UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
EMILY ANNIE, INC.
(Name of small business issuer in its charter)
New York 7261 13-3893213
(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification
organization) No.)
392 Central Park West, New York, New York 10025 (212) 362-7813
(Address and telephone number of principal executive offices)
392 Central Park West, New York, New York 10025 (212) 362-7813
(Address of Principal place of business or
intended principal place of business)
Cheryl Mobley, 392 Central Park West, New York, New York (212) 663-0506
(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public as soon as practicable after
the effective date of this Registration Statement and Prospectus.
By: Schonfeld & Weinstein, L.L.P.
63 Wall Street, (Suite 1801)
New York, New York 10005
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 or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
CALCULATION OF REGISTRATION FEE
Title of Each Class of Amount Proposed Proposed Amount of
Securities Being Being Maximum Maximum Registration
Registered Registered Offering Aggregate Fee
Price Per Offering
Share (1) Price(1)
40,000 $ 5.00 $ 200,000 $ 68.97
A Warrants 40,000
B Warrants 40,000
Common Stock Under- (2)
lying Class A Warrants 40,000 $ 7.00 $ 280,000 $ 96.55
Common Stock Under- (2)
lying Class B Warrants 40,000 $ 6.00 $ 240,000 $ 82.76
TOTAL $ 720,000 $248.28
(1)Estimated for purposes of computing the registration fee pursuant to Rule
457.
(2) Any additional shares issuable pursuant to a stock split, stock
dividend or similar transaction will be deemed registered by this
Registration Statement.
Cross Reference Sheet Pursuant to Rule 404 (c)
Showing the Location In Prospectus of
Information Required by Items of Form SB-2
Part I. Information Required in Prospectus
Item
No. Required Item Location or Caption
1. Front of Registration Statement Front of Registration
and Outside Front Cover of Statement and outside
Prospectus front cover of Prospectus
2. Inside Front and Outside Back Inside front cover page
Cover Pages of Prospectus of Prospectus and outside
front cover page of
Prospectus
3. Summary Information and Risk Prospectus Summary;
Factors High Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Determination of
Price Offering Price
6. Dilution Dilution
7. Selling Security Holders Not Applicable
8. Plan of Distribution Subscription and Plan of
Distribution
9. Legal Proceedings Litigation
10. Directors, Executive Officers, Management
Promoters and Control Persons
11. Security Ownership of Certain Principal Stockholders
Beneficial Owners and Management of Common Stock
12. Description of Securities Description of Securities
Part I Information Required in Prospectus Caption in Prospectus
13. Interest of Named Experts and Legal Opinions; Experts
Counsel
14. Disclosure of Commission Position Statement as
to
on Indemnification for Securities Indemnification
Act Liabilities
15. Organization Within Last Management; Certain
Five Years Transactions
16. Description of Business Proposed Business;
Executive Compensation
17. Management's Discussion and Plan of Operation
Analysis or Plan of
Operation
18. Description of Property Proposed Business
19. Certain Relationships and Related Certain Transactions
Transactions
20. Market for Common Stock and Prospectus Summary,
Related Stockholder Matters Market for the Company's
Common Stock;
Shares Eligible for
Future Sale.
21. Executive Compensation Executive Compensation
22. Financial Statements Financial Statements
23. Changes In and Disagreements Not Applicable
With Accountants on Accounting
and Financial Disclosure
PROSPECTUS
EMILY ANNIE, INC.
(a New York Corporation)
A Minimum of 25,000 Units and a Maximum of 40,000 Units
Each Unit Consisting of One (1) Share of Common Stock and
One (1) Class A Redeemable Warrant and
One (1) Class B Redeemable Warrant
Emily Annie, Inc. (the "Company") hereby offers for sale a minimum of
25,000 units (the "Units")(the "Minimum Offering"), and a maximum of 40,000
Units (the "Maximum Offering") at a purchase price of $5.00 per Unit. The
Units are being offered on a "all or nothing" for the Minimum Offering, and on
a "best efforts basis" for the Maximum Offering. The offering shall be
conducted over a period of ninety (90) days (which may be extended an
additional one hundred and twenty (120) days). The offering proceeds will be
placed in an escrow account (the "Escrow Account") until the Minimum Offering
has been sold, after which they shall be released with every $5,000 received.
Each Unit consists of one (1) share of Common Stock,$.001 par value ("Common
Stock"), one (1) Class A Redeemable Common Stock Purchase Warrant (the "Class
A Warrants") and one (1) Class B Redeemable Common Stock Purchase Warrant (the
"Class B Warrants") (together, the "Warrants.") Each Class A Warrant and each
Class B Warrant shall entitle the holder(s) to purchase one (1) share of the
Company's Common Stock at a price of $7.00 and $6.00, respectively. The Class
A Warrants shall become exercisable on the closing of the Minimum Offering
(the "Closing Date") and shall remain exercisable for a period of three (3)
years from the Closing Date. The Class B Warrants shall become exercisable on
the Closing Date and shall remain exercisable for four (4) years thereafter.
A Class B Warrant may only be exercised after the corresponding Class A
Warrant has been exercised. If there is no current prospectus or if the
Common Stock underlying the Warrants is not qualified for sale in the state in
which a Warrant holder resides, such holder will not be permitted to exercise
his/her Warrants.
EMILY ANNIE, INC.
392 CENTRAL PARK WEST
NEW YORK, NEW YORK 10025
The date of this prospectus is .
THESE SECURITIES ARE HIGHLY SPECULATIVE, INVOLVE A HIGH DEGREE OF RISK,
AND SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE
INVESTMENT. SEE "HIGH RISK FACTORS" FOR SPECIAL RISKS CONCERNING THE COMPANY
AND "DILUTION" FOR INFORMATION CONCERNING DILUTION OF THE BOOK VALUE OF THE
INVESTORS' SHARES FROM THE PUBLIC OFFERING PRICE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE UNITS HAVE BEEN REGISTERED ONLY IN NEW YORK, AND MAY ONLY BE TRADED
IN SUCH STATE AND THE DISTRICT OF COLUMBIA. PURCHASERS OF SUCH SECURITIES
EITHER IN THIS OFFERING OR IN ANY SUBSEQUENT TRADING MARKET WHICH MAY DEVELOP
MUST BE RESIDENTS OF NEW YORK OR THE DISTRICT OF COLUMBIA. THE COMPANY WILL
AMEND THIS PROSPECTUS FOR THE PURPOSE OF DISCLOSING ADDITIONAL STATES, IF ANY,
IN WHICH THE COMPANY'S SECURITIES ARE REGISTERED. (SEE "HIGH RISK FACTORS -
STATE LAW VIOLATIONS.")
PRIOR TO THIS OFFERING THERE HAS BEEN NO PUBLIC MARKET FOR THE UNITS,
COMMON STOCK PURCHASE WARRANTS OR COMMON STOCK OF THE COMPANY. THERE IS NO
ASSURANCE THAT ANY TRADING MARKET IN THESE SECURITIES WILL EVER DEVELOP.
Price to Proceeds to
the Public the Company(1)
Per Unit $ 5.00 $ 5.00
TOTAL MINIMUM $125,000.00 $ 125,00.00
TOTAL MAXIMUM $200,000.00 $ 200,00.00
(1) Before deducting offering expenses which include: Blue Sky fees, legal
fees, accounting fees, printing fees, filing fees, estimated at $20,000.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement (the "Registration Statement") on Form
SB-2 under the Securities Act of 1933 with respect to the Units, the Common
Stock and the Warrants offered hereby. This prospectus does not contain all
of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. The Company will be subject to the reporting requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"), but is currently not a
reporting company. The reports and other information filed by the Company may
be inspected and copied at the public reference facilities of the Commission
in Washington, D.C. Copies of such material can be obtained from the Public
Reference Section of the Commission, Washington, D.C., 20549, at prescribed
rates. Descriptions contained in this prospectus as to the contents of any
contract or other document filed as an exhibit to the Registration Statement
are not necessarily complete and each such description is qualified by
reference to such contract or document.
The Company intends to furnish to its stockholders, after the close of
each fiscal year, an annual report relating to the operations of the Company
and containing audited financial statements examined and reported upon by an
independent certified public accountants. In addition, the Company may
furnish to stockholders such other reports as may be authorized, from time to
time, by the Board of Directors. The Company's year end is April 30.
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER
TO BUY ANY SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS SHALL NOT UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY..............................
The Company...................................
The Offering..................................
High Risk Factors.............................
Determination of Offering Price...............
Use of Proceeds...............................
SELECTED FINANCIAL INFORMATION..................
HIGH RISK FACTORS...............................
DILUTION........................................
USE OF PROCEEDS.................................
CAPITALIZATION..................................
PROPOSED BUSINESS...............................
History and Organization......................
Plan of Operation.............................
Regulation ...................................
Employees.....................................
Facilities....................................
MANAGEMENT......................................
Biography.....................................
Conflicts of Interest..........................
Executive Compensation........................
Management Involvement........................
Management Control............................
STATEMENT AS TO INDEMNIFICATION.................
MARKET FOR THE COMPANY'S COMMON STOCK...........
CERTAIN TRANSACTIONS............................
PRINCIPAL STOCKHOLDERS..........................
DESCRIPTION OF SECURITIES.......................
Units........................................
Common Stock.................................
Preferred Stock..............................
Redeemable Warrants..........................
Anti-dilution provisions of Warrants.........
Future Financing.............................
Reports to Stockholders......................
Dividends....................................
Transfer Agent and Warrant Agent.............
EXPIRATION DATE.................................
LITIGATION......................................
LEGAL OPINIONS..................................
EXPERTS.........................................
FURTHER INFORMATION.............................
FINANCIAL STATEMENTS............................
PROSPECTUS SUMMARY
The following is a summary of certain information contained in this
prospectus and is qualified in its entirety by the more detailed information
and financial statements (including notes thereto) appearing elsewhere in the
prospectus and in the Registration Statement. Investors should carefully
consider the information set forth in this prospectus under the heading "High
Risk Factors".
The Company
EMILY ANNIE, INC ("Company"), was organized under the laws of the State
of New York on September 30, 1995. The Company was organized to sell and
market its primary product, the Emily Annie Serenity Keepsake Urns, which are
created in the likenesses of household pets, in which one is able to contain
the ashes of a deceased pet. Emily Annie Serenity Keepsakes Urns are
decorative memorials made of either ceramic or brass likenesses which have a
vacuumed sealed core of stainless steel which will hold the cremated ashes.
Since its incorporation, the Company's efforts have been focused on developing
its products. The Company has developed prototypes for the products, but as
of the date hereof, there have been no sales of the Emily Annie Serenity
Keepsake Urns.
Shortly following the completion of this Offering, the Company plans to
start manufacturing and marketing its products.
Since organization of the Company, its activities have been limited to
the sale of initial shares in connection with its organization and its
preparation in producing a registration statement and prospectus for its
initial public offering as well as designing its product prototype. (See
"Proposed Business.")
The Company maintains its office at 392 Central Park West, New York, New
York 10025. The Company's phone number is (212)-663-0506.
The Offering
Securities offered(1)...... A Minimum Offering of 25,000 Units,
and a Maximum Offering of 40,000 Units, at $5.00 per Unit, each Unit
consisting of One (1) share of Common Stock, One (1) Class A Warrant and One
(1) Class B Warrant, each Warrant entitling the holder thereof to purchase one
(1) share of Common Stock. The securities comprising the Units are, upon the
issuance of the Units by the Company, immediately separable and tradeable.
(See "Description of Securities".)
Common Stock outstanding
prior to the offering...... 120,000 shares.
Common Stock to be
outstanding after
the Minimum offering(1)..... 145,000 shares.
Common Stock to be
outstanding after
the Maximum Offering (1).... 160,000 shares
Warrants:
Number to be outstanding
after the Minimum
Offering(2)................ 25,000 Class A Warrants
and 25,000 Class B Warrants
Number to be outstanding
after the Maximum
Offering (2)................ 40,000 Class A Warrants and
40,000 Class B Warrants
Exercise price............. The exercise price of each Class A
Warrant is $7.00 per share and the exercise price of each Class B Warrant is
$6.00 per share, each subject to adjustment in certain circumstances. A Class
B Warrant may only be exercised after the corresponding Class A Warrant has
been exercised. (See "Description of Securities").
Exercise period............ The exercise period of both the
Class A Warrants and the Class B Warrants will commence on the Closing Date,
with the Class A Warrants expiring at 5:00 p.m., New York local time, three
years from that date, and the Class B Warrants expiring four years from the
Closing Date.
(1) Excludes (i) 50,000 shares of Common Stock reserved for issuance upon the
exercise of the Warrants in the Minimum Offering and 80,000 shares of Common
Stock in the Maximum Offering.
(2) Excludes 6,000 Units available to Joel Schonfeld and Andrea Weinstein
(the "Schonfeld Units") to purchase 6,000 Units, as well as 6,000 common
shares of common stock included in the Schonfeld Units reserved for issuance
upon exercise of the warrants included in the Schonfeld Units (the "Schonfeld
Warrants", and 12,000 shares of common stock reserved for issuance upon
exercise of the warrants included in the Underlying Units of the Schonfeld
Warrants.
High Risk Factors
Investments in the securities of the Company are highly speculative,
involve a high degree of risk, and should be purchased only by persons who can
afford to lose their entire investment. See "High Risk Factors" for special
risks concerning the Company and "Dilution" for information concerning
dilution of the book value of the investors shares from the public offering.
(See "High Risk Factors" and "Dilution.")
Determination of Offering Price
The offering price of $5.00 per Unit for the Units offered hereby and the
exercise prices of $7.00 and $6.00 for the Class A Warrants and Class B
Warrants, respectively, have been arbitrarily determined by the Company.
These prices bear no relation to the Company's assets, book value, or any
other customary investment criteria, including the Company's prior operating
history. Among factors considered by the Company in determining the offering
and exercise prices were estimates of the Company's business potential, the
limited financial resources of the Company, the amount of equity and control
desired to be retained by the present shareholders, the amount of dilution to
public investors and the general condition of the securities markets. (See
"Determination of Offering Price.")
Use of Proceeds
The proceeds of this offering shall be used by the Company to manufacture
and market its Emily Annie Serenity Keepsake Urns, as well as for general
operating expenses of the Company, including rent and officers salaries. (See
"Use of Proceeds.")
Offering Period ........ The Offering will commence on the date
herein and continue for ninety (90) days hereafter. The Offering Period may
be extended by the Company for an additional one hundred twenty (120) days
thereafter (the "Extended Offering Period.")
Escrow ................. All subscription funds received in the
Offering shall be placed in an escrow account with the Escrow Agent until the
Minimum Offering is sold. Once the Minimum Offering has been sold, the
proceeds from the Minimum Offering shall be released from escrow. Offering
proceeds received thereafter shall be held in the Escrow Account and released
to the Company in $5,000 denominations until the Maximum Offering is sold or
the Offering Period (or the Extended Offering Period) is over.
Selected Financial Information
The following is a summary of the Company's consolidated financial information
and is qualified in its entirety by the unaudited financial statements and
audited balance sheet appearing herein.
Cumulative Period from
Sept. 30, 1995(date of inception) to
December 31, 1996
(audited)
Statement of Income Data:
Net Sales ............... $ - 0 -
Inventory ............... $ - 0 -
Cost of Sales ........... $ - 0 -
Product Profits ......... $ - 0 -
Organization Expenses
and Cost of Sales $ 1,886
Net Deficit $(1,886)
Net Loss Per Share $ 1.87
Shares Outstanding 120,000
As Adjusted
Minimum Maximum
Dec. 31, 1996 Offering Offering
Balance Sheet Data.........
Working Capital ......... 3,000 (92,000) (157,000)
Total Assets ............ 12,237 102,000
167,000
Long Term Debt........... - - -
Total Liabilities........ 8,103 8,000
8,000
Shareholders' Equity..... 4,134 94,000 159,000
HIGH RISK FACTORS RELATING TO THE COMPANY
1. Limited Operating History; Limited Working Capital. The Company was
incorporated under the laws of the State of New York on September 30, 1995.
Since its incorporation, the Company's efforts have been focused on
structuring this offering and product development. The Company's main product
is the Emily Annie Serenity Keepsake Urn, which are urns created in the
likenesses of household pets, in which one is able to contain the ashes of a
deceased pet. Emily Annie Keepsake Urns are decorative memorials made of
either ceramic or brass likenesses which have a rubber gasket sealed core of
stainless steel which will hold the cremated ashes. Since its incorporation,
the Company's efforts have been focused on developing its products. The
Company has currently produced a prototype of the Emily Annie Keepsake Urns,
and intends to market them to veterinarians, pet crematoriums, pet stores, pet
hospitals and pet groomers.
The Company currently has limited assets and liabilities. The Company is
dependent upon proceeds from this Offering for working capital to commence
manufacturing its products and to run operations. The Company has determined
that it will need approximately $125,000 to commence manufacturing and run
operations for a twelve (12) month period. The Company is dependent on the
proceeds of the Maximum Offering, however, to run for a period of more than
twelve (12) months. The Company does not anticipate the need for additional
funding after this offering, but cannot so guarantee; nor can the Company
guarantee that such funding, if required, will be made available to the
Company on terms acceptable to the Company. The Company cannot guarantee that
even the Maximum Offering proceeds will be sufficient to run operations, and
in the event these proceeds are determined to be insufficient, the Company may
have to conduct subsequent offerings. The Company cannot assure investors
that any subsequent offerings will occur, or, in the event they do, that they
will be successful.
Prospective investors should be aware that the Company faces all risks
inherent in any development-stage business undertaking, including the
difficulties inherent in competition from entities which have greater
financial resources and experience than the Company. The likelihood of
success for the Company must be considered in light of undertaking to develop
a new product in a competitive environment. There can therefore be no
assurance that the Company's business operations will be successful, or that
it will be able to achieve revenues and projected profitability. (See "RISK
FACTORS - Start-Up Company," and "BUSINESS").
2. Dependence Upon Management. Success of the Company is dependent upon
the management efforts and expertise of its present management. The Company
will depend heavily upon the skills of its management. The death or
incapacity of any of the members of management could have a substantial
adverse effect upon the Company. While management anticipates the Company
will have sufficient personnel resources to replace the loss of any individual
on an interim basis, such loss could have significant adverse effects on the
Company and would likely require the Company to obtain other personnel to
manage and operate the Company. There can be no assurance a suitable
replacement any lost member of management could be employed or hired on terms
which are acceptable to the Company. (See "MANAGEMENT.")
3. Development Stage Company. The Company is a development stage
company, and it needs the proceeds from this Offering to commence
manufacturing operations, as well as to acquire operating assets, and hire
personnel necessary to commence operations. Until it receives the proceeds of
this Offering, the Company will continue to incur expenses without generating
any income. In addition to all the risks associated with the creation of any
new business, the Company will be subject to certain risk factors affecting
the pet care industry generally, such as competition among pet product
companies. (See "RISK FACTORS - Risks Related to the Pet Care Industry
Generally," "RISK FACTORS - Limited Operating History; Limited Working
Capital," and "BUSINESS.")
4. Competition. The Company intends to market its products to pet
crematoriums and cemeteries pet owners, veterinarians, pet hospitals and pet
shops. The Company believes it will be competing with pet cemeteries and
burial plots for the disposal of deceased pets, but is currently unaware of
any products and/or companies catering to cremated pets. The pet care
industry is highly competitive. The Company may face competition from other
pet care companies which may begin serving any of the markets which the
Company plans to serve and from new companies that may be formed to compete in
this market, including any that may be formed by any of the major pet care
companies. The Company's ability to meet price competition may depend on its
ability to operate at costs equal to or lower than its competitors or
potential competitors. There is a risk that competitors, perceiving the
Company to lack extensive capital resources, may undercut the Company's prices
or increase their service in an effort to force the Company out of business.
5. Reliance on Others. The Company intends to hire manufacturers to
manufacture the Emily Annie Serenity Keepsakes Urns. Currently, the Company
is not a party to any contracts for the manufacture of its products. There is
no guarantee that it will enter into any such contracts or that their will be
manufacturers willing and (or able to manufacture the Company's products on
terms satisfactory to the Company. The Company intends to market its products
on its own through advertisements, flyers and displays, aimed at Pet
Crematoriums and Pet Cemeteries. As the Company grows and expands its
operations, the Company may need to contract for additional services marketing
and/or manufacturing. There is no assurance that the Company will be able to
contract for all of the facilities and services it will require, and even if
entered into, these agreements may be subject to termination. The Company's
reliance upon others to provide essential services on behalf of the Company
may result in relative inflexibility in adjusting costs, and the efficiency
and timeliness of contract services may be beyond the Company's direct
control. Management expects that the Company will be required to rely on such
contractors for some time in the future. (See "BUSINESS - Contracts.")
6. Lack of Market for Securities. The Company has neither conducted,
nor have others made available to it, results of market research concerning
the feasibility of sales of the securities. Currently, there is no market for
the Company's securities, and the Company cannot guarantee that a market will
develop.
7. Control by Current Shareholders. After the completion of the Minimum
Offering, the Company's current shareholders will hold approximately 83% of
the then outstanding stock, and after the Maximum Offering, the Company's
current shareholders will hold approximately 75% of the then outstanding
stock. Thus, current shareholders will remain a majority after this
offering. (See "PRINCIPAL STOCKHOLDERS").
8. Arbitrary Offering Price. The Offering price and the terms and
conditions of the Units offered hereby have been arbitrarily determined by the
Company and bear no relationship to any recognized criterion of value
including assets, earnings or book value or the market value of the Common
Stock. (See "BUSINESS," "DESCRIPTION OF SECURITIES" and "SUBSCRIPTION AND
PLAN OF DISTRIBUTION.")
9. Escrow of Investors' Funds. Under the terms of the Offering, the
Company is offering Units on a "best efforts, all or nothing" basis as to the
first $125,000, and "best efforts" as to the additional $75,000. No
commitment exists by anyone to purchase all or any part of the shares offered
hereby. Consequently, there is no assurance that the Minimum Offering will be
sold, and subscribers' funds may be escrowed for as long as 210 days and then
returned without interest thereon or deduction therefrom, in the event the
Minimum Offering is not sold within the Offering Period or the Extended
Offering Period. Investors, therefore, will not have the use of any funds
paid for the purchase of the Company's Units during the subscription period.
In the event the Company is unable to sell the Minimum Offering within the
Offering Period or the Extended Offering Period if the Offering Period is
extended, the Offering will be withdrawn.
10. Possible Inability to Exercise Warrants. Because the Warrants
included in the Units being offered hereby may be transferred, it is possible
that the Warrants could be acquired by persons residing in states where the
Company is unable to qualify the shares of Common Stock underlying the
Warrants for sale upon exercise. Such Warrant holders would not be able to
sell their Warrants. Also, it is possible that the Company may be unable, for
unforeseen reasons, to cause a Registration Statement covering the shares
underlying the Warrants to be effective when the Warrants are exercisable. In
that event the Warrants may expire unless extended by the Company as permitted
by the Company's Warrant Agreement because a Registration Statement must be in
effect in order for Warrant holders to exercise their Warrants. (See
"Description of Securities.")
11. No Dividends. The Company was only recently organized, has no
earnings, and has paid no dividends to date. Since the Company is a
development stage company, the Company does not anticipate having any earnings
in the near future. (See "Dividends.")
12. Restricted Resale of the Securities. All 120,000 of the Company's
Common Stock presently issued and outstanding as of the date hereof are
"restricted securities" as that term is defined under the Securities Act of
1933 (the "Securities Act"), as amended, and in the future may be sold in
compliance with Rule 144 of the Securities Act, or pursuant to a Registration
Statement filed under the Securities Act. Rule 144 provides, in essence, that
a person holding restricted securities for a period of one (1) year may sell
those securities in unsolicited brokerage transactions or in transactions with
a market maker, in an amount equal to one (1%) percent of the Company's
outstanding Common Stock every three (3) months. Sales of unrestricted shares
by affiliates of the Company are also subject to the same limitation upon the
number of shares that may be sold in any three (3) month period. If all the
Units offered herein are sold, the holders of the restricted shares, and
affiliates holding unrestricted shares, may each sell 1,200 shares during any
three (3) month period after September 30, 1996. Additionally, Rule 144
requires that an issuer of securities make available adequate current public
information with respect to the issuer. Such information is deemed available
if the issuer satisfies the reporting requirements of sections 13 or 15(d) of
the Securities and Exchange Act of 1934 and of Rule 15c2-11 thereunder. Rule
144(k) also permits the termination of certain restrictions on sales of
restricted securities by persons who were not affiliates of the Company at the
time of the sale and have not been affiliates in the preceding three (3)
months. Such persons must satisfy a two (2) year holding period. There is no
limitation on such sales and there is no requirement regarding adequate
current public information. Investors should be aware that sales under Rule
144 or 144(k), or pursuant to a Registration Statement filed under the Act,
may have a depressive effect on the market price of the Company's securities
in any market which may develop for such shares.
13. Immediate Substantial Dilution. As of December 31, 1996, the net
tangible book value of the Company's Common Stock was approximately $.065 per
share, substantially less than the $5.00 per share to be paid by the public
investors, giving no value to the Warrants. In the event all the Units are
sold, public investors will sustain an immediate dilution of approximately
$4.00 per share in the book value of public investors' holdings. (See
"Dilution.")
14. Purchase of Shares. The Company's officers, directors and principal
shareholders may purchase a portion of the Units offered in this offering.
The aggregate number of Units which may be purchased by such persons shall not
exceed 20% of the number of Units sold in this offering. Such purchases may
be made in order to close the "all or nothing" offering. Units purchased by
the Company's officers, directors and principal shareholders will be acquired
for investment purposes and not with a view towards distribution.
15. State Law Violations. The Company will use its best efforts to
ensure that sales of Units will only occur in those states in which such sales
would not be a violation of any of said states laws. The Company's securities
may be sold in New York and the District of Columbia only.
16. Unknown Market for Products. While the Company believes there is a
market for its Emily Annie Keepsakes Urns, there is no guarantee that such a
market does in fact exist. Furthermore, the Company has no assurance that in
the event there is a market for its products, it will be able to capture a
substantial potion of that market.
DILUTION
The net tangible book value of the Company as of December 31, 1996 was
$.065. Net tangible book value is the net tangible assets of the Company
(total assets less total liabilities and intangible assets) (See "Financial
Statements.") As of December 31, 1996, there were 120,000 shares of the
Company's Common Stock outstanding (See "Certain Transactions").
Dilution represents the difference between the public offering price and
the net tangible book value per share immediately after the completion of the
public offering. Dilution arises mainly from the arbitrary decision by the
Company as to the offering price per share. In the event that any Warrants
are exercised (as to which no assurance can be given) there may be further
dilution to stockholders. The following table illustrates this dilution
(giving no value to the Warrants and assuming all Units are sold):
Public offering price per unit ......................... $5.00
Net tangible book value per share before offering........ $ .065
Net tangible book value per share after Maximum offering. $1.00
Increase per share attributable to shares offered hereby. $ .035
Dilution to public investors............................. $4.00
Money Net tangible
received for book value per
# shares shares before share before
before offering offering offering
120,000 $ 6,000 $ .065
- -------------------------------------------------------------
Total Net tangible
Total No. of Amount of Book Value
Shares After Money Received Per Share After
Maximum Offering For Shares Maximum Offering
160,000 $160,000 $1.00
- -------------------------------------------------------------
Increase
Net Tangible Net tangible Per Share
Book Value Per Book Value Attributed
Share After Shares Before To Shares
Maximum Offering Offering Offered Hereby
$ 1.00 $ .065 $ .035
- -------------------------------------------------------------
Net tangible
Book Value Per
Public Offering Share After Dilution to
Price Per Share Maximum Offering Public Investors
$ 5.00 $1.00 $4.00
As of the date of this prospectus, the following table sets forth the
percentage of equity to be purchased by public investors in this offering
compared to the percentage of equity to be owned by the present stockholders,
and the comparative amounts paid for the shares by the public investors as
compared to the total consideration paid by the present stockholders of the
Company, giving no value to the Warrants and assuming all Units are sold (See
"Certain Transactions" and footnotes to "Financial Statements.")
Approx.
Percent Approx.
Total Percent
Units Shares Total Total
Purchased Outstanding(1) Consideration Consideration
New Investors 25,000
Minimum Offering 17.24% $ 125,000 95.42%
New Investors 40,000
Maximum Offering 25.00% $ 200,000 97.09%
Existing
Shareholders(1) 120,000 100% $ 6,000 4.58%
(1) 120,000 shares of common stock were sold prior to this offering at $.05
per share. (See "Certain Transactions")
USE OF PROCEEDS
Net proceeds to the Company of approximately $125,000 in the Minimum Offering
and approximately $200,000 in the Maximum Offering will be applied to
operating expenses of the Company, including production equipment, salaries
and office supplies. The following table sets forth management's proposed use
of such proceeds:
Application of Proceeds Minimum Maximum
Salaries $ 26,400 $ 42,000
Professional Fees $ 17,000 $ 17,000
Advertising $ 4,000 $ 7,000
Office Expenses (1) $ 20,000 $ 30,000
Working Capital $ 57,600 $104,000
Total $125,000 $200,000
(1) Based on moving of offices which the Company intends to do upon
completion of this offering.
The Company plans to apply the proceeds of the Offering to operating and
office expenses and to the commencement of manufacturing operations. In the
event the Company's plans change or its assumptions change or prove to be
inaccurate, or if the proceeds of this Offering or projected cash flow prove
to be insufficient to fund operations (due to unanticipated expense,
production cost overruns, technical problems, or difficulties or otherwise),
the Company may find it necessary or advisable to reallocate some of the
proceeds within the above-described categories, or may be required to seek
additional financing or curtail its operation. A portion of the proceeds of
this Offering allocated to working capital may, in the discretion of
management, be used to pay salaries and other administrative expenses if
revenues from operations are insufficient to pay operating expenses. The
Company has no current arrangements with respect to, or sources of, additional
financing and it is not anticipated that existing stockholders will provide
any portion of the Company's future financing requirements. There can be no
assurance that any such additional financing will be available to the Company,
or if available, on commercially reasonable terms.
Proceeds not immediately required for the purposes described above may be
invested principally in United States government securities, short-term
certificates of deposit, money market funds or other short-term
interest-bearing investments.
CAPITALIZATION
The following table sets forth capitalization of the Company as of December
31, 1996, and as adjusted to reflect the sale of the Units offered hereby and
the application of the estimated net proceeds of such sales.
As Adjusted
Dec 31, 1996 Minimum/Maximum
Liabilities:
Short-Term Debt ......... $ - 0 - $ - 0 -
Existing Long Term Debt . - 0 - - 0 -
Total Debt .... - 0 - - 0
- -
Shareholders' Equity:
Common Stock, $.001 par value
25,000,000 shares authorized
120,000 shares issued and
outstanding.................... 120 122 124
145,000 and 160,000 shares to
be issued and outstanding(1).... - -
- -
Additional Paid-In Capital 5,880 94,878 159,876
Accumulated Deficit ........... (1,886)(1,886)
(1,886)
Total Shareholders' Equity....... 4,134 94,082 159,080
Total Liabilities and
Stockholders' Equity .......... 4,134 94,082 159,080
Total Shareholders' Equity 4,134 94,082 159,080
Total Capitalization............. 4,134 94,082 159,080
_____________________
The Company has paid no cash dividends on its Common Stock. The Company's
present policy is to retain any earnings to finance the growth and development
of its business. Therefore, the Company does not anticipate paying cash
dividends in the foreseeable future.PROPOSED BUSINESS
History and Organization
The Company was organized under the laws of the State of New York on
September 30, 1995. Since inception, the primary activity of the Company has
been directed to organizational efforts and obtaining initial financing. The
Company has also designed the Emily Annie Serenity Urn, a decorative box
designed to hold pets post-cremation ashes. It is the Company's intent to
continue manufacturing these urns, and to market them through various avenues
including veterinarians, pet shows and pet specialty stores, as well as to pet
crematoriums and cemeteries. To date, the Company has manufactured a
prototype of each product, but has no sales. The Company has not entered into
any contracts or agreements for the sale or distribution of its products.
The Company's initial public offering will consist of a minimum of 25,000
Units and a maximum of 40,000 Units at a purchase price of $5.00 per Unit.
Each Unit consists of one (1) share of Common Stock, one (1) Class A Warrant
and one (1) Class B Warrant. Each Class A Warrant is exercisable at $7.00 for
one (1) share of Common Stock. Each Class B Warrant is exercisable for one
(1) share of Common Stock at an exercise price of $6.00. A Class A Warrant
must have been exercised for the corresponding Class B Warrant to be
exercised.
The Company is filing this registration statement in order to effect a
public offering for its securities. (See "Description of Securities.")
Plan of Operation
The Company was organized with the intent to design and market its sole
product, the Emily Annie Serenity Urn, urns specifically designed to contain
the post-cremated ashes of household pets. The Urns will have breed specific
designs, and display a commonly known marking for each breed. Each Emily
Annie Serenity Urn will have a core container made of metal with a rubber
gasket sealed screw on top to secure and preserve the ashes. The outer shell
will be made of ceramic-like non-breakable resin, that will be poured into
custom designed molds made exclusively for the Company.
The Company intends to design the Emily Annie Serenity Urns and to contract
out the manufacturing of its products. As of the date hereof, however, the
Company has no such contracts, nor has it engaged in any manufacturing of its
products. The Company has no sales to date. (See "RISK FACTORS").
The Company intends to market its products initially to pet crematoriums and
pet cemeteries, as well as to veterinarians and pet hospitals. The Company
expects to print brochures for display in such locations. Eventually, the
Company intends to market its products directly to pet owners.
The Company is aware of several companies engaged in a business similar to the
one the Company intends to operate, none of which designs breed-specific urns,
however. The Company believes this unique feature will distinguish it from
its competitors. The Company cannot guarantee that its competitors will not
have greater funding or more recognition than the Company, however, or that
additional companies will not enter the same market. (See "Risk Factors -
Competitors").
Employees
The Company presently has two part-time employee. The Company's employees
are all members of management whose salaries will be drawn from the proceeds
of this Offering. The Company's employees' salaries will be re-evaluated by
the Company after the Company is in operation. (See "Management - Executive
Compensation").
Facilities
The Company is presently using the office of Cheryl Mobley, located at
392 Central Park West, New York, New York 10025 as its office. There is no
cost involved to the Company. Such arrangement is expected to continue after
completion of this offering. The Company at present owns some equipment, and
intends to purchase additional equipment with the offering proceeds.
MANAGEMENT
The officers and directors of the Company, and further information
concerning them are as follows:
Name(1) Age Position(2)
Emily Putterman 30 President/Director
Russell McIntosh 59 Vice President/Secretary
(1) May be deemed "Promoters" of the Company, as that term is defined under
the Securities Act of 1933. These "Promoters" are the Company's only
"Promoters".
(2) All members of management have served in their respective positions since
the Company was organized.
BIOGRAPHY
Emily Putterman, 30, has been the Company's President and a director since the
Company's incorporation. Ms. Putterman has been an Assistant Adjunct
Professor at the Fashion Institute of Technology, where she teaches shoe
design, since 1989. Ms. Putterman is currently Sales and Marketing Director
for Tiny Toppers, located in New York. Ms. Putterman is a graduate of Fashion
Institute of Technology where she received her A.A.S in Footwear and Accessory
Design. She attended Parsons School of Design and is an Elected Life Member
of the Arts Student League in New York City.
Russell McIntosh, 59, has been Vice President and Secretary and a director of
the Company since its incorporation. Mr. McIntosh is a master carpenter who
specializes in restoration and refinishing of fine antique furniture, he
currently is employed by San Lorenzo Restorations and act concurrently as the
plant manager. Mr. McIntosh also has over 30 years experience as a tool and
dye maker. His craftsmanship and engraving skills are a credit to the
company.
Executive Compensation
$26,000 of the Minimum Offering, and $42,000 of the Maximum Offering proceeds
shall be allocated to management salaries. Management salaries shall be
re-evaluated once the Company commences operations.
STATEMENT AS TO INDEMNIFICATION
Section 722 of the New York Business Corporation Law provides for
indemnification of the officers, directors, employees and agents of
registrants by the Company. Pursuant to this section, the Company may
indemnify any director, officer, employee or agent of the Company who has been
made a party to an action, suit or proceeding by reason of the fact that such
person is or was an officer, director or employee or agent of the Company,
against expenses, judgements, fines and amounts paid in settlement actually
and reasonable incurred in such action, suit or proceeding. The general
effect of Section 722 of the New York Business Corporation Law is to indemnify
officers, directors, employees and agents of a company who are acting in good
faith on behalf of or for that company, against costs incurred in suits or
actions brought against such persons as a result of their relation to the
company and/or their actions on behalf of the company. Complete disclosure of
this statute is provided in Part II hereof. This information can be examined
as described in "Further Information," herein.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against the public policy as expressed in the Securities
Act and is therefore, unenforceable.
MARKET FOR THE COMPANY'S COMMON STOCK
Prior to the date hereof, there has been no trading market for the
Company's Common Stock. There are currently four (4) holders of the Company's
outstanding Common Stock. Present shareholders will own approximately 83% of
the outstanding shares upon completion of the Minimum Offering and 75% after
the Maximum Offering, and as a result, there is little likelihood of an active
public trading market, as that term is currently understood, developing for
the shares. There can be no assurance that a trading market will develop for
the Company' securities after the offering, or at any timer thereafter. To
date, neither the Company nor anyone acting on its behalf has taken any
affirmative steps to retain or encourage any broker dealer to act as a market
maker for the Company's Common Stock. Further, there have been no discussions
or understandings, preliminary or otherwise, between the Company or anyone
acting on its behalf and any market maker regarding the participation of any
such market maker in the future trading market, if any, for the Company's
Common Stock. (See "HIGH RISK FACTORS - No Assurance of a Public Market" and
"HIGH RISK FACTORS - Control by Present Management and Shareholders.")
CERTAIN TRANSACTIONS
On October 10,1995, 120,000 shares of the Company's Common Stock were
issued to four (4) shareholders at $.05 per share for a total of $6,000. The
current breakdown of share ownership by shareholder may be found in the
section on Principal Stockholders.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of the date of this Memorandum,
certain information with respect to the Company's Common Stock owned or of
record by (i) each person who owns more than 5% of the Company's outstanding
Common Stock, (ii) each director or officer of the Company, and (iii) all
executive officers and directors as a group.
Percentages of Outstanding Shares Owned
Amount and
Nature of
Beneficial Before After Offering
Ownership Offering Minimum Maximum
Stockholder
Emily Putterman 57,600 48.00% 37.66% 34.13%
209 Columbus Ave.
New York, NY 10023
Russell McIntosh 56,400 47.00% 36.83% 33.37%
264 West 25th St.
New York, NY 10001
Joel Schonfeld 3,500 2.92% 2.41% 2.19%
63 Wall Street
New York, NY 10005
Andrea Weinstein 2,500 2.08% 1.72% 1.56%
63 Wall Street
New York, NY 10005
All Officers and 120,000 95.00% 78.62% 71.25%
Directors as a group
(2 persons)
DESCRIPTION OF SECURITIES
Units
The offering consists of up to 40,000 Units at $5.00 per Unit, each Unit
consisting of one (1) share of Common Stock, one (1) Class A Warrant and one
(1) Class B Warrant. Each Class A Warrant entitles the holder to purchase one
(1) share of Common Stock at an exercise price of $7.00 on the terms set forth
below under "Unit Warrants." Each Class B Warrant entitles the holder to
purchase one (1) share of Common Stock at an exercise price of $6.00 on the
terms set forth below under "Unit Warrants."
Common Stock
The Company is authorized to issue 25,000,000 shares of Common Stock, of
which 120,000 shares were issued and outstanding as of the date of this
prospectus. Each outstanding share of Common Stock is entitled to one vote,
either in person or by proxy, on all matters that may be voted upon by the
owners thereof at meetings of the stockholders.
The holders of Common Stock (i) have equal ratable rights to dividends
from funds legally available therefor, when, as and if declared by the Board
of Directors of the Company; (ii) are entitled to share ratably in all of the
assets of the Company available for distribution to holders of Common Stock
upon liquidation, dissolution or winding up of the affairs of the Company;
(iii) do not have preemptive, subscription or conversion rights, or redemption
or sinking fund provisions applicable thereto; and (iv) are entitled to one
non-cumulative vote per share on all matters on which stockholders may vote at
all meetings of stockholders.
All shares of Common Stock which are the subject of this offering, when
issued, will be fully paid for and non-assessable, with no personal liability
attaching to the ownership thereof. The holders of shares of Common Stock of
the Company do not have cumulative voting rights, which means that the holders
of more than 50% of such outstanding shares voting for the election of
directors can elect all of the directors of the Company if they so choose and,
in such event, the holders of the remaining shares will not be able to elect
any of the Company's directors. At the completion of the Maximum Offering,
the present officers and directors and present shareholders will beneficially
own 71.25% of the then outstanding shares. Accordingly, after completion of
this offering, the present shareholders of the Company will be in a position
to control all of the affairs of the Company.
Redeemable Warrants
Persons intending to exercise their redeemable Class A Warrants must
present the Warrant and the exercise price to the Company's Transfer Agent, in
order to receive one (1) share of Common Stock. Each Class A Warrant is
exercisable at an exercise price of $7.00 from the Closing Date of this
offering and continuing for three (3) years, at which time the Warrants
expire. The Class A Warrants are immediately detachable.
For each Class B Warrant, the holder is entitled to receive one (1) share
of Common Stock, at an exercise price of $6.00 from the Closing Date and
continuing for four (4) years thereafter, at which time the Warrants expire.
The number of shares that may be purchased upon exercise of the Warrants,
and the subscription price, may both be subject to proportionate adjustment in
the event of stock splits and stock dividends.
The Warrants are not entitled to any voting, liquidation or other rights
to which the Common Stock is entitled. Holders of the Warrants will have no
voting power and will not be entitled to any dividends. In the event of any
dissolution or winding up of the Company, the holders of the Warrants will not
be entitled to participate in a distribution of the Company's assets.
If there is no current prospectus or if the Common Stock underlying the
Warrants is not qualified for sale in the state in which a Warrant holder
resides, such holder will not be permitted to exercise his Warrants.
In the event that the Company adopts a resolution to merge, consolidate,
or sell percentages in all of its assets, prior to the expiration of the
Warrants, each Warrant holder upon exercise of his Warrants would be entitled
to receive the same treatment as the holder of any other share of Common
Stock. In the event the Company adopts a resolution for the liquidation,
dissolution, or winding up of the Company's business, the Company will give
written notice of adoption of such resolution to the registered holders of the
Warrants. Thereupon, all liquidation and dissolution rights under the
Warrants will terminate at the end of thirty (30) days from the date of the
notice to the extent not exercised within those thirty (30) days.
The Company currently has no plans, proposals, arrangements or
undertakings with respect to the sale of additional securities after the
completion of this offering or prior to the location of a Business
Combination. The only circumstances under which additional securities may be
issued would be, if the proceeds from this offering and the proceeds from the
exercise of the Warrants are insufficient to accomplish the Company's proposed
business.
The above summary does not purport to be complete. The Warrant Agreement
containing all of the terms and conditions applicable to the Warrants, has
been filed as an exhibit to the Registration Statement of which this
prospectus is a part.
Anti-Dilution Provisions of Warrants
The Warrant Price and number of Common Stock shares subject to the
Warrant shall be subject to adjustment from time to time as set forth
hereinafter.
(A) In case the Company shall declare a dividend or make any other
distribution upon any stock of the Company payable in Common Stock, then the
Warrant Prices shall be proportionately decreased as of the close of business
on the date of record of said dividend.
(B) If the Company shall at any time subdivide its outstanding Common
Stock by recapitalization, reclassification or split-up thereof, the Warrant
Price immediately prior to such subdivision shall be proportionately
decreased, and, if the Company shall at any time combine the outstanding
Common Stock by recapitalization, reclassification or combination thereof, the
Warrant price immediately prior to such combination shall be proportionately
increased. Any such adjustment to the Warrant price shall become effective
at the close of business on the record date for such subdivision or
combination.
(C) Upon any adjustment of the Warrant price as provided herein, the
number of Common Shares issuable upon exercise of this Warrant, shall be
changed to the number of shares determined by dividing (i) the aggregate
Warrant price payable for the purchase of all shares issuable upon exercise of
this Warrant immediately prior to such adjustment by (ii) the Warrant price
per share in effect immediately after such adjustment.
(D) If any capital reorganization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities, cash, or assets with respect to or
in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, the Company or such successor
or purchasing corporation as the case may be, shall execute with the warrant
agent a supplemental Warrant Agreement providing that each registered holder
of a Warrant shall have the right thereafter and until the expiration date to
exercise such Warrant for the kind and amount of stock securities, cash, or
assets receivable upon such reorganization, reclassification, consolidation,
merger or sale by a holder of the number of shares of Common Stock, for the
purchase of which such Warrant might have been exercised immediately prior to
such reorganization, reclassification, consolidation, merger or sale, subject
to adjustments which shall be as nearly equivalent as may be practicable to
the adjustments provided for in this section.
(E) On the Effective Date of any new Warrant price, the number of
shares as to which any Warrant may be exercised shall be increased or
decreased so that the total sum payable to the Company on the exercise of such
Warrant shall remain constant.
(F) The form of Warrant need not be changed because of any change
pursuant to this Section, and Warrants issued after such change may state the
same Warrant price and the same number of shares as it stated in the Warrants
initially issued pursuant to the Warrant Agency Agreement. However, the
Company may at any time in its sole discretion (which shall be conclusive)
make any change in the form of Warrant that the Company may deem appropriate
and that does not affect the substance thereof; and any Warrant thereafter
issued or countersigned, whether in exchange or substitution for an
outstanding Warrant or otherwise, may be in the form as so changed.
The Company acknowledges the fact that if there is any change in the
exercise price of the Warrants, a post-effective amendment will need to be
filed with the Securities and Exchange Commission prior to the commencement of
the exercise of the Warrants. In conjunction with any change in the Warrant
exercise price, notification to all market makers and public news releases
will be sent out immediately. The Company may reduce the exercise price or
extend the exercise period of the Warrants only by a vote of the majority of
the Company's Board of Directors.
The above summary does not purport to be complete. The Warrant Agreement
containing all of the terms and conditions applicable to the Unit Warrants,
has been filed as an exhibit to the Registration Statement of which this
prospectus is a part.
Reports to Stockholders
The Company intends to furnish its stockholders with annual reports
containing audited financial statements as soon as practicable at the end of
each fiscal year. The Company's fiscal year ends on April 30th.
Dividends
The Company was only recently organized, has no earnings, and has paid no
dividends to date. Furthermore, there can be no guarantee that the Company
will pay dividends in the future.
Transfer Agent and Warrant Agent
The Company has appointed Oxford Transfer & Registrar Agency, 1130 S.W.
Morrison, Suite 250, Portland, Oregon 97205, as the Transfer Agent and Warrant
Agent for the Company.
EXPIRATION DATE
This offering will expire 90 days from the date of this prospectus (or
210 days from the date of this prospectus if so extended by the Company).
LITIGATION
The Company is not presently a party to any litigation, nor to the
knowledge of management is any litigation threatened against the Company which
may materially affect the Company.
LEGAL OPINIONS
Schonfeld & Weinstein, L.L.P., 63 Wall Street, New York New York 10005,
Special Counsel to the Company, has rendered an opinion that the Units are
validly issued. Both Joel Schonfeld and his partner, Andrea Weinstein, own
stock in the Company totaling 6,000 shares of Common Stock.
EXPERTS
The financial statements included in this prospectus have been examined
by Boykoff & Bell, P.C., 2 Skyline Drive, Hawthorne, New York 10532,
independent certified public accountant, as stated in his opinion given upon
the authority of that person as an expert in accounting and auditing.
FURTHER INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), a Registration Statement on Form SB-2 with respect to this the
securities offered by this prospectus. This prospectus omits certain
information contained in the Registration Statement as permitted by the Rules
and Regulations of the Commission. Reports and other information filed by the
Company may be inspected and copied at the public reference facilities of the
Commission in Washington, D.C. Copies of such material can be obtained from
the Public Reference Section of the Commission, Washington, D.C. 20549 at
prescribed rate. Statements contained in this prospectus as to the contents
of any contract or other document referred to are not complete and where such
contract or other document is an exhibit to the Registration Statement, each
such statement is deemed qualified and amplified in all respects by the
provisions of the exhibit.
EMILY ANNIE, INC.
FINANCIAL STATEMENTS
(A Development Stage Company)
For the period from September 30, 1995(date of inception)
to December 31, 1996
EMILY ANNIE, INC.
(a development stage company)
CONTENTS
Independent Auditors' Report 1F
Financial
Statements:
Balance Sheet 2F
Statement of Cash Flows 3F
Statement of Operations 4F
Statement of Shareholders' Equity 5F
Notes to Financial Statements 6F-8F
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
Emily Annie, Inc.
New York, New York
We have audited the accompanying balance sheet of Emily Annie, Inc., a
development stage company, as of December 31, 1996 and the related statements
of operations, shareholders' equity and cash flows for the period May 30, 1996
to December 31, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Emily Annie, Inc., a
development stage company, as of December 31, 1996, and the results if its
operations and its cash flows for the period May 30, 1996 to December 31, 1996
in conformity with generally accepted accounting
principles.
Boykoff and Bell, P.C.
Certified Public Accountants
Dated: March 15, 1997
Hawthorne, New York
1-FEMILY ANNIE, INC.
(a development stage company)
BALANCE SHEET
DECEMBER 31, 1996
ASSETS
CURRENT ASSETS:
Cash $ 1,890
Total current assets 1,890
OTHER ASSETS:
Organization costs (Note 2.) 10,347
Total assets $ 12,237
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,000
Due to shareholders (Note 3.) 5,382
Corporate taxes payable (Note 4.) 721
Total liabilities 8,103
SHAREHOLDERS' EQUITY:
Common stock, .001 par value, 25,000,000 authorized,
120,000 issued and outstanding (Note 1.) 120
Additional paid in capital (Note 1.) 5,880
Deficit accumulated during development stage <1,866>
Total shareholders' equity 4,134
Total liabilities and shareholders' equity $ 12,237
See notes to financial statements.
2-FEMILY ANNIE, INC.
(a development stage company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD MAY 30, 1996 TO DECEMBER 31, 1996
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ <1,866>
Adjustments to reconcile net loss to
net cash provided by operating activities:
Increase in accounts payable $2,000
Increase in corporate taxes payable 721
2,721
Net cash provided by operating activities 855
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in organization costs <10,347>
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in due to shareholders 5,382
Proceeds from sale of stock 6,000
11,382
Net increase in cash 1,890
Cash, beginning of period -0-
Cash, end of period $ 1,890
See notes to financial statements.
3-FEMILY ANNIE, INC.
(a development stage company)
STATEMENT OF OPERATIONS
FOR THE PERIOD MAY 30, 1996 TO DECEMBER 31, 1996
OPERATING EXPENSES:
Bank charges $ 145
Corporate taxes (Note 4) 721
Professional fees 1,000
Net loss $ <1,866>
EARNINGS PER SHARE:
Net loss per common share $ 1.87
Weighted average number of shares 120,000
See notes to financial statements.
4-F
EMILY ANNIE, INC.
(a development stage company)
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE PERIOD MAY 30, 1996 TO DECEMBER 31, 1996
SHARES AMOUNT
Initial sale of stock
October 10, 1995 120,000 $6,000
Deficit accumulated
during developmental stage <1,866>
120,000 $4,134
See notes to financial statements.
5-F
EMILY ANNIE, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD MAY 30, 1996 TO DECEMBER 31, 1996
1. ORGANIZATION OF THE COMPANY
The Company was incorporated in New York on September 30, 1995. Subsequent to
incorporation, it issued and sold 120,000 shares of Common Stock on October
10, 1995 to two (2) initial shareholders, at five cents per share.
The Company was organized to sell and market two products relating to the
containment of cremated ashes. Since its organization the companies
activities have been limited to the development of its products and the sale
of its stock. There have been no sales of its products to the public. After
the completion of its public offering the company will then begin to produce
and sell its products.
The Company's only activities to date have been the acquisition of funds from
the sale of its Common Stock. The Board of Directors has voted to authorize
the filing of a registration statement and prospectus to effect a initial
public offering in order to offer its securities to the public. As of
December 31, 1996, the Company had not yet commenced operations. The Company
conducts its operations on a calendar year.
2. SIGNIFICANT ACCOUNTING POLICIES
Organization costs
Organization costs will be amortized on a straight line basis over a five
years.
Leases
The Company has no oral or written leases or freeholds of any kind on any
physical plant. The Company presently uses the offices of Cheryl K. Mobley,
392 Central Park West, New York, New York 10025, at no cost. Such
arrangements are expected to continue until completion of this offering at
which the Company shall commence looking for larger space.
6-F
EMILY ANNIE, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD MAY 30, 1996 TO DECEMBER 31, 1996
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles 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 revenues and expenses during the
reporting period. Actual results could differ from those estimates.
3. DUE TO SHAREHOLDERS
The non-interest bearing amount of $5,382 resulted from the shareholders
payment of corporate expenses from personal funds. No time period or
repayment terms have been established.
4. TAXES
Since the Company has incurred losses since inception, no provision for income
taxes is necessary. The Company has a net operating loss carried forward of
$1,866 which expires December 31, 2011.
5. ADDITIONAL INFORMATION
The Board of Directors passed a resolution authorizing the Management of the
Company to initiate steps to make a public offering of the Company's
securities, in order to raise additional capital of up to $200,000.00.
Management was granted authority to file a Registration Statement on form SB-2
with the Securities and Exchange Commission and to register the securities in
any state jurisdictions that Management felt was required and appropriate.
7-F
EMILY ANNIE, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD MAY 30, 1996 TO DECEMBER 31, 1996
5. ADDITIONAL INFORMATION (CONTINUED)
It was furthermore resolved, that the public offering would consist of a
minimum of 25,000 and maximum of 40,000 Units to be offered at $5.00 per
unit. Each unit would consist of one (1) share of Common Stock, one (1) Class
A Warrant and one (1) Class B Warrant, with the Class A Warrants expiring
three (3) years from the closing date of this offering, and the Class B
Warrants expiring four (4) years from the closing date of this offering.
Each Class A Warrant would permit the holder to purchase one (1)
share of Common Stock for $7.00 (exercise price). Each Class B warrant would
permit the holder to purchase one (1) share of Common Stock for $6.00
(exercise price). The offering is being made on an all or none basis as to
the minimum offering, and a best efforts basis as to the maximum offering.
8-F
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
Section 722 of the New York Business Corporation Law, as amended, provides for
the indemnification of the Company's officers, directors and corporate
employees and agents under certain circumstances as follows:
(a) A corporation may indemnify any person made, or threatened to be
made, a party to an action or proceeding (other than one by or in the right of
the corporation to procure a judgment in its favor), whether civil or
criminal, including an action by or in the right of any other corporation of
any type or kind, domestic or foreign, or any partnership, joint venture,
trust, employee benefit plan or other enterprise, which any director or
officer of the corporation served in any capacity at the request of the
corporation, by reason of the fact that he, his testator or intestate, was a
director or officer of the corporation, or served such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
in any capacity, against judgments, fines, amounts paid in settlement and
reasonable expenses, including attorneys' fees actually and necessarily
incurred as a result of such action or proceeding, or any appeal therein, if
such director or officer acted, in good faith, for a purpose which he
reasonably believed to be in, or, in the case of service for any other
corporation or any partnership, joint venture, trust employee benefit plan or
other enterprise, not opposed to, the best interests of the corporation and,
in criminal actions or proceedings, in addition, had no reasonable cause to
believe that his conduct was unlawful.
(b) The termination of any such civil or criminal action or proceeding
by judgment, settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not in itself create a presumption that any such director or
officer did not act, in good faith, for a purpose which he reasonably believed
to be in, or, in the case of service for any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise,
not opposed to, the best interests of the corporation or that he had
reasonable cause to believe that his conduct was unlawful.
(c) A corporation may indemnify any person made, or threatened to be
made, a party to an action by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he, his testator or
intestate, is or was a director or officer of the corporation, or is or was
serving at the request of the corporation as a director or officer of any
other corporation of any type or kind domestic or foreign, of any partnership,
joint venture, trust, employee benefit plan or other enterprise, against
amounts paid in settlement and reasonable expenses, including attorneys' fees,
actually and necessarily incurred by him in connection with the defense or
settlement of such action, or in connection with an appeal therein, if such
director or officer acted, in good faith, for a purpose which he reasonably
believed to be in, or, in the case of service for any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise,
not opposed to, the best interests of the corporation, except that no
indemnification under this paragraph shall be made in respect of (1) a
threatened action, or a pending action which is settled or otherwise disposed
of, or (2) any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation, unless and only to the extent that
the court in which the action was brought, or if no action was brought, any
court of competent jurisdiction, determines upon application that, in view of
all the circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such portion of the settlement amount and expenses
as the court deems proper.
(d) For the purpose of this section, a corporation shall be deemed to
have requested a person to serve an employee benefit plan where the
performance by such person of his duties to the corporation also imposes
duties on, or otherwise involves services by, such person to the plan or
participants or beneficiaries of the plan; excise taxes assessed on a person
with respect to an employee benefit plan pursuant to applicable law shall be
considered fines; and action taken or omitted by a person with respect to an
employee benefit plan in the performance to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is not opposed to the best interests of the corporation.
The Company will, to the fullest extend permitted by Section 722 of the New
York Business Corporation Law, indemnify any and all persons whom it has the
power to indemnify against any and all of the expense, liabilities and loss,
and this indemnification shall not be deemed exclusive of any other rights to
which the indemnitees may be entitled under any By-law, agreement, or
otherwise, both as to action in his/her official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such persons.
The Company may, at its own expense, maintain insurance to protect itself and
any director, officer, employee or agent of the Company against any such
expense, liability or loss, whether or not the Company would have the power to
indemnify such person against such expense, liability or loss under the New
York Business Corporation Law.
Item 25. Expenses of Issuance and Distribution
The other expenses payable by the Company in connection with the issuance
and distribution of the securities being registered are estimated as follows:
Escrow Fee................................$ 250.00
Securities and Exchange Commission
Registration Fee..........................$ 312.07
Legal Fees................................$15,000.00
Accounting Fees...........................$ 2,000.00
Printing and Engraving....................$ 750.00
Blue Sky Qualification Fees and Expenses..$ 500.00
Miscellaneous.............................$ 837.93
Transfer Agent Fee........................$ 350.00
TOTAL.....................................$20,000.00
Item 26. Recent Sales of Unregistered Securities
The Company issued 120,000 shares on October 10, 1996 to its initial
stockholders for $6,000.
Name/Address
Consideration Shares
Beneficial of Common Price
Owner Stock Purchased(2) Paid
Emily Putterman(1) 57,600 $ 2,880
209 Columbus Ave.
New York, NY 10023
Russell McIntosh(1) 56,400 $ 2,820
264 West 25th St.
New York, NY 10001
Joel Schonfeld(3) 3,500 $ 175
63 Wall St., Ste.1801
New York, NY 10005
Andrea Weinstein(3) 2,500 $ 125
63 Wall St., Ste 1801
New York, NY 10005
Total Officers
and Directors
((2) persons) 120,000 $ 6,000
__________________________
(1) May be deemed "Promoters" of the Company, as that term is defined
under the Securities Act of 1933.
(2) These Shares were sold under the exemption of Section 4(2) of the
Securities Act of 1933.
Neither the Company nor any person acting on its behalf offered or sold the
securities by means of any form of general solicitation or general
advertising.
Each purchaser represented in writing that he/she acquired the securities for
his own account. A legend was placed on the certificates stating that the
securities have not been registered under the Act and setting forth the
restrictions on their transferability and sale. Each purchaser signed a
written agreement that the securities will not be sold without registration
under the Act or exemption therefrom.
(3) Mr. Schonfeld is special counsel to the Company, and Ms. Weinstein
is his associate.
EXHIBITS
Item 27.
3.1 Certificate of Incorporation.
3.2 By-Laws.
4.1 Class A Warrant
4.2 Class B Warrant
4.3 Form of Warrant Agency Agreement.
4.4 Form of Escrow Agreement.
5.0 Opinion of Counsel.
24.0 Accountant's Consent to Use Opinion.
24.1 Counsel's Consent to Use Opinion.
Item 28.
UNDERTAKINGS
The registrant undertakes:
(1) To file, during any period in which offers or sales are being made,
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10 (a) (3) of the
Securities Act of 1933;
(ii) 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;
(iii) 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, including
(but not limited to) any addition or deletion of managing underwriter;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be treated as a new
registration statement of the securities offered, and the offering of the
securities at that time 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.
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 by-laws, 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.
- -This Space is Intentionally Left Blank-
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form SB-2 and authorized this
registration statement to be signed on its behalf by the undersigned, in the
City of , State of , on .
EMILY ANNIE, INC.
(Registrant)
BY:
(Signature and Title)
Emily Putterman, President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
and on the dates stated.
Emily Putterman
EMILY PUTTERMAN DATED April 24, 1997
President, Director
Russel McIntosh
RUSSELL MCINTOSH DATED April 24, 1997
Vice President, Secretary, Director