As filed with the Securities and Exchange Commission on August 2, 2001
File No. 333-48312
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-1/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FREEWILLPC.COM, INC.
(Exact name of registrant as specified in its charter)
Nevada 522200 75-2877111
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(State or jurisdiction of (Primary Industrial I.R.S. Employer
incorporation or organization) Classification Code No.) Identification No.
709-B West Rusk, Suite 500, Rockwall, Texas 75087 (972) 772-5930
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(Address, including the ZIP code & telephone number, including area code of
Registrant's principal executive office)
David McCune
709-B West Rusk, Suite 500, Rockwall, Texas 75087 (972) 772-5930
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(Name, address, including zip code, and telephone number, including area code
of agent for service)
Copies to: Lamberth & Stewart, PLLC
---------
Attorneys at Law
2840 Lincoln Plaza, 500 N. Akard Street
Dallas, Texas 75201
(214) 740-4270
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
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Title of Each Amount Proposed Maximum Proposed Amount of
Class of Securities To be Offering Price Maximum Aggregate Registration
to be Registered Registered Per Share (1) Offering Price (1) Fee
--------------------------------------------------------------------------------------------
Common stock,
$0.001 par value
Minimum 200,000 $0.25 $ 50,000 $269
Maximum 2,000,000 $0.25 $ 500,000 $269
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Total maximum 2,000,000 $0.25 $ 500,000 $269 (2)
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that the registration statement
shall hereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Represents minimum fee.
INITIAL PUBLIC OFFERING
PROSPECTUS
FREEWILLPC.COM, INC.
Minimum of 200,000 shares of common stock, and a
Maximum of 2,000,000 shares of common stock
$0. 25 per share
We are making a best efforts offering to sell common stock in our company. The
common stock will be sold by our sole officer and director, David McCune. The
offering price was determined arbitrarily and we will raise a minimum of $50,000
and a maximum of $500,000. The funds will be held in escrow by an attorney until
the minimum amount is sold, at which time the funds will be released to the
company and stock certificates issued. The offering will end on December 31,
2001 and should we not sell the minimum amount, the funds will promptly be
returned to investors, and no interest will be paid on these funds.
The Offering:
Per Share Minimum Maximum
--------- ------- --------
Public Offering Price . . . $0.25 $50,000 $500,000
There is currently no market for our securities and no market may ever develop
for our securities.
----------------------------
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY
IF YOU CAN AFFORD A COMPLETE LOSS. SEE "RISK FACTORS" BEGINNING ON PAGE 3.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-----------------------------
This Prospectus is dated July 25, 2001
1
PROSPECTUS SUMMARY
OUR COMPANY
We were incorporated on June 13, 2000 in the State of Nevada. Our
executive offices are located at 709-B West Rusk, Suite 500, Rockwall, Texas
75087, and our telephone number is (972) 772-5930. We are engaged in the sale of
computers and computer peripheral products over the internet. The funds from
this offering will allow us to advertise, make strategic marketing alliances and
make agreements with other suppliers in order to increase sales. The minimum
funds raised in this offering will take us to a point where we reach the
operating stage.
THE OFFERING
Minimum Maximum
--------- ---------
Common stock offered 200,000 2,000,000
Total shares outstanding after this offering 4,400,000 6,200,000
Officers, directors and their affiliates will not be able to purchase shares in
this offering.
USE OF PROCEEDS
Most of the money you invest will represent proceeds to the company. We will use
the proceeds from this offering to:
pay expenses of this offering
develop our website to offer more products and better service
marketing and general working capital
2
RISK FACTORS
You should carefully consider the risks described below and all other
information contained in this prospectus before making an investment decision.
OUR OPINION FROM OUR INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT HAS A PARAGRAPH
THAT STATES THAT WE DO NOT HAVE SUFFICIENT CAPITAL TO CONTINUE AS A GOING
CONCERN
A 'going concern opinion' which was expressed by our auditor means that
we do not have sufficient capital resources to operate for the next twelve
months in a manner similar to other companies in our industry. The risk to you
should you purchase common stock in this offering is that we do not raise
sufficient capital and do not continue as a going concern and the amount you can
sell your common stock purchased in this offering is lower than the amount you
paid for it.
WE ARE A RECENTLY FORMED COMPANY, FORMED IN THE STATE OF NEVADA ON JUNE 13,
2000, WITH LIMITED ACTIVITY AND LOSSES THAT MAY CONTINUE FOR THE FORESEEABLE
FUTURE.
We have not achieved profitability and expect to continue to incur net
losses for the foreseeable future. We expect to incur significant operating
expenses and, as a result, will need to generate significant revenues to achieve
profitability, which may not occur. Even if we do achieve profitability, we may
be unable to sustain or increase profitability on a quarterly or annual basis in
the future. If we are unable to achieve profitability, your investment in our
common stock may decline or become worthless.
OUR SOLE OFFICER AND DIRECTOR AT PRESENT SPENDS ONLY FIVE PERCENT (5%) OF HIS
TIME ON THE ACTIVITIES OF THE COMPANY, WHICH COULD CAUSE A LACK OF ATTENTION TO
THE BUSINESS AND CAUSE THE BUSINESS TO DECLINE OR EVEN BECOME WORTHLESS.
At the present time, our sole officer spends only five percent (5%) of
his time on the activities of the Company. After the offering is complete, he
expects to spend more time in order to implement the plan of operations to build
the business of the company. There is a risk that he continues to spend only 5%
of his time on the activities of the Company, and if this turns out to be the
case, the business of the Company could stagnate, decline or even become
worthless.
WE RELY ON OUR SOLE OFFICER FOR DECISIONS AND HE WILL RETAIN SUBSTANTIAL CONTROL
OVER OUR BUSINESS AFTER THE OFFERING AND MAY MAKE DECISIONS THAT ARE NOT IN THE
BEST INTEREST OF ALL STOCKHOLDERS.
Upon completion of this offering, our sole officer will, in the
aggregate, beneficially own approximately 90.9% (or 64.5% if maximum is sold) of
the outstanding common stock. As a result, our sole officer will have the
ability to control substantially all the matters submitted to our stockholders
for approval, including the election and removal of directors and any merger,
3
consolidation or sale of all or substantially all of our assets. He will also
control our management and affairs. Accordingly, this concentration of ownership
may have the effect of delaying, deferring or preventing a change in control of
us, impeding a merger, consolidation, takeover or other business combination
involving us or discouraging a potential acquirer from making a tender offer or
otherwise attempting to take control of us, even if the transaction would be
beneficial to other stockholders. This in turn could materially cause the value
of our stock to decline or become worthless.
WE MAY HAVE TO RAISE ADDITIONAL CAPITAL WHICH MAY NOT BE AVAILABLE OR MAY BE TOO
COSTLY.
Our capital requirements are and will continue to be more than our
operating income. We do not have sufficient cash to indefinitely sustain
operating losses. Our potential profitability depends on our ability to generate
and sustain substantially higher net sales while maintaining reasonable expense
levels. We cannot assure you that we will be able to operate on a profitable
basis or that cash flow from operations will be sufficient to pay our operating
costs. The proceeds raised in this offering will be sufficient to fund
operations for the next six months since our overhead is low, we don't have to
purchase inventory and our primary expenses will be related to advertising and
promoting our web site to draw additional customers. Thereafter, if we do not
achieve profitability, we will need to raise additional capital to finance our
operations. We anticipate seeking additional financing through debt or equity
offerings. We cannot assure you that additional financing will be available to
us, or, if available, any financing will be on terms acceptable or favorable to
us. If we need and cannot raise additional funds, further development of our
business, upgrades in our technology, additions to our product lines may be
delayed and we otherwise may not be able to execute our business plan, all of
which may have a material adverse effect on our operations; if this happens, the
value of your investment will decline and may become worthless.
WE MAY EXPERIENCE DIFFICULTIES WITH OUR SUPPLIERS, WE MAY EXPERIENCE DELAYS, BE
FORCED TO PURCHASE ELSEWHERE AT HIGHER PRICES OR LOSE CUSTOMERS.
We are dependent on one supplier, Premier Computer Source, Inc., for
100% of our custom built products and others to drop ship peripheral products
and are dependent on them to supply them to us on a timely basis. Our agreement
with this supplier is not written which we do not consider a risk because the
market for these type of services is so competitive, that we could make similar
arrangements with other companies, should our current supplier have problems.
This supplier is not an affiliate of our company or of our sole officer and
director. We do not produce our own products and purchase inventory to ship only
after we have received an order. It is possible that events beyond our control
may affect the ability of our supplier(s) to deliver merchandise to us or to our
customers. Any such event could negatively affect our business since customer
orders are often time-sensitive and any delays by our suppliers could cause us
to lose customers. If this happens, the value of your investment will decline or
could become worthless.
4
NO PUBLIC MARKET HAS EXISTED FOR OUR SHARES AND AN ACTIVE TRADING MARKET MAY NOT
DEVELOP OR BE SUSTAINED; IF THAT HAPPENS, YOU MAY NOT BE ABLE TO SELL THE SHARES
PURCHASED IN THIS OFFERING.
There has been no public market for our common shares. We cannot assure
you that an active trading market will develop or be sustained after this
offering. You may not be able to resell your shares at or above the initial
public offering price. The initial public offering price has been determined
arbitrarily and may not be indicative of the market price for our common shares
after this offering.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. These
forward-looking statements are not historical facts but rather are based on
current expectations, estimates and projections about our industry, our beliefs
and our assumptions. Words such as "anticipates", "expects", "intends", "plans",
"believes", "seeks" and "estimates", and variations of these words and similar
expressions, are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond our control, are
difficult to predict and could cause actual results to differ materially from
those expressed, implied or forecasted in the forward-looking statements. In
addition, the forward-looking events discussed in this prospectus might not
occur. These risks and uncertainties include, among others, those described in
"Risk Factors" and elsewhere in this prospectus. Readers are cautioned not to
place undue reliance on these forward-looking statements, which reflect our
management's view only as of the date of this prospectus.
DILUTION
If you purchase common stock in this offering, you will experience an
immediate and substantial dilution in the net tangible book value of the common
stock from the price you pay in this initial offering.
The net tangible book value of our common stock as of April 30, 2001
was $4,879 or $0.001 per share. Net tangible book value per share is equal to
our total assets, less total liabilities, divided by the number of shares of
common stock outstanding.
After giving effect to the sale of common stock offered by us in this
offering, and the receipt and application of the estimated net proceeds (at an
initial public offering price of $0.25 per share, after deducting estimated
offering expenses), our net tangible book value as of April 30, 2001 would be
approximately $38,110 or $0.01 per share, if the minimum is sold, and $471,110
or $0.08 per share, if the maximum is sold.
This means that if you buy stock in this offering at $0.25 per share,
you will pay substantially more than our current shareholders. The following
represents your dilution:
5
if the minimum of 200,000 shares are sold, an immediate decrease in
book value to our new shareholders from $0.25 to $0.01 per share and an
immediate increase in book value per common share to our current
stockholders.
if the maximum of 2,000,000 shares are sold, an immediate decrease in
book value to our new shareholders from $0.25 to $0.08 per share and an
immediate increase in book value per common share to our current
stockholders.
The following table illustrates this per share dilution:
Minimum Maximum
Assumed initial public offering price $0.25 $0.25
Net tangible book value as of April 30, 2001 $0.001 $0.001
Net tangible book value after this offering $0.01 $0.08
Increase attributable to new stockholders: $0.01 $0.08
Net tangible book value
as of April 30, 2001 after this offering $0.01 $0.08
Decrease to new stockholders ($0.24) ($0.17)
Percentage dilution to new stockholders 96% 68%
The following table summarizes on a pro forma basis as of April 30,
2001, shows the differences between the number of shares of common stock
purchased, the total consideration paid and the total average price per share
paid by the existing stockholders and the new investors purchasing shares of
common stock in this offering:
MINIMUM OFFERING
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Number Percent Average
of shares of shares Amount price per
owned owned paid share % paid
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Current
shareholders 4,200,000 95.5 $ 14,000 $ 0.006 18.9
New investors 200,000 4.5 $ 50,000 $ 0.25 81.1
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Total 4,400,000 100.0 $ 74,000 100.0
MAXIMUM OFFERING
Number Percent Average
of shares of shares Amount price per
owned owned paid share % paid
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Current
shareholders 4,200,000 67.7 $ 14,000 $ 0.003 2.7
New investors 2,000,000 32.3 $ 500,000 $ 0.25 97.3
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Total 6,200,000 100.0 $ 514,000 100.0
6
PLAN OF DISTRIBUTION
This is a direct participation offering of our common stock and is
being sold on our behalf by our sole officer and director, who will receive no
commission on such sales. All sales will be made by personal contact by our sole
officer and director, David McCune. We will not be mailing our prospectus to
anyone or soliciting anyone who is not personally known by Mr. McCune,
introduced to Mr. McCune and personally contacted by him or referred to him.
The money we raise in this offering before the minimum amount is sold
will be held under an escrow agreement with T. Alan Owen & Associates, P.C.,
Attorneys at Law. Such funds will be refunded immediately, without interest, if
the minimum amount is not sold by December 31, 2001.
Certificates for shares of common stock sold in this offering will be
delivered to the purchasers by Signature Stock Transfer, Inc., the stock
transfer company chosen by the company as soon as the minimum subscription
amount is raised.
USE OF PROCEEDS
The total cost of the minimum offering is estimated to be $16,769, or
$33,769 if the maximum is sold consisting primarily of legal, accounting and
blue sky fees.
The following table sets forth how we anticipate using the proceeds
from selling common stock in this offering, reflecting the minimum and maximum
subscription amounts:
$50,000 $500,000
Minimum Maximum
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Legal, Accounting & Printing Expenses 9,500 26,500
Other Offering Expenses 7,269 7,269
Net Proceeds to Company 33,231 466,231
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TOTAL $ 50,000 $ 500,000
The following describes each of the expense categories:
legal, accounting and printing expense is the estimated costs
associated with this offering;
other offering expenses includes SEC registration fee, blue sky fees
and miscellaneous expenses with regards to this offering.
The following table sets forth how we anticipate using the net proceeds
to the company:
7
$50,000 $500,000
Minimum Maximum
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Development of website $ 2,500 $ 50,000
Office equipment 4,000 46,000
Salaries -0- 78,000
Internet security -0- 27,000
Advertising our website 19,000 215,000
Expenses in adding new products/services 2,500 30,000
General corporate overhead 5,231 20,231
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Proceeds to company $ 33,231 $466,231
We have a fully operational website which is our main asset. To date,
our internet activity is limited and we have little revenue from operations.
DESCRIPTION OF BUSINESS
We were incorporated in Nevada on June 13, 2000. Our founder, David
McCune is our sole director, officer and employee and holds 4,000,000 shares of
common stock which we issued to him for $4,000, composed of $500 cash and $3,500
of his services.
As well as being a newly formed company, we:
are controlled by one individual;
rely on our sole officer and director to manage the business, this
offering and continuing operations to see us through to profitability;
have limited operating history with little revenue from operations;
operate in an industry with low barriers of entry which could add to
our competition, and one in which there are many competitors already,
many of which have much greater resources than we do; and
received a report from our independent certified public accountant who
gave us a 'going concern' opinion which means that we do not have
sufficient capital or cash flow from operations to show that we can
continue as a viable business for the coming year without success from
our plan of operations.
We currently operate the website http//:www.freewillpc.com. We are a
web-based retailer of built-to-order personal computers and brand name related
peripherals, software, accessories and networking products. We also offer
computer consulting and design which will enable us to sell more built to order
systems. Our primary target customers are individual end users (IEU), home based
business (HBB) owners, and small business owners (SBO). Through an interactive
web site, customers have the ability to browse the products offered by Freewill
PC and order. We offer a broad selection of approximately 15,000 products
targeted for business/home use at competitive prices.
8
For custom built computers we depend upon one supplier who we can
purchase all the parts for on an as needed basis and therefore we have no
inventory for these items. We purchase them as we receive an order, build the
computer and then ship the computer. For these computers, we will book the sale
when it is shipped and the cost of sales for the amount we pay for the parts to
build the computer. For all the peripheral items, we have them drop shipped and
record only the profit as revenue for our financial reporting purposes.
Principal Products or Services and Their Markets.
------------------------------------------------
Freewill has two primary product delivery systems:
For those customers desiring basic technological peripherals and
computer related items, they can choose from an on-line catalogue
(under development) which we will have drop shipped from a supplier,
receiving a "margin" or fee for originating the order.
We will custom build a computer to the specifications of a customer.
The customer "points and clicks" the desired component and we contract
for the unit to be built at a negotiated wholesale price. We then
purchase the computer and re-sell it at our posted order price.
We believe the majority of IEU's and HBB's are technologically literate
and not only capable but also more disposed to ordering needful technological
products over the Internet. This allows the purchaser to transact orders on a
24-hour-a-day, seven-day-a-week basis. We do not incur the overhead expenses
generally associated with traditional storefront operations, thus allowing for
lower operating costs.
Customers enter FreewillPC.com through its home page
www.freewillpc.com, which contains a listing of product categories that allows
for easy exploration of current products and prices. We believe that price,
product selection and availability, and service and support are the most
important competitive factors in its industry.
Competitive Business Conditions.
-------------------------------
The direct marketing and sale of personal computers and related
products is highly competitive. FreewillPC.com competes with PC Connection, CDW
Computer Centers, Inc., Insight Enterprises, Inc. and Micro Warehouse, Inc. We
also compete with certain product manufacturers that sell directly to customers,
such as Dell Computer Corporation and Gateway 2000, Inc., and more recently
Compaq, IBM and Apple; distributors that sell directly to certain customers,
such as MicroAge, Inc. and Vanstar Corporation; various cost-plus aggregators,
franchisers, and national computer retailers, such as CompUSA, Inc. and Computer
City; and companies with an Internet Web site and commercial on-line networks.
Additional competition may arise if other new methods of distribution, such as
broadband electronic software distribution, emerge in the future.
We compete not only for customers, but will also in the future compete
9
for favorable product allocations and cooperative advertising support from
product manufacturers. Several of our competitors are larger and have
substantially greater financial resources than we.
Method of distribution of products and services.
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E-business Strategy:
--------------------
Our marketing strategy is to promote the name FreewillPC and attract
buyers to the FreewillPC.com website. To attract users to our website, we have
relied on word of mouth and being one of many PC supply companies that come up
on search engines. Going forward, we are contemplating sponsorship relationships
with high traffic websites and agreements with search engines so that our site
will be near the top/front of searches for our products. Future proposed
marketing programs include the use of strategic purchases of online advertising
to place advertisements in areas in which we believe we can reach our target
audience
In addition to the foregoing, we anticipate sales and revenues can be
increased by:
increase in the number and assortment of products carried;
increase in outbound telemarketing and email marketing campaigns;
increased buying prowess of computer users;
increase in catalog (proposed and under development) circulation; and
improvements in inbound telemarketing and email marketing service
productivity.
The key elements of our business strategy includes:
premium customer service;
strong brand name and web-based franchise value;
extensive product selection at competitive prices; and
enhanced vendor relationships.
Growth Strategy:
----------------
Our objective is to be a web-based provider of e-commerce PC related
products. Key elements of our growth strategy include:
partner with industry leaders to quickly acquire customers;
increase penetration of our existing customer base;
broaden our product offerings to include higher margin products such as
network servers and communications equipment.
We plan to target a greater number of existing customers: with outbound
telemarketing;
more aggressively pursue first- to-market product offerings;
provide specialized offerings to targeted segments of our customer
base; and
increase investments in electronic commerce and Internet related
marketing opportunities.
We believe that the higher projected growth for the direct marketing
channel is primarily based on an increased user familiarity with PCs, coupled
with the emergence of industry
10
standards and component commonality, and the resultant increase in customer
comfort with purchasing products without the need to "touch and feel" them. In
addition, broader product offerings, lower prices and greater purchasing
convenience that direct marketers generally provide over traditional retail
stores and local dealers.
Status of product or services based on public information requiring an
--------------------------------------------------------------------------------
investment or material assets of the issuer.
-------------------------------------------
As we are a new company, we do not have any information that has been
made public or that will require an investment or material asset of ours.
Sources and Availability of Raw Material.
----------------------------------------
We do not use raw material in the traditional definition of the word.
All products we sell are "finished" or "component" product.
Dependence on One or a Few Major Customers.
------------------------------------------
We are not dependent on any one or a few major customers. Our customers
are individuals ordering from our web site over the internet.
Need for Governmental Approval of Principal Products or Services.
----------------------------------------------------------------
We are not aware of any governmental approval requirements to transact
this type of business.
Effect of Existing or Probable Governmental Regulations on the Business.
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We are not aware of any probable governmental regulations on our
business that would affect our operations.
Research and Development.
------------------------
We have no research and development. We only sell built-to-order
computers and computer peripheral equipment. We are not designing or selling
anything newly created products.
Costs and Effects of Compliance with Environmental Laws.
-------------------------------------------------------
We are not aware of nor do we anticipate any environmental laws with
which we will have to comply.
Number of Employees.
-------------------
We have one employee, the President.
Operations and Technology.
-------------------------
We have built a basic transaction processing system. Our system handles
all aspects of the sales process. The market in which we compete is
characterized by rapidly changing technology, evolving industry standards,
frequent new service and product announcements, introductions and enhancements
and changing customer demands. Accordingly, our future success will depend our
ability to adapt to rapidly changing technologies, to adapt our services to
11
evolving industry standards and to continually improve the performance, features
and reliability of our service in response to competitive service and product
offerings and evolving demands of the marketplace.
Additional information.
----------------------
We have made no public announcements to date and have no additional or
new products or services. In addition, we don't intend to spend funds in the
field of research and development; no money has been spent or is contemplated to
be spent on customer sponsored research activities relating to the development
of new products, services or techniques; and we don't anticipate spending funds
on improvement of existing products, services or techniques.
PLAN OF OPERATIONS
Following is our plan of operations based upon the amount of capital we
raise in this offering.
The following table sets forth how we anticipate using the net proceeds from our
offering:
$50,000 $500,000
Minimum Maximum
--------------------------------------------------------------------------------
Development of website $ 2,500 $ 50,000
Office equipment 4,000 46,000
Salaries -0- 78,000
Internet security -0- 27,000
Advertising for website 19,000 215,000
Expenses in adding new products/services 2,500 30,000
General corporate overhead 5,231 20,231
--------------------------------------------------------------------------------
Proceeds to company $33,231 $ 466,231
Following is a discussion of each anticipated/proposed expense identified above:
If the minimum amount is raised, we will dedicate 5% of the proceeds to
further develop our website. Should the maximum be raised, we will dedicate
10% of the proceeds for this purpose. The reason for the greater percentage
investment if a lower amount is raised is due to the fact our website is
our primary asset and as such requires full operational functionality
immediately for us to be competitive. Consequently, as time unfolds, we
will invest less in our website both monetarily and as a percentage of
revenues as the major investment would already have been made.
Office equipment, although needful, will be scrutinized based on functional
need and business application. Obviously, the more money we have the more
flexibility we will have in purchasing office equipment. Salaries will not
be paid if the minimum amount is raised. Should the maximum amount be
raised, we will acknowledge this as a sign of market
12
acceptance and therefore employ a seasoned and experienced management group
to grow the company, beginning with a key executive, which we plan to
compensate monetarily.
Internet security is needful and demanded by consumers. Such security
relates to confidentiality with respect to credit information, securing
credit card transactions, and maintaining absolute privacy in the
purchasing process.
Typically, in the world of e-commerce, advertising on the "web" and in
trade publications is the medium by which we can raise awareness of our
company and our website. Consequently, advertising on the Internet is
extremely critical to our success and future growth. As a result, we plan
to dedicate significant resources to accomplish brand awareness. New
products and services will expand proportionate to our free cash flow.
Obviously, the more we raise in the initial offering the more investment we
can make in product offerings.
General corporate overhead relates to rent and lease expense, utilities,
and basic facility needs.
Generating Sufficient Revenue:
------------------------------
The Company plans to generate sufficient revenue by leveraging its existing
customer base, expanding and developing its product line, and increasing market
penetration. This is planned to be achieved through the following strategies:
Develop Targeted e-mail Marketing Campaign:
-------------------------------------------
Targeted e-mail marketing campaigns are highly focused marketing efforts
designed to sell product to a defined demographic group. The design of each
campaign includes evaluating and segmenting the target population using
personal data, often in combination with demographic screening programs, to
estimate the sales potential of different groups. The Company's approach
will be to target small businesses and individuals within its local
business environment allowing for delivery of product free of delivery
charges. This, the Company believes, will give them a competitive
advantage. The Company believes that this approach to e-mail marketing
campaigns is an effective and efficient means to generate sales revenue.
Expand Product Line:
--------------------
The Company is constantly evaluating personal computer and peripheral
products, adding new products as they become available. The Company works
closely with its major vendors to identify and source first-to-market
product offerings at aggressive and market leading prices. The Company
believes it will generate more favorable terms with its vendors as volume
increases.
Customer Segmentation & Targeted Advertising:
---------------------------------------------
The Company seeks to increase its customer base through targeted mailings
as well as increasing its penetration in existing customers. The Company
has developed an on-line catalog featuring product offerings designed to
address the needs of specific customer segments. The Company's web-based
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catalog will provide detailed descriptions of product offerings, allowing
for search and on-line capabilities. The Company believes its target market
is electronically savvy and adept and will choose and prefer to shop
on-line.
Financing Needs:
----------------
As noted above, the Company's initial financing needs can and will be met even
if the minimum offering amount is raised. The development of our web site is
critical to our success, as it will be our "touch point" with our customer base
and therefore our point of contact and delivery. As a result, direction to our
web site through on-line advertising will also be critical. As noted, the
Company believes it can develop the web site and fund advertising requirements
for the six months the Company believes it needs to be cash flow positive. It is
the opinion and express intent of the Company to be cash flow positive within
six months of operational commencement. The variable factor as to how fast the
Company believes it can grow is dependent on the initial amount of capital
raised. Future funding requirements will thus be met through Company generated
cash flow.
Cash flow positive operations are projected to be achieved within six months of
operational commencement. This will be due to the following:
On-going cash requirements will consist of advertising, utilities, and
nominal corporate overhead requirements
Advertising, the greatest of these costs, is variable and can be "turned
on" or "turned off" as needed.
As there are no carrying costs due to the fact no inventory is carried in
stock, the Company essentially operates on a "margin" basis. Consequently,
as no product will ever be sold at a loss (all prices are over the
negotiated from vendor cost), every sale contributes to on-going cash flow.
As presented, the net proceeds total $33,231 if the minimum offering amount is
raised and at this level of funding, we expect to implement our advertising in
conjunction with our computer consultation which, coupled with our low overhead,
should cause us to be profitable and operationally self sustaining and not need
to raise additional capital for operations. The net proceeds total $466,231 if
the maximum amount is raised and this would give us the ability, not only to be
profitable and self sustaining, but give us additional funds to promote,
advertise and sell our products.
We anticipate the minimum funding will be sufficient to satisfy our cash
requirements for the next twelve months since our overhead is very low, we do
not have to stock inventory, we do not have to pay salaries and our system for
filling orders is almost completely automated.
DESCRIPTION OF PROPERTY
Our corporate facilities are shared with our sole officer and director
which includes the use of telephones and equipment for $100.00 per month. This
arrangement started in July 2000 and will continue until such time as the
Company needs and can afford to lease its own office facilities.
14
We also lease space on an internet service provider's server based upon the
amount of memory we use.
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
The directors and officers of the company, their ages and principal
positions are as follows:
Name Age Position
--------------------------------------------------------------------------------
David McCune 53 President; Secretary and Director
Background of Directors and Executive Officers:
David McCune. Mr. McCune graduated from Southwestern University, Waxahachie,
Texas in 1973. Mr. McCune was in the U.S. Air Force for four years 1967-1970 and
spent one year in Vietnam 1968-1969, and was a Public speaker for 20 years and
has been in the computer business for 9 years. Mr McCune was Vice President of
Sales of VAR Resources, Inc., a computer leasing company, from 1991 - 1993.
Since that time, Mr. McCune has been a manager of computer companies, working
for MC Cambridge, Inc. from 1994 - 1995 and for LCS, LLC from 1996 to present.
Initially, Mr. McCune will not spend full time on the activities of the
company since his current activities would take up some of his time. In
addition, the company's activities need very little time since most steps in the
business of the company are automated. Mr. McCune's activities include managing
a computer leasing business but can devote more and more time to the activities
of the company as time goes on since the other employees can take over his
functions at the computer leasing company and Mr. McCune can step aside from
those responsibilities in a short time. Initially, he expects to spend five
hours per week and increase that weekly time as the activities of the company
require. Mr. McCune is prepared to devote himself full time to the success of
the company.
REMUNERATION OF DIRECTORS AND OFFICERS
Our sole officer and director has received no compensation other than the
3,500,000 shares of common stock he received for services on June 13, 2000 and
has no employment contract with the company.
Name of Person Capacity in which he served Aggregate
Receiving compensation to receive remuneration remuneration
--------------------------------------------------------------------------------
David McCune President, Secretary 3,500,000 shares
and Treasurer of common stock
Mr. McCune received the common stock upon formation of the company and it
15
is impracticable to determine the cash value. Since the common stock was issued
upon forming of our company for services performed which we cannot estimate the
value since that work continues through the filing and effectiveness of this
registration statement, with no other compensation to be granted for the work
done on this filing.
As of the date of this offering, we have no plans to pay any remuneration
to anyone in or associated with our company. When we have funds and/or revenue,
our board of directors will determine any remuneration at that time.
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
On June 13, 2000 (date of inception), the president of the company received
4,000,000 shares of common stock which we issued to him for $4,000, composed of
$500 cash and $3,500 of his services.
On June 15, 2000, we entered into an agreement with a company to develop
and link our website for which the company received a total of 200,000 shares
valued at $10,000 or $0.05 per share.
As of the date of this filing, there are no agreements or proposed
transactions, whether direct or indirect, with anyone, but more particularly
with any of the following: o a director or officer of the issuer; o any
principal security holder; o any promoter of the issuer; o any relative or
spouse, or relative of such spouse, of the above referenced persons.
PRINCIPAL SHAREHOLDERS
The following table lists the officers, directors and stockholders who, at
the date hereof, own of record or beneficially, directly or indirectly, more
than 10% of the outstanding common stock, and all officers and directors of the
company:
Name and Address Amount owned
Title of Owner before offering Percent
--------------------------------------------------------------------------------
President, Secretary David McCune 4,000,000 95.23%
And Director 709-B West Rusk, Suite 500
Rockwall, Texas 75087
---------- --------
Total 4,000,000 95.23%
After offering: Minimum 4,000,000 90.90%
--------------
Maximum 4,000,000 64.52%
16
SIGNIFICANT PARTIES
The following table lists the significant parties of the issuer:
Relationship Name and
to Issuer business address Residential address
--------------------------------------------------------------------------------
Officer David C. McCune
and Director 709-B West Rusk 1335 Champion Drive
Suite 500 Rockwall, Texas 75087
Rockwall, Texas 75087
Record owner of David C. McCune
5% (or more) owner 709-B West Rusk 1335 Champion Drive
of equity securities Suite 500 Rockwall, Texas 75087
Rockwall, Texas 75087
Beneficial owner of David C. McCune
5% (or more) owner 709-B West Rusk 1335 Champion Drive
of equity securities Suite 500 Rockwall, Texas 75087
Rockwall, Texas 75087
Counsel to Issuer R. Bradley Lambert
Lamberth & Stewart, P.L.L.C 1839 S. FM 740
2840 Lincoln Plaza Forney, Texas 75126
500 North Akard
Dallas, Texas 75201
SECURITIES BEING OFFERED
We are offering for sale common stock in our company at a price of $0.25
per share. We are offering a minimum of 200,000 shares and a maximum of
2,000,000 shares. The authorized capital in our company consists of 25,000,000
shares of common stock, $0.001 par value per share. As of April 30, 2001, we had
17
4,200,000 shares of common stock issued and outstanding.
Every investor who purchases our common stock is entitled to one vote at
meetings of our shareholders and to participate equally and ratably in any
dividends declared by us and in any property or assets that may be distributed
by us to the holders of common stock in the event of a voluntary or involuntary
liquidation, dissolution or winding up of the company.
The existing stockholders have no preemptive rights to purchase common
stock offered for sale by us, and no right to cumulative voting in the election
of our directors.
RELATIONSHIP WITH ISSUER OF EXPERTS NAMED IN REGISTRATION STATEMENT
The experts named in this registration statement were not hired on a
contingent basis and have no direct or indirect interest in our company. Our
attorney may purchase shares in this offering. Our certified public accountant
may not purchase shares in this offering.
LEGAL PROCEEDINGS
We are not involved in any legal proceedings at this time.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
We have retained J.S. Osborn, P.C., as our independent certified public
accountant to audit our financial statements for the period from inception on
June 13, 2000 to December 31, 2000. We have had no disagreements with him on
accounting and disclosure issues.
Our former accountant resigned on May 11, 2001 because of time constraints,
and the board of director appointed J.S. Osborn, P.C. at a meeting on May 15,
2001. No report of the former accountant contained an adverse opinion or
disclaimer of opinion or was modified as to certainty, audit scope or accounting
principles, except to include a "going concern" paragraph in its opinion. There
were no disagreements with the former accountant on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our certificate of incorporation provides that the liability of our
officers and directors for monetary damages shall be eliminated to the fullest
extent permissible under Nevada law, which includes elimination of liability for
monetary damages for defense of civil or criminal actions. The provision does
not affect a director's responsibilities under any other laws, such as the
federal securities laws or state or federal environmental laws.
18
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions,
or otherwise, the small business issuer has 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.
We have no underwriting agreement and therefore no provision for
indemnification of officers and directors is made in an underwriting by a broker
dealer.
LEGAL MATTERS
Our attorney has passed upon the legality of the common stock issued before
this offering and passed upon the common stock offered for sale in this
offering. Our attorney is Lamberth & Stewart, PLLC, 2840 Lincoln Plaza, 500 N.
Akard Street, Dallas, Texas 75201.
EXPERTS
The financial statements as of December 31, 2000, and for the period from
inception (June 13, 2000) to December 31, 2000 of the company included in this
prospectus have been audited by J.S. Osborn, P.C., independent certified public
accountant, as set forth in his report. The financial statements have been
included in reliance upon the authority of him as an expert in accounting and
auditing.
DIVIDEND POLICY
To date, we have not declared or paid any dividends on our common stock. We
do not intend to declare or pay any dividends on our common stock in the
foreseeable future, but rather to retain any earnings to finance the growth of
our business. Any future determination to pay dividends will be at the
discretion of our board of directors and will depend on our results of
operations, financial condition, contractual and legal restrictions and other
factors it deems relevant.
19
TRANSFER AGENT
We will serve as our own transfer agent and registrar for the common stock
until such time as this registration is effective and we sell the minimum
offering, then we intend to retain Signature Stock Transfer, Inc., 14675 Midway
Road, Suite 221, Dallas, Texas 75244.
20
J. S. OSBORN, P.C.
CERTIFIED PUBLIC ACCOUNTANT
17430 CAMPBELL ROAD, SUITE 114
DALLAS, TEXAS 75252
972-735-0033 FAX 972-735-0035
JOSBORN@JSOCPA.COM
================================================
REPORT OF INDEPENDENT PUBLIC ACCOUNTANT
To the Board of Directors and Stockholders
of FreewillPC.com, Inc.
Rockwall, Texas
I have audited the accompanying balance sheet of FreewillPC.com, Inc. (A Nevada
corporation and A Development Stage Enterprise) as of December 31, 2000 and the
related statements of operations, stockholders' equity and accumulated deficit,
and cash flows for the period June 13, 2000 (Date of Inception), to December 31,
2000. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these consolidated
financial statements based on my audit.
I conducted my audit in accordance with auditing standards generally accepted in
the United States. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, based on my audit, the financial statements referred to above
present fairly, in all material respects, the financial position of
FreewillPC.com, Inc. as of December 31, 2000, and the results of their
operations and their cash flows for the period June 13, 2000 (Date of
Inception), to December 31, 2000 in conformity with accounting principles
generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note-F to the
financial statements, the Company incurred a loss for the period, has not
generated significant revenues, and has no capital resources. These conditions
raise substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters also are described in Note-F. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ J.S. Osborn, P.C.
-----------------------
J.S. Osborn, P.C.
Dallas, Texas
June 20, 2001
F-1
FREEWILLPC.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
DECEMBER 31, 2000
ASSETS
------
CURRENT ASSETS:
Cash $4,480
-----------
Total Current Assets $4,480
PROPERTY:
Website (net of $1,945 amortization) 8,055
-----------
Total Property 8,055
-----------
TOTAL ASSETS $12,535
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES:
Accounts payable $6,947
-----------
Total Liabilities 6,947
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value; 25,000,000 shares authorized;
4,200,000 shares issued and outstanding 4,200
Additional paid-in-capital 10,400
Deficit accumulated during the development stage (9,012)
-----------
Total Stockholders' Equity 5,588
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $12,535
===========
See accountant's report and notes to financial statements.
F-2
FREEWILLPC.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
PERIOD JUNE 13, 2000 (DATE OF INCEPTION), TO DECEMBER 31, 2000
June 13, 2000
Date of
Inception
to
Dec 31, 2000
---------------
REVENUE:
Sales $5,669
---------------
Total Revenue 5,669
OPERATING EXPENSE:
Cost of sales 5,008
Amortization 1,945
Consulting - related party 3,500
Bank charges 50
Office expense 115
Organization costs 963
Professional fees 2,500
Rent-related party 600
---------------
Total Operating Expense 14,681
---------------
NET LOSS: ($9,012)
===============
Basic/diluted weighted average number of shares outstanding 4,199,005
===============
Basic/diluted net loss per share ($0.00)
===============
See accountant's report and notes to financial statements.
F-3
FREEWILLPC.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY AND ACCUMULATED DEFICIT
PERIOD JUNE 13, 2000 (DATE OF INCEPTION), TO DECEMBER 31, 2000
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
-------------------------------- ------------- ----------------
Balance,
June 13, 2000
(date of inception) -0- -0- -0- -0-
Shares issued on June 13, 2000 for:
Cash 500,000 500
Services-related party 3,500,000 3,500
June 15, 2000 for:
Website development 200,000 200 9,800
Contributed capital by shareholder:
Quarter ended September 30 300
Quarter ended December 31 300
Net Loss (9,012)
-------------------------------- ------------- ----------------
Balance
December 31, 2000 4,200,000 $4,200 $10,400 ($9,012)
================================ ============= ================
See accountant's report and notes to financial statements.
F-4
FREEWILLPC.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
PERIOD JUNE 13, 2000 (DATE OF INCEPTION), TO DECEMBER 31, 2000
June 13, 2000
Date of
Inception
to
Dec 31, 2000
---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss for the period ($9,012)
Items not requiring cash:
Amortization 1,945
Common stock issued for services 3,500
Changes in working capital:
Increase in accounts payable 6,947
---------------
NET CASH PROVIDED FROM OPERATING ACTIVITIES: 3,380
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of common stock issuance 500
Payment of expense by shareholder 600
---------------
NET CASH PROVIDED FROM FINANCING ACTIVITIES: 1,100
NET INCREASE IN CASH: $4,480
CASH AT BEGINNING OF PERIOD: 0
---------------
CASH AT END OF PERIOD: $4,480
===============
SUPPLEMENTAL DISCLOSURE:
Non-cash investing activity - the company issued 200,000 shares valued
at $0.05 per share for a total of $10,000 for development of its
website.
No income taxes paid.
No interest paid.
See accountant's report and notes to financial statements.
F-5
FREEWILLPC.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE A - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
---------------------------------------------------------------------------
History:
--------
The Company was organized June 13, 2000, as a Nevada corporation under the name
of FreewillPC.com, Inc. and is in the development stage. The Company's business
plan outlines its plan of operations, which is to sell computers and computer
peripheral equipment over the internet. Its development activities included the
development of the Company's website and advertising its website to encourage
borrowers to purchase items over the internet.
Basis of Presentation:
----------------------
It is the Company's policy to prepare its financial statements on the accrual
basis of accounting in conformity with accounting principles generally accepted
in the United States.
Supplier Concentration:
-----------------------
The Company purchased product from only one supplier for its operations for the
period presented. Although products are available from other sources, the
vendor's inability to supply products in a timely manner could adversely affect
the Company's ability to satisfy customer demands.
Revenue Recognition:
--------------------
The Company recognizes revenues from product sales and delivery, net of returns
and discounts, when the products are shipped to customers. The company purchases
and resells computers and records sales and costs of sales. For the peripheral
equipment the Company sells for which it does not take possession of the
product, it records as revenue the difference between the purchase price and the
sales price of the items.
Use of Estimates
----------------
In order to prepare financial statements in conformity with accounting
principals generally accepted in the United States, management must make
estimates, judgments and assumptions that affect the amounts reported in the
financial statements and determine whether contingent assets and liabilities, if
any, are disclosed in the financial statements. The ultimate resolution of
issues requiring these estimates and assumptions could differ significantly from
resolution currently anticipated by management and on which the financial
statements are based.
Cash and Cash Equivalents:
--------------------------
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments with maturity of three months or less to be cash
equivalents.
Property and Equipment:
-----------------------
Property and equipment is carried at cost. Depreciation is provided by the
straight-line method over each asset's estimated useful life. Upon retirement or
disposal, the asset cost and related accumulated depreciation are removed from
the accounts and any resulting gain or loss is included in the determination of
net income.
Long-Lived Assets
-----------------
In accordance with Statement of Financial Accounting Standards ("SFAS") No. 121,
Accounting for the impairment of Long-Lived Assets and for Long -Lived Assets to
be Disposed of, the Company records impairment losses when events and
circumstances indicate that the assets might be impaired and the undiscounted
projected cash flows associated with those assets are less than the carrying
amounts of those assets. Impairment loss on a long-lived asset is measured based
on the excess of the carrying amount of the asset over the asset's fair value,
generally determined based upon discounted estimates of future cash flows.
F-6
FREEWILLPC.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE A - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------------------
(CONTINUED):
------------
Net loss per Share:
-------------------
Basic net loss per share excludes dilution and is computed by dividing net loss
by the weighted average number of common shares outstanding for the period
presented. Diluted net loss per common share was the same as basic net loss per
common share for the period presented since the Company has no potentially
dilutive securities and because of the Company's net loss.
Stock based compensation:
-------------------------
The Company accounts for stock based compensation in accordance with SFAS 123,
Accounting for Stock-Based Compensation. It introduces the use of a fair
value-based method of accounting for stock based compensation. It encourages,
but does not require, companies to recognize stock-based compensation expenses
to employees based on the new fair value accounting rules. The Company has
adopted the new fair value accounting rule and records the issuance of stock at
the fair value of the consideration received.
Capitalized Web Site Development Costs and Software:
----------------------------------------------------
The Company accounts for its web site development costs and internally developed
software costs in accordance with Emerging Issues Task Force 00-2, Accounting
for Web Site Development Costs and the provisions of Statement of Position
("SOP") 98-1, Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use. This requires the capitalization of the costs
incurred. Capitalized costs are amortized on a straight-line basis over the
useful life of the software once it has been placed into service.
Start-Up Costs:
---------------
The Company expenses the costs of start-up activities and organization costs as
they are incurred, in accordance with SOP 98-5, Reporting on the Cost of
Start-up Activities.
Income Tax:
-----------
The Company is subject to the greater of federal income taxes computed under the
regular system or the alternative minimum tax system. The Company uses an asset
and liability approach for the accounting and financial reporting of income tax
as required by SFAS No. 109, Accounting for Income Taxes. Under this method,
deferred tax assets and liabilities are determined based on temporary
differences between the financial carrying amounts and the tax bases of assets
and liabilities using enacted tax rates in effect in the years in which the
temporary differences are expected to reverse. Valuation allowances are
established when necessary to reduce deferred tax asset to the amount expected
to be "more likely than not" realized in future returns.
Year End:
---------
The Company's year-end is December 31.
NOTE B - WEB SITE:
------------------
The Company's primary asset is its web site that is the center of its
operational and income-generating activities for which it issued 200,000 shares
of common stock valued at $10,000. The cost of the web site is being amortized
over three years starting in June 2000, the first month of operation.
In March 2000, the Financial Accounting Standards Board issued Interpretation
No. 44, Accounting for Certain Transactions Involving Stock Compensation, an
interpretation of APB Opinion No. 25, which was effective July 1, 2000. The
website development was paid for by issuing 200,000 shares of common stock
valued at $0.05 per share. Since there was no readily determinable market value
for the Company's common stock, the per share price was negotiated and
determined by the fair value of services received.
F-7
FREEWILLPC.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE C - STOCKHOLDERS' EQUITY:
------------------------------
Common Stock:
-------------
The Company is authorized to issue 50,000,000 common shares of stock at a par
value of $0.001 per share. These shares have full voting rights. At December 31,
2000, there were 4,200,000 shares outstanding. The Company has not paid a
dividend to its shareholders.
Common stock issuances
----------------------
On June 13, 2000, the Company issued 4,000,000 shares to the President for
$4,000, comprised of $500 cash and $3,500 of his services. The services were
valued at $3,500 and the stock issued at par since it was impossible to
determine the fair value of the services. The common stock was issued upon
formation of the Company for services performed before, during and after
formation of the Company.
On June 15, 2000, the Company issued to an unrelated party 200,000 shares for
the development of its website valued at $10,000. The value assigned of to the
website development was fair market value but the number of shares issued for
this website was negotiated and determined by the Company and the developers of
the website since there was no readily determinable market value for the shares.
The basis for valuing the shares at $0.05 per share, which is substantially
below the offering price per share to the public, is that the developers were
giving services in exchange for stock before offering shares to the public and
the website was a prerequisite for the Company to start in business which then
allowed the Company to offer shares to the public. The value substantially below
the public offering price was negotiated since the developers were not
guaranteed that the Company would be able to sell stock to the public and no
guarantee that the Company would be successful. The value of $0.05 per share is
substantially above the price the President paid two days earlier since the
President developed the plan for the Company over a period of time, formed the
Company, and purchased shares immediately upon formation; the plan included the
filing of a registration statement with the U.S. Securities and Exchange
Commission to raise funds at $0.25 per share.
NOTE D - INCOME TAXES:
----------------------
The Company had a net operating loss of $9,012 for the period presented. No
deferred tax asset has been recognized for the operating loss as it is more
likely than not that all or a portion of the net operating loss will not be
realized and any valuation allowance would reduce the benefit to zero.
Operating losses expire: 2020 $8,358
The components of the provision (benefit) for income taxes included in the
financial statements as of December 31, 2000 are as follows:
Deferred tax assets:
Net operating loss carryforwards $(9,012)
Valuation allowance 9,012
--------
Total deferred income tax assets -0-
Total deferred income tax liabilities -0-
--------
Net deferred income tax assets $ -0-
The Company's effective tax rate on a pre-tax income (loss) from continuing
operations differs from the U.S federal statutory rate as follows:
U.S. federal statutory rate ( 34)%
Increase (decrease) in rates resulting from:
Change in valuation allowance for deferred tax asset 34 %
--------
Effective tax rate 0 %
F-8
FREEWILLPC.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE E - RELATED PARTY TRANSACTIONS:
------------------------------------
In June 2000, the Company issued to its President 4,000,000 shares in
consideration for $4,000, comprised of $500 cash and $3,500 of his services. The
services were valued at $3,500 and the stock was issued at par. In addition, a
shareholder is providing office space valued at $100 a month, and is being
recorded as contributed paid in capital.
NOTE F - GOING CONCERN:
-----------------------
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. Although the Company did not have
negative cash flow from operations, it is a development stage enterprise and has
not yet generated significant revenues. The Company has funded its operations to
date from the issuance of shares and debt. These matters raise substantial doubt
about its ability to continue as a going concern.
The company has minimal capital resources available to offset losses from
operating and other obligations expected to be incurred. The continued existence
is dependent upon several factors, including its ability to generate significant
revenue and to generate operating capital.
Management of the Company is engaged in filing a Form SB-1 registration
statement to raise a minimum of $50,000 and a maximum of $500,000 to cover its
anticipated expenses and provide working capital.
The Company plans to generate sufficient revenue by:
Develop Targeted e-mail Marketing Campaign:
-------------------------------------------
Targeted e-mail marketing campaigns are highly focused marketing efforts
designed to sell product to a defined demographic group. The design of each
campaign includes evaluating and segmenting the target population using personal
data, often in combination with demographic screening programs, to estimate the
sales potential of different groups. The Company's approach will be to target
small businesses and individuals within its local business environment allowing
for delivery of product free of delivery charges. This, the Company believes,
will give them a competitive advantage. The Company believes that this approach
to e-mail marketing campaigns is an effective and efficient means to generate
sales revenue.
Expand its Product Line:
------------------------
The Company is constantly evaluating personal computer and peripheral products,
adding new products as they become available. The Company works closely with its
major vendors to identify and source first-to-market product offerings at
aggressive and market leading prices. The Company believes it will generate more
favorable terms with its vendors as volume increases.
Customer Segmentation & Targeted Advertising:
---------------------------------------------
The Company seeks to increase its customer base through targeted mailings as
well as increasing its penetration in existing customers. The Company has
developed an on-line catalog, featuring product offerings, designed to address
the needs of specific customer segments. The Company's web-based catalog will
provide detailed descriptions of product offerings, allowing for search and
on-line capabilities.
Accordingly, the Company's continued existence is dependent upon the successful
raising of capital, successful results from the Company's plan of operations, or
obtaining financing. There can be no assurance that the Company will be
successful in its efforts to raise sufficient operating capital, achieve future
profitable operations, or obtain additional funding. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
F-9
FREWILLPC.COM, INC.
709-B West Rusk, Suite 500
Rockwall, Texas 75087
(972) 772-5930
May 31, 2001
U.S. Securities & Exchange Commission
450 Fifth Street NW
Washington, DC 20549
Dear Sir:
The accompanying financial statements as of April 30, 2001 and for the
four months ended April 30, 2001 have been prepared in accordance with generally
accepted accounting principles and include all adjustments which in the opinion
of management are necessary in order to make the financial statements not
misleading.
Sincerely,
/s/ David McCune
-----------------
David McCune
FREEWILLPC.COM, INC.
a Development Stage Enterprise
BALANCE SHEET
April 30, 2001 and December 31, 2000
UNAUDITED
ASSETS
------
UNAUDITED
Apr 30, 2001 Dec 31, 2000
----------------- -------------------
CURRENT ASSETS:
Cash $1,500 $4,480
PROPERTY AND EQUIPMENT:
Website (net of amortization) 6,944 8,055
----------------- -------------------
TOTAL ASSETS $8,444 $12,535
================= ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
Accounts payable $3,565 $6,947
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 25,000,000 authorized,
4,200,000 shares issued and outstanding 4,200 4,200
Additional paid-in-capital 10,800 10,400
Deficit accumulated during the development stage (10,121) (9,012)
----------------- -------------------
Total Stockholders' Equity 4,879 5,588
----------------- -------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $8,444 $12,535
================= ===================
See accompanying notes F-1
FREEWILLPC.COM, INC.
a Development Stage Enterprise
STATEMENT OF OPERATIONS
June 13, 2000 (Date of Inception) to April 30, 2001, and
June 13, 2000 (Date of Inception) to December 31, 2000, and
Four months ended April 30, 2001 (Unaudited)
UNAUDITED
June 13, 2000 June 13, 2000
UNAUDITED Date of Date of
Four months Inception Inception
ended to to
Apr 30, 2001 Dec 31, 2000 Apr 30, 2001
----------------------------------- -------------------
REVENUE:
Sales $4,242 $5,669 $9,911
COST OF SALES: 3,297 5,008 8,305
----------------------------------- -------------------
GROSS PROFIT 945 661 1,606
OPERATING EXPENSE:
Amortization 1,111 1,945 3,056
Consulting - related party 3,500 3,500
Bank charges 40 50 90
Office expense 115 115
Organization costs & fees 308 963 1,271
Professional fees 2,500 2,500
Freight 195 195
Rent - related party 400 600 1,000
----------------------------------- -------------------
Total Operating Expense 2,054 9,673 11,727
----------------------------------- -------------------
NET LOSS ($1,109) ($9,012) ($10,121)
=================================== ===================
Weighted average shares outstanding 4,200,000 4,199,005 4,199,377
=================================== ===================
Loss per share - basic and diluted ($0.00) ($0.00) ($0.00)
=================================== ===================
See accompanying notes F-2
FREEWILLPC.COM, INC.
a Development Stage Company
STATEMENT OF STOCKHOLDERS' EQUITY AND ACCUMULATED DEFICIT
June 13, 2000 (Date of inception) to December 31, 2000, and
Four months ended April 30, 2001 (Unaudited)
UNAUDITED
Common Stock Paid In
Shares Amount Capital Total
--------------------------------------------------------- -------------------
Balance,
June 13, 2000
(date of inception) -0- -0- -0- -0-
Shares issued on June 13, 2000 for:
Cash 500,000 500 500
Services - related party 3,500,000 3,500 3,500
June 15, 2000 for:
Website development 200,000 200 9,800 10,000
Contributed capital by shareholder:
Quarter ended September 30 300 300
Quarter ended December 31 300 300
Net Loss (9,012)
--------------------------------------------------------- -------------------
Balance
December 31, 2000 4,200,000 $4,200 $10,400 $5,588
========================================================= ===================
Contributed capital by shareholder:
Four months ended April 30 400 400
Net Loss (1,109)
--------------------------------------------------------- -------------------
Balance
April 30, 2001 4,200,000 4,200 10,800 4,879
========================================================= ===================
See accompanying notes F-3
FREEWILLPC.COM, INC.
a Development Stage Company
STATEMENT OF CASH FLOWS
June 13, 2000 (Date of Inception) to April 30, 2001, and
June 13, 2000 (Date of Inception) to December 31, 2000, and
Four months ended April 30, 2001 (Unaudited)
UNAUDITED
UNAUDITED
Period from Period from
UNAUDITED Inception Inception
Four months (June 13, 2000) (June 13, 2000)
ended to to
Apr 30, 2001 Dec 31, 2000 Apr 30, 2001
----------------------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($1,109) ($9,012) ($10,121)
Items not requiring cash:
Amortization 1,111 1,945 3,056
Common stock issued for services 3,500 3,500
Changes in working capital:
Increase (decrease) in accounts payable (3,382) 6,947 3,565
----------------------------------- -------------------
NET CASH (USED) BY OPERATING ACTIVITIES: (3,380) 3,380 0
CASH FLOWS FROM INVESTING ACTIVITIES: 0 0 0
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock issuance 0 500 500
Contributed capital by shareholder 400 600 1,000
----------------------------------- -------------------
Total cash flows from financing activities 400 1,100 1,500
----------------------------------- -------------------
NET INCREASE IN CASH ($2,980) $4,480 $1,500
CASH, BEGINNING OF PERIOD 4,480 0 0
----------------------------------- -------------------
CASH, END OF PERIOD $1,500 $4,480 $1,500
=================================== ===================
Note:
Non-cash investing activity - the company issued 200,000 shares valued
at $0.05 per share for a total of $10,000 for development of its
website. No income taxes paid.
No interest paid.
See accompanying notes F-4
FREEWILLPC.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
April 30, 2001
NOTE A - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
---------------------------------------------------------------------------
History:
-------
The Company was organized June 13, 2000, as a Nevada corporation under the name
of FreewillPC.com, Inc. and is in the development stage. The Company's business
plan outlines its plan of operations, which is to sell computers and computer
peripheral equipment over the internet. Its development activities included the
development of the Company's website and advertising its website to encourage
borrowers to purchase items over the internet.
Basis of Presentation:
----------------------
It is the Company's policy to prepare its financial statements on the accrual
basis of accounting in conformity with accounting principles generally accepted
in the United States. The accompanying financial statements as of April 30, 2001
and for the four months ended April 30, 2001 have been prepared in accordance
with generally accepted accounting principles and include all adjustments which
in the opinion of management are necessary in order to make the financial
statemens not misleading.
Supplier Concentration:
-----------------------
The Company purchased product from only one supplier for its operations for the
period presented. Although products are available from other sources, the
vendor's inability to supply products in a timely manner could adversely affect
the Company's ability to satisfy customer demands.
Revenue Recognition:
--------------------
The Company recognizes revenues from product sales and delivery, net of returns
and discounts, when the products are shipped to customers. The company purchases
and resells computers and records sales and costs of sales. For the peripheral
equipment the Company sells for which it does not take possession of the
product, it records as revenue the difference between the purchase price and the
sales price of the items.
Use of Estimates
----------------
In order to prepare financial statements in conformity with accounting
principals generally accepted in the United States, management must make
estimates, judgments and assumptions that affect the amounts reported in the
financial statements and determine whether contingent assets and liabilities, if
any, are disclosed in the financial statements. The ultimate resolution of
issues requiring these estimates and assumptions could differ significantly from
resolution currently anticipated by management and on which the financial
statements are based.
Cash and Cash Equivalents:
--------------------------
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments with maturity of three months or less to be cash
equivalents.
Property and Equipment:
-----------------------
Property and equipment is carried at cost. Depreciation is provided by the
straight-line method over each asset's estimated useful life. Upon retirement or
disposal, the asset cost and related accumulated depreciation are removed from
the accounts and any resulting gain or loss is included in the determination of
net income.
Long-Lived Assets
-----------------
In accordance with Statement of Financial Accounting Standards ("SFAS") No. 121,
Accounting for the impairment of Long-Lived Assets and for Long -Lived Assets to
be Disposed of, the Company records impairment losses when events and
circumstances indicate that the assets might be impaired and the undiscounted
projected cash flows associated with those assets are less than the carrying
amounts of those assets. Impairment loss on a long-lived asset is measured based
on the excess of the carrying amount of the asset over the asset's fair value,
generally determined based upon discounted estimates of future cash flows.
F-5
FREEWILLPC.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
April 30, 2001
NOTE A - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------
(CONTINUED):
------------
Net loss per Share:
-------------------
Basic net loss per share excludes dilution and is computed by dividing net loss
by the weighted average number of common shares outstanding for the period
presented. Diluted net loss per common share was the same as basic net loss per
common share for the period presented since the Company has no potentially
dilutive securities and because of the Company's net loss.
Stock based compensation:
-------------------------
The Company accounts for stock based compensation in accordance with SFAS 123,
Accounting for Stock-Based Compensation. It introduces the use of a fair
value-based method of accounting for stock based compensation. It encourages,
but does not require, companies to recognize stock-based compensation expenses
to employees based on the new fair value accounting rules. The Company has
adopted the new fair value accounting rule and records the issuance of stock at
the fair value of the consideration received.
Capitalized Web Site Development Costs and Software:
----------------------------------------------------
The Company accounts for its web site development costs and internally developed
software costs in accordance with Emerging Issues Task Force 00-2, Accounting
for Web Site Development Costs and the provisions of Statement of Position
("SOP") 98-1, Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use. This requires the capitalization of the costs
incurred. Capitalized costs are amortized on a straight-line basis over the
useful life of the software once it has been placed into service.
Start-Up Costs:
---------------
The Company expenses the costs of start-up activities and organization costs as
they are incurred, in accordance with SOP 98-5, Reporting on the Cost of
Start-up Activities.
Income Tax:
-----------
The Company is subject to the greater of federal income taxes computed under the
regular system or the alternative minimum tax system. The Company uses an asset
and liability approach for the accounting and financial reporting of income tax
as required by SFAS No. 109, Accounting for Income Taxes. Under this method,
deferred tax assets and liabilities are determined based on temporary
differences between the financial carrying amounts and the tax bases of assets
and liabilities using enacted tax rates in effect in the years in which the
temporary differences are expected to reverse. Valuation allowances are
established when necessary to reduce deferred tax asset to the amount expected
to be "more likely than not" realized in future returns.
Year End:
---------
The Company's year-end is December 31.
NOTE B - WEB SITE:
------------------
The Company's primary asset is its web site that is the center of its
operational and income-generating activities for which it issued 200,000 shares
of common stock valued at $10,000. The cost of the web site is being amortized
over three years starting in June 2000, the first month of operation.
In March 2000, the Financial Accounting Standards Board issued Interpretation
No. 44, Accounting for Certain Transactions Involving Stock Compensation, an
interpretation of APB Opinion No. 25, which was effective July 1, 2000. The
website development was paid for by issuing 200,000 shares of common stock
valued at $0.05 per share. Since there was no readily determinable market value
for the Company's common stock, the per share price was negotiated and
determined by the fair value of services received.
F-6
FREEWILLPC.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
April 30, 2001
NOTE C - STOCKHOLDERS' EQUITY:
------------------------------
Common Stock:
-------------
The Company is authorized to issue 50,000,000 common shares of stock at a par
value of $0.001 per share. These shares have full voting rights. At April 30,
2001, there were 4,200,000 shares outstanding. The Company has not paid a
dividend to its shareholders.
Common stock issuances
----------------------
On June 13, 2000, the Company issued 4,000,000 shares to the President for
$4,000, comprised of $500 cash and $3,500 of his services. The services were
valued at $3,500 and the stock issued at par since it was impossible to
determine the fair value of the services. The common stock was issued upon
formation of the Company for services performed before, during and after
formation of the Company.
On June 15, 2000, the Company issued to an unrelated party 200,000 shares for
the development of its website valued at $10,000. The value assigned of to the
website development was fair market value but the number of shares issued for
this website was negotiated and determined by the Company and the developers of
the website since there was no readily determinable market value for the shares.
The basis for valuing the shares at $0.05 per share, which is substantially
below the offering price per share to the public, is that the developers were
giving services in exchange for stock before offering shares to the public and
the website was a prerequisite for the Company to start in business which then
allowed the Company to offer shares to the public. The value substantially below
the public offering price was negotiated since the developers were not
guaranteed that the Company would be able to sell stock to the public and no
guarantee that the Company would be successful. The value of $0.05 per share is
substantially above the price the President paid two days earlier since the
President developed the plan for the Company over a period of time, formed the
Company, and purchased shares immediately upon formation; the plan included the
filing of a registration statement with the U.S. Securities and Exchange
Commission to raise funds at $0.25 per share.
NOTE D - INCOME TAXES:
----------------------
The Company had a net operating loss of $9,012 for the period presented. No
deferred tax asset has been recognized for the operating loss as it is more
likely than not that all or a portion of the net operating loss will not be
realized and any valuation allowance would reduce the benefit to zero.
Operating losses expire: 2020 $9,012
Operating losses expire: 2021 $1,109
The components of the provision (benefit) for income taxes included in the
financial statements as of April 30, 2001 are as follows:
Deferred tax assets:
Net operating loss carryforwards $(10,121)
Valuation allowance 10,121
---------
Total deferred income tax assets -0-
Total deferred income tax liabilities -0-
Net deferred income tax assets $ -0-
The Company's effective tax rate on a pre-tax income (loss) from continuing
operations differs from the U.S federal statutory rate as follows:
U.S. federal statutory rate ( 34)%
Increase (decrease) in rates resulting from:
Change in valuation allowance for deferred tax asset 34 %
---------
Effective tax rate 0 %
F-7
FREEWILLPC.COM, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
April 30, 2001
NOTE E - RELATED PARTY TRANSACTIONS:
------------------------------------
In June 2000, the Company issued to its President 4,000,000 shares in
consideration for $4,000, comprised of $500 cash and $3,500 of his services. The
services were valued at $3,500 and the stock was issued at par. In addition, a
shareholder is providing office space valued at $100 a month, and is being
recorded as contributed paid in capital.
NOTE F - GOING CONCERN:
-----------------------
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. Although the Company did not have
negative cash flow from operations, it is a development stage enterprise and has
not yet generated significant revenues. The Company has funded its operations to
date from the issuance of shares and debt. These matters raise substantial doubt
about its ability to continue as a going concern.
The company has minimal capital resources available to offset losses from
operating and other obligations expected to be incurred. The continued existence
is dependent upon several factors, including its ability to generate significant
revenue and to generate operating capital.
Management of the Company is engaged in filing a Form SB-1 registration
statement to raise a minimum of $50,000 and a maximum of $500,000 to cover its
anticipated expenses and provide working capital.
The Company plans to generate sufficient revenue by:
Develop Targeted e-mail Marketing Campaign:
-------------------------------------------
Targeted e-mail marketing campaigns are highly focused marketing efforts
designed to sell product to a defined demographic group. The design of each
campaign includes evaluating and segmenting the target population using personal
data, often in combination with demographic screening programs, to estimate the
sales potential of different groups. The Company's approach will be to target
small businesses and individuals within its local business environment allowing
for delivery of product free of delivery charges. This, the Company believes,
will give them a competitive advantage. The Company believes that this approach
to e-mail marketing campaigns is an effective and efficient means to generate
sales revenue.
Expand its Product Line:
------------------------
The Company is constantly evaluating personal computer and peripheral products,
adding new products as they become available. The Company works closely with its
major vendors to identify and source first-to-market product offerings at
aggressive and market leading prices. The Company believes it will generate more
favorable terms with its vendors as volume increases.
Customer Segmentation & Targeted Advertising:
---------------------------------------------
The Company seeks to increase its customer base through targeted mailings as
well as increasing its penetration in existing customers. The Company has
developed an on-line catalog, featuring product offerings, designed to address
the needs of specific customer segments. The Company's web-based catalog will
provide detailed descriptions of product offerings, allowing for search and
on-line capabilities.
Accordingly, the Company's continued existence is dependent upon the successful
raising of capital, successful results from the Company's plan of operations, or
obtaining financing. There can be no assurance that the Company will be
successful in its efforts to raise sufficient operating capital, achieve future
profitable operations, or obtain additional funding. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
F-8
No dealer, salesman or any other person has been authorized to give any
quotation or to make any representations in connection with the offering
described herein, other than those contained in this prospectus. If given or
made, such other information or representation must not be relied upon as having
been authorized by the company or by any underwriter. This prospectus does not
constitute an offer to sell, or a solicitation of an otter to buy any securities
offered hereby in any jurisdiction to any person to whom it is unlawful to make
such an offer or solicitation in such jurisdiction.
TABLE OF CONTENTS
Prospectus Summary 2
Risk Factors 3
Forward Looking Statements 5
Dilution 5
Plan of Distribution 7
Use of Proceeds 7
Description of Business 8
Plan of Operations 12
Description of Property 15
Director's, Executive Officers and Significant Employees 15
Remuneration of Officers and Directors 15
Interest of Management and Others in Certain Transactions 16
Principal Shareholders 16
Significant Parties 17
Securities Being Offered 17
Relationship with Issuer of Experts Named in Registration Statement 18
Legal Proceedings 18
Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure 18
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities 18
Legal Matters 19
Experts 19
Dividend Policy 19
Transfer Agent 19
Financial Statements F-1
Until the (90th day after the later of (1) the effective date of the
registration statement or (2) the first date on which the securities are offered
publicly), all dealers that effect transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealers' obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Indemnification of Directors and Officers
Not applicable.
Item 14. Other Expenses of Issuance and Distribution
All expenses, including all allocated general administrative and overhead
expenses, related to the offering or the organization of the Company will be
borne by the Company.
The following table sets forth a reasonable itemized statement of all
anticipated out-of-pocket and overhead expenses (subject to future
contingencies) to be incurred in connection with the distribution of the
securities being registered, reflecting the minimum and maximum subscription
amounts.
Minimum Maximum
----------------------
SEC Registration Fee $ 269 $ 269
Printing and Engraving Expenses 2,000 19,000
Legal Fees and Expenses 5,000 5,000
Edgar Fees 1,800 1,800
Accounting Fees and Expenses 2,500 2,500
Blue Sky Fees and Expenses 5,000 5,000
Miscellaneous 200 200
--------- ---------
TOTAL $ 16,769 $ 33,769
Item 15. Recent Sales of Unregistered Securities
The Company sold on June 13, 2000 to its founder 4,000,000 shares of
common stock which was issued to him for $4,000, composed of $500 cash and
$3,500 of his services. This stock was issued under the exemption under the
Securities Act of 1933, section 4(2); this section states that transactions by
an issuer not involving any public offering is an exempted transaction. The
company relied upon this exemption because in a private transaction during June
2000, the founder, sole officer and director purchased stock for a combination
of $500 cash and $3,500 of services.
The Company issued 200,000 shares on June 15, 2000 to a company in
consideration for building and developing the website. This stock was valued at
$10,000 or $0.125 per share. This stock was issued under the exemption under the
Securities Act of 1933, section 4(2); this section states that transactions by
an issuer not involving any public offering is an exempted transaction. The
company relied upon this exemption because in a private transaction on June 15,
2000, this company developed the web site in exchange for 200,000 shares of
stock valued at $0.125 per share or a total of $25,000 with no broker dealer
involved in the transaction. The purchasers were sophisticated investors who
purchased the stock for their own account and not with a view toward
distribution to the public. The certificates evidencing the securities bear
legends stating that the shares may not be offered, sold or otherwise
transferred other than pursuant to an effective registration statement under the
Securities Act, or an exemption from such registration requirements.
Item 16. Exhibits
The following Exhibits are filed as part of the Registration
Statement:
Exhibit No. Identification of Exhibit
3.1* - Articles of Incorporation
3.2* - By Laws
4.2* - Specimen Stock Certificate
10.4* - Subscription Escrow Agreement
10.6* - Form of Subscription Agreement
10.8* - Website Development Agreement
16.0 - Letter of Resignation of Former Account
23.1 - Opinion of Lamberth & Stewart, PLLC, Attorneys at Law
23.2* - Consent of Lamberth & Stewart, PLLC, Attorneys at Law
23.3 - Consent of J.S. Osborn, P.C., Certified Public Accountant
* Filed previously
Item 17. Undertakings
The Registrant hereby undertakes to:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act; and (ii) Reflect in the prospectus any facts or
events which, individually or together,
represent a fundamental change in the information in the Registration Statement.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form SB-1 and authorizes this Registration Statement
to be signed on its behalf by the undersigned, being duly authorized, in the
City of Rockwall, State of Texas, on the date indicated below.
FreewillPC.com, Inc.
By: /s/ David McCune
---------------------------
David McCune, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following person in the capacity and on
the date indicated:
Signature Title Date
------------------------ --------------------- ------------
/s/ David McCune
--------------------
David McCune President, Secretary,
Treasurer; Director August 2, 2001