in intensity to
the point where the muscle force can no longer hold the counter-balancing
force in place. Isometrics are done in static positions, rather than a range
of motion. The joint and muscle are either worked against an immovable force
or are held in a static position while opposed by resistance. This counter-
balancing force comes from a pneumatic air pressure which is pumped into the
exercise equipment. The greater the muscle force exerted against the
isometric equipment results in greater counter-balancing force.
Activities to date have been limited primarily to organization, initial
capitalization, establishing an appropriate operating facility in Las Vegas,
Nevada, and commencing its initial operational plans. As of the date of this
offering circular, the Company has developed a business plan, established
administrative offices and started its personal fitness business.
We are a development stage company. The Company is not operational. We
generated minimal revenues from an evaluation program we conducted from
January - June 2007, in Las Vegas, NV. We conducted an evaluation of our
business plan to define our physical fitness services and advertising
program. This evaluation entailed: 1) renting space, by the hour, in a
physical fitness training center; 2) hiring and training a physical fitness
trainer on using isometric techniques; 3) advertising this physical fitness
program in the newspaper; 4) scheduling clients for training sessions; and
5) providing isometric physical fitness training for clients.
The Company's business plan is to establish a model physical fitness facility
in order to train personal trainers on these isometric training techniques.
Once these trainers have been fully educated and demonstrate competencies in
these techniques, the Company will seek additional locations to host
isometric fitness training. The Company's goal is to open four locations
throughout the Las Vegas valley in order to have economies of scale in its
marketing. Our major obstacle in moving our business plan forward is
funding. Management believes we need to raise $100,000 in order to fund our
business. It is management's goal to obtain the necessary funding in the
next six months.
3
We plan to apply through a broker dealer for OTC-Bulletin Board listing after
our Registration Statement becomes effective. Management believes that
listing on the OTC-Bulletin will better position the Company to find the
financing its needs to move its business plan forward. We expect to commence
our personal fitness training program within six months of obtaining the
financing we need. There are no assurances that we will be able to raise the
necessary funding to move our business plan forward.
Since our inception on August 4, 2006 through August 31, 2007, we generated
$7,979 in revenues derived from an evaluation program. For the fiscal year
ending August 31, 2007 we experienced a net loss of $(961). This net loss
was contributed to general and administrative expense of $7,316 and
advertising expenses of $1,624. For the quarter year ending November 30,
2007 we generated no revenues experienced a net loss of $(270), contributed
to general and administrative expenses. Most of the general and
administrative expenses, since our inception, represented legal and audit
fees. Our cash at hand as of August 31, 2007 and November 30, 2007 was
$13,489 and $13,219 respectfully. In our August 31, 2007 year-end
financials, our auditor issued an opinion the our financial condition raises
substantial doubt about the Company's ability to continue as a going concern.
Our principal executive offices and our headquarters are located at 201 Las
Vegas Blvd. S., Ste. 200, Las Vegas, NV 89101, and our telephone number at
this address is (702) 604-7038.
4
About this Offering
Securities Being Offered 100,425,000 common shares by selling shareholders.
Common Stock Outstanding
Before the Offering: 2,625,000 shares
Common Stock Outstanding
After the Offering: 100,425,000 shares (assuming the full conversion
of all Series A Callable and Convertible Preferred
shares which are registered herein). All of the
common stock to be sold under this prospectus will
be sold by our existing shareholders. The shares
issued to the selling shareholders were made
in reliance upon an exemption from registration
under Section 4(2) of the Securities Act. For a
list of the selling stockholders and the amount of
shares that each of them expects to sell, see
"Selling Security holders."
Offering Price The offering price of the common stock is $0.02
per share. We plan to ask a broker dealer to apply
on our behalf with the NASD Over-the-Counter
Bulletin Board electronic quotation service to
allow the trading of our common stock after this
prospectus is declared effective by the U. S.
Securities and Exchange Commission. If our
common stock becomes so traded and a market for the
stock develops, the actual price of stock will be
determined by prevailing market prices at the time
of sale or by private transaction negotiated by the
selling shareholders. The offering price would
thus be determined by market factors and the
independent decisions of the selling shareholders.
Use of proceeds We will not receive any proceeds from the sale of
the common stock by the selling shareholders.
Risk Factors See "Risk Factors" and the other information in
this prospectus for a discussion of the factors
you should consider before deciding to invest in
our common shares.
OTC/BB symbol Not applicable. We are not trading on any
exchange. We intend have a broker dealer file an
application on behalf of the Company for listing
on the OTC-Bulletin Board following the
effectiveness of this Registration Statement.
5
Selected Financial Information
------------------------------
The selected financial information presented below is derived from and should
be read in conjunction with our financial statements, including notes
thereto, appearing elsewhere in this prospectus. See "Financial Statements."
Summary Operating Information
For quarter ended For fiscal year ended
November 30, 2007 August 31, 2007
unaudited audited
----------------- ---------------------
Revenue $ - $ 7,979
Expenses:
General and administrative 270 7,316
Advertising - 1,624
--------- ------------
Net Income (Loss) (270) (961)
Weighted Average number of common
shares outstanding and fully diluted 2,625,000 2,625,000
============ ============
Net Income (Loss) per share -
basic and fully diluted $ (0.38) $ (0.38)
============ ============
Balance sheet data:
November 30, 2007 August 31, 2007
unaudited audited
-------------- ------------------
Working Capital $ 13,219 $ 13,489
Total Assets $ 13,219 $ 13,489
Stockholders' Equity $ 13,219 $ 13,489
6
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should
carefully consider the risks described below and all of the other information
set forth in this prospectus before deciding to invest in shares of our
common stock. If any of the events or developments described below actually
occurs, our business, financial condition or results of operations could be
negatively affected. In that case, the trading price of our common stock
could decline, and you could lose all or part of your investment in our
common stock.
Risk Factors Relating to Our Financial Condition
1. We may not be able to raise sufficient capital or generate adequate
revenue to meet our obligations and fund our operating expenses.
As of November 30, 2007, the Company had $13,219 in working cash and
equivalents. The Company business plan is to provide personal fitness
training using isometric techniques. These plans will require additional
capital. The Company needs to raise at least one hundred thousand dollars
($100,000) in order to implement its business plan. The Company currently
does not have enough funds to fully implement its business plan. Failure to
raise adequate capital and generate adequate sales revenues to meet our
obligations and develop and sustain our operations could result in reducing
or ceasing our operations.
Additionally, even if we do raise sufficient capital and generate revenues to
support our operating expenses, there can be no assurances that the revenue
will be sufficient to enable us to develop business to a level where it will
generate profits and cash flows from operations. These matters raise
substantial doubt about our ability to continue as a going concern. Our
independent auditors currently included an explanatory paragraph in their
report on our financial statements regarding concerns about our ability to
continue as a going concern.
2. We have yet to attain profitable operations and because we will need
additional financing to fund our activities, our accountants believe there is
substantial doubt about the company's ability to continue as a going concern.
The Company has prepared financial statements as of year-end August 31, 2007
and first quarter ending November 30, 2007 reporting that the Company is in
its developmental stages. Its ability to continue to operate as a going
concern is fully dependent upon the Company obtaining sufficient financing to
continue its development and operational activities. The ability to achieve
profitable operations is in direct correlation to the Company's ability to
raise sufficient financing. Accordingly, management believes the Company's
continued existence, future expansion, and ultimate profitability is fully
dependent upon raising sufficient proceeds from this offering. It is
important to note that even if the appropriate financing is received, there
is no guarantee that the Company will ever be able to operate profitably or
derive any significant revenues from its operation. The Company could be
required to raise additional financing to fully implement its entire
business plan.
It is also important to note that the Company anticipates that it will incur
losses and negative cash flow over the next six (6) to twelve (12) months.
There is no guarantee that the Company will ever operate profitably or even
receive positive cash flows from full operations.
7
Risk Factors Relating to Our Company
3. We may not be able to compete with other fitness providers, almost all of
whom have greater resources and experience than we do.
The fitness industry is dominated by large, well-financed firms. We do not
have the resources to compete with larger providers of this service. With
the minimal resources we have available, we may experience great difficulties
in building a customer base. Competition by existing and future competitors
could result in our inability to secure any new customers. This competition
from other entities with greater resources and reputations may result in our
failure to maintain or expand our business as we may never be able to
successfully execute our business plan. Further, Tone in Twenty cannot be
assured that it will be able to compete successfully against present or
future competitors or that the competitive pressure it may face will not
force it to cease operations.
4. Because we are a development stage company, we have only generated $7,979
in revenues since our inception on August 4, 2006 and lack an operating
history, an investment in the shares offered herein is highly risky and could
result in a complete loss of your investment if we are unsuccessful in our
business plan.
Our company was incorporated on August 4, 2006; we have realized $7,979 in
revenues since our inception. We have no operating history upon which an
evaluation of our future prospects can be made. Based upon current plans, we
expect to incur operating losses in future periods as we incur significant
expenses associated with the initial startup of our business. Further, there
are no assurances that we will be successful in realizing sufficient revenues
or in achieving or sustaining positive cash flow at any time in the future.
Any such failure could result in the possible closure of our business or
force us to seek additional capital through loans or additional sales of our
equity securities to continue business operations, which would dilute the
value of any shares you purchase in this offering.
5. The success of our business depends on the viability and acceptance of
isometric training techniques.
The existence and growth of our service depends on the continued acceptance
of isometric fitness training in the marketplace. The fitness industry is
flooded with many fad ideas and schemes for diet and weight loss that produce
either inconsistent or ineffective results. Isometric training has been
recognized for the past 30 years and has been accepted universally as a form
of fitness training. The difference between isometric physical training
versus traditional physical training is that isometric training is an intense
form of training which requires less hours of work for the same results. It
pushes the muscles to their limits within a short period of time. For
example, "push ups" are a form of isometric training as compared to riding a
bicycle, where you pedal then rest as the bicycle coasts. Isometric training
could possibly lose its viability as fitness choice as a result of new
scientific research or increased competition with newer techniques. If for
some reason isometric training techniques are not accepted in the
marketplace, the demand for our services would be significantly reduced,
which would harm or cause our business to fail.
8
6. Evolving regulation of the fitness industry may adversely affect us.
As the fitness industry continues to evolve there may be increased regulation
by federal, state and/or foreign agencies. Any new regulations which
restrict our business could harm or cause our business to fail.
7. If our business plan is not successful, we may not be able to continue
operations as a going concern and our stockholders may lose their entire
investment in us.
As discussed in the Footnote 3 to Financial Statements included in this
registration statement, our auditors have given us a Going Concern comment.
This raises substantial doubt that we will be able to continue operations as
a going concern, and our independent auditors included an explanatory
paragraph regarding this uncertainty in their report on our financial
statements for the period August 6, 2006 (inception) to August 31, 2007 and
for the three months ending November 30, 2007. Our ability to continue as a
going concern is dependent upon our generating cash flow sufficient to fund
operations and reducing operating expenses. Our business plans may not be
successful in addressing these issues. If we cannot continue as a going
concern, our stockholders may lose their entire investment in us.
8. We face strong and varied competition.
In the Las Vegas area, there are many larger companies who provide similar
services which Tone in Twenty plans to provide. The competition includes
larger companies, such as Las Vegas Athletic Clubs, 24 Hour Fitness, Bally's
Fitness, Gold's Gym, and other providers. These companies are better funded
and more established than Tone in Twenty.
9. We may not be able to find suitable employees.
The Company currently relies heavily upon the services and expertise of our
sole officers and directors. In order to implement the aggressive business
plan of the Company, management recognizes that additional clerical staff
will be required. Our sole officer is the only employed personnel at the
outset of operations. Our sole officer can manage the office functions and
bookkeeping services until the Company can generate enough revenues to hire
additional staff.
No assurances can be given that the Company will be able to find suitable
employees that can support the above needs of the Company or that these
employees can be hired on terms favorable to the Company.
10. We may not ever pay cash dividends.
The Company has not paid any cash dividends on the Common Shares to date, and
there can be no guarantee that the Company will be able to pay cash dividends
on the Common Shares in the foreseeable future. Initial earnings that the
Company may realize, if any, will be retained to finance the growth of the
Company. Any future dividends, of which there can be no guarantee, will be
directly dependent upon earnings of the Company, its financial requirements
and other factors that are not determined. (See "CAPITALIZATION")
9
11. We are subject to government regulation.
The Company is subject to federal, state and local laws and regulations
affecting its business. Although the Company plans on obtaining all required
federal and state permits, licenses, and bonds to operate its facilities,
there can be no assurance that the Company's operation and profitability will
not be subject to more restrictive regulation or increased taxation by
federal, state, or local agencies.
12. We may be liable for the products and services we provide.
There is no guarantee that the level of insurance coverage secured by the
Company will be adequate to protect the Company from risks associated with
claims that exceed the level of coverage maintained. As a result of the
Company's limited operations to date, no threatened or actual liability
claims have been made upon the Company.
13. Because our sole officer works or consults for other companies, his other
activities could slow down our operations.
John Dean Harper, our sole director/officer, does not work for us exclusively
and he does not devote all of his time to our operations. Therefore, it is
possible that a conflict of interest with regard to his time may arise based
on his employment in other activities. His other activities will prevent him
from devoting full-time to our operations which could slow our operations and
may reduce our financial results because of the slow down in operations.
John Dean, the President and Director of the company, currently devotes
approximately 5-10 hours per week to company matters. The responsibility of
developing the company's business, and fulfilling the reporting requirements
of a public company all fall upon Mr. Harper. We have not formulated a plan
to resolve any possible conflict of interest with his other business
activities. In the event he is unable to fulfill any aspect of his duties to
the company we may experience a shortfall or complete lack of sales resulting
in little or no profits and eventual closure of the business.
10
14. Our principal stockholders, and sole officer and director own a
controlling interest in our voting stock and investors will not have any
voice in our management, which could result in decisions adverse to our
general shareholders.
Our sole officer and principal stockholder beneficially owns approximately,
or has the right to vote approximately 84% of our outstanding common stock.
If our Preferred shares are converted to common shares, then our largest
shareholder will vote 97% of our outstanding common stock. As a result, this
stockholder, acting alone, will have the ability to control substantially all
matters submitted to our stockholders for approval including:
a) election of our board of directors;
b) removal of any of our directors;
c) amendment of our Articles of Incorporation or bylaws; and
d) adoption of measures that could delay or prevent a change in control or
impede a merger, takeover or other business combination involving us.
15. Increases in the base cost of our services could materially increase our
costs and decrease our profitability.
The fitness industry is characterized by significant facility costs and
investment in the expertise of licensed and trained personnel. These costs
can be influenced by seasonal fluctuations. Significant increases in these
costs could decrease our profitability.
16. The fitness industry is influenced by general economic conditions.
The fitness industry is highly competitive and reactive to the overall level
of consumer spending. Consumer spending is dependent on a number of factors,
including actual and perceived economic conditions affecting disposable
consumer income (such as unemployment, wages and salaries), business
conditions, interest rates, availability of credit and tax rates in the
general economy and in the international, regional and local markets where
our products are sold. As a result, any deterioration in general economic
conditions, reductions in the level of consumer spending or increases in
interest rates could adversely affect the future sales of our products and
services.
A return to recessionary or inflationary conditions, whether in the United
States or globally, additional terrorist attacks or similar events could have
further adverse effects on consumer confidence and spending and, as a result,
could have a material adverse effect on our financial condition and results
of operations.
11
Other Risks Factors
17. These securities are offered at an arbitrary offering price.
The offering price of the Common Shares offered hereunder has been
arbitrarily determined by the Company and bears no relationship to any
objective criterion of value. The price does not bear any relationship to
the assets, book value, historical earnings or net worth of the Company. In
determining the offering price, the Company considered such factors as the
prospects, if any, for similar fitness services, the previous experience of
management, the Company's anticipated results of operations, the present
financial resources of the Company and the likelihood of acceptance of this
Offering. (See "PLAN OF DISTRIBUTION")
18. We may, in the future, issue additional common shares, which would reduce
investors' percent of ownership and may dilute our share value.
Our Articles of Incorporation authorize the issuance of 195,000,000 shares of
common stock and 5,000,000 preferred shares. The future issuance of common
stock may result in substantial dilution in the percentage of our common
stock held by our then existing shareholders. We may value any common stock
issued in the future on an arbitrary basis. The issuance of common stock for
future services or acquisitions or other corporate actions may have the
effect of diluting the value of the shares held by our investors, and might
have an adverse effect on any trading market for our common stock. (See
"DILUTION")
19. If the selling shareholders sell a large number of shares all at once or
in blocks, the market price of our shares would most likely decline.
The selling shareholders are offering 100,425,000 shares of our common stock
through this prospectus. Our common stock is presently not traded on any
market or securities exchange, but should a market develop, shares sold at a
price below the current market price at which the common stock is trading
will cause that market price to decline. Moreover, the offer or sale of a
large number of shares at any price may cause the market price to fall.
12
20. Our common shares are subject to the "Penny Stock" Rules of the SEC and
the trading market in our securities is limited, which makes transactions in
our stock cumbersome and may reduce the value of an investment in our stock.
The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for the purposes relevant to
us, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to
certain exceptions.
For any transaction involving a penny stock, unless exempt, the rules
require:
(a) that a broker or dealer approve a person's account for transactions
in penny stocks; and
(b) the broker or dealer receive from the investor a written agreement
to the transaction, setting forth the identity and quantity of the
penny stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the
broker or dealer must: (a) obtain financial information and investment
experience objectives of the person; and (b) make a reasonable determination
that the transactions in penny stocks are suitable for that person and the
person has sufficient knowledge and experience in financial matters to be
capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prescribed by the Commission relating to the
penny stock market, which, in highlight form: (a) sets forth the basis on
which the broker or dealer made the suitability determination; and (b) that
the broker or dealer received a signed, written agreement from the investor
prior to the transaction. Generally, brokers may be less willing to execute
transactions in securities subject to the "penny stock" rules. This may make
it more difficult for investors to dispose of our Common shares and cause a
decline in the market value of our stock.
Disclosure also has to be made about the risks of investing in penny stocks
in both public offerings and in secondary trading and about the commissions
payable to both the broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies available to an
investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny
stocks.
13
21. There is no current trading market for our securities and if a trading
market does not develop, purchasers of our securities may have difficulty
selling their shares.
There is currently no established public trading market for our securities
and an active trading market in our securities may not develop or, if
developed, may not be sustained. We intend to apply for admission to
quotation of our securities on the NASD OTC Bulletin Board after this
prospectus is declared effective by the SEC and we close the offering of
100,425,000 shares. If for any reason our common stock is not quoted on the
OTC Bulletin Board or a public trading market does not otherwise develop,
purchasers of the shares may have difficulty selling their common stock
should they desire to do so. As of the date of this filing, there have been
no discussions or understandings between Tone in Twenty or anyone acting on
our behalf with any market maker regarding participation in a future trading
market for our securities. If no market is ever developed for our common
stock, it will be difficult for you to sell any shares you purchase in this
offering. In such a case, you may find that you are unable to achieve any
benefit from your investment or liquidate your shares without considerable
delay, if at all. In addition, if we fail to have our common stock quoted on
a public trading market, your common stock will not have a quantifiable value
and it may be difficult, if not impossible, to ever resell your shares,
resulting in an inability to realize any value from your investment.
22. State securities laws may limit secondary trading, which may restrict the
states in which and conditions under which you can sell the shares offered by
this prospectus.
Secondary trading in common stock sold in this offering will not be possible
in any state until the common stock is qualified for sale under the
applicable securities laws of the state or there is confirmation that an
exemption, such as listing in certain recognized securities manuals, is
available for secondary trading in the state. We do plan to register our
post-effective amendment by coordination with the Securities Division of the
State of Nevada, pursuant to NRS Section 90.480. If we fail to register or
qualify, or to obtain or verify an exemption for the secondary trading of,
the common stock in any particular state, the common stock could not be
offered or sold to, or purchased by, a resident of that state. In the event
that a significant number of states refuse to permit secondary trading in our
common stock, the liquidity for the common stock could be significantly
impacted thus causing you to realize a loss on your investment.
23. Liability of directors for breach of duty of care is limited.
According to Nevada law [NRS 78.138(7)], all Nevada corporations limit the
liability of directors and officers, including acts not in good faith. Our
stockholders' ability to recover damages for fiduciary breaches may be
reduced by this statute. In addition, we are obligated to indemnify our
directors and officers regarding stockholder suits which they successfully
defend (NRS 78.7502).
14
24. Because we do not intend to pay any cash dividends on our common stock,
our stockholders will not be able to receive a return on their shares unless
they sell them.
We intend to retain any future earnings to finance the development and
expansion of our business. We do not anticipate paying any cash dividends on
our common stock in the foreseeable future. Unless we pay dividends, our
stockholders will not be able to receive a return on their shares unless they
sell them. There is no assurance that stockholders will be able to sell
shares when desired.
25. Tone in Twenty will not receive any of the proceeds from the selling of
shares offered in this prospectus.
We will not receive any proceeds from the sale of the common stock by the
selling shareholders offered in this prospectus.
26. We will incur ongoing costs and expenses for SEC reporting and
compliance, without revenue we may not be able to remain in compliance with
the SEC, making it difficult for investors to sell their shares, if at all.
We may plan to locate a market maker following the effectiveness of our
Registration Statement and have them file an application on our behalf to
have the shares quoted on the OTC Electronic Bulletin Board. To be eligible
for quotation on the OTCBB, issuers must remain current in their filings with
the SEC. Market Makers are not permitted to begin quotation of a security
whose issuer does not meet this filing requirement. Securities already
quoted on the OTCBB that become delinquent in their required filings will be
removed following a 30 or 60 day grace period if they do not make their
required filing during that time. In order for us to remain in compliance we
will require future revenues to cover the cost of these filings, which could
comprise a substantial portion of our available cash resources. If we are
unable to generate sufficient revenues to remain in compliance it may be
difficult for you to resell any shares you may purchase, if at all.
27. We may issue additional shares of preferred stock in the future that may
adversely impact your rights as holders of our common stock.
Our articles of incorporation authorize us to issue up to 5,000,000 shares of
"blank check" preferred stock. To date, the Company has issued 500,000
shares of preferred stock. Our board of directors will have the authority to
fix and determine the relative rights and preferences of preferred shares, as
well as the authority to issue additional shares, without further stockholder
approval. As a result, our board of directors could authorize the issuance
of a series of preferred stock that would grant to holders preferred rights
to our assets upon liquidation, the right to receive dividends before
dividends are declared to holders of our common stock, and the right to the
redemption of such preferred shares, together with a premium, prior to the
redemption of the common stock. To the extent that we do issue such
additional shares of preferred stock, your rights as holders of common stock
could be impaired thereby, including, without limitation, dilution of your
ownership interests in us. In addition, shares of preferred stock could be
issued with terms calculated to delay or prevent a change in control or make
removal of management more difficult, which may not be in your interest as
holders of common stock.
15
CAPITALIZATION
The following table sets forth, as of November 30, 2007 and August 31, 2007
the capitalization of the Company on an actual basis. This table should be
read in conjunction with the more detailed financial statements and notes
thereto included elsewhere herein.
Nov. 30, 2007 Aug 31, 2007
unaudited audited
------------- -------------
Debt $ - $ -
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, 500,000, 500,000 shares
issued and outstanding as of 11/30/07 and
8/31/07, respectfully 500 500
Common stock, $0.001 par value, 195,000,000
shares authorized, 2,625,000, 2,625,000 shares
issued and outstanding as of 11/30/07 and
8/31/07, respectfully 2,625 2,625
Additional Paid-in Capital 1,008,254 1,008,254
Earnings (Deficit) accumulated during
development stage (998,160) (997,890)
--------- ---------
13,219 13,489
--------- ---------
$ 13,219 $ 13,489
========= =========
16
FORWARD LOOKING STATEMENTS
This Prospectus contains forward-looking statements, including statements
concerning possible or assumed results of exploration and/or operations of
Tone in Twenty, and those proceeded by, followed by or that include the words
"may," "should," "could," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," or "continue" or the negative of such
terms and other comparable terminology. Investors should understand that the
factors described below, in addition to those discussed elsewhere in this
document could affect Tone in Twenty's future results and could cause those
results to differ materially from those expressed in such forward looking
statements.
OFFERING INFORMATION
This prospectus relates to the following:
The resale by certain selling security holders of the Company of up to
100,425,000 share of common stock in connection with the resale of shares of
common stock issued by us in two separate transactions were issued in
reliance upon an exemption from registration under Section 4(2) of the
Securities Act and/or Rule 506/505 of Regulation D promulgated thereunder as
a transaction not involving a public offering. (See "Liquidity and Capital
Resources" Section.)
The selling shareholders may sell their shares of our common stock at a fixed
price of $0.02 per share until shares of our common stock are quoted on the
OTC Bulletin Board, and thereafter at prevailing market prices or privately
negotiated prices. There can be no assurance that we will be able to obtain
an OTCBB listing. We will not receive any proceeds from the resale of common
shares by the selling security holders.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock offered
through this prospectus by the selling shareholders.
17
DETERMINATION OF OFFERING PRICE
The $0.02 per share offering price of our common stock was determined
arbitrarily by us. There is no relationship whatsoever between this price
and our assets, earnings, book value or any other objective criteria of
value. We intend to apply to the Over-the-Counter Bulletin Board electronic
quotation service for the trading of our common stock upon our becoming a
reporting entity under the Securities Exchange Act of 1934 (the "Exchange
Act"). If our common stock becomes so traded and a market for the stock
develops, the actual price of stock will be determined by prevailing market
prices at the time of sale or by private transactions negotiated by the
selling shareholders named in this prospectus. The offering price would thus
be determined by market factors and the independent decisions of the selling
shareholders named in this prospectus.
DILUTION
The common stock to be sold by the selling shareholders is common stock that
is currently issued and outstanding, with the exception of convertible
preferred shares that can convert to 100,000,000 common shares. If these
convertible preferred shares are converted to 100,000,000 common shares the
shares currently issued an outstanding will be diluted by approximately 98%.
DIVIDEND POLICY
The Company has not paid any cash dividends on the Common Stock to date, and
there are no plans for paying cash dividends on the Common Stock in the
foreseeable future. Initial earnings that the Company may realize, if any,
will be retained to finance the growth of the Company. Any future dividends,
of which there can be no guarantee, will be directly dependent upon earnings
of the Company, its financial requirements and other factors.
DESCRIPTION OF BUSINESS
Our Company
- -----------
Tone in Twenty or ("the Company"), is a Nevada Corporation with a principal
business strategy to provide personal fitness training using isometric
techniques. The difference between isometric physical training versus
traditional physical training is that isometric training is an intense form
of training which requires less hours of work for the same results. It is a
form of exercise where exertion is used against a resistance force that
strengthens and tones the muscle without changing the length of the muscle
fibers. Isometrics are done in static positions, rather than a range of
motion. The joint and muscle are either worked against an immovable force or
are held in a static position while opposed by resistance.
The Company's business plan is to establish a model facility in order to
train personal trainers on these techniques. Once these trainers have been
fully educated and demonstrate competencies in these techniques, the Company
will seek additional locations to host isometric fitness training. The
Company's goal is to open four locations throughout the Las Vegas valley in
order to have economies of scale in its marketing.
18
Management believes that isometric training can be beneficial to individuals
having a very limited time for fitness training, as it only requires visits
once or twice per week to the training facility. Isometric training is a
form of strength training designed to help build muscle mass. It is a form
of exercise involving the static contraction of a muscle without any visible
movement in the angle of the joint. The term "isometric" combines the prefix
"iso" (same) with "metric" (distance), meaning that in these exercises the
length of the muscle does not change, as compared to isotonic contractions in
which the contraction strength does not change but the joint angle does. It
is a process of muscle-building exercises which uses equipment that produces
muscular contractions against resistance without movement.
Management purchased the following equipment from a third party to implement
its isometric training program, this includes: Keiser Multi Hip, Keiser
Abductor, Keiser Shoulder Press, Keiser Bicep Curl, Keiser Low Back, Keiser
Lateral Deltoid, Keiser Upper Back, Keiser Lat Pulldown, Keiser Vertical,
Keiser Leg Press, Keiser Leg Curl, Keiser Vertical Press, Keiser Adductor,
Keiser Leg Extension, Keiser Tricep, and a Keiser Squat. Utilizing this
equipment, the joint and muscles are held in a static position while opposed
by resistance. The equipment uses pneumatic air pressure to generate this
resistance. The goal in utilizing isometric training is to help the trainee
build lean muscle mass while spending one or two 20-minutes sessions a week
in an isometric physical fitness training program.
Currently, the Company is not operational, the Company did conduct an
evaluation of its personal fitness training using isometric techniques
between January-June, 2007, in Las Vegas, NV. Management identified a
physical fitness center that permitted the use of its facilities to conduct
this evaluation. The Company spent $1,624 to advertise its fitness training
program in the local newspapers and subsequently generated $7,979 in
business. This evaluation model helped management define the Company's
services and advertising program.
Based on this evaluation, management believes it can duplicate this model.
Management is preparing this Registration Statement with the plan to raise
$100,000 in funding, provided the Company is listed on the Over the Counter
Bulletin Board. Management believes that if the Company is listed on the
Over the Counter Bulletin Board, it might be easier to fund the Company, as
it gives potential investors an exit strategy. However, there are no
assurance even if the Company is listed on the OTC-Bulletin Board that it
will be able to fund its future operations.
These funds will be used to establish four (4) separate isometric fitness
training centers in Las Vegas, NV. With four fitness centers, the Company
can use economy of scale to advertise its centers in the local newspapers and
on the local television cable. This will minimize advertising costs, per
customer, and provide a location convenient for future customers. Management
anticipates that the four planned isometric training centers can be in place
within approximately six months of obtaining funding it requires.
19
Expected Capital Expenditures
- -----------------------------
Provided that the Company can raise the funding necessary to establish its
business plan, management expects to allocate funding as follows:
Expected manner
of occurrence Number of
or method months needed
Event or Milestone of achievement to accomplish
--------------------------------------------------------------------------
1. Business funded Completion of offering Next six months
($100,000 raised)
2. Rent space at Funds from offering Two months after
a fitness center ($10,000 expense*) completion of offering
3. Hire and train Funds from offering Two months after
trainers ($10,000 expense*) completion of offering
4. Purchase Funds from offering Four months after
additional ($40,000 expense*) completion of offering
equipment
5. Market our Through newspaper and Five months after
services(s) cable advertising completion of offering
($30,000 expense*)
6 Develop a Establishing individual Six months after
solid customer training program completion of offering
base
7. The Company Customer base in place Within 6 months
operates at a after we become
profit operational, i.e,
steps 1 through 6
have been accomplished
* Please note, these chart reflects estimated expenses and an estimated
timeline, based on management's best judgment. Actual expenses and the
timeline presented may vary.
20
The Industry
It is management's belief that the industry is well established with a number
well-financed competitors who have an established client base. There are
many large gym facilities in Las Vegas, where the Company is based, such as
Gold's Gym, Las Vegas Athletic Club and 24-Hour Fitness. Management believes
the American society has increased knowledge and awareness of personal health
and fitness over the past decade through various media outlets, such as
television, magazines and the Internet. This has prompted the rapid building
of gyms and other personal fitness locations. Tone in Twenty plans to focus
on a particular segment of the fitness industry, by specializing in providing
personal isometric training at competitive prices for the market it serves.
Competition
The personal fitness industry is highly competitive. Competition is generally
based upon brand name recognition, price, service, reach and target
marketing. There are many larger companies who provide similar services as
Tone in Twenty. The competition includes larger companies, such as, Gold's
Gym, 24-Hour Fitness, Las Vegas Athletic Clubs and Bally's Gyms. We are an
insignificant player as compared to these larger fitness centers. These
companies are better funded and more established than Tone in Twenty. The
competition has built brand loyalty and has the resources to build its
customer bases through promotional advertising. We do not have the
advertising dollars available to compete against our competitors and we might
not be able to compete successfully with these competitors in the future.
All of our competitors have significantly greater financial, marketing, other
resources, and larger customer bases than we have and are less financially
leveraged than we are. As a result, these competitors may be able to adapt
changes in customer requirements more quickly; introduce new and more
innovative products more quickly; better adapt to downturns in the economy or
other decreases in sales; better withstand pressure for cancelled services,
take advantage of acquisition and other opportunities more readily; devote
greater resources to the marketing and sale of their products; and adapt more
aggressive pricing policies.
Our Strategy
Our marketing success will be determined by our ability to create brand
awareness for our personal fitness service, acquire customers and provide our
services at a competitive price. The Company has developed a few strategies
to accomplish this goal. This includes waiving any start-up fee. Many of
the larger companies charge a start-up fee to begin membership.
21
Management plans to target our services primarily towards individuals with
limited time to spend on personal fitness training, such as business
professionals and owners. The difference between isometric physical training
and traditional physical training is the time involved. Because of the
intensity of isometric training, a training session will not last more than
20-minutes per session, as compared traditional physical training programs
that can last one-two hours. Management anticipates to charge $40.00 for a
twenty (20) minute training session.
Therefore, management plans to market its services, through newspaper ads,
and its local television cable market, to individuals who do not have a great
deal of time to devote to physical training, but can afford to spend a 20-
minutes a week in an isometric physical fitness training program.
Intellectual Property
Many of the isometric health fitness training processes depend upon the
training techniques, protocols, knowledge, and experience of Mr. Harper, our
sole officer, who is responsible for purchasing this isometric training
equipment from a third party for the benefit of the Company. Specifically,
our training equipment utilizes a method, whereby the force applied to this
equipment increases with the amount of pressure applied to the equipment.
For example, when a customer uses our equipment, they begin by holding a
movable bar with no pressure. They are required to hold the bar level, while
the machine slowly exerts pressure against the bar. As the bar pressure
increases, the customer needs to increase their force against this movable
bar, until they can no longer hold the bar level. Different equipment will
be used to apply pressure against different parts of the body.
To help protect its rights, the Company will require future employees,
collaborators, and significant consultants and advisors with access to
confidential information on how our equipment works, to enter into
confidentiality agreements with the Company. There can be no assurance,
however, that these agreements will provide adequate protection for the
Company's trade secrets, know-how or proprietary information in the event of
any unauthorized use or disclosure. The Company's success and ability to
compete is dependent in part upon its proprietary technology. There can be
no assurance that the steps taken by the Company in this regard will be
adequate to prevent misappropriation of its technology or that the Company's
competitors will not independently develop technologies that are
substantially equivalent or superior to the Company's technologies.
22
The Company regards substantial elements of its underlying infrastructure and
health fitness training techniques and equipment as proprietary information
and will attempt to protect them by relying on trademark, service mark,
copyright and trade secret laws and restrictions on disclosure and
transferring title and other methods. The Company plans to enter into
confidentiality agreements with its future employees, future suppliers and
future consultants and in connection with its license agreements with third
parties and generally seeks to control access to and distribution of its
technology, documentation and other proprietary information. Despite these
precautions, it may be possible for a third party to copy or otherwise obtain
and use the Company's proprietary information without authorization or to
develop similar technology independently.
There can be no assurance that the steps taken by the Company will prevent
misappropriation or infringement of its proprietary information, which could
have a material adverse effect on the Company's business, results of
operations and financial condition. Litigation may be necessary in the
future to enforce the Company's intellectual property rights, to protect the
Company's trade secrets or to determine the validity and scope of the
proprietary rights of others. Such litigation might result in substantial
costs and diversion of resources and management attention. Moreover, from
time to time, the Company may be subject to claims of alleged infringement by
the Company or service marks and other intellectual property rights of third
parties. Such claims and any resultant litigation, should it occur, might
subject the Company to significant liability for damages, might result in
invalidation of the Company's proprietary rights and, even if not
meritorious, could result in substantial costs and diversion of resources and
management attention and could have a material adverse effect on the
Company's business, results of operations and financial condition.
Government Regulation.
We are subject to federal, state and local laws and regulations affecting our
business. Although the Company plans on obtaining all required federal and
state permits, licenses, and bonds to operate its facilities, there can be no
assurance that the Company's operation and profitability will not be subject
to more restrictive regulation or increased taxation by federal, state, or
local agencies.
Personnel
The Company has one employee, who serves as the sole Officer and the Director
of the Company. As the company grows, Tone in Twenty may need additional
personnel.
Facilities and Expenses
We currently maintain our corporate offices at 201 Las Vegas Blvd. South,
Suite 200, Las Vegas, NV 89101, Telephone: (702) 604-7038, in space provided
to us at no cost by our director.
23
Bankruptcy and Similar Proceedings
There has been no bankruptcy, receivership or similar proceeding.
Reorganizations, Purchase or Sale of Assets
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course
of business.
Patents, Trademarks, Franchises, Concessions, Royalty Agreements, or Labor
We currently have no pending or provisional patents or trademark
applications.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Certain statements contained in this prospectus, including statements
regarding the anticipated development and expansion of our business, our
intent, belief or current expectations, primarily with respect to the future
operating performance of Tone in Twenty and the services we expect to offer
and other statements contained herein regarding matters that are not
historical facts, are "forward-looking" statements. Future filings with the
Securities and Exchange Commission, future press releases and future oral or
written statements made by us or with our approval, which are not statements
of historical fact, may contain forward-looking statements, because such
statements include risks and uncertainties, actual results may differ
materially from those expressed or implied by such forward-looking
statements.
All forward-looking statements speak only as of the date on which they are
made. We undertake no obligation to update such statements to reflect events
that occur or circumstances that exist after the date on which they are made.
Revenues
We generated $7,979 in revenues for the period from August 4, 2006
(inception) through August 31, 2007 and no revenues for the first quarter
ending November 30, 2007. We currently do not have any operations and our
revenues came from an evaluation program we conducted from January - June
2007, in Las Vegas, NV. This evaluation model helped management define the
Company's services and advertising program. This evaluation entailed: 1)
renting space, by the hour, in a physical fitness training center; 2) hiring
and training a physical fitness trainer on using isometric techniques; 3)
advertising this physical fitness program in the newspaper; 4) scheduling
clients for training sessions; and 5) providing isometric physical fitness
training for clients.
24
Currently, we are spending approximately $600 per month. As of August 31,
2007, we had cash or cash equivalents of $13,489. As of November 30, 2007,
we had cash or cash equivalents of $13,219. The bulk of our expenses include
legal and accounting fees. These fees are being spent to become a fully
reporting Company so that we can apply through a broker dealer for OTC-
Bulletin Board listing. Management believes that listing on the OTC-Bulletin
will better position the Company to find the financing it needs to move its
business plan forward. We expect to be operational within six months of
obtaining the financing we need. We do not anticipate generating any profit
for at least 18 months.
Liquidity and Capital Resources
Our balance sheet as of August 31, 2007 reflects cash assets of $13,489 and
no current liabilities. As of November 30, 2007, our balance sheet reflects
cash assets of $13,219 and no current liabilities. Cash and cash equivalents
from inception to date have been sufficient to provide the operating capital
necessary to operate to date.
On August 4, 2006 (inception), we issued 2,200,000 shares of our $0.001 par
value common stock to our founder for $2,200 cash.
In February, 2007, we issued 500,000 shares of our $0.001 par value non-
voting Callable and Convertible Preferred stock for $10,000 paid for by
private investor for funding our operations. This Preferred Stock converts
to two hundred shares of common stock for each share of Preferred Stock.
In March, 2007, we issued 425,000 shares of our $0.001 par value common stock
pursuant to a Rule 505 of Regulation D offering for $4,250 cash to
approximately 30 shareholders.
There have been no other issuance of stock.
Notwithstanding, we anticipate generating losses and therefore we may be
unable to continue operations in the future. We anticipate we will require
additional capital up to approximately $100,000 to forward our business plan,
and we would have to issue debt or equity or enter into a strategic
arrangement with a third party. We intend to try and raise capital through a
private offering after this registration statement is declared effective and
our shares are quoted on the Over the Counter Bulletin Board. There can be
no assurance that additional capital will be available to us. We currently
have no agreements, arrangements or understandings with any person to obtain
funds through bank loans, lines of credit or any other sources.
Our sole officer/director has agreed to donate funds to the operations of the
Company, in order to keep it fully reporting for the next twelve (12) months,
without seeking reimbursement for funds donated. No agreement exists that
our sole officer/director will continue to donate funds to the operations of
the Company for the next twelve months; therefore, there is no guarantee that
he will continue to do so in the future.
25
Future Financings
We anticipate continuing to rely on equity sales of our common shares in
order to continue to fund our business operations. Issuances of additional
shares will result in dilution to our existing shareholders. There is no
assurance that we will achieve any of additional sales of our equity
securities or arrange for debt or other financing to fund our exploration and
development activities.
Going Concern Consideration
Our independent auditors included an explanatory paragraph in their report on
the accompanying financial statements regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional
note disclosures describing the circumstances that lead to this disclosure by
our independent auditors.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company is a party or in
which any director, officer or affiliate of the Company, any owner of record
or beneficially of more than 5% of any class of voting securities of the
Company, or security holder is a party adverse to the Company or has a
material interest adverse to the Company. The Company's property is not the
subject of any pending legal proceedings.
26
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following sets forth certain information with respect to executive
officers, directors, key employees and advisors of the Company as of the date
of this Memorandum:
Name Position
John Dean Harper Director/President/Secretary
All directors hold office until the next annual meeting of stockholders of
the Company and until their successors have been elected and qualified.
Directors currently receive no fees for services provided in that capacity.
The officers of the Company are elected annually and serve at the discretion
of the Board of Directors.
Set forth below is a brief description of the background and business
experience of our sole officer and director.
John Dean Harper, Director, President and Secretary
- ---------------------------------------------------
Mr. Harper is a graduate of Ohio University in Athens, Ohio with Bachelors of
Business Administration degree and a double major in Business Pre-Law and
General Business. He is also a graduate of the University of Cincinnati,
College of Law with a Juris Doctor. Mr. Harper has a private law practice
focusing primarily on corporate law, labor/employment and litigation. Mr.
Harper serves as counsel for the Las Vegas Police Protective Association,
Chief General Counsel, 1998-Present.
Work Experience:
- ----------------
Dates Name of Company Job Title
- ----- -------------- ---------
1986-1989 Univ. of Cincinnati, College of Law Law Student
1989-1991 Schottenstein, Zox and Dunn Assoc. Atty.
1991-1995 Redmon & Harper Partner
1996-1998 Gugino & Schwartz Assoc. Atty.
1999-2002 Starbase-1 Coffee Co. Ltd. President
2000-2002 Lock-Gun.com President
1998-Present Injured Police Officers Fund General Counsel
2001-2005 Absolute Glass Protection, Inc. Pres., Treasurer, Director
1996-Present John Dean Harper, Attorney at Law
1998-Present Las Vegas Police Protective Assoc. Chief General Counsel
1998-Present Nevada Conf. of Police and Sheriffs General Counsel
27
Involvement in Certain Legal Proceedings
Our director, executive officer and control persons have not been involved in
any of the following events during the past five years and which is material
to an evaluation of the ability or the integrity of our director or executive
officer:
1. any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor offences);
3. being 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; and
4. being found by a court of competent jurisdiction (in a civil action), the
SEC 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.
EXECUTIVE COMPENSATION
Summary Compensation Table
As a result of our the Company's current limited available cash, no officer
or director received compensation since the inception of the company.
Tone in Twenty intends to pay salaries when cash flow permits.
SUMMARY COMPENSATION TABLES
----------------------------------------------------
Annual Compensation
----------------------------------------------------
Name and Year Other Annual Stock
Principal Position End Salary ($) Bonus ($) Compensation ($) Awards($)
- -----------------------------------------------------------------------------
John Dean Harper
President 2007 -0- -0- -0- -0-
- -----------------------------------------------------------------------------
28
Long Term Compensation Table
------------------------------------------------------
Long Term Compensation
------------------------------------------------------
Awards Payouts
------------------------------------------------------
Restricted Stock Securities LTIP All Other
Name and Principal Year Award(s)($) Underlying Options/ Payouts Compensation
Position End SARs(#) ($) ($)
- -----------------------------------------------------------------------------
John Dean Harper
President 2007 -0- -0- -0- -0-
- -----------------------------------------------------------------------------
Mr. Harper, the President and Director of the company, currently devotes
approximately 5-10 hours per week to company matters. We do not pay to our
directors or officers any salary or consulting fee. We do not pay to our
directors any compensation for serving as a director on our board of
directors.
The Company currently does not have employment agreements with its executive
officer. The executive officer/director of the Company has agreed to take no
salary until the Company can generate enough revenues to support salaries on
a regular basis. The officer will not be compensated for services previously
provided. He will receive no accrued remuneration.
Stock Option Grants
- -------------------
We did not grant any stock options to the executive officers or directors
from inception through November 30, 2007.
Family Relationships
- --------------------
Not applicable.
Significant Employees
- ---------------------
We have no significant employees other than our Officer/Director. We conduct
our business through arms-length third parties and independent contractors.
29
Audit Committee Financial Expert
- --------------------------------
We do not have an audit committee financial expert nor do we have an audit
committee established at this time.
Auditors; Code of Ethics; Financial Expert
- ------------------------------------------
Our principal independent accountant is Moore & Associates, Chartered. We do
not currently have a Code of Ethics applicable to our principal executive,
financial and accounting officer. We do not have an audit committee or
nominating committee.
Advisory Board
- --------------
Tone in Twenty does not have an advisory board.
Advisor Compensation
- --------------------
Tone in Twenty does not have an advisory board.
Potential Conflicts of Interest
- -------------------------------
We are not aware of any current or potential conflicts of interest with any
of our officers/directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists, as of April 7, 2008, the number of shares of
Common Stock beneficially owned by (i) each person or entity known to our
Company to be the beneficial owner of more than 5% of the outstanding common
stock; (ii) each officer and director of our Company; and (iii) all officers
and directors as a group. Information relating to beneficial ownership of
common stock by our principal shareholders and management is based upon
information furnished by each person using "beneficial ownership" concepts
under the rules of the Securities and Exchange Commission. Under these
rules, a person is deemed to be a beneficial owner of a security if that
person has or shares voting power, which includes the power to vote or direct
the voting of the security, or investment power, which includes the power to
vote or direct the voting of the security. The person is also deemed to be a
beneficial owner of any security of which that person has a right to acquire
beneficial ownership within 60 days. Under the Securities and Exchange
Commission rules, more than one person may be deemed to be a beneficial owner
of the same securities, and a person may be deemed to be a beneficial owner
of securities as to which he or she may not have any pecuniary beneficial
interest. Except as noted below, each person has sole voting and investment
power.
30
We do not have any outstanding options or warrants exercisable for or
convertible into shares of our common stock.
AMOUNT AND PERCENT OF PERCENT OF
NATURE OF CLASS CLASS
TITLE OF NAME OF BENEFICIAL BENEFICIAL BEFORE AFTER
CLASS OWNER AND POSITION OWNERSHIP CONVERSION(1) CONVERSION(2)
Common John Dean Harper, 2,200,000 84.0% 2.1%
Stock 201 Las Vegas Blvd. So.,
Ste. 200
Las Vegas, NV 89101
- ----------------------------------------------------------------------------
Ownership upon conversion of
shareholders' preferred stock:
Common San Nicholas, Inc. 100,000,000 0.0% 97.0%
Stock
- ----------------------------------------------------------------------------
Common All Executive Officers
Stock and Directors as a
Group (1 person) 2,200,000 84.0% 2.1%
(1) Percent of Class based on 2,625,000 shares before conversion of Series
A Callable and Convertible Preferred shares.
(2) Percent of Class based on 102,625,000 after conversion of the 500,000
Series A Callable and Convertible Preferred shares.
(3) San Nicholas, Inc. a Nevada Corporation, beneficially owned and
Controlled by Mrs. Eva Esparza, Escobedo 435 Ote., Torreon,
Coah, Mexico.
We are not aware of any arrangements that may result in "changes in control"
as that term is defined by the provisions of Item 403(c) of Regulation S-B.
We believe that all persons named have full voting and investment power with
respect to the shares indicated, unless otherwise noted in the table. Under
the rules of the Securities and Exchange Commission, a person (or group of
persons) is deemed to be a "beneficial owner" of a security if he or she,
directly or indirectly, has or shares the power to vote or to direct the
voting of such security, or the power to dispose of or to direct the
disposition of such security. Accordingly, more than one person may be deemed
to be a beneficial owner of the same security. A person is also deemed to be
a beneficial owner of any security, which that person has the right to
acquire within 60 days, such as options or warrants to purchase our common
stock.
31
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 4, 2006 (inception), the Company issued 2,200,000 shares of its
$0.001 par value common stock to Mr. John Dean Harper, the founder of the
Company for $2,200 cash.
In February 2007, the Company issued 500,000 shares of its $0.001 par value
preferred stock for $10,000 cash to San Nicholas, Inc, a Nevada corporation,
beneficially owned and controlled by Mrs. Eva Esparza.
In March 2007, the Company issued 425,000 shares of its $0.001 par value
common stock for $4,250 cash to the selling shareholders identified in this
prospectus under the section entitled "Selling Shareholders."
There have been no other issuances of common stock or preferred stock.
As of August 31, 2007, the Company has 2,625,000 common shares issued and
outstanding and 500,000 Callable and Convertible Preferred Stock preferred
shares issued and outstanding.
There are no outstanding or issued options or warrants.
Certain Relationships and Related Transactions
The company's sole Director has contributed office space for the Company's
use for all periods presented. There is no charge to Tone in Twenty for the
space. This space consists of a unit within a larger five story commercial
office building that is also used by unrelated businesses. This building is
owned by parties not related to the management nor the shareholders of Tone
in Twenty. Management believes that its current facilities are adequate for
its needs through the next twelve months, and that, should it be needed,
suitable additional space will be available to accommodate expansion of the
Company's operations on commercially reasonable terms, although there can be
no assurance in this regard. Our officer will not seek reimbursement for
past office expenses. No written agreement exists that our sole
officer/director will continue to donate office space to the operations.
Therefore, there is no guarantee that he will not seek reimbursement for the
donated office space in the future.
Our officer and sole director can be considered a promoter of Tone in Twenty
in consideration of his participation and managing of the business of the
company since its incorporation.
Other than as set forth above, there are no transactions since our inception,
or proposed transactions, to which we were or are to be a party, in which any
of the following persons had or is to have a direct or indirect material
interest:
a) Any director or executive officer of the small business issuer;
b) Any majority security holder; and
c) Any member of the immediate family (including spouse, parents, children,
siblings, and in-laws) of any of the persons in the above.
32
SELLING SHAREHOLDERS
The selling shareholders named in this prospectus are offering all of the
100,425,000 shares of common stock offered through this prospectus. The
selling shareholders acquired the 100,425,000 shares of common stock offered
through two separate private offerings that were exempt from registration
under Regulation D of the Securities Act of 1933, as amended (the "Securities
Act"). None of the selling stockholders are broker-dealers or affiliates of
broker-dealers.
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:
1. the number of shares owned by each prior to this offering;
2. the total number of shares that are to be offered by each;
3. the total number of shares that will be owned by each upon completion
of the offering;
4. the percentage owned by each upon completion of the offering; and
5. the identity of the beneficial holder of any entity that owns the shares.
Total
shares Total Total
held Number of Shares
including Shares to to be Percent
issuable be Owned Owned
upon full Offered for Upon Upon
Conversion Selling Completion Completion
and/or Shareholder of this of this
Name of Selling Stockholder(1) exercise Account(2) Offering Offering(3)
- ----------------------------- -------- ----------- ---------- ----------
Margaret M. Adymy 10,000 10,000 0 Nil
Jessica Aldrich 20,000 20,000 0 Nil
Keith Beall 25,000 25,000 0 Nil
Benjamin Burkhalter 20,000 20,000 0 Nil
Craig M. Colton II 20,000 20,000 0 Nil
Adam Daskivich 25,000 25,000 0 Nil
Tim Hanson 20,000 20,000 0 Nil
Anthony A. Junker 10,000 10,000 0 Nil
Cynthia Junker 10,000 10,000 0 Nil
Alexandra Kelishes 10,000 10,000 0 Nil
Betty Jane Konkel 10,000 10,000 0 Nil
Nicholas Manteris 20,000 20,000 0 Nil
Jeorge A. Martin 10,000 10,000 0 Nil
Patricia L. Martin 10,000 10,000 0 Nil
Evelyn B. Meadows 25,000 25,000 0 Nil
Cynthia Murtha 20,000 20,000 0 Nil
Kevin Murtha 20,000 20,000 0 Nil
Marlena Niemann 10,000 10,000 0 Nil
Donald D. Patterson 10,000 10,000 0 Nil
James Patterson 10,000 10,000 0 Nil
Michael C. Patterson 10,000 10,000 0 Nil
Paloma Patterson 10,000 10,000 0 Nil
Cecila Quiroz 10,000 10,000 0 Nil
Johanna Quiroz 10,000 10,000 0 Nil
Juan Quiroz 10,000 10,000 0 Nil
Rosa Quiroz 10,000 10,000 0 Nil
Robert Sandoval 20,000 20,000 0 Nil
San Nicholas, Inc.(4)(5) 100,000,000 100,000,000 0 Nil
Daniel Schwartz 10,000 10,000 0 Nil
Mark Theis 10,000 10,000 0 Nil
Kirk Whiting 10,000 10,000 0 Nil
TOTAL 100,425,000 100,425,000 0
1) The named party beneficially owns and has sole voting and investment
power over all shares or rights to these shares, unless otherwise shown in
the table.
2) This table assumes that each shareholder will sell all of his/her shares
available for sale following the effectiveness of the registration statement
that includes this prospectus. Shareholders are not required to sell their
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. will be sold following the effectiveness of this
registration statement.
3) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the
information is not necessarily indicative of beneficial ownership for any
other purpose. Under such rule, beneficial ownership includes any shares as
to which the selling stockholders has sole or shared voting power or
investment power and also any shares, which the selling stockholders has the
right to acquire within 60 days. The percentage of shares owned by each
selling stockholder is based on a total outstanding number of 154,231,000,
(assuming the full conversion of all Series A Callable and Convertible
Preferred shares which are registered herein) as of February 15, 2007.
(4) San Nicholas, Inc. a Nevada Corporation, beneficially owned and
controlled by Mrs. Eva Esparza.
(5) Owner(s) of the Series A Callable and Convertible Preferred Shares. The
Board of Tone and Twenty has resolved that they do not plan on calling the
these Series A Preferred Shares; therefore, these shareholders may call for
the conversion of these shares at their sole discretion.
34
All of the selling shareholders:
1. have not had a material relationship with us other than as a shareholder
at any time within the past two years; or
2. has ever been one of our officers or director or
3. are not broker-dealers or affiliates of a broker-dealer
Expenses of Issuance and Distribution
We have agreed to pay all expenses incident to the offering and sale to the
public of the shares being registered other than any commissions and
discounts of underwriters, dealers or agents and any transfer taxes, which
shall be borne by the selling security holders. The expenses which we are
paying are set forth in the following table.
Nature of Expenses: Amount
Securities and Exchange Commission registration fee $ 62
Legal fees and miscellaneous expenses* $ 1,500
Audit Fees $ 1,000
Transfer Agent fees* $ 750
Printing* $ 538
-------
Total $ 3,850
=======
*Estimated Expenses
PLAN OF DISTRIBUTION
The selling shareholders may sell some or all of their common stock in one or
more transactions, including block transactions:
1. On such public markets as the common stock may from time to time
be trading;
2. In privately negotiated transactions;
3. Through the writing of options on the common stock;
4. In short sales; or
5. In any combination of these methods of distribution.
There is currently no market for any of our shares, and we cannot give any
assurance that our shares will have any market value. The sales price to the
public is fixed at $0.02 per share until such time as the shares of our
common stock may be traded on the Over-the-Counter Bulletin Board electronic
quotation service. Although we intend to apply for trading of our common
stock on the Over-the-Counter Bulletin Board electronic quotation service,
public trading of our common stock may never materialize. In addition, if a
market for our stock does materialize, we cannot give any assurances that a
public market for our securities may be sustained.
35
If our common stock becomes traded on the Over-the-Counter Bulletin Board
electronic quotation service, then the sales price to the public will vary
according to the selling decisions of each selling shareholder and the market
for our stock at the time of resale. In these circumstances, the sales price
to the public may be:
1. The market price of our common stock prevailing at the time of sale;
2. A price related to such prevailing market price of our common stock; or
3. Such other price as the selling shareholders determine from time to time.
We can provide no assurance that all or any of the common stock offered will
be sold by the selling shareholders named in this prospectus.
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 named in this prospectus must comply with the
requirements of the Securities Act and the Exchange Act in the offer and sale
of the common stock. The selling shareholders and any broker-dealers who
execute sales for the selling shareholders may be deemed to be an
"underwriter" within the meaning of the Securities Act in connection with
such sales. 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
they 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 Exchange Act.
36
Penny Stock Regulations
You should note that our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines "penny stock" to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and "accredited investors". The term
"accredited investor" refers generally to institutions with assets in excess
of $5,000,000 or individuals with a net worth in excess of $1,000,000 or
annual income exceeding $200,000 or $300,000 jointly with their spouse. The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document in a form prepared by the SEC which provides information
about penny stocks and the nature and level of risks in the penny stock
market. The broker-dealer also must provide the customer with current bid and
offer quotations for the penny stock, the compensation of the broker-dealer
and its salesperson in the transaction and monthly account statements showing
the market value of each penny stock held in the customer's account. The bid
and offer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before
or with the customer's confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt
from these 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 level of trading activity in
the secondary market for the stock that is subject to these penny stock
rules. Consequently, these penny stock rules may affect the ability of
broker-dealers to trade our securities. We believe that the penny stock rules
discourage investor interest in and limit the marketability of our common
stock.
Blue Sky Restrictions on Resale
If a selling security holder wants to sell shares of our common stock under
this registration statement in the United States, the selling security
holders will also need to comply with state securities laws, also known as
"Blue Sky laws," with regard to secondary sales. All states offer a variety
of exemption from registration for secondary sales. Many states, for
example, have an exemption for secondary trading of securities registered
under Section 12(g) of the Securities Exchange Act of 1934 or for securities
of issuers that publish continuous disclosure of financial and non-financial
information in a recognized securities manual, such as Standard & Poor's.
The broker for a selling security holder will be able to advise a selling
security holder which states our common stock is exempt from registration
with that state for secondary sales.
37
Any person who purchases shares of our common stock from a selling security
holder under this registration statement who then wants to sell such shares
will also have to comply with Blue Sky laws regarding secondary sales. When
the registration statement becomes effective, and a selling security holder
indicates in which state(s) he desires to sell his shares, we will be able to
identify whether it will need to register or it will rely on an exemption
there from.
Transfer Agent
We are currently serving as our own transfer agent, and plan to continue to
serve in that capacity until such time as management believes it is necessary
or appropriate to employ an independent transfer agent in order to facilitate
the creation of a public trading market for its securities. Should our
securities be quoted on any exchange or OTC quotation system or application
is made to have the securities quoted, an independent transfer agent will be
appointed.
Admission to Quotation on the OTC Bulletin Board
We intend to apply to have our common stock be quoted on the OTC Bulletin
Board. If our securities are not quoted on the OTC Bulletin Board, a
security holder may find it more difficult to dispose of, or to obtain
accurate quotations as to the market value of our securities. The OTC
Bulletin Board differs from national and regional stock exchanges in that it
(1) is not situated in a single location but operates through communication
of bids, offers and confirmations between broker-dealers, and (2) securities
admitted to quotation are offered by one or more Broker-dealers rather than
the "specialist" common to stock exchanges.
To qualify for quotation on the OTC Bulletin Board, an equity security must
have one registered broker-dealer, known as the market maker, willing to list
bid or sale quotations and to sponsor the company listing. If it meets the
qualifications for trading securities on the OTC Bulletin Board our
securities will trade on the OTC Bulletin Board. We may not now or ever
qualify for quotation on the OTC Bulletin Board. We currently have no market
maker who is willing to list quotations for our securities.
DIVIDEND POLICY
We have not declared or paid dividends on our Common Stock since our
formation, and we do not anticipate paying dividends in the foreseeable
future. Declaration or payment of dividends, if any, in the future, will be
at the discretion of our Board of Directors and will depend on our then
current financial condition, results of operations, capital requirements and
other factors deemed relevant by the board of directors. There are no
contractual restrictions on our ability to declare or pay dividends.
38
DESCRIPTION OF SECURITIES
The Company, a Nevada corporation, is authorized to issue 195,000,000 shares
of Common Stock, $0.001 par value and 5,000,000 shares of Preferred Stock,
$0.001 par value. The Company has issued 2,200,000 shares of Common Stock to
the original officer of the Company. The Company subsequently sold 425,000
shares to further capitalize the Company. The Company also sold 500,000
shares of preferred stock. The holders of Common Stock: (i) have equal
rights to dividends from funds legally available therefore, ratably when as
and if declared by the Board of Directors of the Company; (ii) are entitled
to share ratably in all assets of the Company available for distribution to
holders of Common Stock upon liquidation, dissolution, or winding up of the
affairs of the Company; (iii) do not have preemptive, subscription or
conversion rights and there are no redemption or sinking fund provisions
applicable thereto; (iv) are entitled to one non-cumulative vote per share of
Common Stock, on all matters which stockholders may vote on at all meetings
of Shareholders; and (v) the holders of Common Stock have no conversion,
preemptive or other subscription rights. There is no cumulative voting for
the election of directors. There are currently 2,625,000 shares of Common
Stock outstanding held by thirty-one shareholders of record. (See "Principal
Shareholders").
Share Purchase Warrants
We have not issued and do not have outstanding any warrants to purchase
shares of our common stock.
Options
We have not issued and do not have outstanding any options to purchase shares
of our common stock.
Preferred Convertible Securities
We issued 500,000 non-voting Callable and Convertible Preferred shares. We
filed with the Nevada Secretary of State the designation that "These Series
A Preferred shares shall be designated as "Callable and Convertible Preferred
Stock." The corporation has the right to call for and purchase these shares
at any time, within twelve months of issue, either at par value or at a
slight premium above par value, or if corporation should designate that these
shares are deemed not callable, the holders of these non-voting Series A
Preferred Shares shall have the right to cause the corporation to redeem
shares for Common Stock at any time. Each holder of the non voting Series A
Callable and Convertible Preferred Stock shall have the right to convert all
or any portion of such shares as such holder desires to convert, into shares
of the Common Stock of the corporation, as follows: each share of Series A
Convertible Preferred Stock can be exchanged for two hundred (200) shares of
Common Stock of the corporation."
39
Through a Board Resolution, it was resolved that we shall not call nor redeem
our Series A non-voting Callable and Convertible Preferred shares. The
shareholder of the Series A Preferred shares will be permitted to convert
each Series A Preferred share owned for two hundred common shares, at their
sole discretion. The conversion of 500,000 Series A Preferred Shares
converts into 100,000,000 common shares which we registering in this
Prospectus.
Rule 144 Shares
- ---------------
As of November 30, 2007, no shares currently issued and outstanding could be
resold pursuant to Section 144 of the Securities Act. This is because no
shares have been held for 2 years in order to satisfy 144(K) and no
sufficient public information is available to satisfy the other 144 rules.
A total of 2,200,000 shares of our common stock will be available for resale
to the public after August, 2008, in accordance with the volume and trading
limitations of Rule 144 of the Securities Act of 1933.
In general, under Rule 144 as currently in effect, a person who has
beneficially owned shares of a company's common stock for at least one year
is entitled to sell within any three month period a number of shares that
does not exceed the greater of:
1. one percent of the number of shares of the company's common stock then
outstanding, which, in our case, will equal approximately 26,250 shares as
of the date of this prospectus, or;
2. the average weekly trading volume of the company's common stock during
the four calendar weeks preceding the filing of a notice on form 144 with
respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions and notice
requirements and to the availability of current public information about the
company.
Under Rule 144(k), a person who is not one of the company's affiliates at any
time during the three months preceding a sale, and who has beneficially owned
the shares proposed to be sold for at least two years, is entitled to sell
shares without complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144.
As of the date of this prospectus, persons who are our affiliates hold 100%
of the total shares that may be sold, at least partially, pursuant to Rule
144(k) after March 2009.
40
Nevada Anti-Takeover laws
Nevada revised statutes sections 78.378 to 78.3793 provide state regulation
over the acquisition of a controlling interest in certain Nevada corporations
unless the articles of incorporation or bylaws of the corporation provide
that the provisions of these sections do not apply. Our articles of
incorporation and bylaws do not state that these provisions do not apply. The
statute creates a number of restrictions on the ability of a person or entity
to acquire control of a Nevada company by setting down certain rules of
conduct and voting restrictions in any acquisition attempt, among other
things. The statute is limited to corporations that are organized in the
state of Nevada and that have 200 or more stockholders, at least 100 of whom
are stockholders of record and residents of the State of Nevada; and does
business in the State of Nevada directly or through an affiliated
corporation. Because of these conditions, the statute does not apply to our
company.
LEGAL MATTERS
The Law Offices of John Dean Harper has opined on the validity of the shares
of common stock being offered hereby.
EXPERTS
The financial statements included in this prospectus and in the registration
statement have been audited by Moore & Associates, Chartered, an independent
registered public accounting firm, to the extent and for the period 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.
Interest of Named Experts and Counsel
Certain legal matters in connection with this registration statement will be
passed upon for Tone in Twenty by the Law Offices of John Dean Harper. John
Dean Harper is the sole officer/director of Tone in Twenty, and a shareholder
of the registrant.
Our sole officer/director can be considered promoters of Tone in Twenty in
consideration of their participation and managing of the business of the
company since its incorporation.
41
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our Articles and By-laws provide to the fullest extent permitted by law, our
directors or officers, former directors and officers, and persons who act at
our request as a director or officer of a body corporate of which we are a
shareholder or creditor shall be indemnified by us. We believe that the
indemnification provisions in our By-laws are necessary to attract and retain
qualified persons as directors and officers. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 (the "Act" or
"Securities Act") may be permitted to directors, officers or persons
controlling us pursuant to the foregoing provisions, or otherwise, we have
been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
Reports to Security Holders
At this time, we are not required to provide annual reports to security
holders. However, shareholders and the general public may view and download
copies of all of our filings with the SEC, including annual reports,
quarterly reports, and all other reports required under the Securities
Exchange Act of 1934, by visiting the SEC site (http://www.sec.gov) and
performing a search of our electronic filings. We intend to file with the
Securities and Exchange Commission a Form 8-A to register our common stock
pursuant to Section 12(g) of the Securities and Exchange Act of 1934, as soon
as practicable after this registration statement is declared effective by the
Securities and Exchange Commission. Thereafter, annual reports will be
delivered to security holders as required or they will be available online.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form SB-2 under the Securities Act
with the SEC for the securities offered hereby. This prospectus, which
constitutes a part of the registration statement, does not contain all of the
information set forth in the registration statement or the exhibits and
schedules which are part of the registration statement. For additional
information about us and our securities, we refer you to the registration
statement and the accompanying exhibits and schedules. Statements contained
in this prospectus regarding the contents of any contract or any other
documents to which we refer are not necessarily complete. In each instance,
reference is made to the copy of the contract or document filed as an exhibit
to the registration statement, and each statement is qualified in all
respects by that reference. Copies of the registration statement and the
accompanying exhibits and schedules may be inspected without charge (and
copies may be obtained at prescribed rates) at the public reference facility
of the SEC at Room 1024, 100 F Street, N.E. Washington, D.C. 20549.
You can request copies of these documents upon payment of a duplicating fee
by writing to the SEC. You may call the SEC at 1-800-SEC-0330 for further
information on the operation of its public reference rooms. Our filings,
including the registration statement, will also be available to you on the
Internet web site maintained by the SEC at http://www.sec.gov.
42
FINANCIAL STATEMENTS
Tone in Twenty
August 31, 2007
November 30, 2007
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Financial Statement
-------------------
PAGE
----
Year end August 31, 2007 Financials (audited):
Independent Auditors' Report F-1a
Balance Sheets F-2a
Statements of Operations F-3a
Statements of Changes in Stockholders' Equity F-4a
Statements of Cash Flows F-5a
Notes to Financials F-6a-10a
First Quarter end November, 2007 Financials (unaudited):
Independent Auditors' Report F-1b
Balance Sheets F-2b
Statements of Operations F-3b
Statements of Changes in Stockholders' Equity F-4b
Statements of Cash Flows F-5b
Notes to Financials F-7b-8b
43
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
------------------------
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To the Board of Directors
Tone in Twenty
(A Development Stage Company)
We have audited the accompanying balance sheet of Tone in Twenty (A
Development Stage Company) as of August 31, 2007 and 2006, and the related
statements of operations, stockholders' equity and cash flows through
August 31, 2007 and 2006, and inception on August 4, 2006 through
August 31, 2007. 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 audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide 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 Tone in Twenty (A
Development Stage Company) as of August 31, 2007 and 2006 and the results
of its operations and its cash flows through August 31, 2007 and 2006, and
inception on August 4, 2006 through August 31, 2007, 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 3 to the
financial statements, the Company has recognized $7,979 to date and has
accumulated operating losses of approximately $2,961 since inception which
raises substantial doubt about its ability to continue as a going concern.
Management's plans concerning these matters are also described in Note 3.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ Moore & Associates, Chartered
- ---------------------------------
Moore & Associates Chartered
Las Vegas, Nevada
October 15, 2007
2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146
(702) 253-7499 Fax (702) 253-7501
F-1a
Tone in Twenty
Balance Sheets
(a development stage company)
August 31, 2007 and August 31, 2006
Balance Sheets
August 31, August 31,
2007 2006
---------- ----------
Assets
Current Assets:
Cash $ 9,239 $ 200
Funds held in escrow 4,250 -
--------- --------
Total Assets $ 13,489 $ 200
========= ========
Liabilities and Stockholders' Equity
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, 500,000, 0 shares
issued and outstanding as of 8/31/07 and
8/31/06, respectfully 500 -
Common stock, $0.001 par value, 195,000,000
shares authorized, 2,625,000, 2,200,000 shares
issued and outstanding as of 8/31/07 and
8/31/06, respectfully 2,625 2,200
Additional Paid-in Capital 1,008,254 -
Earnings (Deficit) accumulated during
development stage (997,890) (2,000)
--------- --------
13,489 200
--------- --------
$ 13,489 $ 200
========= ========
The accompanying notes are an integral part of these statements.
F-2a
Tone in Twenty
Statement of Operations
(a development stage company)
For the years ending August 31, 2007 and August 31, 2006
For the period from August 4, 2006 (Inception) to August 31, 2007
Statement of Operations
For the period
from
For the year For the year August 4, 2006
ending ending (Inception) to
August 31, August 31, August 31,
2007 2006 2007
------------ ------------ --------------
Revenue $ 7,979 $ - $ 7,979
------------ ------------ --------------
Expenses:
General and administrative
expenses 7,316 1,000 8,316
Incorporating Fees - 1,000 1,000
Advertising 1,624 - 1,624
------------ ------------ --------------
Total expenses 8,940 2,000 10,940
------------ ------------ --------------
Net income (loss) $ (961) $ (2,000) $ (2,961)
============ ============ ==============
Beneficial Conversion
Feature of Preferred stock (994,929) (2,000)
Net income (loss) applicable
to common shareholders $ (995,890) (2,000)
============== ============
Basic Weighted Average
Number of Common Shares
Outstanding 2,625,000 2,200,000
============== ============
Net (loss) per share - basic and
fully diluted $ (0.38) $ (0.00)
============ ============
The accompanying notes are an integral part of these statements
F-3a
Tone in Twenty
Statement of Stockholders' Equity
(a development stage company)
For the period from August 4, 2006 (Inception) to August 31, 2007
Statement of Stockholders' Equity
(Deficit)
Preferred Accumulated
Common Stock Stock Additional During Total
------------------ ----------------- Paid-in Development Stockholders
Shares Amount Shares Amount Capital Stage Equity
---------- ------- --------- ------- --------- ------------ ------------
August
2006,
Founders
initial
investment,
$0.001
per
share 2,200,000 $ 2,200 $ - $ - $ - $ 2,200
Net (loss)
year ended
8/31/06 (2,000) (2,000)
---------- ------- --------- ------- --------- ------------ ------------
Balance,
8/31/06 2,200,000 $ 2,200 - $ - $ - $ (2,000) $ 200
February
2007,
Preferred
shares
issued for
cash 500,000 500 9,500 10,000
Deemed dividends from
beneficial conversion
feature on preferred
stock 994,929 (994,929)
March
2007,
Shares
issued
pursuant
to 505
offering
at $0.01
per
share 425,000 425 3,825 4,250
Net (loss)
year
ended
8/31/07 (961) (961)
---------- ------- --------- ------- --------- ------------ ------------
Balance,
8/31/07 2,625,000 2,625 500,000 500 1,008,254 (997,890) 13,489
========== ======= ========= ======= ========= ============ ============
The accompanying notes are an integral part of these statements
F-4a
Tone in Twenty
Statement of Cash Flows
(a development stage company)
For the years ending August 31, 2006 and August 31, 2007
For the period from August 4, 2006 (Inception) to August 31, 2007
Statement of Cash Flows
For the period
from
For the year For the year August 4, 2006
ending ending (Inception) to
August 31, August 31, August 31,
2007 2006 2007
------------ ------------ --------------
Cash flows from operating activities:
Net income (loss) $ (961) $ (2,000) $ (2,961)
------------ ------------ --------------
Net cash provided from
operating activities (961) (2,000) (2,961)
Cash flows from financing activities:
Issuances of common stock 4,250 2,200 6,450
Issuances of preferred stock 10,000 - 10,000
------------ ------------ --------------
Net cash provided from financing
activities 14,250 2,200 16,450
Net increase (decrease) in cash 13,289 200 13,489
Cash and equivalents - beginning 200 - -
------------ ------------ --------------
Cash and equivalents - ending $ 13,489 $ 200 13,489
============ ============ ==============
Supplemental disclosures:
Interest paid $ - $ - $ -
============ ============ ==============
Income taxes paid $ - $ - $ -
============ ============ ==============
The accompanying notes are an integral part of these statements
F-5a
Tone in Twenty
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2007
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
Tone in Twenty (the Company) was incorporated under the laws of the state of
Nevada on August 4, 2006. The Company was organized to conduct any lawful
business. The Company plans to offer personalized physical fitness training
through its iso-toning program.
The Company has been in the development stage since inception and has had
limited operations to date.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
The Company has $13,489 in cash assets and no debt as of August 31, 2007.
The relevant accounting policies are listed below.
Basis of Accounting
- -------------------
The basis is United States generally accepted accounting principles.
Earnings per Share
- ------------------
The basic earnings (loss) per share is calculated by dividing the Company's
net income (loss) 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 not issued any options or warrants or similar securities since
inception.
Dividends
- ---------
The Company has not yet adopted any policy regarding payment of dividends. No
Dividends have been paid during the period shown.
Income Taxes
- ------------
The provision for income taxes is the total of the current taxes payable and
the net of the change in the deferred income taxes. Provision is made for the
deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.
F-6a
Tone in Twenty
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2007
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES-CONTINUED
Year end
- --------
The Company's year-end is August 31.
Advertising
- -----------
Advertising is expensed when incurred. There have been advertising costs of
$1,624 from August 4, 2006 (inception) through August 31, 2007.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 3. GOING CONCERN
These financial statements have been prepared in accordance with generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and the
satisfaction of liabilities and commitments in the normal
course of business. As at August 31, 2007, the
Company has recognized revenues of $7,979 to date and has accumulated
operating losses of approximately $(2,961) since inception. The Company's
ability to continue as a going concern is contingent upon the successful
completion of additional financing arrangements and its ability to achieve
and maintain profitable operations. Management plans to raise equity capital
to finance the operating and capital requirements of the Company. Amounts
raised will be used to further development of the Company's products, to
provide financing for marketing and promotion, to secure additional property
and equipment, and for other working capital purposes. While the Company is
expending its best efforts to achieve the above plans, there is no assurance
that any such activity will generate funds that will be available for
operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments that might arise from this uncertainty.
F-7a
Tone in Twenty
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2007
NOTE 4. STOCKHOLDERS'EQUITY
The Company is authorized to issue 195,000,000 shares of its $0.001 par value
common stock and 5,000,000 shares of its $0.001 par value preferred stock.
Common Stock
- ------------
On August 4, 2006 (inception), the Company issued 2,200,000 shares of its
$0.001 par value common stock to its founder for $2,200.
On March 31, 2007 the Company issued 425,000 shares of its $0.001 par value
common stock to approximately 30 shareholders for $4,250 pursuant to a
Regulation 505 offering.
Preferred Stock
- ---------------
In February, 2007, the Company issued 500,000 shares of its $0.001 par value
preferred stock to one non-affiliated shareholder for $10,000.
On June 1, 2007, the Company filed a Series A Designation with the
Nevada Secretary of State that states: "Series A Preferred shares shall
be designated as "Callable and Convertible Preferred Stock". The corporation
has the right to call for and purchase these shares at any time, within
twelve months of issue, either at par value or at a slight premium above par
value, or if corporation should designate that these shares are deemed not
callable, the holders of these non-voting Series A Preferred Shares shall
have the right to cause the corporation to redeem shares for Common Stock
at any time. Each holder of the non-voting Series A Callable and
Convertible Preferred Stock shall have the right to convert all or any
portion of such shares as such holder desires to convert, into shares of
the Common Stock of the corporation, as follows: each share of Series A
Convertible Preferred Stock can be exchanged for two hundred (200) shares
of Common Stock of the corporation."
There were no other issuances of common or preferred stock or equivalents
since August 4, 2006 (inception) through August 31, 2007. The Company has
not issued any options or warrants or similar securities since inception.
NOTE 5. RELATED PARTY TRANSACTIONS
The officer and director of the Company is involved in other business
activities. This person may face a conflict in selecting between the Company
and their other business interests. The Company has not formulated a policy
for the resolution of such conflicts.
F-8a
Tone in Twenty
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2007
NOTE 6. REVENUE AND EXPENSES
Revenue recognition
- -------------------
The Company recognizes revenue on an accrual basis as it invoices for
services." Revenue is generally realized or realizable and earned when all
of the following criteria are met: 1) persuasive evidence of an arrangement
exists between the Company and our customer(s); 2) services have been
rendered; 3) our price to our customer is fixed or determinable; and 4)
collectibility is reasonably assured. For the period from August 4, 2006
(inception) to August 31, 2007, the Company has not recognized any revenues.
NOTE 7. PROVISION FOR 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.
All of the expenditures thus far have been to organize the Company and will
not be expensed for tax purposes until the Company has operations.
The provision for income taxes is comprised of the net changes in deferred
taxes less the valuation account plus the current taxes payable as shown in
the chart below.
Net changes in Deferred Tax Benefit less than
valuation account 0
Current Taxes Payable 0
-----
Net Provision for Income Taxes 0
-----
NOTE 8. OPERATING LEASES AND OTHER COMMITMENTS:
The Company also has no lease obligations or employment agreements.
F-9a
Tone in Twenty
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2007
NOTE 9. EARNINGS PER SHARE
Historical net (loss) per common share is computed using the weighted average
number of common shares outstanding. Diluted earnings per share include
additional dilution from common stock equivalents, such as stock issuable
pursuant to the exercise of securities or other contracts to issue common
stock were exercised or converted into common stock or resulted in the
issuance of common stock that shared in the earnings of the entity, but these
potential common stock equivalents were determined to be antidilutive.
Calculation of net income(loss) per share is as follows:
For the period
from
April 24, 2006
(Inception) to
August 31,
2007
-------------
Net loss (numerator) $ (994,929)
=============
Weighted Average Common Shares Outstanding 2,625,000
=============
Basic Loss per Share $ (0.38)
=============
NOTE 10. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Below is a listing of the most recent accounting standards and their effect
on the Company.
SFAS 148 Accounting for Stock-Based Compensation- Transition and
Disclosure
Amends FASB 123 to provide alternative methods of transition for an entity
that voluntarily changes to the fair value based method of accounting for
stock-based employee compensation.
SFAS 149 Amendment of Statement 133 on Derivative Instruments and
Hedging Activities
This Statement amends and clarifies financial accounting and reporting for
Derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives) and for hedging
activities under FASB Statement NO. 133, Accounting for Derivative
Instruments and Hedging Activities.
SFAS 150 Financial Instruments with Characteristics of both Liabilities
and Equity
This Statement requires that such instruments be classified as liabilities in
the balance sheet. SFAS 150 is effective for financial instruments entered
into or modified after May 31, 2003.
Interpretation No. 46 (FIN 46)
Effective January 31, 2003, The Financial Accounting Standards Board requires
certain variable interest entities to be consolidated by the primary
beneficiary of the entity if the equity investors in the entity do not have
the characteristics of a continuing financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties. The Company
has not invested in any such entities, and does not expect to do so in the
foreseeable future.
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.
F-10a
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
------------------------
PCAOB REGISTERED
Report of Independent Registered Public Accounting Firm
-------------------------------------------------------
To the Board of Directors
Tone in Twenty
We have reviewed the accompanying balance sheet of Tone in Twenty as of
November 30, 2007, and the related statements of operations, retained
earnings, and cash flows for the three months then ended, in accordance with
the standards of the Public Company Accounting Oversight Board (United
States). All information included in these financial statements is the
representation of the management of Tone in Twenty.
A review consists principally of inquiries of company personnel and
analytical procedures applied to financial data. It is substantially less in
scope than an audit in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that
should be made to the financial statements in order for them to be in
conformity with generally accepted accounting principles.
/s/ Moore & Associates, Chartered
- ---------------------------------
Moore & Associates, Chartered
Las Vegas, Nevada
January 11, 2008
2675 S. JONES BLVD. SUITE 109, LAS VEGAS, NEVADA 89146
(702) 253-7499 Fax: (702)253-7501
F-1b
Tone in Twenty
(a development stage company)
Balance Sheets
November 30, 2007 and August 31, 2007
Balance Sheets
(unaudited)
November 30, August 31,
2007 2007
---------- ----------
Assets
Current Assets:
Cash $ 8,969 $ 9,239
Funds held in escrow 4,250 4,250
--------- --------
Total Assets $ 13,219 $13,489
========= ========
Liabilities and Stockholders' Equity
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, 500,000, 500,000 shares
issued and outstanding as of 11/30/07 and
8/31/07, respectfully 500 500
Common stock, $0.001 par value, 195,000,000
shares authorized, 2,625,000, 2,625,000 shares
issued and outstanding as of 11/30/07 and
8/31/07, respectfully 2,625 2,625
Additional Paid-in Capital 1,008,254 1,008,254
Earnings (Deficit) accumulated during
development stage (998,160) (997,890)
--------- ---------
13,219 13,489
--------- ---------
$ 13,219 $ 13,489
========= =========
The accompanying notes are an integral part of these statements.
F-2b
Tone in Twenty
(a development stage company)
Statement of Operations
For the three months ending November 30, 2006 and November 30, 2007
For the period from August 4, 2006 (Inception) to November 30, 2007
(unaudited)
Statement of Operations
For the period
from
For the 3 months For the 3 months August 4, 2006
ending ending (Inception) to
November 30, November 30, November 30,
2007 2006 2007
------------ -------------- --------------
Revenue $ - $ 466 $ 7,979
------------ -------------- --------------
Expenses:
General and administrative
expenses 270 - 8,586
Incorporating Fees - - 1,000
Advertising - - 1,624
------------ -------------- --------------
Total expenses 270 - 11,210
------------ -------------- --------------
Net income (loss) $ (270) $ 466 $ (3,231)
============ ============== ==============
Beneficial Conversion
Feature of Preferred stock (994,929)
Net income (loss) applicable
to common shareholders $ (270) $ 466 $ (995,890)
============ ============== =============
Basic Weighted Average
Number of Common Shares
Outstanding 2,625,000 2,200,000
============== ============
Net (loss) per share - basic and
fully diluted $ (0.38) $ (0.00)
============== ============
The accompanying notes are an integral part of these statements
F-3b
Tone in Twenty
(a development stage company)
Statement of Cash Flows
For the three months ending November 30, 2006 and November 30, 2007
For the period from August 4, 2006 (Inception) to November 30, 2007
(unaudited)
Statement of Cash Flows
For the period
from
For the 3 months For the 3 months August 4, 2006
ending ending (Inception) to
November 30, November 30, November 30,
2007 2006 2007
------------ -------------- --------------
Cash flows from operating activities:
Net income (loss) $ (270) $ 466 $ (3,231)
------------ -------------- --------------
Net cash provided from
operating activities (270) 466 (3,231)
Cash flows from financing activities:
Issuances of common stock - - 6,450
Issuances of preferred stock - - 10,000
------------ -------------- --------------
Net cash provided from financing
activities - - 16,450
Net increase (decrease) in cash (270) 466 13,219
Cash and equivalents - beginning 13,489 200 -
------------ -------------- --------------
Cash and equivalents - ending $ 13,219 $ 666 13,219
============ ============== ==============
Supplemental disclosures:
Interest paid $ - $ - $ -
============ ============== ==============
Income taxes paid $ - $ - $ -
============ ============== ==============
The accompanying notes are an integral part of these statements
F-4b
Tone in Twenty
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2007
Note 1 - Basis of Presentation
The consolidated interim financial statements included herein, presented in
accordance with United States generally accepted accounting principles and
stated in US dollars, have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that
these consolidated interim financial statements be read in conjunction with
the financial statements of the Company for the period ended August 31, 2007
and notes thereto included in the Company's SB-2 registration statement. The
Company follows the same accounting policies in the preparation of interim
reports.
Results of operations for the interim periods are not indicative of annual
results.
Note 2 - Going concern
These consolidated financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern which
contemplates the realization of assets and the satisfaction of liabilities
and commitments in the normal course of business. As at November 30, 2007,
the Company has recognized revenues of $7,979 to date and has accumulated
operating losses of approximately $3,231 since inception. The Company's
ability to continue as a going concern is contingent upon the successful
completion of additional financing arrangements and its ability to achieve
and maintain profitable operations. While the Company is expending its best
efforts to achieve the above plans, there is no assurance that any such
activity will generate funds that will be available for operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments that might arise from this uncertainty.
F-5b
Tone in Twenty
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2007
Note 3 - Related party transactions
The Company does not lease or rent any property. Office services are
provided without charge by a director. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their
other business interests. The Company has not formulated a policy for the
resolution of such conflicts.
F-6b
TONE IN TWENTY
100,425,000 Shares of
Common Stock
---------------
PROSPECTUS
---------------
April 11, 2008
DEALER PROSPECTUS DELIVERY OBLIGATION
-------------------------------------
UNTIL JULY 11, 2008 (90 DAYS FROM THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.