As filed with the Securities and Exchange Commission on June 7, 1999
Registration No. _______________
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
AGE RESEARCH, INC.
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(Name of Small Business Issuer in its Charter)
Delaware 87-0419387
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
31103 Rancho Viejo Road, #2102, San Juan Capistrano, CA 92675
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (800) 597-1970
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Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
N/A N/A
--- ---
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $0.001 per share
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(Title of Class)
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AGE RESEARCH, INC
FORM 10-SB
TABLE OF CONTENTS
PART 1 Page
Item 1. Description of Business ..................................... 3
Item 2. Management's Discussion and Analysis or Plan of Operation ... 6
Item 3. Description of Property...................................... 8
Item 4. Security Ownership of Certain Beneficial Owners
and Management.............................................. 8
Item 5. Directors, Executive Officers, Promoters
and Control Persons......................................... 9
Item 6. Executive Compensation....................................... 9
Item 7. Certain Relationships and Related Transactions............... 11
Item 8. Description of Securities.................................... 11
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters................. 11
Item 2. Legal Proceedings............................................ 12
Item 3. Changes in and Disagreements with Accountants................ 12
Item 4. Recent Sales of Unregistered Securities...................... 12
Item 5. Indemnification of Directors and Officers.................... 12
PART F/S
Financial Statements......................................... 14
PART III
Item 1. Index to Exhibits............................................. 27
Item 2. Signatures.................................................... 27
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Corporate History
- -----------------
The Registrant was incorporated on July 10, 1984, under the name Mammon
Oil & Gas, Inc. ("Mammon"), in the state of Utah. On February 24, 1986,
Mammon's shareholders approved proposals to to change the business direction
of the Registrant to the business of health care including research,
development and marketing, and a name change to Volt Research, Inc.
Subsequent to the name change, the Registrant began investigating and
seeking out investments and acquisitions generally in the health care
industry, and specifically in the area of new concepts for the prevention and
treatment of aging skin. From August 1986 to August 1988, the Registrant
engaged in operating clinics dedicated to Retin-A skin therapy. In August
1988, management decided to concentrate on selling its expertise and products
directly to physicians, and the clinic operations were phased out.
In the latter half of 1987, the Registrant, in cooperation with Dr.
Albert Kligman, a leading dermatologist and the inventor of the Retin-A
(Tretinoin) treatment program, developed and tested a complete skin care
regimen designed to be used with Retin-A treatments. Since 1987, the
Registrant has directed its resources toward the development and marketing of
a comprehensive skin-renewal program called RejuvenAge for physicians wanting
to offer Retin-A therapy in their offices.
Current Business Activities
- ----------------------------
Since December 1987, the Registrant has marketed its RejuvenAge products
to physicians practicing skin therapy medical specialities. Management
believes that this market represents the group that is best qualified and most
interested in the RejuvenAge program.
The RejuvenAge products are non-prescription skin care products that do
not contain Retin-A or any other precription drug. However, they were
formulated to be used in conjunction with Retin-A.
The RejuvenAge products are designed to be used together in a simple
regimen of cleansing followed by either a night-time moisterizer (emollient)
or a day-time moisterizer with a sun-protection factor of 15. Special
formulations include a glycolic formula which produces skin exfoliation,
useful with sun-damaged skin, and a hydrocortizone formula which reduces
inflammation of minor skin irritations such as sunburn and bug bites.
In addition to the RejuvenAge products, the Registrant sells a
proprietary moisturizing shaving cream for sensitive or irritated beard
conditions called Bladium. The Bladium product helps relieve irritation due
to a condition known as razor bumps, or pseudofolliculitis-barbae.
The Registrant owns the formulations for both the RejuvenAge and Bladium
products. The products are manufactured by independent contractors.
Products
- --------
RejuvenAge Products
1. Moisture Rich Cleanser - a moisturizing, pH balanced cleanser
designed to cleanse dry, sensitive skin.
2. Moisture Rich Emollient (Regular) - a concentrated super skin
moisturizer designed to nourish and protect skin with an essential oil
depleted in the aging process, developed for excessively dry skin, or skin
exposed to low humidity conditions in travel and outdoor activities.
3. Moisture Rich Emollient (Glycolic) - regular moisturizer (above) with
glycolic acid to help produce skin exfoliation.
4. Moisture Rich Emollient (HC) - regular moisturizer (above) with
hydrocortizone to help reduce itching and rash associated with starting the
use of Retin-A.
5. Moisturizing Sunblock - light hand, face and body moisturizer with
SPF rating of 15 for sun protection.
Bladium Product
1. Moisturizing shave cream for sensitive or irritated beard conditions.
All of the products are all fragrance-free, non-comedogenic,
hypoallergenic, PH balanced, and dermatology tested.
Distribution of Products
- ------------------------
The Registrant markets its treatment program and products directly to
physicians and by mail order. Since the beginning of its direct marketing
program, the Registrant has concentrated its marketing to physicians
practicing in medical specialty areas such as dermatology. The RejuvenAge
treatment program is designed to complement and enhance a Retin-A treatment
program, and is intended to assist physicians in increasing patient base and
revenues from the resale of RejuvenAge skin care products.
Competition
- -----------
The Registrant competes with numerous companies marketing cosmetics
claiming to treat aging and sun-damaged skin. Most of these companies are
substantially larger and have significantly greater financial resources,
personnel and experience. By marketing directly to physicians, management
believes it has established a market niche which it hopes to expand.
Sources and Availability of Raw Materials
- -----------------------------------------
The Registrant owns the formulations of the products and uses various
independent contractors to manufacture the products to its specifications.
The Registrant has not experienced and does not anticipate any difficulty
sufficient quantities of products to meet its current and anticipated sales
objectives.
Dependence on One or a Few Major Customers
- ------------------------------------------
The Registrant does not depend on a few customers, but rather has a broad
customer base to whom it sells relatively small quantities of its products.
The loss of any one of these customers would not jeopardize the Registrant's
operations.
Trademarks
- ----------
The Registrant owns the U.S. Trademarks for RejuvenAge and Bladium, and
the U.K. Trademarks for RejuvenAge.
Government Regulation
- ---------------------
The Registrant is, and will continue to be, subject to numerous
government regulations by federal, state, and local government agencies which
are applicable to all businesses. Additionally, the Registrant may be
subjected to laws and regulations which are specifically designated for
businesses involved in the health care industry. The RejuvenAge products are
non-prescription skin care products that do not contain Retin-A or any other
ingredients classified by the U.S. Food and Drug Administration ("FDA")as
prescription drugs requiring specific approval under current FDA laws and
regulations.
Employees
- ---------
As of the date hereof, the Registrant does not have any employees and has
no plans for retaining employees until such time as the Registrant's business
warrants the expense, or until the Registrant successfully acquires or merges
with an operating business. The Registrant may find it necessary to
periodically hire part-time clerical help on an as-needed basis.
Facilities
- ----------
The Registrant currently leases an approximately 400 square foot
office/warehouse facility at 26411 Via De Anza, San Juan Capistrano,
California, for $234 per month on a month-to-month basis.
Year 2000 Computer Problem
- --------------------------
The Year 2000, or Y2K problem concerns potential failure of certain
computer software to correctly process information because of the software's
inability to calculate dates. The Registrant has no operations or current
equipment which might be affected by the Year 2000 computer glitch.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The Registrant is voluntarily filing its registration statement on Form
10SB in order to make information concerning itself more readily available to
the public.
Results of Operations
- ---------------------
General
- -------
Since December 1987, the Registrant has marketed its RejuvenAge products
to physicians practicing skin therapy medical specialities. The RejuvenAge
products are non-prescription skin care products that do not contain Retin-A
or any other precription drug. In addition to the RejuvenAge products, the
Registrant sells a proprietary moisturizing shaving cream for sensitive or
irritated beard conditions called Bladium.
The Registrant owns the formulations for both the RejuvenAge and Bladium
products. The products are manufactured by independent contractors. In order
to increase its profitability and reduce expenses, in fiscal 1998 the
Registrant reduced its office expenses to a minimum and eliminated its
advertising and salary expenses.
Year ended December 31, 1998
- ----------------------------
Revenues and Costs of Sales. For the fiscal year ended December 31,
1998, the Registrant had revenues of $17,457 with cost of sales of $3,765, or
approximately 22% of revenues, for a gross profit of $13,692, compared to the
prior year's revenues of $26,975 with cost of sales of 13,934, or
approximately 52% of revenues, for a gross profit of $13,041. Management
believes that the reduction in sales volume is due primarily to the reduction
in advertising. The concomitant reduction in operating expenses and the
decrease in cost of sales reflects the success of management's efforts to
reduce expenses and control costs by moving towards temporary employment on an
as needed basis.
General and Administrative Expense. Total operating expenses for 1998
were $17,578 compared to $23,104 for 1997, with substantial savings on rent
and office expenses. Legal and professional fees were for 1998 increased to
$8,800 from $2,300 in 1997, the only area where operating expenses increased
significantly, primarily due to the expenses associated with the preparation
of audited financial statements and legal expenses incurred in preparation for
the filing of this registration statement. The net loss from operations for
1998 was (7,988), after taking into account other income of $4,243,
compared to a net loss from operations for 1997 of $(22,087).
Liquidity and Capital Resources
- -------------------------------
Historically, the Registrant has financed its operations through a
combination of cash flow derived from operations and debt and equity
financing. At December 31, 1998, the Registrant had a working capital of
$(18,841) based on current assets of $12,248 consisting of cash ($2,916),
accounts receivable ($2,503), and inventory ($6,829), and current liabilities
of $31,089, consisting of accounts payable ($2,649) and accrued expenses
($28,440).
Based on its current marketing program and sales, it is clear that the
Company will have to increase its sales volume significantly in order to
continue operations. At this time, however, the Registrant does not have any
working capital to expand its marketing efforts.
The Registrant proposes to finance its needs for additional working
capital through some combination of debt and equity financing. Given its
current financial condition, it is unlikely that the Registrant could make a
public sale of securities or be able to borrow any significant sum from either
a commercial or private lender. The most likely method available to the
Registrant would be the private sale of its securities. There can be no
assurance that the Registrant will be able to obtain such additional funding
as needed, or that such funding, if available, can be obtained on terms
acceptable to the Registrant.
The Statements of Stockholders' Equity includes a figure for issuance of
stocks in fiscal 1997 of 2,300,000 shares. 1,050,000 of the shares shown as
issued in 1997 represent an adjustment to bring the unaudited prior years up
to the audit's reconciliation with the shareholder report at December 31,
1997. Apparently, certain shares were issued prior to December 31, 1996 which
were not previously reflected in the financial statements.
ITEM 3. DESCRIPTION OF PROPERTY
The information required by this Item 3 is not applicable to this Form
10SB due to the fact that the Registrant does not own or control any material
property.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables sets forth the number of shares of the Registrant's
Common Stock, par value $0.001, held by each person who is believed to be
the beneficial owner of 5% or more of the 63,944,251 shares of the
Registrant's common stock outstanding at December 31, 1998, based on the
Registrant's transfer agent's list, and the names and number of shares held by
each of the Registrant's officers and directors and by all officers and
directors as a group.
Title of Name and Address Amount and Nature of Percent
Class Of Beneficial Owner Beneficial Ownership of Class
- -------- ------------------- --------------------- --------
Common Mark A. Scharmann 5,069,400 Direct 7.93
1661 Lakeview Circle 3,200 Indirect(1) 0.01
Ogden, UT 84403
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Officers, Directors and Nominees
Common Richard F. Holt,
President/Director 3,064,543 Direct 4.79
1 Strawberry Lane 17,087,290 Indirect(2) 26.72
San Juan Capistrano,
CA 92675
Common Eldridge D. Huntington,
Vice President/Director 6,000,000 Direct 9.38
5314 Anaheim Road
Long Beach, CA 90815
Common Jean Armstrong,
Secretary/Treasurer
and Director 5,750,000 Direct 8.99
All Officers, Directors, and
Nominees as a Group (3 Persons) 14,814,543 Direct 23.16
17,087,290 Indirect 26.72
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______________________________
(1) Shares held of record by Troika Capital Investments, a company controlled
by Mark Scharmann
(2) 15,500,000 shares held of record by the Richard and Bonnie Holt Trust,
50,000 shares held of record by the Bonnie Holt Trust, and 1,537,290
shares held of record by the minor children of Richard and Bonnie Holt.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The names of the Registrant's executive officers and directors and the
positions held by each of them are set forth below:
Name Position
- ---- --------
Richard F. Holt President and Director
Eldridge D. Huntington Vice President and Director
Jean S. Armstrong Secretary/Treasurer and Director
The term of office of each director is one year and until his or her
successor is elected at the Registrant's annual shareholders' meeting and is
qualified, subject to removal by the shareholders. The term of office for
each officer is for one year and until a successor is elected at the annual
meeting of the board of directors and is qualified, subject to removal by the
board of directors.
Biographical Information
Set forth below is certain biographical information with respect to each
of the Registrant's officers and directors.
Richard F. Holt, age 58, has been president and director of the Company
since August 1995. In 1963, Mr. Holt graduated from Stanford University with
a Bachelor of Science degree. Mr. Holt earned an MBA from UCLA School of
Business in 1968. From 1969 to 1985, Mr. Holt was the CEO of Modulearn, Inc.,
and Micro General, Inc. From 1985 until 1995, when he became president of the
Company, Mr. Holt worked independently as an investor.
Eldredge D. Huntington, age 64, has been vice-president and a director of
the Company since 1990. Mr. Huntington earned an MPA from California State
University, and has completed coursework for a Ph.D From 1960 to 1990, Mr.
Huntington was Chief Information Officer at the Veterans Administration
Medical Center in Sepulveda, California. Since 1982, he has also been
teaching undergraduate and graduate courses as an adjunct professor at
California State University. In 1992, Mr. Huntington founded Functional
Analysis, a computer-based assessment and management decision-making training
organization.
Jean S. Armstrong, age 66, has been a vice president and a director of
the Company since 1990. Ms. Armstrong earned a Master's Degree in Psychology
from Antioch University. She spent over four years in the real estate
business in and around Los Angeles. Since 1989, Ms. Armstrong has been the
owner of her own interior design business serving the local community as well
as customers in the Bakersfield and Los Angeles areas.
ITEM 6. EXECUTIVE COMPENSATION
The Registrant has not had a bonus, profit sharing, or deferred
compensation plan for the benefit of its employees, officers or directors.
Except as noted below, the Registrant has not paid any salaries or other
compensation to its officers, directors or employees for the years ended
October 31, 1998, 1997 and 1996, nor at any time during 1998, 1997 or 1996.
Further, the Registrant has not entered into an employment agreement with any
of its officers, directors or any other persons and no such agreements are
anticipated in the immediate future. It is intended that the Registrant's
directors may be compensated for services provided to the Company. As of the
date hereof, no person has accrued any compensation from the Registrant.
The following tables set forth certain summary information concerning the
compensation paid or accrued for each of the Registrant's last three completed
fiscal years to the Registrant's or its principal subsidiaries chief executive
officer and each of its other executive officers that received compensation in
excess of $100,000 during such period (as determined at December 31, 1998, the
end of the Registrant's last completed fiscal year):
SUMMARY COMPENSATION TABLE
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
Other Restricted
Name and Annual Stock Options LTIP All other
Principal Position Year Salary Bonus($) Compensation Awards /SARs Payout Compensation
- ------------------ ---- ------ -------- ------------ ------ ------- ------ ------------
Richard F. Holt 1998 $ -0- -0- -0- -0- -0- -0- -0-
President 1997 $ -0- -0- -0- -0- -0- -0- -0-
1996 $ -0- -0- -0- -0- -0- -0- -0-
Options/SAR Grants in Last Fiscal Year
None.
Bonuses and Deferred Compensation
None.
Compensation Pursuant to Plans
None.
Pension Table
Not Applicable.
Other Compensation
None.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
At December 31, 1998, the Company had two 7.0% interest bearing notes
outstanding payable to Eldridge Huntington, the Company's Vice-president and a
director, and Jean Armstrong, the Company's Secretary/Treasurer and a
director, totalling $84,602. The notes are secured by the Company's assets,
and are due on demand.
At December 31, 1998, the Company had an 8.0% interest bearing note
outstanding payable to Richard Holt, the Company's President and a director,
totalling $12,000. The note is unsecured and is due on demand.
ITEM 8. DESCRIPTION OF SECURITIES
General
- -------
The Registrant is authorized to issue one hundred million shares of one
class of capital stock, consisting of 100,000,000 shares of common stock, par
value $0.001 per share (the "Common Stock"). There were 63,944,251 shares of
Common Stock issued and outstanding as of December 31, 1998.
The holders of Common Stock are entitled to one vote per share on each
matter submitted to a vote at any meeting of shareholders. Shares of Common
Stock do not carry cumulative voting rights and, therefore, a majority of the
shares of outstanding Common Stock will be able to elect the entire board of
directors and, if they do so, minority shareholders would not be able to elect
any persons to the board of directors. The Registrant's bylaws provide that a
majority of the issued and outstanding shares of the Registrant constitutes a
quorum for shareholders' meetings, except with respect to certain matters for
which a greater percentage quorum is required by statute or the bylaws.
Shareholders of the Registrant have no preemptive rights to acquire
additional shares of Common Stock or other securities. The Common Stock is
not subject to redemption, call or assessment, and carries no subscription or
conversion rights. In the event of liquidation of the Registrant, the shares
of Common Stock are entitled to share equally in corporate assets after
satisfaction of all liabilities.
Holders of Common Stock are entitled to receive such dividends as the
board of directors may from time to time declare out of funds legally
available for the payment of dividends. The Registrant seeks growth and
expansion of its business through the reinvestment of profits, if any, and
does not anticipate that it will pay dividends in the foreseeable future.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
The Registrant's common stock is not listed for publication of
quotations and, to the best of the Registrant's knowledge, its common stock
has not received a symbol from the NASD for publication of quotations.
Since its inception, the Registrant has not paid any dividends on its
Common Stock, and the Registrant does not anticipate that it will pay
dividends in the foreseeable future.
As of December 31, 1998, there were 63,944,251 shares of common stock
outstanding held by approximately 271 stockholders of record, as reported by
the Registrant's transfer agent.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings and no such
action by or against it, to the best of its knowledge, has been threatened.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Registrant has not changed nor had any disagreements with its
independent certified accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
In 1997, the Registrant issued 1,250,000 shares Common Stock in a private
placement to an accredited investor for cash, at $0.004 per share. No
underwriter or placement agent was used by the Company and no commissions were
paid. Securities issued in the foregoing transaction were issued in reliance
on the exemption from registration and the prospectus delivery requirements of
the Securities Act of 1933, as amended (the "Securities Act"), set forth in
Rule 506 of Regulation D and/or Section 4(2) thereof and the regulations
promulgated thereunder. The purchaser represented that he is an "accredited
investor" as that term is defined under Rule 501 of Regulation D of the
Securities Act. The purchaser was not an officer and/or director of the
issuer at the time of the issuance of the securities or currently holds such
positions with the issuer. Such purchaser was provided information regarding
the Company and its business and financial condition and met and/or was given
opportunity to ask questions of the Company's officers and directors. No
general advertising or solicitation was used in connection therewith.
In 1998, the Registrant issued 3,250,000 shares of Common Stock in a
private placement to an accredited investor for cash, at $0.0017 per share.
No underwriter or placement agent was used by the Company and no commissions
were paid. Securities issued in the foregoing transaction were issued in
reliance on the exemption from registration and the prospectus delivery
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
set forth in Rule 506 of Regulation D and/or Section 4(2) thereof and the
regulations promulgated thereunder. The purchaser represented that he is an
"accredited investor" as that term is defined under Rule 501 of Regulation D
of the Securities Act. The purchaser was not an officer and/or director of
the issuer at the time of the issuance of the securities or currently holds
such positions with the issuer. Such purchaser was provided information
regarding the Company and its business and financial condition and met and/or
was given opportunity to ask questions of the Company's officers and
directors. No general advertising or solicitation was used in connection
therewith.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware Corporation Law provides in relevant parts as
follows:
(1) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by or in the right of
the corporation) by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, conviction, or on
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(2) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending, or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the feet that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation unless and only
to the extent that the court in which such action or suit was brought shall
determine on application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
(3) To the extent that a director, officer, employee, or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit, or proceeding referred to in 1) or (2) of this subsection, or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection therewith.
(4) The indemnification provided by this section shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any bylaws, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to
a person who has ceased to be a director, officer, employee, or agent and
shall inure to the benefit of the heirs, executors, and administrators of such
a person.
The foregoing discussion of indemnification merely summarizes certain
aspects of indemnification provisions and is limited by reference to the above
discussed sections of the Delaware Corporation Law.
The Registrant's certificate of incorporation and bylaws provide that the
Registrant "may indemnify" to the full extent of its power to do so, all
directors, officers, employees, and/or agents. It is anticipated that the
Registrant will indemnify its officers and directors to the full extent
permitted by the above-quoted statute.
Insofar as indemnification by the Registrant for liabilities arising
under the Securities Act may be permitted to officers and directors of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant
is aware that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
PART F/S
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's financial statements for the fiscal years ended December
31, 1998, and 1997, have been examined to the extent indicated in their
reports by Harold Y. Spector, a corporation of certified public accountants,
and have been prepared in accordance with generally accepted accounting
principles and are attached hereto and incorporated herein by this reference.
Harold Y. Spector
Certified Public Accountant
80 SOUTH LAKE AVENUE, SUITE 723
PASADENA, CALIFORNIA 91101
INDEPENDENT AUDITOR'S REPORT
To the Broad of Directors and stockholders
of Age Research, Inc.
I have audited the accompanying balance sheet of Age Research, Inc.(a Delaware
Corporation), as of December 31, 1998 and 1997, and the related statements of
income and retained earnings, stockholders' equity and cash flows for the
years then ended. 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 audits.
I conducted my audits 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 disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audits have a reasonable basis for
my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Age Research, Inc. as of
December 31, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 9 to the
financial statements, the Company's significant operating losses, and deficits
in working capital and net worth raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Harold Y. Spector
Pasadena, CA
February 19, 1999
AGE RESEARCH, INC.
BALANCE SHEET
December 31, 1998 and 1997
ASSETS
1998 1997
----------- -----------
Current Assets
Cash $ 2,916 $ 2,014
Accounts Receivable 2,503 2,912
Inventory 6,829 7,270
----------- -----------
Total Current Assets 12,248 12,196
----------- -----------
Property and Equipment
Furniture and Fixtures 5,560 5,560
Machinery and Equipment 1,794 1,794
----------- -----------
7,354 7,354
Less: Accumulated Depreciation (6,700) (6,342)
----------- -----------
Total Property and Equipment 654 1,012
----------- -----------
TOTAL ASSETS $ 12,902 $ 13,208
=========== ===========
See accompanying notes and auditor's report
AGE RESEARCH, INC.
BALANCE SHEET
December 31, 1998 and 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
1998 1997
----------- -----------
Current Liabilities
Accounts Payable $ 2,649 $ 1,907
Accrued Expenses 28,440 21,800
----------- -----------
Total Current Liabilities 31,089 23,707
----------- -----------
Long-Term Liabilities
Due to Stockholders 96,602 102,602
----------- -----------
Total Liabilities 127,691 126,309
----------- -----------
Stockholders' Equity
Common stock, $.001 par value, 100,000,000
shares authorized and 63,944,251 shares
issued and outstanding in 1998 and
60,694,251 in 1997 63,944 60,694
Paid-in Capital 600,977 591,227
Less: Stocks Subscription Receivable (7,500) 0
Retained Earnings (Accumulated Deficits) (772,210) (765,022)
----------- -----------
Total Stockholders' Equity (Deficits) (114,789) (113,101)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,902 $ 13,208
----------- -----------
See accompanying notes and auditor's report
AGE RESEARCH, INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
For the years ended December 31, 1998 and 1997
1998 1997
------------- ----------------
SALES $ 17,457 $ 27,093
Less: Returns and Allowances - (118)
------------- ----------------
NET SALES 17,457 26,975
COST OF SALES - Schedule A 3,765 13,934
------------- ----------------
GROSS PROFIT 13,692 13,041
OPERATING EXPENSES - Schedule B 17,578 23,104
------------- ----------------
INCOME (LOSS) FROM OPERATIONS (3,886) (10,063)
------------- ----------------
OTHER INCOME (EXPENSES)
Interest Income 8 14
Other Income 4,243 -
Depreciation and Amortization (358) (358)
Interest Expenses (7,082) (7,362)
Penalties and Late Charges (113) (60)
Loss on Investments - (3,458)
------------- ----------------
Total Other Income (Expenses) (3,302) (11,224)
------------- ----------------
NET INCOME (LOSS) BEFORE TAXES (7,188) (21,287)
PROVISION FOR INCOME TAXES 800 800
------------- ----------------
NET INCOME (LOSS) (7,988) (22,087)
ACCUMULATED DEFICITS
Beginning Balance (765,022) (742,935)
Prior year adjustments 800 -
------------- ----------------
Ending Balance $ (772,210) $ (765,022)
============= ================
See accompanying notes and auditor's report
AGE RESEARCH, INC.
COSTS OF SALES
For the years ended December 31, 1998 and 1997
Schedule A
1998 1997
COSTS OF SALES ------------- ----------------
Beginning Inventory $ 7,270 $ 15,135
Purchases 2,862 4,053
Freight 462 2,016
------------- ----------------
10,594 21,204
Less: Ending Inventory (6,829) (7,270)
------------- ----------------
TOTAL COSTS OF SALES $ 3,765 $ 13,934
============= ================
See accompanying notes and auditor's report
AGE RESEARCH, INC.
OPERATING EXPENSES
For the years ended December 31, 1998 and 1997
Schedule B
1998 1997
OPERATING EXPENSES ------------- ----------------
Advertising $ - $ 1,013
Auto Expense - 200
Bad Debt 632 585
Bank Charges 650 1,276
Dues and Subscriptions 69 -
Insurance 1,615 2,149
Legal and Professional 8,800 2,300
Licenses/Taxes 70 695
Miscellaneous - 246
Office Expenses and Supplies 181 655
Outside Services 270 218
Postage 1,017 503
Rent 2,896 8,547
Repairs and Maintenance 304 330
Salaries - 1,607
Shareholder Expense 94 265
Taxes/Payroll - 104
Taxes/Property 41 -
Telephone 939 2,176
Utilities - 235
------------- ----------------
TOTAL OPERATING EXPENSES $ 17,578 $ 23,104
============= ================
See accompanying notes and auditor's report
AGE RESEARCH, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
For The Years Ended December 31, 1998 and 1997
Paid
Common in Accumulated
Shares Stock Capital Deficit Total
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1996 58,394,251 $ 58,394 $ 588,527 $ (742,935) $ (96,014)
Issuance of Stocks 2,300,000 2,300 2,700 5,000
Net Loss (22,087) (22,087)
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1997 60,694,251 $ 60,694 $ 591,227 $ (765,022) $ (113,101)
Prior year adjustment 800 800
------------ ------------ ------------ ------------ ------------
Adjusted Balance 60,694,251 $ 60,694 $ 591,227 $ (764,222) $ (112,301)
Issuance of Stocks 3,250,000 3,250 2,250 5,500
Net Loss (7,988) (7,988)
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1998 63,994,251 $ 63,994 $ 593,477 $ (772,210) $ (114,789)
============ ============ ============ ============ ============
See accompanying notes and auditor's report
AGE RESEARCH, INC.
STATEMENTS OF CASH FLOWS
For the years ended December 31, 1998 and 1997
1998 1997
------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (7,988) $ (22,087)
Adjustment to reconcile net income to
net cash provided by operating
activities
Depreciation 358 358
Prior year adjustment 800 -
(Increase) Decrease in:
Accounts Receivable 409 489
Inventory 441 7,865
Increase (Decrease) in:
Accounts Payable 742 651
Accrued Expenses 6,640 7,976
------------- ----------------
Net Cash Provided (Used) by Operating
Activities 1,402 (4,748)
------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in Partnership Loan Receivable - 1,858
------------- ----------------
Net Cash Provided by Investing
Activities - 1,858
------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments of Notes Payable (6,000) -
Proceeds from issuance of stocks 5,500 5,000
------------- ----------------
Net Cash Provided (Used) by Financing
Activities (500) 5,000
------------- ----------------
NET INCREASE (DECREASE)IN CASH 902 2,110
CASH AT BEGINNING OF YEAR 2,014 (96)
------------- ----------------
CASH AT END OF YEAR $ 2,916 $ 2,014
============= ================
SUPPLEMENTARY DISCLOSURES:
Cash paid for:
Interest paid $ 0 $ 0
============= ================
Income Tax Paid $ 800 $ 0
============= ================
Noncash investing and financing activities:
A stock subscription receivable of $7,500 was incurred for issuance of
stocks.
See accompanying notes and auditor's report
AGE RESEARCH, INC.
NOTES OF FINANCIAL STATEMENTS
For The Years Ended December 31, 1998 and 1997
NOTE 1 - GENERAL
Age Research, Inc. ("the Company"), fka Volt Research, Inc., was incorporated
under the laws of Utah on July 10, 1984. In April, 1987, the Company changed
its name to Age Research, Inc., and changed its state of domicile to Delaware.
Age Research, Inc. produces and sells a line of premium skin care products to
physicians and mail order. The Company has developed its own line of
dermatologist-formulated skin care products including moisturizers, cleaners,
sunscreens, and anti-aging emollients with glycolic acid. The products are
sold under the name of RejuvenAge, which is trademarked in U.S. and U.K., and
name of Bladium, which is trademarked in U.S.. The trademark in U.K. will be
expired in September, 2006.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company uses the accrual basis of accounting for financial and tax
reporting in accordance with generally accepted accounting principles.
Use of estimates
In preparing financial statements in conformity with GAAP, management is
required to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and revenues and expenses during the
reporting period. Actual results could differ from these estimates.
Revenue Recognition
Revenue from sales is recognized when the products are delivered and accepted
by the customers.
Accounts Receivable
The Company has not established an allowance for doubtful accounts and does
not use reserve method for recognizing bad debts. Bad debts are treated as
direct write-offs in the period management determines that collection is not
probable. Bad debt expense for years ended December 31, 1998 and 1997 was $632
and $585, respectively.
Inventories
Inventories consist of products already packaged and ready for shipments to
customers, and are stated at cost, using the first-in, first-out method.
Property and Equipment
Property and Equipment are stated at cost. Depreciation is computed over their
estimated useful lives using straight-line method for financial reporting, and
accelerated methods for tax reporting, therefore, temporary differences exist.
Expenditures for major renewals and betterment that extend the useful lives of
the assets are capitalized. Expenditures for maintenance and repairs are
charged to expense as incurred.
Depreciation expense was both $358 for years ended December 31, 1998 and 1997.
AGE RESEARCH, INC.
NOTES OF FINANCIAL STATEMENTS
For The Years Ended December 31, 1998 and 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Statement of Cash Flows
The Company prepares its statement of cash flows using the indirect method as
defined under Financial Accounting Standards Board Statement No. 95. For
purposes of the statements of cash flows, the Company considers all highly
liquid investments with a maturity of three months or less to be cash
equivalents.
Income Taxes
The Company accounts income taxes in accordance with Financial Accounting
standards Board Statement No. 109.
Reclassification
Certain reclassification have been made to the 1997 financial statements to
conform with the 1998 financial statement presentation. Such reclassification
had no effect on net loss as previously reported.
NOTE 3 - SUBSIDIARY
The Company has a wholly-owned subsidiary, Evergreen Skin Care Centers of
America, Inc. which is inactive with no assets and liabilities, and has no
activity either in 1998 or 1997.
NOTE 4 - A LIMITED PARTNERSHIP
The Company is the general partner of a limited partnership named as
RejuvanAge Spa Treatments Glen Ivy/Age Research Santa Monica Cart. The
partnership was terminated under mutual consent of the partners on December
31, 1994. In 1997, the Company wrote-off the loan receivable from the
partnership of $1,858, and included an accrual of $1,600 of the Partnership's
state franchise tax. The Company reversed this accrual in 1998.
NOTE 5 - LONG-TERM DEBTS
Long-term debts consisted of the following at December 31, 1998 and 1997:
1998 1997
a.) 7.0% note payable to related party, ------------ ------------
secured by the Company's assets,
due on demand $ 84,602 $ 84,602
b.) 8.0% note payable to stockholder,
unsecured, due on demand 12,000 18,000
------------ ------------
96,602 102,602
Less current portion 0 0
------------ ------------
$ 96,602 $ 102,602
============ ============
AGE RESEARCH, INC.
NOTES OF FINANCIAL STATEMENTS
For The Years Ended December 31, 1998 and 1997
NOTE 6 - INCOME TAXES
Provision for income tax consisted of $800 minimum state franchise tax.
The Company has federal net operating losses carryforward of $682,574 to
reduce future taxable income. To the extent not utilized, the loss
carryforwards will begin to expire in 2001. Additionally, the Company has
state net operating losses to carryforward which expire as follows:
Expiring in Amount
----------- --------
1998 $ 5,303
1999 39,345
2000 34,078
2001 21,691
2002 8,416
--------
$108,833
========
NOTE 7 - LEASES
The Company leases a warehouse facility for $234 per month on a month-to-month
basis. Rent expense for 1998 and 1997 was $2,896 and $8,547, respectively.
NOTE 8 - PRIOR YEAR ADJUSTMENT
An overstatement of 1997 reported Accrued Expenses was discovered during 1998.
Correction of this error resulted in an increase of previously reported
Retained Earnings for year ended December 31, 1997 amounting to $800. This
error has no effect on year of 1998.
NOTE 9 - GOING CONCERN
The accompanying financial statements are presented on the basis that the
Company is going concerns. Going concern contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business
over a reasonable length of time. As shown in the accompanying financial
statements, the Company incurred net losses of $9,588 and $22,087 in 1998 and
1997, respectively, and as of December 31, 1998, the Company had a working
capital deficiency of $20,441 and a negative net worth of $116,389.
Management is currently involved in active negotiations to obtain additional
financing and actively increasing marketing efforts to increase revenues. The
Company continued existence depends on its ability to meet its financing
requirements and the success of its future operations. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
NOTE 10 - YEAR 2000
The Company believes that it has identified each of its computer systems that
will require modifications to enable it to perform satisfactorily on and after
January 1, 2000. The financial impact of making such modifications to the
AGE RESEARCH, INC.
NOTES OF FINANCIAL STATEMENTS
For The Years Ended December 31, 1998 and 1997
NOTE 10 - YEAR 2000 (Continued)
Company's systems is not expected to be material to the Company's financial
position or results of operations. In addition, the Company is currently
corresponding with vendors that provide products and systems to the Company in
order to determine if such products and systems will be required to be
upgraded or replaced. Although management believes the Company has an adequate
program in place to address the year 2000 issue, the costs of upgrades to, or
replacements of, its purchased products or systems has not been determined and
there can be no assurance that the program will ultimately be successful.
PART III
ITEM 1. INDEX TO EXHIBITS
Copies of the following documents are included as exhibits to this Form
10SB pursuant to Item 601 of Regulation SB.
SEC
Exhibit Reference
No. No. Title of Document
- ------- --------- -----------------
1 3(i) Articles of Incorporation of the Registrant and related
Amendments
2 3(ii) Bylaws of the Registrant
3 4.01 Specimen Stock Certificate
4 27 Financial Data Schedule
ITEM 2. SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Age Research, Inc.
[Registrant]
Dated: June 4, 1999 By:/S/Richard F. Holt, President