ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
“FORWARD-LOOKING” INFORMATION
This report on Form 10-QSB contains certain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Generally, the words “anticipates,” “expects,” “believes,” “intends,” “could,” “may,” and similar expressions identify forward looking statements. Forward-looking statements involve risks and uncertainties. We caution you that while we believe any forward-looking statement are reasonable and made in good faith, expectations almost always vary from actual results, and the differences between our expectations and actual results may be significant.
The following discussion and analysis of our results of operations and our financial condition should be read in conjunction with the information set forth in the financial statements and notes thereto included elsewhere in this report.
Changes in Business Operations
On May 15, 2002, we completed a transaction pursuant to the Settlement of Debts and Asset Purchase Agreement, dated as of March 29, 2002, with Starbrand, LLC, pursuant to which we divested all of our operations and sold substantially all of our assets and certain specified liabilities to Starbrand, LLC in exchange for cancellation of $450,000 of outstanding 4%, $1,500,000 convertible debentures. The transaction resulted in a gain of $373,921 to Famous Fixins. We are contingently liable for the payment of the liabilities transferred aggregating approximately $200,000.
Since May 15, 2002, we have not engaged in substantive business operations and have no plans to engage in any such activity in the foreseeable future. In our present form, we may be deemed to be a vehicle to acquire or merge with a business or company. To the extent that we intend to seek the acquisition of assets, property or business that may benefit our company and our stockholders, we are essentially a “blank check” company.
Results of Operations
In reviewing our results of operations, you should note that we have not conducted any substantive business operations since May 15, 2002. Our results of operations for the period ended June 30, 2002 discusses the results of our former discontinued business, and is in no way reflective of our operations on a going-forward basis, because since May 15, 2002 and through the present, we have not conducted any substantive business operations.
Sales for the three months ended June 30, 2002 decreased approximately 91% to $77,847 from $870,158 for the three months ended June 30, 2001. Sales for the six months ended June 30, 2002 decreased approximately 67% to $428,881 from $1,297,982 for the six months ended June 30, 2001. The decrease in sales for the three and six months ended June 30, 2002 is attributable to the slowdown in sales in connection with the gradual discontinuation of several product lines that were offered in the three and six months ended June 30, 2001, and the divestiture of the business on May 15, 2002. Because we have not engaged in substantive business operations since May 15, 2002, we do not anticipate generating any revenues in the foreseeable future.
Cost of goods sold for the three months ended June 30, 2002 was $74,305, approximately 96% of sales, as compared to $483,427, approximately 56% of sales, for the comparable period in fiscal year 2001. Cost of goods sold for the six months ended June 30, 2002 was $305,213, approximately 71% of sales, as compared to $754,422, approximately 58% of sales, for the comparable period in fiscal year 2001. The decrease in the amount of the cost of goods sold for the three and six months ended June 30, 2002 as compared to the three and six months ended June 30, 2001 is attributable to the discontinuation of several product lines that were offered for sale in the three and six months ended June 30, 2001, and the divestiture of the business on May 15, 2002. Because we have not engaged in substantive business operations since May 15, 2002, we do not anticipate to incur any significant expenses in the foreseeable future.
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Gross profit on sales for the three months ended June 30, 2002 was $3,182, a decrease of 99%, as compared to gross profit of $386,731 for the three months ended June 30, 2001. Gross profit on sales for the six months ended June 30, 2002 was $123,668, a decrease of 77%, as compared to gross profit of $543,560 for the six months ended June 30, 2001. Gross profit was approximately 4% of sales for the three months ended June 30, 2002 as compared to gross profit as a percentage of sales for the three months ended June 30, 2001 of 44%. Gross profit was approximately 29% of sales for the six months ended June 30, 2002 as compared to gross profit as a percentage of sales for the six months ended June 30, 2001 of 42%. The decrease in the amount of gross profit is attributable to less sales resulting from the slowdown in sales in connection with the gradual discontinuation of several product lines that were offered in the three and six month period ended June 30, 2001, and the divestiture of the business on May 15, 2002.
For the three months ended June 30, 2002 as compared to the three months ended June 30, 2001, operating expenses decreased to $399,277 from $479,938, which represents a 17% decrease in operation expenses and an increase to 518% of sales from 55% of sales. For the six months ended June 30, 2002 as compared to the six months ended June 30, 2001, operating expenses decreased to $722,532 from $901,556, which represents a 20% decrease in operation expenses and an increase to 168% of sales from 69% of sales. The decrease in our operating expenses for the three and six months ended June 30, 2002 was due mainly to a decrease in selling expenses and decreased employment.
For the three months ended June 30, 2002, we operated at a net loss of $(43,961), or a loss of $(0.002) per share basic, as compared to net loss of $(107,629), or a loss of $(0.008) per share basic for the three months ended June 30, 2001. For the six months ended June 30, 2002, we operated at a net loss of $(187,809), or a loss of $(0.010) per share basic, as compared to net loss of $(403,082), or a loss of $(0.029) per share basic for the six months ended June 30, 2001. The decrease in net loss for the three and six months ended June 30, 2002 as compared to the three and six months ended June 30, 2001 was mainly due to a gain of $373,921 resulting in the sale of our former business.
Our former business was not seasonal in nature.
Inflation was not deemed to be a factor in our former operations.
Financial Condition or Liquidity and Capital Resources
Financing Activities in connection with Former Business
In connection with our former business operations that were discontinued on May 15, 2002, we funded our operations through a line of credit, bank borrowings, and borrowings from, and issuances of warrants and sales of securities to, stockholders, and from operating revenues. Our inability to obtain sufficient credit and capital financing has limited our operations and growth from inception.
In October 1999, we entered into agreements pursuant to which certain investors agreed to purchase an aggregate of $550,000 principal amount of 5% convertible debentures due October 19, 2002 and 139,152 warrants to purchase shares of our common stock. At the initial closing date, we received gross proceeds of $450,000, and in February 2000, we received the remaining $100,000 when a registration statement in connection with the resale of the underlying common stock became effective. The warrants are exercisable between October 30, 1999 and October 30, 2004 at a purchase price of $.494 per share, which was 125% of the market price on the closing date. Through June 30, 2002, debenture holders have converted debentures with an aggregate of $526,032 in principal and interest into 3,136,279 shares of common stock. Debentures with a principal of $33,975 and interest thereon remain outstanding. None of the warrants have been exercised.
In March 2000, we entered into an agreement pursuant to which certain investors agreed to purchase an aggregate of $1,000,000 principal amount of 0% convertible debentures due March 13, 2005 and warrants to purchase 2,500,000 shares of our common stock. We received gross proceeds of $1,000,000 from the transaction. The holders of the convertible debentures were entitled to convert the debentures into shares of common stock at a conversion price of $.40 per share. The warrants are exercisable before March 13, 2005 at a purchase price of $.75 per share. In October 2000, we entered into an agreement for the sale of $1,500,000 principal amount of 4% convertible debentures pursuant to which the outstanding principal amount of the 0% convertible debentures were surrendered.
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In October 2000, we entered into an agreement pursuant to which certain investors agreed to purchase an aggregate of $1,500,000 principal amount of 4% convertible debentures and warrants to purchase 250,000 shares of common stock. The principal amount of the 4% convertible debentures of $1,500,000 consists of principal in the amount of $500,000 and the surrender of outstanding 0% convertible debentures with a principal amount of $1,000,000 issued in March 2000. The warrants are exercisable before November 7, 2003 at a purchase price per share of $0.0588. At the closing of the transaction, we received gross proceeds of $500,000, less payment to the escrow agent of $10,000 for the investors’ legal, administrative and escrow costs, and less payment of a 10% placement agent fee. We also issued to the placement agent 75,000 shares of restricted common stock and a warrant to purchase 100,000 shares of common stock as part of the placement agent fee. The warrants are exercisable before November 7, 2003 at a purchase price per share of $0.0588.
The 4% debenture holders have the right to convert the interest into shares of common stock based on the average of the 5 lowest closing bid prices of the common stock over a 22 trading day period immediately prior to the interest payment date. We agreed to enter into an equity line of credit type of transaction within 10 days of this transaction. If we are unable to pay the amounts due on the maturity date but we can draw down on the equity line of credit, we are to draw down the maximum amount each draw down period to pay the investors the full amount due. To date, we are unable to draw down upon the equity line of credit.
Since August 7, 2001, the 4% debenture holders may elect to convert the 4% convertible debentures into shares of common stock because a registration statement for the equity line of credit was not effective on the August 7, 2001 maturity date and because we are not able to draw down the maximum amount permitted each month under the equity line under an effective equity line of credit registration statement. The conversion price shall equal the lesser of $0.054 or 85% of the average of the 5 lowest closing bid prices during the 22 trading days preceding the applicable conversion date. At the 4% debenture holders’ election, we shall redeem the 4% convertible debentures, including interest and a redemption premium of 30%, using up to 50% of the net proceeds received pursuant to the equity line of credit and any other equity financing permitted under the agreement, and all proceeds received in an equity financing not permitted under the future financing restrictions.
The 4% convertible debentures matured unpaid on August 7, 2001 with a 5% premium on the principal and the accrued unpaid interest. In March 2002, the terms of the 4% convertible debentures were amended to extend the due date for the debentures until May 8, 2003 and to waive any premiums or penalties that may have been incurred in connection the original due date having passed. In March 2002, the 4% convertible debenture holders converted accrued interest with an aggregate amount of $46,623 into 4,662,276 shares. None of the principal amount or other accrued interest have been repaid or converted into shares of common stock, and none of the warrants have been exercised.
In October 2000, we entered into an agreement for the future issuance and purchase of shares of our common stock which establishes what is sometimes termed an equity line of credit or an equity drawdown facility. In general, the drawdown facility operates as follows: the investor has committed to provide us with up to $5 million as we request it over a 24 month period, in return for shares of common stock we issue to the investor.
Subject to a maximum of 16 draws, once every 29 trading days, we may request a draw of up to $5 million under the equity line, however, no single draw can exceed $5 million. We must wait at least 7 trading days after each 22 trading day drawdown period before requesting another drawdown. The maximum amount we actually can draw down upon each request will be determined by 4.5% of the volume-weighted average daily price of our common stock for the 3 month period prior to our request and the total trading volume for the 3 months prior to our request. Each draw down must be for at least $100,000.
The number of shares registered under the registration statement for the resale of the common stock upon each drawdown under the equity line may limit the amount of money we receive under the common stock purchase agreement. Moreover, the funds we may receive could be further limited by a provision of the common stock purchase agreement that prevents us from issuing shares to the investor to the extent the investor would beneficially own more than 9.9% of our then outstanding common stock.
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At the end of a 22-day trading period following the drawdown request, the final drawdown amount is determined based on the volume-weighted average stock price during that 22-day period. We then use the formulas contained in the common stock purchase agreement to determine the number of shares we will issue to the investor in return for that money. The per share dollar amount the investor pays for our common stock for each drawdown includes a 17.5% discount to the average daily market price of our common stock for the 22-day period after our drawdown request, weighted by trading volume. We will receive the amount of the drawdown less an escrow agent fee equal to $1,500 per drawdown and less a 10% placement fee.
In lieu of making a commitment to the investor to draw a minimum aggregate amount, on October 31, 2000, we issued to the investor a stock purchase warrant to purchase up to 500,000 shares of our common stock and we also agreed to issue additional warrants to purchase a number of shares equal to 50% of the shares purchased by the investor on the settlement date of each drawdown. The warrants to purchase 500,000 shares of common stock have an exercise price of $0.0636 and expire on October 31, 2003. The additional warrants issuable at each settlement date will be exercisable for 35 calendar days and have an exercise price equal to the weighted average of the purchase prices of the common stock during the applicable settlement period. A registration statement for the shares underlying the equity line of credit is presently not effective. Until an effective registration statement is in place, we cannot use and will not receive any funds from the equity line.
In January 2002, we entered into promissory notes of $27,500 with interest at a rate of 10% per year to pay for current business expenses. Beginning June 15, 2002, the notes become payable on demand.
In February 2002, we entered into an accounts receivable factoring agreement subject to a minimum annual fee of $5,000. Under the agreement, we may selectively assign and sell part or all of its accounts receivable, subject to approval by the factor.
On March 29, 2002, we entered into a Settlement of Debts and Asset Purchase Agreement with Starbrand, LLC, pursuant to which Starbrand agreed to acquire substantially all of our assets, properties and business in exchange for the assumption of certain of our liabilities. The assets to be transferred and the liabilities to be assumed had an approximate value of $725,000, and $938,000, respectively, at December 31, 2001. Based upon the structure of the Settlement of Debts and Asset Purchase Agreement, immediately following the closing of the transfer, we will retain assets with an estimated value of $33 as of December 31, 2001 and no business operations and will retain liabilities estimated to be approximately $1,163,000 as of December 31, 2001, consisting mostly of certain outstanding debentures, plus possible liabilities with respect to certain unasserted claims against us. The Settlement of Debts and Asset Purchase Agreement specifically provides that we shall retain all claims for tax refunds, tax loss carry forwards or carrybacks or tax credits of any kind applicable to our business prior to the closing of the asset purchase agreement. As of December 31, 2001, we had net operating loss carry forwards of approximately $2,426,000, all of which expire by 2021. Without future profits, such tax losses are of limited or no value. The liabilities that will not be assumed by Starbrand consist primarily of: principal amount of $1,050,000 of our 4% convertible debentures, in the aggregate, owned by Roseworth Group Limited, Balmore Funds, S.A. and Austost Anstalt Schaan, including accrued interest on $1,500,000 of the debentures; principal amount of $33,975 of our 5% convertible debentures owned by AMRO International, S.A., including accrued interest; and promissory notes issued in 2002, as of June 30, 2002, totaling $27,500.
On May 15, 2002, we borrowed an aggregate of $21,283 from two lenders and issued notes payable at an interest rate of 10% per annum. The notes are payable on demand, on or after June 15, 2002. The lenders include a party related to the holders of its 4% convertible debentures and another unrelated party. Subsequently, in July 2002, we entered into an agreement for the sale of 4% convertible debentures with an aggregate principal amount of $100,000 due on July 30, 2003 with the unrelated party, Alpha Capital. There were no preexisting arrangements or understandings among members of both the former and new control groups and their associates with respect to such transaction.
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Barter Credits in connection with Former Business
In connection with our former business operations that were discontinued on May 15, 2002, we entered into arrangements in 1998 and 2000, pursuant to which we received barter credit entitlements. Such credits generally relate to our right to exchange credits for future television, radio and other types of advertisements for our products. In the six months ended June 30, 2002, we recorded an impairment charge of $119,186, to write down unused barter credits to net realizable value based upon management’s estimate of future utilization of the unused credits. On May 15, 2002, we sold all unused barter credit in connection with the divestiture of our operations and sale of assets and certain specified liabilities to Starbrand, LLC.
Going Concern Comment
The auditors’ report to our financial statements for the year ended December 31, 2001 cites factors that raise substantial doubt about our ability to continue as a going concern. The factors include that we have incurred substantial operating losses since inception of operations and as at December 31, 2001 reflect deficiencies in working capital and stockholders’ equity. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Management’s Plan of Action
We have not engaged in any material operations since May 15, 2002. We presently have no plans to engage in any such activity in the foreseeable future, other than in seeking the acquisition of assets, property or business that may be beneficial to us and our stockholders. In our present form, we may be deemed to be a vehicle to acquire or merge with a business or company. To the extent that we intend to seek the acquisition of assets, property or business that may benefit our company and our stockholders, we are essentially a “blank check” company.
Based upon our present status as a company with no substantive operations, our foreseeable material cash requirements during the next twelve months relate to maintaining our in good standing in the State of New York, keeping current in federal, state and local taxes, keeping current with filings with the Securities and Exchange Commission, and making repayment of principal and interest on convertible debentures and notes payable.
We have incurred substantial losses from operations and we have deficiencies in working capital and stockholders’ equity at June 30, 2002 which raise substantial doubt about our ability to continue as a going concern. Our ability to operate as a going concern is dependent upon our ability to continue to raise adequate capital and financing as may be required. We are actively seeking to acquire a new business. There can be no assurance that future capital contributions, financing or acquiring a new business will be sufficient for us to continue as a going concern or that we can achieve profitable operations in the future. If new capital should become available, or if we acquire a new business such transaction would likely result in an immediate and substantial dilution to the presently existing shareholders.
In connection with the divestiture of our former business and our current status as substantially a non-operating company, the primary issue that management has focused on to address the going concern matter has been to seek short term financing through promissory notes and/or through issuance of convertible debentures in order to fund operations in connection with our activities related to seeking the acquisition of assets, property or business.
We are exploring various options to obtain financing and to resolve our existing debt burden, including by means of merger, consolidation, sale of assets, reorganization or restructuring. We do not presently have any such plans and there can be no assurance that raising such capital or acquiring a new business will be possible. If new capital should become available or we acquire a new business, the financing or acquisition is likely to result in immediate and substantial dilution to our presently existing shareholders.
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Subsequent to this June 30, 2002 reporting period, we entered into an agreement for the sale of 4% convertible debentures due July 30, 2003 with a principal amount of $100,000. Our management does not anticipate that we will have to raise additional funds during the next six to twelve months. We earlier believed that the funds from the 4% convertible debentures would be sufficient to fund our current operating needs, subject to our ability to resolve the repayments due on maturity of existing obligations, including convertible debentures.
Because, subsequent to the discontinuation of our former business, we do not have any business or tangible assets with which to generate revenue, we do not have any means to satisfy our liabilities or obligations unless and until we are able to raise additional capital or acquire a business. Although the sale of assets provides for the assumption by Starbrand of significant operating liabilities of Famous Fixins, we remain contingently responsible for the satisfaction of such liabilities and there can be no assurance that such liabilities will be satisfied.
In any business venture, there are substantial risks specific to the particular enterprise which cannot be ascertained until a potential acquisition, reorganization or merger candidate has been identified; however, at a minimum, our present business operations will be highly speculative and subject to the same types of risks inherent in any new or unproven venture. We can provide no assurance that any acquired business will produce any material revenues for us or our stockholders or that any such business will operate on a profitable basis. Because we are not currently engaged in any substantive business activities, and with management’s broad discretion with respect to the acquisition of assets, property or business, we may be deemed to be a “blank check” company. Although management intends to apply substantially all of the proceeds that it may receive through the issuance of stock or debt to a suitable acquisition, such proceeds will not otherwise be designated for any more specific purpose. We can provide no assurance that any allocation of such proceeds will allow us to achieve our business objectives. Because we have not yet identified any assets, property or business that we may potentially acquire, potential investors in our company will have virtually no substantive information upon which to base a decision whether or not to invest in Famous Fixins.
To date, we have not identified any particular industry or business in which to concentrate our acquisition efforts. To the extent that we may acquire a business in a highly risky industry, we will become subject to those risks. Similarly, if we acquire a financially unstable business or a business that is in the early stages of development, we will become subject to the numerous risks to which such businesses are subject. Although management intends to consider the risks inherent in any industry and business in which we may become involved, there can be no assurance that we will correctly assess such risks. We are unable to predict the time as to when and if we may actually participate in any specific business endeavor.
Management has had no preliminary contact or discussions regarding, and there are no present plans, proposals or arrangements to acquire any specific assets, property or business. Accordingly, it is unclear whether such an acquisition would take the form of an exchange of capital stock, a merger or an asset acquisition. However, because we have little resources as of the date of this Report, management expects that any such acquisition would take the form of an exchange of capital stock. This would result in substantial dilution of the shares of current stockholders.
Current management is not required to devote full time to the affairs of the company. Because of time commitments, as well as the fact that we have no substantial operating business presently, management anticipates that an insignificant amount of time will be devoted to the activities of the company, at least until such time as we have identified a suitable acquisition target.
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PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
Subsequent to June 30, 2002, we entered into agreements, dated July 30, 2002, with Alpha Capital A.G. for the sale of 4% convertible debentures due July 30, 2003 with a principal amount of $100,000, in transactions deemed to be exempt under Section 4(2) of the Securities Act of 1933. We made a determination that Alpha Capital was a sophisticated investor with enough knowledge and experience in business to evaluate the risks and merits of the investment. Prior to the transaction, Alpha Capital was an unrelated party who previously loaned us an aggregate of $26,891 pursuant to short-term promissory notes.
The 4% convertible debentures with an aggregate principal amount of $100,000 are due on July 30, 2003 with a 5% premium on the principal and the accrued but unpaid interest. We may not pay the principal before the maturity date without the express written consent of Alpha Capital. Semi-annual interest payments are due and payable in arrears on December 1 and June 1 of each year, commencing with December 1, 2002. With respect to the interest, the holders have the right to cause us to issue common stock in exchange for interest otherwise payable in cash. The exact number of shares of common stock into which such interest payment is convertible shall be based on the average of the five lowest closing bid prices of the common stock over the twenty-two trading days immediately prior to the interest payment date.
These 4% convertible debentures carry similar rights and privileges, including registration rights, accorded the debentures executed and delivered pursuant to the Convertible Debenture and Warrants Purchase Agreement dated as of October 27, 2000 between Famous Fixins, Inc. and those convertible debenture holders. Under the October 2000 purchase agreement, we agreed to prepare, file and seek effectiveness of a registration statement under the Securities Act for the resale of shares of common stock issuable upon the conversion of the earlier issued 4% convertible debentures, however, such a registration statement is not currently effective. On October 31, 2002, we entered into an equity line of credit transaction, for which the shares issuable upon drawdowns on the equity line are also the subject of such a registration statement. If we are unable to pay the amounts due on these 4% convertible debentures on the maturity date but we can draw down on the equity line of credit, we are to draw down the maximum amount each draw down period to pay these 4% convertible debenture holders the full amount due.
At the election of Alpha Capital, we are to redeem these 4% convertible debentures, plus all accrued but unpaid interest, along with a payment premium of 30% of such total amounts due, using up to 50% of the net proceeds received pursuant to the equity line of credit type of financing.
On or after the maturity date, Alpha Capital may elect to convert the 4% convertible debentures and accrued but unpaid interest into shares of common stock if the registration statement for the equity line is not effective on the maturity date or if we do not draw down the maximum amount permitted each drawdown period under the equity line after such a registration statement is effective. In such an event, the conversion price shall equal the lesser of $0.05 or 85% of the average of the 5 lowest closing bid prices during the 22 trading days preceding the applicable conversion date. The $0.05 conversion price is subject to downward adjustment if we sell other securities at a lower per share selling price.
The maximum number of shares of common stock that may be received upon the conversion of the debentures by Alpha Capital is 9.9% of our then-outstanding common stock after the conversion, including any other shares of common stock held by Alpha Capital, however, this 9.9% limit may be waived by Alpha Capital.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
In April 2002, we submitted an Information Statement on Schedule 14C related to actions in connection with an amendment to our certificate of incorporation to increase our authorized capital from 25,000,000 shares to 200,000,000 shares, and actions in connection with the Settlement of Debts and Asset Purchase Agreement with Starbrand, LLC. In March 2002, the holders of a majority of the shares of our outstanding common stock approved in writing, in accordance with the provisions of Section 615 of the New York Business Corporation Law, an amendment to our certificate of incorporation to increase our authorized capital from 25,000,000 shares to 200,000,000 shares, and actions related to the Settlement of Debts and Asset Purchase Agreement with Starbrand, LLC. Our shareholders representing 10,931,770 shares voted for those actions. At the time of the approval, the aggregate of these shares constituted 53.7% of the then outstanding shares of common stock.
ITEM 5. OTHER INFORMATION
We intend to file in the near future an amendment to our certificate of incorporation to reflect the shareholder action approving an increase in our authorized capital from 25,000,000 shares to 200,000,000 shares,
In our Quarterly Report on Form 10-QSB, filed on May 21, 2002, we reported that on March 29, 2002, we entered into a Settlement of Debts and Asset Purchase Agreement with Starbrand, LLC, pursuant to which Starbrand agreed to acquire substantially all of our assets, properties and business in exchange for the assumption of certain of our liabilities.
On May 15, 2002, we completed the transaction pursuant to the Settlement of Debts and Asset Purchase Agreement. We have not engaged in any material operations since May 15, 2002. We presently have no plans to engage in any such activity in the foreseeable future, other than in seeking the acquisition of assets, property or business that may be beneficial to us and our stockholders. In our present form, we may be deemed to be a vehicle to acquire or merge with a business or company. To the extent that we intend to seek the acquisition of assets, property or business that may benefit our company and our stockholders, we are essentially a “blank check” company. We are not aware of any arrangements, including any pledge by any person of securities of Famous Fixins, the operation of which may at a subsequent date result in a change in control of Famous Fixins.
On May 21, 2002, our Board of Directors accepted Victor Bauer’s resignation from the Board of Directors. On June 13, 2002, S. Michael Rudolph was appointed to the Board of Directors. Mr. Rudolph was a nominee of certain beneficial owners of Famous Fixins. Mr. Rudolph did not have any direct or indirect interest in Famous Fixins prior to the completion of the transaction. On June 13, 2002, Jason Bauer resigned from his positions as an executive officer and as a director of Famous Fixins, Inc.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
The following exhibits are filed with this report:
| Exhibit Number | Description of Exhibit |
| Exhibit 2 | Settlement of Debt and Asset Purchase Agreement |
| Exhibit 10.1 | Form of 4% Convertible Debenture Due July 30, 2003 |
| Exhibit 10.2 | Form of 4% Convertible Debenture Due July 30, 2003 |
| Exhibit 10.3 | Agreement to Extend August 7, 2001 Issued Debenture |
| Exhibit 11 | Statement Concerning Computation of Per Share Earnings is hereby incorporated by reference to “Financial Statements” of Part I - Financial Information, Item 1 – Financial Statements, contained in this Form 10-QSB. |
(b) Reports on Form 8-K.
On June 27, 2002, we filed a current report on Form 8-K announcing the appointment of S. Michael Rudolph as a director of Famous Fixins, Inc. and the resignations of Victor Bauer as a director and of Jason Bauer as an executive officer and as a director.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Dated: September 13, 2002 | By: /s/ S. Michael Rudolph
S. Michael Rudolph
Director |
CERTIFICATION
I, S. Michael Rudolph, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Famous Fixins, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report.
| Dated: September 13, 2002 | /s/ S. Michael Rudolph
Acting Chief Executive Officer and
Acting Financial Officer |
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