-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TVqXif/TClYjyHPRET65kC9+xZXSRUkTgKc/rIiYwBxB0lntIOAX0gbrbom+/Da7 WfN2CFVkWTOC4n1KPrgJ/A== 0001127855-01-000018.txt : 20010402 0001127855-01-000018.hdr.sgml : 20010402 ACCESSION NUMBER: 0001127855-01-000018 CONFORMED SUBMISSION TYPE: SB-2 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20010330 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORGANIC SOILS COM INC CENTRAL INDEX KEY: 0001108046 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 123456789 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SB-2 SEC ACT: SEC FILE NUMBER: 333-57946 FILM NUMBER: 1586018 BUSINESS ADDRESS: STREET 1: 300 E 54TH ST STREET 2: STE 202 CITY: ANCHORAGE STATE: AK ZIP: 99518 BUSINESS PHONE: 4153877500 MAIL ADDRESS: STREET 1: 300 E 54TH STREET STREET 2: SUITE 202 CITY: ANCHORAGE STATE: AK ZIP: 99518 SB-2 1 0001.txt ORGANIC SOILS.COM, INC. SB-2 As filed with the Securities and Exchange Commission on March 29, 2001 File No. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ORGANIC SOILS.COM, INC. (Exact name of registrant as specified in its charter) Nevada 88-0448626 (State or Other Jurisdiction of (IRS Employer Incorporation or Organization) Identification No.) 300 East 54th Avenue, Suite 200 Anchorage, Alaska 99518 Telephone: 907-770-3709 (Address and telephone number of registrant's principal offices) Ray L. Smith, President Organic Soils.com, Inc. 300 East 54th Avenue, Suite 200 Anchorage, Alaska 99518 Telephone: 907- 770-3709 (Name, address and telephone number of agent for service) Copies to: Peter R. Chernik, Esq. 28 Fifteenth Avenue San Francisco, CA 94118 Telephone: (415) 387-7500 Facsimile: (415) 387-7200 Approximate date of commencement of proposed sale to the public: As soon as practicable after the Registration Statement becomes effective. If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE Title of each class Amount to be Proposed offering Proposed maximum Amount of of securities to registered price per share aggregate offering registration be registered price fee Common Stock 160,000 shares $1.50 per share $240,000 $60
The number of shares to be registered is estimated solely for the purpose of calculating the registration fee. Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Page 2 The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. PROSPECTUS Subject to completion ____________, 2001 No Minimum / $240,000 Maximum ORGANIC SOILS.COM, INC. COMMON STOCK This is Organic.Soils.Com, Inc.'s (the "Company") initial public offering. We are offering a maximum of 160,000 shares of its common stock. There is no minimum. The public offering price is $1.50 per share. No public market currently exists for our shares. See "Risk Factors" beginning on page 2 for certain information you should consider before you purchase the shares. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. This is a best efforts offering, with no minimum amount, to be made by the officers and directors of the Company. No commission or other compensation related to the sale of the shares will be paid to any of our officers or directors. No arrangements have been made to place funds in escrow, trust or any similar account. Funds will be immediately available to the Company. ----------- PRICE $1.50 PER SHARE ------------ Price to Public Commissions Proceeds to Company Per Share $1.50 $-0- $1.50 Minimum -0- $-0- -0- Maximum $240,000 $-0- $240,000 The date of this Prospectus is _____________, 2001. Page 3 TABLE OF CONTENTS Page ---- Available Information.................................... 6 Prospectus Summary....................................... 7 Summary of Financial Information......................... 7 Risk Factors............................................. 8 Forward-Looking Statements............................... 10 Use of Proceeds.......................................... 10 Determination of Offering Price.......................... 11 Dilution................................................. 11 Legal Proceedings.........................................12 Directors, Executive Officers, Promoters and Control Persons..........................................12 Security Ownership of Certain Beneficial..................13 Owners and Management....................................13 Description of Securities...............................13 Interest of Named Experts and Counsel..................13 Disclosure of Commission Position on Indemnification for Securities Act Liabilities..........14 Description of Business.................................14 Management's Discussion and Analysis of Results of Operations and Financial Condition............17 Description of Property...................................18 Certain Relationships and Related Transactions............18 Market for Common Stock and Related Stockholder Matters......................................18 Executive Compensation....................................19 Plan of Distribution......................................19 Capitalization............................................19 Description of the Securities.............................20 Shares Available for Future Sale..........................20 Experts...................................................21 Financial Statements......................................F-1 Page 4 ORGANIC SOILS.COM, INC. 300 West 54th Avenue Suite 200 Anchorage, Alaska 93940 160,000 Shares of Common Stock $1.50 Per Share We are offering hereby to sell 160,000 shares of our common stock and will not use an underwriter nor pay a commission for the sale of these shares. This is our initial public offering, and no public market currently exists for our shares. The offering price may not reflect the market price of our shares after the offering. 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 6 for a discussion of factors that should be considered by investors. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities, or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The Offering Maximum Minimum Proceeds Proceeds Price to Public Commissions to Company to Company --------------- ----------- ---------- ---------- Per Share $ 1.50 $0 $ 240,000 $0 Total $ 1.50 $0 $ 240,000 $0 You should rely only on the information contained in this document. We have not authorized anyone to provide you with information that is different. Application will be made to the NASDAQ OTC Bulletin Board stock Market under a symbol -----. This is a best efforts offering with no minimum amount. No arrangements have been made to place funds in escrow, trust or any similar account. Funds will be immediately available to the Company. Page 5 AVAILABLE INFORMATION The Company has filed with the Securities and Exchange Commission a Registration Statement on Form SB-2 under the Securities Act of 1933 for the common stock offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules which are part of the registration statement. The Registration Statement, including the attached exhibits and schedules, as well as all future reports and other information filed by the Company with the Securities and Exchange Commission ("SEC"), may be inspected without charge at the Public Reference Room of the SEC's principal office at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional offices at 13th Floor, Seven World Trade Center, New York, N.Y. 10048, and Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of these materials can also be obtained at prescribed rates from the Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Electronic filings made through the Electronic Data Gathering Analysis and Retrieval System are also publicly available through the SEC's Web site ( Upon completion of this offering, we will become subject to the information and periodic reporting requirements of the Securities Exchange Act and, in accordance therewith, will file periodic reports, proxy statements and other information with the SEC. Such information will be available for inspection and copying at the SEC's public reference rooms and the Web site of the SEC referred to above. Page 6 PROSPECTUS SUMMARY About our company We were formed as a Nevada corporation on January 19, 2000 and operate under the name of Organic.Soils.Com, Inc. (the "Company"). The Company was organized to engage in the business to package, promote and market Alaskan organic humus soil. The Company's main offices are located at 300 East 54th Avenue, Suite 200, Anchorage, Alaska and its telephone number is 907-770-3709. We have commenced only limited operations and are considered a development stage company. As of December 31, 2000 we have realized $211,035 net losses and have not yet established profitable operations. These factors raise substantial doubts about our ability to continue as a going concern. The proceeds from this offering are needed so we can continue operations and implement our growth and marketing plan. We intend to actively pursue contracts for providing food service for sports facilities, convention centers, and recreational events. The Offering This is a best efforts offering to be made by the officers and directors of the Company. We are offering a maximum of 160,000 shares of our common stock. There is no minimum. No commission or other compensation related to the sale of the shares will be paid to any of our officers or directors. No arrangements have been made to place funds in escrow, trust or any similar account. Funds will be immediately available to the Company. SUMMARY OF FINANCIAL INFORMATION A summary of our financial condition, as of December 31, 2000, is set forth below. YEAR ENDED DECEMBER 31, 2000 Revenues 23,612 Expenses Costs of goods sold 22,465 General and Administrative 211,927 ------- Total expenses 234,392 Other income and expenses Interest income 45 Interest expense 300 Net Loss (211,035) Net Loss Available to common shareholders (211,035) Net Loss per share of common shareholders (0.51) Balance Sheet Data Assets 18,576 Liabilities 10,261 Page 7 RISK FACTORS THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. You should carefully consider the risks and uncertainties described below and the other information in this prospectus before deciding whether to invest in shares of our common stock. If any of the following risks actually occur, our business, operating results or financial condition could be materially adversely affected. This could cause the market price of our common stock to decline, and could cause you to lose all or part of your investment. ALTHOUGH OUR MANAGEMENT HAS PAST EXPERIENCE IN THE SOIL INDUSTRY, WE ARE A NEW BUSINESS AND INVESTMENT IN OUR COMPANY IS RISKY. We have an extremely limited operating history so it will be difficult for you to evaluate an investment in our stock. We have limited experience and a short history of operations with respect to marketing and selling our soil. To date, we have had revenue of approximately $23,612 and net losses of $211,035 and do not expect to be profitable for at least six months following this offering and no assurances can be given that we will ever be profitable. As a young company, we are especially vulnerable to the problems, delays, expenses and difficulties encountered by any company in the development stage. Since we have not proven the essential elements of profitable operations, you will be furnishing venture capital to us and will bear the risk of complete loss of your investment in the event we are not successful. IF WE DO NOT RAISE MONEY THROUGH THIS OFFERING, IT IS UNLIKELY WE CAN CONTINUE OPERATIONS. We have limited assets and need the proceeds from this offering to continue our business, identify new markets and sell our products. If we cannot raise money through this offering, we will have to seek other sources of financing or we will be severely limited in achieving our plan of operation. There is no assurance that additional sources of financing will be available at all or at a reasonable cost. OUR INDEPENDENT AUDITOR HAS EXPRESSED DOUBTS ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN. We are a development stage company as defined in Financial Accounting Standards Board Statement No. 7. We are devoting substantially all of our present efforts in establishing a new business. Although we have started our planned operation, we have generated only $23,612 in revenue as of December 31, 2000 had net losses of $211,035. These factors raise substantial doubt about our ability to continue as a going concern. OUR REVENUES WOULD BE AFFECTED IF WE WERE UNABLE TO RETAIN EXISTING OR OBTAIN NEW CLIENTS. We are dependent upon our ability to extend or renew existing client contracts on favorable terms and to negotiate and obtain acceptable new client contracts. If we are not successful in contract negotiations, our revenues and results of operations could suffer. WE OPERATE IN A VERY COMPETITIVE BUSINESS ENVIRONMENT THAT COULD REDUCE OUR REVENUE AND EARNINGS. The market for organic soil sales is highly competitive and the Company expects that this competition will continue to intensify. Horticultural soils enhancement and cattle feed markets are markets that Canada has engaged in for several years. Canada has, however, been unable to provide the large bulk quantities demanded by international soil enhancement markets. This market has been available to those that can produce massive quantities, but no company in Alaska has, at date, marketed to this demand. Although the Company intends to enter this market, there can be no assurance that the Company will be able to compete successfully or that the competitive pressures faced by the Company, including those described below, will not have a material adverse effect on the Company's business, results of operations and financial condition. Page 8 WE DEPEND ON KEY PERSONNEL AND COULD BE AFFECTED BY THE LOSS OF THEIR SERVICES. There are a limited number of people with adequate knowledge of and experience in the soil industry to implement and carry out our strategy. The process of locating personnel with the skills required to implement and carry out our business plan may be lengthy and costly. We do not currently have employment agreements with any of our executive officers nor do we carry key man insurance on their lives. The loss of the services of our current officers could have a material adverse effect on our business, operating results and financial condition. WE ARBITRARILY DETERMINED OUR OFFERING PRICE. Our management arbitrarily determined the offering price of the shares. The offering price bears no relationship to our assets, book value, net worth or other economic or recognized criteria of value. In no event should the offering price be regarded as an indicator of any future market price of our securities. In determining the offering price, we considered such factors as the prospects for our products, our management's previous experience, our historical and anticipated results of operations and our present financial resources. WE MAY HAVE CONFLICTS OF INTEREST WITH APC EXPORT, INC. Our management consists of the same management that controls APC Export, Inc., a supplier of our humus soil. In the context of negotiating commercial arrangements with APC Export, Inc., conflicts of interest may arise in this and other contexts. We cannot give any assurances that the conflicts of interest will be resolved in our favor. OUR DIRECTORS AND MANAGEMENT WILL COLLECTIVELY CONTROL OVER 82% OF OUR OUTSTANDING COMMON STOCK. After this offering, assuming the maximum amount of shares offered are sold, our directors and officers will collectively control approximately 82.76% of our outstanding common stock. As a result, these stockholders, if they act together, will be able to influence our management and affairs and all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control of our Company and might adversely affect the market price of our common stock. WE ARE DEPENDENT ON OUR RELATIONSHIP WITH APC EXPORT, INC. The Company's revenue is highly dependent on its relationship with APC Export, Inc. The Company entered into a certain distribution and marketing agreement with APC Export, Inc. from which the Company has derived its only revenue to date. Any termination, adverse adjustment of purchase price or any other material terms under this agreement, APC Export, Inc.'s inability to deliver product to the Company, change in APC Export, Inc.'s distribution methods or adverse change in the Company's relationship with APC Export, Inc. could have a material adverse effect on the Company's business, financial condition and results of operations. IT IS LIKELY OUR STOCK WILL BECOME SUBJECT TO THE PENNY STOCK RULES WHICH IMPOSE SIGNIFICANT RESTRICTIONS ON THE BROKER-DEALERS AND MAY AFFECT THE RESALE OF OUR STOCK. A penny stock is generally a stock that - is not listed on a national securities exchange or Nasdaq, - is listed in "pink sheets" or on the NASD OTC Bulletin Board, - has a price per share of less than $5.00 and - is issued by a company with net tangible assets less than $5 million. The penny stock trading rules impose additional duties and responsibilities upon broker-dealers and salespersons effecting purchase and Page 9 sale transactions in common stock and other equity securities, including - determination of the purchaser's investment suitability, - delivery of certain information and disclosures to the purchaser, and - receipt of a specific purchase agreement from the purchaser prior to effecting the purchase transaction. Many broker-dealers will not effect transactions in penny stocks, except on an unsolicited basis, in order to avoid compliance with the penny stock trading rules. In the event our common stock becomes subject to the penny stock trading rules, - such rules may materially limit or restrict the ability to resell our common stock, and - the liquidity typically associated with other publicly traded equity securities may not exist. SHARES OF STOCK THAT ARE ELIGIBLE FOR SALE BY OUR STOCKHOLDERS MAY DECREASE THE PRICE OF OUR STOCK. We have issued 2,300,000 shares of common stock at an average price of approximately $0.06 per share. These shares were issued in reliance on exemptions from registration and will be freely tradable at various times. As these shares are sold into the market, the price of the common stock will be depressed. Persons who have acquired share for $0.06 will be able to profitably sell their shares at much less than the $1.50 offering price of the shares under this offering. This tendency may drive the market price of the shares less than the $1.50 offering price. FORWARD-LOOKING STATEMENTS You should carefully consider the risk factors set forth above, as well as the other information contained in this prospectus. This prospectus contains forward-looking statements regarding events, conditions, and financial trends that may affect our plan of operation, business strategy, operating results, and financial position. You are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Actual results may differ materially from those included within the forward-looking statements as a result of various factors. Cautionary statements in this "Risk Factors" section and elsewhere in this prospectus identify important risks and uncertainties affecting our future, which could cause actual results to differ materially from the forward-looking statements made in this prospectus. USE OF PROCEEDS The Company will rely on the proceeds from this offering to develop its products, advertise, built a web site, and pay legal and accounting fees. This is a best-efforts offering with no minimum. The principal purposes and priorities in which proceeds are to be used, are as follows: Legal and Accounting $ 20,000 Product and Packaging Development $ 70,000 Marketing and Advertising $ 100,000 Web Site Development $ 30,000 Working Capital $ 20,000 ---------- Total $ 240,000 Page 10 Any funds not used for the purposes indicated will be used for general working capital. If less than the entire offering is received, funds will be applied according to the priorities outlined above. For example, if $75,000 is received, $20,000 will be used to pay legal and accounting fees, $50,000 will be used to develop packaging and the remaining $5,000 will be spent on advertising when the website becomes operational. If less than $20,000 is received, the entire amount will be applied toward legal and accounting fees. If no proceeds are received from this offering, the Company will plan on meeting its obligations from future revenue. If no proceeds are received, the Company will not incur any additional legal and accounting expenses. DETERMINATION OF OFFERING PRICE Because there has been no prior public trading market for our common stock, the initial public offering price of the common stock has been arbitrarily determined by management and is not necessarily related to our asset value, net worth or other criteria of value. The factors considered in determining the offering price include an evaluation by management of the history of and prospects for the industry in which we compete and our earnings prospects. Factors such as our financial results, announcements of developments related to our business, and the introduction of products and product enhancements by ourselves or our competitors may have a significant impact on the market price of our securities. DILUTION As of the date of this prospectus, the Company had issued 2,300,000 shares of common stock and the net tangible book value per share of the common stock (the Company's net tangible assets less its liabilities divided by the number of shares of common stock then outstanding) was approximately $0.004 per share of common stock. After giving effect to the receipt of the estimated net proceeds from the sale of all of the shares, and assuming that the offering price of the shares is $1.50 per share, the purchasers will have paid a total of $240,000 for 160,000 shares of common stock and the net tangible book value of the Company's presently outstanding shares will increase to $0.10 per share. The investors will experience a corresponding dilution of $1.40 per share from the offering price. If a smaller number of shares is sold, the dilution to the investors will be greater than that indicated above as indicated in the table below. "Dilution" is normally defined as the difference between the offering price per share of common stock and the net tangible book value per share of common stock immediately after the offering. The following table illustrates the per share dilution to new investors: Offering Price per share .............................................$1.50 Net tangible book value per share before offering .................$0.004 Increase in net tangible book value per share attributable to investors purchasing in this offering .......................$0.096 Pro forma net tangible book value per share after offering ...........$0.10 Dilution per share ...................................................$(1.40) ======= The following table summarizes the differences between Existing Shareholders, as of the date of this prospectus, and New Investors with respect to the number of common shares purchased from the Company, the total consideration paid and the average price per share: Page 11
Shares Purchased Total Consideration Paid -------------------------------------------------------------- Average Price Number Percent Amount Percent Per Share Existing Shareholders 2,300,000 93.5% $219,350 47% $0.095 New Investors 160,000 6.5% $240,000 53% $1.50 Total 2,460,000 100%
The numbers used for Existing Shareholders assumes that none of the Existing Shareholders purchases additional shares in this offering. The above table illustrates that as an investor in this offering, you will pay a price per share that substantially exceeds the price per share paid by current shareholders and that you will contribute a high percentage of the total amount to fund the Company, but will own only a small percentage of our shares. Investors will have contributed $240,000 if the maximum of this offering is raised, compared to $219,350 contributed by Existing Shareholders, but the Existing Shareholders will retain approximately 93.5% stock ownership of the Company, while the New Investors will own 6.5% of the stock ownership of the Company. LEGAL PROCEEDINGS The Company is not a party to any pending legal proceedings. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS Ray L. Smith, President, Director, CEO (Age 53). Mr. Smith has been in the civil engineering field since 1970. Primarily working in the highway construction industry, he has been project superintendent and division manager with Summit Paving and Construction in Anchorage, Alaska from June 1982 to present. From September 1998 to present, he has also been a Vice President of APC Export, Inc. Richard L. Strahl, COO, Director (Age 57). Mr. Strahl has worked throughout Alaska on major construction projects and has administered more than $140,000,000 of construction contracts for the Alaska Department of Transportation and the City of Anchorage. Mr. Strahl has owned R & L Trucking from May 1989 to present. In this capacity, he has performed large analysis of back haul rates, which are an important cost factor in the business of the Company. He has also been a president of APC Export from September 1998 to present. William S. Seidel, Vice-President, Director (Age 48). From 1985 to present, Mr. Seidel has been a lecturer at the University of California, Berkeley on the topics of marketing, entreprenership and innovation. He wrote, instituted and established the Berkeley Study Program in Direct Marketing. He is also a speaker and workshop leader for the US Patent Office. Page 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information about the beneficial ownership of our outstanding common stock as of the date of this prospectus of each person or entity who is known to us to own beneficially more than five percent of our common stock, each of the named officers, each of our directors and all our officers and directors as a group.
Before Offering After Offering --------------- -------------- Name of Beneficial Owner Number of Percentage Number of Percentage Shares Shares Ray L. Smith 1,990,000 88.4% 1,990,000 82.6% Richard L. Strahl 20,000 0.09% 20,000 0.82% William S. Seidel 20,000 0.09% 20,000 0.08% Officers and Directors 2,030,000 88.58% 2,030,000 82.76% as a group (3 people) --------- ------ --------- ------
DESCRIPTION OF SECURITIES Common Stock We are authorized to issue up to 50,000,000 shares of common stock with a par value of $.001. As of the date of this prospectus, there are 2,300,000 shares of common stock issued and outstanding. The holders of common stock are entitled to one vote per share on each matter submitted to a vote of stockholders. In the event of liquidation, holders of common stock are entitled to share ratably in the distribution of assets remaining after payment of liabilities, if any. Holders of common stock have no cumulative voting rights, and, accordingly, the holders of a majority of the outstanding shares have the ability to elect all of the directors. Holders of common stock have no preemptive or other rights to subscribe for shares. Holders of common stock are entitled to such dividends as may be declared by the board of directors out of funds legally available therefor. The outstanding common stock is, and the common stock to be outstanding upon completion of this offering will be, validly issued, fully paid and non-assessable. We anticipate that we will retain all of our future earnings, if any, for use in the operation and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. INTEREST OF NAMED EXPERTS AND COUNSEL The Company's securities counsel, Peter R. Chernik, of San Francisco, CA currently holds 10,000 shares of our common stock. Page 13 DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES Our company's charter provides that, to the fullest extent that limitations on the liability of directors and officers are permitted by the Nevada Revised Statutes, no director or officer of the company shall have any liability to the company or its stockholders for monetary damages. The Nevada Revised Statutes provide that a corporation's charter may include a provision which restricts or limits the liability of its directors or officers to the corporation or its stockholders for money damages except: (1) to the extent that it is provided that the person actually received an improper benefit or profit in money, property or services, for the amount of the benefit or profit in money, property or services actually received, or (2) to the extent that a judgment or other final adjudication adverse to the person is entered in a proceeding based on a finding in the proceeding that the person's action, or failure to act, was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding. The company's charter and bylaws provide that the company shall indemnify and advance expenses to its currently acting and its former directors to the fullest extent permitted by the Nevada Revised Business Corporations Act and that the company shall indemnify and advance expenses to its officers to the same extent as its directors and to such further extent as is consistent with law. The charter and bylaws provide that we will indemnify our directors and officers and may indemnify our employees or agents to the fullest extent permitted by law against liabilities and expenses incurred in connection with litigation in which they may be involved because of their offices with Alaska Freightways. However, nothing in our charter or bylaws of the company protects or indemnifies a director, officer, employee or agent against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. To the extent that a director has been successful in defense of any proceeding, the Nevada Revised Statutes provide that he shall be indemnified against reasonable expenses incurred in connection therewith. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy and is, therefore, unenforceable. DESCRIPTION OF BUSINESS General Plan of Operations The Company has entered into the Distribution/Marketing Agreement ("Agreement") with APC Export, Inc., a soil developer in Alaska. According to the terms of this agreement, the Company markets the soil provided by APC Export, Inc. to households and the local greenhouse industry, as well as on the national market. As production expands, the Company will also export organic humus soil (wholesale) to various international markets. The Company is the exclusive distributor of APC Export, Inc. products in the United States and receives a five percent (5%) commission on the gross sales of APC Export, Inc.'s products. APC Export, Inc. retains the right to sell to the United States, or its agencies and to any foreign government, or its agencies. Either party to this Agreement may terminate the Agreement upon 120 days notice to the other party. To date, the Company's only source of revenue has been from APC Export, Inc. under the Agreement. Page 14 Alaska is rich with both sphagnum moss and humus soil. APC develops both types as part of its business. The growth strategy that has been developed will embrace a competitive strategy that allows for market penetration. The Company has received various foreign inquiries about the export of humus. The Company believes it will have the opportunity to penetrate humus overseas markets. The Company recognizes the marketing opportunity provided by the Internet and intends to expand its market share by establishing a multi-service web site. The management also believes that much of the Internet's rapid evolution towards becoming a mass medium can be attributed to the accelerated pace of technological innovation, which is expanding the Web's capabilities and qualitatively improved users' on-line experiences. Most notably, the Internet has evolved from a mass of static, text-oriented Web pages and e-mail services to a much richer environment, capable of delivering graphical, interactive multimedia content. Products Humus is a natural, organic material of botanical origin and commercial significance. Humus lands are situated predominately in shallow wetlands areas of the Northern Hemisphere, where large deposits developed from the gradual decomposition of plant matter under oxygen free conditions. Humus has widespread use as a plant growth medium in a variety of horticultural and agricultural applications, where its fibrous structure and porosity promote a unique combination of water retention and drainage characteristics. Commercial applications include potting soils, lawn and garden soil amendments and turf maintenance on golf courses. In addition, humus may be used as a component of a filtration medium to remove toxic materials from mines and to process waste streams, pathogens from sewage effluents, deleterious materials suspended in municipal storm drain water. The United States is a producer and significant consumer of humus and spaghnum peat for horticultural, agricultural, and industrial purposes. A variety of peat types are extracted and processed from more than 56 identified operations in 20 of the contiguous United States and by several operations in Alaska. These varieties include, in order of importance, reed sedge, sphagnum moss and peat moss. About 90% of U.S. production is from the Southern and Great Lakes states. Florida, Michigan and Minnesota rank as dominant producers of those regions. The United States imports more than one-half of its total domestic requirements, principally from Canada, where deposits of sphagnum moss are extensive. One of the main products the Company intends to market is a general potting soil mix. This product is typically used by the home gardener and sold through national chains. The generic nature of this potting mix will not claim to do more than other mixes but it will claim to be 100% organic. The true organic content of the product will differentiate it from others on the shelves. The Company intends to become a soil and soil enhancement distributor utilizing its management's experience in the field, as well as its business relationships with wholesalers, such as APC Export, Inc. Marketing Strategy and Pricing The Company intends to derive substantial revenues from providing packaging, organic product development and distribution, consulting and marketing fees from various soil and soil enhancement developers, as well as from the mark up on the products distributed by the company. The Company will market soil and soil enhancement products to households and the local greenhouse industry through its web site located at www.organicsoils.com. The rapidly increasing number of Web consumers and the ubiquitous access to the Internet, both in the United States and internationally, have resulted in the emergence of the Web as a new mass medium for advertising. An independent study conducted by e-land estimates that the number of Web consumers doubled during 1996 to 19 million. A high rate of growth is expected to continue over the next few years with over 140 million consumers anticipated by the year 2002, including 64 million consumers in the United States alone. Page 15 The proliferation of workstations and personal computers served by local networks has also resulted in an increase in the number of potential recipients of electronically distributed information. Forester Research estimates that electronic delivery of information to corporate desktops alone will generate approximately $800 million in revenues by the year 2001. The Global Internet Project estimates that the amount of information on the Internet is doubling each year and that the number of pages currently on the Internet is approximately 11 million. The Web is an attractive medium for advertising because of its interactivity, flexibility, targetability, and measurability. Advertisers can reach audiences and target advertisements to consumers with similar demographic characteristics, specific regional populations, and affinity groups of selected individuals. The interactive nature of the Web enables advertisers to determine customer preferences, using these to initiate ongoing commercial relationships with potential customers. Advertisers can easily change their impression levels, and demographic information concerning consumers can be tracked and reported to advertisers. According to e-land, Web advertising in the United States in 1996 was approximately $175 million and is expected to be as high as $8 billion by the year 2002. As production expands, the Company intends to export its products to the continental United States and to various international markets. Alaska is rich with both sphagnum moss and humus soil. APC Export, Inc. develops both types as part of its business. The growth strategy that has been developed will embrace a competitive strategy that allows for market penetration. The Company has received various foreign inquiries about the export of humus. The Company believes it will have the opportunity to penetrate humus overseas markets. The Company believes that it will be able to sell organic soil in bulk to several international customers. Some of the countries that have markets for such soil include Saudi Arabia, China, Japan, Thailand, Korea, and Israel. Some of the United States potential bulk customers include US Golf Industry, S. CA Flower Industry, California Wine Industry, New Mexico Agriculture, Washington Agriculture, Idaho Agriculture, Texas Agriculture, Arizona Agriculture, Nevada Agriculture, Texas Golf Industry, Arizona Golf Industry, Nevada Golf Industry, Texas Landscape Industry, Arizona Landscape Industry, Nevada Landscape Industry and Oregon Agriculture. However, no assurances can be given that the Company will be economically successful in its attempts to enter any of these markets. Industry The fertilizer, soil, and pesticide markets are multi-billion dollar markets both within the United States and abroad. In total, the Company believes its products will compete with products in the 30 billion-dollar North American market and the estimated 70 billion-dollar world market. Additionally, the Company intends to expand these markets because its products will be used to create agricultural areas from regions that are not currently in the agricultural market. According to an article by Anita Manning in USA TODAY dated May 22, 2000, although healthy crops depend on healthy soil, nearly 40% of the world's land used for agriculture is seriously degraded. Evidence shows that soil degradation has already reduced food production on about 16% of the world's cropland. Based on the Company's research, the fertilizer, soil and pesticide markets are substantial, both within the North America (over $30 billion) and worldwide (over $70 billion). The Company presently intends to enter the North American Consumer Lawn and Garden Market comprising $2.9 billion in fertilizer, soil and pesticide. In addition, the Company also intends to enter the US Agricultural Industry market, which includes organic farms growing fast to $5.5 billion in gross sales (USDA) and showing 20% annual growth. Page 16 Competition The company will face competition from many other soil and soil products distributors, some of which have longer operating histories and substantially greater resources. The management believes that by offering highly effective foliar and soil foodweb products that provide a consistent and predictable result, and by solving agriculture problems naturally, the Company intends to penetrate this competitive market. However, no assurances can be given that the Company will be economically successful in its attempts to enter these markets. The Company will not only compete in a local market, but will face competition from foreign soil distributors, including Canadian distributors, which have penetrated these markets for several years. Canada has, however, been unable to provide the large bulk quantities demanded by international soil enhancement markets. This market has been available to those that can produce massive quantities. By establishing strategic alliance with APC Export, Inc., the Company may become one of the first distributors of the rich Alaskan soil. In markets for traditional soil and soil products, the Company competes against well-established distributors of such products. Many of these competitors have substantially greater financial, technical and personnel resources than the Company and include such companies as T & J Enterprises, Supersoil, Western Organics, and WetSoil. The Company competes on the basis of price, name recognition, convenience and customer service with distributors of traditional soil products. There can be no assurance that we will be able to compete successfully or that the competitive pressures faced by us, including those described, will not have a material adverse effect on our business, results of operations and financial condition. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION When used in this discussion, the words "believes", "anticipates", "expects" and similar expressions are intended to identify forward-looking statements. Actual results could be substantially different from those projected due to risks and uncertainties. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Results of Operations The Company had $23,612 in revenues for the period ending December 31, 2000. To date the Company has not relied on any revenues for funding its activities and it does not expect to receive revenues from operations to be profitable for at least six months following the receipt of the funds raised through this offering. We believe that the proceeds from this offering will satisfy the Company's cash requirements for the next twelve months. We anticipate an increase in capital expenditures consistent with anticipated growth in operations, infrastructure and personnel. We will also continue to expend marketing and development programs. Liquidity and Capital Resources The Company does not believe that there will be significant research expenses during the next 12 months. Even though we have contracted an independent company to develop our web site design, this development will be achieved through modifications of available technologies. Expenditures on activities of this type do not constitute research and development expenses. The Company expects to hire technical personnel to service the web site as soon as sufficient funds become available either as a result of this offering, or from the profits gained through the Company's operations. Until Page 17 then the Company will be required to engage the services of a third party to develop the web site. The Company anticipates that the total cost of these web site services will be $30,000. The Company does not anticipate purchasing or selling any plant or significant equipment during the next twelve month. We also plan to hire additional employees by the end of our first 12 months of operations. These additional employees may serve in any of the following capacities: marketing and promotion; administration; and web site technicians. DESCRIPTION OF PROPERTY Presently, the Company does not own any equipment or properties. Currently, the Company rents its office located at 300 West 54th Avenue, Suite 200, Anchorage, AK 99518 and pays approximately $3,000 a year in rent. The Company will expand its offices and potentially move into a larger space as the Company's business expands CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS On January 20, 2000 the Company entered into an agreement with one of the founders to provide consulting services to the Company. The contract calls for a total amount of $20,000 to be paid to the founder. As of the period of ending December 31, 2000 there was a total of $15,200 paid against the contract. Also, the founder was paid an additional $1,680 for certain copying and other costs incurred on behalf of the Company. Various founders of the Company have performed consulting services for which the Company has paid them consulting fees as voted on during the organization meeting. For the period ending December 31, 2000 this amount paid to the founders amounted to $18,808. Services include clerical support, rent, office supplies, legal services, etc. MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS We have approximately 70 shareholders. Currently, there is no public trading market for our securities and there can be no assurance that any market will develop. If a market develops for our securities, it will likely be limited, sporadic and highly volatile. Presently, we are privately owned. This is our initial public offering. Most initial public offerings are underwritten by a registered broker-dealer firm or an underwriting group. These underwriters generally will act as market makers in the stock of a company they underwrite to help insure a public market for the stock. This offering is to be sold by our officers and directors. We have no commitment from any brokers to sell shares in this offering. As a result, we will not have the typical broker public market interest normally generated with an initial public offering. Lack of a market for shares of our stock could adversely affect a shareholder in the event a shareholder desires to sell his shares. The company does anticipate a market maker filing for listing on the Over the Counter Bulletin Board should the offering succeed. Currently the Shares are subject to Rule 15g-1 through Rule 15g-9, which provides, generally, that for as long as the bid price for the Shares is less than $5.00, they will be considered low priced securities under rules promulgated under the Exchange Act. Under these rules, broker-dealers participating in transactions in low priced securities must first deliver a risk disclosure document which describes the risks associated with such stocks, the broker-dealer's duties, the customer's rights and remedies, and certain market and other information, and make a suitability determination approving the Page 18 customer for low priced stock transactions based on the customer's financial situation, investment experience and objectives. Broker-dealers must also disclose these restrictions in writing to the customer and obtain specific written consent of the customer, and provide monthly account statements to the customer. Under certain circumstances, the purchaser may enjoy the right to rescind the transaction within a certain period of time. Consequently, so long as the common stock is a designated security under the Rule, the ability of broker-dealers to effect certain trades may be affected adversely, thereby impeding the development of a meaningful market in the common stock. The likely effect of these restrictions will be a decrease in the willingness of broker-dealers to make a market in the stock, decreased liquidity of the stock and increased transaction costs for sales and purchases of the stock as compared to other securities. Dividend Policy The Company has never paid a dividend and does not anticipate paying any dividends in the foreseeable future. It is the present policy of the Board of Directors to retain the Company's earnings, if any, for the development of the Company's business. EXECUTIVE COMPENSATION The Company does not currently have any employment agreements with its directors, officers, employees or key personnel. Broad members do not receive any compensation or any reimbursement of expenses incurred in connection with attending board meetings. However, the Company reserves the right to pay consulting fees to its board members and its officers for the time and services they provide to the Company. PLAN OF DISTRIBUTION We are offering the securities for sale through our officers and directors. We intend to engage the services of a registered broker or dealer in each state that requires that a registered broker or dealer act on behalf of a company selling its own securities in that state. The offering is a "best-efforts" offering and will conclude at the discretion of the Company, or sooner if all the shares are sold. No underwriter has been engaged and no commitment to provide the funds has been made. A subscription agreement will be required to be submitted by all purchasers of the shares. The offering is for up to $240,000 at a price of $1.50 per share. We may receive $240,000 or $0 depending on the amount of shares offered hereby have been sold to investors. Investing in our stock is very risky and you should be able to bear a complete loss of your investment. CAPITALIZATION The following tables sets forth our capitalization as of the date of this prospectus, on an actual basis. This table should be read in conjunction with the financial statement of the company and the notes thereto. Stockholders' equity: Common stock, $0.001 par value, authorized 50,000,000 Shares; 2,300,000 shares issued and outstanding $219,350 Retained earnings (211,035) Page 19 DESCRIPTION OF THE SECURITIES Common Stock We are authorized to issue up to 50,000,000 shares of common stock with a par value of $.001. As of the date of this prospectus, there are 2,300,000 shares of common stock issued and outstanding. The holders of common stock are entitled to one vote per share on each matter submitted to a vote of stockholders. In the event of liquidation, holders of common stock are entitled to share ratably in the distribution of assets remaining after payment of liabilities, if any. Holders of common stock have no cumulative voting rights, and, accordingly, the holders of a majority of the outstanding shares have the ability to elect all of the directors. Holders of common stock have no preemptive or other rights to subscribe for shares. Holders of common stock are entitled to such dividends as may be declared by the board of directors out of funds legally available therefor. The outstanding common stock is, and the common stock to be outstanding upon completion of this offering will be, validly issued, fully paid and non-assessable. We anticipate that we will retain all of our future earnings, if any, for use in the operation and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Transfer Agent First American Stock Transfer, 17717 E. Bell Road, Suite 2, Phoenix, Arizona 85022, (602) 485-1346, is our transfer agent. SHARES AVAILABLE FOR FUTURE SALE As of the date of this prospectus, there are 2,300,000 shares of our common stock issued and outstanding. Upon the effectiveness of this registration statement, 160,000 shares will be freely tradable if the maximum number of shares is sold. The remaining 2,300,000 shares of common stock will be subject to the resale provisions of Rule 144. Sales of shares of common stock in the public markets may have an adverse effect on prevailing market prices for the common stock. Rule 144 governs resale of "restricted securities" for the account of any person (other than an issuer), and restricted and unrestricted securities for the account of an "affiliate of the issuer. Restricted securities generally include any securities acquired directly or indirectly from an issuer or its affiliates which were not issued or sold in connection with a public offering registered under the Securities Act. An affiliate of the issuer is any person who directly or indirectly controls, is controlled by, or is under common control with the issuer. Affiliates of the company may include its directors, executive officers, and person directly or indirectly owning 10% or more of the outstanding common stock. Under Rule 144 unregistered resales of restricted common stock cannot be made until it has been held for one year from the later of its acquisition from the company or an affiliate of the company. Thereafter, shares of common stock may be resold without registration subject to Rule 144's volume limitation, aggregation, broker transaction, notice filing requirements, and requirements concerning publicly available information about the company ("Applicable Requirements"). Resales by the company's affiliates of restricted and unrestricted common stock are subject to the Applicable Requirements. The Page 20 volume limitations provide that a person (or persons who must aggregate their sales) cannot, within any three-month period, sell more that the greater of one percent of the then outstanding shares, or the average weekly reported trading volume during the four calendar weeks preceding each such sale. A non-affiliate may resell restricted common stock which has been held for two years free of the Applicable Requirements. EXPERTS The financial statements of the Company as of December 31, 2000 (audited) appearing in this Prospectus and Registration Statement have been prepared by Hawkins Accounting as set forth in their report appearing elsewhere herein, and are included in reliance upon such report given upon the authority of said firm as experts in accounting and auditing. Page 21 To the Board of Directors and Shareholders Organic Soils.Com, Inc. Monterey, California Independent Auditor's Report I have audited the balance sheet of Organic Soils.Com, Inc. (a development stage company) as of December 31, 2000 and the related statements of operations, stockholders' equity and cash flows for the year ending December 31, 2000. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with generally accepted auditing standards. 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 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 reasonable basis for my opinion. In my opinion, the financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of Organic Soils.Com, Inc as of December 31, 2000, the results of operations the cash flows and the cumulative results of operations and cumulative cash flows for the year then ended in conformity with generally accepted accounting principles. The deficit accumulated during the development stage of the Company is $211,035. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 6 to the financial statements, the Company has incurred net losses since inception, which raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty. February 4, 2001 F-1 ORGANIC SOILS.COM, INC. (A Development Stage Company) BALANCE SHEET DECEMBER 31, 2000 ASSETS Current assets Cash in bank $ 626 Other assets Money raising costs 17,950 ------- Total assets $ 18,576 -------- LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Accounts payable $ 10,261 -------- Total liabilities 10,261 SHAREHOLDERS' EQUITY Common stock, 50,000,000 shares authorized at $.001 par 2,267,300 issued and outstanding. 2,317 Paid in capital 217,033 Deficit accumulated during development stage (211,035) --------- Total shareholders' equity 8,315 --------- Total liabilities and shareholders' equity $ 18,576 --------- The accompanying notes are an integral part of these financial statements F-2
ORGANIC SOILS.COM, INC. (A Development Stage Company) STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2000 Deficit Accumulated During Development Stage ----- Revenue $ 23,612 $ 23,612 Cost of Sales 22,465 22,465 ------ Gross profit 1,147 1,147 Expenses Bank charges 112 112 Consulting fees 89,177 89,177 Travel and entertainment 4,097 4,097 Office expenses 3,386 3,386 Start up costs 1,655 1,655 Promotion 377 377 License and permits 114 114 Miscellaneous 89 89 Rent 3,039 3,039 Options granted for services 99,000 99,000 Stock issued for legal services 10,000 10,000 Telephone 882 882 -------- ------ Total expenses 211,927 211,927 -------- ------- Loss from operations (210,780) (210,780) Other income and (expense) Interest income 45 45 Interest expense (300) (300) ----- ----- Total other income and (expense) (255) (255) ----- ----- Net loss $ (211,035) $(211,035) --------- ---------- Loss per share of common stock $ (0.51) $ (0.51) ------ ------ Weighted average of shares outstanding 414,908 414,908 ------- -------
The accompanying notes are an integral part of these financial statements F-3
ORGANIC SOILS.COM, INC. (A Development Stage Company) STATEMENT OF SHAREHOLDERS' EQUITY FOR THE YEAR ENDED DECEMBER 31, 2000 Deficit Accumulated During Paid in Development Shares Amount Capital Stage Total ------ ------ ------- ----- ----- February 104,700 $ 155 $ 24,675 $ 24,830 March 9,500 10 9,490 9,500 April 103,000 103 102,847 102,950 May 3,500 3 3,497 3,500 June 5,100 5 5,095 5,100 July 5,500 5 5,495 5,500 August 5,000 5 4,995 5,000 September 30,000 30 29,970 30,000 October 0 November 12,500 12 12,488 12,500 December 1,988,500 1,989 18,481 20,470 Net loss (211,035) (211,035) --------- --------- 2,267,300 $ 2,267 $ 217,033 $ (211,035 $ 8,315 --------- -------- ---------- ---------- ---------
The accompanying notes are an integral part of these financial statements F-4 ORGANIC SOILS.COM, INC. (A Development Stage Company) STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2000 Deficit Accumulated During Development Stage ----- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (211,035) (211,035) Adjustments to reconcile net income to net cash provided by operating activities Options for legal expenses 10,000 10,000 Options granted for services 99,000 99,000 Increase in current liabilities 10,261 10,261 ------ -------- NET CASH PROVIDED BY OPERATING ACTIVITIES (91,774) (91,774) INVESTING ACTIVITIES Money raising costs 17,950 17,950 ------ -------- NET CASH USED IN INVESTING ACTIVITIES 17,950 17,950 FINANCING ACTIVITIES Sale of common stock 110,350 110,350 ------- -------- NET CASH REALIZED FROM FINANCING ACTIVITIES 110,350 110,350 ------- -------- INCREASE ON CASH AND CASH EQUIVALENTS$ $ 626 $ 626 ------- -------- Supplemental disclosures to the statement of cash flows: Interest paid during the year $ 300 $ 300 -------- -------- The accompanying notes are an integral part of these financial statements F-5 ORGANIC SOILS.COM, INC. (A Development Stage Company) NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF THE BUSINESS - ORGANIC SOILS.COM, INC. was formed to perform marketing and distribution services. The Company was incorporated under the laws of the State of Nevada on January 19, 2000. DEVELOPMENT STAGE COMPANY - Although the Company had sales during the year, it is a development stage company, as defined in the Financial Accounting Standards Board No. 7. The Company is devoting substantially all of its present efforts in funding the company and attracting investors for major expansion. The only material sale was to one customer as more of a promotion sale. PERVASIVENESS OF ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS - For financial statement presentation purposes, the Company considers all short term investments with a maturity date of three months or less to be cash equivalents. EQUIPMENT- Equipment is recorded at cost. Maintenance and repairs are expensed as incurred; major renewals and betterments are capitalized. INCOME TAXES- Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the recorded book basis and tax basis of assets and liabilities for financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income and tax credits that are available to offset future federal income taxes. STOCK OPTIONS-Stock that is issued for services rendered are recorded at the fair value of the stock in the year that the stock is given and recorded as an expense in the same year. F-6 ORGANIC SOILS.COM, INC. (A Development Stage Company) NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 2 COMMON STOCK COMMON STOCK -During the period ended December 31, 2000, pursuant to an exemption under Rule 504 of Regulation D of the Securities Act of 1933, as amended (the Act), the Company sold solely to accredited and/or sophisticated investors, its common stock. Each share has a par value of $.001 and offered to the potential investors for $1.00 per share. There were fifty-nine different transactions to different investors raising a total of $107,300 during the year period ended December 31, 2000. The Company intends to sell 140,000 shares under this offering. FOUNDER'S STOCK-At it's organizational meeting, the Company voted to offer to the founders of the Company the opportunity to buy stock at the par value. As of December 31, 2000 2,050,000 shares were issued for the total amount of $2,050. One founder has yet to exercise the founder's shares as of December 31, 2000. NOTE 3 RELATED PARTY TRANSACTIONS On January 20, 2000 the Company entered into an agreement with one of the founders to provide services in locating investors for the Company. The contract calls for a total amount of $20,000 to be paid to the founder. As of the period ending December 31, 2000 there was a total of $15,200 was paid against the contract. Also, the founder was paid an additional amount of $1,680 for certain coping and other costs incurred on behalf of the Company. Various founders of the Company have performed consulting services for which the Company has paid them consulting fees as voted on during the organization meeting. For the period ending December 31, 2000 this amount paid to the founders amounted to $18,808. Services include clerical support, rent, office supplies legal services, etc. NOTE 4 INCOME TAXES The benefit for income taxes from operations consisted of the following components. Current tax benefit of $40,000 resulting from a net loss before income taxes, and deferred tax expense $40,000 resulting from the valuation allowance recorded against the deferred tax asset resulting from the net operating loss. The change in the valuation allowance for the F-7 ORGANIC SOILS.COM, INC. (A Development Stage Company) NOTES TO THE FINANCIAL STATEMENTS December 31, 2000 NOTE 4 INCOME TAXES (con't) period ending December 31, 2000 was $40,000 carryforward will expire 2020. The valuation allowance will be evaluated at the end of each year, considering positive and negative evidence about whether the asset will be realized. At the time the allowance will either be increased or reduced; Reduction could result in the complete elimination of the allowance if positive evidence indicates that the value of the deferred tax asset is no longer required. It is management's position that the deferred tax asset be recorded when there is positive evidence it will be realized. NOTE 5 STOCK OPTIONS On January 20, 2000 the Board of Directors voted to issue stock options to one individual. The options are to be exercised at a price of $.01 per share. There were a total of 100,000 options to be exercised. All options were exercised on April 4, 2000. The options were granted for services rendered. The financial statements request a compensation expense of $99,000 for the difference between the exercise price and the fair value of the options. NOTE 6 GOING CONCERN As of December 31, 2000, the Company had a net loss since inception, which raises substantial doubt about its ability to continue as a going concern. Management entered into an agreement with a company that is controlled by some of the founders of the Company to provide marketing and distribution services for the company's product which is humus soil. The Company's ability to continue as a going concern is dependent upon successful public offering and ultimately achieving profitable operations. There is no assurance that the Company will be successful in its efforts to raise additional proceeds or achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. F-8 ==================================== ========================= Until _____________, 2001, 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 No Minimum addition to the dealers' obligation to deliver a prospectus when acting as underwriters and $240,000 Maximum with respect to their unsold allotments or subscriptions. -------------------------------- Organic Soils.Com, Inc. No Minimum Shares 160,000 Shares Maximum Common Stock $.001 Par Value --------------------- PROSPECTUS --------------------- No dealer, salesperson or other person has been authorized to give any information or to make any representations other than those contained in this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by the _________ 2001 Company. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby to whom it is unlawful to make such offer in any jurisdiction. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create any implication that information contained herein is correct as of any time subsequent to the date hereof or that there has been no change in the affairs of the Company since such date. ==================================== PART II. INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS Our company's charter provides that, to the fullest extent that limitations on the liability of directors and officers are permitted by the Nevada Revised Statutes, no director or officer of the company shall have any liability to the company or its stockholders for monetary damages. The Nevada Revised Statutes provide that a corporation's charter may include a provision which restricts or limits the liability of its directors or officers to the corporation or its stockholders for money damages except: (1) to the extent that it is provided that the person actually received an improper benefit or profit in money, property or services, for the amount of the benefit or profit in money, property or services actually received, or (2) to the extent that a judgment or other final adjudication adverse to the person is entered in a proceeding based on a finding in the proceeding that the person's action, or failure to act, was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding. The company's charter and bylaws provide that the company shall indemnify and advance expenses to its currently acting and its former directors to the fullest extent permitted by the Nevada Revised Business Corporations Act and that the company shall indemnify and advance expenses to its officers to the same extent as its directors and to such further extent as is consistent with law. The charter and bylaws provide that we will indemnify our directors and officers and may indemnify our employees or agents to the fullest extent permitted by law against liabilities and expenses incurred in connection with litigation in which they may be involved because of their offices with DML. However, nothing in our charter or bylaws of the company protects or indemnifies a director, officer, employee or agent against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. To the extent that a director has been successful in defense of any proceeding, the Nevada Revised Statutes provide that he shall be indemnified against reasonable expenses incurred in connection therewith. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy and is, therefore, unenforceable. ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the expenses in connection with this Registration Statement. We will pay all expenses of the offering. All of such expenses are estimates, other than the filing fees payable to the Securities and Exchange Commission. Securities and Exchange Commission Filing Fee $ 100.00 Printing Fees and Expenses 500.00 Legal Fees and Expenses 11,000.00 Accounting Fees and Expenses 5,000.00 Blue Sky Fees and Expenses 2000.00 Trustee's and Registrar's Fees 1000.00 Miscellaneous 400.00 ----------- TOTAL $ 20,000.00 ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES Upon incorporation, seven founders were issued common stock. Ray L. Smith was issued 1,990,000 shares at $0.001, Richard L. Strahl was issued 20,000 shares at $0.001, William Seidel was issued 20,000 shares at $0.001, Robert Strahl was issued 100,000 shares at $0.001, Natalie Shahvaran was issued 10,000 shares at $0.001, Melissa DeAnzo was issued 10,000 shares at $0.001, and Peter R. Chernik was issued 10,000 shares at $0.001 per share for services. The issuances of these securities by the Company did not involve a public offering and were exempt from the registration provisions of the Securities Act of 1933, as amended, pursuant to section 4(2). The securities bear a restrictive legend permitting the transfer thereof only upon registration of the securities or an exemption under the Securities Act. On April 4, 2000, pursuant to the terms of an option, Robert A. Strahl acquired 100,000 shares of the Company's common stock for $0.001 per share. Under the terms of a private placement effectuated by the Company in reliance on Regulation D, Rule 504, 140,000 shares of common stock of the Company were sold to approximately 65 investors, and resulted in receipt by the Company of $140,000. These shares were sold to a total of sixty accredited and five unaccredited investors. The proceeds from this offering were used for working capital, legal, accounting and consulting fees. ITEM 27. EXHIBITS. Exhibits. SEC Ref. No. Title of Document Location 3(i) Articles of Incorporation Attached 3(ii) By-laws Attached 5 Legal Opinion included in Exhibit 23.1 Attached 10 Material Contract - Distribution/Marketing Agreement Attached 23.1 Consent of Peter R. Chernik Attached 23.2 Consent of Hawkins Accounting Attached 99 Subscription Agreement Attached ITEM 28. UNDERTAKINGS Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in this Registration Statement or otherwise, we have been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the us of expenses incurred or paid by a director, officer or controlling persons of DML in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned 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; (ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement; and (iii) Include any additional or changed material information on the plan of distribution. (2) For determining liability under the Securities Act, treat each post- effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide o ffering. (3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. SIGNATURES In accordance with the requirements of the Securities Act of 1933, Organic Soils.Com, Inc., certifies that it has reasonable ground to believe that it meets all of the requirements of filing on Form SB-2 and authorizes this Registration Statement to be signed on its behalf on ___________, 2001. Organic Soils.Com, Inc. By: /s/ Ray L. Smith President By: /s/ Richard L. Strahl Treasurer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following person in the capacity and on the dates indicated. POWER OF ATTORNEY Know all men by these presents, that each person whose signature appears below constitutes and appoints Ray L. Smith and Richard L. Strahl (with full power to each of them to act alone) as his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead in any and all capacities to sign any or all amendments or post-effective amendments to this Registration Statement, including registration statements filed or amendments made pursuant to Rule 462 under the Securities Act of 1933, as amended, and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, to sign any and all applications, registration statements, notices or other document necessary or advisable to comply with the applicable state securities laws, and to file the same, together with all other documents in connection therewith, with the appropriate state securities authorities, granting unto said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, thereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement or amendment has been signed below by the following persons in the capacities and on the dates indicated. Dated: _______________, 2001 __________________________ Ray L. Smith Director and President Dated: _______________, 2001 __________________________ Richard L. Strahl Director, Secretary & Treasurer Dated: _______________, 2001 __________________________ William S. Seidel Director EX-23 2 0002.txt ORGANIC SOILS.COM, INC., SB-2, INDPNDT AUDTR CNSNT HAWKINS ACCOUNTING CERTIFIED PUBLIC ACCOUNTANT 341 MAIN STREET SALINAS, CA.93901 (831) 759-2480 FAX (831) 759-2482 CONSENT OF THE INDEPENDENT AUDITOR As the independent auditor for Organic Soils.com, Inc., I hereby consent to the incorporation by reference in this Form SB2 Statement of my report, relating to the financial statements and financial statement schedules of Organic Soils.com, Inc. for the period from date of inception to December 31, 2000 included of Form SB2. The report is dated February 4, 2001. /s/ Hawkins Accounting EX-99 3 0003.txt ORGANIC SOILS.COM, INC., SB-2, SUBSN AGRMNT FRM ORGANIC SOIL.COM, INC. - COMMON STOCK SUBSCRIPTION AGREEMENT Investment I desire to purchase __________ shares of Organic Soils.Com, Inc at $1.50 per share for a total of $ __________. Make Checks Payable to: Organic Soils.Com, Inc. Subscriber Information: Please clearly print name(s) in which Shares are to be acquired. All correspondence will go to the Investor Residence Address Investor 1 (First, Middle I., Last): Investor 2 (First, Middle I. Last): FORM OF OWNERSHIP (HOW THE INVESTMENT SHOULD BE TITLED): INVESTOR RESIDENCE ADDRESS 1: - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ CHECK ONE OF THE FOLLOWING: ____ U.S. Citizen ____ Resident Alien ____ U.S. Citizen residing outside the U.S. ____Non-resident Alien INVESTOR RESIDENCE ADDRESS 2: - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- CHECK ONE OF THE FOLLOWING: ____ U.S. Citizen ____ Resident Alien ____ U.S. Citizen residing outside the U.S. ____Non-resident Alien Enter the taxpayer identification number. For most individual taxpayers, it is their Social Security Number. Note: If the purchase is in more than one name, the number should be that of the first person listed. For IRAs, Keoghs, and qualified plans, enter both the Social Security Number and the Taxpayer Identification Number for the plan. SOCIAL SECURITY NUMBER TAXPAYER IDENTIFICATION NUMBER (IF APPLICABLE) Investor No. 1 - ------------------- --------------------------------- Investor No. 2 - ------------------- ---------------------------------- Subscriber Signature: The undersigned has the authority to enter into this subscription agreement on behalf of the person(s) or entity registered above. By signing this subscription agreement, the undersigned acknowledges that he/she/it has read the Prospectus and understands the risks associated with this investment. Authorized Signature of Investor 1____________________Date:__________________ Authorized Signature of Investor 2____________________Date:__________________ Company's Acceptance (To be completed only by an authorized representative of the Company.) The foregoing subscription is accepted this ______ day of____________, _____ ---------------------------------------- Authorized Representative of the Company EX-3.(I) 4 0004.txt ORGANIC SOILS.COM, INC., SB-2, ARTCLS INC., [LOGO - SECRETARY OF STATE, STATE OF NEVADA] CORPORATE CHARTER I, DEAN HELLER, the duly elected and qualified Nevada Secretary of State, do hereby certify that ORGANIC SOILS.COM, INC. did on January 19, 2000 file in this office the original Articles of Incorporation; that said Articles are now on file and of record in the office of the Secretary of State of the State of Nevada, and further, that said Articles contain all the provisions required by the law of said State of Nevada. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Great Seal of State, at my office, in Carson City, Nevada, on January 19, 2000. /s/ Dean Heller Secretary of State By (signature) Certification Clerk [LOGO - THE GREAT SEAL OF THE STATE OF NEVADA] [LOGO - FILED #C1420-00JAN 19 2000] Articles of Incorporation of ORGANIC SOILS.COM, INC. FIRST. The name of the corporation is: ------ ORGANIC SOILS.COM, INC. SECOND. Its principle office in the State of Nevada is located ------- at 251 Jeanell Dr. Suite 3, Carson City, NV 89703, although this Corporation may maintain an office, or offices, in such other place within or without the state of Nevada as may from time to time be designated by the Board of Directors, or by the by-laws of said Corporation, and that this Corporation may conduct all Corporation business of every kind and nature, including the holding of all meetings of Directors and Stockholders, outside the State of Nevada as well as within the State of Nevada. THIRD. The objects for which this Corporation is formed are: ------ To engage in any lawful activity, including, butnot limited to the following: (A) Shall have such rights, privileges and powers as may be conferred upon corporations by any existing law (B) may at any time exercise such rights, privileges and powers, when not inconsistent with the purposes and objects for which this corporation is organized. (C) Shall have power to have succession by its corporate name for the period limited in its certificate or articles of incorporation, and when no period is limited, perpetually, or until dissolved and its affairs wound up according to law. (D) Shall have power to sue and be sued in any court of law or equity. (E) Shall have power to make contracts. (F) Shall have power to hold, purchase and convey real and personal estate and to mortgage or lease any such real and personal estate with its franchises. The power to hold real and personal estate shall include the power to take the same devise or bequest in the State of Nevada, or any other state, territory or country. (G) Shall have power to appoint such officers and agents as the affairs of the corporation shall require, and to allow them suitable compensation. (H) Shall have power to make by-laws not inconsistent with the constitution of the United States, or of the State of Nevada, for the management, regulation and government of its affairs and property, the transfer of its stock, the transaction of its business, and the calling and holding of meetings of its stockholders. (I) Shall have power to wind up and dissolve itself, or be wound up or dissolved. (J) Shall have power to adopt and use a common seal or stamp by the corporation on any corporate documents is not necessary. The corporation may use a seal or stamp, if it desires, but such non-use shall not in any way affect the legality of the document. (K) Shall have power to borrow money and contract debts when necessary for the transaction of its business or for the exercise of its corporate rights, privileges or franchises, or for any other lawful purpose of its incorporation; to issue bonds, promissory notes, bills of exchange, debentures, and other obligations and evidences of indebtedness, payable upon the happening of specified event or events, whether secured by mortgage, pledge, or otherwise, or unsecured, for money borrowed, or in payment for property purchased, or acquired, or for any other lawful object. (L) Shall have power to guarantee, purchase, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of the shares of the capital stock, or any bonds, securities or evidences of the indebtedness created by any other corporation or corporations of the State of Nevada, or any other state or government, and while owners of such stock, bonds, securities or evidences of indebtedness, to exercise all the rights, powers and privileges of ownership, including the right to vote, if any. (M) Shall have power to purchase, hold, sell and transfer shares of its own capital stock, and use therefor its capital, capital surplus, surplus, or other property or fund. (N) Shall have power to conduct business, have one or more offices, and hold, purchase, mortgage and convey real and personal property in the State of Nevada, and in any of the states, territories, possessions, and dependencies of the United States, the District of Columbia, and any foreign countries. (O) Shall have power to do all and everything necessary and proper for the accomplishment of the objects enumerated in its certificate or articles of incorporation, or any amendment thereof, or necessary or incidental to the protection and benefit of the corporation, and, in general, to carry on any lawful business necessary or incidental to the attainment of the objects of the corporation, or any amendment thereof. (P) Shall have the power to make donations for the public welfare or for charitable, scientific or educational purposes. (Q) Shall have the power to enter into partnerships, general or limited, or joint ventures, in connection with any lawful activities. FOURTH. That the voting common stock authorized that may be issued by ------- the corporation is FIFTY MILLION (50,000,000) shares of stock with a nominal or par value of .001 and no other class of stock shall be authorized. Said shares with a nominal or par value that may be issued by the corporation from time to time for such considerations as may be fixed from time to time by the Board of Directors. FIFTH. The governing body of the corporation shall be known as ------ directors, and the number of directors may from time to time be increased or decreased in such manner as shall be provided by the By-Laws of this Corporation, providing that the number of directors shall be reduced to no less than one (1). The name and post office address of the first board of Directors shall be one (1) in number and listed as follows: NAME POST OFFICE ADDRESS Michael D. Taylor 251 Jeanell Dr. Suite 3 Carson City, NV 89703 SIXTH. The capital stock, after the amount of the subscription price, ------ or par value, has been paid in, shall not be subject to assessment to pay the debts of the corporation. SEVENTH. The name and post office address of the incorporator(s) -------- signing the Articles of Incorporation is as follows: NAME ADDRESS Michael D. Taylor 251 Jeanell Dr. Suite 3 Carson City, NV 89703 EIGHTH. The resident agent for this corporation shall be: ------- CORPORATE ADVISORY SERVICE, INC. The address of said agent, and, the principle or statutory address of this corporation in the State of Nevada is. 251 Jeanell Dr. Suite 3 Carson City, NV 89703 NINTH. The corporation is to have perpetual existence. ------ TENTH. In furtherance and not in limitation of the powers conferred ------ by statute, the Board of Directors is expressly authorized: Subject to the By-Laws, if any, adopted by the stockholders, to make, alter or amend the By-Laws of the Corporation. To fix the amount to be reserved as working capital over and above its capital stock paid in; to authorize and cause to be executed, mortgages and liens upon the real and personal property of this corporation. By resolution passed by a majority of the whole Board, to consist of one (1) or more committees, each committee to consist of one or more directors of the corporation, which, to the extent provided in the resolution, or in the By-Laws of the Corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation. Such committee, or committees, shall have such name, or names, as may be stated in the By-Laws of the Corporation, or as may be determined from time to time by resolution adopted by the Board of Directors. When and as authorized by the affirmative vote of the Stockholders holding stock entitling them to exercise at least a majority of the voting power given at a Stockholders meeting called for the purpose, or when authorized by written consent of the holders of at least a majority of the voting stock issued and outstanding, the Board of Directors shall have power and authority at any meeting to sell, lease or exchange all of the property and assets of the Corporation, including its good will and its corporate franchises, upon such terms and conditions as its Board of Directors deems expedient and for the best interests of the Corporation. ELEVENTH. No shareholder shall be entitled as a matter of right to --------- subscribe for, or receive additional shares of any class of stock of the Corporation, whether now or hereafter authorized, or any bonds, debentures or securities convertible into stock may be issued or disposed of by the Board of Directors to such persons and on such terms as is in its discretion it shall deem advisable. TWELFTH. No director or officer of the Corporation shall be personally -------- liable to the Corporation or any of its stockholders for damages for breach of fiduciary duty as a director or officer involving any act of omission of any such director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director officer (i) for acts or omissions which involve intentional misconduct, fraud or a knowing violation of the law, or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statues. Any repeal or modification of this Article by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the Corporation for acts or omissions prior to such repeal or modification. THIRTEENTH. This Corporation reserves the right to amend, alter, ----------- change, in any manner now or hereafter prescribed by statute, or by the Articles of Incorporation, and all rights conferred upon Stockholders herein are granted subject to this reservation. I, THE UNDERSIGNED, being the Incorporator Herein before named for the purpose of forming a Corporation pursuant to the General Corporation Law of the State of Nevada, do make and file these Articles of Incorporation, hereby declaring and certifying that the facts herein are true, and accordingly have hereunto set my hand this 10th. day of January, 2000. /s/ Michael D. Taylor --------------------------- Michael D. Taylor STATE OF NEVADA ) ) SS: CARSON CITY ) On this 10th. day of January, 2000, in Carson City, Nevada, before me, the undersigned, a Notary Public in and for Carson City, State of Nevada, personally appeared: Michael D. Taylor Known to be the person whose name is subscribed to the foregoing document and acknowledged to me that he executed the same. /s/Deanna K. Kelly - --------------------- Notary Public [LOGO-Deanna K. Kelly Notary Public - Nevada] Corporate Advisory Service, Inc. does hereby accept as Resident Agent for the previously named Corporation. Corporate Advisory Service, Inc. /s/Michael D. Taylor /s/ 1/10/00 - ------------------------ ----- ----------------- By Michael D. Taylor, President Date EX-99 5 0005.txt ORGANIC SOILS.COM, INC., SB-2, DIST/MARKTNG AGMNT DISTRIBUTOR/MARKETING AGREEMENT This DISTRIBUTOR/MARKETING AGREEMENT ("Agreement") is made by and between APC Export, Inc. ("Company") and Organic Soils.Com, Inc. ("Distributor"), in consideration of the promises made herein and intending to be legally bound, agree as follows: ARTICLE 1. RECITALS Section 1.01. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada, with corporate power to own property and carry on its business as it is now being conducted. The Company has its principal office and place of business at 300 E. 54th Avenue, Anchorage, Alaska. Section 1.02. The Distributor is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, with corporate power to own property and carry on its business as contemplated by this Agreement. Distributor has its principal office and place of business at 300 E. 54th Avenue, Anchorage, Alaska. Section 1.03. The Company is engaged in the business of removal of humus soil, its export and sale, as well as other products incidental thereto. The Company also desires that the Distributor perform certain marketing and research and development services to promote the products of the Company. Section 1.04. The Distributor represents that it possesses the technical facilities and ability to promote the sale and use of products removed by the Company and is desirous of developing demand for and selling such products on an exclusive basis in the territory herinafter described. Section 1.05. The Distributor also represents that it possesses the technical facilities and ability to perform marketing and research and development services on behalf of the Company to promote the Company's products. Section 1.06. Company is desirous of having Distributor develop demand for and sell its products in such territory and perform certain marketing and research and development services, on behalf of the Company, on the terms and conditions set forth herein. DISTRIBUTOR/MARKETING AGREEMENT 1 ARTICLE 2. DISTRIBUTORSHIP/MARKETING Section 2.01. (a) The Company appoints the Distributor as the exclusive distributor for the sale of its products at wholesale in the continental United States, as well as Hawaii and Alaska ("Territory"). The Territory so described, and as may be subsequently enlarged, reduced, or otherwise changed in area with the mutual consent of the parties hereto. (b) During the continuance of this Agreement, the Company shall not appoint any other or different person, firm, or corporation to sell the same products in the Territory. Section 2.02. The Company reserves the right to sell, either directly or through its branches, any of its products to any of the following, the gross profit from the sales to be divided as hereinafter provided: (a) United States or any of its agencies, bureaus, commissions, or departments. (b) Any foreign government or any of its agencies, bureaus, commissions, or departments. Section 2.03. The Distributor accepts the appointment to develop demand for and to sell Company products within the Territory and will make all sales hereunder in accordance with this Agreement. Section 2.04. The Distributor also accepts its responsibility to perform certain marketing activity obligations, on behalf of the Company, that includes, upon direction of the Company, research and development service, for development and promotion of the Company's products, to wit: (a) to determine which products should be developed, (b) to determine what research, and to what extent, is required to validate any product, (c) to submit its budget requirements for Company approval for any proposal, (d) upon approval by the Company, to organize and initiate the research so approved, (e) to supervise the research so approved, (f) to consolidate all research data, (g) to analyze the research data in light of market feasibility for any proposed product, and (h) based upon the forgoing criteria, and any other relevant factors, to submit its recommendation to the Company concerning the Marketing strategy for any product, as well as its recommendation for additional research and development that it deems to be necessary or helpful to satisfactorily promote any product. Section 2.05. This Agreement shall continue in full force for the period of, three (3) years from the date of this Agreement and, unless either of the parties hereto has given to the other party written notice of its election DISTRIBUTOR/MARKETING AGREEMENT 2 to terminate this Agreement at least ninety (90) days prior to the end of any three (3) year period, thereafter for successive periods of three (3) years each. ARTICLE 3. OPERATIONS Section 3.01. (a) All orders the Company receives for its products from the Distributor are subject to acceptance by Company. (b) The Company will use its best efforts to fill the accepted orders as promptly as practicable, subject, however, to delays caused by Government orders or requirements, transportation conditions, labor or material shortages, strikes, riots, fires, or any other cause beyond the Company's control. In all cases, the Company will use its best efforts to advise the Distributor in advance of any inability to make full and timely delivery of any products which the Distributor has previously ordered. Section 3.02. (a) The Company shall pay the Distributor a five percent (5%) commission on the gross sales (less any return items) from the sale of its products to Distributor's customers. (b) The customer of the Distributor shall tender payment directly to the Company. The Company, in turn, shall pay the Distributor, within fifteen (15) days after receipt of payment from Distributor's customers, a commission of five (5%) percent on the gross sales (less any return items). Section 3.03. The Distributor will use his best efforts to promote demand for and sale of the Company's products and will maintain adequate facilities and sales and field personnel for this purpose. Section 3.04. The Distributor shall maintain a place of business, display room, and service department satisfactory to the Company at all times, and the Company shall have the right at all reasonable times during business hours to inspect the place of business, display room, and service department. Section 3.05. (a) The Distributor shall work and develop the Territory to the satisfaction of the Company, and in doing so shall appoint dealers, salesmen, or other representatives to sell the Company's products as needed. (b) The Distributor shall file with the Company a copy of each agreement entered into with such dealers, salesmen, or other representatives defining the Territory to be served, which agreements shall be on appropriate forms approved by the Company. DISTRIBUTOR/MARKETING AGREEMENT 3 (c) Upon expiration or prior termination of any such agreement for any cause, the Distributor shall furnish the Company with notice thereof in order that the Company's field personnel records will be up to date at all times. Section 3.06. (a) The Distributor shall provide and maintain at his own expense an efficient maintenance service on all of the Company's products installed in the Territory, in accordance with instructions issued from time to time by the Company. (b) The Distributor shall (1) see that all necessary replacements of Company's products are promptly and properly made; and (2) use every reasonable effort to maintain a standard of service consistent with policy of the Company. Section 3.07. The Distributor may charge to and collect from each customer to whom it sells the Company's products any freight charges paid or incurred by Distributor. Section 3.08. (a) Unless the Company shall have authorized or permitted the return of any products, the Company shall not be obligated to accept from the Distributor any products returned, nor to make any exchange thereof, nor to credit the Distributor therefor. (b) Except in the case of damage or defect attributable to the Company, the distributor shall not make any claim against the Company for damaged or defective product. Section 3.09. Whenever the Company shall deliver or cause to be delivered to a common carrier any products ordered by the Distributor, whether the particular carrier shall have been designated in the shipping or routing instructions of the Distributor or not, the Company shall not be responsible for any delays or damages in shipment and the common carrier, to which the Company shall deliver goods shipped to the Distributor, is declared to be the agent of the Distributor. Section 3.10. In order to enable the Company to have a complete record of all products sold, the Distributor shall furnish the Company weekly, or at such intervals as the Company and the Distributor shall otherwise agree, a report of all sales of the Company's products in the territory. Section 3.11. The Company reserves the right to change the design of any product thereof at any time without notice to the Distributor. If any such change is made, the Company may, but shall not be obligated to, make the change upon any products shipped thereafter on the orders of the Distributor, nor shall DISTRIBUTOR/MARKETING AGREEMENT 4 the Company be obligated to make a similar change on any products previously shipped to the Distributor. Section 3.12. Where the Company solicits business from the United States government, the Company will make the price quotation to the government on Company products on whatever basis it deems most advisable. Section 3.13. (a) Subject to the provisions of Subsection (b), the Distributor may use the name APC Export, Inc., or any other name or logo supplied by the Company, as applied to the Company's products in any sign or advertising during the continuance of this Agreement. (b) In case of termination of this Agreement, or upon request of the Company, the Distributor shall discontinue use of such name in any sign or advertising and thereafter shall not use the name directly or indirectly in connection with his business, nor use any other name, title, or expression so nearly resembling it as would be likely to lead to confusion or uncertainty or to deceive the public. Section 3.14. To be reimbursed for its marketing expenditures, including any research and development expenditures, that are incurred by Distributor, Distributor hereby acknowledges that it must first obtain the Company's approval for any and all such expenditures. In the event Distributor fails to obtain such approval from the Company, the Company may, but is not obligated to, reimburse the Distributor its marketing expenditures. However, in the event the Company accepts the benefits of any marketing services that are based upon certain marketing expenditures, the Company shall reimburse the Distributor those specific expenditures that are related to those marketing services rendered by Distributor to the Company. Section 3.15. As for any marketing services, including any research and development services, rendered to the Company by the Distributor, the Company shall pay reimburse the Distributor its total expenditures in the rendition of such services on behalf of the Company, plus an amount equal to twenty percent (20%) of such gross expenditures, as compensation for Distributor's overhead and profit. Section 3.16. Distributor further agrees that all files, records, documents, drawings, specifications, equipment, software, data, and similar items whether maintained in hard copy or on line relating to the such marketing and research and development services whether prepared by Distributor or others as described in Section 2.04., supra, including, without limitation, any matters incidental thereto, are and shall remain exclusively the property of the Company. DISTRIBUTOR/MARKETING AGREEMENT 5 Section 3.17. The Distributor shall have his books audited at least annually by a competent accountant or auditor and shall furnish a certified copy of such audit to the Company for its permanent record. In its sole discretion, the Company may waive this requirement, as long as the Company is satisfied that the Distributor's disclosure of its unaudited financial statements to the Company is adequate. ARTICLE 4. TERMINATION Section 4.01. In case that any disagreement of any nature shall arise between the members of the Distributor, or its officers or managers whereby the Company deems its interests may be imperiled, or threaten by the insolvency of the distributor, or in case an application is made to have the Distributor declared bankrupt, or in case a receiver or trustee is appointed for the Distributor, then the Company may at its option cancel this Agreement without any notice to the Distributor. Section 4.02. Either party may terminate this Agreement at any time without cause by giving the other party 120 days' written notice of termination. Section 4.03. In the event of termination, this Agreement shall remain applicable to any orders for products which the Distributor has previously placed and to any other orders which may be executed within ninety (90) days subsequent to the effective date of termination. Section 4.04. In the event of the termination of this Agreement by either party for any reason, the Company may at its option repurchase from Distributor at the net price paid by the Distributor to the Company, plus actual freight on the shipment thereof to the Distributor, any Company products on hand in the Distributor's place of business or in the possession of the Distributor. On demand and the tender of the repurchase price, the Distributor shall be obligated to deliver such products to the Company forthwith. The Company reserves the right, however, to reject any product not in first-class condition. Section 4.05. In case this Agreement shall be terminated for any reason, the Company shall thereupon at its option be subrogated immediately to any agreements, rights, and relations of the Distributor with dealers, salesmen, or other representatives appointed by the Distributor hereunder with regard to the sale of Company products, and all such agreements shall contain a clause to make this provision effective in favor of the Company when this Agreement shall be terminated. DISTRIBUTOR/MARKETING AGREEMENT 6 ARTICLE 5. INTERPRETATION AND ENFORCEMENT Section 5.01. Any notice, request, demand, or other communication required or permitted hereunder shall be deemed to be properly given when deposited in the United States mail, postage prepaid, or when deposited with a public telegraph company for transmittal, charges prepaid, addressed: (a) In the case of the Company, to APC Export, Inc., Attention: Richard L. Strahl, 300 East 54th Avenue, Suite 202, Anchorage, Alaska 99518-1230, or to such other person or address as the Company may from time to time furnish to the Distributor. (b) In the case of the Distributor, to Organic Soils.Com, Inc., Attention: William S. Seidel, 300 East 54th Avenue, Suite 202, Anchorage, Alaska, 99518-1230, or to such other person or address as the Distributor may from time to time furnish to the Company. Section 5.02. This Agreement does not constitute the Distributor as agent or legal representative of the Company for any purpose whatsoever. The Distributor is not granted any right or authority to assume or to create any obligation or responsibility, express or implied, in behalf of or in the name of the Company or to bind the Company in any manner. Section 5.03. This Agreement constitutes a personal contract and the Distributor shall not transfer or assign the Agreement or any part thereof without written consent of the Company. Section 5.04. The failure of either party at any time to require performance by the other party of any provision hereof shall not affect in any way the full right to require such performance at any time thereafter. Nor shall the waiver by either party of a breach of any provision hereof be taken or held to be a waiver of the provision itself. Section 5.05. If any legal action, including an action for declaratory relief, is brought to enforce or interpret the provisions of this agreement, the prevailing party will be entitled to reasonable attorneys' fees, which may be set by the court in the same action or in a separate action brought for that purpose, in addition to any other relief to which that party may be entitled. For the purpose, the parties agree that any such legal action shall be commenced and prosecuted in the City of Anchorage, State of Alaska. Section 5.06. This Agreement supersedes any and all agreements, either oral or written, between the parties with respect to this agreement and contains DISTRIBUTOR/MARKETING AGREEMENT 7 all the representations, covenants, and agreements between the parties with respect to the rendering of those services. Each party to this agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not contained in this agreement, and that no other agreement, statement, or promise not contained in this agreement will be valid or binding. Any modification of this agreement will be effective only if it is in writing signed by the party to be charged. Section 5.07. If any provision of this agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions will continue in full force and effect without being impaired or invalidated in any way. Section 5.08. The validity, interpretation, and performance of this Agreement shall be controlled by and construed under the laws of the State of Alaska. Executed on /s/ Jan. 24, 2000, at /s/ Monterey, CA. ----------------- ------------------------ APC EXPORT, INC. /s/ Richard L. Strahl -------------------------------- By: ORGANIC SOILS.COM, INC. /s/ -------------------------------- By: DISTRIBUTOR/MARKETING AGREEMENT 8 EX-3.(II) 6 0006.txt ORGANIC SOILS.COM, INC., SB-2, BYLAWS ORGANIC SOILS.COM, INC. ----------------------- By-Laws ------- ARTICLE I MEETINGS OF STOCKHOLDERS - ------------------------------------ 1. Stockholders meetings shall be held in the office of the Corporation, at Carson City, NV, or at such other place or places as the directors shall from time to time determine. 2. The annual meeting of the Stockholders of this Corporation shall be held at 11 A.M., on the 19th. day of January of each year beginning in 2001, at which time there shall be elected by the Stockholders of the Corporation a Board of Directors for the ensuing year, and the Stockholders shall transact such other business as shall properly come before them. 3. A notice setting out the time and place of such annual meeting shall be mailed postage prepaid to each of the Stockholders of record, at his address and as the same appears on the stock book of the company, or if no such address appears, at his last known place of business, at least ten (10) days prior to the annual meeting. 4. If a quorum is not present at the annual meeting, the Stockholders present, in person or by proxy, may adjourn to such future time as shall be agreed upon by them, and notice of such adjournment shall be mailed, postage prepaid, to each Stockholder of record at least ten (10) days before such date to which the meeting was adjourned; but if a quorum is present, they may adjourn from day to day as they see fit, and no notice of such adjournment need be given. 5. Special meetings of the Stockholders may be called at any time by the President; by all of the Directors provided there are no more than three, or if more than three, by any three Directors; or by the holder of a majority share of the capital stock of the Corporation. The Secretary shall send a notice of such called meeting to each Stockholder of record at least ten (10) days before such meeting, and such notice shall state the time and place of the meeting, and the object thereof. No business shall be transacted at a special meeting except 1 as stated in the notice to the Stockholders, unless by unanimous consent of all the Stockholders present, either in person or by proxy, all such stock being represented at the meeting. 6. A majority of the stock issued and outstanding, either in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of the Stockholders. 7. Each Stockholder shall be entitled to one vote for each share of stock in his own name on the books of the company, whether represented in person or by proxy. 8. All proxies shall be in writing and signed. 9. The following order of business shall be observed at all meetings of the Stockholders so far as is practicable: a. Call the roll; b. Reading, correcting, and approving of the minutes of the previous meeting c. Reports of Officers; d. Reports of Committees; e. Election of Directors; f. Unfinished business; and g. New business. ARTICLE II STOCK - ------------------ 1. Certificates of stock shall be in a form adopted by the Board of Directors and shall be signed by the President and Secretary of the Corporation. 2. All certificates shall be consecutively numbered; the name of the person owning the shares represented thereby, with the number of shares and the date of issue shall be entered on the company's books. 3. All certificates of stock transferred by endorsement theron shall be surrendered by cancellation and new certificates issued to the purchaser or assignee. 2 ARTICLE III DIRECTORS - ----------------------- 1. A Board of Directors, consisting of at least one (1) person shall be chosen annually by the Stockholders at their meeting to manage the affairs of the company. The Directors' term of office shall be one year, and Directors may be re-elected for successive annual terms. 2. Vacancies on the Board of Directors by reason of death, resignation or other causes shall be filled by the remaining Director or Directors choosing a Director or Directors to fill the unexpired term. 3. Regular meetings of the Board of Directors shall be held at 1 P.M., on the 19th. day of January of each year beginning in 2001 at the office of the company at Carson City, NV, or at such other time or place as the Board of Directors shall by resolution appoint; special meetings may be called by the President or any Director giving ten (10) days notice to each Director. Special meetings may also be called by execution of the appropriate waiver of notice and call when executed by a majority of the Directors of the company. A majority of the Directors shall constitute a quorum. 4. The Directors have the general management and control of the business and affairs of the company and shall exercise all the powers that may be exercised or performed by the Corporation, under the statutes, the Articles of Incorporation, and the By-Laws. Such management will be by equal vote of each member of the Board of Directors with each board member having an equal vote. 5. A resolution, in writing, signed by all or a majority of the members of the Board of Directors, shall constitute action by the Board of Directors to effect therein expressed, with the same force and effect as though such resolution has been passed at a duly convened meeting; and it shall be the duty of the secretary to record every such resolution in the Minute Book of the Corporation under its proper date. 3 ARTICLE IV OFFICERS - --------------------- 1. The officers of this company shall consist of: a President, one or more Vice President(s), Secretary, Treasurer, Resident Agent, and such other officers as shall, from time to time, be elected or appointed by the Board of Directors. 2. The PRESIDENT shall preside at all meetings of the Directors and the Stockholders and shall have general charge and control over the affairs of the Corporation subject to the Board of Directors. He shall sign or countersign all certificates, contracts and other instruments of the Corporation as authorized by the Board of Directors and shall perform all such other duties as are incident to his office or are required by him by the Board of Directors. 3. The VICE PRESIDENT shall exercise the functions of the President during the absence or disability of the President and shall have such powers and such duties as may be assigned to him from time to time by the Board of Directors. 4. The SECRETARY shall issue notices for all meetings as required by the By-Laws, shall keep a record of the minutes of the proceedings of the meetings of the Stockholders and Directors, shall have charge of the corporate books, and shall make such reports and perform such other duties as are incident to his office, or properly required of him by the Board of Directors. He shall be responsible that the corporation complies with Section 78.105 of the Nevada Corporation laws and supplies to the Nevada Resident Agent or Registered Office in Nevada, and maintain, any and all amendments or changes to the By-Laws of the Corporation. In compliance with Section 78.105, he will also supply to the Nevada Resident Agent or registered Office in Nevada, and maintain, a current statement setting out the name of the custodian of the stock ledger or duplicate stock ledger, and the present and complete Post Office address, including street and number, if any, where such stock ledger or duplicated stock ledger specified in the section is kept. 4 -----END PRIVACY-ENHANCED MESSAGE-----