CNQ EXCHANGE
FORM 2A
QUOTATION STATEMENT
FOR
WINTERCREST RESOURCES LTD.
Incorporated Feb 16, 1987
Under Alberta Business Corporation Act
Corporate Office Corporation Number
145 Front Street East, Suite 107 20361381
Toronto, Ontario, M5A 4E1
ISSUER’S REGISTERED OFFICE
145 Front Street, Suite 107,
Toronto, Ontario, M5A 4E1
January 30, 2004
1. Table of Contents
Description Page
1.Table of Contents i
2.Corporate Structure1
3.General Development of the Business1
4.Narrative Description of the Business2
5.Selective Consolidated Financial Information8
6.Management’s Discussion and Analysis8
7.Market for Securities9
8.Consolidated Capitalization 10
9.Options to Purchase Securities10
10.Prior Sales10
11.Escrowed Securities10
12.Principal Shareholders11
13.Directors and Officers11
14.Capitalization12
15.Executive Compensation13
16.Indebtedness of Directors and Executive Officers13
17.Risk Factors14
18.Promoters15
19.Legal Proceedings15
20.Interest of Management and Others in Material Transactions16
21.Auditors, Transfer Agents and Registrars16
22.Material Contracts16
23.Other Material Facts 16
24.Financial Statements16
Exhibits:
Audited Fiscal Year: August 31, 2003
Quarterly Statements:November 30, 2003
May 31, 2003
February 28, 2003
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WINTERCREST RESOURCES LTD.
QUOTATION STATEMENT ON FORM 2A
January 30, 2004
2. CORPORATE STRUCTURE:
The Company was incorporated on February 16, 1987 under the laws of the Province of Alberta, Canada under the name of Home Realty Investments Inc. On February 14, 1989 the Company amended its Articles of Incorporation to change its name to Brimac Development Corporation. On November 23, 1992 the Company amended its Articles of Incorporation to change its name to Wintertherm Corporation. On May 16, 1997 the Company amended its Articles of Incorporation to change its name to Wintercrest Resources Ltd.
In December 4, 1990 the Company became a reporting issuer in Alberta. Presently it is not a reporting issuer in any other province. It is not under any default of any requirements applicable to the Security Laws. The Company is a current filer of its periodic reports on SEDAR.
On January 30th, 2004 the Company had 28,935,300 common shares issued and outstanding. The Company has no par with unlimited authorized shares. The Company has no preferred stock.
The Company does not currently own any subsidiaries.
3. GENERAL DEVELOPMENT OF THE BUSINESS:
On December 12, 2003 the Company offered to purchase all of the outstanding common Shares of MyStoryFriend.com Inc. The offer was made on the basis of one common share of Wintercrest Resources Ltd. for each one Common Share of MyStoryFriend.com Inc. The offer was accepted at the annual general meeting of Wintercrest Resources Ltd. shareholders on January 23rd 2004 with all 25,963,200MyStoryFriend.com Inc. shares being acquired on the one for one basis.
MyStoryFriend.com Inc. is a technology services and products company with the principal business being a children’s audio content-on-demand service via the internet. The following Item “4. Narrative Description of the Business” gives additional information of MyStoryFriend.com Inc. business.
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4. NARRATIVE DESCRIPTION OF THE BUSINESS:
MyStoryFriend.com Inc. has its corporate offices in Toronto, Ontario.MyStoryFriend.com Inc. will be in the business of delivering audio content to children via the internet to transfer into their plush toys in the home, by way of MP3 technology inside the plush toys. The principal business objective of MyStoryfriend.com Inc. will be the marketing and sale of memberships for this service. Management believes that the market will readily accept the service based on the low membership fee, the quality of the product, and the convenience of families being able to put children’s content into plush toys from the comfort of their home via the website.
According to the business plan developed by the Business Development Bank of Canada (a Canadian Government Federal Institution) an annual US $4.5 billion is spent on plush toys,where the industry offers various plush toys that play only limited audio content which is permanently stored in the toy and cannot be changed. The founderand inventor Alan Zaakir, saw an opportunity to offer vast amounts of content to children and allow them to change old content for new ones as often as they desire, by creating the MyStoryFriend.com network.
The Technology Application
The Interactive Plush Toys
MyStoryFriend plush toys function with state of the art mp3 audio technology built into a device smaller than a modern cell phone. This device is referred to as the “StoryBox". This StoryBox is interchangeable and can be can inserted from one plush toy to another.
A self-loading CD installs the program on the user’s computer as a one-time installation only. A USB cable connects to the computer as a one-time connection.
From this point, whenever the parent and child wish to put new content into the toy, 2 simple steps are required. (1) The toy is simply connected to the computer by plugging it to the USB cable; and (2) the parent goes to our website and clicks on any content and watch it download automatically into the toy. The toy is then disconnected and given to the child to enjoy at home, travel, play, bedtime, etc.
From that point onwards whenever the child desires new content, the parent and child simply go to the website and select the new content for transfer into the toy. If the toy has existing content inside, the computer screen will show the parent and child the current content in the toy and allow them to (a) either keep favorites and delete others; or
(b) delete all the content on board the toy and click and transfer new content into the toy.
Manufacturing
Manufacturers in Asia have been carefully chosen, for the MP3 unit (StoryBox) and for the manufacture of the plush stuffed toys. The plush toys and electronic unit will be assembled, packaged and shipped from our manufacturer directly to customers worldwide and to participating department stores.Content suppliers located in North America and overseas have been screened and preliminary arrangements made to purchase the songs,
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poems, stories and educational curriculum, which will be refreshed and updated monthly to ensure fresh new material for our young customers. Content suppliers are well established companies that create children’s audio and video content, and all content will be provided on condition it is fully copyrighted to MyStoryFriend.
Product/Features.
This unique line of stuffed toys is powered by MP3 technology that enables the unit to access the MyStoryFriend.com website to download stories, songs and educational material into the unit. Once filled with audio content, the unit is placed into the plush toy and the toy then replays these stories at the push of a button. The toy stores fifteen to twenty different pieces of content at a time. Old content is replaced with fresh content whenever the child desires a new set of stories and songs. Hence, the child gets to decide what he or she wants to listen to. Current competition only allows the child to listen to stuffed toys with pre-recorded content that cannot be changed.
The existing product is fully developed, tested and functional. A name / brand recognition will be created with the lead character “StoryBear” and the other MyStoryFriend plush characters for the young users that make up the current US $4.5 billion per year plush toy market.
The company’s marketing will encourage the buyer to collect the entire line of stuffed StoryFriends from MyStoryFriend.com. because the StoryBox unit can be removed from one toy and inserted into another, the child can collect more than one plush character and simply insert the StoryBox unit into the toy. Making their entire line of StoryFriends plush toys, storytellers.
Additionally, since MyStoryFriend’s main concern and objective is to generate revenue by selling monthly membership fees for the audio content service, the StoryBox unit (once filled with content) can be attached to any plush toy for playback.
Stuffed toys are hugely popular with children and ones that tell stories have not changed since it was first developed. MyStoryFriend will use Internet technology to take this to the next level, by allowing parent and child to select which content goes into their toys. And additionally, allow them to change the content as often as they want.
Revenue Model.
The revenue model is to get customers to pay a monthly fee of $5 US per month for unlimited access to all the continuous new content on the website, to transfer into their toys. While the company will promote it’s brand of plush toys, it is not essential for the customers to use the StoryBox with the company’s plush toys, since the Storybox comes with a velcro strap-on “knapsack” that can be placed onto any plush toy the child loves, such as Mickey Mouse or Barney, etc.The company’s relationship with the customer is for the sale of audio content delivered as MP3 files for storage and playback on the Storybox. The company by no means a conventional plush toy company or is it competing as a plush toy company. The company is in fact a software company, where the software being sold is children’s songs, stories and educational content.
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STATED BUSINESS OBJECTIVES OF THE ISSUER
It is intended that the issuer will raise approximately $500,000 by way of a share issue coincident or immediately following the public quotation of its shares.
The funds will be used judiciously in One Year for:
-Purchase content for website.
-Purchase of hardware units “StoryBox”
-Purchase of Plush Toys.
-Promotion and Marketing
-Research and Development of new products and markets
-Salaries
-Working Capital
Milestones
-MyStoryFriend.com Inc. Business Plan, Feasibility Study, and Valuation Report prepared by the Business Development Bank of Canada.
-Fully operational online database and software system developed to work with all proposed products.
-Manufacturers in China have been assessed by direct visits and capabilities confirmed for supply of StoryBear and the StoryBox.
-Content providers have been reviewed and assessed and capabilities confirmed for the volume and quality of content required.
-Completed over $330,000 of development expenditures, assembled experienced and capable management , creative, and technical team, arranged for transaction with the Company to create liquidity for current and future shareholders.
- Initiated and commenced a pilot project in July 2003 where designed and produced an educational child safety booklet for review and evaluation by the Toronto Police Department for possible use as part of its elementary school safety awareness program. This represents the first internet – interactive book created for use in such a program. The book works by providing a link to the MyStoryFriend.com website from which children can be introduced to the online plush toy audio content service, as part of a strategy to attract subscribers to purchase memberships through this introduction. The pilot project if successful, could result in similar projects on a commercial basis with other North American public service departments.
MANAGEMENT
Directors
(Alan) Sheik Zaakir - President and Head of Research & Development of MyStoryFriend.
Designed the MyStoryFriend.com Internet toy application.
Marilyn Medina - Director and Administrator. Key part of the product development team.
Lawrence Weingarten – Director and Business Development personnel. Managing Partner of Weingarten, Ross and Cash Chartered Accountants.
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Staff
Jared Clarke - Accounting Consultant.
Joe Rockman - Public Relations.Forte Records Vice president, and a founding member of the Jeff Healey Band.
Maureen Shelleau - Content Development. A recognized computer animation artist. She is responsible for website graphics, animation and content.
Storyfriend has benefited from the advice of numerous persons with excellent experience and qualifications and has formed an advisory board. Members of this board are not involved in day to day operations, do not carry out any duties of Directors, and do not attend any Directors meetings and are only involved in strategic and market planning usually by way of direct advice to Mr. Zaakir.
Advisory Board
Gary Fazzino - Business Development Advisor to MyStoryFriend.com
Current Mayor of Palo Alto (Silicon Valley), California. He is also a Director and Vice President of Federal Public Policy Programs at Hewlett Packard head office in Silicon Valley, California.
Dennis Irwin - Business Development Advisor to MyStoryFriend.com
Mr. Irwin is a marketing coordinator for the Air Miles program; formerly he was Vice President of Marketing for McDonalds Canada.
Jack Dyson - Business Development Advisor to MyStoryFriend.com
Mr. Dyson was a part of senior management at Irwin Toys and brings vast experience in marketing, distribution and promotion.
David Bond - Business Development Advisor to MyStoryFriend.com
Mr. Bond is a senior trader at a major Toronto securities firm and brings vast public market knowledge and understanding to guide the company towards a successful life.
OTHER PRODUCTS
The companyis focus on developing a number of products in varying stages of completion towards commercialization. The following products are currently slated for launch in 2004.
Colouring Bears
This is a non electronic plush toy which has a code that when registered at the MyStoryFriend.com site, allows the customer to receive a new coloring book every month for a year. The book is delivered to the customer directly from the website, where the customer can print it off for use. Additionally, a plastic rectangle tablet which comes with the toy allows the child to put a crayon in a movable rod to color on one half of the tablet, while an adjoining connected rod with another crayon (fastened to the hand of the plush toy) allows the plush toy to mimic the drawing of the child. Promoted as “COLORING BEARS, the Bears that Color with you”.
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The Recordable Wishing Star
The Recordable Wishing Star (the “Star”) is a voice recordable ornament which allows a child and parent to record a ten second message in their own voice. The Star has a simple plastic tab that when pulled, makes the recording permanent. A star can be recorded on each special occasion during childhood.As the child grows,the family creates a historical collection ofspecial events such as Christmas, Birthdays, and Easter wishes. Field testing of this product shows it has universal sales appeal.
Young Hall of Fame.com Service
This data management business will maintain statistics of individual players in youth sports of all categories (little league, schools and college teams, minor leagues etc.). For an annual fee, players, teams or entire leagues can register, record and access their statistics on the website’s database. They will be allowed to provide and post their own statistics, photos and video clips to their own stats webpage within the YoungHallOfFame.com site. Information will be real-time and it will create an archived record over time.Additional features such as printing and selling Young Hall Of Fame Trading Cards for memberswill be available.
PROPRIETARY PROTECTION
MyStoryFriend will seek copyright protection on any content it has created, the brand names of its products, such as StoryBear, and StoryBox, and on its products and branded services currently under development.
MARKETING PLANS AND STRATEGIES
MyStoryFriend’s strategy is to position the product as a unique line of plush toys that can be repeatedly refreshed with new content within minutes, via the internet. The ability to use the internet to deliver new content to the toy without having to sell the content in stores, greatly reduces the cost. The Company sees an opportunity in operating on a subscription based business model to sell children’s content by a combination of utilizing the internet as an inexpensive delivery system, and delivering this content into plush toys. Plush toys are already established as a leading toy that children are familiar with for pressing buttons to hear content, and the subscription model enables the toy itself to be priced very affordably since the consumer is paying for content over a duration of years.
The plush toys will be marketed to children and parents, through children television shows, the Internet, children’s hospitals and shopping malls. MyStoryFriend plush toys will be introduced free to some children’s hospitals and kindergartens for testing consumer response and establishing market interest. In hospitals, children can use the toys during their stay in the hospital, but be able to purchase one in the hospital gift shops to take home with him or her. This creates exposure and leads to an increase of sales of membership to the website. The company will also sponsor children’s shows and events.
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Other conventional marketing programs planned include:
Promotions
Through fastfood chains such as McDonalds, that market to children, video stores and department stores. Attractions and fairs throughout North America including Disney and worldwide.
Internet
Through popular websites like Yahoo, AOL and various children’s websites, customers can receive coupons for 2 free months subscription to MyStoryFriend.com. Advertising and the hosting of E-commerce websites for Affiliate children’s stores in turn for MyStoryFriend.