AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 29, 2000
REGISTRATION NO.
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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FREEDOM SURF, INC.
(Exact Name of Registrant as Specified in Its Charter)
NEVADA
(State or Other Jurisdiction of
Incorporation or Organization)
88-0446457
(I.R.S. Employer
Identification No.)
207 W. 138th Street
Los Angeles, CA 90061
(Address of Principal Executive Offices, Including Zip Code)
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Consulting Agreement
(Full Title of the Plan)
--------------------
Globalwide Investment Company, LLC
Brian Dvorak, Managing Member
3450 E. Russell Road
Las Vegas, NV 89121
(Name, Address, and Telephone Number of Agent for Service)
COPIES TO:
Lawrence R. Young, Esq.
Lawrence R. Young & Associates, P.C.
9530 E. Imperial Highway, Suite K
Downey, CA 90242-3041
(562) 803-4240
CALCULATION OF REGISTRATION FEE
-------------------------------
Title of Securities Amount to be Proposed Maximum Proposed Amount
to be Registered Registered Offering Price maximum of
per share (1) aggregate Registration
Offering Fee (2)
Price
- ------------------- ----------- --------------- --------- -----------
Common Stock,
par value $0.001 120,000 $1.00 (1) $120,000 $ 50.90 (2)
- ------------------- ----------- ------------- --------- -----------
TOTAL REGISTRATION FEE: $ 50.90
(1) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(c). (2) Represents shares of Common Stock issued to
consultants to the Company. Please refer to the Selling Shareholders section of
this document.
EXPLANATORY NOTE
Freedom Surf, Inc("FRSH") has prepared this Registration Statement in accordance
with the requirements of Form S-8 under the Securities Act of 1933, as amended
(the "1933 Act"), to register certain shares of common stock, par value $0.001
per share, issued to certain selling shareholders.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
FRSH will send or give the documents containing the information specified in
Part 1 of Form S-8 to employees or consultants as specified by Securities and
Exchange Commission Rule 428 (b) (1) under the Securities Act of 1933, as
amended (the "1933 Act"). FRSH does not need to file these documents with the
commission either as part of this Registration Statement or as prospectuses or
prospectus supplements under Rule 424 of the 1933 Act.
PROSPECTUS
FREEDOM SURF, INC.
PO Box 231
Huntington Beach, CA 92648
(949) 376-3125
120,000 SHARES OF COMMON STOCK
The shares of common stock, $0.001 par value per share, of Freedom Surf, Inc.
("FRSH" or the "Company") offered hereby (the "Shares") will be sold from time
to time by the individuals listed under the Selling Shareholders section of this
document (the "Selling Shareholders"). The Selling Shareholders acquired the
Shares pursuant to a Consulting Agreement for consulting services that the
Selling Shareholders provided to FRSH.
The sales may occur in transactions on the over-the-counter market maintained by
Nasdaq at prevailing market prices or in negotiated transactions. FRSH will not
receive proceeds from any of the sale the Shares. FRSH is paying for the
expenses incurred in registering the Shares except with respect to the legal
fees incurred in connection therewith, which have been waived by our counsel in
connection with this registration statement.
The Shares are "restricted securities" under the Securities Act of 1933 (the
"1933 Act") before their sale under this Prospectus. The Prospectus has been
prepared for the purpose of registering the Shares under the 1933 Act to allow
for future sales by the Selling Shareholders to the public without restriction.
To the knowledge of the Company, the Selling Shareholders have no arrangement
with any brokerage firm for the sale of the Shares. The Selling Shareholders may
be deemed to be an "underwriter" within the meaning of the 1933 Act. Any
commissions received by a broker or dealer in connection with resales of the
Shares may be deemed to be underwriting commissions or discounts under the 1933
Act.
FRSH's common stock is currently traded on the NASDAQ Over-the-Counter Bulletin
Board under the symbol "FRSH."
This investment involves a high degree of risk. Please see "Risk Factors"
beginning on page 5.
2
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED WHETHER
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
July 26, 2000
TABLE OF CONTENTS
Where You Can Find More Information 3
Incorporated Documents 3
The Company 4
Risk Factors 5
Use of Proceeds 6
Selling Shareholders 6
Plan of Distribution 8
Legal Matters 8
Experts 8
------------------------
You should only rely on the information incorporated by reference or provided in
this Prospectus or any supplement. We have not authorized anyone else to provide
you with different information. The common stock is not being offered in any
state where the offer is not permitted. You should not assume that the
information in this Prospectus or any supplement is accurate as of any date
other than the date on the front of this Prospectus.
WHERE YOU CAN FIND MORE INFORMATION
FRSH is required to file annual, quarterly and special reports, proxy statements
and other information with the Securities and Exchange Commission (the "SEC") as
required by the Securities Exchange Act of 1934, as amended (the "1934 Act").
You may read and copy any reports, statements or other information we file at
the SEC's Public Reference Rooms at:
450 Fifth Street, N.W., Washington, D.C. 20549;
Seven World Trade Center, 13th Floor, New York, N.Y. 10048
Please call the SEC at 1-800-SEC-0330 for further information on the Public
Reference Rooms. Our filings are also available to the public from commercial
document retrieval services and the SEC website (http://www.sec.gov).
INCORPORATED DOCUMENTS
The SEC allows FRSH to "incorporate by reference" information into this
Prospectus, which means that the Company can disclose important information to
you by referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this Prospectus,
except for any information superseded by information in this Prospectus.
The following documents filed by FRSH are incorporated herein by reference:
1. 10SB12-G-A dated January 3, 2000;
2. 10KSB-A dated May 16, 2000;
3. 10QSB dated May 15, 2000;
4. 8-K Report dated May 15, 2000;
5. 8-K Report dated August 11, 2000;
6. 10QSB dated August 29, 2000;
7. 8-K/A dated September 29, 2000.
The Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon oral or written request, a copy of any or all
documents incorporated by reference into this Prospectus (excluding exhibits
unless the exhibits are specifically incorporated by reference into the
information the Prospectus incorporates). Requests should be directed to the
Chief Financial Officer at FRSH's executive offices, located at 207 W. 138th
Street, Los Angeles, CA 90061. FRSH's telephone number is (310) 352-3300.
3
THE COMPANY
BUSINESS
General
The Company was organized August 2, 1997(Date of Inception) under the laws of
the State of Delaware, as Interstate Capital Corporation The Company has no
operations and in accordance with SFAS #7, the Company is considered a
development stage company. On or about November 17, 1999, the Company caused a
Nevada corporation to be incorporated under the name of Freedom Surf, Inc.,
authorized to issued 20,000,000 shares of $.001 par value common stock, and
5,000,000 shares of $.001 par value preferred stock and merged with that
Corporation, for the purpose of changing its domicile to Nevada, in accordance
with Articles of Merger adopted on or about November 17, 1999, 1998.
On April 5, 1999, the Company completed a public offering that was exempt from
federal registration pursuant to Regulation D, Rule 504 of the Securities Act of
1933 as amended. The Company sold 5,000,000 shares of Common Stock at a price of
$.001 per share for a total amount raised of $5,000.00.
On or about December 10, 1999, the Company purchased certain assets valued at
$5,180,000.00 issuing 969,000 common shares of its $.001 par value stock and
assuming a long term liability in the amount of $335,000.00
Freedom Surf, Inc. ("FSI" or the "Company"), a Nevada corporation, was formed to
enter into the surf apparel and accessory products market, and consolidate and
manage an integrated network of companies in the surfing industry. The Company
will also manufacture and market surf suits and surf accessory products.
Effective as of January 4, 2000, the Company acquired all of the issued and
outstanding shares in Southern California Logo, Inc. (Sewcal Logo). The contract
for the purchase of the corporation was executed on May 12, 2000 with an
effective date of January 4, 2000.
Southern California Logo, Inc. was acquired through a structured acquisition of
all of the issued and outstanding shares in that corporation for 900,000 shares
in Freedom Surf common stock valued for purposes of this acquisition at $2.1667
per share plus $800,000.00 in cash.
Sewcal employs around 60 persons and is a leading supplier of high quality
promotional clothing to the film industry. Sewcal Logo has provided product for
over 500 movies including The Rock, Armageddon, Top Gun, Terminator 1 and 2 and
many other major films. Freedom Surf plans to continue producing film related
products and expand the manufacturing facility to include manufacture of high
quality surf and skate clothing products. As of January 2000 the company has
secured contracts to manufacture product for major surf and skate brands. Sewcal
Logo sales for 1999 exceeded $1.3 million. Sales in the first quarter 2000 are
double that of the same period last year.
The Company continues the development of the "Freedom Wetsuit" brand,
incorporating the company's proprietary stitch free technology. First run
products have been developed and proven under real surf conditions and
production of the suits is expected to begin in 2000 for Fall/Winter delivery.
The Company purchased exclusive marketing rights to the "Stitchfree"
manufacturing process.
4
RISK FACTORS
In this section we highlight some of the risks associated with the Company's
business and operations. Prospective investors should carefully consider the
following risk factors when evaluating an investment in the common stock offered
by this Prospectus.
CONFLICTS OF INTEREST. Certain conflicts of interest exist between the Company
and its officers and directors. They have other business interests to which they
devote attention, and they may be expected to continue to do so although
management time should be devoted to the business of the Company. As a result,
conflicts of interest may arise that can be resolved only through exercise of
such judgment as is consistent with their fiduciary duties to the Company.
POSSIBLE NEED FOR ADDITIONAL FINANCING. The ultimate success of the Company may
depend upon its ability to raise additional capital. The Company has not
investigated the availability, source, or terms that might govern the
acquisition of additional capital and will not do so until it determines a need
for additional financing. If additional capital is needed, there is no assurance
that funds will be available from any source or, if available, that they can be
obtained on terms acceptable to the Company. If not available, the Company's
operations will be limited to those that can be financed with its modest
capital.
NO ASSURANCE OF SUCCESS OR PROFITABILITY. There is no assurance that the Company
will continue to generate profits, or that the market price of the Company's
Common Stock will be increased thereby.
INDEMNIFICATION OF OFFICERS AND DIRECTORS. The Company's Articles of
Incorporation provide for the indemnification of its directors, officers,
employees, and agents, under certain circumstances, against attorney's fees and
other expenses incurred by them in any litigation to which they become a party
arising from their association with or activities on behalf of the Company. The
Company will also bear the expenses of such litigation for any of its directors,
officers, employees, or agents, upon such person's promise to repay the Company
therefore if it is ultimately determined that any such person shall not have
been entitled to indemnification. This indemnification policy could result in
substantial expenditures by the Company which it will be unable to recoup.
DIRECTOR'S LIABILITY LIMITED. The Company's Articles of Incorporation exclude
personal liability of its directors to the Company and its stockholders for
monetary damages for breach of fiduciary duty except in certain specified
circumstances. Accordingly, the Company will have a much more limited right of
action against its directors than otherwise would be the case. This provision
does not affect the liability of any director under federal or applicable state
securities laws.
DEPENDENCE UPON OUTSIDE ADVISORS. To supplement the business experience of its
officers and directors, the Company may be required to employ accountants,
technical experts, appraisers, attorneys, or other consultants or advisors. The
selection of any such advisors will be made by the Company's President without
any input from stockholders. Furthermore, it is anticipated that such persons
may be engaged on an "as needed" basis without a continuing fiduciary or other
obligation to the Company. In the event the President of the Company considers
it necessary to hire outside advisors, they may elect to hire persons who are
affiliates, if they are able to provide the required services.
LEVERAGED TRANSACTIONS. There is a possibility that any acquisition of a
business opportunity by the Company may be leveraged, i.e., the Company may
finance the acquisition of the business opportunity by borrowing against the
assets of the business opportunity to be acquired, or against the projected
future revenues or profits of the business opportunity. This could increase the
Company's exposure to larger losses. A business opportunity acquired through a
leveraged transaction is profitable only if it generates enough revenues to
cover the related debt and expenses. Failure to make payments on the debt
incurred to purchase the business opportunity could result in the loss of a
portion or all of the assets acquired. There is no assurance that any business
opportunity acquired through a leveraged transaction will generate sufficient
revenues to cover the related debt and expenses.
5
COMPETITION. The search for potentially profitable business opportunities is
intensely competitive. The Company may be at a disadvantage when competing with
many firms that have substantially greater financial and management resources
and capabilities than the Company.
NO FORESEEABLE DIVIDENDS. The Company has not paid dividends on its Common Stock
and does not anticipate paying such dividends in the foreseeable future.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS. Management believes that this
Report on Form 8-K contains forward-looking statements, including statements
regarding, among other items, the Company's future plans and growth strategies
and anticipated trends in the industry in which the Company operates. These
forward-looking statements are based largely on the Company's control.
Actual results could differ materially from these forward-looking statements as
a result of factors described herein, including, among others, regulatory or
economic influences. In light of these risks and uncertainties, there can be no
assurance that the forward-looking information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.
6
USE OF PROCEEDS
FRSH will not receive any of the proceeds from the sale of shares of common
stock by the Selling Shareholders.
SELLING SHAREHOLDERS
The Shares of the Company to which this Prospectus relates are being registered
by the Selling Shareholders, who acquired the Shares pursuant to a compensatory
benefit plan with FRSH for legal and consulting services they provided to FRSH.
The Selling Shareholders may resell all, a portion or none of such Shares from
time to time.
The table below sets forth with respect to the Selling Shareholders, based upon
information available to the Company as of May 25, 2000, the number of Shares
owned, the number of Shares registered by this Prospectus and the number and
percent of outstanding Shares that will be owned after the sale of the
registered Shares assuming the sale of all of the registered Shares.
NUMBER OF NUMBER OF % OF SHARES
SHARES SHARES NUMBER OF OWNED BY
SELLING OWNED REGISTERED BY SHARES OWNED SHAREHOLDER
SHAREHOLDERS(1) BEFORE SALE PROSPECTUS AFTER SALE AFTER SALE
- ----------------------- ------------- ------------- ------------ -----------
Neil Liebman (1) 10,000 10,000 -0- -0-
- ----------------------- ------------- ------------- ------------ -----------
John Cruickshank (2) 100,000 100,000 -0- -0-
- ----------------------- ------------- ------------- ------------ -----------
Jonathan Barsades (3) 10,000 10,000 -0- -0-
- ----------------------- ------------- ------------- ------------ -----------
(1) Neil Liebman, Esq., performed consulting services for FRSH.
(2) John Cruickshank is the sole shareholder and officer and director of Public
Securities Services, Inc. who performed consulting services for FRSH in
connection with the drafting and filing of all of its current reports with
the Securities and Exchange Commission. He is currently a director of FRSH
but was not a director at the time the services were performed.
(3) Jonathan Barsades, Esq. performed consulting services for FRSH.
7
PLAN OF DISTRIBUTION
The Selling Shareholders may sell the Shares for value from time to time under
this Prospectus in one or more transactions on the Over-the-Counter Bulletin
Board maintained by Nasdaq, or other exchange, in a negotiated transaction or in
a combination of such methods of sale, at market prices prevailing at the time
of sale, at prices related to such prevailing market prices or at prices
otherwise negotiated. The Selling Shareholders may effect such transactions by
selling the Shares to or through brokers-dealers, and such broker-dealers may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of the Shares
for whom such broker-dealers may act as agent (which compensation may be less
than or in excess of customary commissions).
The Selling Shareholders and any broker-dealers that participate in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of Section 2(11) of the 1933 Act, and any commissions received by them and any
profit on the resale of the Shares sold by them may be deemed be underwriting
discounts and commissions under the 1933 Act. All selling and other expenses
incurred by the Selling Shareholders will be borne by the Selling Shareholders.
In addition to any Shares sold hereunder, the Selling Shareholders may, at the
same time, sell any shares of common stock, including the Shares, owned by him
or her in compliance with all of the requirements of Rule 144, regardless of
whether such shares are covered by this Prospectus.
There is no assurance that the Selling Shareholders will sell all or any portion
of the Shares offered.
The Company will pay all expenses in connection with this and will not receive
any proceeds from sales of any Shares by the Selling Shareholders. The legal
fees incurred in connection with the preparation of this registration statement
have been waived by Lawrence R. Young & Associates, P.C.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Lawrence R. Young & Associates, P.C., Lawrence R. Young, Esq. whose
address is 9530 E. Imperial Highway, Suite K, Downey, CA 90242-3041.
EXPERTS
The balance sheets as of December 31, 2000 and the statements of operations,
shareholders' equity and cash flows for the periods then ended have been
incorporated by reference in this Registration Statement in reliance on the
report of James E. Slayton, CPA, independent accountant, given on the authority
of that firm as experts in accounting and auditing.
8
PART II
INFORMATION NOT REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference in this
Registration Statement:
1. 10SB12-G-A dated January 3, 2000;
2. 10KSB-A dated May 16, 2000;
3. 10QSB dated May 15, 2000;
4. 8-K Report dated May 15, 2000;
5. 8-K Report dated August 11, 2000;
6. 10QSB dated August 29, 2000;
7. 8-K/A dated September 29, 2000
8. All other reports and documents subsequently filed by the Registrant
pursuant after the date of this Registration Statement pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 and prior
to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference and to be a part hereof from the date of the filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Corporation Laws of the State of Nevada and the Company's Bylaws
provide for indemnification of the Company's Directors for liabilities and
expenses that they may incur in such capacities. In general, Directors and
Officers are indemnified with respect to actions taken in good faith in a manner
reasonably believed to be in, or not opposed to, the best interests of the
Company, and with respect to any criminal action or proceeding, actions that the
indemnitee had no reasonable cause to believe were unlawful. Furthermore, the
personal liability of the Directors is limited as provided in the Company's
Articles of Incorporation.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The Shares were issued for advisory and legal services rendered. These
sales were made in reliance of the exemption from the registration requirements
of the Securities Act of 1933, as amended, contained in Section 4(2) thereof
covering transactions not involving any public offering or not involving any
"offer" or "sale".
ITEM 8. EXHIBITS
Exhibit No. Description
- ----------- -----------
3.1 Articles of Incorporation
3.2 Bylaws
5 Opinion of Lawrence R. Young & Associates, P.C. with respect
to legality of the securities of the Registrant being
registered
10.1 Consulting Agreement with Defined Holding Corporation
23.1 Consent of James E. Slayton, Certified Public Accountant
23.3 Consent of Lawrence R. Young & Associates, P.C. (contained
in opinion to be filed as Exhibit 5)
- -----------------------
9
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any 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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement 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.
(c) 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 Securities Act and will be governed by the final
adjudication of such issue.
10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that is meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on July 26, 2000.
Freedom Surf, Inc.
/s/ Rick Songer
-------------------------------
By: Rick Songer
President & Director
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.
Dated: July 26, 2000
/S/ David McKenzie
- -----------------------------------
David McKenzie
Vice President & Director
Dated: July 26, 2000
/S/ Judy Songer
- -----------------------------------
Judy Songer
Chief Financial Officer
11