Registration No. 333-88662
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
(Amendment No. 6)
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FIRSTCDP, INC.
(Name of small business issuer in its charter)
NEVADA 7310 86-1030964
(State or jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Identification
organization) Classification Code Number)
Number)
4745 North 7th Street, Suite 234
Phoenix, Arizona 85014
Telephone: 602-235-9080
(Address and telephone number of principal executive offices)
4745 North 7th Street, Suite 234
Phoenix, Arizona 85014
Telephone: 602-235-9080
(Address of principal place of business or intended principal
place of business)
Jonathan A. Firestein
FirstCDP, Inc.
4745 North 7th Street, Suite 234
Phoenix, Arizona 85014
Telephone: 602-235-9080
Facsimile: 602-235-9040
(Name, address, and telephone number of agent for service)
Copies to:
David B. Stocker, Esq.
4745 North Seventh Street, Suite 234
Phoenix, Arizona 85014
Telephone: 602-235-9080
Facsimile: 602-235-9040
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement or 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
================================================================================
Title of each Proposed Proposed Proposed
class of Dollar maximum maximum Amount of
securities to Amount to offering price aggregate registration
be registered registered per unit offering price fee
- --------------------------------------------------------------------------------
Common Stock(1) $25,000 $0.25 $25,000 $2.30
Common Stock(2) $25,000 $0.25(3) $25,000 $2.30
Total: $4.60
================================================================================
(1) 100,000 shares of common stock relate to the offering by FirstCDP, Inc.
(2) 100,000 shares of common stock relate to the offering by the Selling
Security Holder.
(3) Estimated solely for purposes of calculating registration fee pursuant to
Rule 457(c) under the Securities Act of 1933, as amended.
Pursuant to Rule 416 of the Act, this registration statement also covers such
indeterminate additional shares of common stock as may become issuable as a
result of stock splits, stock dividends or other similar events.
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 WHICH 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.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there by any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
EXPLANATORY NOTE
This registration statement contains two consolidated prospectuses: one relating
to the offering by FirstCDP, Inc. of 100,000 shares of its common stock, and
another prospectus relating to the offering of 100,000 shares of common stock
held by the Selling Security Holder who may wish to sell its common stock.
PROSPECTUS
October ___, 2002
FIRSTCDP, INC.
100,000 Shares of Common Stock Offered by the Company
100,000 Shares of Common Stock Offered by the Selling Security Holder
$0.25 per Share
We are in the business of developing and operating an electronic commerce
website that focuses on the history and charm of the Haight-Ashbury district in
San Francisco, California. The website will be located at www.TheHaight.com.
This is our initial public offering, and no public market currently exists for
our shares. The offering price may not reflect the market price of our shares
after the offering. The selling security holder will sell at the price of $0.25
per share until our shares are quoted on the OTC Bulletin Board and thereafter,
at prevailing market prices or privately negotiated prices.
Both offerings will terminate on the earlier of (i) the date when the sale of
the 100,000 shares by the company, and the sale of the 100,000 shares by the
selling security holder, are both completed or (ii) 180 days from the date of
this prospectus, unless we extend this offering, without further notice, for an
additional 90 days. Notwithstanding the conditions (i) and (ii) above, we may,
in our sole discretion, terminate this offering prior to 180 days from the date
of this prospectus by a unanimous vote of our board of directors.
We and the selling security holder are offering the shares of common stock in a
self-underwritten offering. There is no minimum number of shares to be sold in
this offering. No underwriting arrangements for this offering exist. The
proceeds from the sale of up to 100,000 shares of common stock will be available
directly to our company, and the proceeds from the sale of up to 100,000 shares
of common stock will be available directly to the selling security holder. There
are no arrangements to place any of the proceeds in escrow.
Number Underwriting Proceeds to the
of Offering Discounts & Company and the
Shares Price Commissions Selling Security Holder
- --------------------------------------------------------------------------------
Per Share 1 $0.25 $0.00 $0.25
100,000(1) $25,000.00 $0.00 $25,000.00
100,000(2) $25,000.00 $0.00 $25,000.00
------- ---------- ----- ----------
Total: 200,000 $50,000.00 $0.00 $50,000.00
(1) 100,000 shares of common stock relate to the offering by FirstCDP, Inc.
(2) 100,000 shares of common stock relate to the offering by the selling
security holder.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE THE SHARES
ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT. SEE "RISK FACTORS"
BEGINNING ON PAGE 8.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.
The date of this prospectus is October ____, 2002
[Inside Front Cover and Back Cover Pages]
Dealer Prospectus Delivery Obligation
Until ______________, 2002, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligations to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
TABLE OF CONTENTS
PART I: INFORMATION REQUIRED IN PROSPECTUS
Item 3. Summary Information and Risk Factors................................3
Item 4. Use of Proceeds....................................................12
Item 5. Determination of Offering Price....................................14
Item 6. Dilution...........................................................14
Item 7. Selling Security Shareholder.......................................15
Item 8. Plan of Distribution...............................................15
Item 9. Legal Proceedings..................................................18
Item 10. Directors, Executive Officers, Promoters and
Control Persons...................................................19
Item 11. Security Ownership of Certain Beneficial Owners and Management.....21
Item 12. Description of Securities..........................................21
Item 13. Interests of Named Experts and Counsel.............................22
Item 14. Disclosure of Commission Position of Indemnification
for Securities Act Liabilities....................................22
Item 15. Organization Within Last Five Years................................23
Item 16. Description of Business............................................23
Item 17. Management's Discussion and Plan of Operation......................30
Item 18. Description of Property............................................35
Item 19. Certain Relationships and Related Transactions.....................35
Item 20. Market for Common Equity and Related Stockholder Matters...........35
Item 21. Executive Compensation.............................................36
Item 22. Financial Statements..............................................F-1
Item 23. Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure...........................................37
PART II: INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers..........................37
Item 25. Other Expenses of Issuance and Distribution........................38
Item 26. Recent Sales of Unregistered Securities............................38
Item 27. Exhibits...........................................................39
Item 28. Undertakings.......................................................39
PART I: INFORMATION REQUIRED IN PROSPECTUS
ITEM 3. SUMMARY INFORMATION AND RISK FACTORS.
This prospectus contains forward-looking statements, which involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of certain factors including
those set forth under "Risk Factors" and elsewhere in this prospectus. You
should read and carefully consider the entire prospectus before making a
decision to purchase our common stock.
OUR COMPANY
FirstCDP, Inc. (the "company," "we," or "our") was incorporated in the State of
Nevada on May 24, 2001. We intend to develop and operate an electronic commerce
("e-commerce") website that focuses on the history and charm of the
Haight-Ashbury district in San Francisco, California. The website will be
located at www.TheHaight.com. Our management believes that the market for
internet advertising and sales of city-specific merchandise is highly
competitive with low barriers to entry, which serves simultaneously as an
opportunity and a risk to our business plan. We have not yet commenced planned
operations. As of the date of this prospectus, we have engaged in only limited
start-up efforts and have not generated any revenues. Taking these facts into
account, our independent auditor has expressed substantial doubt about our
ability to continue as a going concern.
As of the date of this prospectus, we have 10,115,000 shares of $0.001 par value
common stock issued and outstanding.
Our administrative office is located at 4745 North 7th Street, Suite 234,
Phoenix, Arizona 85014, telephone 602-235-9080.
Our fiscal year end is December 31st.
THE OFFERING BY FIRSTCDP, INC.
We are offering up to 100,000 shares of common stock. We have set the offering
price at $0.25 per share. The proceeds from the sale of up to 100,000 shares of
common stock will be available directly to us. We plan to use these proceeds for
office equipment and supplies, web design and hosting, marketing, and general
working capital.
THE OFFERING BY THE SELLING SECURITY HOLDER
Concurrently, we are also registering 100,000 additional shares of common stock
for sale by the Selling Security Holder, who will sell at the price of $0.25 per
share until our shares are quoted on the OTC Bulletin Board and thereafter, at
prevailing market prices or privately negotiated prices. The proceeds from the
sale of up to 100,000 shares of common stock will be available directly to the
Selling Security Holder.
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BOTH OFFERINGS
We and the Selling Security Holder are offering the shares of common stock in a
self-underwritten offering. There is no minimum number of shares to be sold in
this offering. No underwriting arrangements for this offering exist. There are
no arrangements to place any of the proceeds in escrow.
Both offerings shall terminate on the earlier of (i) the date when the sale of
the 100,000 shares by the company, and the sale of the 100,000 shares by the
Selling Security Holder, are both completed or (ii) one hundred and eighty (180)
days from the date of this prospectus, unless we extend this offering, without
further notice, for an additional ninety (90) days. Notwithstanding the
conditions (i) and (ii) above, we may, in our sole discretion, terminate this
offering prior to one hundred and eighty (180) days from the date of this
prospectus by a unanimous vote of our Board of Directors.
Prior to this offering, there has been no public market for our common stock.
Neither the Nasdaq National Market nor any national securities exchange lists
our common stock. We anticipate that our common stock will initially be traded
on the OTC Bulletin Board after this offering. We have not taken any steps to
obtain a market maker for our common stock.
Our transfer agent is Holladay Stock Transfer, 2939 North 67th Place,
Scottsdale, Arizona 85251, telephone 480-481-3940.
We have agreed to pay all costs and expenses relating to the registration of our
common stock.
The purchase of the common stock of this offering involves a high degree of
risk. Our common stock offered in this prospectus is for investment purposes
only, and currently no market exists for our common stock. See "Risk Factors"
and "Dilution."
4
FINANCIAL SUMMARY INFORMATION
The following Summary Financial Summary and Operating Data have been derived
from our financial statements for the periods indicated. You should read the
following financial data in conjunction with the our financial statements and
the notes thereto included elsewhere in this Registration Statement.
Nine Months
Ending Year Ending
September 30, December 31,
2002 2001
------------ ------------
(Audited) (Audited)
Statement of Operations
INCOME STATEMENT DATA:
Revenues $ 0 $ 0
Income (loss) from operations $ (8,569) $ (500)
Net Interest Expense $ -- $ --
Income (loss) before income taxes $ (8,569) $ (500)
Income tax $ 0 $ 0
Net income (loss) $ (8,569) $ (500)
PER SHARE DATA:
Weighted average shares outstanding 10,115,000 10,000,000
Net Income (loss) $ (8,569) $ (500)
BALANCE SHEET DATA:
Working capital (deficiency) $ 181 $ 500
Total assets $ 181 $ 500
Long term debt $ -- $ --
Total liabilities and stockholders' equity $ 181 $ 500
5
RISK FACTORS
Investment in the securities offered hereby involves certain risks and is
suitable only for investors of substantial financial means. You should carefully
consider the following material risk factors, in addition to the other
information contained in this prospectus, before making an investment decision
concerning the common stock.
BECAUSE WE HAVE SUBSTANTIAL NEAR-TERM CAPITAL NEEDS AND WE MAY BE UNABLE TO
OBTAIN ADDITIONAL FUNDING, WE MAY NEVER BECOME PROFITABLE OR WE MAY FILE FOR
BANKRUPTCY PROTECTION.
We will require funding over the next twenty-four (24) months to develop and
expand our business. We estimate that we may need up to an additional $150,000
to fund our future expansion, which would include the costs of marketing,
equipment, and employees. We have no agreement for future financing. Our capital
requirements will depend on many factors, including the level of our revenues.
The percentage ownership of our current shareholders will be reduced if
additional funds are raised through the issuance of equity securities. Such
equity securities may have rights, preferences, and privileges senior to those
of our common stock holders. In the event of a bankruptcy, shareholders could
lose their entire investments as a result of the senior preferences or
privileges. Further, we cannot assure you that additional capital will be
available on terms favorable to our company or shareholders.
Our cash requirements may vary materially depending on our rate of development
and expansion, results, competitive and technological advances and other
factors. If adequate funds are not available, we may be required to
significantly curtail operations or obtain funds by entering into collaboration
agreements, which may contain unfavorable terms. When additional capital is
needed, we cannot assure you that funds will be available from any source or, if
available, that they can be obtained on terms acceptable to us. Our inability to
raise capital could cause our business to fail.
OUR BOARD OF DIRECTORS HAS THE AUTHORITY TO ISSUE SHARES WITHOUT SHAREHOLDER
CONSENT AND THEREFORE, THEY MAY ISSUE SHARES WHICH COULD CAUSE YOUR SHARES TO BE
WORTH LESS IN THE FUTURE.
Our Articles of Incorporation authorize the issuance of a maximum of
seventy-five million (75,000,000) shares of common stock with a par value of
$0.001 per share, and twenty-five million shares of preferred stock with a par
value of $0.001. As of September 30, 2002, there were 10,115,000 common shares
issued and outstanding and no shares of preferred stock outstanding. The
authority of our Board of Directors to issue stock without shareholder consent
may have a depressive effect on the market value of our stock even prior to any
such designation or issuance of the preferred stock.
OUR PRINCIPAL STOCKHOLDER, JONATHAN A. FIRESTEIN, OWNS APPROXIMATELY 99% OF OUR
COMMON STOCK AND THEREFORE, CONTROLS OUR COMPANY.
Jonathan A. Firestein has the ability to significantly control our company's
affairs and management. He currently owns approximately 99% of our common stock,
giving him significant influence over all matters requiring approval by our
stockholders, but not requiring approval of minority stockholders. In addition,
6
Jonathan A. Firestein has the voting power to elect all members of our Board of
Directors. Such control could adversely affect the market value of our common
stock or delay or prevent a change in control of our company. In addition,
Jonathan A. Firestein may control most corporate matters requiring stockholder
approval by written consent, without the need for a duly-noticed and duly-held
meeting of stockholders.
BECAUSE WE HAVE NEVER PAID DIVIDENDS, YOU MAY NOT EARN INCOME ON YOUR
INVESTMENT.
As a newly formed corporation, we have never paid dividends and therefore, you
may never get income from your investment. We do not anticipate declaring or
paying any dividends in the foreseeable future. We intend to retain earnings, if
any, to finance the development and expansion of our business. Our future
dividend policy will be subject to the discretion of the Board of Directors and
will be contingent upon future earnings, our financial condition, capital
requirements, general business conditions and other factors. Future dividends
may also be subject to covenants contained in loan or other financing documents
that we may execute. Accordingly, we cannot assure that you we will ever pay or
declare cash dividends of any kind.
BECAUSE WE HAVE A LIMITED OPERATING HISTORY, YOU WILL BE UNABLE TO DETERMINE
WHETHER WE WILL EVER BECOME PROFITABLE; OUR AUDITOR HAS EXPRESSED SUBSTANTIAL
DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.
The Company was incorporated in May of 2001 and was not operational until the
fiscal year 2002. Our operating history is very limited. We have never had
revenues. As such, we cannot assure you that we will be profitable in the
future. Taking these facts into account, our independent auditor has expressed
substantial doubt about our ability to continue as a going concern.
OUR BUSINESS COULD FAIL IF INTERNET USAGE DOES NOT CONTINUE TO GROW.
The market for our services is new and rapidly evolving. Our business could fail
if Internet usage does not continue to grow. A number of factors may inhibit
Internet usage, including:
- inadequate network infrastructure;
- security concerns;
- inconsistent quality of service;
- lack of availability of cost-effective, high-speed service;
- consumers returning to traditional or alternative sources for
information, shopping and services; and
- privacy concerns, including those related to the ability of websites
to gather information about users without their knowledge or consent.
7
OUR BUSINESS COULD FAIL IF THE INTERNET INFRASTRUCTURE DOES NOT SUPPORT GROWTH
AND USAGE.
If Internet usage continues to grow significantly, the Internet infrastructure
may not be able to support the demands placed on it by this growth and its
performance and reliability may decline. In addition, websites have experienced
interruptions in their services as a result of outages and other delays
occurring throughout the Internet network infrastructure. If these outages and
delays frequently occur in the future, Internet usage, including the usage of
our website, could grow more slowly or decline.
THE MARKET FOR INTERNET ADVERTISING AND E-COMMERCE IS STILL DEVELOPING. IF THE
INTERNET FAILS TO GAIN FURTHER ACCEPTANCE AS A MEDIUM FOR ADVERTISING, WE WOULD
HAVE SLOWER REVENUE GROWTH THAN EXPECTED AND WOULD INCUR GREATER THAN EXPECTED
LOSSES.
We expect to derive a substantial portion of our revenues from sponsorships and
advertising for the foreseeable future, as demand and market acceptance for
Internet advertising continues to develop. Accordingly, our business depends on
market acceptance of the Internet as a medium for advertising.
Although there are currently several standards for the measurement of the
effectiveness of Internet advertising, the industry has had difficulty
convincing potential advertisers that Internet advertising is a significant
advertising medium. Advertisers and advertising agencies that have historically
relied on traditional forms of advertising may be reluctant or slow to adopt
online advertising. In addition, advertisers and advertising agencies that use
the Internet as an advertising medium may find online advertising to be less
effective for promoting their products and services than traditional advertising
media, including television, radio and print. Advertisers and advertising
agencies that have invested substantial resources in traditional methods of
advertising may also be reluctant to reallocate their resources to online
advertising. Moreover, software programs that limit or prevent advertising from
being delivered to an Internet user's computer are available. Widespread
adoption of this software could reduce the commercial viability of Internet
advertising. The market for online advertising also depends on the overall
growth and acceptance of electronic commerce. If the markets for online
advertising and electronic commerce fail to develop or develop more slowly than
we expect, or if we are unable to adapt to new forms of Internet advertising, we
would have slower than expected revenue growth and would incur greater than
expected losses, and our business and financial condition would be harmed.
Furthermore, different pricing models are used to sell advertising on the
Internet and it is difficult to predict which, if any, of the models will emerge
as the industry standard. This makes it difficult to project our future
advertising rates and revenues.
BECAUSE WE ARE IN A HIGHLY COMPETITIVE MARKET, WE ARE AT A COMPETITIVE
DISADVANTAGE WHICH MAY HINDER OUR ABILITY TO BECOME PROFITABLE.
We are, and will continue to be, an insignificant participant in the electronic
commerce and advertising business. A large number of established and
well-financed entities, including small public companies and venture capital
firms, are engaged in similar businesses of the company. In addition, these
companies are better financed and have a broader range of clients which makes it
easier for them to expand into the market into which we are attempting to go.
Nearly all these entities have significantly greater financial resources,
technical expertise and managerial capabilities than we do and, consequently, we
will be at a competitive disadvantage in our market.
8
THERE IS INTENSE COMPETITION AMONG INTERNET-BASED BUSINESSES AND PUBLISHING
COMPANIES FOCUSED ON LOCAL SPECIFIC GUIDES AND/OR CITY GUIDES, AND THIS
COMPETITION COULD RESULT IN PRICE REDUCTIONS, REDUCED MARGINS OR LOSS OF MARKET
SHARE.
The number of websites competing for the attention and spending of users and
advertisers has increased and we expect it to continue to increase. Our website
will compete for users and advertisers with the following types of companies:
- online services or websites targeted at consumers of a specific place,
such as Citysearch.com;
- publishers and distributors of travel guides, such as Frommers and
Fodors.
- Restaurant guides such as Zagat;
- Web search and retrieval and other online service companies, commonly
referred to as portals, such as America Online, Yahoo, and Google; and
- e-commerce companies such as Amazon.com.
Increased competition could result in price reductions, reduced margins or loss
of market share, any of which could cause our revenues to decrease substantially
or our business to fail.
BECAUSE MANAGEMENT ONLY DEVOTES A LIMITED AMOUNT OF TIME TO THE COMPANY, THE
COMPANY MAY NOT REALIZE ITS GROWTH POTENTIAL.
Jonathan A. Firestein, our president, intends to devote approximately 20 hours
per week to the business of our company. Charles L. Firestein, our secretary, is
a full time practicing attorney, and he will only approximately five hours of
time per week to the business of our company. None of our officers have entered
into written employment agreements with us and none is expected to do so in the
foreseeable future. This limited commitment may adversely affect the Company's
ability to grow and reach its goals.
BECAUSE OUR MANAGEMENT IS INVOLVED IN OTHER BUSINESS ACTIVITIES, THERE MAY BE A
CONFLICT WITH OUR INTERESTS AND WE HAVE NO POLICY FOR THE RESOLUTION OF THESE
POSSIBLE CONFLICTS.
Our management is involved in other business activities and may, in the future,
become involved in other business opportunities. If a specific business
opportunity becomes available, our management may face a conflict in selecting
between the our company and their other business interests. We have not
formulated a policy for the resolution of such conflicts.
BECAUSE WE ARE DEPENDENT ON KEY PERSONNEL, OUR BUSINESS COULD FAIL IF WE LOSE
THE SERVICES OF OUR OFFICERS.
Our success is heavily dependent upon the continued active participation of our
current executive officers, Jonathan A. Firestein and Charles L. Firestein. The
loss of their services could cause our business to fail. We do not maintain "key
person" life insurance on the life of either Jonathan A. Firestein or Charles L.
Firestein, or their beneficiaries. We do not have written employment agreements
with Jonathan A. Firestein or Charles L. Firestein. We cannot assure you that we
will be able to recruit or retain other qualified personnel should that
necessity arise.
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BECAUSE MANAGEMENT HAS LIMITED OR NO EXPERIENCE IN OPERATING A WEBSITE, OUR
BUSINESS COULD FAIL.
Jonathan A. Firestein has limited experience in, and Charles L. Firestein has no
experience in, implementing an extensive website. Jonathan A. Firestein has not
previously operated a website as a chief executive officer. This collective lack
of experience may cause our business to fail.
CONSUMER PROTECTION PRIVACY REGULATIONS COULD IMPAIR OUR ABILITY TO OBTAIN
INFORMATION ABOUT OUR USERS, RESULTING IN DECREASED ADVERTISING REVENUES.
We intend to obtain personal data from users who register to become members of
our website. Registration as a member may be required in order for users to have
full access to our services. Personal data gathered from members would be used
to tailor content to them and is provided, on an aggregate basis, to advertisers
to assist them in targeting their advertising campaigns to particular
demographic groups. The attractiveness of our website to current or prospective
advertisers depends in part on our ability to provide user data to support this
tailoring capability. However, privacy concerns may cause users to resist
providing this personal data. Even the perception of security and privacy
concerns, whether or not valid, may indirectly inhibit market acceptance of our
use of personal data. In addition, legislative or regulatory requirements may
heighten these concerns if businesses must notify Internet users that the data
may be used by marketing entities to direct product promotion and advertising to
the user. If we become unable to collect this personal data from a sufficient
number of the users of our website, we may lose significant advertising
revenues.
WE MAY INCUR LIABILITY FOR INFORMATION WE PUBLISH OR PRODUCTS WE SELL. OUR
BUSINESS COULD BE HARMED BECAUSE WE DO NOT MAINTAIN COMMERCIAL GENERAL LIABILITY
INSURANCE.
We may be subject to claims for defamation, negligence, copyright or trademark
infringement, personal injury or other legal theories relating to the
information we publish on our website. These types of claims have been brought,
sometimes successfully, against providers of Internet services in the past. In
addition, we could be subjected to claims based upon content that is accessible
from our website through links to other websites or through content and
materials that may be posted by members in chat rooms or bulletin boards.
We do not have insurance to cover commercial general liability, and as such, we
will not be adequately protected against these claims. Liability claims could
require us to spend significant time and money in litigation and to pay
significant damages. As a result, liability claims, whether or not successful,
could seriously damage our reputation and business. We may also be forced to
implement expensive measures to alter the way our services are provided to avoid
potential liability.
10
THERE IS PRESENTLY NO PUBLIC MARKET FOR OUR COMMON STOCK AND A MARKET MAY NEVER
DEVELOP.
We intend to apply for listing of the securities on the Over the Counter
Bulletin Board ("OTCBB"); however, we cannot assure you that we will be able to
obtain such a listing. The over-the-counter market ("OTC") differs substantially
from national and regional stock exchanges because it (1) operates through
communication of bids, offers and confirmations between broker-dealers, rather
than one centralized market (exchange) and (2) securities admitted to quotation
are offered by one or more broker-dealers rather than "specialists" which
operate in stock exchanges. To qualify for listing on the OTCBB, an equity
security must have at least one registered broke-dealer, which acts as the
market maker listing bids or ask quotations and which sponsors an issuer
listing. A market maker sponsoring a company's securities is required in order
to obtain listing of securities on any of the public trading markets, including
the OTCBB. We currently do not have a market maker for our securities. If we are
able to obtain a market maker for our securities, we may obtain a listing on the
OTCBB or develop a trading market for our common stock. We may be unable to
locate a market maker that will agree to sponsor our securities. Even if we do
locate a market maker, we cannot assure you that our securities will be able to
meet the OTCBB requirements or that the securities will be accepted for a OTCBB
listing.
We cannot assure you that a market for our common stock will be established or
that, if established, such market will be sustained. Therefore, you may not be
able to sell your shares, because a public market for our securities may not
exist. Any purchaser of our securities should be in a financial position to bear
the risks of losing their entire investment.
"PENNY STOCK" REGULATION MAY CAUSE BROKER-DEALERS TO BE UNABLE TO SELL OUR
SECURITIES.
There will be "penny stock" regulation of broker-dealer sales of our securities.
For transactions covered by Rule 15g-9 under the Exchange Act, a broker-dealer
must furnish to all investors in penny stocks a risk disclosure document
required by the rule, make special suitability determination of the purchaser
and have received the purchaser's written agreement to the transaction prior to
the sale. In order to approve a person's accounts for transaction in penny
stock, the broker or dealer must (i) obtain information concerning the person's
financial situation, investment experience and investment objectives; (ii)
reasonably determine, based on the information required by paragraph (i) that
transactions in penny stock are suitable for the person and that the person has
sufficient knowledge and experience in financial matters that the person
reasonably may be expected to be capable of evaluating the risks of transactions
in penny stock; and (iii) deliver to the person a written statement setting
forth the basis on which the broker or dealer made the determination required by
paragraph (ii) of this section unless the broker or dealer has received, prior
to the transaction, a written agreement to the transaction from the person; and
stating in a highlighted format immediately preceding the customer signature
line that the broker or dealer is required to provide the person with the
written statement and the person should not sign and return the written
statement to the broker or dealer if it does not accurately reflect the person's
financial situation, investment experience and investment objectives and obtain
from the person a manually signed and date copy of the written statement.
11
A penny stock means any equity security other than a security (i) registered, or
approved for registration, upon notice of issuance on a national securities
exchange that makes transaction reports available pursuant to 17 CFR 11Aa3-1;
(ii) authorized or approved for authorization upon notice issuance, for
quotation on the Nasdaq NMS; (iii) that has a price of five dollars or more; or
(iv) whose issuer has net tangible assets in excess of $2,000,000 demonstrated
by financial statements dated less than fifteen months previously that the
broker or dealer has reviewed and has a reasonable basis to believe are true and
complete in relation to the date of the transaction with the person.
Consequently, the rule may affect the ability of broker-dealers to sell our
securities.
INVESTORS FACE SIGNIFICANT RESTRICTIONS ON THE RESALE OF OUR STOCK DUE TO THE
WAY IN WHICH STOCK TRADES ARE HANDLED BY BROKER-DEALERS.
Because of large broker-dealer spreads, investors may be unable to sell the
stock immediately back to the broker-dealer at the same price the broker-dealer
sold the stock to the investor. In some cases, the stock may fall quickly in
value. Investors may be unable to reap any profit from any sale of the stock, if
they can sell it at all. The market among broker-dealers may not be active.
Investors in penny stock often are unable to sell stock back to the dealer that
sold them the stock. The mark ups or commissions charged by the broker-dealers
may be greater than any profit a seller may make.
THE MARKET FOR PENNY STOCKS HAS SUFFERED IN RECENT YEARS FROM PATTERNS OF FRAUD
AND ABUSE WHICH MAY CAUSE INVESTORS TO LOSE THEIR INVESTMENT.
Shareholders should be aware that, according to the Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse which could cause investors to
lose their entire investment. Such patterns include:
- control of the market for the security by one or a few broker-dealers
that are often related to the promoter or issuer;
- manipulation of prices through prearranged matching of purchases and
sales and false and misleading press releases;
- "boiler room" practices involving high pressure sales tactics and
unrealistic price projections by inexperienced sales persons;
- excessive and undisclosed differentials and markups by selling
broker-dealers; and
- the wholesale dumping of the same securities by promoters and
broker-dealers after prices have been manipulated to a desired level,
along with the inevitable collapse of those prices with consequent
investor losses.
ITEM 4. USE OF PROCEEDS
We estimate that the net proceeds from the sale of the 100,000 shares of common
stock that we are offering will be $25,000. We are paying for all of the
expenses of this offering.
We intend to use all of such proceeds as indicated in the table below. The
amounts and timing of the expenditures may vary significantly depending on
numerous factors, such as the progress of our development efforts and the
competitive environment for our services.
12
Pending use of the net proceeds, we intend to invest the net proceeds in an FDIC
insured money market bank account.
This prospectus is part of a registration statement that permits the Selling
Security Holder to sell its shares on a continuous or delayed basis in the
future. We will not receive any of the proceeds from the sale of the shares
owned by the Selling Security Holder.
Only the proceeds from the sale of 100,000 shares of common stock will go
directly to the company. The proceeds from the sale of 100,000 shares of common
stock will go directly to the Selling Security Holder. This offering is
self-underwritten, and we cannot guarantee you that we will sell any number of
shares. Assuming that we sell all or portion of the 100,000 shares, we plan to
use the proceeds as follows:
100% of 75% of 50% of 25% of
Offering % Offering(1) % Offering % Offering(1) %
- --------------------------------------------------------------------------------------------------------------
Offering Proceeds $25,000 100.0% $18,750 100.0% $12,500 100.0% $ 6,250 100.0%
Offering Expenses (2) 5,955 23.8% 5,955 31.8% $ 5,955 47.6% $ 5,955 95.3%
Net Proceeds
from Offering 19,045 76.2% 12,795 68.2% $ 6,545 52.4% $ 295 4.7%
Use of Net Proceeds
Office Equipment
and Supplies 5,000 20.0% 3,750 20.0% $ 2,500 20.0% $ 295 4.7%
Website Design
and Hosting 5,000 20.0% 3,750 20.0% $ 2,000 16.0% $ 0 0.0%
Marketing and
Advertising 5,000 20.0% 3,750 20.0% $ 1,000 8.0% $ 0 0.0%
General Working
Capital (3) 4,045 16.2% 1,545 8.2% $ 1,045 8.4 $ 0 0.0%
---------------------------------------------------------------------------------------
Total Use of
Net Proceeds 19,045 76.2% 12,795 68.2% $ 6,545 52.4% $ 295 4.7%
---------------------------------------------------------------------------------------
Total Use of Proceeds 25,000 100.0% 18,750 100.0% $12,500 100.0% $ 6,250 100.0%
- --------------------------------------------------------------------------------------------------------------
(1) If we fail to raise at least $20,000 in this offering, Stiltskin, Inc., a
shareholder, has agreed to provide sufficient additional funds as a loan
not to exceed $20,000 over the next twelve (12) month period on an as
needed basis. (See "Item 17. Management's Discussion and Plan of
Operation.")
(2) The offering expenses are fixed and will not vary depending on the proceeds
raised in this offering.
(3) The category of General Working Capital includes officer salaries (if any),
printing costs, postage, telephone services, office supplies, and delivery
services.
In the event that the offering proceeds are between the $20,000 and $25,000 in
proceeds indicated in the table above, we intend to apply the net proceeds on
approximately a pro rata basis according to the percentages referenced above.
13
ITEM 5. DETERMINATION OF OFFERING PRICE
We have arbitrarily determined the offering price of the common stock, and the
offering price bears no relationship to any objective criterion of value. The
price does not bear any relationship to our assets, book value, historical
earnings or net worth. In determining the offering price, we considered such
factors as the prospects, if any, for similar companies, the previous experience
of management, our anticipated results of operations, our present financial
resources, and the likelihood of acceptance of this offering.
This offering is partly for the purpose of allowing our Selling Security Holder
to sell its stock. The Selling Security Holder may sell its shares when the
registration statement becomes effective, or it may elect to sell some or all of
its shares at a later date.
As the market develops, the Selling Security Holder will determine the price for
the stock. We have 10,115,000 shares of common stock issued and outstanding, of
which 10,000,000 shares were issued on July 1, 2001, at $0.001 per share, 15,000
shares were issued on April 1, 2002 at $0.25 per share, and 100,000 shares were
issued on April 29, 2002 at $0.05 per share. All stock was issued based on a
valuation by the Board of Directors. No sale of our common stock has ever been
sold from one investor to another and the last issue of stock from treasury
occurred on April 29, 2002, when a total of 100,000 shares of our common stock
were sold at a price of $0.05 per share.
ITEM 6. DILUTION
"Dilution" represents the difference between the offering price and the net book
value per share of common stock immediately after completion of this offering.
"Net Book Value" is the amount that results from subtracting our total
liabilities from total assets. In this offering, the level of dilution is
substantial as a result of the low book value of the issued and outstanding
stock. The net book value of the company on September 30, 2002, was $0.00002 per
share. Assuming all shares offered herein are sold, and given effect to the
receipt of the maximum estimated proceeds of this offering from shareholders net
of the offering expenses, the net book value of the company will be $24,522 or
$.0024 per share. Therefore, the purchasers of the common stock in this offering
will suffer an immediate and substantial dilution of approximately $0.2475 per
share, while our present stockholders will receive an immediate and substantial
increase of $0.0019 per share in the net tangible book value of the shares they
hold. This will result in a 99.99% dilution for purchasers of stock in this
offering.
14
The following table illustrates the dilution to the purchasers of the shares in
this offering:
Assuming the sale by the company of:
Maximum
of
50,000 100,000
1 share shares shares
--------- --------- ---------
Offering price per share $ 0.25 $ 0.25 $ 0.25
Net tangible book value per
share before offering $ 0.00002 $ 0.00002 $ 0.00002
--------- --------- ---------
Increase attributable to
shareholders ($0.00002) $ 0.0012 $ 0.0025
Net tangible book value per
share after offering ($0.00002) $ 0.0012 $ 0.0025
Per share dilution $ 0.2499 $ 0.2488 $ 0.2475
--------- --------- ---------
Dilution % 99.96% 99.52% 99.00%
--------- --------- ---------
ITEM 7. SELLING SECURITY HOLDERS.
The following table sets forth (i) the number of outstanding shares,
beneficially owned by the Selling Security Holder prior to the offering; (ii)
the aggregate number of shares offered by each such stockholder pursuant to this
prospectus; and (iii) the amount and the percentage of the class to be owned by
such security holder after the offering is complete:
Number Number Percentage
of of of
Shares Shares Shares
Beneficially Beneficially Beneficially
Owned Number Owned Owned
before of after after
Name of Beneficial Owner the Shares the the
of Common Stock Offering Offered Offering Offering
- --------------------------------------------------------------------------------
Stiltskin, Inc.(1) 100,000 100,000 0 0%
(1) Chris Allen controls Stiltskin, Inc.
The Selling Security Holder has not been affiliated with us in any capacity in
the past three years. The Selling Security Holder is not a broker/dealer nor an
affiliate of a broker/dealer.
ITEM 8. PLAN OF DISTRIBUTION.
OFFERING OF 100,000 SHARES BY THE COMPANY
Our shares of common stock will be sold directly through the efforts of Jonathan
A. Firestein and Charles L. Firestein, our officers and directors. We believe
that Jonathan A. Firestein and Charles L. Firestein are both exempt from
15
registration as a brokers under the provisions of Rule 3a4-1 promulgated under
the Securities Exchange Act of 1934. In particular, neither person is:
1. not subject to a statutory disqualification, as that term is defined
in section 3(a)39 of the Act, at the time of their participation; and
2. not compensated in connection with his participation by the payment of
commissions or other remuneration based either directly or indirectly
on transactions in securities; and
3. not at the time of his participation associated persons of a broker or
dealer; and
4. meeting the conditions of the following:
A. They primarily perform, or are intended primarily to perform at
the end of the offering, substantial duties for or on behalf of
the issuer otherwise than in connection with transactions in
securities; and
B. He is not a broker or dealer, or associated persons of a broker
or dealer, within the preceding 12 months; and
C. He does not participate in selling an offering of securities for
any issuer more than once every 12 months other than in reliance
on paragraph (a)4(i) or (a)4(iii) of this section, except that
for securities issued pursuant to rule 415 under the Securities
Act of 1933, the 12 months shall begin with the last sale of any
security included within one rule 415 registration.
Our officers and directors may not purchase any securities in this offering. We
cannot assure you that we will sell all or any of the shares. As of the date of
this prospectus, we have not entered into any agreements or arrangements for the
sale of the shares with any broker/dealer or sales agent. However, if we were to
enter into such arrangements, we will file a post effective amendment to
disclose those arrangements because any broker/dealer participating in the
offering would be acting as an underwriter and would have to be so named in the
prospectus.
In order to comply with the applicable securities laws of certain states, the
securities may not be offered or sold unless they have been registered or
qualified for sale in such states or an exemption from such registration or
qualification requirement is available and with which we have complied.
Investors can purchase common stock in this offering by completing a
Subscription Agreement (attached hereto as Exhibit 99(d)) and sending it
together with payment in full to FirstCDP, Inc., c/o David B. Stocker, Esq. 4745
North 7th Street, Suite 234, Phoenix, Arizona 85014. All payments must be made
in United States currency; either by personal check, bank draft, or cashiers
check. There is no minimum purchase requirement. An investor's failure to pay
the full subscription amount will entitle us to disregard the investor's
subscription. An investor's subscription is not binding and will not become
effective unless and until we accept it. We have 3 business days after receipt
either to accept or to reject the subscription. We will return any subscription
that we reject during this 3-day period to the subscriber within 5 business days
of the rejection date. Furthermore, once we accept a subscription, the
subscriber cannot withdraw it. We will notify an accepted subscriber within 5
days after we accept its subscription agreement.
16
OFFERING OF 100,000 SHARES BY THE SELLING SECURITY HOLDER
This is not an underwritten offering. This prospectus is part of a registration
statement that permits the Selling Security Holder to sell its shares on a
continuous or delayed basis in the future. The Selling Security Holder will sell
at the price of $0.25 per share until our shares are quoted on the OTC Bulletin
Board and thereafter, at prevailing market prices or privately negotiated
prices. We have not committed to keep the registration statement effective for
any set period of time.
The Selling Security Holder or his transferee may sell the shares offered by
this prospectus from time to time. To the best of our knowledge, the Selling
Security Holder has not entered into any underwriting arrangement. The
distribution of the shares by the Selling Security Holder may be effected in one
or more transactions that may take place in the over-the-counter market,
including ordinary broker's transactions, privately negotiated transactions or
through sales to one or more dealers for resale of the shares as principals at
prevailing market prices at the time of the sale and prices related to
prevailing market prices or negotiated prices.
The Selling Security Holder may pledge all or a portion of the shares owned as
collateral for margin accounts or in loan transactions. Such shares may be
resold pursuant to the terms of such pledges, accounts or loan transactions.
Upon default by such Selling Security Holder, the pledgee in such loan
transactions would have the same rights of sale as the Selling Security Holder
under this prospectus. The Selling Security Holder also may enter into exchange
traded listed option transactions which require the delivery of the shares
listed hereunder. The Selling Security Holder may also transfer the shares owned
in other ways not involving market makers or established trading markets,
including directly by gift, distribution, or other transfer without payment of
consideration. Upon any such transfer the transferee would have the same rights
of sale as such Selling Security Holder under this prospectus.
The Selling Security Holder and any brokers and dealers through whom sales of
the shares are made may be deemed to be "underwriters" within the meaning of the
Securities Act. The commissions or discounts and other compensation paid to such
persons may be regarded as underwriters' compensation.
We cannot assure you that the Selling Security Holder will sell any or all of
its shares. In order to comply with certain state securities laws the shares
will be sold in such jurisdictions only through registered or licensed brokers
or dealers. In certain states the shares may not be sold unless such shares have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with. Under
applicable rules and regulations of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), any person engaged in a distribution of the shares
may not simultaneously engage in market-making activities with respect to such
shares for a period of one or five business days prior to the commencement of
such distribution.
In addition to, and without limiting the foregoing, the Selling Security Holder
and any other person participating in a distribution will be subject to the
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Regulation M, which provisions may
17
limit the timing of purchases and sales of any of the shares by the Selling
Security Holder or any such other person.
All of the foregoing may affect the marketability of the shares. Pursuant to an
oral understanding we have with the Selling Security Holder, we will pay all the
fees and expenses incident to the registration of the shares (other than the
Selling Security Holder's pro rata share of underwriting discounts and
commissions, if any, which is to be paid by the Selling Security Holder).
OTC BULLETIN BOARD
No public market currently exists for shares of our common stock. We intend to
apply to have our shares traded on the OTC bulletin board. We have not taken any
actions to have our shares traded on the OTC bulletin board. We intend to apply
to have our shares traded on the OTC bulletin board immediately after we have
met the listing standards for the OTC bulletin board as set out by the National
Association of Stock Dealers. In our case, these listing standards currently
are:
- An effective Registration Statement under The Securities Act of 1933;
- To remain current with its quarterly and annual report filings with
the Securities and Exchange Commission; and,
- At least one market maker to make a market in its securities.
Other than to remain current with our quarterly and annual report filings, we
need to achieve a sufficient number of shareholders to interest a market maker
in making a market in our securities. There is no minimum number of shareholders
required for a stock to trade on the OTC Bulletin Board. We anticipate that our
registered offering may result in our stock being held by enough shareholders to
interest a market maker to make a market in trading FI's stock.
BLUE SKY CONSIDERATIONS
Because our securities have not been registered for resale under the blue sky
laws of any state, the holders of such shares and those persons desiring to
purchase them in any trading market that may develop in the future should be
aware that there may be significant state blue sky law restrictions on the
ability of investors to sell and on purchasers to buy our securities. You may be
unable to sell our stock. Accordingly, you should consider the secondary market
for our securities to be a limited one. You may be unable to resell your stock
without the significant expense of state registration or qualification. We
currently do not have any plans to register the shares being offered in this
prospectus with any State.
ITEM 9. LEGAL PROCEEDINGS.
No director, officer, significant employee, or consultant of the company has
been convicted in a criminal proceeding, exclusive of traffic violations.
No director, officer, significant employee, or consultant of the company has
been permanently or temporarily enjoined, barred, suspended, or limited from
involvement in any type of business, securities or banking activities.
No director, officer, significant employee, or consultant of the company has
been convicted of violating a federal or state securities or commodities law.
18
Further, our officers and directors know of no legal proceedings against the
company, or its property contemplated by any governmental authority.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Each of our directors is elected by the stockholders to a term of one (1) year
and serves until his successor is elected and qualified. Each of the officers is
appointed by the Board of Directors to a term of one (1) year and serves until
his successor is duly elected and qualified, or until he is removed from office.
The Board of Directors has no nominating, auditing, or compensation committees.
The following table sets forth certain information regarding executive officers
and directors of the company as of the date of this Registration Statement:
Name and Address Age Position
- ---------------- --- --------
Jonathan A. Firestein 26 President, Chief Accounting
and Financial Officer, and
Director
Charles L. Firestein 56 Secretary, Director
Jonathan A. Firestein has held his office/position since inception of our
business operations. Both persons are expected to hold their office/position
until the next annual meeting of our stockholders.
BACKGROUND OF DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Jonathan A. Firestein became a director and officer of the company in July,
2001. In December, 1997, Mr. Firestein graduated from the University of Arizona
with a B.A. degree in Economics. In May, 2000, Mr. Firestein graduated from
Arizona State University with a Masters of Business Administration and a M.S.
degree in Economics. The following list summarizes Mr. Firestein's experience
from 1996 to present:
Winter 1996 - Summer 1997 Dinan & Company, Phoenix, Arizona
Research Analyst
Summer 1999 Pricewaterhouse Coopers, LLP,
San Francisco, California
Financial Advisory Services Intern
Fall 1999 - Summer 2000 Camelback Research Alliance,
Scottsdale, Arizona
Research Associate
Summer 2000 - Spring 2001 MyHomeKey.com, San Francisco, California
Business Development Associate
Spring 2001 - Fall 2001 MyHomeKey.com, San Francisco, California
Business Development Manager
19
MyHomeKey.com was a private company that operated a website that allowed
homeowners to schedule home repair services, buy home products, purchase
security services, and receive home and community information. MyHomeKey.com
also entered into joint venture agreements with large regional gas and utility
companies to offer information about those companies on MyHomeKey.com's website.
Mr. Firestein's business experience at MyHomeKey.com included, but was not
limited to, participating in the creation of an informational memorandum that
was used to solicit Series E investments, participating on the team that revised
the financial model incorporated into that solicitation, assisting the chief
financial officer in the preparation of monthly reports for management and the
board of directors, and creating and overseeing corporate presentations to
potential investors and business partners. MyHomeKey.com ceased operations in
the Fall of 2001 because of a lack of revenues.
Mr. Firestein has no experience in the programming and construction of a
website. We plan to use an undetermined outside source to program and construct
our website.
Mr. Firestein also intends to enter into an independent contractor consulting
agreement with Practical Plastics, Inc. in the near future. PPI is a private
company in the business of developing and marketing the FreedomFlask(R), a
pliable plastic container designed to carry liquid around a person's waist. Mr.
Firestein intends to devote approximately 20 hours per week to our company, and
20 hours per week to the business of PPI.
Charles L. Firestein became a director and officer of the company in April,
2002. In 1963, Mr. Firestein graduated from the University of Arizona with B.S.
degree in Business Administration. Mr. Firestein graduated from the University
of Arizona College of Law with a J.D. degree in 1971. From 1972 until the
present, Mr. Firestein has been a full-time practicing attorney. Since 1980, his
practice as a sole practitioner has emphasized bankruptcy, creditors rights,
collection, foreclosure, and civil litigation. Mr. Firestein has been licensed
by, and in good standing with, the State Bars of Arizona and California since
1972. Mr. Firestein is not serving as counsel for the company. Mr. Firestein
will not be devoting his full time and attention to our affairs. Mr. Firestein
continues to work full time as a practicing attorney. He will devote
approximately five hours per week to our business affairs. Jonathan A. Firestein
will conduct most of the business for the company. See "Directors and Executive
Officers".
FAMILY RELATIONSHIPS
Jonathan A. Firestein is the son of Charles L. Firestein.
COMPENSATION
We have no stock option, retirement, incentive, defined benefit, actuarial,
pension or profit-sharing programs for the benefit of our officers or directors,
but the Board of Directors may recommend adoption of one or more such programs
in the future. We have no employment contract or compensatory plan or
arrangement with any of our officers. For the time period from inception to
September 30, 2002, Management has not received any salaries.
20
Each director of the company is entitled to receive reasonable out-of-pocket
expenses incurred in attending meetings of our Board of Directors but do not
receive compensation for services that they have provided as directors. There is
no compensation committee and no compensation policies have been adopted. We may
elect to pay non-cash consideration in the form of options to officers and
directors in the future. In the future, we may elect a cash payment as well as a
non-cash consideration.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information as of the date of this
offering with respect to the beneficial ownership of our common stock by all
persons known by us to be beneficial owners of more than 5% of any such
outstanding classes, and by each director and executive officer, and by all
officers and directors as a group. Unless otherwise specified, the named
beneficial owner has, to our knowledge, either sole or majority voting and
investment power.
Name and Amount of
Address of shares
Title Of Beneficial held by Percent of
Class Owner of Shares Position Owner Class
----- --------------- -------- ----- -----
Common Jonathan A. Firestein President, 10,000,000 98.9%
Chief Financial
and Accounting
Officer, and
Director
Common Charles L. Firestein Secretary and 15,000 0.1%
Director
Common Executive 10,015,000 99.0%
Officers and
Directors as a
Group
Management's addresses are in care of the company at its business address.
ITEM 12. DESCRIPTION OF SECURITIES.
Our authorized capital stock consists of 75,000,000 shares of common stock,
having a $0.001 par value, and 25,000,000 shares of Preferred Stock having a
$0.001 par value.
The holders of our common stock:
- have equal ratable rights to dividends from funds legally available
therefor, when, as and if declared by our Board of Directors;
- are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution
or winding up of our affairs;
- do not have preemptive, subscription or conversion rights and there
are no redemption or sinking fund provisions or rights; and
- are entitled to one vote per share on all matters on which
stockholders may vote.
21
NON-CUMULATIVE VOTING
Holders of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the outstanding shares, voting
for the election of directors, can elect all of the directors to be elected, if
they so choose, and, in such event, the holders of the remaining shares will not
be able to elect any of our directors.
CASH DIVIDENDS
As of the date of this prospectus, we have not paid any cash dividends to
stockholders. The declaration of any future cash dividend will be at the
discretion of our Board of Directors and will depend upon our earnings, if any,
capital requirements and financial position, general economic conditions, and
other pertinent conditions. We do not presently intend to pay any cash dividends
in the foreseeable future, but rather we intend to reinvest earnings, if any, in
our business operations.
REPORTS
After this offering, we will furnish our shareholders with annual financial
reports certified by our independent accountant, and we will furnish unaudited
quarterly financial reports.
ITEM 13. INTEREST OF NAMED EXPERTS AND COUNSEL.
The validity of the common stock offered hereby will be passed upon for
FirstCDP, Inc. by David B. Stocker, Esq., Phoenix, Arizona.
Certain of the financial statements of FirstCDP, Inc. included in this
prospectus and elsewhere in the registration statement, to the extent and for
the periods indicated in their reports, have been audited by Shelley Intl CPA,
an independent certified public accountant, whose reports thereon appear
elsewhere herein and in the registration statement. Shelley Intl CPA has served
as our independent auditor since inception. We have not had any dispute with our
auditor over accounting or financial disclosure.
Neither Shelley Intl CPA (Auditor) or David B. Stocker, Esq. (Legal Counsel) was
employed on a contingent basis in connection with the registration or offering
of our common stock.
ITEM 14. DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Articles of Incorporation, Bylaws, and certain statutes provide for the
indemnification of a present or former directors or officers. See Item 24
"Indemnification of Directors and Officers."
22
THE SECURITIES AND EXCHANGE COMMISSION'S POLICY ON INDEMNIFICATION.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to any provisions contained in its Certificate of
Incorporation, or Bylaws, or otherwise, the Registrant has been advised that, in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant 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 Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 15. ORGANIZATION WITHIN LAST FIVE YEARS.
The company was incorporated in the State of Nevada on May 24, 2001.
See Item 26 "Recent Sales of Unregistered Securities" herein for our
capitalization history.
ITEM 16. DESCRIPTION OF BUSINESS.
GENERAL
The company was incorporated under the laws of the State of Nevada on May 24,
2001, and is in its early development and promotional stages. To date, our only
activities have been organizational, raising our initial capital and developing
our business plan. We have not commenced commercial operations. We do not own
any real estate.
BUSINESS DESCRIPTION
We intend to develop and operate an electronic commerce ("e-commerce") website
that focuses on the history and charm of the Haight-Ashbury district in San
Francisco, California. Management believes that many websites exist today to
address an entire city or urban area, but few websites address the theme of an
individual neighborhood.
PRODUCT DESCRIPTION
Our principal asset is a Uniform Resource Locator ("URL"), www.TheHaight.com. We
intend to develop this URL as a theme destination website. We intend to offer
services that will enable our website to capture our target audience of tourists
from all areas, as well as local residents. We intend to form business
relationships with Haight-Ashbury District, greater San Francisco, and national
merchants. We have divided what we believe is the primary revenue generating
model of TheHaight.com into three categories: content, business services, and
e-commerce.
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CONTENT: We intend for the TheHaight.com to be an online source for news,
events, and local information pertaining to the Haight-Ashbury district. Such
content will include feature articles, advertisements, and resources to aid
tourists and consumers in finding restaurants, shopping opportunities, bars,
night clubs, and live events in the Haight-Ashbury district.
We anticipate obtaining the news, feature articles, and other information for
our website from various news services, and executing license agreements
provided by these services. We intend to feature content highlighting the
historical role of the Haight-Ashbury district in the societal development of
the 1960's. We intend to feature selected digital music files (commonly known as
"MP3" files) of local artists that will be available for download from our site.
We anticipate obtaining the music files from music companies, and directly from
artists who are unaffiliated with a music company. We intend to execute license
agreements provided by the music companies and artists. We intend to offer
information on local subjects and community resources, and chat rooms to link
the local residents with each other. We intend to design the content on our
website to build a user base and repeat visits, and to drive electronic
commerce.
We have not as yet obtained any licenses or other types of permission from any
news services, musicians, music companies, or companies who have published
writings on the societal changes of 1960's. If we are unable to obtain the
necessary license agreements or permissions, our business could fail.
Jonathan A. Firestein intends to personally visit the Haight-Ashbury district on
a weekly basis to compile a list of restaurants, shopping opportunities, bars,
night clubs, and live events in the Haight-Ashbury district. Mr. Firestein will
rely on the knowledge of the area that he gained when he lived in the
Haight-Ashbury district. For current events, we will rely upon information that
the district's establishments provide to us, on information that our advertisers
provide to us, and on information that we receive from users of our website or
from residents of the area. We have not yet compiled such a list.
We intend to offer an interactive outing planner. The planner should be a "one
stop website for a night out" that will meet the needs of our customers who are
looking for activities in the Haight-Ashbury district. The planner will
incorporate a database of restaurants, bars, clubs, and other entertainment
providers. The website user will be able to dictate and change the areas of the
district or the city in which the visitor is searching. In this manner, the user
can broaden or narrow his search for an area that the user is willing to visit.
The outing planner will include various types of advertising possibilities for
business establishments based in the Haight-Ashbury district and elsewhere. We
intend to derive revenue from the sales of this advertising.
We will not need any special software to implement the interactive outing
planner. The planner will be database driven - the application will display
options and selections for an outing in the Haight-Ashbury district based on
selections made by our users as they "interact" with the planner. We intend to
construct such a database application as a part of the general construction and
implementation of our website.
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BUSINESS SERVICES: We intend to feature online "store-fronts" for merchants
located in the Haight-Ashbury district, for merchants who sell Haight-Ashbury
district related goods, and for merchants who sell other types of goods. These
merchants include book, music, and novelty stores. Within our store-fronts, the
merchants will be able to sell Haight-Ashbury themed goods online. We anticipate
that these products will include, but are not limited to, books, clothing,
novelty items, art, posters, postcards, bumper stickers, stuffed animals, shoes,
handbags, sunglasses, and musical instruments. Our implementation of the
e-commerce element of our site should provide multiple merchants with an
economical way to sell goods, as well as generating revenues for the company by
capturing service fees and a percentage of the sales through our website. We
intend to build our e-commerce system to showcase pictures and descriptions of
items and process credit card payments. The e-commerce system will also allow
the merchants to change their assortment of products, prices, and display on the
website via a password protected entry to the system. We also intend to provide
a sales channel for any business that is seeking to expand their sales through
the use of e-commerce. Haight-Ashbury and other merchants with a presence on our
website may experience an increase in their overall sales because of the
world-wide reach of the Internet, and its ability to deliver new traffic and new
prospective customers to the Haight-Ashbury area. We will receive a commission
for each item sold through our website.
We have entered into an agreement with NetStar2000, Inc. to advertise on our
website. The agreement provides that our users will be able to "click through"
from our website to the website operated by NetStar2000, i.e.,
www.cookforfun.com. The agreement also provides that we will receive ten percent
(10%) of the gross proceeds from the sale of all NetStar2000 goods that are
purchased as a result of our user's "click through" to the NetStar2000 website.
E-COMMERCE: In addition to the store-fronts that we will host for merchants
based in the Haight-Ashbury area, we intend to host our own virtual store-front.
We intend to offer literature, music, memorabilia, and other information
pertaining to the Haight-Ashbury district. The literature will include books
about the 1960's, the social, cultural, and art world changes that occurred
during that time, the "hippie" movement, the peace movement, and books about the
art of the 1960's. The memorabilia will include vintage and new clothing and
accessories that embody the fashions of the 1960's. Regarding music, we intend
to specialize in recordings of artists such as Janis Joplin and Jerry Garcia,
who originated their careers in the Haight-Ashbury district. We intend to obtain
all of this merchandise and music from various wholesalers and distributors who
specialize in these items. We have not identified these wholesalers and
distributors.
We currently have an agreement with NetStar2000, Inc. to provide CD-ROM
cookbooks for us to sell on our website. One cookbook will feature foods and
recipes indicative to the San Francisco area. The other will feature vegetarian
and organic foods and recipes, a theme that we believe is indicative of the
Haight-Ashbury district.
We have committed in that agreement to purchase a total of 100 units of the
CD-ROM cookbooks during the twelve month period ending July 15, 2003. We will
determine the schedule of the purchases of the cookbooks during the twelve month
period. The agreement provides that we may sell the cookbooks to individual
end-users or persons residing in any location. We have agreed to sell the books
at a retail price of $24.99, although NetStar2000, Inc. may later change this
retail price. Further, in the event that we introduce another distributor or
dealer to NetStar2000, Inc., we will receive a commission of twenty percent of
the net sale proceeds that NetStar2000, Inc. receives from the dealer for a
period of 6 months after our introduction.
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INTERNET TECHNIQUES
We intend to use the following techniques in the development of our website:
customer profiling, e-mail newsletters, search engine strategies, affiliate
program deployment, viral marketing, and community.
CUSTOMER PROFILING: We intend to monitor the habits of customers on our website
in order to improve the user experience. We intend to analyze shopping habits in
order to recommend and sell certain products. We intend to track a customer's
preferences and use this information to deliver related content to the user in a
"what's hot" section of the site. We intend to use this information to help
create a personalized experience for TheHaight.com customers. We will have a
privacy policy where we will disclose and explain our customer profiling to the
customer. We do not intend to resell any customer profiling information.
E-MAIL NEWSLETTERS: We intend to offer e-mail newsletters to communicate
additions to the website and to present special offers to our user base. We will
require that a customer request to receive our e-mails prior to our sending any
e-mail to that customer. We intend to produce and distribute our e-mail
newsletters on a monthly basis. In the e-mails, we will include TheHaight.com
branded content and links to our website. The newsletters will also contain
advertising that will include advertising banners and links to our advertisers'
websites.
SEARCH ENGINE STRATEGIES: We intend to use search engines as a primary source of
marketing. We intend to maintain a presence within search engines that a
consumer may use to search for websites relating to San Francisco and the
Haight-Ashbury district. We intend to achieve proper placements within the major
search engines in order to market our website and its services. We will
continually attempt to increase our website's exposure within various search
engines. These techniques include but are not limited to routine site
maintenance checks, ensuring correct routing of all website links, utilizing
gathered data to facilitate real time adjustments to marketing strategy, and
continual observation of search engine placement and performance.
AFFILIATE PROGRAM: Affiliates are companies that agree to place merchant
promotions on their website for the purpose of selling a merchant's goods and/or
services. Affiliates control the type of promotions placed, the location on the
site and the length of time the promotion runs. In return, the affiliate can
earn commissions on click-throughs, leads or purchases made through the site,
depending on the arrangement with the merchant. We intend to submit our website
to two or more affiliate programs, specifically, BeFree.com and LinkShare.com.
BeFree.com promotes itself is an "online marketing service," among other
services. LinkShare.com promotes itself as engaging in "online affiliate
marketing." No discussions have yet occurred with these affiliate prospects. In
the event that we are able to reach affiliate agreements, the affiliates should
make a link to our website available to their networks, allowing for the
distribution of our website.
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VIRAL MARKETING: The concept of "viral marketing" is based on the idea that
customers refer new potential customers to each other. In a traditional sense,
viral marketing is the term for online "word of mouth" advertising. Viral
Marketing can be an effective manner to promote a business because it is less
expensive and more credible than other forms of marketing. We intend to use
viral marketing by offering discounts or rewards to customers who refer new
customers to our website.
COMMUNITY: The presence of community-focused services should increase the
loyalty of the users of our website. We intend to create message boards, online
chat rooms, and information that will hopefully make TheHaight.com a part of the
user's normal online experience. We also intend to include community information
such as civic notices, local services and recreation activities.
WEBSITE ARCHITECTURE
We intend to design our website for optimum performance and minimal downtime. We
intend to utilize leading hardware and software solutions in the construction of
our systems. We are currently exploring options from Sun Microsystems (servers),
Oracle (database software), and Microsoft (web page design software). We intend
to be able to interact with numerous databases. The databases will be expandable
in order to account for the growth of the Company. We intend to have a redundant
backup system at a third party site to ensure that our site is operating or "up"
as much as possible. We intend our website to be accessible via either America
Online or Microsoft Internet Explorer.
INDUSTRY CONDITIONS AND COMPETITION
We believe that our proposed concentration on local subjects and businesses, and
our intent to personalize the website to each visitor, will provide us with a
competitive advantage over other products or services. We believe that localized
concentration allows complete coverage and flexibility to an area of San
Francisco that is highly trafficked by both locals and tourists. Concentration
should also allow us to provide information on local businesses or places of
interest that websites with a broader base may miss.
We are currently aware of several products that compete directly for our primary
target audience but we are unaware of any other product that uses a similar,
neighborhood specific platform combined with a variety of e-commerce. A consumer
has many resources available for information regarding dining and entertainment
options in major metropolitan areas. These resources are generally broad in
nature and do not embrace the specific theme and feel of the target
neighborhood. We have no knowledge of any online destination website that
combines information and a variety of e-commerce targeted specifically to the
Haight-Ashbury district of San Francisco. We believe that no online destination
website serves to provide online storefronts for businesses operating in or
selling wares associated with the Haight-Ashbury district.
The following are possible specific competitors:
(1) www.haightstreet.com provides stories about the Haight-Ashbury
district. However, the primary purpose of that website is to sell the
"Haight Street Stories" comic book, not to provide the scope and type
of services and products that our company intends to provide.
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(2) www.sfgate.com lists merchants, restaurants, bars, and night clubs in
the Haight-Ashbury district similar to what we intend to provide.
However, that website does not offer any e-commerce services to both
businesses and consumers such as we intend to provide.
(3) www.citysearch.com offers information on the San Francisco area, but
that site does not concentrate on the Haight-Ashbury district. The
site does not allow the visitor the ability to view all of the
businesses of interest in a certain area. In contrast, we intend to
offer that feature on our website.
(4) www.haightashbury.org offers community information, but visitors to
that site provide the information. The management of that website does
not compile the information. In contrast, we will compile our own
information. Since the users of that site supply the listings, we
believe that site may overlook certain events, or not fully describe a
particular event. We intend to provide full and complete descriptions
of local events by receiving information from various sources,
including merchants and event promoters. Our website will also differ
in that we intend to offer online storefronts.
The numerous targeted features of our website should differentiate our website
from these other online resources. However, we may have to compete with such
companies or websites in the future. We do not yet know whether the deployment
of the www.TheHaight.com website will result in profitability. We do believe,
however, that if the neighborhood-specific concept is profitable, we should be
able to duplicate our efforts in other historic neighborhoods around the
country.
SHORT-TERM PLAN OF OPERATION FOR THE PERIOD ENDING JUNE 30, 2003
We initially plan to build and develop our website to be located at
www.TheHaight.com. We intend to develop a comprehensive list of merchants and
retailers with products and services related to the Haight-Ashbury district, and
we intend to solicit and educate these contacts on the benefits of including
their businesses on our website. We will pursue strategic alliances with
entities that focus on Haight-Ashbury centered interests, such as the Haight
Ashbury Merchant Association. We estimate that the sales cycle needed to bring
these merchants onto our website to be approximately six months to one year.
While we conduct our efforts to enter into business relationships with
merchants, we also intend to launch the website. We intend to create and gather
materials for the initial launch of the website. We intend to submit our website
to various search engines. We intend to deploy our viral marketing technique.
Viral marketing is the term for online "word of mouth" advertising.
We do not anticipate requiring additional capital within the next twelve months
since budgeted expenditures over the period should be less than cash on hand.
Assuming that we sell all 100,000 shares that we are offering, we should have
approximately $25,000 to cover the anticipated expenditures over the next twelve
months, which are summarized below:
- Printing and engraving expenses $ 500
- Attorneys' fees and expenses $2,500
- Accountants' fees and expenses $1,000
- Transfer agent's and registrar's fees
and expenses $ 500
- Miscellaneous $1,000
------
Total: $5,500
======
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The development of the company, including, but not limited to, the construction
of the website, the recruitment of merchants, the compiling of content, and the
acquisition of customers and users, is estimated to take six months to one year.
Because the development cycle is lengthy and the offering under this prospectus
is partially for the Selling Security Holder, we will eventually need to raise
funds to achieve profitability. By raising additional funds through the sale of
common stock or securities convertible into common stock, the ownership interest
of holders of existing shares of our common stock will be diluted.
EMPLOYEES
We are a development stage company and, other than our officers and directors,
we currently have no employees. We are currently managed by Jonathan A.
Firestein, president, chief financial and accounting officer, and director, and
his father, Charles L. Firestein, secretary and director. Jonathan A.
Firestein's experience includes working with MyHomeKey.com, a consumer-focused
start-up Internet company from Summer, 2000 to Fall, 2001. Applicable experience
as a Business Development Manager for that company led him to formulate our
business plan.
For a complete discussion of the experience of Management, please see "Directors
and Executive Officers."
Management plans to use consultants, attorneys, accountants, and contract
information technology professionals as necessary and does not plan to engage
any full-time employees in the near future. Our marketing plan will focus on two
major goals: identifying the local merchants that would benefit from the
business services offered by our website and identifying the best outlets to
promote our services to online consumers. We may hire additional employees based
on the identified need and time constraints of Jonathan A. Firestein and Charles
L Firestein. A portion of any employee compensation likely would include the
right to acquire stock in the company, which would dilute the ownership interest
of holders of existing shares of our common stock.
AVAILABLE INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form SB-2 with respect to the common stock offered by this
prospectus. This prospectus, which constitutes a part of the registration
statement, does not contain all of the information set forth in the registration
statement or the schedules, which are parts of the registration statement. For
further information with respect to our company and its common stock, see the
registration statement and the exhibits and schedules thereto. Any document that
we file may be read and copied at the Commission's Public Reference Room located
at 450 Fifth Street N.W., Washington D.C. 20549. Please call the Commission at
1-800-SEC-0330 for further information about the public reference room. Our
filings with the Commission are also available to the public from the
Commission's website at www.sec.gov.
29
Upon completion of this offering, we will become subject to the information and
periodic reporting requirements of the Securities Exchange Act and, accordingly,
will file periodic reports, proxy statements and other information with the
Commission. Such periodic reports, proxy statements and other information will
be available for inspection and copying at the Commission's public reference
rooms, and the website of the Commission referred to above.
DESCRIPTION OF PROPERTY
Our president, Jonathan A. Firestein, has assigned all of his rights in and to
the URL domain name, www.TheHaight.com, to the company.
We currently use space in the office of our counsel without charge pursuant to
an oral agreement. We do not believe that we will need to obtain other office
space at any time in the foreseeable future until our business plan is more
fully implemented, at which time we may rent office facilities. We anticipate
that any such facilities would be initially be located in Los Angeles or San
Francisco, California.
The Company has no patent trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts.
GOVERNMENT REGULATION
We do not require any government approval for the implementation of our business
plan. There are no current government regulations and none are anticipated which
should affect the business of our company.
ITEM 17. MANAGEMENT'S DISCUSSION AND PLAN OF OPERATION
This section must be read in conjunction with the Audited Financial Statements
included in this Registration Statement.
A. MANAGEMENT'S DISCUSSION
The company was incorporated in the State of Nevada on May 24, 2001. We are a
start up company and have not yet realized any revenues. To date, we have:
- raised start-up capital through private equity offerings,
- recruited and retained a management team and board of directors, and
- developed a business plan.
In the initial period from May 24, 2001 (inception) to September 30, 2002, we
generated no revenues while incurring $9,069 in general and administrative
expenses. This resulted in a cumulative net income loss of $9,069 for the
period, which is equivalent to $0.00009 per share. The cumulative net loss is
attributable solely to the costs of start-up operations.
B. PLAN OF OPERATION
Without realizing all or a portion of the offering proceeds, we will have to
seek alternative sources of funding to commence planned operations and implement
our business plan. We estimate that we need a minimum of $10,000 to maintain
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bare-bones operations for the next twelve (12) months. In this context,
"bare-bones operations" means all of the following:
1. We will not be able to work without purchasing the proper computer
equipment, supplies, and Internet connection.
2. We will focus our operations exclusively in a small target market not
extending beyond the Haight-Ashbury district of San Francisco,
California area; and
3. We will perform all administrative and office functions out of the
office of our counsel.
If we fail to raise at least $20,000 in this offering, Stiltskin, Inc., a
shareholder, has agreed to provide additional funds as a loan not to exceed
$20,000 over the next twelve (12) months period on an as needed basis. The
amount loaned will be calculated against the amount raised up to $20,000. (i.e.,
if $2,500 is raised then Stiltskin, Inc. will loan only $17,500). The loan will
mature at an annual interest rate of prime plus one percentage point. The
principal and interest will be payable one year from the date of the first
disbursement to the company. At the time of our repayment, and at our option,
the principal and interest may be converted to our common shares at a price of
$0.25 a share.
Over the next twelve (12) months, we plan to invest up to $5,000 in office
equipment, including computers and peripherals, a fax machine, a copier, and a
phone system.
Our president, Jonathan A. Firestein, resides in San Francisco, California. Mr.
Firestein intends to visit the Haight-Ashbury district on at least a weekly
basis in order to personally contact local merchants and to obtain information
about the area.
We anticipate that over the next twelve (12) months we will not hire any
additional full- or part-time employees, as the services provided by Jonathan A.
Firestein and Charles L. Firestein appear sufficient during the initial growth
stage.
Sales growth in the next six (6) to twelve (12) months is important for our plan
of operations. However, we cannot guarantee you that we will generate such
growth. If we do not generate sufficient cash flow to support our operations in
the next twelve (12) to eighteen (18) months, we may need to raise additional
capital by issuing capital stock in exchange for cash in order to continue as a
going concern. However, we cannot assure you that we will be able to raise
enough capital to stay in business.
Our first goal is to complete our website, a process that should take
approximately 6 months. At the same time, our plan is to obtain contracts with
stores and shops, restaurants, bars, night clubs, and other businesses located
in the Haight-Ashbury district. This separate process should take 12 months, and
will begin when we start to build our website.
We intend to provide news and information by utilizing a link to www.sfgate.com,
a website comprised of news and information published by the San Francisco
Chronicle newspaper, a division of Hearst Communications, Inc. Hearst's website
states that it welcomes links to the www.sfgate.com website. Based on the
information in Hearst's website, we do not expect that Hearst will require us to
pay for this link. We intend to implement this link at the same time that we
complete the build out of our website.
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We intend to obtain permissions to reprint articles regarding the Haight-Ashbury
district from various periodicals, including the San Francisco Examiner and the
San Francisco Chronicle, two newspapers. We expect to pay fees ranging from $50
to $100 per article. The placement of these articles on our website should take
place within 3 months after we complete the build out of our website.
We intend to obtain music files from local musicians by advertising in the San
Francisco newspapers. The costs of this advertising should be approximately
$250. We will not pay the local artists for the licensing of their works. We
expect the process of securing the music to take approximately 6 months.
We intend to obtain music files from music companies by contacting with these
companies directly. We anticipate the costs of each file to be $250 to $500,
however these costs may be less if the music companies agree to use the file
placements on our website as a method of advertising their products and artists.
We expect the process of securing this music to take approximately 12 months.
Jonathan Firestein will secure information regarding restaurants, shopping,
bars, night clubs, and events. Mr. Firestein also expects to receive information
from merchants and businesses that advertise on our website, and from users of
our website. We do not believe that obtaining this information will result in
any specific cost expenditures for our company. This process is continual, and
will begin when we start to build our website.
We intend to incorporate the interactive outing planner into the build out of
our website. The information in the planner will be based on Jonathan
Firestein's knowledge of commerce and events in the Haight-Ashbury district, and
on information that we receive from our merchants and users. We expect this
feature to add $500 to the overall costs of building our website. However, we
have budgeted for this expense in our estimated costs of website design.
To provide our community or chat room feature, we intend to utilize the services
of ezboard, Inc., a company that specializes in online communities. We expect
the cost of this service to be approximately $500, but this amount may vary
depending on the amount of customization that we require and the level of usage.
We will incorporate this community feature into the build out of our website. We
have not as yet entered into any negotiations or agreements with ezboard, Inc.
Regarding the e-commerce store-fronts for our merchants, we intend to utilize a
software solution from Ecommerce Software, Inc. that will provide these
services. This software allows for online, password protected editing of a
storefront, which will allow the merchant to immediately change its storefront
at will. The software also allows us to accept credit cards and offer real time
calculation of shipping charges. The level of service for this software that
should meet our needs is priced at $79.95 per month. This price includes
customer support for our company and for our merchants. We will include this
software into the build out of our website. We have not as yet entered into any
negotiations or agreements with Ecommerce Software, Inc.
Regarding the products that we will sell directly, we intend to obtain books
from Ingram Retailer Services, Inc., a division of the Ingram Book Group, a book
wholesaler. In order to purchase books from Ingram, we intend to enter into a
32
distribution agreement with Ingram that will require our expenditure of $115 per
month, in addition to the costs of the books that we purchase. We initially
intend to stock approximately $250 (wholesale cost) in various titles, and to
re-order the titles on an as-needed basis. We have not as yet selected the
specific titles that we will sell. We expect the process of securing the books
to take approximately 6 months. We have not as yet entered into any negotiations
or agreements with Ingram Retailer Services, Inc.
Regarding the memorabilia that we will sell directly, we intend to obtain San
Francisco specific greeting cards and images from Sight and Sound Productions
("SSP"). SSP requires a minimum 50 card order for first time orders, and does
not require a distribution agreement. Our average cost of the cards will
initially be $1.75 per unit, and we intend to start with the 50 card minimum
order. We have not as yet selected the cards for sale. We expect the process of
securing the cards and pictures to take approximately 6 months. We have not as
yet entered into any negotiations or agreements with SSP.
Regarding the clothing that we intend to sell, we expect to partner with
existing clothing stores in the Haight-Ashbury district for the sale of their
merchandise, or to purchase specific items of clothing and resell them on our
website. We anticipate that a partnership arrangement would result in no costs
expenditure, and that we would equally share the profits of the partnered items
that we sell. If we purchase specific items, we intend to initially expend $250
on various pieces, and to order new pieces on an as needed basis. We have not as
yet identified any specific clothing stores, nor drafted any partnership
agreements. We expect the process of securing the clothing to take approximately
6 months. Within 12 months, we also intend to sell clothes that we acquire from
as yet unidentified wholesale clothing distributors, and we anticipate placing
orders from these distributors in the range of $500 to $750.
Regarding our intent to profile our customers and visitors to our website, the
Ecommerce Software, Inc. software product will generate our sales reports. We
intend to use NetTracker software to track visits to our website. The cost for
the NetTracker software is $495, a one-time fee, and will be incorporated into
the build out of our website.
We intend to advertise our e-mail newsletter on the front page of our website,
and allow visitors to enter their e-mail addresses in order to receive our
newsletter. We will manage our own e-mail list, and we will not require any
special software to publish and distribute the newsletter. We do not anticipate
any costs expenditures in the production and dissemination of our newsletter. We
expect to commence the newsletter within the first 6 to 12 months of operations.
Once we have contracts established with businesses in the Haight-Ashbury
district and have started building a reputation in the community, we will look
to expand. We foresee reaching that stage in 12-18 months.
The second goal is to expand our business to residents of the greater San
Francisco area and/or potential tourists who may become users of our website.
Specifically, we intend for our users to use the website for the buying and
selling of merchandise and items of interest identified above. We foresee taking
18-36 months to expand in this manner.
33
RESULTS OF OPERATIONS
During the period from May 24, 2001, (inception) through the period ending
September 30, 2002, we engaged in no significant operations other than
organizational activities, acquisition of the URL address for the website, and
preparation for registration of our securities under the Securities Act of 1933.
We did not receive revenues during this period. We anticipate generating revenue
around June, 2003.
For the current fiscal year, we anticipate incurring a loss as a result of
organizational expenses, expenses associated with registration under the
Securities Act of 1933, and expenses associated with setting up a company
structure to begin implementing our business plan. The expenses of state annual
report fees, qualifications to do business and the like are included in the
attorneys fees and expenses included in our offering expenses. The costs
associated with filing this registration statement, and our expenses associated
with applying for our shares to trade on the OTC bulletin board are also
included in our offering expenses and attorneys fees.
With respect to costs of implementing our business plan, we anticipates that we
will not generate revenues, and may continue to operate at a loss thereafter,
depending upon the performance of the business. We anticipate that expenditures
from inception of the company to the fiscal year end of June, 2003 will be
approximately $10,000 to $20,000. We anticipate having the resources to support
our operations during the next 12 months.
LIQUIDITY AND CAPITAL RESOURCES
We remain in the development stage and, since inception, we have experienced no
significant change in liquidity or capital resources or shareholders' equity.
Consequently, our balance sheet as of September 30, 2002 reflects total assets
of $181 in the form of cash, and the URL address of www.TheHaight.com. We expect
to carry out our plan of business discussed above.
We anticipate that cash on hand will meet short-term cash requirements. The
following table illustrates how budgeted our cash on hand over the short-term:
- Printing and engraving expenses $ 500
- Attorneys' fees and expenses $2,500
- Accountants' fees and expenses $1,000
- Transfer agent's and registrar's fees
and expenses $ 500
- Miscellaneous $1,000
------
Total: $5,500
======
We will not expand our operations until sales have occurred and management feels
that budgeted sales can support expansion. We therefore have no specific
long-term capital requirements other than those that vary with sales. These
future costs of sales include the costs of operating the website. We plan to
generate sufficient cash flow from sales to meet our long-term requirements.
Although existing cash and cash flow from sales is expected to fulfill future
capital needs, sales in the long term may be insufficient. In the event that we
require more capital, no commitments to provide additional funds have been made
by management or shareholders, other than the loan arrangement with Stiltskin,
Inc. (See Item 4). Accordingly, we cannot assure you that any additional funds
will be available on terms acceptable to us or at all.
34
ITEM 18. DESCRIPTION OF PROPERTY.
Our president, Jonathan A. Firestein, has assigned all of his rights in and to
the URL domain name, www.TheHaight.com, to the company.
We currently use the office of our legal counsel without charge, pursuant to an
oral agreement. Jonathan A. Firestein, a director and shareholder, intends to
later provide office space at no charge to the Company.
ITEM 19. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
We use the office space of our legal counsel, David B. Stocker, without charge,
pursuant to an oral agreement.
Jonathan A. Firestein is the son of Charles L. Firestein.
ITEM 20. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
MARKET INFORMATION
As of the date of this Registration Statement, there is no public market in our
common stock. This Registration Statement is a step toward creating a public
market for our stock, which may enhance the liquidity of our shares. However, we
cannot assure you that a meaningful trading market will develop. We make no
representation about the value of our common stock.
As of the date of this Registration Statement,
- there are no outstanding options or warrants to purchase, or other
instruments convertible into, common equity of the company, with the
exception of the note executed by Stiltskin, Inc., the Selling
Security Holder,(See Item 4).
- there is no stock that currently could be sold pursuant to Rule 144
under the Securities Act or that we agreed to register for sale, other
than the 100,000 shares being registered on behalf of the Selling
Security Holder;
- there are 10,000,000 shares of common stock not registered under this
Registration Statement that are eligible for sale pursuant to Rule 144
under the Securities Act; and
- other than the stock registered under this Registration Statement,
there is no stock that has been proposed to be publicly offered
resulting in dilution to current shareholders.
35
HOLDERS
As of the date of this Registration Statement, we have 10,115,000 shares of
$0.001 par value common stock issued and outstanding held by three (3)
shareholders of record. Our Transfer Agent is Holladay Stock Transfer, 2939
North 67th Place, Scottsdale, Arizona 85251, telephone 480-481-3940.
DIVIDENDS
We have never declared or paid any cash dividends on our common stock. For the
foreseeable future, we intend to retain any earnings to finance the development
and expansion of our business, and we do not anticipate paying any cash
dividends on our common stock. Any future determination to pay dividends will be
at the discretion of our Board of Directors and will be dependent upon then
existing conditions, including our financial condition and results of
operations, capital requirements, contractual restrictions, business prospects,
and other factors that the board of directors considers relevant.
ITEM 21. EXECUTIVE COMPENSATION.
Compensation for the Period
from Inception (May 24, 2001)
to September 30, 2002
------------------------------
Name Position Salary Other
- ------------------------------------------------------------------------------
Jonathan A. Firestein President, $0 $0
Director, and
Chief Financial
and Accounting
Officer
Charles L. Firestein Secretary and $0 $0
Director
We have no existing or planned option/SAR grants.
We have not paid any officer or director any remuneration. Although we have no
current plan in existence, we may adopt a plan to pay or accrue compensation to
our officers and directors for services related to the implementation of our
business plan. We have no stock option, retirement, incentive, defined benefit,
actuarial, pension or profit-sharing programs for the benefit of directors,
officers or other employees, but the board of directors may recommend adoption
of one or more such programs in the future. We have no employment contract or
compensatory plan or arrangement with any of our executive officers. We do not
currently pay our directors any cash compensation for their service as members
of the board of directors. We do not have a compensation committee, and we have
not adopted any compensation policies. See "Certain Relationships and Related
Transactions."
36
ITEM 22. FINANCIAL STATEMENTS.
FIRSTCDP, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
December 31, 2001
September 30, 2002
TABLE OF CONTENTS
PAGE
----
COVER SHEET .................................................................F-1
TABLE OF CONTENTS ...........................................................F-2
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT ............................F-3
BALANCE SHEET, ASSETS .......................................................F-4
BALANCE SHEET, LIABILITIES AND STOCKHOLDERS' EQUITY .........................F-5
STATEMENT OF OPERATIONS .....................................................F-6
STATEMENT OF STOCKHOLDERS' EQUITY ...........................................F-7
STATEMENT OF CASH FLOWS .....................................................F-8
NOTES TO FINANCIAL STATEMENTS ............................................F-9-14
F-2
SHELLEY INTL., CPA
161 E. 1ST. ST. #1.
MESA, AZ 85201
(480) 461-8301
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
To the Board of Directors FIRSTCDP, INC.
I have audited the accompanying balance sheet of FirstCDP, Inc.., (a
Development Stage Company) as of September 30, 2002 and December 31, 2001 and
the related statements of operations, stockholders' equity, and cash flows for
the period from May 24, 2001 (inception) to December 31, 2001 and the period
January 1, 2002 to September 30, 2002. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of FirstCDP, Inc. (a
development stage company) as of September 30, 2002 and December 31, 2001 and
the related statements of operations, stockholders' equity, and cash flows for
the period from May 24, 2001 (inception) to December 31, 2001 and the period
January 1, 2002 to September 30, 2002 in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in the notes to the
financial statements, the Company has no established source of revenue. This
raises substantial doubt about the Company's ability to continue as a going
concern. See Note 3 for management's plans. The financial statements do not
include any adjustments that might result from this uncertainty.
Shelley Intl., CPA
October 10, 2002
F-3
FIRSTCDP, INC.
(A Development Stage Company)
BALANCE SHEET
AS OF SEPTEMBER 30, 2002 AND DECEMBER 31, 2001
ASSETS
September 30, December 31,
2002 2001
------------- ------------
CURRENT ASSETS
Cash 181 500
---- ----
Total Current Assets 181 500
---- ----
OTHER ASSETS 0 0
---- ----
Total Other Assets 0 0
---- ----
TOTAL ASSETS 181 500
==== ====
The accompanying notes are an integral part of these statements
F-4
FIRSTCDP, INC.
(A Development Stage Company)
BALANCE SHEET
AS OF SEPTEMBER 30, 2002 AND DECEMBER 31, 2001
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, December 31,
2002 2001
------------- ------------
LIABILITIES
Current Liabilities 0 500
------- -------
Total Current Liabilities 0 500
------- -------
STOCKHOLDERS' EQUITY
Preferred Stock, authorized
25,000,000 shares, no shares
outstanding, par value $0.001
Common Stock, authorized 75,000,000 shares of
stock, issued and outstanding 10,115,000 shares
at September 30, 2002 and 10,000,000 shares
at December 31, 2002, par value $0.001 10,115 10,000
Additional Paid in Capital 8,635 0
Stock Subscribed (9,500) (9,500)
Deficit accumulated during the
development stage (9,069) (500)
------- -------
Total Stockholders' Equity 181 0
------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 181 500
======= =======
The accompanying notes are an integral part of these statements
F-5
FIRSTCDP, INC.
(a development stage company)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JANUARY 1, TO SEPTEMBER 30, 2002,
MAY 24, 2001 (INCEPTION) TO DECEMBER 31, 2001 AND
MAY 24, 2001 (INCEPTION) TO SEPTEMBER 30, 2002
Period Period May 24, Period May 24,
January 1, (inception) 2001 (inception)
to September 30, to December 31, to September 30,
2002 2001 2002
----------- ----------- -----------
INCOME
Sales 0 0 0
----------- ----------- -----------
EXPENSES
General, Selling and
Administrative 8,569 500 9,069
----------- ----------- -----------
Total Expense 8,569 500 9,069
----------- ----------- -----------
Loss before Provision for
Income Taxes (8,569) (500) (9,069)
Provision for Income Taxes 0 0 0
----------- ----------- -----------
NET INCOME (LOSS) (8,569) (500) (9,069)
=========== =========== ===========
Primary and Diluted Earnings
(Loss) per Weighted Average
Number of Common Shares a a a
----------- ----------- -----------
Weighted Average Number of
Common Shares 10,025,126 10,000,000 10,000,000
----------- ----------- -----------
The accompanying notes are an integral part of these statements
F-6
FIRSTCDP, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM MAY 24, 2001 (INCEPTION) TO SEPTEMBER 30, 2002
Common Stock Additional
-------------------------- Paid in Stock Accumulated Total
Shares Amount Capital Subscribed Deficit Equity
----------- ----------- ----------- ----------- ----------- -----------
Initial Capitalization 10,000,000 10,000 (9,500) 500
Accumulated Deficit (500) (500)
----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 2001 10,000,000 10,000 -- (9,500) (500) --
Stock Sales 100,000 100 4,900 5,000
Stock for Services 15,000 15 3,735 3,750
Accumulated Deficit (8,569) (8,569)
----------- ----------- ----------- ----------- ----------- -----------
Balance, September 30, 2002 10,115,000 10,115 8,635 (9,500) (9,069) 181
=========== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of these statements
F-7
FIRSTCDP, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JANUARY 1, TO SEPTEMBER 30, 2002,
MAY 24, 2001 (INCEPTION) TO DECEMBER 31, 2001 AND
MAY 24, 2001 (INCEPTION) TO SEPTEMBER 30, 2002
Period Period May 24, Period May 24,
January 1, to (inception) 2001 (inception)
September 30, to December 31, to September 30,
2002 2001 2002
-------- -------- --------
Cash Flows from Operating Activities
Net Loss (8,569) (500) (9,069)
Consulting for stock 3,750 0 3,750
Changes payables (500) 500 520
-------- -------- --------
Net Cash Provided by Operations (5,319) 0 (4,799)
-------- -------- --------
Cash Flow Used in Investing Activities 0 0 0
-------- -------- --------
Cash Flows from Financing Activities
Sales of Stock 5,000 10,000 15,000
Stock Subscribed 0 (9,500) (9,500)
-------- -------- --------
Cash Flows from Financing Activities 5,000 500 5,500
-------- -------- --------
Net Increase (Decrease) in Cash (319) 500 701
Cash, Beginning of Period 500 0 0
-------- -------- --------
Cash, End of Period 181 500 701
======== ======== ========
The amount of interest paid for the periods shown above was $0.00. The amount of
taxes paid for the periods shown above was $00.00.
Significant non cash transactions
Issuance of 15,000 shares of common stock for consulting services valued at
$3,750 April 1, 2002
The accompanying notes are an integral part of these statements
F-8
FIRSTCDP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
FirstCDP, Inc., (the Company) was organized in the state of Nevada on May 24,
2001. The Company is currently in its development stage and to date its
activities have been limited to organization and capital formation. The Company
currently has no operations and, in accordance with SFAS No. 7, is considered a
development stage company.
The Company intends to develop and operate a website that focuses on the history
and charm of the Haight-Ashbury district in San Francisco. The company owns the
domain name "thehaight.com and intends to be an online source for news, events,
and local information pertaining to the Haight-Ashbury district.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company has no assets except cash and the domain name "thehaight.com". The
only debt is accounts payable relating to the organization of the Company. There
has been no operational revenue. The relevant accounting policies and procedures
are listed below.
ACCOUNTING BASIS
The basis is generally accepted accounting principles.
EARNINGS PER SHARE
The basic earnings (loss) per share is calculated by dividing the Company's net
income available to common shareholders by the weighted average number of common
shares during the year. The diluted earnings (loss) per share is calculated by
dividing the Company's net income (loss) available to common shareholders by the
diluted weighted average number of shares outstanding during the year. The
diluted weighted average number of shares outstanding is the basic weighted
number of shares adjusted as of the first of the year for any potentially
dilutive debt or equity.
The Company has no potentially dilutive securities outstanding at the end of the
statement periods. Therefore, the basic and diluted earnings (loss) per share
are presented on the face of the statement of operations as the same number.
The Company has not issued any options or warrants or similar securities since
inception.
DIVIDENDS
The Company has not yet adopted any policy regarding payment of dividends. No
dividends have been paid since inception.
F-9
STOCK BASED COMPENSATION
The Company accounts for its stock based compensation based upon provisions in
SFAS No. 123, Accounting for Stock-Based Compensation. In this statement stock
based compensation is divided into two general categories, based upon who the
stock receiver is, namely, and 1. non-employees, 2. employees or directors. The
employees/directors category is further divided based upon the particular stock
issuance plan, namely compensatory and non-compensatory. Each of these
categories treats the valuation of the stock issuance for accounting purposes in
a specific manner. For non-employees, the security is recorded at its fair
value. For employees receiving non-compensatory stock based compensation, no
security value is recorded until the stock is issued and paid for. For employees
receiving compensatory stock based securities the Company may select between two
methods. These two methods are either the recording of the compensation at the
securities fair value or its intrinsic value. The recoding of the securities at
fair value is the preferred method of accounting.
The Company has selected to utilize the fair value method for the valuation of
its securities given as compensation.
INCOME TAXES
The provision for income taxes is the total of the current taxes payable and the
net of the change in the deferred income taxes. Provision is made for the
deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.
ADVERTISING
Advertising is expensed when incurred. There has been no advertising since
inception.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
TRANSFER OF DOMAIN NAME
The Company's president and 98.8% shareholder previously owned the domain name
"thehaight.com." He transferred this asset to the Company at his historic basis,
which was essentially zero.
DEFERRED OFFERING COSTS
Offering costs from outside the Company (such as broker fees) are accumulated
and amortized directly against the offering proceeds ratably over the life of
the offering through the statement of stockholders' equity. Offering costs
generated internally (officer salaries, etc.) are expensed as incurred.
F-10
NOTE 3. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern, which contemplates the realization of
assets and the liquidation of liabilities in the normal course of business.
However the Company has no current source of revenue, nor operations. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern. It is management's plan to seek additional capital
through a small public offering. No guarantee can be given that this offering
will be successful.
NOTE 4. STOCKHOLDERS' EQUITY
At inception, the Company had 75,000,000 shares of common stock authorized and
25,000,000 shares of preferred stock authorized. The shareholders have all of
the rights afforded Nevada shareholders.
Par value is $0.001 per common share.
There are no warrants or options outstanding to acquire any additional shares of
common stock.
The Company was initially capitalized on May 24, 2001 with cash of $500 and a
note of $9,500 from the Company president. This note is shown as stock
subscribed in the stockholders' equity section of the balance sheet and in the
statement of stockholders' equity. Accrued interest will not be recorded until
payment has occurred. Payments on the note are to commence on January 1, 2005 at
a rate of $500 per month until paid off. These shares of stock are R144
restricted stock. Aside from the normal officer trading restrictions these
shares carry no other trading restrictions.
The detail of the stock subscription note are as follows.
Principal balance 9,500
Annual interest rate, prime + 1,
(the rate utilized was 5.75%)
Accrued interest earned for period 331
-------
Balance 12/31/01 9,831
Accrued interest earned for period 405
-------
Balance with interest 9/30/02 10,236
-------
On April 1, 2002 the Company issued 15,000 shares of restricted common stock for
consulting services valued at $3,750, or $0.25 per share.
On April 29, 2002 the Company sold 100,000 shares of restricted common stock for
$5,000 cash, or $0.05 per share.
F-11
NOTE 5. RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. Office
services are currently provided without charge by the Company counsel. Such
costs are immaterial to the financial statements and accordingly, have not been
reflected therein. The officers and directors of the Company are involved in
other business activities and may, in the future, become involved in other
business opportunities. If a specific business opportunity becomes available,
such persons may face a conflict in selecting between the Company and their
other business interests. The Company has not formulated a policy for the
resolution of such conflicts.
The president and major shareholder has a note to the Company of $9,500 for the
purchase of the Company's stock. The details of this note are shown in the
stockholders' equity note above.
The shareholder who purchased 100,000 shares of restricted common stock also has
extended to the Company a line of credit for twenty thousand dollars. The
interest rate on this note will be prime plus 1%. Any funds drawn on this line
of credit will be due and payable one year from the first disbursement. The
Company has the option at the due date for repayment of converting any amounts
due on this line of credit to restricted common stock at the price of $0.25 per
share. If the full amount of the line of credit was drawn and then converted the
amount (excluding interest) of new shares issued would be 80,000 shares.
NOTE 6. INCOME TAXES
The Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, ACCOUNTING FOR INCOME TAXES. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect when these differences are expected to reverse.
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset. Accordingly, a
valuation allowance equal to the deferred tax asset has been recorded. The total
deferred tax asset is $1,360, which is calculated by multiplying a 22% estimated
tax rate by the items making up the deferred tax account, the NOL of $6,179. The
total valuation allowance is a comparable $1,360.
The provision for income taxes is comprised of the net change in deferred taxes
less the valuation account plus the current taxes payable as shown in the chart
below.
2002
--------
Net change in deferred taxes $ 1,360
Valuation Account (1,360)
Current taxes payable 0
--------
Provision for Income Taxes 0
--------
F-12
Below is a chart showing the federal net operating losses and the year in which
it will expire.
Year Amount Expiration
---- ------ ----------
2001 1,360 2022
------
NOTE 7. OPERATING LEASES AND OTHER COMMITMENTS:
As explained in the note pertaining to related parties, the Company uses the
offices of its counsel with no charge. The Company has no lease obligations of
any kind. The five year projection of these future obligations are as followings
will be zero in each year.
Year 1 Year 2 Year 3 Year 4 Year 5
------ ------ ------ ------ ------
Operating Leases, etc 0 0 0 0 0
NOTE 8. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Below is a listing of the most recent accounting standards SFAS 141-144 and
their effect on the Company.
SFAS 141 BUSINESS COMBINATIONS
This Statement addresses financial accounting and reporting for business
combinations and supersedes APB 16 and SFAS 38. All business combinations in the
scope of this Statement are to be accounted for using one method, the purchase
method. The effective date for this Statement is June 30, 2001 and thereafter.
SFAS 142 GOODWILL AND OTHER INTANGIBLES ASSETS
This Statement addresses financial accounting and reporting for acquired
goodwill and other intangible assets and supersedes APB 17. It addresses how
intangible assets that are acquired individually or with a group (but not those
acquired in a business combination) should be accounted for in financial
statements upon their acquisition. This Statement also addresses how goodwill
and other intangible assets should be accounted for after they have been
initially recognized in the financial statements. The effective date for this
Statement is December 15, 2001.
SFAS 143 ACCOUNTING FOR ASSET RETIREMENT OBLIGATIONS
This Statement addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. This Statement applies to all entities. It applies to
legal obligations associated with the retirement of long-lived assets that
result from the acquisition, construction, development and (or) the normal
operation of a long-lived asset, except for certain obligations of leases. This
Statement amends SFAS 19. The effective date for this Statement is June 15,
2002.
F-13
SFAS 144 ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS
This Statement addresses financial accounting and reporting for the impairment
or disposal of long-lived assets. This statement supersedes SFAS 121, the
accounting and reporting provisions of APB 30 and amends ARB 51. The effective
date of this Statement is December 15, 2001.
SFAS 145 EXTRA-ORDINARY ITEM CLASSIFICATION, SALE-LEASE-BACK CLASSIFICATION
This statement rescinds SFAS 4, 44 and 64 and reinstates APB 30 as the standard
for the classification of gains and losses of the extinguishment of debt as
extra-ordinary items. This standard also amends SFAS 13 in that it requires that
capital leases that are modified so that the resulting lease agreement is
classified as an operating lease be accounted for under the sale-lease-back
provisions of SFAS 98. The effective date of this statement is May 15, 2002.
The adoption of these new Statements is not expected to have a material effect
on the Company's current financial position, results or operations, or cash
flows.
NOTE 9. DISTRIBUTOR AGREEMENT
On July 15, 2002 the Company entered into a distributor agreement with
NetStar2000, Inc., a Nevada Corporation. The agreement provides that the Company
is allowed to market and distribute (on a non exclusive basis) CD-ROM cookbooks
which NetStar2000 publishes yearly. The agreement provides that the Company is
to purchase a minimum of one hundred CD-ROM cookbooks per year. The Company has
agreed to sell these cookbooks through its Internet website to individual
end-users or persons residing in any location. NetStar2000 has the right to
determine the retail price of the cookbooks. In addition, the agreement also
provides that the Company will receive a finder's fee for any third party the
Company refers to NetStar2000. To date, the Company has not purchased any units
from NetStar2000 nor received any finder's fee.
F-14
ITEM 23. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our Articles of Incorporation and our Bylaws provide for the indemnification of
a present or former director or officer. We indemnify any of our directors,
officers, employees or agents who are successful on the merits or otherwise in
defense on any action or suit. Such indemnification shall include expenses,
including attorney's fees actually or reasonably incurred by him. Nevada law
also provides for discretionary indemnification for each person who serves as or
at our request as one of our officers or directors. We may indemnify such
individuals against all costs, expenses and liabilities incurred in a
threatened, pending or completed action, suit or proceeding brought because such
individual is one of our directors or officers. Such individual must have
conducted himself in good faith and reasonably believed that his conduct was in,
or not opposed to, our best interests. In a criminal action, he must not have
had a reasonable cause to believe his conduct was unlawful.
NEVADA LAW
Pursuant to the provisions of Nevada Revised Statutes 78.751, the Corporation
shall indemnify its directors, officers and employees as follows: every
director, officer, or employee of the Corporation shall be indemnified by the
Corporation against all expenses and liabilities, including counsel fees,
reasonably incurred by or imposed upon him/her in connection with any proceeding
to which he/she may be made a party, or in which he/she may become involved, by
reason of being or having been 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 the Corporation, partnership, joint
venture, trust or enterprise, or any settlement thereof, whether or not he/she
is a director, officer, employee or agent at the time such expenses are
incurred, except in such cases wherein the director, officer, employee or agent
is adjudged guilty of willful misfeasance or malfeasance in the performance of
his/her duties; provided that in the event of a settlement the indemnification
herein shall apply only when the Board of Directors approves such settlement and
reimbursement as being for the best interests of the Corporation. The
Corporation shall provide to 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 the corporation,
partnership, joint venture, trust or enterprise, the indemnity against expenses
of a suit, litigation or other proceedings which is specifically permissible
under applicable law.
37
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses payable by the company in
connection with the sale of the common stock being registered. We have agreed to
pay all costs and expenses relating to the registration of our common stock. All
amounts are estimated.
SEC Registration Fee $ 5
EDGAR Conversion Fees $1,500
Blue Sky Qualification Fees $ 250
and Expenses
Accounting Fees and Expenses $1,000
Legal Fees and Expenses $2,500
Printing and Engraving $ 200
Miscellaneous $ 500
------
Total $5,955
======
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
On July 1, 2001, the company issued 10,000,000 shares of its $0.001 par value
common stock to Jonathan A. Firestein, president, chief accounting and financial
officer, and director, in exchange for $9,500 in subscription receivable and
$500 in cash. The total amount of the transaction was $10,000 or $0.001 per
share. This sale of stock by the company did not involve any public offering or
solicitation. At the time of the issuance, Jonathan A. Firestein was in
possession of all available material information about the company. Also,
Jonathan A. Firestein has a degree of financial sophistication, which allowed
him to make independent assessments of the investment merits of the company. On
the basis of these facts, we claim that the issuance of stock to Jonathan A.
Firestein was qualified for the exemption from registration contained in Section
4(2) of the Securities Act of 1933.
On April 1, 2002, the company issued 15,000 shares of its $0.001 par value
common stock in exchange for consulting services in the amount of $3,750, or
$0.25 per share, to Charles L. Firestein, secretary and director, pursuant to
the exemption from registration contained in Section 4(2) of the Securities Act
of 1933. Charles L. Firestein, a sophisticated investor and the father of
Jonathan A. Firestein, was familiar with our business plans and made the
investment decision on the basis of material information disclosed to him by the
company.
On April 29, 2002, the company issued 100,000 shares of its $0.001 par value
common stock to Stiltskin, Inc., a shareholder, in exchange for cash in the
amount of $5,000, or $0.05 per share, pursuant to the exemption from
registration contained in Section 4(2) of the Securities Act of 1933. Chris
Allen, the individual controlling Stiltskin, Inc., and a sophisticated investor,
made the investment decision on the basis of material information disclosed to
him by the company.
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ITEM 27. EXHIBITS.
Exhibit
Number Name and/or Identification of Exhibit
- ------- -------------------------------------
3. Articles of Incorporation & By-Laws
(a) Articles of Incorporation of FirstCDP, Inc. filed on May 4, 2001
(previously filed)
(b) Amendment to Articles of Incorporation of FirstCDP, Inc. filed on
June 25, 2001 (previously filed)
(c) Bylaws of FirstCDP, Inc. adopted on July 1, 2001 (previously
filed)
5. Opinion on Legality
Attorney Opinion Letter (previously filed)
23. Consent of Experts and Counsel
(a) Consent of Counsel, incorporated by reference to Exhibit 5 of
this filing (previously filed)
(b) Consent of Independent Auditor
99. Other Exhibits
(a) Loan Arrangement Letter (previously filed)
(b) Promissory Note (previously filed)
(c) Amended Charles L. Firestein Subscription Agreement (previously
filed)
(d) Stiltskin, Inc. Subscription Agreement (previously filed)
(e) Subscription Agreement (general) (previously filed)
(f) Specimen Share of Common Stock (previously filed)
(g) Assignment of URL Domain Name (previously filed)
(h) NetStar2000, Inc. Advertising and Commission Contract (previously
filed)
(i) NetStar2000, Inc. Distributor Agreement (previously filed)
(j) First Amendment to Distributor Agreement (previously filed)
ITEM 28. UNDERTAKINGS.
In this Registration Statement, we are including undertakings required pursuant
to Rule 415 of the Securities Act and Rule 430A under the Securities Act.
Under Rule 415 of the Securities Act, we are registering securities for an
offering to be made on a continuous or delayed basis in the future. The
registration statement pertains only to securities (a) the offering of which
will be commenced promptly, will be made on a continuous basis and may continue
for a period in excess of 30 days from the date of initial effectiveness and (b)
are registered in an amount which, at the time the registration statement
becomes effective, is reasonably expected to be offered and sold within two
years from the initial effective date of the registration.
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Based on the above-referenced facts and in compliance with the above-referenced
rules, we include the following undertakings in this Registration Statement:
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers and sales are being made, a
post-effective amendment to this registration statement:
(a) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20% change
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(c) To include any material information distribution not previously
disclosed in the material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(4) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant 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
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Phoenix, Arizona on
October 10, 2002.
FirstCDP, Inc.
/s/ Jonathan A. Firestein
-----------------------------------------
By: Jonathan A. Firestein
Its: President, Director, Chief Executive
Officer, and Chief Accounting and
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
/s/ Jonathan A. Firestein President, Director, Chief October 10, 2002
- ----------------------------- Executive Officer, and
Jonathan A. Firestein Chief Accounting and
Financial Officer
/s/ Charles L. Firestein Secretary and Director October 10, 2002
- -----------------------------
Charles L. Firestein
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