-----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, MHw3UyHLVL3P8goHgPitn4+JZjHT1fh560jS3jt0dPFLvjML1woNRiq3JKWGG5jB QykoLpM4kWYE/h2yAgNFYg== 0001127855-02-000391.txt : 20020819 0001127855-02-000391.hdr.sgml : 20020819 20020819124735 ACCESSION NUMBER: 0001127855-02-000391 CONFORMED SUBMISSION TYPE: SB-1 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20020819 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RUB A DUB SOAP INC CENTRAL INDEX KEY: 0001169138 IRS NUMBER: 841609495 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SB-1 SEC ACT: 1933 Act SEC FILE NUMBER: 333-98315 FILM NUMBER: 02742179 BUSINESS ADDRESS: STREET 1: 13279 W OHIO AVE CITY: LAKEWOOD STATE: CO ZIP: 80228 BUSINESS PHONE: 303-949-5834 SB-1 1 rubadubsb2.txt RUB A DUB SOAP SB-1 As filed with the Securities and Exchange Commission on August 19, 2002 Registration No. 333- ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM SB-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------ RUB A DUB SOAP, INC. ---------------------------------------------- (Name of small business issuer in its charter) Colorado 2840 84-1609495 - ------------------------------ ----------------------------- ------------- (State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.) ------------------ 13279 West Ohio Avenue Lakewood, Colorado 80228; (303) 949-5834 ------------------------------------------------------------- (Address and telephone number of principal executive offices) 13279 West Ohio Avenue Lakewood, Colorado 80228 ------------------------------------------------------------------------------- (Address of principal place of business or intended principal place of business) Ms. Lisa R. Powell 13279 West Ohio Avenue Lakewood, Colorado 80228; (303) 949-5834 --------------------------------------------------------- (Name, address and telephone number of agent for service) Please send copies of all correspondence to: PATRICIA CUDD, ESQ. Cudd & Associates 12441 West 49th Avenue, Suite #1-A Wheat Ridge, Colorado 80033 Telephone: (303) 861-7273 Approximate date of proposed sale to the public: As soon as practicable after the Registration Statement becomes effective. 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 this Form is a post-effective amendment filed pursuant to Rule 462(d) 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, check the following box. [ ]
CALCULATION OF REGISTRATION FEE =========================================================================================== Proposed Proposed Title of Each Dollar Maximum Maximum Amount of Class of Securities Amount to Offering Price Aggregate Registration to Be Registered Be Registered Per Share* Offering Price* Fee - ------------------------- ------------- -------------- --------------- ------------ Common Stock, $.001 par value $200,000 $.25 $200,000 $18.40 TOTAL $200,000 $18.40 *Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o).
The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. 2 PART I - Narrative Information Required in Prospectus Item 2. Significant Parties. - ---------------------------- List the full names and business and residential addresses, as applicable, for the following persons: (1) The issuer's directors: Lisa R. Powell Residence/Business Address: 13279 West Ohio Avenue Lakewood, Colorado 80228 (2) The issuer's officers: Lisa R. Powell, President, Residence/Business Address: Secretary and Treasurer 13279 West Ohio Avenue Lakewood, Colorado 80228 (3) The issuer's general partners: The issuer is a corporation and, accordingly, has no general partners. (4) Record owners of 5 per cent or more of any class of the issuer's equity securities: The following individual, whose address is set forth in Items 1.(a) and (b) above, is the owner of record of five per cent or more of the outstanding shares of common stock of Rub A Dub Soap, Inc. Shares Owned Per Cent of Class Name of Record Owner of Record* Before Offering - -------------------- -------------- --------------------- Lisa R. Powell 3,000,000 83.7% - ------------------ *Based upon 3,583,000 shares of our common stock issued and outstanding as of the date of this prospectus. (5) Beneficial owners of 5 per cent or more of any class of the issuer's equity securities: See the response to Item 2.,(4) above. (6) Promoters of the issuer: Ms. Lisa R. Powell may be deemed to be a "promoter" of Rub A Dub Soap, as that term is defined in the Securities Act of 1933. (7) Affiliates of the issuer: Ms. Lisa R. Powell is an affiliate of Rub A Dub Soap. (8) Counsel to the issuer with respect to the proposed offering: Patricia Cudd, Esq. Cudd & Associates 12441 West 49th Avenue, Suite #1-A Wheat Ridge, Colorado 80033 (9) Each underwriter with respect to the proposed offering: Not applicable. There is no underwriter(s) with respect to the proposed offering. (10) The underwriter's directors: Not applicable. (11) The underwriter's officers: Not applicable. (12) The underwriter's general partners: Not applicable. (13) Counsel to the underwriter: Not applicable. Item 3. Relationship with Issuer of Experts Named in Offering Statement. - ------------------------------------------------------------------------ Patricia Cudd, Esq., record and beneficial owner of 135,000 shares, representing approximately 3.8% of the outstanding shares, of our common stock, is the sole proprietor of Cudd & Associates, the law firm that has acted as our legal counsel in connection with this proposed offering. We have no parents or subsidiaries. Item 4. Selling Security Holders. - --------------------------------- Not applicable. None of our shareholders is offering any shares of common stock in the offering. 2 Item 5. Changes in and Disagreements with Accountants. - ------------------------------------------------------ Not applicable. We had no independent accountant prior to the retention of Comiskey & Company, P.C., 789 Sherman Street, Suite #440, Denver, Colorado 80203, in May 2002. There has been no change in our independent accountant during the period commencing with the retention of Comiskey & Company, P.C., through the date of this report. Item 6. Disclosure of Commission Position on Indemnification for Securities Act - -------------------------------------------------------------------------------- Liabilities. ------------ Under Colorado law and pursuant to our Articles of Incorporation, we may indemnify our officers and directors for various expenses and damages resulting from their acting in these capacities. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our officers or directors pursuant to those provisions, we have been informed by our counsel that, in the opinion of the U.S. Securities and Exchange Commission, the indemnification is against public policy as expressed in the Securities Act of 1933, and is therefore unenforceable. 3 Rub A Dub Soap, Inc. - -------------------------------------------------------------------------------- (Exact name of Company as set forth in Charter) Type of securities offered: Shares of common stock, $.001 par value per share ------------------------------------------------- Maximum number of securities offered: 800,000 shares of common stock ------------------------------ Minimum number of securities offered: 100,000 shares of common stock ------------------------------ Price per security: $.25 per share -------------- Total proceeds: If maximum sold: $200,000 If minimum sold: $25,000 -------- ------- (See Questions 9 and 10) Is a commissioned selling agent selling the securities in this offering? [ ] Yes [X] No If yes, what per cent is commission of price to public? -0-% Not applicable. Is there other compensation to selling agent(s)? [ ] Yes [X] No Not applicable Is there a finder's fee or similar payment to any person? [ ] Yes [X] No (See Question No. 22) Is there an escrow of proceeds until minimum is obtained? [ ] Yes [X] No (See Question No. 26) Is this offering limited to members of a special group, such as employees of the Company or individuals? [ ] Yes [X] No (See Question No. 25) Is transfer of the securities restricted? [ ] Yes [X] No (See Question No. 25) INVESTMENT IN SMALL BUSINESSES INVOLVES A HIGH DEGREE OF RISK, AND INVESTORS SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. SEE QUESTION NO. 2 FOR THE RISK FACTORS THAT MANAGEMENT BELIEVES PRESENT THE MOST SUBSTANTIAL RISKS TO AN INVESTOR IN THIS OFFERING. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED OR APPROVED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THESE AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. 4 THE U.S. SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY PROSPECTUS OR SELLING LITERATURE. This Company: [ ] Has never conducted operations. [X] Is in the development stage. [X] Is currently conducting operations. [ ] Has shown a profit in the last fiscal year. [ ] Other (Specify): (Check at least one, as appropriate) This offering has been registered for offer and sale in the following states: None. State State File No. Effective Date ----- -------------- -------------- Colorado -------- -------------- -------------- -------- -------------- -------------- -------- -------------- -------------- 5 TABLE OF CONTENTS Page The Company 8 Risk Factors 8 Business and Properties 18 Offering Price Factors 33 Use of Proceeds 37 Capitalization 40 Description of Securities 41 Plan of Distribution 43 Dividends, Distributions and Redemptions 45 Officers and Key Personnel of the Company 45 Directors of the Company 46 Principal Stockholders 48 Management Relationships, Transactions and Remuneration 49 Litigation 52 Federal Tax Aspects 52 Miscellaneous Factors 52 Financial Statements 53 Management's Discussion and Analysis of Certain Relevant Factors 53 THIS PROSPECTUS CONTAINS ALL OF THE REPRESENTATIONS BY THE COMPANY CONCERNING THIS OFFERING, AND NO PERSON SHALL MAKE DIFFERENT OR BROADER STATEMENTS THAN THOSE CONTAINED HEREIN. INVESTORS ARE CAUTIONED NOT TO RELY UPON ANY INFORMATION NOT EXPRESSLY SET FORTH IN THIS PROSPECTUS. 6 This Prospectus, together with Financial Statements and other Attachments, consists of a total 67 pages. 7 THE COMPANY 1. Exact corporate name: Rub A Dub Soap, Inc. State and date of incorporation: Colorado; September 28, 2001. Street address of principal office: 13279 West Ohio Avenue, Lakewood, Colorado 80228. Company telephone number: (303) 949-5834. Company e-mail address: service@rubadubsoaps.com Fiscal year: December 31. Person(s) to contact at Company with respect to offering: Ms. Lisa R. Powell. Telephone number (if different from above): Not applicable. Same as above. RISK FACTORS 2. List in the order of importance the factors that the Company considers to be the most substantial risks to an investor in this offering in view of all facts and circumstances or that otherwise make the offering one of high risk or speculative (i.e., those factors that constitute the greatest threat that the investment will be lost in whole or in part, or not provide an adequate return). Risk Factors Related to Our Business - ------------------------------------ We are a development-stage company with limited prior business operations --------------------------------------------------------------------------- and we may not be able to establish ourselves as a going concern. We are an - --------------------------------------------------------------------- online retailer of handmade, natural, herbal soaps and gift baskets in the early development stage. The likelihood of our success must be considered in light of our stage of development. We have only limited operating history on which you can base an evaluation of our business and prospects. Our efforts, since inception, have been allocated primarily to the following: o Organizational activities; o Developing a business plan; o Obtaining interim funding; o Increasing our inventory of natural, vegetable-based soaps and gift baskets; and o Establishing and enhancing our web site on the Internet. 8 In order to establish ourselves as a significant competitor in the retail market for natural products, we are dependent upon the anticipated proceeds of this offering, the receipt of additional funds from other sources to continue business operations and/or the achievement of profitable operations. You should be aware of the increased risks, uncertainties, difficulties and expenses we face as an online retailer with limited operating history in a new and rapidly evolving market. If we are unable to raise additional funds or achieve profitability or if we encounter unexpected difficulties and expenses, then our business strategy may not be successful. We have realized very limited revenues and no earnings, and we may not be --------------------------------------------------------------------------- able to achieve profitable operations in the future. We only began selling - -------------------------------------------------------- handmade, natural, herbal soaps and gift baskets online in January 2002 and have yet to realize meaningful revenues. We realized revenues of $971, and a net loss of $(93,848), for the period from inception (September 28, 2001) to May 31, 2002. We may not be able to achieve profitable operations in the future from the online sale of handmade, natural soaps and gift baskets and, if sufficient demand exists, other natural products such as soap molds and soap making equipment. Our ability to increase the level of our revenues will be dependent on a number of factors, including the following: o Our ability to keep our web site operational; o Our ability to expand our inventory of soaps and gift baskets and, if demand warrants, develop an inventory of other natural products; o The success of brand building and marketing campaigns, including our test marketing trial with Stacy's Hallmark in Denver, Colorado; o The continued increase in the use of the Internet and the growth of electronic commerce; o Consumer confidence in the security of transactions on our web site; o Our ability to upgrade and develop our systems and infrastructure to accommodate growth; o The availability and reasonable cost of advertising in traditional media and on other web sites; and o Favorable general economic conditions specific to the Internet and electronic commerce industries. Our success in the business of selling handmade, vegetable-based soaps is dependent upon our achieving profitable operations or obtaining additional financing to enable us to fully implement our business plan. If we are unable to obtain additional debt and/or equity financing from this or other securities offerings or otherwise, then we will not be able to continue as a going concern unless we realize meaningful revenues. During the development stage of our operations, the revenues generated from operations can be expected to be insufficient to cover expenses. 9 We expect significant increases in our costs and expenses to result in a --------------------------------------------------------------------------- loss for at least the next year. We cannot be certain that we will obtain enough - -------------------------------- customer traffic on our web site or a high enough volume of purchases online and/or from wholesale customers, trade shows and/or individually-hosted parties to generate sufficient revenues and achieve profitability. We intend to increase our costs and expenses substantially as we: o Purchase manufacturing and office equipment and soap ingredients; o Increase our sales and marketing activities online; to prospective wholesale customers; and via trade shows and direct sales from individually-hosted parties; o Increase our general and administrative functions to support our growing operations; o Increase our inventory to include other types of soaps and gift baskets; o Expand our product line to include other natural products such as soap molds and soap making equipment; and o Further develop our Internet web site. We may find that these efforts will be more expensive than we currently anticipate or that these efforts may not result in proportional increases in our revenues, which would further increase our losses. Accordingly, we believe that we may incur an operating and net loss for at least the next year, and possibly longer, and that the rate at which we incur these losses may increase. We have limited assets and working capital and minimal shareholders' equity --------------------------------------------------------------------------- and, if our financial condition does not improve, we will cease operations and - -------------------------------------------------------------------------------- our shareholders will lose their entire investment. As of May 31, 2002, we had - ---------------------------------------------------- total assets of $27,793, including $15,722 in cash and cash equivalents, $1,787 in inventory, accounts receivable of $95 and furniture and equipment (less accumulated depreciation) of $10,189. Our working capital and total stockholders' equity as of May 31, 2002, were $15,978 and $25,802, respectively. Accordingly, we have only very limited assets, including working capital, and financial resources. Ms. Lisa R. Powell, our sole executive officer and director and principal shareholder, received 3,000,000 shares of our common stock in exchange for consideration valued at $3,050. In addition, we issued 370,000 shares of common stock to three shareholders for $370 in cash and an additional 213,000 shares of common stock to twenty shareholders for $42,600 in cash. After this offering, which, if completed, will yield net proceeds of a minimum of $19,300 and a maximum of $194,300, our working capital may be dissipated by current liabilities. Our financial condition may not improve. We believe that the proceeds of this offering, together with revenues from operations, will be sufficient to implement our business plan on a limited scale over the next year. However, we do not expect to continue in operation, without an infusion of capital, after the expiration of one year from the closing of this offering. In order to obtain additional equity financing, we may be required to dilute the interest of existing shareholders or forego a substantial interest in our revenues, if any. See "Certain Transactions" for a more detailed description of our capitalization and financial condition. 10 Because we will need to raise additional funds and these funds may not be --------------------------------------------------------------------------- available to us when we need them, we may need to change our business plan, sell - -------------------------------------------------------------------------------- or merge our business or face bankruptcy. Based on our current projections, we - ----------------------------------------- will need to raise funds after the expiration of one year from the closing of this offering through the issuance of equity, equity-related or debt securities in addition to the funds we are raising in this offering. We will need to raise additional capital sooner than one year after the closing of this offering if we are unable to sell at least the minimum number of shares of common stock being offered or if we receive the minimum proceeds and our sales are lower than expected. Additional capital may not be available to us on favorable terms when required, or at all. If this additional financing is not available to us, we may need to dramatically change our business plan, sell or merge our business or face bankruptcy. In addition, our issuance of equity or equity-related securities will dilute the ownership interest of existing shareholders and our issuance of debt securities could increase the risk or perceived risk of our company. Any of these actions could cause our stock price to fall. Apart from our requirements for capital in addition to the anticipated proceeds of this offering, prospective investors should be aware of the possibility that we will not raise any funds in this offering. The use of our soaps and/or other natural products by purchasers may --------------------------------------------------------------------------- subject us to substantial liability and the $1,000,000 limit of our product - -------------------------------------------------------------------------------- liability insurance policy may not be enough to insulate us from liability. We - ---------------------------------------------------------------------------- may be subject to substantial liability for loss, damages or injury to purchasers caused by the use of our handmade, natural, herbal soaps and/or other natural products that we may market in the future, on or in the human body. Currently, the limit of our insurance policy covering product liability claims is $1,000,000. No proceeds of this offering have been allocated to purchase any additional product liability insurance coverage. If any product liability claims were to be filed and were to be successful, we may not have adequate insurance coverage or sufficient resources to pay those claims. If we paid any claims from our working capital, our liquidity and future results of operations would be adversely affected. We have no current plans to increase the limits of our product liability insurance policy. In any event, any additional coverage we obtain may not cover our liability or damages may exceed the limits of the additional coverage, if any. We may not succeed in establishing the Rub A Dub Soap brand, which would --------------------------------------------------------------------------- adversely affect customer acceptance and our revenues. The market for natural - -------------------------------------------------------- products, such as handmade, vegetable-based soaps, is competitive in nature. We may lose the opportunity to build a critical mass of customers if we do not establish our brand quickly. Promoting and positioning our brand will depend largely on the success of our marketing efforts and our ability to provide consistent, high quality customer experiences. To promote our brand, we will incur substantial expense in our advertising efforts, initially, via mailings of brochures together with advertising on web sites that we believe our customers are likely to visit; our participation in test marketing trials with Stacy's Hallmark and, possibly, other retailers; and our attendance at industry trade shows. We will also incur substantial expense in our efforts to enter into strategic alliances with online and more traditional companies that we believe will promote our brand and drive customers to our web site. Ultimately, we will also need to expend funds to attract and train customer service personnel and to develop content to help build our brand and attract customers to our web site. We will incur additional losses if these brand promotion activities do not yield increased revenues. 11 We depend on our ability to build and maintain relationships with our --------------------------------------------------------------------------- suppliers to obtain sufficient quantities of quality merchandise on acceptable - -------------------------------------------------------------------------------- commercial terms. Our business strategy depends on providing a large selection - ------------------ of quality, handmade, natural, vegetable-based soaps and/or other natural products that, in turn, depends on our ability to build or maintain relationships with our current suppliers and other suppliers. Our arrangements with these suppliers and potential arrangements or contracts with other suppliers do not guarantee the availability of merchandise, establish guaranteed prices or provide for the continuation of particular pricing practices. Our current suppliers may not continue to supply us on current terms or at all, and we may not be able to establish new suppliers to ensure delivery of products in a timely manner or on terms acceptable to us. If the quality of products supplied to us falls below our customers' expectations, we may lose customers. We are also subject to the risks our suppliers face, including employee strikes and inclement weather. Our failure to deliver a large selection of quality, natural, herbal soaps and/or other products to our customers in a timely and accurate manner and at acceptable prices would harm our reputation, the Rub A Dub Soap brand and our results of operations. Our systems and operations, and those of our suppliers and shippers, are --------------------------------------------------------------------------- vulnerable to natural disasters and other unexpected problems, which could - -------------------------------------------------------------------------------- reduce customer satisfaction and harm our sales. Substantially all of our - ----------------------------------------------------- computer and communications hardware is located at our facility in Lakewood, Colorado, and our systems infrastructure is hosted at a facility in Wheat Ridge, Colorado. Our systems and operations are vulnerable to damage or interruption from fire, flood, power loss, telecommunications failure and similar events. In addition, our servers are vulnerable to computer viruses, physical or electronic break-ins and similar disruptions, which could lead to interruptions, delays, loss of data or the inability to accept and fulfill customer orders. We do not currently have fully redundant systems or a formal disaster recovery plan and do not carry business interruption insurance to compensate for losses that may occur. Our suppliers also face these risks. We also depend on the efficient operation of Internet connections from customers to our systems. These connections, in turn, depend on the efficient operation of web browsers, Internet service providers and Internet backbone service providers, all of which have had periodic operational problems or experienced outages. Any system delays, failure or loss of data, whatever the cause, could reduce customer satisfaction with our applications and services and harm our sales. We face the risk of systems interruptions and capacity constraints on our --------------------------------------------------------------------------- web site, possibly resulting in losses of revenue, erosion of customer trust and - -------------------------------------------------------------------------------- adverse publicity. The availability, reliability and satisfactory performance of - ------------------ our web site, network infrastructure and transaction processing systems are critical to our reputation and our ability to attract and retain customers and to maintain adequate customer service. Any future systems interruption that results in the unavailability of our web site or reduced order fulfillment could result in negative publicity and reduce the volume of products sold and the attractiveness of our web site, which could negatively affect our revenues. We may experience temporary system interruptions in the future for a variety of reasons, including power failures, software bugs, viruses and an overwhelming number of visitors trying to reach our web site during sales or promotions. We may not be able to correct a problem in a timely manner because of our dependence on outside consultants for the implementation of certain aspects of our system. Because some of the reasons for a systems interruption may be outside our control, we also may not be able to remedy the problem quickly or at 12 all. To the extent that customer traffic grows substantially, we will need to expand the capacity of our systems to accommodate a larger number of visitors. Any inability to scale our systems may cause unanticipated system disruptions, slower response times, degradation in levels of customer service, impaired quality and speed of order fulfillment or delays in reporting accurate financial information. We are not certain that we will be able to project the rate or timing of increases, if any, in the use of our web site accurately or in a timely manner to permit us to effectively upgrade and expand our transaction-processing systems or to integrate smoothly any newly developed or purchased modules with our existing systems. Because our sole executive officer and director is our only employee, --------------------------------------------------------------------------- devotes only 20% of her time to our business and is not bound by an employment - -------------------------------------------------------------------------------- agreement, we may not be able to achieve profitability or maintain our - -------------------------------------------------------------------------------- operations with the limited time commitment of this individual and we may - -------------------------------------------------------------------------------- realize serious harm if she leaves. Ms. Lisa R. Powell, our - --------------------------------------------- President/Secretary/Treasurer and a director of Rub A Dub Soap, is our only employee. For the foreseeable future, we have no plans to employ any other personnel. Ms. Powell devotes approximately 20% of her time and effort to our business and affairs currently. We may not be able to achieve profitability or maintain our operations with the limited time commitment of our sole executive officer and director. We face the additional risk that Ms. Powell could leave with little or no prior notice because she is not bound by an employment agreement. If we lost the services of Ms. Powell, our business could be seriously harmed. We do not have a "key person" life insurance policy covering Ms. Powell. We must enter into strategic relationships to help promote our web site --------------------------------------------------------------------------- and, if we fail to develop, maintain or enhance these relationships, we may not - -------------------------------------------------------------------------------- be able to attract and retain customers, build our Rub A Dub Soap brand and - -------------------------------------------------------------------------------- enhance our sales and marketing capabilities. We believe that our ability to - ----------------------------------------------- attract customers, facilitate broad market acceptance of our products and the Rub A Dub brand and enhance our sales and marketing capabilities depends on our ability to develop and maintain strategic relationships with other natural product and related web sites and portals that can drive customer traffic to our web site. If we are unsuccessful in developing or maintaining these relationships, or if the relationships do not assist us in attracting or retaining customers, it may be difficult to grow our business. We may be unable to achieve profitability with our single product line and --------------------------------------------------------------------------- the limited number of products we are able to produce with the limited proceeds - -------------------------------------------------------------------------------- of this offering. Our product line is presently limited to handmade, natural, - ----------------- vegetable-based soaps, including thirteen types of soaps and four styles of gift baskets. Further, while we have allocated $1,750 (7%) of the minimum net proceeds, and $32,500 (16.25%) of the maximum net proceeds, anticipated to be received from this offering for the development of new products, possibly soap molds and soap cutting equipment, this funding is limited and will only permit us to develop one or two additional products to a limited extent. No funds have been allocated for market research to determine if there is demand sufficient to warrant the addition of soap making equipment to our product line or for the purchase of this equipment. We may be unable to achieve profitable operations with our current single product line together with the possible addition of soap making equipment. 13 The success of our business depends on attracting and retaining a large --------------------------------------------------------------------------- number of potential customers. As a development-stage company that recently - ------------------------------- established our Internet site featuring handmade, natural, vegetable-based soaps and gift baskets, we lack recognition in the market. Our success depends on attracting a large number of potential customers who traditionally shop in retail stores and specialty shops, and persuading them to shop on our web site. Our success is also dependent on ensuring that these customers remain our loyal, long-term customers. In addition to persuading customers to purchase our products on the Internet, our customers may not accept our online solution over those offered by our competitors. If we fail to persuade customers to shop online or our competitors are more successful in achieving sales, then our revenues will suffer. Furthermore, we may be required to incur significantly higher and more sustained advertising and promotional expenditures than we currently anticipate to attract online shoppers to our web site and to convert these shoppers to purchasing customers. As a result, we may not be able to achieve profitability when we expect, or at all. Competition from traditional and online retailers may result in price --------------------------------------------------------------------------- reductions and decreased demand for our products. The market for natural - ----------------------------------------------------- products has become increasingly competitive. Competition is expected to intensify in the future, which may result in price reductions, fewer customer orders, reduced gross margins and loss of market share. We currently or potentially compete with a variety of companies located both inside and outside the United States that retail soaps, gift baskets and/or other natural products. Many of our current and potential traditional store-based competitors have longer operating histories, larger customer or user bases, greater brand recognition and significantly greater financial, marketing and other resources than we do. These companies include grocery stores, organic or natural food stores and small specialty shops. Many of these current and potential competitors can devote substantially more resources to web site and systems development than we can. In addition, larger, more well-established and financed entities may acquire, invest in or form joint ventures with online competitors as the use of the Internet and other online services increases. We may be unable to adequately protect or enforce our intellectual property --------------------------------------------------------------------------- rights. We rely on a combination of trademark, trade secret and copyright law to - ------- protect our intellectual property. These laws afford only limited protection. Despite our efforts to protect our proprietary rights, unauthorized persons may attempt to copy aspects of our web site, including the look and feel of our web site, products that we sell, product organization, product information and sales mechanics or to obtain and use information that we regard as proprietary, such as the technology used to operate our web site and our content. We have not filed an application to secure registration for our trademark, "Rub A Dub Soap," in the United States or any other country. Any encroachment upon our proprietary information, the unauthorized use of our trademark, the use of a similar name by a competing company or a lawsuit initiated against us for our infringement upon another company's proprietary information or improper use of their trademark, may affect our ability to create brand name recognition, cause customer confusion and/or have a detrimental effect on our business. Litigation or proceedings before the U.S. Patent and Trademark Office may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets and domain name and to determine the validity and scope of the proprietary rights of others. Any litigation or adverse proceeding could result in substantial costs and diversion of resources and could seriously 14 harm our business and operating results. Finally, if we sell products internationally, the laws of many countries do not protect our proprietary rights to as great an extent as do the laws of the United States. Third parties may also claim infringement by us with respect to past, current or future technologies. We expect that participants in our markets will be increasingly subject to infringement claims as the number of services and competitors in our industry segment grows. Any claim, whether meritorious or not, could be time-consuming, result in costly litigation, cause service upgrade delays or require us to enter into royalty or licensing agreements. These royalty or licensing agreements might not be available on terms acceptable to us or at all. Risk Factors Related to This Offering - ------------------------------------- Because of the absence of escrow arrangements for the minimum offering --------------------------------------------------------------------------- proceeds, the funds paid for shares of common stock will not be insulated from - -------------------------------------------------------------------------------- our creditors, if any. Until such time as subscriptions for at least 100,000 - ------------------------ shares of common stock have been received and accepted by Rub A Dub Soap, all proceeds from the offering will be held in our money market account at Citywide Banks, N.A., Wheat Ridge, Colorado. Customarily, entities such as Rub A Dub Soap, which are seeking to raise equity funding, provide for the escrow or other impoundment of the proceeds to be received from the minimum number of securities being offered. No such escrow or impound arrangements have been made for the minimum proceeds anticipated to by received by us from this offering. Thus, subscribers for the minimum number of shares of common stock being offered by this memorandum are subject to additional risks in that the funds paid for the shares will not be insulated from our creditors, if any. There is no public market for our common stock and, if a public market --------------------------------------------------------------------------- fails to develop or be sustained, then investors may be unable to sell, and - -------------------------------------------------------------------------------- therefore lose their investments in, the shares of common stock. There is no - ------------------------------------------------------------------- public market for our common stock and there is no assurance that a public market will develop as a result of this offering or, if developed, that it will be sustained. Many brokerage firms may not effect transactions in the securities and many lending institutions may not permit their use as collateral for loans. The common stock will be traded, if at all, in the "pink sheets" maintained by members of the National Association of Securities Dealers, Inc., and possibly on the electronic Bulletin Board. We will not satisfy the requirements either for being quoted on the National Association of Securities Dealers' Automated Quotations System or for listing on any national securities exchange. Accordingly, until we qualify for NASDAQ or listing on an exchange, any trading market that may develop for the common stock is not expected to qualify as an "established trading market" as that term is defined in Securities and Exchange Commission regulations, and is expected to be substantially illiquid. Because the offering will not be underwritten, investors in the shares of --------------------------------------------------------------------------- common stock being offered will not be afforded the protections of certain of - -------------------------------------------------------------------------------- the NASD conduct rules and our management may not be successful in raising even - -------------------------------------------------------------------------------- the minimum amount of funds. This offering is self-underwritten and, - -------------------------------- accordingly, is not being conducted by a broker-dealer that is a member of, and subject to the Conduct Rules regarding securities distributions promulgated by, 15 the National Association of Securities Dealers, Inc. Accordingly, investors in the shares of common stock being offered by this memorandum will not be afforded the protections of certain of the NASD Conduct Rules that regulate activities, such as communications with the public, transactions with customers, permissible commissions, the manner of distribution of securities and the maintenance of records, among other things, of broker-dealers that are members of the NASD. Despite her best efforts, Ms. Lisa R. Powell, our sole executive officer and director may not be capable of selling at least 100,000 shares of common stock within the offering period, or any shares in excess of 100,000. Ms. Powell has not previously participated in selling an offering of securities for any issuer. If we are unable to sell at least 100,000 shares of common stock within the offering period, then the offering will terminate and we will be obligated to refund all funds to the subscribers in full, without deduction for offering expenses. The fact that the offering may not be registered in any states other than the State of Colorado may also make it difficult for our management to find purchasers for the shares. The offering price of our common stock is arbitrary and was not determined --------------------------------------------------------------------------- based on a market price; therefore, it should not be considered to bear any - -------------------------------------------------------------------------------- relationship to our assets, book value or net worth and should not be considered - -------------------------------------------------------------------------------- to be an indication of our value. Because there is no public market for our - ----------------------------------- common stock, the offering price was not determined based on a market price. The factors considered in determining the offering price of the common stock include our future prospects, the likely trading price for the common stock if a public market develops and management's opinion of the implicit value of the company. Accordingly, we have arbitrarily established the offering price of the common stock and it should not be considered to bear any relationship to our assets, book value or net worth and should not be considered to be an indication of our value. Because our sole management member will continue to control Rub A Dub Soap, --------------------------------------------------------------------------- she will be able to determine the outcome of all matters requiring approval of - -------------------------------------------------------------------------------- our shareholders. Ms. Lisa R. Powell, our President/Secretary/Treasurer and - ------------------ owner of 3,000,000 shares of our outstanding common stock, is a parent and controlling person of Rub A Dub Soap because of her position and share ownership. Even following the completion of this offering, Ms. Powell will own approximately 69% to approximately 82% of our outstanding shares of common stock. Therefore, our sole management member will be able to determine the outcome of all matters requiring approval by our shareholders, including the election of directors and the approval of mergers or other business combination transactions. See "Principal Shareholders" for a description of management's share ownership and "Management" for background on Ms. Powell. Our stock price will fluctuate after this offering, which may result in --------------------------------------------------------------------------- substantial losses for investors. The offering price for the shares of common - ----------------------------------- stock being offered by this prospectus was arbitrarily selected and the trading price will fluctuate after this offering once trading commences, if ever. The fluctuation of the stock price could result in substantial losses for investors. The market price of our common stock may fluctuate significantly in response to a number of factors, some of which will be beyond our control. These factors include: o Quarterly variations in operating results; 16 o Announcements by us or our competitors of new product and service offerings, significant contracts, acquisitions or strategic relationships; o Publicity about our company, our products and services or our competitors; o Additions or departures of key personnel; o Any future sales of our common stock; and o Stock market price and volume fluctuations of publicly-traded companies in general. The trading prices of many public companies have been especially volatile and many are at or near historical lows. Investors may be unable to resell their shares of common stock at or above the offering price. New shareholders will incur substantial dilution of approximately $.18 to --------------------------------------------------------------------------- $.19 per share as a result of this offering. The current shareholders of Rub A - -------------------------------------------- Dub Soap have acquired their shares of common stock at an average cost of $.01 per share, which is substantially less than the price of $.25 per share to be paid by the investors in this offering. Accordingly, the offering price is substantially higher than the book value per share of our outstanding common stock. As a result, an investor who acquires shares of common stock in this offering will incur immediate substantial dilution of approximately $.18 per share, in the event of the minimum offering, and approximately $.19 per share, in the event of the maximum offering. See "Dilution" for a more detailed description of how new shareholders will incur dilution. The proceeds of this offering may be inadequate and, in that event, if we --------------------------------------------------------------------------- are unable to generate revenue or obtain additional capital, our business may - -------------------------------------------------------------------------------- fail. The minimum and maximum net proceeds of this offering are $25,000 and - ----- $200,000, respectively, and, therefore, are sufficient to conduct only a limited amount of activity. If the proceeds of this offering are insufficient to enable us to continue operations until we are able to generate revenue or obtain additional capital on acceptable terms, our business may fail. Particularly if only the minimum number of shares of common stock being offered hereby is sold, our continued operation will be dependent on our ability to generate operating revenue or procure additional financing. We may not be able to generate any revenue or obtain any additional financing on favorable terms. Sales of substantial amounts of our shares may depress our stock price. A ------------------------------------------------------------------------- total of 800,000 shares being offered by Rub A Dub Soap in this offering will be available for resale immediately after the effectiveness of this offering. The balance of 3,583,000 shares of common stock held by our current shareholders, including an aggregate of 3,000,000 shares held by our sole executive officer, become eligible for resale pursuant to Rule 144 commencing in September 2001. Sales of a substantial number of shares of our common stock could cause our stock price to fall. In addition, the sale of these shares could impair our ability to raise capital through the sale of additional stock. After this offering, we will have 4,383,000 shares of common stock outstanding, including 800,000 shares that we are selling in this offering that may be resold immediately in the public market. The remaining 3,583,000 shares will be eligible for resale in the public market pursuant to Rule 144 commencing in September 2001. 17 There is no guarantee that we will be able to raise the necessary funds in --------------------------------------------------------------------------- this offering or that additional funds will be available to us when we need them - -------------------------------------------------------------------------------- and, if financing is unavailable, we may need to dramatically change our - -------------------------------------------------------------------------------- business plan, sell or merge our business or face bankruptcy. Based on our - ------------------------------------------------------------------ current projections, we will need to raise funds after the expiration of one year from the closing of this offering through the issuance of equity, equity-related or debt securities in addition to the funds we are raising in this offering. However, there is no guarantee that we will be able to raise the funds in this offering that are necessary to maintain our business for the following year. We cannot be certain that additional capital will be available to us on favorable terms when required, or at all. If this additional financing is not available to us, we may need to dramatically change our business plan, sell or merge our business or face bankruptcy. In addition, our issuance of equity or equity-related securities will dilute the ownership interest of existing shareholders and our issuance of debt securities could increase the risk or perceived risk of our company. Any of these actions could cause our stock price to fall. Note: In addition to the above risks, businesses are often subject to risks not foreseen or fully appreciated by management. In reviewing this Prospectus potential investors should keep in mind other possible risks that could be important. BUSINESS AND PROPERTIES 3. With respect to the business of the Company and its properties: (a) Describe in detail what business the Company does and proposes to do, including what product or goods are or will be produced or services that are or will be rendered. General - ------- We were organized as a Colorado corporation on September 28, 2001, and are in the early stage of development. In January 2002, we commenced operations in the online retailing of handmade, natural, vegetable-based soaps and gift baskets. As a small online retailer of soaps, we are dedicated to serving the natural product enthusiast with a wide variety of handmade, natural, herbal soaps and gift baskets featured on our web site located at http://www.rubadubsoaps.com, expert information and superior customer service. - --------------------------- Information set forth on our web site does not constitute part of this prospectus. We have very limited sales and a net loss from operations for the period from our inception through the date of this prospectus. As of May 31, 2002, we had realized $971 in revenues and a net loss of $(93,848). Our objective is to become a leading online retailer of handmade, natural, herbal soaps, gift baskets and other natural products, such as essential oils and herbs. Key elements of our strategy include the following: o Offering the broadest possible selection of handmade, natural, herbal soaps, gift baskets and/or other natural products available to our customers at competitive prices; 18 o Delivering superior customer service and promoting repeat purchases through continuous enhancement of our technology, web site functionality and inventory; o Developing relationships with other companies that can help grow our business. Ms. Lisa R. Powell, our sole executive officer, director and controlling shareholder, has in excess of five years of experience in producing natural, vegetable-based soaps by hand and practicing aromatherapy as a hobby. Her gift baskets of soaps have been highly regarded for the past two years. She has taken numerous courses in aromatherapy and herbology at Red Rocks Community College, Lakewood, Colorado. Products - -------- Our soaps are handmade, and fragrance is added, with all natural ingredients, including: o All natural ingredients; o Pure Aromatherapy-Grade Essential Oils; o Natural glycerin; and o Natural colorants. Commercially-made soaps differ from our soaps in that they typically contain animal fat instead of vegetable oils because it is much less expensive and more stable in high temperatures. However, tallow or lard can clog the skin's pores while the vegetable oils used in our soaps enable the skin to retain its natural moisture and still breathe. Commercial soaps also typically contain synthetic ingredients since the synthetic ingredients are more stable during the manufacturing process. The biggest difference, however, between commercial soaps and our soaps is the ingredient of natural glycerin, a skin softener, in our soaps. In the manufacture of many commercial soaps, glycerin is extracted from the soap and sold separately in other products. In the cold process method of making soap that we employ, the soap retains the natural glycerin created during the saponification process. Our soaps never contain any of the following ingredients: o Alcohol; o Petroleum products; o Harsh detergents; o Artificial ingredients; o Artificial colorants; o Petroleum products; 19 o Synthetic fragrances; o Preservatives; or o Animal fats. The cost of producing an average bar of soap, including each of the above-described four types of bars, is approximately $2.00. These soaps are presently available for sale on our web site at a price of either $2.95 or $3.95 per bar. Each bar may be purchased in multiple units or a single unit. The cost of shipping is added to the price of each purchaser's order. In addition to soaps, gift baskets prepared using a number of soaps selected by the purchaser from the variety of the soaps available on our web site from time to time, are available for purchase. The price of each gift basket includes the total of the unit prices of each bar of soap included in the basket plus an amount equivalent to two times the wholesale price we paid for the basket. In the future, we intend to produce soaps in larger batches and custom label the bars. Also, we propose to add soap molds, soap cutting equipment and/or other natural products to our inventory if we determine that sufficient demand exists for these products. Thirteen types of soaps and four styles of gift baskets, each of which is wrapped in cellophane and tied with wraffia, are currently available for sale on our web site, including the following: Soaps - ----- o Almond Milk Soap - Almond essential oil gives the soap a delightfully sweet smell; ground almonds provide a mild exfoliant; and milk is added as a soothing moisturizer. o Citrus Bar - Citrus and spice is blended in this bar to make it tangy and refreshing. o Hippie Bar - Known for it anti-depressant and calming qualities, patchouli essential oil gives this soap a distinct and earthy fragrance. o Honey Bar - This is a gentle bar made with olive oil and infused with calendula, chamomile and comfrey leaf. Honey is used as an ingredient because it acts as a skin conditioner and emollient. o Honey Oatmeal Bar - This bar is very gentle and contains bits of oatmeal for exfoliation. Honey is used to soften the skin and give it a mild fragrance. o Kitchen Soap - Coffee grounds are used in this soap to help remove odors. Cinnamon and almond essential oils are added. o Lavender Mint Bar - A creamy bar made of lavender essential oil, known for its relaxing and uplifting qualities, with a hint of peppermint essential oil, which awakens the senses. Both lavender essential oil, because of its gentle and widely therapeutic effects, and peppermint essential oil are widely used in aromatherapy. 20 o Lavender Oatmeal Soap - The most popular bar, it has a terrific scent because it is made from lavender essential oil. Oatmeal is added to this soap for mild exfoliation and lavender flowers are added for texture. o Rise and Shine Bar - This smooth cream bar combines peppermint essential oil, with its refreshing, "wake me up" scent, and rosemary, which lifts the spirits and is said to be naturally antiseptic and antibacterial. o Scrub A Dub Bar - Cornmeal is added to this lemongrass, cedarwood and pine-scented bar because it acts as a luffa. The soap is suitable for men and women. o Spicy Bar - This soap is a favorite of men. Clove essential oil acts as a deodorant, while the spices of cinnamon and nutmeg in this bar provide exfoliation. o Tangerine Grapefruit Bar - This bar has a beautiful, natural orange tint from the tangerine essential oil favored by citrus lovers. o Tea Tree Bar - The tea tree ingredient in this soap is frequently used to treat many skin problems such as acne and rashes because of the antibacterial properties for which it is known. Gift Baskets - ------------ o Guest Sampler Basket - This basket contains six miniature bars of soap. o Medium Gift Basket - This gift basket includes three bars of soap and one 4.5 ounce fizzing bath bomb made with bath salt and pure essential oil. o Large Gift Basket - This gift basket includes five bars of soap and three 4.5 ounce fizzing bath bombs. o Extra Large Gift Basket - The same basket that is used for our large gift basket is packed with eight bars of soap and four 4.5 ounce fizzing bath bombs. Online Retailing - ---------------- We strive to provide customers with a convenient shopping experience by providing an organized, logical and customer-friendly Internet site designed in an attractive manner so as to capture and maintain the interest of most visitors. The web site includes a high-resolution photograph of each type of soap or gift basket together with a picture and a description of the ingredients and process employed in its production. Payment arrangements can be made using credit cards. We have implemented security measures, including but not limited to layering, locking and encryption, in order to secure, to our best ability as of the date of this prospectus, the commercial transactions conducted on our web site. Detailed instructions are available on our site to enable the purchaser to consummate the purchase transaction with as much ease and simplicity as is possible. 21 We attract and retain customers by emphasizing the following key factors: Extensive Product Selection. We provide consumers with a wide variety of ----------------------------- handmade, natural, vegetable-based soaps, with delivery direct to their door or the third party recipient of a gift. We offer a broad selection of soaps and gift baskets that we expect, within two years from the date of this prospectus, to transcend the limited selection, if any, of grocery stores, natural product specialty shops and others. However, our ability to provide a selection of natural, herbal soaps and gift baskets that exceeds the selection offered by the aforementioned sellers is limited by the fact that we have minimal assets and substantial net losses. Our online business model enables us to aggregate a diverse product selection that is not generally found in a single retail outlet and dynamically change our product mix to meet consumer needs and interests. Expert Information. Accompanying each type of soap or gift basket featured ------------------ on the web site is a detailed description of the soap type(s); the quantity available, the ingredients, the distinctive attributes and price; a photograph; and any other relevant information. We tightly integrate broad product selection with highly relevant content, providing consumers with the information they need to make informed purchase decisions. Superior Shopping Experience. We believe that we provide an intuitive, ------------------------------ easy-to-use web site, offering extensive product selection supported by tightly integrated, relevant resource information. Each product presentation is supported by a high-resolution photograph of the soap or gift basket available for sale on our web site. Money-Back and Other Guarantees. We provide each customer with a thirty-day ------------------------------- guarantee permitting the return of the unused product if the customer is not satisfied. We guarantee that each bar of soap is handmade and comprised of natural materials. Wholesale Sales - --------------- We are in the third month of a four-month test marketing trial with Stacy's Hallmark, owner of eleven Hallmark card stores, including eight stores located in the Denver, Colorado, area and three stores located in Phoenix, Arizona. The trial is being conducted in four Denver area stores. At the end of the four-month trial period, Stacy's Hallmark will determine whether to conduct a full marketing campaign and promotion of our handmade, natural, vegetable-based soaps and gift baskets in all eleven stores. Further, if the full marketing campaign conducted by Stacy's Hallmark is successful, we anticipate that we may receive an order(s) for soaps and/or gift baskets from Hallmark Inc. to be sold in company-owned Hallmark card stores. However, we do not expect Hallmark Inc. to be interested in our products unless the test marketing trial in four Stacy's Hallmark stores through September 2002 is successful and, in addition, Stacy's Hallmark undertakes the full marketing campaign and promotion in all eleven stores and the results of the campaign are favorable. Trade Shows and Direct Sales - ---------------------------- Depending upon the availability of funding from this offering, we intend to display our soaps, gift baskets and any new products, such as soap molds and 22 soap cutting equipment, at natural product trade shows held in various large cities in the United States. In the event of the minimum offering, we intend to attend one or two such industry trade shows and, in the event of the maximum offering, approximately five such shows. We also have plans to generate direct sales at parties hosted by individuals who receive product as compensation. Although no such parties have yet been held, we anticipate that the host of the party would receive compensation in the form of soaps and/or gift baskets equivalent in value to 10% of the gross product sales generated at the party. Fulfillment and Distribution - ---------------------------- We currently fulfill all customer orders from our facilities in Lakewood, Colorado. We make our soaps by hand from ingredients, primarily herbs and natural fruits, received from our suppliers. We also receive baskets from our suppliers that we use to produce gift baskets. Our sole executive officer and director makes soaps and prepares gift baskets to fill customer orders. We presently manually update product availability on our web site. We pack the items on location at our offices and then deliver them to UPS, the United States Postal Service or other shipping company for distribution to consumers anywhere in the United States. We are committed to shipping accurate orders, efficiently and effectively. Generally, the delivery time is within ten business days from the date of the receipt of the order. We charge each customer in advance for the shipping costs associated with the order. Our management brings to Rub A Dub Soap her determination in fulfillment and distribution. We intend to obtain office and/or warehouse space as the need for more production and product availability grows. Customer Service - ---------------- The typical shopping experience begins with the search for products that meet specific needs, including the ordering process and extends through product delivery and post-purchase support. We believe that the ability to accurately fulfill orders, ship products quickly to a customer's door or efficiently handle customer inquiries is as important to customer satisfaction as product selection. In this connection, we believe that a high level of customer service and support is critical to retaining and expanding our customer base. No portion of the proceeds of this offering has been allocated for the employment of any customer support personnel. Accordingly, we expect to be dependent upon the proceeds, if any, to be received from future equity and/or debt financing for this purpose. Accordingly, while we will not have the financial resources as a result of this offering to employ any customer service personnel, we intend to develop our own in-house customer service operation in the future. Our sole management member is available via e-mail, generally, from 8:00 a.m. to 5:00 p.m., Mountain Time, Monday to Friday, and can also be reached by voicemail. Presently, we provide by e-mail order and shipping confirmation (with tracking numbers), notification of customers regarding out-of-stock situations and, for those orders, frequent updating of customers on order status. We are dedicated to customer satisfaction. We deliver on this commitment in a number of ways, including: o Product guarantee, including a thirty-day refund if the shipment is not satisfactory; 23 o Customer service guarantee of a one-business day response time for all inquiries; o Privacy guarantee to use personal information exclusively to process orders and not to sell, trade or rent the information to other companies; and o Security guarantee ensuring protection of personal information and compensation to consumers for the amount of their liability, up to $50, in the unlikely event of unauthorized interception and use of their credit card. Technology and Network Operations - --------------------------------- We have implemented services and systems for site management, searching and customer interaction. Our system has been custom-designed and written for performance, reliability and scalability using software applications for: o Displaying soaps, gift baskets and other products in an organized, logical and customer-friendly way; o Accepting, verifying, organizing and managing customer orders; o Notifying and updating customers of order status; and o Managing shipment of products. These systems and services employ a combination of our own proprietary technologies and commercially available, licensed technologies. Our proprietary technologies are embodied in software that is exclusively owned and implemented by Rub A Dub Soap. We have a non-exclusive license to use a shopping cart commerce application, which has been customized for us. This commerce application is integrated with our custom software, enabling a fully automated order fulfillment process. We realize many benefits from the integration of these systems, including: o Tracking customer orders through the entire supply chain in real-time; o Making rapid changes to processes such as a change in shipping policy; and o Efficiently expanding our infrastructure. Our operating system is FreeBSD Unix and our software platform and architecture is integrated with Apache/1.3.12 Ben-SSL/1.41 (Unix) mod_perl/1.24 web software and database software PostGreSQL 7.1.1. Our production system is located at 12441 West 49th Avenue, Suite #8, Wheat Ridge, Colorado 80033, with power backup and high-speed Internet connection. We address the goals of performance, reliability and scalability. Our objective is to have fast download times and make use of caching and load balancing at the web server and application level for optimal performance. We outsource development work to outside consultants. Our web site is up and running twenty-four hours a day, 24 seven days a week. We anticipate that we will continue to devote significant resources to product development in the future as we add new features and functionality to our web site. (b) Describe how these products or services are to be produced or rendered and how and when the Company intends to carry out its activities. If the Company plans to offer a new product(s), state the present stage of development, including whether or not a working prototype(s) is in existence. Indicate if completion of development of the product would require a material amount of the resources of the Company, and the estimated amount. If the Company is or is expected to be dependent upon one or a limited number of suppliers for essential raw materials, energy or other items, describe. Describe any major existing supply contracts. See the response to Item 3.(a) hereinabove. We produce each bar of soap by hand using a minimal amount of fresh, natural ingredients, primarily natural fruits and herbs, and basic utensils. We spend at least six weeks in the production and curing of a batch of soaps. We believe that our soap is especially effective in revitalizing and freshening the skin because of our usage of only fresh ingredients. We choose our suppliers based upon the quality and price of the merchandise available. We believe that, because of the increasing popularity of natural products, we will have no difficulty in obtaining quality supplies of fruits and herbs, primarily, at attractive prices from a variety of suppliers. Currently, our products are limited to the thirteen types of handmade, natural, herbal soaps and four styles of gift baskets described above. In the future, we propose to add new products, such as soap molds and soap cutting equipment, to our product line if we determine that sufficient demand exists for these products. We have allocated the sums of $1,750 (7%) of the minimum net proceeds and $32,500 (16.25%) of the maximum net proceeds expected, without assurance, to be received from this offering for new product development. However, because the funds anticipated to be received from this offering are limited, especially in the event of the minimum offering, the number of new products that we will be able to develop with these funds will also be limited. We intend to expand our activities with the proceeds, if any, available from this offering and/or otherwise. Our current plans include the development of new products, such as soap molds and soap cutting equipment; increased marketing to wholesalers, via trade shows and direct sales generated from individually-hosted parties and in other new markets; and the enhancement and improvement of our Internet web site. We have allocated the sums of $40,000 (20%), $32,500 (16.25%) and $15,000 (7.5%) of the maximum proceeds of this offering for marketing, new product development and enhancement of the web site, respectively. Depending upon the availability of capital, we also have plans to attend trade shows held annually throughout the United States. (c) Describe the industry in which the Company is selling or expects to sell its products or services and, where applicable, any recognized trends within that industry. Describe that part of the industry and the geographic area in which the business competes or will compete. See the response to item 3.(a) hereinabove with regard to the limitation of our business to the marketing, sale and distribution of handmade, natural, 25 vegetable-based soaps using recipes developed by our sole executive officer and director, and gift baskets. We presently market our products online. Our Internet web site enables us to market our products throughout the world, although our primary target market continues to be the United States. The Internet has become an increasingly significant medium for commerce in many industries. Our success depends upon the widespread acceptance and use of the Internet as an effective medium of business and communication by our target customers. While we cannot be certain, we expect rapid growth in the use of and interest in the Internet to continue, although the rate of growth may not be at historical rates. We occupy a small niche within the sizable industry of the manufacture, marketing and distribution of natural products. We believe that our business may not be profitable for the next several years during which expenses related to our expansion may cause us to continue to incur a loss from operations. The market for natural products of all types, including the natural, handmade, vegetable-based soaps and gift baskets that we offer, has increased dramatically in recent years. While we believe, we cannot be certain, that this recognized industry trend will continue in the future. Indicate whether competition is or is expected to be by price, service, or other basis. Indicate (by attached table if appropriate) the current or anticipated prices or price ranges for the Company's products or services, or the formula for determining prices, and how these prices compare with those of competitors' products or services, including a description of any variations in product or service features. Name the principal competitors that the Company has or expects to have in its area of competition. Indicate the relative size and financial and market strengths of the company's competitors in the area of competition in which the Company is or will be operating. State why the Company believes it can effectively compete with these and other companies in its area of competition. We expect to compete on the basis of our reputation among customers as a quality provider of products that are "100% money-back guaranteed" and, to a lesser extent, on the basis of price. The market for natural and handmade soaps has grown substantially in the past five years. Competition is expected to intensify in the future, which may result in price reductions, fewer customer orders, reduced gross margins and loss of market share. We currently or potentially compete with a variety of companies located both inside and outside the United States that retail soaps, gift baskets, herbs, essential oils and/or other natural products. Many of our current and potential traditional store-based competitors have longer operating histories, larger customer or user bases, greater brand recognition and significantly greater financial, marketing and other resources than we do. These companies include grocery stores, organic or natural food stores and small specialty shops. Many of these current and potential competitors can devote substantially more resources to web site and systems development than we can. In addition, larger, more well-established and financed entities may acquire, invest in or form joint ventures with online competitors as the use of the Internet and other online services increases. We are aware of a limited number of other companies that are presently retailing natural soaps and/or other natural products online. We believe that there will be an increasing number of online retailers of natural products of the types being offered by us and, in the instance of certain soaps, identical to the soaps we offer. Some of our competitors may be able to secure ingredients from suppliers on more favorable terms, fulfill customer orders more efficiently and adopt more aggressive pricing or inventory availability policies than we 26 can. Traditional store-based retailers also enable customers to see and feel products in a manner that is not possible over the Internet. We believe that the following are principal competitive factors in our market: o Web site recognition; o Inventory selection; o Streamlined shopping experience; o Reliability and speed of order shipment; o Customer service; o Speed and accessibility of web site; o Convenience; and o Price. While we expect to compete on the basis of our reputation among customers as a quality provider of products and, to a lesser extent, on the basis of price, we are not certain that this strategy will be successful. Ultimately, we seek to exceed the more limited selections of natural, herbal soaps and gift baskets, if any, offered by grocery stores, organic or natural food stores and natural product specialty shops. We believe that we will be able to exceed the selections of soaps of these traditional stores because we will not be limited with respect to display and storage area. We hope, to the extent practicable, to minimize our weaknesses, including, among others, our undercapitalization, cash shortage, limitations with respect to personnel, technological, financial and other resources and lack of a customer base and market recognition, through our focus on the Internet; which eliminates the need for a retail facility and a sizeable marketing staff. However, our opportunity to obtain wholesale and other larger customers may also be limited by our financial resources and other assets. Our soaps are presently available for sale on our web site at a price of either $2.95 or $3.95 per bar. The price of each of our gift baskets includes the total of the unit prices of each bar of soap included in the basket plus an amount equivalent to two times the wholesale price we paid for the basket. The cost of shipping is added to the price of each purchaser's order. Generally, we believe that our soaps and gift baskets are priced lower than soaps and gift baskets of similar quality available from our competitors. Note: Because this Prospectus focuses primarily on details concerning the Company rather than the industry in which the Company operates or will operate, potential investors may wish to conduct their own separate investigation of the company's industry to obtain broader insight in assessing the Company's prospects. 27 (d) Describe specifically the marketing strategies the Company is employing or will employ in penetrating its market or in developing a new market. Set forth in response to Question 4 below the timing and size of the results of this effort which will be necessary in order for the company to be profitable. Indicate how and by whom its products or services are or will be marketed (such as by advertising, personal contact by sales representatives, etc.), how its marketing structure operates or will operate and the basis of its marketing approach, including any market studies. Name any customers that account for, or based upon existing orders will account for, a major portion (20% or more) of the Company's sales. Describe any major existing sales contracts. We have allocated the sums of $4,000 (16%) of the minimum proceeds, and $45,000 (22.5%) of the maximum proceeds, of this offering for marketing. Our marketing strategy is designed to meet or exceed customer expectations, drive repeat purchases and build enduring brand equity. In order to implement this strategy, we intend to implement an integrated marketing campaign that includes the following: o Advertising; o Participation in test marketing trials with Stacy's Hallmark and, possibly, other retailers of soaps and other natural products; o Attendance at industry trade shows; and o Direct sales generated at parties hosted by individuals who receive product as compensation. We have initiated our proposed integrated marketing campaign with regard to the first two methods described above. However, the proposed campaign is in the design stage insofar as the last two methods above-described and we have not yet taken any steps toward their implementation. We are dependent upon the anticipated proceeds of this offering for funding with which to attend trade shows featuring soaps and other natural products. In the future, depending upon the availability of funding, we intend to target businesses, in addition to consumers, as potential customers as part of our marketing strategy. Advertising. We will design our advertising to build brand equity, create ----------- awareness and generate initial purchases of soaps and gift baskets sold on our web site and otherwise. Depending on the availability of funds, we intend to use a mix of advertising methods, including: o Word of mouth referrals by satisfied customers, friends and relatives and recipients of our products as gifts; o Online banners, text links and e-mail newsletters; and o Mailings of brochures to, among others, prior customers and recipients of our products. 28 Test Marketing Trial with Stacy's Hallmark and, Possibly, Other Retailers. -------------------------------------------------------------------------- We are currently participating with our handmade, natural, vegetable-based soaps and gift baskets in a 120-day test marketing trial with Stacy's Hallmark, owner of eleven Hallmark card stores located in the Denver, Colorado, area and Phoenix, Arizona. We have filled Stacy's Hallmark's initial order for soaps and gift baskets that are presently available in four of the Denver, Colorado, area Hallmark card stores. If the results of the trial are favorable at the end of September 2002, Stacy's Hallmark has verbally indicated, without assurance, that it will conduct a full marketing promotion and campaign featuring our products in all eleven Colorado and Arizona stores. Further, if the full marketing campaign conducted by Stacy's Hallmark is successful, we anticipate that we may receive an order(s) for soaps and/or gift baskets from Hallmark Inc. to be sold in company-owned Hallmark card stores. However, we do not expect Hallmark Inc. to be interested in our products unless the test marketing trial in four Stacy's Hallmark stores through September 2002 is successful and, in addition, Stacy's Hallmark undertakes the full marketing promotion and campaign in all eleven stores and the results of the campaign are favorable. Attendance at Industry Trade Shows. Depending upon the availability of ----------------------------------- funding from this offering, we intend to display our soaps, gift baskets and any new products, such as soap molds and soap cutting equipment, at natural product trade shows held in various large cities in the United States. In the event of the minimum offering, we anticipate attending one or two such industry trade shows and, in the event of the maximum offering, approximately five such shows. Direct sales generated at parties hosted by individuals who receive product --------------------------------------------------------------------------- as compensation. We have plans to generate direct sales at parties hosted by - ---------------- individuals who receive product as compensation. Although no such parties have yet been held, we anticipate that the host of the party would receive compensation in the form of soaps and/or gift baskets equivalent in value to 10% of the gross product sales generated at the party. We expect that we may incur losses for the next several years as a result of the expansion of our operations. In order for us to operate profitably, the funds we expend for hosting, maintenance, expansion, enhancement and otherwise in connection with our web site will be required to be offset by the revenues realized from online sales. The test marketing trial in which we are participating with Stacy's Hallmark, Denver, Colorado, will not conclude until September 2002. The results of the trial may not be favorable. Stacy's Hallmark will not conduct a full marketing and promotional campaign in all eleven of its stores if the trial is unsuccessful and we will not obtain sales contracts with company-owned Hallmark stores. Further, we have not yet attended any industry trade shows or conducted any individually-hosted parties to generate direct product sales. Accordingly, we have no basis upon which to predict the volume of sales, if any, that can be expected from these events. We have conducted no marketing studies. None of our customers accounts for, or based upon existing orders will account for, a major portion (20% or more) of our sales. We have no existing sales contracts. (e) State the backlog of written firm orders for products and/or services as of a recent date (within the last 90 days) and compare it with the backlog of a year ago from that date. We have no backlog of written firm orders for our handmade, natural, vegetable-based soaps and gift baskets. 29 Explain the reason for significant variations between the two figures, if any. Indicate what types and amounts of orders are included in the backlog figures. State the typical orders. If the Company's sales are seasonal or cyclical, explain. Not applicable. See the response to this Item above. The company experiences increased sales on holidays and, in particular, Mother's Day. (f) State the number of the Company's present employees and the number of employees it anticipates it will have within the next 12 months. Also, indicate the number by type of employee (i.e., clerical, operation, administrative, etc.) the Company will use, whether or not any of them are subject to collective bargaining agreements, and the expiration date(s) of any collective bargaining agreement(s). If the Company's employees are on strike, or have been in the past three years, or are threatening to strike, describe the dispute. Indicate any supplemental benefits or incentive arrangements the company has or will have with its employees. Ms. Lisa R. Powell, our sole executive officer and director, is our only employee currently. We do not anticipate the employment of any additional individuals within the next twelve months. We have no plans to adopt any supplemental benefits or incentive arrangements at the present time. (g) Describe generally the principal properties (such as real estate, plant and equipment, patents, etc.) that the Company owns, indicating also what properties it leases and a summary of the terms under those leases, including the amount of payments, expiration dates and the terms of any renewal options. Indicate what properties the Company intends to acquire in the immediate future, the cost of such acquisitions and the sources of financing it expects to use in obtaining these properties, whether by purchase, lease or otherwise. We presently own no real property. We maintain our offices at the residence of Ms. Lisa R. Powell, the President/Secretary/Treasurer, the sole director and an 83.7% shareholder of Rub A Dub Soap, located at 13279 West Ohio Avenue, Lakewood, Colorado 80228. We have made arrangements with Ms. Powell to use her residence free of charge until the completion of this offering. We have allocated the amount of $1,800 of the proceeds of this offering to pay rent to Ms. Powell during the period of one year following the closing of this offering at the rate of $150 per month. These arrangements are verbal and we have no lease with Ms. Powell to rent premises at her residence for the one-year period following the closing of the offering. The space we currently occupy is expected to be adequate to meet our foreseeable future needs if we realize the minimum proceeds of this offering. In the event of the maximum offering, we have allocated the sum of $12,000 for the rental of office space in the Denver, Colorado, area from an unaffiliated third party at the rate of approximately $1,000 per month. We have allocated no portion of the proceeds of this offering for the purchase of any real property. As of May 31, 2002, we had personal property valued, at historical cost, at a total of $11,976, including inventory ($1,787) and furniture and equipment ($10,189). We have allocated the sums of $1,250 (minimum) and $15,000 (maximum) out of the offering proceeds for the purchase of manufacturing and office equipment and the sums of $1,060 (minimum) and $15,000 (maximum) for the purchase of soap ingredients, including aromatherapy-grade essential oils, 30 coconut, olive and palm oils, herbs, grains, milk and honey, and packaging materials, including handmade paper, cellophane and wraffia. (h) Indicate the extent to which the Company's operations depend or are expected to depend upon patents, copyrights, trade secrets, know-how or other proprietary information and the steps undertaken to secure and protect this intellectual property, including any use of confidentiality agreements, covenants-not-to-compete and the like. Summarize the principal terms and expiration dates of any significant license agreements. Indicate the amounts expended by the Company for research and development during the last fiscal year, the amount expected to be spent this year and what percentage of revenues research and development expenditures were for the last fiscal year. We rely on a combination of trademark, trade secret and copyright law to protect our intellectual property. These laws afford only limited protection. Despite our efforts to protect our proprietary rights, unauthorized persons may attempt to copy aspects of our web site, including the look and feel of our web site, photographic prints that we sell, product organization, product information and sales mechanics or to obtain and use information that we regard as proprietary, such as the technology used to operate our web site and our content. We have not filed an application to secure registration for our trademark, "Rub A Dub Soap," in the United States or any other country. Any encroachment upon our proprietary information, the unauthorized use of our trademark, the use of a similar name by a competing company or a lawsuit initiated against us for our infringement upon another company's proprietary information or improper use of their trademark, may affect our ability to create brand name recognition, cause customer confusion and/or have a detrimental effect on our business. Litigation or proceedings before the U.S. Patent and Trademark Office may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets and domain name and to determine the validity and scope of the proprietary rights of others. Any litigation or adverse proceeding could result in substantial costs and diversion of resources and could seriously harm our business and operating results. Finally, if we sell photographic reproductions internationally, the laws of many countries do not protect our proprietary rights to as great an extent as do the laws of the United States. We have expended no funds for research and development during our last fiscal year ended December 31, 2001, and we do not expect to incur any research and development expenditures this year. (i) If the Company's business, products, or properties are subject to material regulation (including environmental regulation) by federal, state, or local governmental agencies, indicate the nature and extent of regulation and its effects or potential effects upon the Company. We are not currently subject to direct federal, state or local regulation other than regulations applicable to businesses generally or directly applicable to retailing or electronic commerce. However, as the Internet becomes increasingly popular, it is possible that a number of laws and regulations may be adopted with respect to the Internet. These laws may cover issues such as user privacy, freedom of expression, pricing, content and quality of products 31 and services, taxation, advertising, intellectual property rights and security of information. Furthermore, the growth of electronic commerce may prompt demand for more stringent consumer protection laws. Several states have proposed legislation to limit the uses of personal user information gathered online or require online services to establish privacy policies. The Federal Trade Commission has also initiated action against at least one online service regarding the manner in which personal information is collected from users and provided to third persons and has proposed regulations restricting the collection and use of information from minors online. We do not currently provide individual personal information regarding our users to third persons and we currently do not identify registered users by age. However, the adoption of additional privacy or consumer protection laws could create uncertainty in usage of the Internet and reduce the demand for our products and services or require us to redesign our web site. We are not certain how our business may be affected by the application of existing laws governing issues such as property ownership, copyrights, encryption and other intellectual property issues, taxation, libel, obscenity, qualification to do business and personal privacy. The vast majority of these laws were adopted prior to the advent of the Internet. As a result, they do not contemplate or address the unique issues of the Internet and related technologies. Changes in laws intended to address these issues could create uncertainty in the Internet marketplace. This uncertainty could reduce demand for our products, increase the cost of doing business as a result of litigation costs and/or increase product delivery costs. (j) State the names of any subsidiaries of the Company, their business purposes and ownership, and indicate which are included in the Financial Statements attached hereto. If not included, or if included but not consolidated, please explain. Not applicable. We have no subsidiaries. (k) Summarize the material events in the development of the Company (including any material mergers or acquisitions) during the past five years, or for whatever lesser period the Company has been in existence. Discuss any pending or anticipated mergers, acquisitions, spin-offs or recapitalizations. If the Company has recently undergone a stock split, stock dividend or recapitalization in anticipation of this offering, describe (and adjust historical per share figures elsewhere in this Prospectus accordingly). There have been no material events, such as mergers, acquisitions, spin-offs, recapitalizations, stock splits or stock dividends, in our development since our inception on September 28, 2001. 4.(a) If the Company was not profitable during its last fiscal year, list below in chronological order the events which in management's opinion must or should occur, or the milestones which in management's opinion the Company must or should reach, in order for the Company to become profitable, and indicate the expected manner of occurrence or the expected method by which the Company will achieve the milestones. In order to become fully operational and profitable, we must increase our inventory of handmade, natural, vegetable-based soaps and gift baskets; 32 thoroughly market the "Rub A Dub Soap" brand name and our products; attend trade shows; develop a full line of new products, including, initially, soap molds and soap making equipment; and enhance our web site. We are currently in the process of increasing our soap and gift basket inventory. We will pursue the other steps with the funds raised in this offering of common stock, if any. However, funding for the completion of these milestones is dependent upon the receipt of capital from equity and/or debt financing in addition to that anticipated from this offering and/or the realization of profits from operations. Because of this, we are unable to anticipate the timing of the milestones from when we begin offering the shares of common stock after effectiveness of the registration statement of which this prospectus is a part. Further, because we have only commenced the first milestone listed above, we are not yet able to determine the costs associated with each milestone. (b) State the probable consequences to the Company of delays in achieving each of the events or milestones within the above time schedule, and particularly the effect of any delays upon the Company's liquidity in view of the Company's then anticipated level of operating costs. (See Questions No. 11 and 12) The probable consequences to us of delays in achieving each of the milestones listed in Item 4.(a) immediately above is that we will likely continue to incur operating and net losses during the period of the delays, and the rate at which we incur these losses may increase. Any delays are expected to have an adverse effect on our liquidity because we intend to increase our costs and expenses substantially as we purchase soap ingredients, soap making utensils and software and computer supplies; increase our sales and marketing activities; increase our general and administrative functions to support our growing operations; and further develop our Internet web site. In the event that we are unable to implement our business plan and/or continue as a going concern because of the realization of continuing losses, we may need to dramatically change in our business plan, sell or merge our business or face bankruptcy. Note: After reviewing the nature and timing of each event or milestone, potential investors should reflect upon whether achievement of each within the estimated time frame is realistic and should assess the consequences of delays or failure of achievement in making an investment decision. OFFERING PRICE FACTORS If the securities offered are common stock, or are exercisable for or convertible into common stock, the following factors may be relevant to the price at which the securities are being offered. 5. What were net, after-tax earnings for the last fiscal year? (If losses, show in parenthesis.) Total $(93,848) ($(.03) per share) for the period from September 28, 2001 (inception) to May 31, 2002. 33 6. If the Company had profits, show offering price as a multiple of earnings. Adjust to reflect for any stock splits or recapitalizations, and use conversion or exercise price in lieu of offering price, if applicable. Offering Price Per Share = ------------------------------------------ ------------------------- Net After-Tax Earnings Last Year Per Share (price/earnings multiple) Not applicable. We had a loss for the period from September 28, 2001 (inception) to May 31, 2002. 7.(a) What is the net tangible book value of the Company? (If deficit, show in parenthesis.) For this purpose, net tangible book value means total assets (exclusive of copyrights, patents, goodwill, research and development costs and similar intangible items) minus total liabilities. $25,802 ($.007 per share) If the net tangible book value per share is substantially less than this offering (or exercise or conversion) price per share, explain the reasons for the variation. The difference between the price per share of common stock being offered hereby and the net tangible book value per share is primarily attributable to the fact that the initial four shareholders of Rub A Dub Soap, including Ms. Lisa R. Powell, our sole executive officer and director, acquired their aggregate 3,370,000 shares, representing 94.1% of our outstanding shares, of common stock at a cost of approximately $.001 per share, which is substantially less than the price of $.20 per share to be paid by the investors in this offering. If this offering is successful and we succeed in expanding our business as described in Item 3.(b) above and in achieving the milestones described in Item 4.(a) above, we expect that our sales, revenues, assets, shareholders' equity and net tangible book value will increase; our liquidity may improve; and we may achieve profitability. In that event, the net tangible book value per share of Rub A Dub Soap's common stock may be substantially equivalent to or in excess of the price of $.25 per share paid by investors in this offering. Further, we believe, but cannot assure, that if a public trading market develops for Rub A Dub Soap's common stock, the bid price for the common stock will reflect the company's future prospects and will likely be in excess of $.25. (b) State the dates on which the Company sold or otherwise issued securities during the last 12 months, the amount of such securities sold, the number of persons to whom they were sold, and relationship of such persons to the Company at the time of sale, the price at which they were sold and, if not sold for cash, a concise description of the consideration. (Exclude bank debt.) 34
Date Relationship Number Price Of Sale Name of Shareholder of Shareholder of Shares Per Share Consideration - -------- ------------------- --------------- ---------- --------- ------------- 9/28/01 Lisa R. Powell President, Secre- 3,000,000 $.001 (1) tary, Treasurer and Director 11/29/01 Bruce A. Capra None 135,000 $.001 $135.00(3) 12/10/01 Derek J. Jones(2) None 135,000 $.001 $135.00(3) 1/2/02 Paul J. Zueger None 100,000 $.015 $2,500.00(4) 1/31/02 Paul J. Zueger None 25,000 $.20 $5,000.00 1/24/02 Aylin Cankardes None 20,000 $.20 $4,000.00 1/16/02 Bruce Granger None 5,000 $.20 $1,000.00 1/21/02 Joan Granger None 5,000 $.20 $1,000.00 1/21/02 Albert Guida None 500 $.20 $100.00 1/18/02 Michael Legler None 25,000 $.20 $5,000.00 1/25/02 Karen Lucht None 25,000 $.20 $5,000.00 1/21/02 Margolis Trust None 15,000 $.20 $3,000.00 1/21/02 Barry Meyer None 10,000 $.20 $2,000.00 1/21/02 Jodi Meyer None 5,000 $.20 $1,000.00 1/17/02 Darlene Nelson None 15,000 $.20 $3,000.00 1/22/02 Lynn Ohmstede None 5,000 $.20 $1,000.00 2/12/02 Michael Robinson None 250 $.20 $50.00 2/12/02 Tracy Robinson None 250 $.20 $50.00 1/30/02 James Scheel None 500 $.20 $100.00 1/22/02 Mark Shaner None 1,250 $.20 $250.00 1/22/02 Christopher Townson None 250 $.20 $50.00 35 1/23/02 Robin Kolsky Yaeger None 5,000 $.20 $1,000.00 1/22/02 Douglas Zueger None 25,000 $.20 $5,000.00 1/21/02 Paul Chris Zueger None 25,000 $.20 $5,000.00 - ------------------ (1) Includes assets comprised of web site software, soap making supplies and utensils, books, furniture, soap recipes and a customer list valued at a total of $3,050. (2) Patricia Cudd, Esq., Rub A Dub's legal counsel, purchased the shares on June 14, 2002. (3) Does not include the value of $26,865 in services in excess of cash paid, recorded for financial statement purposes. (4) Does not include the value of $19,900 in services in excess of cash paid, recorded for financial statement purposes.
8.(a) What percentage of the outstanding shares of the Company will the investors in this offering have? (Assume exercise of outstanding options, warrants or rights and conversion of convertible securities, if the respective exercise or conversion prices are at or less than the offering price. Also assume exercise of any options, warrants or rights and conversions of any convertible securities offered in this offering.) If the maximum is sold: 18.3% If the minimum is sold: 2.7% (b) What post-offering value is management implicitly attributing to the entire Company by establishing the price per security set forth on the cover page (or exercise or conversion price if common stock is not offered)? (Total outstanding shares after offering times offering price, or exercise or conversion price if common stock is not offered.) If the maximum is sold: $1,095,750* If the minimum is sold: $920,750* *These values assume that the Company's capital structure would be changed to reflect any conversions of outstanding convertible securities and any use of outstanding securities as payment in the exercise of outstanding options, warrants or rights included in the calculation. The type and amount of convertible or other securities thus eliminated would be: not applicable. These values also assume an increase in cash in the Company by the amount of any cash payments that would be made upon cash exercise of options, warrants or rights included in the calculations. The amount of such cash would be: $-0-. Not applicable. We have no outstanding convertible securities, including options, warrants or other rights. (For above purposes, assume outstanding options are exercised in determining "shares" if the exercise prices are at or less than the offering price. All convertible securities, including outstanding convertible securities, shall be assumed converted and any options, warrants or rights in this offering shall be assumed exercised.) 36 Note: After reviewing the above, potential investors should consider whether or not the offering price (or exercise or conversion price, if applicable) for the securities is appropriate at the present stage of the Company's development. USE OF PROCEEDS 9.(a) The following table sets forth the use of the proceeds from this offering:
If Minimum If Maximum Sold Sold Amount Per Cent Amount Per Cent ---------- -------- ---------- -------- Total Proceeds $25,000 100.00% $200,000 100.00% ------- ------- -------- ------- Less: Offering Expenses Commissions & Finders Fees -0- 0.00% -0- 0.00% Legal & Accounting(1) 4,000 16.00% 4,000 2.00% Copying & Advertising 1,500 6.00% 1,500 .75% Other (Specify): Blue Sky Filing Fees 200 .80% 200 .20% --- --- --- ---- Net Proceeds from Offering 19,300 77.20% 194,300 97.15% Use of Net Proceeds Management Salary(2) 6,000 24.00% 25,000 12.50% Marketing 3,000 16.00% 40,000 20.00% New Product Development 1,750 7.00% 32,500 16.25% Office Rent 1,800(3) 7.20% 12,000(4) 6.00% Administrative expenses 2,440 5.76% 5,440 2.72% Manufacturing and Office Equipment 1,750 7.00% 35,000 17.50% Soap Ingredients and Packaging 1,560 6.24% 15,000 7.50% Professional Fees 1,000 4.00% 5,000 2.50% Working Capital -0- 0.00% 9,360 4.68% Enhancement of Web Site -0- 0.00% 15,000 7.50% --- ----- ------ ----- Total Use of Net Proceeds $19,300 77.20% $194,300 97.15% - ------------------
(1) The total legal fees for this offering will be $10,000, which amount has been paid heretofore with funding from other sources. (2) Represents the salary of Ms. Lisa R. Powell, our President/Secretary/Treasurer and the sole director, and an 83.7% shareholder, of Rub A Dub Soap, for a period of one year from the date of the closing of this offering. 37 (3) Payable to Ms. Powell for the maintenance of our offices at her residence for a period of one year from the date of the closing of this offering. (4) Payable to an unaffiliated third party for office space in the Denver, Colorado, area to be rented at the rate of approximately $1,000 per month. (b) If there is no minimum amount of proceeds that must be raised before the Company may use the proceeds of the offering, describe the order of priority in which the proceeds set forth above in the column "If Maximum Sold" will be used. Not applicable. We must raise a minimum of at least $25,000 from the sale of shares of common stock before we may use the proceeds of the offering. Note: After reviewing the portion of the offering allocated to the payment of offering expenses, and to the immediate payment to management and promoters of any fees, reimbursements, past salaries or similar payments, a potential investor should consider whether the remaining portion of his investment, which would be that part available for future development of the Company's business and operations, would be adequate. 10.(a) If material amounts of funds from sources other than this offering are to be used in conjunction with the proceeds from this offering, state the amounts and sources of such other funds, and whether funds are firm or contingent. If contingent, explain. Not applicable. No material amounts of funds from sources other than this offering are to be used in conjunction with the proceeds from this offering. (b) If any material part of the proceeds is to be used to discharge indebtedness, describe the terms of such indebtedness, including interest rates. If the indebtedness to be discharged was incurred within the current or previous fiscal year, describe the use of proceeds of such indebtedness. Not applicable. No part of the proceeds is to be used to discharge indebtedness. (c) If any material amount of proceeds is to be used to acquire assets, other than in the ordinary course of business, briefly describe and state the cost of the assets and other material terms of the acquisitions. If the assets are to be acquired from officers, directors, employees or principal stockholders of the Company or their associates, give the names of the persons from whom the assets are to be acquired and set forth the cost to the Company, the method followed in determining the cost, and any profit to such persons. We will acquire assets with a total of $3,310 of the minimum proceeds, and $50,000 of the maximum proceeds, of the offering. The amounts of $1,750 (minimum) and $35,000 (maximum) have been allocated for the acquisition of manufacturing and office equipment and the sums of $1,560 (minimum) and $15,000 (maximum) have been allocated for the purchase of soap ingredients and packaging materials. The assets will be purchased for cash. We will not acquire any of 38 these assets from Ms. Lisa R. Powell, our sole officer, director, employee and principal stockholder, or her associates. (d) If any amount of the proceeds is to be used to reimburse any officer, director, employee or stockholder for services already rendered, assets previously transferred, or monies loaned or advanced, or otherwise, explain: Not applicable. No amount of the proceeds is to be used to reimburse any officer, director, employee or shareholder for services already rendered, assets previously transferred, monies loaned or advanced or otherwise. 11. Indicate whether the Company is having or anticipates having within the next 12 months any cash flow or liquidity problems and whether or not it is in default or in breach of any note, loan, lease or other indebtedness or financing arrangement requiring the Company to make payments. Indicate if a significant amount of the Company's trade payables have not been paid within the stated trade term. State whether the Company is subject to any unsatisfied judgments, liens or settlement obligations and the amounts thereof. Indicate the Company's plans to resolve any such problems. We are not having and do not anticipate having within the next twelve months any cash flow or liquidity problems. However, in the next twelve months, we intend to increase our costs and expenses substantially as we increase our sales and marketing activities and attend trade shows; develop new products; acquire manufacturing and office equipment and additional soap ingredients; increase our general and administrative functions to support our growing operations; and, in the event of the maximum offering, further develop our Internet web site. The additional revenues that we expect to generate may not be sufficient to offset these costs and expenses and enable us to operate profitably. Further, our efforts to grow our business may be more expensive than we currently anticipate or these efforts may not result in proportional increases in our revenues. As a result, we believe that we may incur an operating and net loss for at least the next year, and possibly longer, and that the rate at which we incur these losses may increase. We are not a party to or the maker of any note, loan, lease or other indebtedness or financing arrangement requiring us to make payments. Our trade payables have been paid within the stated trade term. We are not subject to any unsatisfied judgments, liens or settlement obligations. 12. Indicate whether proceeds from this offering will satisfy the Company's cash requirements for the next 12 months, and whether it will be necessary to raise additional funds. State the source of additional funds, if known. Management anticipates, without assurance, that the proceeds from this offering will satisfy our cash requirements for the next twelve months and that it will not be necessary to raise additional funds. If we receive the maximum proceeds of this offering, we will have net proceeds of $194,300 available for administrative expenses, marketing and trade shows, new product development, the purchase of equipment and supplies, working capital and the enhancement of our web site. We will only have net proceeds of $19,300 available for these 39 purposes, not including web site enhancement and working capital, if we realize the minimum offering proceeds. Accordingly, we expect the scale of our operations to be directly related to the amount of funding available to us from this offering. That is, we will operate on a significantly smaller scale if we are only successful in raising the minimum, as compared to the maximum, proceeds. Also, as discussed in Item 11. above, in the event that our costs and expenses increase dramatically as we seek to grow our business, we may continue to realize operating and net losses for the next year or longer, and we may incur these losses at an increasingly rapid rate. CAPITALIZATION 13. Indicate the capitalization of the Company as of the most recent balance sheet date (adjusted to reflect any subsequent stock splits, stock dividends, recapitalizations or refinancings) and as adjusted to reflect the sale of the minimum and maximum amount of securities in this offering and the use of the net proceeds therefrom:
Amount Outstanding As of: As Adjusted 5/31/02 Minimum Maximum ------- ------- ------- Debt: Short-term debt (average interest rate __%) $-0- $-0- $-0- Long-term debt (average interest rate __%) $365 $365 $365 Total debt $365 $365 $365 Stockholders' equity (deficit): Preferred stock - par or state value (by class of preferred in order of preferences) $-0- $-0- $-0- Common stock - par or stated value $3,583 $4,683 $4,383 Additional paid in capital $116,067 $139,050 $314,750 Retained earnings (deficit) $(93,848) $(93,848) $(93,848) Total stockholders equity $25,802 $49,885 $225,285 Total capitalization $26,167 $50,250 $225,650
Number of preferred shares authorized to be outstanding: 10,000,000 shares. Par or stated value, if any: $.01. Number of common shares authorized: 100,000,000 shares. Par or stated value per share, if any: $.001. Number of common shares reserved to meet conversion requirements or for the issuance upon exercise of options, warrants or rights: -0- shares. Not applicable. 40 DESCRIPTION OF SECURITIES 14. The securities being offered hereby are: [X] Common stock [ ] Preferred or preference stock [ ] Notes or debentures [ ] Units of two or more types of securities composed of: [ ] Other: 15. These securities have: Yes No [ ] [X] Cumulative voting rights [ ] [X] Other special voting rights [ ] [X] Preemptive rights to purchase in new issues of shares [ ] [X] Preference as to dividends or interest [ ] [X] Preference upon liquidation [ ] [X] Other special rights or preferences (specify): Explain: not applicable. 16. Are the securities convertible? [ ] Yes [X] No If so, state conversion price or formula. Date when conversion becomes effective: - / - / - Not applicable. Date when conversion expires: - / - / - Not applicable. 17.(a) If securities are notes or other types of debt securities: (1) What is the interest rate? -0-% Not applicable. If interest rate is variable or multiple rates, describe: not applicable. (2) What is the maturity date: - / - / - Not applicable. If serial maturity dates, describe: not applicable. (3) Is there a mandatory sinking fund? [ ] Yes [X] No Not applicable. Describe: not applicable. (4) Is there a trust indenture? [ ] Yes [X] No Not applicable. Name, address and telephone number of trustee. Not applicable. (5) Are the securities callable or subject to redemption? [ ] Yes [X] No Not applicable. Describe, including redemption prices: not applicable. (6) Are the securities collateralized by real or personal property? [ ] Yes [X] No Describe: not applicable. 41 (7) If these securities are subordinated in right of payment of interest or principal, explain the terms of such subordination. Not applicable. How much currently outstanding indebtedness of the Company is senior to the securities in right of payment of interest or principal? $-0- Not applicable. How much indebtedness shares in right of payment on an equivalent (pari passu) basis? $-0- Not applicable. How much indebtedness is junior (subordinated) to the securities? $-0- Not applicable. (b) If notes or other types of debt securities are being offered and the Company had earnings during its last fiscal year, show the ratio of earnings to fixed charges on an actual and pro forma basis for that fiscal year. "Earnings" means pretax income from continuing operations plus fixed charges and capitalized interest. "Fixed charges" means interest (including capitalized interest), amortization of debt discount, premium and expense, preferred stock dividend requirements of majority owned subsidiary, and such portion of rental expense as can be demonstrated to be representative of the interest factor in the particular case. The pro forma ratio of earnings to fixed charges should include incremental interest expense as a result of the offering of the notes or other debt securities. Not applicable. Shares of common stock, not notes or other types of debt securities, are being offered. Note: Care should be exercised in interpreting the significance of the ratio of earnings to fixed charges as a measure of the "coverage" of debt service, as the existence of earnings does not necessarily mean that the Company's liquidity at any given time will permit payment of debt service requirements to be timely made. See Questions No. 11. and 12. See also the Financial Statements and especially the Statement of Cash Flows. 18. If securities are preference or preferred stock: not applicable. Are unpaid dividends cumulative? [ ] Yes [X] No Are securities callable? [ ] Yes [X] No Explain: Not applicable. Note: Attach to this Prospectus copies or a summary of the charter, bylaw or contractual provision or document that gives rise to the rights of holders of preferred or preference stock, notes or other securities being offered. We are offering shares of common stock, not preferred or preference stock, notes or other securities having rights superior to the rights of shareholders of common stock. 19. If securities are capital stock of any type, indicate restrictions on dividends under loan or other financing arrangements or otherwise: 42 Not applicable. There are no restrictions on dividends under loan or other financing arrangements or otherwise. 20. Current amount of assets available for payment of dividends (if deficit must be first made up, show deficit in parenthesis): $(93,848) It is highly unlikely that we will pay dividends on the common stock in the foreseeable future. PLAN OF DISTRIBUTION 21. The selling agents (that is, the persons selling the securities as agent for the Company for a commission or other compensation) in this offering are: Not applicable. There are no selling agents in this offering. 22. Describe any compensation to selling agents or finders, including cash, securities, contracts or other consideration, in addition to the cash commission set forth as a per cent of the offering price on the cover page of this Prospectus. Also indicate whether the Company will indemnify the selling agents or finders against liabilities under the securities laws. ("Finders" are persons who for compensation act as intermediaries in obtaining selling agents or otherwise making introductions in furtherance of this offering.) Not applicable. We will not utilize the services of selling agents or finders and, accordingly, no selling commissions or other compensation will be paid with respect to sales of common stock in this offering. 23. Describe any material relationships between any of the selling agents or finders and the Company or its management. Not applicable. See the responses to Items 21. and 22. above. Note: After reviewing the amount of compensation to the selling agents or finders for selling the securities, and the nature of any relationship between the selling agents or finders and the Company, a potential investor should assess the extent to which it may be inappropriate to rely upon any recommendation by the selling agents or finders to buy the securities. 24. If this offering is not made through selling agents, the names of persons at the Company through which this offering is being made: Name: Ms. Lisa R. Powell Address: 13279 West Ohio Avenue Lakewood, Colorado 80228 Telephone No.: (303) 949-5834 43 25. If this offering is limited to a special group, such as employees of the Company, or is limited to a certain number of individuals (as required to qualify under Subchapter S of the Internal Revenue Code) or is subject to any other limitations, describe the limitations and any restrictions on resale that apply: There are no limitations on the types of persons who may invest. Will the certificates bear a legend notifying holders of such restrictions? [ ] Yes [X] No Not applicable. 26.(a) Name, address and telephone number of independent bank or savings and loan association or other similar depository institution acting as escrow agent if proceeds are escrowed until minimum proceeds are raised: Not applicable. Proceeds will not be escrowed until minimum proceeds are raised. (b) Date at which funds will be returned by escrow agent if minimum proceeds are not raised: See the response to Item 26.(a) above regarding the fact that the minimum proceeds of the offering will not be escrowed. However, if we do not receive subscriptions for at least 100,000 shares of common stock within ninety days from the date of this prospectus (unless extended for up to an additional ninety days by us in our sole discretion), we will refund the funds promptly to subscribers, without deduction or interest. Will interest on proceeds during escrow period be paid to investors? [ ] Yes [X] No 27. Explain the nature of any resale restrictions on presently outstanding shares, and when those restrictions will terminate, if this can be determined: Of the 3,583,000 shares of common stock of Rub A Dub Soap presently outstanding, (i) 3,000,000 shares of common stock are owned by Ms. Lisa R. Powell, our sole executive officer and director; (ii) 370,000 shares are owned by three shareholders, including Messrs. Bruce A. Capra and Paul J. Zueger and Patricia Cudd, Esq., sole proprietor of Cudd & Associates, our legal counsel in connection with this offering; and (iii) 213,000 shares are owned by twenty shareholders, including Mr. Zueger. The shares of common stock described in (i) and (ii) of the previous sentence are "restricted securities" because of their issuance and sale in reliance upon the exemptions from registration provided under Section 4(2) of the Securities Act of 1933 and Section 11-51-308(1)(p) of the Colorado Securities Act and the shares described in (iii) of the previous sentence are "restricted securities" because of their issuance and sale in reliance upon the exemptions from registration provided under Rule 504 of Regulation D under Section 3(b) of the Securities Act of 1933 and Section 11-51-308(1)(p) of the Colorado Securities Act. As such, these shares of common stock are subject to the resale restrictions under Rule 144 of Section 4(1) under the Securities Act. Rule 144 of the Securities Act provides, in essence, that holders of restricted securities for a period of one year after the acquisition of the securities from us or an affiliate of ours, may, every three months, sell to a market maker or in ordinary brokerage transactions an amount 44 equal to one per cent of our then outstanding securities. Nonaffiliates of Rub A Dub Soap who hold restricted securities for a period of two years may sell their securities without regard to volume limitations or other restriction. Accordingly, the aggregate 3,000,000 shares of common stock owned by Ms. Powell will become available for resale under Rule 144 commencing September 28, 2002; 135,000 shares owned by each of Mr. Capra and Ms. Cudd become available for resale under Rule 144 commencing November 29 and December 10, 2002, respectively; 100,000 shares and 25,000 shares owned by Mr. Zueger will become available for resale under Rule 144 on January 2 and January 31, 2002, respectively; and the balance of 188,000 shares of common stock owned by nineteen shareholders will become available for resale under Rule 144 on various dates during the period commencing on January 16 through February 12, 2002. In each instance, the date on which the shares of common stock become available for resale under Rule 144 is a period of one year from the date of purchase of the shares from Rub A Dub Soap. Following the expiration of two years from the date of purchase, these shareholders may sell their securities without regard to volume limitations or other restriction if they are not then affiliates of Rub A Dub Soap and have not been affiliates for the preceding three months. Sales of these shares of common stock under Rule 144 may have a depressive effect on the market price of our common stock, should a public market develop for the stock. Transfers and resales of the shares of common stock will be subject, in addition to the federal securities laws, to the "Blue Sky" laws of each state in which the transfer or resale occurs. Note: Equity investors should be aware that unless the Company is able to complete a further public offering or the Company is able to be sold for cash or merged with a public company that their investment in the Company may be illiquid indefinitely. DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS 28. If the Company has within the last five years paid dividends, made distributions upon its stock or redeemed any securities, explain how much and when: Not applicable. We have not, since our inception on September 28, 2001, paid dividends, made distributions upon our stock or redeemed any securities. OFFICERS AND KEY PERSONNEL OF THE COMPANY 29. Chief executive officer: Title: President Name: Ms. Lisa R. Powell Age: 29 Office Street Address: Telephone No.: (303) 949-5834 13279 West Ohio Avenue, Lakewood, Colorado 80228 Name of employers, titles and dates of positions held during past five years with an indication of job responsibilities. 45 Lisa R. Powell has served as the President, the Secretary and the Treasurer -------------- of Rub a Dub Soap since its inception on September 28, 2001. Ms. Powell has been making natural, vegetable-based soaps by hand and practicing aromatherapy as a hobby since May 1996. Since December 1998, she has been employed by Muller Engineering Corporation, Denver, Colorado, as a design engineer. From June 1993 through December 1998, Ms. Powell was employed as a water drainage engineer by the U.S. National Park Service. She is a licensed civil engineer specializing in roadway design. Education (degrees, schools, and dates): Ms. Powell received a Bachelor of Science degree in civil engineering from the University of Colorado, Boulder, Colorado, in 1996. Also a director of the Company [X] Yes [ ] Indicate amount of time to be spent on Company matters if less than full time: Not applicable. Ms. Powell will spend 20% of her time and effort on Rub A Dub Soap's matters. 30. Chief operating officer: See the response to Item 29. above. 31. Chief financial officer: Title: Secretary/Treasurer See the response to Item 29. above. 32. Other key personnel: None. DIRECTORS OF THE COMPANY 33. Number of directors: one. If directors are not elected annually, or are elected under a voting trust or other arrangement, explain: Not applicable. Directors are elected annually. 34. Information concerning outside or other directors (i.e., those not described above): Not applicable. We have no outside directors or directors other than Ms. Lisa R. Powell. 35.(a) Have any of the officers or directors ever worked for or managed a company (including a separate subsidiary or division of a larger enterprise) in the same business as the Company: [ ] Yes [X] No Explain: 46 (b) If any of the officers, directors or other key personnel have ever worked for or managed a company in the same business or industry as the Company or in a related business or industry, describe what precautions, if any (including the obtaining of releases or consents from prior employers), have been taken to preclude claims by prior employers for conversion or theft of trade secrets, know-how or other proprietary information. Not applicable. Ms. Lisa R. Powell, our sole executive officer, director and key employee, has never worked for or managed a company in our business of retailing handmade, natural, vegetable-based soaps and gift baskets online or in a related business or industry. (c) If the Company has never conducted operations or is otherwise in the development stage, indicate whether any of the officers or directors has ever managed any other company in the start-up or development stage and describe the circumstances, including relevant dates. Not applicable. Ms. Lisa R. Powell, our sole executive officer and director, has never managed any other company in the start-up or development stage. (d) If any of the Company's key personnel are not employees but are consultants or other independent contractors, state the details of their engagement by the Company. Not applicable. Ms. Lisa R. Powell, our sole executive officer and director, is an employee although she has received no cash or other remuneration from us, except that we issued 3,000,000 shares of common stock to her in consideration for her assignment to us of certain assets, including web site software, soap making supplies and utensils, books, furniture, soap recipes and a customer list valued at a total of $3,050. The sums of $6,000 of the minimum proceeds, and $25,000 of the maximum proceeds, anticipated to be received from this offering have been allocated for a salary of $6,000 and $25,000 per annum in the event of the minimum and the maximum offerings, respectively, payable to Ms. Powell during the period of one year from the closing of this offering. (e) If the Company has key man life insurance policies on any of its officers, directors or key personnel, explain, including the names of the persons insured, the amount of insurance, whether the insurance proceeds are payable to the Company and whether there are arrangements that require the proceeds to be used to redeem securities or pay benefits to the estate of the insured person or a surviving spouse. Not applicable. We have no key man life insurance policy on Ms. Lisa R. Powell, our sole executive officer, director and key employee. 36. If a petition under the Bankruptcy Act or any State insolvency law was filed by or against the Company or its officers, directors or other key personnel or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of any such persons, or any partnership in which any of such persons was a general partner at or within the past five years, or any corporation or business association of which any such person was 47 an executive officer at or within the past five years, set forth below the name of such persons, and the nature and date of such actions. Not applicable. No petition under the Bankruptcy Act or any State insolvency law has been filed by or against Rub A Dub Soap or Ms. Lisa R. Powell, our sole executive officer, director and key employee, and no receiver, fiscal agent or similar officer has been appointed by a court for the business or property of Rub A Dub Soap or Ms. Powell, or any partnership in which Ms. Powell was a general partner at or within the past five years, or any corporation or business association of which Ms. Powell was an executive officer at or within the past five years. Note: After reviewing the information concerning the background of the Company's officers, directors and other key personnel, potential investors should consider whether or not these persons have adequate background and experience to develop and operate this Company and to make it successful. In this regard, the experience and ability of management are often considered the most significant factors in the success of a business. PRINCIPAL STOCKHOLDERS 37. Principal owners of the Company (those who beneficially own directly or indirectly 20% or more of the common and preferred stock presently outstanding) starting with the largest common stockholder. Include separately all common stock issuable upon conversion of convertible securities (identifying them by asterisk) and show average price per share as if conversion has occurred. Indicate by footnote if the price paid was for a consideration other than cash and the nature of any such consideration.
No. of Shares Shares of Average No. of Shares After Offering if Common Stock Price Per Share Now Held % of Total(1) All Securities Sold % of Total ------------ --------------- --------------- ------------- ------------------- ---------- Name: Lisa R. Powell $.001(2) 3,000,000 83.7% 3,000,000 68.5%(3) (maximum) 81.5%(4) (minimum)
Office Street Address: 13279 West Ohio Avenue Lakewood, Colorado 80228 Telephone No. (303) 949-5834 - ------------------ 48 (1) Based upon 3,583,000 shares of our common stock issued and outstanding as of the date of this prospectus. (2) Represents consideration comprised of certain assets assigned to us by Ms. Powell, including web site software, soap making supplies and utensils, books, furniture, soap recipes and a customer list, valued at a total of $3,050. (3) Based upon 4,383,000 shares of our common stock to be issued and outstanding if the maximum 800,000 shares of common stock are sold. (4) Based upon 3,683,000 shares of our common stock to be issued and outstanding if the minimum 100,000 shares of common stock are sold. 38. Number of shares beneficially owned by officers and directors as a group: Before offering: 3,000,000 shares of common stock (83.7% of total outstanding) After offering: a) Assuming minimum securities sold: 3,000,000 shares of common stock (81.5% of total outstanding) b) Assuming maximum securities sold: 3,000,000 shares of common stock (68.5% of total outstanding) (Assume all options exercised and all convertible securities converted.) MANAGEMENT RELATIONSHIPS, TRANSACTIONS AND REMUNERATION 39.(a) If any of the officers, directors, key personnel or principal stockholders are related by blood or marriage, please describe. Not applicable. Ms. Lisa R. Powell is our sole executive officer, director, key employee and principal shareholder. (b) If the Company has made loans to or is doing business with any of its officers, directors, key personnel or 20% stockholders, or any of their relatives (or any entity controlled directly or indirectly by any such persons) within the last two years, or proposes to do so within the future, explain. (This includes sales or lease of goods, property or services to or from the Company, employment or stock purchase contracts, etc.) State the principal terms of any significant loans, agreements, leases, financing or other arrangements. We borrowed the sum of $365 from Ms. Lisa R. Powell, the President, the Secretary, the Treasurer, a director and an 83.7% shareholder of Rub A Dub Soap, during the period from our inception on September 28, 2001, through May 31, 2002. This amount is shown as "shareholder loan" at March 31, 2002, in the accompanying audited Financial Statements of Rub A Dub Soap. On September 28, 2002, we issued 3,000,000 shares of common stock to Ms. Powell in consideration for her assignment to us of certain assets, including 49 web site software, soap making supplies and utensils, books, furniture, soap recipes and a customer list valued at a total of $3,050. We have a verbal arrangement with Ms. Powell to rent space at her residence located at 13279 West Ohio Avenue, Lakewood, Colorado 80228, at the rate of $150 per month commencing with the date of the closing of this offering. We have allocated the sum of $1,800 out of the minimum proceeds of this offering to pay rent for these facilities for a period of one year from the closing date of the offering. Ms. Powell has provided us with these facilities rent-free since the date of our organization on September 28, 2002. In the event of the maximum offering, we anticipate that we will rent office space from an unaffiliated third party at a rate of approximately $1,000 per month. Except as described above, we have not made loans to or done business with Ms. Powell, or any of her relatives (or any entity controlled directly or indirectly by Ms. Powell) since our inception on September 28, 2002, and have no plans to do so in the future. (c) If any of the Company's officers, directors, key personnel or 20% stockholders has guaranteed or co-signed any of the company's bank debt or other obligations, including any indebtedness to be retired from the proceeds of this offering, explain and state the amounts involved. Not applicable. We have no bank debt or other obligations except the indebtedness to Ms. Powell, our sole executive officer and director, which is to be retired from the proceeds of this offering, described in Item 39.(b) immediately above. 40.(a) List all remuneration by the Company to officers, directors and key personnel for the last fiscal year:
Name-Officer, Director and Key Employee Cash Other - --------------------------------------- ---- -------------------------------- Lisa R. Powell, President, Secretary, $-0- 3,000,000 shares of common Treasurer and Key Employee stock* Others: Not applicable Total: $-0- 3,000,000 shares of common stock Directors as a group (number of persons - 1) $-0- 3,000,000 shares of common stock - ------------------ *(1) The shares of common stock were received in consideration for certain assets assigned to us by Ms. Powell, including web site software, soap making supplies and utensils, books, furniture, soap recipes and a customer list, valued at a total of $3,050.
(b) If remuneration is expected to change or has been unpaid in prior 50 years, explain: We have allocated the sums of $6,000 of the minimum proceeds, and $25,000 of the maximum proceeds, of this offering to pay Ms. Lisa R. Powell, the President/Secretary/Treasurer, a director and an 83.7% shareholder of Rub A Dub Soap, a salary of $6,000 and $25,000 for a period of one year commencing with the closing of this offering in the event of the minimum and the maximum offerings, respectively. Except as aforesaid, we do not intend to pay Ms. Powell, our sole executive officer, director and key employee, a salary or compensate her with other remuneration for the foreseeable future. (c) If any employment agreements exist or are contemplated, describe: Not applicable. No employment agreement exists or is contemplated. 41.(a) Number of shares subject to issuance under presently outstanding stock purchase agreements, stock options, warrants or rights: -0- shares (-0-% of total shares to be outstanding after the completion of the offering if all securities sold, assuming exercise of options and conversion of convertible securities). Indicate which have been approved by shareholders. State the expiration dates, exercise prices and other basic terms for these securities: Not applicable. We have no stock purchase agreements, stock options, warrants or other convertible securities or rights outstanding. (b) Number of common shares subject to issuance under existing stock purchase or option plans but not yet covered by outstanding purchase agreements, options or warrants: -0- shares. Not applicable. We have no existing stock purchase, option or similar plans. (c) Describe the extent to which future stock purchase agreements, stock options, warrants or rights must be approved by shareholders. Shareholders of Rub A Dub Soap are not required to approve future stock purchase agreements, stock options, warrants or rights. 42. If the business is highly dependent on the services of certain key personnel, describe any arrangements to assure that these persons will remain with the Company and not compete upon any termination: Ms. Lisa R. Powell, the President, the Secretary and the Treasurer, the sole director and the owner of 3,000,000 shares, representing approximately 83.7% of the outstanding shares, of common stock of Rub A Dub Soap, is our only key employee. There are no arrangements to assure that Ms. Powell will remain with us and not compete upon any termination. Note: After reviewing the above, potential investors should consider whether or not the compensation to management and other key personnel, directly or indirectly, is reasonable in view of the present stage of the Company's development. 51 LITIGATION 43. Describe any past, pending or threatened litigation or administrative action which has had or may have a material effect upon the Company's business, financial condition, or operations, including any litigation or action involving the Company's officers, directors or other key personnel. State the names of the principal parties, the nature and current status of the matters, and amounts involved. Give an evaluation by management or counsel, to the extent feasible, of the merits of the proceedings or litigation and the potential impact on the Company's business, financial condition, or operations. There is no past, pending or threatened litigation or administrative action, including any litigation or action involving Ms. Lisa R. Powell, our sole executive officer, director and key employee, that has had or may have a material effect upon our business, financial condition or operations. FEDERAL TAX ASPECTS 44. If the Company is an S corporation under the Internal Revenue Code of 1986, and it is anticipated that any significant tax benefits will be available to investors in this offering, indicate the nature and amount of such anticipated tax benefits and the material risks of their disallowance. Also, state the name, address and telephone number of any tax advisor that has passed upon these tax benefits. Attach any opinion or description of the tax consequences of an investment in the securities by the tax advisor. Not applicable. We are a "C" corporation under the Internal Revenue Code of 1986 and no such tax benefits are believed to exist. We have not consulted with a tax advisor. Name of tax advisor: not applicable Address: not applicable Telephone no.: not applicable Note: Potential investors are encouraged to have their own personal tax consultant contact the tax advisor to review details of the tax benefits and the extent that the benefits would be available and advantageous to the particular investor. MISCELLANEOUS FACTORS 45. Describe any other material factors, either adverse or favorable, that will or could affect the Company or its business (for example, discuss any defaults under major contracts, any breach of bylaw provisions, etc.) or which are necessary to make any other information in this Prospectus not misleading or incomplete. Not applicable. 52 FINANCIAL STATEMENTS 46. The audited Financial Statements of Rub A Dub Soap, Inc., commence on page F-1 hereof in response to Part F/S of this prospectus section of Form SB-1. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CERTAIN RELEVANT FACTORS 47. If the Company's financial statements show losses from operations, explain the causes underlying these losses and what steps the Company has taken or is taking to address these causes. Of our net loss of $(93,848) incurred during the period from our inception (September 28, 2001) through May 31, 2002, the sum of $74,280 represents compensation expense that we recorded for financial statement purposes in connection with our issuance of 370,000 shares of our common stock to three individuals for $2,770 in cash at the rate of $.007 per share. This amount was calculated based upon the difference between the most recent price of $.20 per share that we charged for the sale of shares of our common stock and the actual price of $.007 that these three individuals paid for the acquisition of the shares. The causes underlying our operating losses include, primarily, (i) insufficient capital available for the purchase of soap ingredients, packaging materials and soap making equipment, marketing and sales, general and administrative expenses, new product development and enhancement of our web site; limited sales and marketing activities; (ii) limited prior experience as an online retailer; insufficient customer traffic to our web site; (iii) an inadequate volume of online purchases; (iv) an insufficient number of strategic relationships needed to help promote our web site; (v) an insufficient number of personnel; and (vi) only one product line and a limited number of products available for sale. We are currently taking steps to increase our inventory of soaps and gift baskets. We are conducting this offering to raise additional capital for all of the activities listed in (i) immediately above. We are striving to improve our skills as an online retailer and establish strategic relationships with other natural product and related web sites and portals that can drive customer traffic to our web site. 48. Describe any trends in the Company's historical operating results. Indicate any changes now occurring in the underlying economics of the industry of the Company's business which, in the opinion of management, will have a significant impact (either favorable or adverse) upon the Company's results of operations within the next 12 months, and give a rough estimate of the probable extent of the impact, if possible. We have only conducted operations as an online retailer of handmade, natural, vegetable-based soaps and gift baskets since January 2001. While we are currently participating in a test marketing trial in four of eleven Hallmark card stores located in the Denver, Colorado, area and Phoenix, Arizona, the results of this trial will not be known until late September 2002. We have plans to commence attending trade shows with the proceeds anticipated from this offering. Although we intend to generate direct product sales from 53 individually-hosted parties, no such parties have been held as of the date of this prospectus. Accordingly, we believe that we have been operational for a length of time inadequate for us to discern any significant trends in our historical operating results. However, we have observed that the gift basket portion of our business is seasonal in that sales increase on holidays and, in particular, Mother's Day. The seasonality of our business is expected to diminish as online sales increase and we continue to increase our marketing and expand, enhance and improve our web site. Also, we experienced increasing sales until May 2002, when sales decreased, in our opinion, coincident with the general downturn in the economy. We believe, although we cannot be certain, that increasing consumer interest in natural products of all types, including the handmade, natural, herbal soaps that we produce, will enable us to increase our annual sales in the future. While we believe that this phenomenon will favorably impact the results of our operations in the next twelve months, we are unable to quantify the probable extent of this expected impact. Also in the next twelve months, we intend to increase our costs and expenses substantially as we purchase soap ingredients, packaging materials and soap making and office equipment; increase our sales and marketing activities via participation in test marketing trials and other activities calculated to generate sales contracts with wholesalers; attend trade shows; seek to generate direct sales from individually-hosted parties; increase our general and administrative functions to support our growing operations; develop new products such as soap molds and soap making equipment; and further develop our Internet web site. The additional revenue that we expect to generate from online operations may not be sufficient to offset these costs and expenses and enable us to operate profitably. Further, our efforts to grow our business may be more expensive than we currently anticipate or these efforts may not result in proportional increases in our revenues. Accordingly, the benefit to us from the anticipated increase in our sales may be negated by the expected significant increases in our costs and expenses. As a result, we believe that we may incur an operating and net loss for at least the next year, and possibly longer, and that the rate at which we incur these losses may increase. 49. If the Company sells a product or products and has had significant sales during its last fiscal year, state the existing gross margin (net sales less cost of such sales as presented in accordance with generally accepted accounting principles) as a percentage of sales for the last fiscal year: __%. What is the anticipated gross margin for next year of operations? Approximately __%. If this is expected to change, explain. Also, if reasonably current gross margin figures are available for the industry, indicate these figures and the source or sources from which they are obtained. The recipes for the handmade, natural, vegetable-based soaps we produce were developed by Ms. Lisa R. Powell, the President/Secretary/Treasurer, the sole director and the controlling shareholder of Rub A Dub Soap, and, accordingly, are unique. Further, we know of no online retailers of natural products whose sole product is soap. As a result, there are no standard industry gross margin figures available. 50. Foreign sales as a per cent of total sales for last fiscal year: not applicable. Domestic government sales as a per cent of total domestic sales for last fiscal year: not applicable. Explain the nature of these sales, including any anticipated changes: 54 We do not anticipate that Rub A Dub Soap will consummate any foreign or government sales. 55 Rub A Dub Soap, Inc. (A Development Stage Company) FINANCIAL STATEMENTS May 31, 2002 F-1 CONTENTS Page REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS F-3 BALANCE SHEET F-4 STATEMENT OF OPERATIONS F-5 STATEMENT OF CASH FLOWS F-6 STATEMENT OF STOCKHOLDERS' DEFICIT F-7 NOTES TO FINANCIAL STATEMENTS F-8 - F-9 F-2 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS The Board of Directors and Stockholders of Rub A Dub Soap, Inc. We have audited the accompanying balance sheet of Rub A Dub Soap, Inc. (a development stage company) as of May 31, 2002, and the related statements of operations, stockholders' equity, and cash flows for the initial period from inception (September 28, 2001) to May 31, 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Rub A Dub Soap, Inc. as of May 31, 2002, and the results of its operations and cash flows for the initial period from inception (September 28, 2001) to May 31, 2002, in conformity with accounting principles generally accepted in the United States. Denver, Colorado June 17, 2002 PROFESSIONAL CORPORATION F-3 Rub A Dub Soap, Inc. (A Development Stage Company) BALANCE SHEET May 31, 2002 ASSETS CURRENT ASSETS Cash and cash equivalents $ 15,722 Accounts receivable 95 Inventory 1,787 ------------ Total current assets 17,604 ------------ EQUIPMENT - AT COST Furniture and equipment 11,106 Less accumulated depreciation 917 ------------ 10,189 TOTAL ASSETS $ 27,793 ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 1,251 Payroll liabilities 354 Sales tax payable 21 ------------ Total current liabilities 1,626 ------------ LONG-TERM LIABILITIES Shareholder loan 365 ------------ Total long-term liabilities 365 ------------ STOCKHOLDERS' EQUITY Preferred stock, .01 par value; 10,000,000 shares authorized; no shares issued and outstanding - Common stock, .001 par value; 100,000,000 shares authorized; 3,583,000 shares issued and outstanding 3,583 Additional paid-in capital 116,067 Deficit accumulated during the development stage (93,848) ------------ 25,802 ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 27,793 ============ The accompanying notes are an integral part of the financial statements. F-4 Rub A Dub Soap, Inc. (A Development Stage Company) STATEMENT OF OPERATIONS For the initial period from inception (September 28, 2001) to May 31, 2002 Revenues $ 971 Cost of sales 932 ------------- Gross profit 39 General and administrative expenses 93,227 ------------- Loss from operations (93,188) ------------- Other income (expense) Interest income 108 Loss on sale of assets (768) ------------- NET LOSS $ (93,848) ============= NET LOSS PER SHARE Loss from continuing operations $ (0.03) ============= WEIGHTED AVERAGE NUMBER OF SHARES OF COMMONM STOCK AND COMMON STOCK EQUIVALENTS OUTSTANDING 3,374,229 ============= The accompanying notes are an integral part of the financial statements. F-5 Rub A Dub Soap, Inc. (A Development Stage Company) STATEMENT OF CASH FLOWS For the initial period from inception (September 28, 2001) to May 31, 2002 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (93,848) Adjustments to reconcile net loss to net cash flows from operating activities: Stock for services 74,280 Depreciation 917 Increase in inventory (1,787) Increase in accounts receivable (95) Increase in accrued expenses 375 Increase in accounts payable 1,251 ---------------- Net cash flows from operating activities (18,907) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment (11,106) ---------------- Net cash flows from investing activities (11,106) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from notes payable to stockholders 365 Issuance of common stock 45,370 ---------------- Net cash flows from financing activities 45,735 ---------------- NET INCREASE IN CASH AND CASH EQUIVALENTS 15,722 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - ---------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 15,722 ================ The accompanying notes are an integral part of the financial statements. F-6
Rub A Dub Soap, Inc. (A Development Stage Company) STATEMENT OF STOCKHOLDERS' EQUITY For the initial period from inception (September 28, 2001) to May 31, 2002 Deficit Common stock accumulated ---------------------------------- Additional during the Total Number of paid-in development stockholders' shares Amount capital stage equity ---------------- ---------------- ---------------- ---------------- ---------------- Common stock issued September 2001 - for equipment 3,000,000 $ 3,000 $ 50 $ - $ 3,050 November 2001 - for cash & services 135,000 135 26,865 - 27,000 December 2001 - for cash & services 135,000 135 26,865 - 27,000 January 2002 - for cash & services 100,000 100 19,900 - 20,000 January 2002 - for cash 212,250 213 42,237 - 42,450 February 2002 - for cash 750 - 150 - 150 Net loss for the period ended May 31, 2002 - - - (93,848) (93,848) ---------------- ---------------- ---------------- ---------------- ---------------- Balance, May 31, 2002 3,583,000 $ 3,583 $ 116,067 $ (93,848) $ 25,802 ================ ================ ================ ================ ================
The accompanying notes are an integral part of the financial statements. F-7 Rub A Dub Soap, Inc. (A Development Stage Company) Notes to Financial Statements May 31, 2002 1. Summary of Significant Accounting Policies - ----------------------------------------------- Development Stage Activities and Basis of Presentation ------------------------------------------------------ Rub A Dub Soap, Inc. (a development stage company) (the "Company") was formed to be a small online retailer of handmade, natural, vegetable-based soaps and gift baskets. In the future, if sufficient demand exists, the Company intends to add essential oils and herbs to their online inventory. The Company has few sales and a net loss from operations for the period from organization through the date of the balance sheet. Management believes the Company has received a sufficient capital infusion through issuance of stock to maintain operations for the next year. Revenue Recognition ------------------- The Company records income and expenses on the accrual method. Revenues are recognized when the item is shipped to the customer. Reporting Year -------------- The reporting year of the Company is December 31. Financial Instruments --------------------- Unless otherwise indicated, the fair value of all reported assets and liabilities that represent financial instruments (none of which are held for trading purposes) approximate the carrying values of such assets and liabilities. Statement of Cash Flows ----------------------- For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Loss per share -------------- Loss per share has been calculated based upon the weighted average number of shares outstanding. Use of Estimates ---------------- The preparation of the Company's financial statements in conformity with generally accepted accounting principles requires the Company's management to make estimates and assumptions that effect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. Consideration of Other Comprehensive Income Items ------------------------------------------------- SFAS No. 130 - Reporting Comprehensive Income, requires companies to present comprehensive income (consisting primarily of net income plus other direct equity changes and credits) and its components as part of the basic financial statements. For the period ended May 31, 2002, the Company's financial statements do not contain any changes in equity that are required to be reported separately in comprehensive income. F-8 Rub A Dub Soap, Inc. (A Development Stage Company) Notes to Financial Statements May 31, 2002 1. Summary of Significant Accounting Policies (continued) - ----------------------------------------------------------- Stock-Based Compensation ------------------------ SFAS No. 123 - Accounting for Stock-Based Compensation allows companies to choose whether to account for stock-based compensation under the method prescribed in Accounting Principles Board Opinion No. 25 ("APB 25") or use the fair value method described in SFAS No. 123. The Company continues to follow the accounting measurement provisions of APB 25 and implements the disclosure provisions of SFAS 123. Income Taxes ------------ The Company accounts for income taxes in accordance with SFAS No. 109 - Accounting for Income Taxes. Deferred tax assets and liabilities are recognized with respect to the tax consequences attributable to differences between the financial statement carrying values and tax basis of existing assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. Further, the effect on deferred tax assets and liabilities of changes in tax rates is recognized in income in the period that includes the enactment date. 2. Stockholders' Equity - ------------------------- The Company is authorized to issue 10,000,000 shares of preferred stock. The Company's Board of Directors is authorized to divide the preferred stock into series, and with respect to each series, to determine the preferences and rights and qualifications, limitations or restrictions thereof, including the dividend rights, conversion rights, voting rights, redemption rights and terms, liquidation preferences, sinking fund provisions, and the number of shares constituting the series and the designations of such series. The Board of Directors could, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting rights of the holders of common stock which issuance could have certain anti-takeover effects. The Company issued 370,000 shares of stock to consultants for cash consideration of $2,770, an average of $0.007 per share. For financial statement purposes, the Company recorded compensation expense equal to the difference between the public offering price of $0.20 per share and the cash price, a total of $71,230. 3. Related Party Transactions - ------------------------------- As of May 31, 2002, the Company had notes payable to the president in the amount of $365. 4. Income Taxes - ----------------- A deferred tax asset of $4,000 at May 31, 2002 relates to net operating losses and deductible temporary differences due to development stage costs. Management does not consider it more likely than not that the entire deferred tax asset will be realized. Therefore, a full valuation allowance has been established against the deferred tax asset. The net operating losses will expire in 2022. F-9 PART II - INFORMATION NOT REQUIRED IN PROSPECTUS Item 1. Indemnification of Directors and Officers. - -------------------------------------------------- Sections 7-109-101 through 7-109-110 of the Colorado Business Corporation Act provide for the indemnification of the officers, directors and controlling persons of a corporation as follows: Section 7-109-101 Definitions. As used in this article: ------------------------------ (1) "Corporation" includes any domestic or foreign entity that is a predecessor of a corporation by reason of a merger or other transaction in which the predecessor's existence ceased upon consummation of the transaction. (2) "Director" means an individual who is or was a director of a corporation or an individual who, while a director of a corporation, is or was serving at the corporation's request as a director, an officer, an agent, an associate, an employee, a fiduciary, a manager, a member, a partner, a promoter, or a trustee of, or to hold any similar position with, another domestic or foreign corporation or other person or of an employee benefit plan. A director is considered to be serving an employee benefit plan at the corporation's request if the director's duties to the corporation also impose duties on, or otherwise involve services by, the director to the plan or to participants in or beneficiaries of the plan. "Director" includes, unless the context requires otherwise, the estate or personal representative of a director. (3) "Expenses" includes counsel fees. (4) "Liability" means the obligation incurred with respect to a proceeding to pay a judgment, settlement, penalty, fine, including an excise tax assessed with respect to an employee benefit plan, or reasonable expenses. (5) "Official capacity" means, when used with respect to a director, the office of director in a corporation and, when used with respect to a person other than a director as contemplated in section 7-109-107, the office in a corporation held by the officer or the employment, fiduciary, or agency relationship undertaken by the employee, fiduciary, or agent on behalf of the corporation. "Official capacity" does not include service for any other domestic or foreign corporation or other person or employee benefit plan. (6) "Party" includes a person who was, is, or is threatened to be made a named defendant or respondent in a proceeding. 56 (7) "Proceeding" means and threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal. 7-109-102. Authority to indemnify directors. --------------------------------------------- (1) Except as provided in subsection (4) of this section, a corporation may indemnify a person made a party to a proceeding because the person is or was a director against liability incurred in the proceeding if: (a) The person conducted himself or herself in good faith; and (b) The person reasonably believed: (I) In the case of conduct in an official capacity with the corporation, that his or her conduct was in the corporation's best interests; and (II) In all other cases, that his or her conduct was at least not opposed to the corporation's best interests; and (c) In the case of any criminal proceeding, the person had no reasonable cause to believe his or her conduct was unlawful. (2) A director's conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the interests of the participants in or beneficiaries of the plan is conduct that satisfies the requirement of subparagraph (II) of paragraph (b) of subsection (1) of this section. A director's conduct with respect to an employee benefit plan for a purpose that the director did not reasonably believe to be in the interests of the participants in or beneficiaries of the plan shall be deemed not to satisfy the requirements of paragraph (a) of subsection (1) of this section. (3) The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this section. (4) A corporation may not indemnify a director under this section: (a) In connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation; or (b) In connection with any other proceeding charging that the director derived an improper personal benefit, whether or not involving action in an official capacity, in which proceeding the director was adjudged liable on the basis that he or she derived an improper personal benefit. 57 (5) Indemnification permitted under this section in connection with a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in connection with the proceeding. 7-109-103. Mandatory indemnification of directors. Unless limited by its ---------------------------------------------------- articles of incorporation, a corporation shall indemnify a person who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the person was a party because the person is or was a director, against reasonable expenses incurred by him or her in connection with the proceeding. 7-109-104. Advance of expenses to directors. -------------------------------------------- (1) A corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if: (a) The director furnishes to the corporation a written affirmation of the director's good faith belief that he or she has met the standard of conduct described in section 7-109-102; (b) The director furnishes to the corporation a written undertaking, executed personally or on the director's behalf, to repay the advance if it is ultimately determined that he or she did not meet the standard of conduct; and (c) A determination is made that the facts then known to those making the determination would not preclude indemnification under this article. (2) The undertaking required by paragraph (b) of subsection (1) of this section shall be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment. (3) Determinations and authorizations of payments under this section shall be made in the manner specified in section 7-109-106. 7-109-105. Court-ordered indemnification of directors. ------------------------------------------------------ (1) Unless otherwise provided in the articles of incorporation, a director who is or was a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court, after giving any notice the court considers necessary, may order indemnification in the following manner: (a) If it determines that the director is entitled to mandatory indemnification under section 7-109-103, the court shall order indemnification, in which case the court shall also order the corporation to pay the director's reasonable expenses incurred to obtain court-ordered indemnification. 58 (b) If it determines that the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director met the standard of conduct set forth in section 7-109-102 (1) or was adjudged liable in the circumstances described in section 7-109-102 (4), the court may order such indemnification as the court deems proper; except that the indemnification with respect to any proceeding in which liability shall have been adjudged in the circumstances described in section 7-109-102 (4) is limited to reasonable expenses incurred in connection with the proceeding and reasonable expenses incurred to obtain court-ordered indemnification. 7-109-106. Determination and authorization of indemnification of directors. --------------------------------------------------------------------------- (1) A corporation may not indemnify a director under section 7-109-102 unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set forth in section 7-109-102. A corporation shall not advance expenses to a director under section 7-109-104 unless authorized in the specific case after the written affirmation and undertaking required by section 7-109-104 (1) (a) and (1) (b) are received and the determination required by section 7-109-104 (1) (c) has been made. (2) The determinations required by subsection (1) of this section shall be made: (a) By the board of directors by a majority vote of those present at a meeting at which a quorum is present, and only those directors not parties to the proceeding shall be counted in satisfying the quorum; or (b) If a quorum cannot be obtained, by a majority vote of a committee of the board of directors designated by the board of directors, which committee shall consist of two or more directors not parties to the proceeding; except that directors who are parties to the proceeding may participate in the designation of directors for the committee. (3) If a quorum cannot be obtained as contemplated in paragraph (a) of subsection (2) of this section, and a committee cannot be established under paragraph (b) of subsection (2) of this section, or, even if a quorum is obtained or a committee is designated, if a majority of the directors constituting the quorum or the committee so directs, the determination required to be made by subsection (1) of this section shall be made: (a) By independent legal counsel selected by a vote of the board of directors or the committee in the manner specified in paragraph (a) or (b) of subsection (2) of this section or, if a quorum of the full board cannot be obtained and a committee cannot be established, by independent legal counsel selected by a majority vote of the full board of directors; or (b) By the shareholders. 59 (4) Authorization of indemnification and advance of expenses shall be made in the same manner as the determination that indemnification or advance of expenses is permissible; except that, if the determination that indemnification or advance of expenses is permissible is made by independent legal counsel, authorization of indemnification and advance of expenses shall be made by the body that selected this counsel. 7-109-107. Indemnification of officers, employees, fiduciaries, and agents. --------------------------------------------------------------------------- (1) Unless otherwise provided in the articles of incorporation: (a) An officer is entitled to mandatory indemnification under section 7-109-103, and is entitled to apply for court-ordered indemnification under section 7-109-105, in each case to the same extent as a director; (b) A corporation may indemnify and advance expenses to an officer, employee, fiduciary, or agent of the corporation to the same extent as to a director; and (c) A corporation may also indemnify and advance expenses to an officer, employee, fiduciary, or agent who is not a director to a greater extent, if not inconsistent with public policy, and if provided for by its bylaws, general or specific action by its board of directors or shareholders, or contract. 7-109-108. Insurance. A corporation may purchase and maintain insurance on --------------------- behalf of a person who is or was a director, officer, employee, fiduciary, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, fiduciary, or agent of another domestic or foreign corporation or other person or of an employee benefit plan, against liability asserted against or incurred by the person in that capacity or arising from his or her status as a director, officer, employee, fiduciary, or agent, whether or not the corporation would have power to indemnify the person against the same liability under section 7-109-102, 7-109-103, or 7-109-107. Any such insurance may be procured from any insurance company designated by the board of directors, whether such insurance company is formed under the laws of this state or any other jurisdiction of the United States or elsewhere, including any insurance company in which the corporation has an equity or any other interest through stock ownership or otherwise. 7-109-109. Limitation of indemnification of directors. ------------------------------------------------------ (1) A provision treating a corporation's indemnification of, or advance of expenses to, directors that is contained in its articles of incorporation or bylaws, in a resolution of its shareholders or board of directors, or in a contract, except an insurance policy, or otherwise, is valid only to the extent the provision is not inconsistent with sections 7-109-101 to 7-109-108. If the articles of incorporation limit indemnification or advance of expenses, indemnification and advance of expenses are valid only to the extent not inconsistent with the articles of incorporation. 60 (2) Sections 7-109-101 to 7-109-108 do not limit a corporation's power to pay or reimburse expenses incurred by a director in connection with an appearance as a witness in a proceeding at a time when he or she has not been made a named defendant or respondent in the proceeding. 7-109-110. Notice to shareholders of indemnification of director. If a --------------------------------------------------------------------- corporation indemnifies or advances expenses to a director under this article in connection with a proceeding by or in the right of the corporation, the corporation shall give written notice of the indemnification or advance to the shareholders with or before the notice of the next shareholders' meeting. If the next shareholder action is taken without a meeting at the instigation of the board of directors, such notice shall be given to the shareholders at or before the time the first shareholder signs a writing consenting to such action. Item 2. Other Expenses of Issuance and Distribution. - ---------------------------------------------------- The following is an itemized statement of the expenses incurred in connection with this registration statement and the issuance and distribution of the shares of common stock being registered under this registration statement. All such expenses will be paid by Rub A Dub Soap. Securities and Exchange Commission registration fee.............. $ 50 Legal fees and expenses.......................................... 10,000 Accounting fees and expenses..................................... 4,000 Blue sky fees and expenses....................................... 200 Transfer agent fees and expenses................................. 500 Printing, electronic filing and engraving expenses............... 1,500 Miscellaneous expenses........................................... 750 --- TOTAL ................................................... $ 17,000 All of the above items except the Securities and Exchange Commission registration fee are estimates. Item 3. Undertakings. - --------------------- (e) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer 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, the small business issuer will, unless in the opinion of its counsel the matter has 61 been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. Item 4. Unregistered Securities Issued or Sold Within One Year. - --------------------------------------------------------------- Since September, 2001, the date of our inception, we have sold securities in transactions summarized in the following subsections (a) and (b). (a) Number of Shares of Purchaser Date of Sale Consideration Common Stock Sold - ------------------- ------------ ------------- ------------------ Lisa R. Powell 9/28/01 (1) 3,000,000 Bruce A. Capra 11/29/01 $135.00(3) 135,000 Derek J. Jones(2) 12/10/01 $135.00(3) 135,000 Paul J. Zueger 1/2/02 $2,500.00(4) 100,000 - ------------------ (1) Includes assets comprised of web site software, soap making supplies and utensils, books, furniture, soap recipes and a customer list valued at a total of $3,050. (2) Patricia Cudd, Esq., Rub A Dub's legal counsel, purchased the shares on June 14, 2002. (3) Does not include the value of $26,865 in services in excess of cash paid, recorded for financial statement purposes. (4) Does not include the value of $19,900 in services in excess of cash paid, recorded for financial statement purposes. (b) Paul J. Zueger 1/31/02 $.20 25,000 Aylin Cankardes 1/24/02 $.20 20,000 Bruce Granger 1/16/02 $.20 5,000 Joan Granger 1/21/02 $.20 5,000 Michael Legler 1/18/02 $.20 25,000 Karen Lucht 1/25/02 $.20 25,000 Margolis Trust 1/21/02 $.20 15,000 Barry Meyer 1/21/02 $.20 10,000 62 Jodi Meyer 1/21/02 $.20 5,000 Darlene Nelson 1/17/02 $.20 15,000 Lynn Ohmstede 1/22/02 $.20 5,000 Michael Robinson 2/12/02 $.20 250 Tracy Robinson 2/12/02 $.20 250 James Scheel 1/30/02 $.20 500 Mark Shaner 1/22/02 $.20 1,250 Christopher Townson 1/22/02 $.20 250 Robin Kolsky Yaeger 1/23/02 $.20 5,000 Douglas Zueger 1/22/02 $.20 25,000 Paul Chris Zueger 1/21/02 $.20 25,000 With respect to the sales described in subsection (a), we relied upon Section 4(2) of the Securities Act of 1933 for transactions by an issuer not involving any public offering, as an exemption from the registration requirements of Section 5 of the Securities Act of 1933. As the President/Secretary/Treasurer and sole director and controlling shareholder of Rub A Dub Soap, Ms. Powell had access to information enabling her to evaluate the merits and risks of the transaction on the date of sale. Messrs. Capra, Jones and Zueger are accredited or sophisticated investors and, accordingly, had access to information enabling them to evaluate the merits and risks of the transactions on the date of sale. Ms. Powell and Messrs. Capra, Jones and Zueger each represented in writing that he or she acquired the securities for investment for his or her own account and not with a view to distribution. Stop transfer instructions have been issued to Rub A Dub Soap's transfer agent with respect to the securities, and the transfer agent has been instructed to issue the certificates representing the securities bearing a restrictive investment legend. Each purchaser signed a written agreement stating that the securities will not be sold except by registration under the Securities Act of 1933 or pursuant to an exemption from registration. With respect to the sales described in subsection (b), we relied upon Rule 504 of Regulation D under Section 3(b) of the Securities Act of 1933 for transactions by an issuer not involving any public offering, as an exemption from the registration requirements of Section 5 of the Securities Act of 1933. All of the purchasers had a pre-existing personal or business relationship with Rub A Dub Soap's sole executive officer and director. Each said person had enough knowledge and experience in finance and business matters to evaluate the risks and merits of making his, her or its investment in Rub A Dub Soap. The company made the determination that these individuals were sophisticated 63 investors who had enough knowledge and experience in business to evaluate the risks and merits of the investment. Additionally, each of these persons was provided with the Confidential Offering Memorandum dated January 10, 2002, and otherwise had access to the kind of information normally provided in a prospectus. Each investor represented in writing that he, she or it received the shares of common stock for investment for his, her or its own account and not with a view to distribution. Each purchaser signed a written agreement stating that the securities will not be sold except by registration under the Securities Act of 1933 or pursuant to an exemption from registration. Item 5. Index to Exhibits - --------------------------- (a) An index to the exhibits filed should be presented immediately following the cover page to Part III. (b) Each exhibit should be listed in the exhibit index according to the number assigned to it under Item 6. below. (c) The index to exhibits should identify the location of the exhibit under the sequential page numbering system for this Form SB-1. (d) Where exhibits are incorporated by reference, the reference shall be made in the index of exhibits. Item 6. Description of Exhibits - --------------------------------- The following Exhibits are filed as part of this Registration Statement on Form SB-1. Item Number Description - ------ -------------------------------------------------------------------- (2.1)* Articles of Incorporation of Rub A Dub Soap, Inc., filed September 28, 2001. (2.2)* Bylaws of Rub A Dub Soap, Inc. (3)* Form of Stock Certificate. (4)* Form of Subscription Agreement. (10)(a)* Consent of Cudd & Associates (included in Exhibit (11) hereto). (10)(b)* Consent of Comiskey & Company, Professional Corporation, Certified Public Accountants & Consultants, independent auditors. (11)* Opinion and Consent of Cudd & Associates. 64 - ------------------ *Filed herewith. SIGNATURES In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-1 and authorizes this registration statement to be signed on its behalf by the undersigned, in the City of Denver, State of Colorado, on August 12, 2002. RUB A DUB SOAP, INC. (Registrant) By: /s/ Lisa R. Powell ------------------------------------ Lisa R. Powell, President, Secretary and Treasurer (Principal Executive, Financial and Accounting Officer) In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following person in the capacities and on the dates stated. Date: August 12, 2002 /s/ Lisa R. Powell ---------------------------------------- Lisa R. Powell, President, Secretary, Treasurer and Director (Principal Executive, Financial and Accounting Officer) 65 EXHIBIT INDEX The following Exhibits are filed as part of this Registration Statement on Form SB-1. Item Number Description - ------ ----------- (2.1)* Articles of Incorporation of Rub A Dub Soap, Inc., filed September 28, 2001. (2.2)* Bylaws of Rub A Dub Soap, Inc. (3)* Form of Stock Certificate. (4)* Form of Subscription Agreement. (10)(a)* Consent of Cudd & Associates (included in Exhibit (11) hereto). (10)(b)* Consent of Comiskey & Company, Professional Corporation, Certified Public Accountants & Consultants, independent auditors. (11)* Opinion and Consent of Cudd & Associates. - ------------------ *Filed herewith. 66 EX-2.1 3 rubartofinc.txt RUB A DUB SOAP SB-1, ARTICLES OF INCORPORATION ARTICLES OF INCORPORATION OF RUB A DUB SOAP, INC. KNOW ALL MEN BY THESE PRESENTS: That I, Patricia Cudd, desiring to establish a corporation under the name of Rub A Dub Soap, Inc., for the purpose of becoming a body corporate under and by virtue of the laws of the State of Colorado and, in accordance with the provisions of the laws of said State, do hereby make, execute and acknowledge this certificate in writing of my intention to become a body corporate, under and by virtue of said laws. ARTICLE I The name of the corporation shall be: Rub A Dub Soap, Inc. ARTICLE II The nature of the business and the objects and purposes to be transacted, promoted and carried on are to do any or all of the things herein mentioned as fully and to the same extent as natural persons might or could do, and in any part of the world, viz: (a) To transact all lawful business for which corporations may be incorporated pursuant to the Colorado Corporation Code. (b) To manufacture, purchase or otherwise acquire and to hold, own, mortgage or otherwise lien, pledge, lease, sell, assign, exchange, transfer or in any manner dispose of, and to invest, deal and trade in and with goods, wares, merchandise and personal property of any and every class and description, within or without the State of Colorado. (c) To acquire the goodwill, rights and property and to undertake the whole or any part of the assets and liabilities of any person, firm, association or corporation; to pay for the same in cash, the stock of the corporation, bonds or otherwise; to hold or in any manner dispose of the whole or any part of the property so purchased; to conduct in any lawful manner the whole or any part of any business so acquired and to exercise all the powers necessary or convenient in and about the conduct and management of such business. (d) To guarantee, purchase or otherwise acquire, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of shares of the capital stock, bonds or other evidences of indebtedness created by other corporations and, while the holder of such stock, to exercise all the rights and privileges of ownership, including the right to vote thereon, to the same extent as natural persons might or could do. (e) To purchase or otherwise acquire, apply for, register, hold, use, sell or in any manner dispose of and to grant licenses or other rights in and in any manner deal with patents, inventions, improvements, processes, formulas, trademarks, trade names, rights and licenses secured under letters patent, copyright or otherwise. (f) To enter into, make and perform contracts of every kind for any lawful purpose, with any person, firm, association or corporation, town, city, county, body politic, state, territory, government, colony or dependency thereof. (g) To borrow money for any of the purposes of the corporation and to draw, make, accept, endorse, discount, execute, issue, sell, pledge or otherwise dispose of promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable or non-negotiable, transferable or nontransferable instruments and evidences of indebtedness, and to secure the payment thereof and the interest thereon by mortgage or pledge, conveyance or assignment in trust of the whole or any part of the property of the corporation at the time owned or thereafter acquired. (h) To lend money to, or guarantee the obligations of, or to otherwise assist the directors of the corporation or of any other corporation the majority of whose voting capital stock is owned by the corporation, upon the affirmative vote of at least a majority of the outstanding shares entitled to vote for directors. (i) To purchase, take, own, hold, deal in, mortgage or otherwise pledge, and to lease, sell, exchange, convey, transfer or in any manner whatever dispose of real property, within or without the State of Colorado. (j) To purchase, hold, sell and transfer the shares of its capital stock. (k) To have one or more offices and to conduct any and all operations and business and to promote its objects, within or without the State of Colorado, without restrictions as to place or amount. (l) To do any or all of the things herein set forth as principal, agent, contractor, trustee, partner or otherwise, alone or in company with others. (m) The objects and purposes specified herein shall be regarded as independent objects and purposes and, except where otherwise expressed, shall be in no way limited or restricted by reference to or inference from the terms of any other clauses or paragraph of these Articles of Incorporation. -2- (n) The foregoing shall be constructed both as objects and powers and the enumeration thereof shall not be held to limit or restrict in any manner the general powers conferred on this corporation by the laws of the State of Colorado. ARTICLE III The total number of shares of all classes of capital stock that the corporation shall have authority to issue is 110,000,000 of which 10,000,000 shall be shares of preferred stock, $.01 par value per share, and 100,000,000 shall be shares of common stock, $.001 par value per share, and the designations, preferences, limitations and relative rights of the shares of each class shall be as follows: (a) Shares of Preferred Stock. The corporation may divide and issue the shares of preferred stock in series. Shares of preferred stock of each series, when issued, shall be designated to distinguish them from the shares of all other series. The Board of Directors is hereby vested with authority to divide the class of shares of preferred stock into series and to fix and determine the relative rights and preferences of the shares of any such series so established to the full extent permitted by these Articles of Incorporation and the Colorado Corporation Code in respect of the following: (i) The number of shares to constitute such series, and the distinctive designations thereof; (ii) The rate and preference of dividends, if any, the time of payment of dividends, whether dividends are cumulative and the date from which any dividends shall accrue; (iii) Whether shares may be redeemed and, if so, the redemption price and the terms and conditions of redemption; (iv) The amount payable upon shares in event of involuntary liquidation; (v) The amount payable upon shares in event of voluntary liquidation; (vi) Sinking fund or other provisions, if any, for the redemption or purchase of shares; (vii) The terms and conditions upon which shares may be converted, if the shares of any series are issued with the privilege of conversion; (viii) Voting powers, if any; and -3- (ix) Any other relative rights and preferences of shares of such series, including, without limitation, any restriction on an increase in the number of shares of any series theretofore authorized and any limitation or restriction of rights or powers to which shares of any future series shall be subject. (b) Shares of Common Stock. The rights of holders of shares of common stock to receive dividends or share in the distribution of assets in the event of liquidation, dissolution or winding up of the affairs of the corporation shall be subject to the preferences, limitations and relative rights of the shares of preferred stock fixed in the resolution or resolutions which may be adopted from time to time by the Board of Directors of the corporation providing for the issuance of one or more series of shares of preferred stock. The capital stock, after the subscription price has been paid in, shall not be subject to assessment to pay the debts of the corporation. Any stock of the corporation may be issued for money, property, services rendered, labor done, cash advances for the corporation or for any other assets of value in accordance with the action of the Board of Directors, whose judgment as to value received in return therefor shall be conclusive and said stock when issued shall be fully-paid and non-assessable. ARTICLE IV The corporation shall have perpetual existence. ARTICLE V The governing board of this corporation shall be known as the Board of Directors, and the number of directors may from time to time be increased or decreased in such manner as shall be provided by the Bylaws of this corporation, provided that the number of directors shall not be reduced to less than one. The name and post office address of the incorporator is as follows: Patricia Cudd 12241 West 49th Avenue, Suite #1-A Wheat Ridge, Colorado 80033 The name and post office address of the director comprising the original Board of Directors of the corporation is as follows: Lisa R. Powell 13279 West Ohio Avenue Lakewood, Colorado 80228 -4- In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized: (a) To manage and govern the corporation by majority vote of members present at any regular or special meeting at which a quorum shall be present. (b) To make, alter, or amend the Bylaws of the corporation at any regular or special meeting. (c) To fix the amount to be reserved as working capital over and above its capital stock paid in. (d) To authorize and cause to be executed mortgages and liens upon the real and personal property of this corporation. (e) To designate one or more committees, each committee to consist of two or more of the directors of the corporation, which, to the extent provided by resolution or in the Bylaws 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 committees shall have such name or names as may be stated in the Bylaws of the corporation or as may be determined from time to time by resolution adopted by the Board of Directors. The Board of Directors shall have power and authority to sell, lease, exchange or otherwise dispose of all or substantially all of the property and assets of the corporation, if in the usual and regular course of its business, upon such terms and conditions as the Board of Directors may determine without vote or consent of its shareholders. The Board of Directors shall have power and authority to sell, lease, exchange or otherwise dispose of all or substantially all the property or assets of the corporation, including its goodwill, if not in the usual and regular course of its business, upon such terms and conditions as the Board of Directors may determine, provided that such sale shall be authorized or ratified by the affirmative vote of the shareholders of at least a majority of the shares entitled to vote thereon at a shareholders meeting called for that purpose, or when authorized or ratified by the written consent of all the shareholders of the shares entitled to vote thereon. The Board of Directors shall have the power and authority to merge or consolidate the corporation upon such terms and conditions as the Board of Directors may authorize, provided that such merger or consolidation is approved or ratified by the shares entitled to vote thereon at a shareholders meeting called for that purpose, or when authorized or ratified by the written consent of all the shareholders of the shares entitled to vote thereon. The corporation shall be dissolved upon the affirmative vote of the shareholders of at least a majority of the shares entitled to vote thereon at a -5- meeting called for that purpose, or when authorized or ratified by the written consent of all the shareholders of the shares entitled to vote thereon. The corporation shall revoke voluntary dissolution proceedings upon the affirmative vote of the shareholders of at least a majority of the shares entitled to vote at a meeting called for that purpose, or when authorized or ratified by the written consent of all the shareholders of the shares entitled to vote. ARTICLE VI The following provisions are inserted for the management of the business and for the conduct of the affairs of the corporation, and the same are in furtherance of and not in limitation of the powers conferred by law. No contract or other transactions of the corporation with any other person, firm or corporation, or in which this corporation is interested, shall be affected or invalidated by (a) the fact that any one or more of the directors or officers of this corporation is interested in or is a director or officer of such other firm or corporation; or (b) the fact that any director or officer of this corporation, individually or jointly with others, may be a party to or may be interested in any such contract or transaction, so long as the contract or transaction is authorized, approved or ratified at a meeting of the Board of Directors by sufficient vote thereon by directors not interested therein, to which such fact or relationship or interest has been disclosed, or so long as the contract or transaction is fair and reasonable to the corporation. Each person who may become a director or officer of the corporation is hereby relieved from any liability that might otherwise arise by reason of his contracting with the corporation for the benefit of himself or any firm or corporation in which he may be in any way interested. The officers, directors and other members of management of this corporation shall be subject to the doctrine of corporate opportunities only insofar as it applies to business opportunities in which this corporation has expressed an interest as determined from time to time by the corporation's Board of Directors as evidenced by resolutions appearing in the corporation's minutes. When such areas of interest are delineated, all such business opportunities within such areas of interest that come to the attention of the officers, directors and other members of management of this corporation shall be disclosed promptly to this corporation and made available to it. The Board of Directors may reject any business opportunity presented to it and thereafter any officer, director or other member of management may avail himself of such opportunity. Until such time as this corporation, through its Board of Directors, has designated an area of interest, the officers, directors and other members of management of this corporation shall be free to engage in such areas of interest on their own and the provisions hereof shall not limit the rights of any officer, director or other member of management of this corporation to continue a business existing prior to the time that such area of interest is designated by this corporation. This provision shall not be construed to release any employee of the corporation (other than an officer, director or member of management) from any duties that he may have to the corporation. -6- ARTICLE VII Each director and officer of the corporation shall be indemnified by the corporation as follows: (a) The corporation shall 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 otherwise 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 upon 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 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 the action was unlawful. (b) The corporation shall 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 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 attorney's 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, 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 upon application that, despite the adjudication of liability, but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnification for such expenses which such court deems proper. (c) To the extent that a director, officer, employee or agent of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections (a) and (b) of this -7- Article, 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. (d) Any indemnification under Section (a) or (b) of this Article (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the officer, director and employee or agent is proper in the circumstances, because he has met the applicable standard of conduct set forth in Section (a) or (b) of this Article. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such quorum is not obtainable or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the affirmative vote of the holders of a majority of the shares of stock entitled to vote and represented at a meeting called for such purpose. (e) Expenses (including attorneys' fees) incurred in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding, as authorized in Section (d) of this Article, upon receipt of an understanding by or on behalf of the director, officer, employee or agent to repay such amount, unless it shall ultimately be determined that he is entitled to be indemnified by the corporation as authorized in this Article. (f) The Board of Directors may exercise the corporation's power to purchase and maintain insurance on behalf of any person who 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 any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under this Article. (g) The indemnification provided by this Article shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under these Articles of Incorporation, the Bylaws, agreements, vote of the shareholders 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 and personal representatives of such a person. -8- ARTICLE VIII The initial registered and principal office of said corporation shall be located at 13279 West Ohio Avenue, Lakewood, Colorado 80228, and the initial registered agent of the corporation at such address shall be Lisa R. Powell. Part or all of the business of said corporation may be carried on in the County of Arapahoe, or any other place in the State of Colorado or beyond the limits of the State of Colorado, in other states or territories of the United States and in foreign countries. ARTICLE IX Whenever a compromise or arrangement is proposed by the corporation between it and its creditors or any class of them, and/or between said corporation and its shareholders or any class of them, any court of equitable jurisdiction may, on the application in a summary way by said corporation, or by a majority of its stock, or on the application of trustees in dissolution, order a meeting of the creditors or class of creditors and/or of the shareholders or class of shareholders of said corporation, as the case may be, to be notified in such manner as the said court decides. If a majority in number, representing at least three-fourths in amount of the creditors or class of creditors, and/or the holders of a majority of the stock or class of stock of said corporation, as the case may be, agree to any compromise or arrangement and/or to any reorganization of said corporation, as a consequence of such compromise or arrangement, the said compromise or arrangement and/or the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding upon all the creditors or class of creditors, and/or on all the shareholders or class of shareholders of said corporation, as the case may be, and also on said corporation. ARTICLE X No shareholder in the corporation shall have the preemptive right to subscribe to any or all additional issues of stock and/or other securities of any or all classes of this corporation or securities convertible into stock or carrying stock purchase warrants, options or privileges. ARTICLE XI Meetings of shareholders may be held at any time and place as the Bylaws shall provide. At all meetings of the shareholders, a majority of all shares entitled to vote shall constitute a quorum. ARTICLE XII Cumulative voting shall not be allowed. -9- ARTICLE XIII These Articles of Incorporation may be amended by resolution of the Board of Directors if no shares have been issued, and if shares have been issued, by affirmative vote of the shareholders of at least a majority of the shares entitled to vote thereon at a meeting called for that purpose, or, when authorized, when such action is ratified by the written consent of all the shareholders of the shares entitled to vote thereon. ARTICLE XIV Except as provided in this Article XIV, whenever the shareholders must approve or authorize any matter, whether now or hereafter required by the laws of the State of Colorado, the affirmative vote of a majority of the shares entitled to vote thereon shall be necessary to constitute such approval or authorization. The affirmative vote of all of the shares entitled to vote thereon shall be necessary to constitute approval or authorization of any reverse split or combination of shares of common stock or any reorganization, recapitalization or other action whatsoever (other than a merger, exchange, consolidation or similar transaction with an unaffiliated entity) which has the effect of changing the number of outstanding shares of common stock into a smaller number of shares of common stock. ARTICLE XV No director shall be personally liable to the corporation or any shareholder for monetary damages for breach of fiduciary duty as a director, except for any matter in respect of which such director shall be liable under Section 7-108-403 of the Colorado Revised Statutes, or any amendment thereto or successor provision thereto and except for any matter in respect of which such director shall be liable by reason that he (i) has breached his duty of loyalty to the corporation or its shareholders, (ii) has not acted in good faith or, in failing to act, has not acted in good faith, (iii) has acted in a manner involving intentional misconduct or a knowing violation of law or, in failing to act, has acted in a manner involving intentional misconduct or a knowing violation of law, or (iv) has derived an improper personal benefit. Neither the amendment nor repeal of this Article XV, nor the adoption of any provision of the Articles of Incorporation inconsistent with this Article XV, shall eliminate or reduce the effect of this Article XV in respect of any matter occurring, or any cause of action, suit or claim that, but for this Article XV would accrue or arise prior to such amendment, repeal or adoption of an inconsistent provision. -10- IN TESTIMONY WHEREOF, I have hereunto set my hand on this 20th day of May, 2002. /s/ Patricia Cudd ----------------------------- Patricia Cudd -11- CONSENT TO APPOINTMENT AS INITIAL REGISTERED AGENT I hereby consent to my appointment as the initial registered agent of the corporation. /s/ Lisa R. Powell ----------------------------- Lisa R. Powell -12- EX-2.2 4 rubbylaws.txt RUB A DUB SOAP SB-1, BYLAWS BYLAWS OF RUB A DUB SOAP, INC. ARTICLE I OFFICES ------- The registered office of Rub A Dub Soap, Inc. (the "Corporation") shall be located in the State of Colorado. The Corporation may have its principal office and such other offices either within or without the State of Colorado as the Board of Directors of the Corporation (the "Board") may designate or as the business of the Corporation may require. The registered office of the Corporation in the Articles of Incorporation (the "Articles") need not be identical with the principal office. ARTICLE II SHAREHOLDERS ------------ Section 1. Annual Meeting. The annual meeting of the shareholders shall -------------- be held each year on a date and at a time and place to be determined by resolution of the Board, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the election of directors shall not be held on the day designated for the annual meeting of the shareholders, or at any adjournment thereof, the Board shall cause the election to be held at a special meeting of the shareholders. Section 2. Special Meetings. Special meetings of the shareholders for ---------------- any purpose, unless otherwise provided for by statute, may be called by the president, the Board or by the president at the request of the holders of not less than one-tenth of all the shares of the Corporation entitled to vote at the meeting. Section 3. Place of Meeting. The Board may designate any place, either ---------------- within or without the State of Colorado, as the place of meeting for any annual or special meeting. If no designation is made, the place of meeting shall be the registered office of the Corporation in the State of Colorado. Section 4. Notice of Meeting. Written notice, stating the place, day and ----------------- hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered as the laws of the State of Colorado shall provide. Section 5. Fixing of Record Date. For the purpose of determining ------------------------ shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or shareholders entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board may fix in advance a date (the "Record Date") for any such determination of shareholders, which date shall be not more than 50 days prior to the date on which the particular action requiring such determination of shareholders is to be taken. If no Record Date is fixed by the Board, the Record Date for any such purpose shall be ten days before the date of such meeting or action. The Record Date determined for the purpose of ascertaining the number of shareholders entitled to notice of or to vote at a meeting may not be less than ten days prior to the meeting. When a Record Date has been determined for the purpose of a meeting, the determination shall apply to any adjournment thereof. Section 6. Quorum. If less than a quorum of the outstanding shares as ------ provided for in the Articles are represented at a meeting, such meeting may be adjourned without further notice for a period which shall not exceed 60 days. At such adjourned meeting, at which a quorum shall be present, any business may be transacted which might have been transacted at the original meeting. Once a quorum is present at a duly organized meeting, the shareholders present may continue to transact business until adjournment, notwithstanding any departures of shareholders during the meeting which leave less than a quorum. Section 7. Voting of Shares. Each outstanding share entitled to vote ---------------- shall be entitled to one vote upon each matter submitted to a vote at a meeting of shareholders. Section 8. Proxies. At all meetings of shareholders, a shareholder may ------- vote by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact. Such proxy shall be filed with the Secretary of the Corporation before or at the time of the meeting. No proxy shall be valid after 11 months from the date of its execution, unless otherwise provided in the proxy. Proxies shall be in such form as shall be required by the Board of Directors and as set forth in the notice of meeting and/or proxy or information statement concerning such meeting. Section 9. Voting of Shares by Certain Holders. Shares standing in the ----------------------------------- name of another corporation may be voted by agent or proxy as the bylaws of such corporation may prescribe or, in the absence of such provision, as the Board of Directors of such corporation may determine as evidenced by a duly certified copy of either the bylaws or corporate resolution. Neither treasury shares nor shares held by another corporation, if the majority of the shares entitled to vote for the election of directors of such other corporation is held by the Corporation, shall be voted at any meeting or counted in determining the total number of outstanding shares at any given time. Shares held by an administrator, executor, guardian or conservator may be voted by such fiduciary, either in person or by proxy, without a transfer of such shares into the name of such fiduciary. Shares standing in the name of a trustee may be voted by such trustee, either in person or by proxy, but no trustee shall be entitled to vote shares held by a trustee without a transfer of the shares into such trust. Shares standing in the name of a receiver may be voted by such receiver and shares held by or under the control of a receiver may be voted by such receiver, without the transfer thereof into the name of such receiver if authority so to do is contained in an appropriate order of the court by which the receiver was appointed. -2- A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred on the books of the Corporation into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred. Section 10. Action by Consent of all Shareholders. Any action required to ------------------------------------- be taken, or which may be taken at a meeting of the shareholders may be taken without a meeting, if a consent in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof. Such written consent or consents shall be filed with the minutes of the Corporation. Such action by written consent of all entitled to vote shall have the same force and effect as a unanimous vote of such shareholders. Section 11. Inspectors. The Board may, in advance of any meeting of ---------- shareholders, appoint one or more inspectors to act at such meeting or any adjournment thereof. If the inspectors shall not be so appointed or if any of them shall fail to appear or act, the chairman of the meeting may appoint inspectors. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors shall determine the number of shares outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, the validity and effect of proxies and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result and do such acts as are proper to conduct the election or vote with fairness to all shareholders. On request of the chairman of the meeting or any shareholder entitled to vote thereat, the inspectors shall make a report in writing of any challenge, request or matter determined by them and shall execute a certificate of any fact found by them. ARTICLE III BOARD OF DIRECTORS ------------------ Section 1. General Powers. The Board shall have the power to manage the -------------- business and affairs of the Corporation in such manner as it sees fit. In addition to the powers and authorities expressly conferred upon it, the Board may do all lawful acts which are not directed to be done by the shareholders by statute, by the Articles or by these Bylaws. Section 2. Number, Tenure and Qualifications. The number of directors of --------------------------------- the Corporation shall not be less than one. Each director shall hold office until the next annual meeting of shareholders and until a successor director has been elected and qualified, or until the death, resignation or removal of such director. Directors need not be residents of the State of Nevada or shareholders of the Corporation. Section 3. Regular Meetings. A regular meeting of the Board shall be ---------------- held, without other notice than this Bylaw, immediately after and at the same place as the annual meeting of shareholders. The Board may provide, by resolution, the time and place, either within or without the State of Colorado, for the holding of additional regular meetings, without other notice than such resolution. -3- Section 4. Special Meetings. Special meetings of the Board may be called ---------------- by or at the request of the Chairman of the Board, the Chief Executive Officer or any two directors. The person or persons authorized to call special meetings of the Board may fix any place, either within or without the State of Colorado, as the place for holding any special meeting of the Board called by them. Section 5. Telephonic Meetings. Members of the Board and committees ------------------- thereof may participate and be deemed present at a meeting by means of conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other at the same time. Section 6. Notice. Notice of any special meeting of the Board shall be ------ given by telephone, telegraph or written notice sent by mail. Notice shall be delivered at least one day prior to the meeting (five days before the meeting if the meeting is held outside the State of Colorado) if given by telephone or telegram or if delivered personally. If notice is given by telegram, such notice shall be deemed to be delivered when the telegram is delivered by the telegraph company. Written notice may be delivered by mail to each director at such director's business or home address and, if mailed, shall be delivered at least five days prior to the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed with postage thereon prepaid. Any director may waive notice of any meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice or waiver of notice of such meeting. Section 7. Quorum. A majority of the total membership of the Board shall ------ constitute a quorum for the transaction of business at any meeting of the Board, but if a quorum shall not be present at any meeting or adjournment thereof, a majority of the directors present may adjourn the meeting without further notice. Section 8. Action by Consent of All Directors. Any action required to ----------------------------------- be taken, or which may be taken at a meeting of the Board may be taken without a meeting, if a consent in writing, setting forth the action so taken, shall be signed by all of the directors entitled to vote with respect to the subject matter thereof. Such written consent or consents shall be filed with the minutes of the Corporation. Such action by written consent of all entitled to vote shall have the same force and effect as a unanimous vote of such directors at a meeting of directors at which a quorum is present. Section 9. Manner of Acting. The act of a majority of the directors ---------------- present at a meeting at which a quorum is present shall be an act of the Board. The order of business at any regular or special meeting of the Board shall be: 1. Record of those present. 2. Secretary's proof of notice of meeting, if notice is not waived. -4- 3. Reading and disposal of unapproved minutes, if any. 4. Reports of officers, if any. 5. Unfinished business, if any. 6. New business. 7. Adjournment. Section 10. Vacancies. Any vacancy occurring in the Board by reason of an --------- increase in the number specified in these Bylaws, or for any other reason, may be filled by the affirmative vote of a majority of the remaining directors, though less than a quorum of the Board may remain at the time such meeting considering filling such vacancies is held. Section 11. Compensation. By resolution of the Board, the directors may ------------ be paid their expenses, if any, for attendance at each meeting of the Board and may be paid a fixed sum for attendance at each meeting of the Board and a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor or from receiving compensation for any extraordinary or unusual services as a director. Section 12. Presumption of Assent. A director of the Corporation who is --------------------- present at a meeting of the Board at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless the dissent of such director shall be entered in the minutes of the meeting, filed in writing with the person acting as the secretary of the meeting before the adjournment thereof or forwarded by registered mail to the Secretary of the Corporation immediately after the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. Section 13. Executive or Other Committees. The Board, by resolution -------------------------------- adopted by a majority of the entire Board, may designate among its members an executive committee and one or more other committees, each of which, to the extent provided in the resolution, shall have all of the authority of the Board, but no such committee shall have the authority of the Board in reference to amending the Articles, adopting a plan of merger or consolidation, recommending to the shareholders the sale, lease, exchange or other disposition of all or substantially all of the property and assets of the Corporation otherwise than in the usual and regular course of its business, recommending to the shareholders a voluntary dissolution of the Corporation or a revocation thereof, or amending the Bylaws. The designation of such committees and the delegation thereto of authority shall not operate to relieve the Board, or any member thereof, of any responsibility imposed by law. Any action required to be taken, or which may be taken at a meeting of a committee designated in accordance with this Section of the Bylaws, may be taken without a meeting, if a consent in writing setting forth the action so taken shall be signed by all those entitled to vote with respect to the subject matter thereof. Such written consent or consents shall be filed with the minutes of the Corporation. Such action by written consent of all entitled to vote shall have the same force and effect as a unanimous vote of such persons. Section 14. Resignation of Officers or Directors. Any director or officer ------------------------------------ may resign at any time by submitting a resignation in writing. Such resignation -5- takes effect from the time of its receipt by the Corporation unless a date or time is fixed in the resignation, in which case it will take effect from that time. Acceptance of the resignation shall not be required to make it effective. Section 15. Notice Requirements for Director Nominations. Any nomination --------------------------------------------- for election to the Board of Directors by the stockholders otherwise than pursuant to Board resolution must be submitted to the Corporation's secretary no later than 25 days and no more than 60 days prior to the meeting of stockholders at which such nominations are to be submitted. In the event notice of the meeting at which such nomination is desired to be submitted is not mailed or otherwise sent to the stockholders of the Corporation at least 30 days prior to the meeting, the Corporation must receive the notice of intent to nominate no later than seven days after notice of the meeting is mailed or sent to the stockholders by the Corporation. Notices to the Corporation's Secretary of intent to nominate a candidate for election as a director must give the name, age, business address and principal occupation of such nominee and the number of shares of stock of the Corporation held by such nominee Within seven days after filing of the notice, a signed and completed questionnaire relating to the proposed nominee (which questionnaire will be supplied by the Corporation to the person submitting the notice) must be filed with the Secretary of the Corporation. Unless this notice procedure is followed, the chairman of a stockholders' meeting may declare the nomination defective and it may be disregarded. ARTICLE IV OFFICERS -------- Section 1. Number. The officers of the Corporation shall be a president, ------ a secretary and a treasurer, all of whom shall be executive officers and each of whom shall be elected by the Board, and such other officers as the Board may designate from time to time. A Chairman of the Board, Vice Chairman of the Board and one or more Vice Presidents shall be executive officers if the Board so determines by resolution. Such other officers and assistant officers, as may be deemed necessary, shall be designated administrative assistant officers and may be appointed and removed as the Chief Executive Officer decides. Any two or more offices may be held by the same person, except the offices of President and Secretary. Section 2. Election and Term of Office. The executive officers of the --------------------------- Corporation, to be elected by the Board, shall be elected annually by the Board at its first meeting held after each annual meeting of the shareholders or at a convenient time soon thereafter. Each executive officer shall hold office until the resignation of such officer or until a successor shall be duly elected and qualified, until the death of such executive officer, or until removal of such officer in the manner herein provided. Section 3. Removal. Any officer or agent elected or appointed by the ------- Board may be removed by the Board whenever, in its judgment, the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. -6- Section 4. Vacancies. A vacancy in any executive office because of --------- death, resignation, removal, disqualification or otherwise may be filled by the Board for the unexpired portion of the term. Section 5. The Chairman of the Board. If a Chairman of the Board (the -------------------------- "Chairman") shall be elected by the Board, the Chairman shall preside at all meetings of the shareholders and of the Board. The Chairman may sign, with the officers authorized by the Chief Executive Officer or the Board, certificates for the shares of the Corporation and shall perform such other duties as from time to time are assigned by the Chief Executive Officer or the Board. The Chairman of the Board may be elected as the Chief Executive Officer, in which case the Chairman shall perform the duties hereinafter set forth in Article IV, Section 7, of these Bylaws. Section 6. The President. The President may sign, with the officers ------------- authorized by the Chief Executive Officer or the Board, certificates for shares of the Corporation and shall perform such other duties as from time to time are assigned by the Chief Executive Officer or the Board. The President may be elected as the Chief Execttive Officer of the Corporation, in which case, the President shall perform the duties hereinafter set forth in Article IV, Section 7, of these Bylaws. Section 7. The Chief Executive Officer. If no Chairman shall be elected --------------------------- by the Board, the President shall be the Chief Executive Officer of the Corporation. If a Chairman is elected by the Board, the Board shall designate, as between the Chiarman and the President, who shall be the Chief Executive Officer. The Chief Executive Officer shall be, subject to the control of the Board, in general charge of the affairs of the Corporation. The Chief Executive Officer may sign, with the other officers of the Corporation authorized by the Board, deeds, mortgages, bonds, contracts or other instruments whose execution the Board has authorized, except in cases where the signing and execution thereof shall be expressly delegated by the Board or these Bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed. Section 8. The Vice Chairman of the Board. If a Chairman shall be ----------------------------------- elected by the Board, the Board bay also elect a Vice Chairman of the Board (the "Vice Chairman"). In the absence of the Chairman or in the event of the death or inability or refusal to act of the Chairman, the Vice Chairman shall perform the duties of the Chairman and when so acting shall have all of the powers of and be subject to all of the restrictions upon the Chairman. The Vice Chairman may sign, with the other officers authorized by the Chief Executive Officer or the Board, certificates for shares of the Corporation and shall perform such other duties as from time to time may be assigned by the Chief Executive Officer or the Board. Section 9. The Vice President. In the absence of the President or in the ------------------ event of the death or inability or refusal to act of the President, the Vice President shall perform the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions upon the President. In the event there is more than one Vice President, the Vice Presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their election, shall perform the duties of the President and, when so acting, shall have all the powers of and shall be subject to all the restrictions upon the President. Any Vice President may sign, with the other officers authorized by the Chief Executive -7- Officer or the Board, certificates for shares of the Corporation and shall perform such other duties as from time to time may be assigned by the Chief Executive Officer or the Board. Section 10. The Secretary. Unless the Board otherwise directs, the -------------- Secretary shall keep the minutes of the shareholders' and directors' meetings in one or more books provided for that purpose. The Secretary shall also see that all notices are duly given in accordance with the law and the provisions of the Bylaws; be custodian of the corporate records and the seal of the Corporation; affix the seal or direct its affixation to all documents, the execution of which on behalf of the Corporation is duly authorized; keep a list of the address of each shareholder; sign, with the other officers authorized by the Chief Executive Officer or the Board, certificates for shares of the Corporation; have charge of the stock transfer books of the Corporation and perform all duties incident to the office of Secretary and such other duties as may be assigned by the Chief Executive Officer or by the Board. Section 11. The Treasurer. If required by the Board, the Treasurer shall ------------- give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board shall determine. He shall have charge and custody of and be responsible for all funds and securities of the Corporation, receive and give receipts for monies due and payable to the Corporation from any source whatsoever and deposit all such monies in the name of the Corporation in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of the Bylaws. The Treasurer may sign, with the other officers athorized by the Chief Executive Officer or the Board, certificates for shares of the Corporation and shall perform all duties incident to the office of Treasuer and such other duties as from time to time may be assigned by the Chief Executive Officer or the Board. Section 12. Assistant Officers. The Chief Executive Officer may appoint ------------------- such other officers and agents as may be necessary or desirable for the business of the Corporation. Such other officers shall include one or more assistant secretaries and treasurers who shall have the power and authority to act in place of the officer for whom they are elected or appointed as an assistant in the event of the officer's inability or unavailability to act in his official capacity. The assistant secretary or secretaries or assistant treasurer or treasuers may sign, with the other officers authorized by the Chief Executive Officer or the Board, certificates for shares of the Corporation. The assistant treasurer or treasurers shall, if required by the Board, give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board shall determine. The assistant secretaries and assistant treasurers, in general, shall perform such duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the Chief Executive Officer or the Board. Section 13. Salaries. The salaries of the executive officers shall be -------- fixed by the Board and no officer shall be prevented from receiving such salary by reason of the fact that such officer is also a director of the Corporation. The salaries of the administrative assistant officers shall be fixed by the Chief Executive Officer. -8- ARTICLE V CONTRACTS, LOANS, CHECKS AND DEPOSITS ------------------------------------- Section 1. Contracts. The Board may authorize any officer or officers, --------- agent or agents, to enter into any contract on behalf of the Corporation and such authority may be general or confined to specific instances. Section 2. Checks, Drafts, Etc. All checks, drafts or other orders for ------------------- the payment of money, notes or other evidence of indebtedness, issued in the name of the Corporation, shall be signed by such officer or officers, agent or agents, of the Corporation and in such manner as shall from time to time be determined by resolution of the Board. Section 3. Deposits. All funds of the Corporation not otherwise employed -------- shall be deposited from time to time to the credit of the Cororation in such banks, trust companies or other depositories as the Board may select. ARTICLE VI CERTIFICATES FOR SECURITIES AND THEIR TRANSFER ---------------------------------------------- Section 1. Certificates for Securities. Certificates representing ------------------------------- securities of the Corporation (the "Securities") shall be in such form as shall be determined by the Board. To be effective, such certificates for Securities (the "Certificates") shall be signed by (i) the Chairman or Vice Chairman or by the President or a Vice President; and (ii) the Secretary or an assistant Secretary or by the Treasurer or an assistant treasurer of the Corporation. Any of all of the signatures may be facsimiles if the Certificate is either countersigned by the transfer agent, or countersigned by the facsimile signature of the transfer agent and registered by the written signature of an officer of any company designated by the Board as registrar of transfers so long as that officer is not an employee of the Corporation. A Certificate signed or impressed with the facsimile signature of an officer, who ceases by death, resignation or otherwise to be an officer of the Corporation before the Certificate is delivered by the Corporation, is valid though signed by a duly elected, qualified and authorized officer, provided that such Certificate is countersigned by the signature of the transfer agent or facsimile signature of the transfer agent of the Corporation and registered as aforesaid. All Certificates shall be consecutively numbered or otherwise identified. Certificates shall state the jurisdiction in which the Corporation is organized, the name of the person to whom the Securities are issued, the designation of the series, if any, and the par value of each share represented by the Certificate, or a statement that the shares are without par value. The name and address of the person to whom the Securities represented hereby are issued, the number of Securities, and date of issue, shall be entered on the Security transfer books of the Corporation. All Certificates surrendered to the Corporation for transfer shall be cancelled and no new Certificate shall be issued until the former Certificate for a like number of shares shall have been surrendered and cancelled, except that, in case of a lost, destroyed or mutilated Certificate, a new one may be issued therefor upon such terms and indemnity to the Corporation as the Board may prescribe. -9- Section 2. Transfer of Securities. Transfers of Securities shall be made ---------------------- only on the security transfer books of the Corporation by the holder of record thereof, by the legal representative of the holder who shall furnish proper evidence of authority to transfer, or by an attorney authorized by a power of attorney which was duly executed and filed with the Secretary of the Corporation and a surrender for cancellation of the certificate for such shares. The person in whose name Securities stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes. ARTICLE VII FISCAL YEAR ----------- The fiscal year of the Corporation shall be determined by resolution of the Board. ARTICLE VIII DIVIDENDS --------- The Board may declare, and the Corporation may pay in cash, stock or other property, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and its Articles. ARTICLE IX SEAL ---- The Board shall provide a corporate seal, circular in form, having inscribed thereon the corporate name, the state of incorporation and the word "Seal." The seal on Securities, any corporate obligation to pay money or any other document may be facsimile, or engraved, embossed or printed. ARTICLE X WAIVER OF NOTICE ---------------- Whenever any notice is required to be given to any shareholder or director of the Corporation under the provisions of these Bylaws or under the provisions of the Articles or under the provisions of the applicable laws of the State of Colorado, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before, at or after the time stated therein, shall be deemed equivalent to the giving of such notice. ARTICLE XI INDEMNIFICATION --------------- The Corporation shall have the power to indemnify any director, officer, employee or agent of the Corporation or any person serving at the request of the -10- Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise to the fullest extent permitted by the laws of the State of Colorado. ARTICLE XII AMENDMENTS ---------- These Bylaws may be altered, amended, repealed or replaced by new Bylaws by the Board at any regular or special meeting of the Board. ARTICLE XIII UNIFORMITY OF INTERPRETATION AND SEVERABILITY --------------------------------------------- These Bylaws shall be so interpreted and construed as to conform to the Articles and the statutes of the State of Colorado or of any other state in which conformity may become necessary by reason of the qualification of the Corporation to do business in such foreign state, and where conflict between these Bylaws and the Articles or a statute has arisen or shall arise, the Bylaws shall be considered to be modified to the extent, but only to the extent, conformity shall require. If any Bylaw provision or its application shall be deemed invalid by reason of the said nonconformity, the remainder of the Bylaws shall remain operable in that the provisions set forth in the Bylaws are severable. -11- EX-3 5 rubstockcert.txt RUB A DUB SOAP SB-1, STOCK CERTIFICATE FORM {{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{ }}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}} }{ STATE OF COLORADO }{ }{ }{ }{ )-------------( )-------------( }{ }{ | NUMBER | (Picture - Bald Eagle) | SHARES | }{ }{ | | | | }{ }{ )-------------( )-------------( }{ }{ }{ }{ }{ }{ )-----------------------------------------------------------------( }{ }{ ) ( }{ }{ ) RUB A DUB SOAP, INC. ( }{ }{ ) Common Stock, $.001 Par Value - Authorized 1,000,000 Shares ( }{ }{ ) ( }{ }{ )-----------------------------------------------------------------( }{ }{ }{ }{ }{ }{ }{ }{ This certifies that _____________________________________is the }{ }{ }{ }{ registered holder of ____________________________________Shares }{ }{ }{ }{ transferable only on the books of the Corporation by the holder }{ }{ hereof in person or by Attorney upon surrender of this }{ }{ Certificate properly endorsed. }{ }{ }{ }{ In Witness Whereof, the said Corporation has caused this }{ }{ Certificate to be signed by its duly authorized officers and }{ }{ its Corporate Seal to be hereunto affixed }{ }{ }{ }{ this_____day of __________ A.D. _____ }{ }{ }{ }{ }{ }{ _____________________________ _____________________________ }{ }{ Lisa R. Powell,President/Secretary }{ }{ }{ }{============================================================================}{ {{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{{ }}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}} EX-4 6 rubsubagree.txt RUB A DUB SOAP SB-1, SUBSCRIPTION AGREEMENT FORM ---------------------------------------------------------------------------- SUBSCRIPTION AGREEMENT ---------------------------------------------------------------------------- _________, 2002 Board of Directors Rub A Dub Soap, Inc. 13279 West Ohio Avenue Lakewood, Colorado 80228 Dear Ms. Powell: In connection with your offer and my purchase of _______ shares of common stock, as described in the Prospectus to which this Subscription Agreement is attached, of Rub A Dub Soap, Inc., a Colorado corporation, at a subscription price of $.25 per share (for an aggregate purchase price payable by me of $___________), I hereby represent, warrant, covenant and agree with you that at the time of such offer and purchase and as of the date of this Subscription Agreement: 1. I am over the age of twenty-one years. 2. I represent and warrant that I am a resident of the state in which this offer is made insofar as I occupy a dwelling within the state and I intend to remain within the state for an indefinite period of time. Further, if the undersigned is not a resident of the state in which the offer is made, then the undersigned represents and warrants that he is not a resident of any other state or possession of the United States. 3. I have received the Prospectus of Rub A Dub Soap, delivery of which by you to me has preceded the closing under this Subscription Agreement and my purchase of the shares. The subscription made by this Subscription Agreement is subject to acceptance by Rub A Dub Soap in its sole discretion; which acceptance shall be evidenced by Rub A Dub Soap's signing and delivering to me at the address set forth on the signature page hereof a fully-executed counterpart of this Subscription Agreement. In the event that Rub A Dub Soap shall reject my subscription, the purchase price for the shares shall be refunded promptly to me without interest or deduction. 1 Attached to and incorporated in that certain Subscription Agreement attached to that certain Prospectus of Rub A Dub Soap, Inc. Very truly yours, Individuals execute below: Corporations, partnerships, trusts and other entities execute below: - ------------------------------------ ------------------------------------ Name (please type or print) Name (please type or print) By: - ------------------------------------ --------------------------------- (Signature) (Signature of authorized officer, partner or trustee) Attest: - ------------------------------------ ----------------------------- Name (please type or print) (Signature) - ------------------------------------ ------------------------------------ (Signature) (Address) - ------------------------------------ ------------------------------------ (Address) (Address) - ------------------------------------ ------------------------------------ (Home Telephone) (Tax Identification Number) 2 Attached to and incorporated in that certain Subscription Agreement attached to that certain Prospectus of Rub A Dub Soap, Inc. Individuals execute below: - ------------------------------------ (Office Telephone) - ------------------------------------ (Social Security Number) ACCEPTED this ___ day of _________, 2002. RUB A DUB SOAP, INC. By: --------------------------------- Ms. Lisa R. Powell, President ATTEST: ------------------------------------ (Signature) 3 EX-10.1 7 rublegalopinion.txt RUB A DUB SOAP SB-1, LEGAL OPINION, CUDD CUDD & ASSOCIATES 12441 West 49th Avenue, Suite #1-A Wheat Ridge, Colorado 80033 Telephone: (303) 861-7273 FAX: (303) 861-7560 E-mail: pcudd@cuddlaw.com August 15, 2002 Board of Directors Rub A Dub Soap, Inc. 13279 West Ohio Avenue Lakewood, Colorado 80228 Dear Ms. Powell: I have acted as counsel to Rub A Dub Soap, Inc., a Colorado corporation (the "Company"), in connection with the Registration Statement on Form SB-1, including all pre- or post-effective amendments thereto (collectively, the "Registration Statement"), which Registration Statement is being filed with the U.S. Securities and Exchange Commission under Section 5 of the Securities Act of 1933 on or about the date hereof. The Registration Statement relates to a maximum of 800,000 shares (the "Shares") of common stock, $.001 par value per share, being offered by the Company. In connection with this opinion, I have examined the Company's Articles of Incorporation; the Company's Bylaws; minutes of the Company's corporate proceedings and unanimous written consents in lieu thereof, as made available to me by the sole executive officer and director of the Company; executed copies of such Registration Statement, and all exhibits thereto in the form filed with the Commission; and such matters of law deemed necessary by me in order to deliver the within opinion. In the course of my examination, I have assumed the genuineness of all signatures, the authenticity of all documents submitted to me as original documents, the conformity to original documents of all documents submitted to me as certified or photostatic copies and the due execution and delivery of all documents where due execution and delivery are a prerequisite to the effectiveness thereof. As to certain factual matters, I have relied upon information furnished to me by the sole executive officer and director of the Company. On the basis of the foregoing, and solely in reliance thereon, I am of the opinion that the Shares have been duly authorized and, upon effectiveness of the Registration Statement by order of the Securities and Exchange Commission (or upon the twentieth day following the filing of an amendment indicating the intention to become effective by operation of the terms of Section 8(a) of the Securities Act of 1933) and the necessary state securities authorities and upon Board of Directors Rub A Dub Soap, Inc. August 15, 2002 Page 2 delivery of the Shares to subscribers against payment therefor in the manner described in the Registration Statement, the Shares have been or will be validly issued, fully-paid and nonassessable. I hereby consent to the filing of this letter as Exhibit (5) to the Registration Statement and to the reference to Cudd & Associates in the Registration Statement. Very truly yours, CUDD & ASSOCIATES /s/ Patricia Cudd ------------------ Patricia Cudd PC:das EX-10.2 8 runauditorsconsent.txt RUB A DUB SOAP SB-1, AUDITORS' CONSENT, COMISKEY CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS We consent to the use in this registration statement of our report dated June 17, 2002 on the financial statements for Rub A Dub Soap, Inc. as of the period from inception (September 28, 2001) to May 31, 2002, and to references to our firm as accounting and auditing experts in the prospectus. Denver, Colorado August 19, 2001 /s/Comiskey & Company PROFESSIONAL CORPORATION -----END PRIVACY-ENHANCED MESSAGE-----