SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ x ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ x ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
KidsToysPlus.com, Inc.
(Name of registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required
[ x ] Fee computed on table below per Exchange Act Rule 14a-6(I)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
Common
2) Aggregate number of securities to which transaction applies:
11,130,884
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act rule 0-11 (Set forth the
amount of which the filing fee is calculated and state how it
was determined): Fee based on sale price of assets of
$160,000.
4) Proposed maximum aggregate value of transaction: $160,000
5) Total fee paid: $32.00
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of
its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
KIDSTOYSPLUS.COM, Inc.
2924 Cliffe Avenue
Courtenay, British Columbia, Canada
V9N 2L7
Office of Michael L. Labertew, Attorney at Law
4685 South Highland Drive #202A
Salt Lake City, Utah 84117
(address of meeting)
SPECIAL MEETING OF STOCKHOLDERS
April 30, 2001
PROXY STATEMENT AND NOTICE
SOLICITATION OF PROXIES
The enclosed proxy is being solicited by the Board of Directors of
KidsToysPlus.com, Inc., a Nevada corporation ("KidsToysPlus" or the
"Company"), for use at the Special Meeting of the Stockholders of
KidsToysPlus (the "Special Meeting") to be held at 10:00 a.m., on Monday,
April 30, 2001, at the office of Michael L. Labertew, Attorney at Law
listed above, and at any adjournment thereof. This Proxy Statement
serves as notice of the Special Meeting, a description of the proposals
to be addressed at the Special Meeting, and a source of information on
the Company and its management.
Stockholders may revoke their proxies by delivering a written notice
of revocation to the Secretary of the Company at any time prior to the
exercise thereof, by the execution of a later-dated proxy by the same
person who executed the prior proxy with respect to the same shares or by
attendance at the Special Meeting and voting in person by the person who
executed the prior proxy.
The solicitation will be primarily by mail but may also include
telephone, telegraph or oral communication by officers or regular
employees. Officers and employees will receive no additional
compensation in connection with the solicitation of proxies. All costs
of soliciting proxies will be borne by FYI Corporation. The Company will
not reimburse FYI Corporation for the cost of soliciting proxies or the
preparation of this proxy statement. The total amount estimated in
connection with the solicitation of shareholders is approximately
$10,000. Should Proposal 1 be approved, FYI Corporation will become the
controlling shareholder of the Company.
The approximate mailing date of the proxy statement and proxy to
stockholders is April 17, 2001.
All proxies will be voted as specified. In the absence of specific
instructions, proxies will be voted FOR:
(1) approval of the transfer of all or substantially all of the
assets of KidsToysPlus to Albert R. Timcke;
(2) the election of two Directors of KidsToysPlus to serve for a
term of one year or until their successors are duly elected and
qualified;
(3) approval of the change of the Company's corporate name to
"Mikim, Inc.";
(4) approval of the Consulting Agreement between Mikim, Inc. and
FYI Corporation; and
(5) approval of all other matters by the persons named in the proxies in
accordance with their judgment.
PLEASE SIGN YOUR NAME EXACTLY AS IT APPEARS ON THE STOCK CERTIFICATE.
STOCKHOLDERS RECEIVING MORE THAN ONE PROXY BECAUSE OF SHARES REGISTERED
IN DIFFERENT NAMES OR ADDRESSES MUST COMPLETE AND RETURN EACH PROXY IN
ORDER TO VOTE ALL SHARES TO WHICH ENTITLED.
OUTSTANDING SHARES AND VOTING RIGHTS
Record Date. Stockholders of record at the close of business on
April 9, 2001, are entitled to notice of and to vote at the Special
Meeting or any adjournment thereof.
Shares Outstanding. As of April 9, 2001, a total of 11,130,884
shares of the Company's Common Stock (the "Common Stock") were
outstanding and entitled to vote.
One Shareholder Owns 50.045% of the Issued and Outstanding Stock.
Albert R. Timcke owns and controls 50.045% of the issued and outstanding
Common Stock of the Company. Mr. Timcke is an interested party to the
sale transaction of all of the Company's assets, and therefore will vote
his shares in accordance with the majority of the remaining votes or
proxies received by the Company for each of the Proposals. Under Nevada
law, shareholders do not possess dissenter's rights for the proposals at
the Special Meeting.
Voting Rights and Procedures. Each outstanding share of Common
Stock is entitled to one vote on all matters submitted to a vote of
stockholders.
The Company's Bylaws and Nevada law require the presence, in person
or by proxy, of a majority of the outstanding shares of Common Stock
entitled to vote to constitute a quorum to convene the Special Meeting.
Shares represented by proxies that reflect abstentions or "broker non-
votes" (i.e., shares held by a broker or nominee which are represented at
the meeting, but with respect to which such broker or nominee is not
empowered to vote on a particular proposal) will be counted as shares
that are present and entitled to vote for purposes of determining the
presence of a quorum.
APPROVAL OF THE TRANSFER OF ALL OR SUBSTANTIALLY ALL
OF THE ASSETS OF KIDSTOYSPLUS.COM, INC. TO ALBERT R. TIMCKE
(PROPOSAL NO. 1)
At the Special Meeting, stockholders will be asked to approve the
transfer of all or substantially all of the assets of KidsToysPlus.com,
Inc. to Albert R. Timcke, in exchange for which the Company shall receive
$100,000 in cash or marketable securities. A copy of the proposed
Acquisition Agreement is presented in Appendix A to this proxy statement
for review and approval.
Purpose of the Disposition of Assets
Since inception, the Company operated a retail website on the
Internet, specializing in children's products offering information
about children's toys, entertainment products and other related topics
of interest to children and their parents. The Company has not been
successful in obtaining the necessary funding to pursue its objectives
and has exhausted its financial resources.
As reported in the Company's unaudited financials contained in Form
10-QSB for the quarter ending October 31, 2000, and the Company's
unaudited financials for the year ended January 31, 2001, which will be
audited and will be reported in the Company's 10KSB, to be filed on or
about April 30, 2000, the Company had/has the following assets:
As of:
10/31/2000 1/31/2001
Cash and cash equivalents $ 119,647 $ 28,403
Accounts receivable 14,616 15,406
Inventory 72,855 73,801
Prepaid expenses and deposits 16,709 850
Due from the president of the Company 29,189 31,350
Due from an officer of the Company 18,445 16,500
-------- --------
Total current assets 271,461 166,310
Capital assets 25,290 23,044
--------- --------
Total assets $ 296,751 $ 189,354
Currently, the Company is indebted in the amount of $29,902.
Currently the Company has assets in the amount of $189,354. The Company
has not been able to continue with its intended business operations as it
has lost money in every quarter since its inception, has exhausted its
financial resources and has been unable to find a funding source to
continue operations.
In view of the current financial situation of the Company,
Management has determined it is in the best interest of the shareholders
to sell all the assets of the Company in return for cancellation of debt,
assumption of all liabilities and indemnification from any and all
liabilities. The directors of the Company who are not related to Albert
R. Timcke have approved this decision. Selling the assets and reducing
liabilities to zero will situate the Company to pursue a new business
venture.
The pro forma financial statements showing the effect of the sale of
assets of the Company are presented in Appendix B of this proxy
statement.
Interested Parties
Albert R. Timcke, Chairman of the Board of Directors, President and
Secretary directly controls 50.045% of the Company's issued and
outstanding stock, to whom the Company desires to sell its assets in
return for cancellation of debt, assumption of and indemnification from
its liabilities. Further, part of the debts owed by the Company are to
Mr. Timcke.
If the disposition of the assets is approved by the shareholders,
FYI Corporation, a Utah corporation will purchase the 5,565,500 shares of the
5,570,400 shares of common stock owned by Mr. Timcke, for $250,000 CAD cash
(approximately $160,000 USD) and $100,000 USD in cash or marketable
securities, and thus will become the majority shareholder of the Company.
Prior to the effect of this transaction, FYI Corporation was not an affiliate
or shareholder of the Company.
Assets to be Sold
The Company intends on selling all of its assets which are more
fully set forth on the enclosed unaudited financial statements. The
property consists of inventory, an operational internet website, and
retail operations which are on leased premises. The Company did not
engage the services of a disinterested "Special Review Person," or an
independent appraisal of the assets to be sold, rather, the Company has
relied upon the stated values as will be verified by the Company's
auditors. The figures used in this Proxy are being prepared from a
working copy of the financials which will be audited and will be filed
with the Company's 10KSB on or about April 30, 2001. The Company does
not expect the final audited figures to differ substantially, if any,
from those set forth in this Proxy.
Consideration
In return for the assets of the Company, Mr. Timcke will assume any
remaining liabilities and indemnify the Company against any losses or
causes of action from these liabilities, and shall pay to the Company
$100,000 USD in cash or marketable securities. After deduction of the
Company's debts, the Company has total net assets of $159,452. For
purposes of the intended sale of the assets set forth in this Proxy,
Management has discounted the inventory as well as the accounts
receivable, to arrive at the sale price of $100,000 USD.
Business Strategy
Should the shareholders approve this proposal, the Company intends
to seek, investigate, and if warranted, acquire an interest in a business
opportunity. The Company does not propose to restrict its search for a
business opportunity to any particular industry or geographical area and
may, therefore, engage in essentially any business in any industry. The
Company has unrestricted discretion in seeking and participating in a
business opportunity, subject to the availability of such opportunities,
economic conditions and other factors.
The selection of a business opportunity in which to participate is
complex and extremely risky and will be made by management in the
exercise of its business judgment. There is no assurance that the
Company will be able to identify and acquire any business opportunity
which will ultimately prove to be beneficial to the Company and its
shareholders.
The activities of the Company are subject to several significant
risks which arise primarily as a result of the fact that the Company has
no specific business and may acquire or participate in a business
opportunity based on the decision of management which will, in all
probability, act without the consent, vote, or approval of the Company's
shareholders.
Sources of Opportunities
It is anticipated that business opportunities may be available to
the Company from various sources, including its officers and directors,
professional advisers, securities broker-dealers, venture capitalists,
members of the financial community, and others who may present
unsolicited proposals.
The Company will seek a potential business opportunity from all
known sources, but will rely principally on personal contacts of its
officers and directors as well as indirect associations between them and
other business and professional people. Although the Company does not
anticipate engaging professional firms specializing in business
acquisitions or reorganizations, if management deems it in the best
interests of the Company, such firms may be retained. In some instances,
the Company may publish notices or advertisements seeking a potential
business opportunity in financial or trade publications.
Criteria
The Company will not restrict its search to any particular business,
industry or geographical location. The Company may acquire a business
opportunity or enter into a business in any industry and in any stage of
development. The Company may enter into a business or opportunity
involving a "start-up" or new company. The Company may acquire a
business opportunity in various stages of its operation.
In seeking a business venture, the decision of management of the
Company will not be controlled by an attempt to take advantage of an
anticipated or perceived appeal of a specific industry, management group,
or product or industry, but will be based upon the business objective of
seeking long-term capital appreciation in the real value of the Company.
In analyzing prospective business opportunities, management will
consider such matters as the available technical, financial and
managerial resources; working capital and other financial requirements;
the history of operations, if any; prospects for the future; the nature
of present and expected competition; the quality and experience of
management services which may be available and the depth of the
management; the potential for further research, development or
exploration; the potential for growth and expansion; the potential for
profit; the perceived public recognition or acceptance of products,
services, trade or service marks, name identification; and other relevant
factors.
Generally, the Company will analyze all available factors in the
circumstances and make a determination based upon a composite of
available facts, without reliance upon any single factor as controlling.
Methods of Participation of Acquisition
Specific business opportunities will be reviewed and, on the basis
of that review, the legal structure or method of participation deemed by
management to be suitable will be selected. Such structures and methods
may include, but are not limited to, leases, purchase and sale
agreements, licenses, joint ventures, other contractual arrangements, and
may involve a reorganization, merger or consolidation transaction. The
Company may act directly or indirectly through an interest in a
partnership, corporation, or other form of organization.
Procedures
As part of the Company's investigation of business opportunities,
officers and directors may meet personally with management and key
personnel of the firm sponsoring the business opportunity, visit and
inspect material facilities, obtain independent analysis or verification
of certain information provided, check references of management and key
personnel, and conduct other reasonable measures.
The Company will generally request that it be provided with written
materials regarding the business opportunity containing such items as a
description of product, service and company history; management resumes;
financial information; available projections with related assumptions
upon which they are based; an explanation of proprietary products and
services; evidence of existing patents, trademarks or service marks or
rights thereto; present and proposed forms of compensation to management;
a description of transactions between the prospective entity and its
affiliates; relevant analysis of risks and competitive conditions; a
financial plan of operation and estimated capital requirements; and other
information deemed relevant.
Vote and Recommendation
Approval of the disposition of the assets will require the
affirmative vote of the holders of a majority of the issued and
outstanding shares of Common Stock. Abstentions as to this Proposal 1
will be treated as votes against Proposal 1. Broker non-votes, however,
will be treated as unvoted for purposes of determining approval of
Proposal 1 and will not be counted as votes for or against Proposal 1.
Properly executed, unrevoked Proxies will be voted FOR Proposal 1 unless
a vote against Proposal 1 or abstention is specifically indicated in the
Proxy.
The Board of Directors Recommends a Vote "For" the Sale of Assets.
ELECTION OF DIRECTORS
(PROPOSAL NO. 2)
The Company's Bylaws authorize a Board comprised of not less than
two and not more than five members. Shareholders will be asked to elect
two new Directors.
Set forth below for each nominee for election as a Director, based
on information supplied by him, are his name, age as of the date of the
Special Meeting, any presently held positions with the Company, his
principal occupation now and for the past five years, other Directorships
in public companies and his tenure of service with the Company as a
Director. Each shall hold office until the annual meeting of
stockholders in 2001.
Nominees For Election As Directors
Justeene Blankenship, 42 years old. Ms. Blankenship is Chief
Financial Officer of Pacific Management Services, Inc., a mergers and
acquisitions company, with over fifteen years of experience working with
the financial side of publicly-traded corporations, including directing
accountants and attorneys. She has had a diverse background working with
computer hardware, mortgage banking and real estate industries and has
had extensive experience in Initial Public Offerings and assisting with
reverse mergers. Early in her career, Ms. Blankenship ran Blankenship &
Associates, an accounting firm whose main focus was small companies.
Christopher J. Nielsen, 42 years old. Mr. Nielsen is employed as a
sales executive for EIS. EIS is a distributor of manufacturing supplies.
Mr. Nielsen has worked in the sales industry for the past twenty years.
Vote and Recommendation
Each Director is elected by vote of a plurality of the shares of
voting stock present and entitled to vote, in person or by proxy, at the
Special Meeting. Abstentions or broker non-votes as to the election of
directors will not affect the election of the candidates receiving the
plurality of votes. Unless instructed to the contrary, the shares
represented by the proxies will be voted FOR the election of the nominees
named above as directors. Although it is anticipated that each nominee
will be able to serve as a director, should any nominee become
unavailable to serve, the proxies will be voted for such other person or
persons as may be designated by the Company's Board of Directors.
The Board Recommends a Vote "For" The Nominees
CHANGE IN CORPORATE NAME
(PROPOSAL NO. 3)
Due to the evolving nature of the Company's business and as part of
the Acquisition Agreement (see Proposal 1) where the Company has agreed
to transfer the name "KidsToysPlus.com, Inc.", the Board of Directors has
determined that it is the best interests of the Company to change its
corporate name to Mikim, Inc. The Board of Directors has approved a
change in the Company's corporate name to Mikim, Inc. Subject to
stockholder approval, Mikim, Inc. will be the name of the Company. The
name change will be effected by an amendment to the Company's Articles of
Incorporation.
Vote and Recommendation
Approval of the change in corporate name will require the
affirmative vote of the holders of a majority of the issued and
outstanding shares of Common Stock. Abstentions as to this Proposal 3
will be treated as votes against Proposal 3. Broker non-votes, however,
will be treated as unvoted for purposes of determining approval of
Proposal 3 and will not be counted as votes for or against Proposal 3.
Properly executed, unrevoked Proxies will be voted FOR Proposal 3 unless
a vote against Proposal 3 or abstention is specifically indicated in the
Proxy.
The Board of Directors Recommends a Vote "For" the Corporate Name Change.
CONSULTING AGREEMENT
(PROPOSAL NO. 4)
FYI Corporation has agreed to assist the Company in its
reorganization as explained in this Proxy, including the arrangement of
and payment for all legal services necessary to effectuate the
transactions required by this Proxy, seeking out merger, acquisition, and
business opportunities, investigating these opportunities, and if
warranted, assisting and consulting with the Company in order that it may
acquire an interest in such business opportunities. In exchange for its
services and its assumption of legal fees, FYI Corporation has requested
that the Company enter into Consulting Agreement with FYI Corporation,
under which FYI Corporation would be paid $100,000 USD in cash or marketable
securities. A copy of the Consulting Agreement is presented in Appendix
C to this Proxy.
Interested Parties
If Proposal 1, above, is approved, FYI Corporation will own 50.001%
of the Company's issued and outstanding stock, and thus will become the
majority shareholder of the Company. Prior to the effect of this
transaction, FYI Corporation was not an affiliate or shareholder of the
Company. FYI Corporation will therefore be an interested party to the
Consulting Agreement, and accordingly will vote its shares in accordance
with the majority of the remaining votes or proxies received by the
Company on this Proposal.
Vote and Recommendation
Approval of the Consulting Agreement will require the affirmative
vote of the holders of a majority of the issued and outstanding shares of
Common Stock. Abstentions as to this Proposal 4 will be treated as votes
against Proposal 4. Broker non-votes, however, will be treated as
unvoted for purposes of determining approval of Proposal 4 and will not
be counted as votes for or against Proposal 4. Properly executed,
unrevoked Proxies will be voted FOR Proposal 4 unless a vote against
Proposal 4 or abstention is specifically indicated in the Proxy.
The Board of Directors Recommends a Vote "For" the approval of the
Consulting Agreement.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The table on the following page sets forth as of March 26, 2001, the
number and percentage of the outstanding shares of Common Stock which,
according to the information supplied to the Company, were beneficially
owned by (i) each person who is currently a director of the Company, (ii)
each Named Executive Officer (as defined below), (iii) all current
directors and executive officers of the Company as a group and (iv) each
person who, to the knowledge of the Company, is the beneficial owner of
more than 5% of the outstanding Common Stock. Except as otherwise
indicated, the persons named in the table have sole voting and
dispositive power with respect to all shares beneficially owned, subject
to community property laws where applicable.
_________________________________________________________________
TITLE OF NAME AND ADDRESS OF AMOUNT PERCENT OF
CLASS BENEFICIAL OWNER CLASS
____________________________________________________________________
Common Stock Albert R Timcke, 5,570,400 50.045%
Director, President
1703 Valley View Drive
Courtney, B.C.
V9N 9A7 Canada
EXECUTIVE OFFICERS
All executive officers are elected by the Board and hold office
until the next Annual Meeting of stockholders and until their successors
are elected and qualify.
EXECUTIVE COMPENSATION
Annual Compensation
The following table sets forth certain information regarding the
annual and long-term compensation for services in all capacities to the
Company for the year ended January 31, 2001 of those persons who were
either (i) the chief executive officer of the Company during the last
completed fiscal year or (ii) one of the other four most highly
compensated executive officers of the Company as of the end of the last
completed fiscal year whose annual salary and bonuses exceeded $100,000
(collectively, the "Named Executive Officers").
Summary Compensation Table
- -----------------------------------------------------------------------
Name and Fiscal Year Long Term All Other
Principal ended January Compensation Compensation Compensation(1)
Position 31, 2001 ----------------------------------- ($)
Salary Bonus Other Annual Securities
($) ($) Compensation($) Under Options
(#)
- ---------------------------------------------------------------------------
Albert R Timcke $ 80,000 Nil Nil Nil Nil
Brian C. Doutaz 18,000 Nil Nil Nil Nil
(1) These figures represent compensation paid to Mr. Timcke
and Mr. Doutaz pursuant to Consulting Agreements between the Company
and said individuals dated April 1, 1999.
Stock Options and Warrants
No stock options were issued to any of the Named Executive Officers
during the year ended January 31, 2001, and all stock options and
warrants that were outstanding have been cancelled.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following discussion includes certain relationships and related
transactions which occurred during the Company's fiscal year ended
January 31, 2001.
None.
RESTRICTION ON TRANSFER OF CONTROL SHARES
If the disposition of the assets is approved by the shareholders,
FYI Corporation will purchase the 5,565,500 shares of the 5,570,400 shares of
common stock owned by Mr. Timcke for $250,000 CAD (approximately $160,000 USD)
and thus become the majority shareholder of the Company. Following the effect
of this transaction, FYI Corporation,will be an affiliate and controlling
shareholder of a "shell" corporation with no assets and no specific business
plan or purpose, other than to engage in a merger or acquisition with an
unidentified company or companies, or other entity or person. It is the
position of the SEC, as set forth in its January 2000 letter to Ken Worm of the
NASD, that FYI Corporation and any of its transferees, are "underwriters" of the
5,565,500 shares, and accordingly these shares can only be resold through
registration under the Securities Act. Similarly, it is the SEC's
position that these shares are unavailable for resale pursuant to Rule 144.
OTHER INFORMATION
Section 16(a) of the Securities Exchange Act of 1934 requires
officers and Directors of the Company and persons who own more than ten
percent of a registered class of the Company's equity securities to file
reports of ownership and changes in their ownership with the Securities
and Exchange Commission, and forward copies of such filings to the
Company. Based on the copies of filings received by the Company, during
the most recent fiscal year, the directors, officers, and beneficial
owners of more than ten percent of the equity securities of the Company
registered pursuant to Section 12 of the Exchange Act, have filed on a
timely basis, all required Forms 3, 4, and 5 and any amendments thereto.
FINANCIAL INFORMATION
The Company's: (1) audited financial statements for the year ended
January 31, 2000, as presented in the Company's 10-KSB for the period
ended January 31, 2000, (2) unaudited financials statements as of October
31, 2000, as presented in the Company's 10-QSB for the quarter ended
October 31, 2000, as filed with the Securities and Exchange Commission,
(3) unaudited financial statements for the year ended January 31, 2001,
which will be audited and filed with the SEC as part of the Company's 10-
KSB on or about April 30, 2001, and (4) the Company's pro forma financial
statements showing the effect of the transactions referenced herein on
the Company's financial statements, are presented in Appendix B of this
proxy statement.
FORM 10-KSB
The Company will provide without charge a copy of the Company's most
recent report on Form 10-KSB for the periods ending January 31, 2000 and
January 31, 2001, as filed and as to be filed with the Securities and
Exchange Commission, upon written request to the Company's secretary at
KidsToysPlus.com, Inc., 2924 Cliffe Avenue, Courtenay, British Columbia,
CanadaV9N 2L7.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of
the Company knows of no other matters which may come before the Special
Meeting. However, if any matters other than those referred to herein
should be presented properly for consideration and action at the Special
Meeting, or any adjournment or postponement thereof, the proxies will be
voted with respect thereto in accordance with the best judgment and in
the discretion of the proxy holders.
Please sign the enclosed proxy and return it in the enclosed return
envelope.
Dated:
___________________, 2001
Appendix A
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (hereinafter referred to as this
"Agreement") is entered into this ___day of April, 2001, by and between
FYI CORPORATION, a Utah corporation (hereinafter "FYI");
KIDSTOYSPLUS.COM, INC., a Nevada corporation, and ALBERT R. TIMCKE, based
on the following premises.
Premises
1. Timcke owns, directly or indirectly, 5,570,400 shares of
common stock (the "Stock") of KidsToysPlus.com, Inc., par value
$0.001 per share, representing approximately 50.045% of the issued and
outstanding stock of KidsToysPlus.com, Inc.
2. Timcke desires to acquire from KidsToysPlus.com all of its
assets and liabilities for the amount of $100,000 USD in cash or
marketable securities.
3. FYI desires to acquire the 5,565,500 shares of the 5,570,400 shares
of common stock of KidsToysPlus.com, Inc. referenced above, all pursuant
to the terms and conditions of this Agreement.
Agreement
NOW, THEREFORE, based on the stated premises, which are incorporated
herein by reference, and for and in consideration of the mutual covenants
and agreements hereinafter set forth and the mutual benefit to the
parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
ACQUISITION OF ASSETS
Section 1.01 Acquisition of Stock by FYI. On the terms and
conditions contained in this Agreement, Timcke, shall sell, assign,
transfer, convey, set over, and deliver, or shall otherwise make
available to FYI, and FYI shall purchase, 5,565,500 shares of common
stock of KidsToysPlus.com, Inc.
Section 1.02 Payment of FYI. The purchase price to be paid by FYI
to Timcke for the Stock shall be $250,000 CAD (approximately $160,000 USD),
of which $5,000 USD has been paid, the balance payable at the closing in cash or
immediately available funds by wire transfer, certified official bank check, or
other means of payment acceptable to Timcke.
Section 1.03 Closing. The closing (the "closing") of the
transactions contemplated by this Agreement shall be immediately
following the shareholder's meeting set forth in Section 4.06, held on
such a date (the "Closing Date") and at such time as the parties may
agree, but, if not previously closed, on April 30, 2001 at 10:00 a.m.
MST. Such Closing shall take place at the offices of Michael L.
Labertew, Attorney at Law, or at such other location as may be mutually
acceptable to the parties hereto and their respective legal counsel.
Section 1.04 Closing Events.
At the Closing, the following shall be executed, acknowledged, and
delivered to FYI:
(1) Certificates representing 5,565,500 share of common stock of
KidsToysPlus.com, Inc., properly endorsed for transfer with signatures
guaranteed.
(2) Such other bills of sale, assignments, and other documents and
instruments of conveyance and transfer, all in form and substance
satisfactory to FYI and its counsel, necessary to vest marketable
title in FYI to the shares of KidsToysPlus.com, Inc. being conveyed
hereunder pursuant to this Agreement.
(3) All certificates, opinions, schedules, agreements, resolutions, or
other instruments required by this Agreement to be so delivered at
or prior to the Closing.
(4) Such other items as may be reasonably requested by FYI and its legal
counsel to effectuate or evidence the transactions contemplated
hereby.
At the Closing, FYI shall deliver to Timcke payment of the purchase price
in accordance with section 1.02 or, if paid into escrow, said funds shall
be released from Escrow to Timcke.
Section 1.05 Transfer of KidsToysPlus.com, Inc. Assets and
Assumption of Liabilities
Transfer of Assets. Contemporaneously with or prior to the Closing,
KidsToysPlus.com, Inc. shall sell, assign, transfer, convey, set over,
and deliver to Timcke, all of KidsToysPlus.com, Inc.'s business,
operations, and assets, including, without limitation, all interests in
real and tangible personal property generally described in
KidsToysPlus.com, Inc.'s Annual Report on form 10-KSB for the fiscal year
ended January 31, 2001 (the "2000 10-KSB"); its equipment, inventory, and
fixtures; all tangible rights and property, contracts, and agreements to
which it is a party or by which it benefits; all of Seller's goodwill and
going concern value, including the rights to its name and any trade
names, service marks or copyrights; and all other rights, interests,
assets, and properties owned by KidsToysPlus.com, Inc. or used in
connection with its business and operations.
Purchase Price. In consideration of the rights, interests, assets, and
properties transferred to Timcke as set forth in section 1.05(a):
Timcke shall pay to KidsToysPlus.com, Inc. $100,000 USD in cash or
marketable securities having a market value as of the Closing Date of at
least $100,000 USD.
Timcke shall assume and agree to discharge all liabilities and
obligations of KidsToysPlus.com, Inc. existing on the Closing Date or
applicable to the assets conveyed to Timcke hereunder or attributable to
periods (or portions thereof) ending on or prior to the Closing Date
together with all liabilities and obligations to be paid or performed
after the Closing Date under the contracts and other agreements relating
to the assets being conveyed to Timcke hereunder; and
Timcke shall indemnify and hold harmless KidsToysPlus.com, Inc. from and
against any and all losses, costs, obligations, liabilities, damages,
expenses or other charges and any and all expenses incurred in connection
with investigating, defending or asserting any claim, action, suit or
proceeding incident to any matter indemnified against hereunder
(including, without limitation, court filing fees, court costs,
arbitration fees or costs, witness fees, and reasonable fees and
disbursements of legal counsel, investigators, expert witnesses,
accountants and other professionals) incurred by KidsToysPlus.com, Inc.
in connection with or arising from the ownership, occupancy, operation,
use or control of any of the assets transferred to Timcke by
KidsToysPlus.com, Inc. pursuant hereto.
Closing Events. At the Closing:
(i) KidsToysPlus.com, Inc. shall execute, acknowledge,
and deliver to Timcke (or shall cause to be executed,
acknowledged, and delivered) (A) the deeds, bills of
sale, assignments, and/or other documents and
instruments of conveyance and transfer, all in form
and substance satisfactory to Timcke and its counsel,
necessary to vest marketable title in Timcke to all
the rights, interests, assets, and properties
acquired by Timcke pursuant to this Agreement; (B)
originals or copies of all of KidsToysPlus.com,
Inc.'s agreements, contracts, and commitments assumed
by Timcke hereunder; (C) originals of all copyrights,
patents, patent applications, trademarks, or
registrations; (D) all certificates, opinions,
schedules, agreements, resolutions, or other
instruments required by this Agreement to be so
delivered at or prior to the Closing; and (F) such
other items as may be reasonably requested by Timcke
and its legal counsel to effectuate or evidence the
transactions contemplated hereby.
(ii) Timcke shall deliver to KidsToysPlus.com, Inc. (A)
assumptions evidencing the obligation of Timcke to
assume and timely pay and discharge the obligations
to be assumed by it hereunder; (B) all certificates,
opinions, schedules, agreements, resolutions, or
other instruments required by this Agreement to be so
delivered at or prior to the Closing; and (C) such
other items as may be reasonably requested by FYI and
its legal counsel to effectuate or evidence the
transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF KIDSTOYSPLUS.COM, INC. AND TIMCKE
As an inducement to, and to obtain the reliance of FYI, Timcke and
KidsToysPlus.com, Inc., jointly and severally represent, covenant, and
warrant to FYI as follows:
Section 2.01 Organization. KidsToysPlus.com, Inc. is a
corporation validly existing and in good standing under the laws of the
state of Nevada and has power and is duly authorized, qualified,
franchised, and licensed under all applicable laws, regulations,
ordinances, and orders of public authorities to own all of its properties
and assets and to carry on its business in all material respects as it is
now being conducted. There is no jurisdiction in which,
KidsToysPlus.com, Inc., is not so qualified in which the character and
location of the assets owned by it or the nature of the business
transacted by it requires qualification, except where failure to do so
would not have a material adverse effect on its business or properties.
The execution and delivery of this Agreement, and any other agreement and
instrument to be delivered in connection herewith, do not, and the
consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not, violate any provision
KidsToysPlus.com, Inc.'s articles of incorporation or bylaws.
Section 2.02 Approval of Agreement. The board of directors of
KidsToysPlus.com, Inc. has authorized the execution and delivery of this
Agreement, and has approved the consummation of the transactions
contemplated hereby. Subject to the approval of the transactions
contemplated by this Agreement by the holders of a majority of the issued
and outstanding stock of KidsToysPlus.com, Inc., the execution, delivery
and performance of this Agreement by Timcke and KidsToysPlus.com, Inc.,
and the consummation of the transactions contemplated hereby do not
require any further authorization or consent of Timcke or
KidsToysPlus.com. This Agreement is the legal, valid, and binding
agreement of Timcke and KidsToysPlus.com, Inc., enforceable between the
parties in accordance with its terms.
Section 2.03 KidsToysPlus.com, Inc. The assets being transferred
by KidsToysPlus.com, Inc. to Timcke as described in Section 1.05(a)
constitute all the assets, tangible and intangible, owned by
KidsToysPlus.com, Inc. or in which KidsToysPlus.com, Inc. has an
interest.
Section 2.04 Stock. The stock transferred to FYI by Timcke
pursuant to this Agreement represents all of the stock of
KidsToysPlus.com, Inc. owned or held of record by Timcke or in which
Timcke has an interest except 4,900 shares.
Section 2.05 Capitalization. There are no treasury shares or
shares reserved for issuance upon the exercise of options, warrants or
other securities or the exercise of conversion or other rights. There
are no dividends or other amounts due or payable with respect to any of
the shares of FYI stock of KidsToysPlus.com, Inc. There are no
agreements, arrangements, options, warrants, calls rights, or commitments
of any character relating to the issuance, sale, purchase or redemption
of any shares of stock of KidsToysPlus.com, Inc. All of the outstanding
shares of FYI stock are validly issued, fully paid and non-assessable and
not issued in violation of the pre-emptive or other right of any person.
Section 2.06 Title to Property. KidsToysPlus.com, Inc. has good
and marketable title to all of the assets being conveyed to Timcke
hereunder and the stock being conveyed to FYI hereunder is free and clear
of all liens, pledges, charges, or encumbrances. Upon delivery to FYI on
the Closing Date of the instruments of transfer contemplated by section
1.04(a), Timcke will thereby transfer to FYI good and marketable title to
the KidsToysPlus.com, Inc. stock being conveyed, subject to no
encumbrances.
Section 2.07 Books and Records. The books and records,
financial and otherwise, of KidsToysPlus.com, Inc. are in all material
respects complete and correct and have been made and maintained in
accordance with sound business and bookkeeping practices and, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of KidsToysPlus.com, Inc. KidsToysPlus.com,
Inc. has maintained a system of internal accounting controls sufficient
to provide reasonable assurances that (a) transactions have been and are
executed in accordance with management's general or specific
authorization; (b) transactions are recorded as necessary to permit the
preparation of financial statements in conformity with generally accepted
accounting principles or any other criteria applicable to such statements
and to maintain accountability for assets; (c) access to assets is
permitted only in accordance with management's general or specific
authorization; and (d) the recorded accountability for assets is compared
with the existing assets at reasonable intervals, and appropriate action
is taken with respect to any differences.
Section 2.08 Reports; Financial Statements, Liabilities. For
the two calendar years preceding the date of this Agreement,
KidsToysPlus.com, Inc. and any subsidiaries have filed all forms,
reports, statements and other documents required to be filed with (a) the
Securities and Exchange Commission (the "SEC") including, (i) all Annual
Reports on Form 10-K, (ii) all Quarterly Reports on Form 10-Q, (iii) all
proxy, information or consent solicitation statements relating to
meetings of stockholders or consents in lieu thereof (whether annual or
special), (iv) all Current Reports on Form 8-K and (v) all other reports,
schedules, registration statements or other documents, and (b) any
applicable state or provincial securities authorities and all forms,
reports, statements and other documents required to be filed with any
other applicable federal, state, or provincial regulatory authorities,
except where the failure to file any such forms, reports, statements or
other documents would not have a material adverse effect on
KidsToysPlus.com, Inc. or its business or properties (all such forms,
reports, statements and other documents in clauses (a) and (b) of this
Section 2.12 being referred to herein, collectively, as the
"KidsToysPlus.com, Inc. Reports"). The KidsToysPlus.com, Inc. Reports,
including all KidsToysPlus.com, Inc. Reports filed after the date of this
Agreement and prior to the Closing, were or will be prepared in
accordance with the requirements of applicable law (including the
Exchange Act, and the rules and regulations of the SEC thereunder), and
did not at the time they were filed, or will not at the time they are
filed, contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which
they are made, not misleading. KidsToysPlus.com, Inc. did not have, as
of the date of the most recent financial statements included in such
KidsToysPlus.com, Inc. Reports, except as and to the extent reflected or
reserved against therein, any liabilities or obligations (absolute or
contingent) which should be reflected in a balance sheet or the notes
thereto prepared in accordance with generally accepted accounting
principles, and all assets reflected therein present fairly the assets of
KidsToysPlus.com, Inc. in accordance with generally accepted accounting
principles. After giving effect to the transfer of assets to Timcke for
the consideration, including the assumption of liabilities and
obligations provided herein, KidsToysPlus.com, Inc. will have no
liabilities or obligations, absolute or contingent, liquidated or
unliquidated.
Section 2.09 Shareholders' List. The stockholders' list of
KidsToysPlus.com, Inc. to be delivered to FYI pursuant to Section 4.01
hereof is a true and accurate copy thereof as of the date indicated
thereon. The transfer agent (the "Transfer Agent") of KidsToysPlus.com,
Inc. retains in safekeeping all certificates that have been or should be
canceled on the registration of transfer thereof. All of such canceled
certificates have on their face in conspicuous permanent ink or
perforations the word "canceled." All stock certificates are accounted
for as either canceled and in the possession of the Transfer Agent,
outstanding, or unissued. To the best of KidsToysPlus.com, Inc.'s
knowledge, except for securities broker-dealers, clearing agencies,
securities depositories, banks, or other securities industry entities
registered with the SEC whose regular business consists of holding
securities beneficially owned by others, each stockholder listed on such
stockholders' list is the beneficial owner thereof, and such stockholder
is not a party to, and such stockholder's stock is not subject to, any
agreement, understanding, power-of-attorney, or other arrangement of any
kind with any person who is an affiliate of KidsToysPlus.com, Inc. or
acting in concert with such affiliate under which such affiliate or
person acting in concert with such affiliate has or shares investment or
voting power over such securities.
Section 2.10 Compliance with Securities Laws, Rules, and
Regulations. All securities of KidsToysPlus.com, Inc. issued since its
inception, consisting solely of common voting stock, have been issued
pursuant to and in compliance with applicable federal and state laws,
rules, and regulations; specifically, all offers and sales of shares of
common voting stock were made pursuant to exemptions from the
registration requirements of Section 5 of the Securities Act of 1933, as
amended (the "Securities Act"), and pursuant to available exemptions
provided by applicable state securities laws. Further, KidsToysPlus.com,
Inc. has made all the required filings with any federal or state
regulatory agency regarding the offer and sale of all issued and
outstanding shares of common voting stock.
Section 2.11 Certain Business Practices. None of
KidsToysPlus.com, Inc., or any directors, officers, agents or employees
of KidsToysPlus.com, Inc. has used any funds for unlawful contributions,
gifts, entertainment or other expenses, relating to any unlawful
initiating or maintaining of a trading market in KidsToysPlus.com, Inc.'s
securities, or any political activity, made any unlawful payment to
foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns or violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended, or made any other
unlawful payment.
Section 2.12 Public Trading Activity. Neither KidsToysPlus.com,
Inc. nor, to the best of KidsToysPlus.com, Inc.'s knowledge, any other
person, has at any time during the past year or currently has any
agreement, plan, or arrangement to at any time in the future (a) submit
or publish or cause to be submitted or published, directly or indirectly,
any quotation at any specific or minimum prices for the common stock of
KidsToysPlus.com, Inc. on behalf of KidsToysPlus.com, Inc. or any of its
affiliates; or (b) provide to any securities broker-dealer any incentive
or inducement, financial or otherwise, to publish quotations for the
common stock of KidsToysPlus.com, Inc. at any specific or minimum prices
or amounts or to execute any specific transactions in such common stock,
other than usual and customary commissions and markups.
Section 2.13 Blue Sky. To the extent applicable,
KidsToysPlus.com, Inc. has complied with the securities laws of each and
every jurisdiction in which a shareholder resided as of the date such
shareholder purchased securities from KidsToysPlus.com, Inc.
Section 2.14 Litigation and Proceedings. There are no actions,
suits, or proceedings pending or, to the knowledge of KidsToysPlus.com,
Inc., threatened by or against, or affecting KidsToysPlus.com, Inc. or
its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before
any arbitrator of any kind; KidsToysPlus.com, Inc. does not have any
knowledge of any default on its part with respect to any judgment, order,
writ, injunction, decree, award, rule, or regulation of any court,
arbitrator, or governmental agency or instrumentality.
Section 2.15 Material Contract Defaults. KidsToysPlus.com, Inc.
is not in default in any respect under the terms of any outstanding
contract, agreement, lease, or other commitment which is material to the
business, operations, properties, assets, or condition of
KidsToysPlus.com, Inc., and there is no event of default or other event
which, with notice or lapse of time or both, would constitute a default
in any material respect under any such contract, agreement, lease, or
other commitment in respect of which KidsToysPlus.com, Inc. has not taken
adequate steps to prevent such a default from occurring.
Section 2.16 Taxes. All federal, state, local, and foreign tax
returns and tax reports required to be filed by or on behalf of
KidsToysPlus.com, Inc. have been filed with the appropriate governmental
agency and all jurisdictions in which such reports are required to be
filed and all taxes which have become due pursuant to such tax returns or
to any assessment which has become payable have been paid.
Section 2.17 Third-Party Consents. None of the contracts
agreements, leases, or other commitments, written or oral, to which
KidsToysPlus.com, Inc. is a party or to which any of its properties or
assets are subject require the consent of the other party to consummate
the transactions herein contemplated, except where the failure to obtain
such consent would not have a material adverse effect on the assets
transferred pursuant hereto.
Section 2.18 No Conflict With Other Instruments. The execution
of this Agreement and the consummation of the transactions contemplated
by this Agreement will not result in the breach of any term or provision
of, or constitute an event of default under, any material indenture,
mortgage, deed of trust, or other material contract, agreement, or
instrument to which Timcke or KidsToysPlus.com, Inc. is a party or to
which any of their respective properties or operations are subject.
Section 2.19 Compliance With Laws and Regulations.
KidsToysPlus.com, Inc. has complied with all applicable statutes and
regulations of any federal, state, or other governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets, or
condition of KidsToysPlus.com, Inc. or except to the extent that
noncompliance would not result in the incurrence of any material
liability for KidsToysPlus.com, Inc.
Section 2.20 Minute Book. The minute book of KidsToysPlus.com,
Inc. contains, and will contain at the Closing Date, evidence of the due
election and incumbency of the board of directors and officers of
KidsToysPlus.com, Inc. executing this Agreement or any document,
certificate, or other instrument executed in order to consummate the
transactions herein contemplated together with an accurate and complete
record of the proceeds of all meetings of directors, committees thereof,
or stockholders and all written consents in lieu thereof.
Section 2.21 Information. The information concerning Timcke and
KidsToysPlus.com, Inc., set forth in this Agreement, in the exhibits
hereto, and in the schedules is complete and accurate in all material
respects and does not contain any untrue statement of a material respect
and does not contain any untrue statement of a material fact or omit to
state a material fact required to make the statements made, in light of
the circumstances under which they were made, not misleading.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF FYI
As an inducement to, and to obtain the reliance of Timcke and
KidsToysPlus.com, Inc., FYI represents, covenants and warrants as
follows:
Section 3.01 Organization. FYI is a corporation validly
existing and in good standing under the laws of the state of Utah and has
the corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders
of public authorities to own all of its properties and assets and to
carry on its business in all material respects as it is now being
conducted and is contemplated under the provisions of this Agreement.
There is no jurisdiction in which FYI is not so qualified in which the
character and location of the assets owned by it, or the nature of the
business transacted by it, requires qualification, except where failure
to do so would not have a material adverse effect on the business or
properties of FYI. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not, violate any
provision of FYI's articles of incorporation or bylaws.
Section 3.02 Approval of Agreement. The board of directors of
FYI has authorized the execution and delivery of this Agreement by FYI
and has approved the consummation of the transactions contemplated
hereby. The execution, delivery, and performance of this Agreement by
FYI and the consummation of the transactions contemplated hereby do not
require any further authorization or consent of FYI. This Agreement is
the legal, valid and binding agreement of FYI enforceable between the
parties in accordance with its terms.
Section 3.03 Investment Representations.
(a) FYI is an "accredited investor" as that term is defined
under rule 501 of regulation D promulgated under the
Securities Act.
(b) FYI acknowledges that neither the SEC nor the securities
commission of any state or other federal agency has made
any determination as to the merits of purchasing the
Stock. FYI understands that the offer of the Stock has
not been registered with or passed on by any securities
regulatory agency, that the representations and warranties
set forth herein provides a necessary prerequisite for
determining whether FYI is qualified to make an investment
in such securities and is a basis for KidsToysPlus.com,
Inc. and Timcke to rely on exemptions from registration
provided in section 4(1) of the Securities Act and
preemption from the registration or qualification
requirements (other than notice filing and fee provisions)
of applicable state laws under the National Securities
Markets Improvement Act of 1996;
(c) FYI acknowledges that an investment in KidsToysPlus.com,
Inc. involves a high degree of risk. FYI acknowledges
that, except as specifically set forth in this Agreement,
no representations or warranties have been made to FYI, or
to its advisors, by KidsToysPlus.com, Inc. or Timcke, or
by any person acting on behalf of them, with respect to
their business, or any other aspects or consequences of
the purchase of the Stock and/or an investment in
KidsToysPlus.com, Inc., and that FYI has not relied upon
any information concerning the offering, written or oral,
other than that contained in this Agreement.
(d) FYI has been provided with all materials and information
requested by FYI or its representatives, including any
information requested to verify any information furnished,
and FYI has been provided the opportunity for direct
communication with KidsToysPlus.com, Inc. and its
representatives regarding the purchase made hereby,
including the opportunity to ask questions of and receive
answers from executive officers and directors of
KidsToysPlus.com, Inc.
(e) All information which FYI has provided to
KidsToysPlus.com, Inc. or its agents or representatives
concerning FYI's suitability to invest in
KidsToysPlus.com, Inc. is complete, accurate, and correct
as of the date of the signature on the last page of this
Agreement.
(f) FYI was at no time solicited by any leaflet, public
promotional meeting, circular, newspaper or magazine
article, radio or television advertisement, or any other
form of general advertising or solicitation in connection
with the offer, sale, or purchase of the Stock through
this Agreement.
(g) FYI has adequate means of providing for its current needs
and possible personal contingencies and has no need now,
and anticipates no need in the foreseeable future, to sell
any of the Stock. FYI is able to bear the economic risks
of this investment, and, consequently, without limiting
the generality of the foregoing, is able to hold the Stock
for an indefinite period of time, and has a sufficient net
worth to sustain a loss of the entire investment, in the
event such a loss should occur.
(h) FYI has no present intention of dividing any of the Stock
or the rights under this Agreement with others or of
reselling or otherwise disposing of all or any portion of
such securities.
(i) In connection with the acquisition by FYI of the Stock,
FYI represents that such securities are being acquired
without a view to, or for, resale in connection with any
distribution of such securities or any interest therein
without registration or other compliance under the
Securities Act and that FYI has no direct or indirect
participation in any such undertaking or in the
underwriting of such an undertaking.
(j) FYI understands that the Stock has not been registered,
but is being acquired by reason of a specific exemption
under the Securities Act as well as under certain state
statutes for transactions by any person other than an
issuer, underwriter or dealer and that any disposition of
such securities may, under certain circumstances, be
inconsistent with this exemption and may make FYI an
"underwriter" within the meaning of the Securities Act.
(k) FYI acknowledges that the Stock must be held and may not
be sold, transferred, or otherwise disposed of for value
unless subsequently registered under the Securities Act or
in reliance on exemptions from registration under the
Securities Act and applicable state securities laws. FYI
understands that such an exemption may not be available
and, in such case, FYI would not be able to resell such
securities. KidsToysPlus.com, Inc. is under no obligation
to register the Stock under the Securities Act or under
section 12 of the Securities Exchange Act of 1934, as
amended; if rule 144 is available, and no assurance is
given that it will be, initially only routine sales of
such securities in limited amounts can be made in reliance
on rule 144 in accordance with the terms and conditions of
that rule; in the event rule 144 is not available,
compliance with regulation A or some other exemption may
be required before FYI can sell, transfer, or otherwise
dispose of such securities without registration under the
Securities Act; and the certificates representing such
securities will bear a legend so restricting the sale of
such securities.
Section 3.05 Information. The information concerning FYI set
forth in this Agreement and in the exhibits hereto is complete and
accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact required to
make the statements made, in light of the circumstances under which they
were made, not misleading.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Deliveries. Within five (5) days after the date of
this Agreement, KidsToysPlus.com, Inc. shall deliver to FYI, at FYI's
offices, originals or true and correct copies of: (a) all written
contracts relating to stockholders, directors, officers, employees, and
agents, and any attorneys, accounts, and other professional or agent
engaged by KidsToysPlus.com, Inc.; (b) the current stockholder list,
showing each stockholder's name, address, number of shares owned, and
denomination and date of each certificate, all as of a date within five
(5) days of the date of this Agreement; (c) a transaction register from
KidsToysPlus.com, Inc.'s Transfer Agent setting forth the details of all
issuances of common stock certificates, indicating in the case of each
certificate the date of issuance, certificate number, number of shares,
registered owner, and whether such certificate constitutes an original
issuance or the transfer of outstanding stock, indicating, in the case of
transfers, the number of the certificate from which such stock was
transferred; and (d) all filings, notices, or other communications with
the SEC, the NASD, any state securities commission, state corporation
commission, or similar agency, and any non-United States securities
commission, non-United States corporations commission, Canadian province,
or similar authority, together with copies of all communications received
by KidsToysPlus.com, Inc.
Section 4.02 Access to Properties and Records. Until the
Closing, KidsToysPlus.com, Inc. will afford to the officers and
authorized representatives of FYI full access to its properties, books,
and records in order that FYI may have full opportunity to make such
reasonable investigation as it shall desire to make of the affairs of
KidsToysPlus.com, Inc., and will furnish FYI with such additional
financial and operating data and other information as to its business and
properties as FYI shall from time to time reasonably request. Any such
investigation by FYI shall be conducted in such a manner as not to
interfere unreasonably with the operations of KidsToysPlus.com, Inc. and
all information obtained in connection with such investigation shall be
treated as confidential in accordance with section 7.01.
Section 4.03 Third-Party Consents. FYI, KidsToysPlus.com, Inc.,
and Timcke agree to cooperate with each other in order to obtain required
third-party consents to this Agreement and the transactions herein
contemplated.
Section 4.04 Action Prior to Closing. From and after the date
of this Agreement until the Closing Date and except as set forth in the
schedules or as permitted or contemplated by this Agreement, each party
hereto, will:
(a) Carry on its business in substantially the same manner as
it has heretofore;
(b) Maintain and keep its assets in as good repair and
condition as at present, except for depreciation due to
ordinary wear and tear and damage due to casualty;
(c) Maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by
it;
(d) Perform in all material respects all of its obligations
under material contracts, leases, and instruments relating
to or affecting its assets, properties, and business;
(e) Use its best efforts to maintain and preserve its business
organization intact, to retain its key employees, and to
maintain its relationship with its material suppliers and
customers; and
(f) Fully comply with and perform in all material respects all
obligations and duties imposed upon it by all federal and
state laws and all rules, regulations, and orders imposed
by federal or state governmental authorities.
Section 4.05 Indemnification on Transfer of Stock. FYI agrees
to indemnify and hold harmless Timcke and KidsToysPlus.com, Inc. from and
against any and all loss, cost, liability, penalty, damages or other
charges and any and all expenses incurred in connection with
investigating or defending any claim, action or proceeding incident to
any matter indemnified against hereunder (including, with out limitation,
court costs and reasonable attorneys' fees) incurred by any such person
in connection with or arising from the offer or sale by FYI or any
affiliate thereof of the Stock acquired by FYI pursuant to this Agreement
in violation of the Securities Act, the Securities Exchange Act, or any
applicable state securities laws.
Section 4.06 Stockholder Meeting. Within ten (10) days after
the mailing of the proxy statement pursuant to Section 4.07(a) hereof,
KidsToysPlus.com, Inc. shall, at a meeting of its stockholders duly
called by its board of directors to be held as soon as practicable,
present for the authorization and approval of its stockholders, in
accordance with its articles of incorporation and bylaws, the applicable
provisions of the laws of the state of Nevada and all applicable federal
and state securities laws, this Agreement, the transactions contemplated
hereby, including the transfer of all or substantially all of the assets
of KidsToysPlus.com, Inc. to Timcke pursuant to section 1.05, the
amendment of the articles of incorporation of KidsToysPlus.com, Inc., the
change of the name of KidsToysPlus.com, Inc. to such name as may be
acceptable to FYI, and the election as directors of those persons
nominated by FYI.
Section 4.07 Proxy Statement.
(a) The parties shall prepare and file with the SEC a proxy
statement for stockholders of KidsToysPlus.com, Inc. in
connection with the transactions contemplated by this
Agreement (the "Proxy Statement"). The parties shall use
their best efforts to obtain the SEC's approval of the
Proxy Statement, if reviewed by the SEC, as promptly as
practicable. KidsToysPlus.com, Inc. and FYI shall furnish
to the other all information concerning it and the holders
of their stock as the other may reasonably request in
connection with such actions. Within ten (10) days after
the expiration of the waiting period set forth in Rule
14a-6 or, if the preliminary proxy statement is reviewed
by the SEC, the resolution of all comments of the SEC,
whichever is later, KidsToysPlus.com, Inc. shall mail the
Proxy Statement to its stockholders entitled to notice of
and to vote at the stockholders meeting. The Proxy
Statement shall include the recommendation of
KidsToysPlus.com, Inc.'s board of directors in favor of
the matters set forth herein, subject to the fiduciary
obligations of KidsToysPlus.com, Inc.'s board of directors
to its shareholders.
(b) The information supplied by KidsToysPlus.com, Inc. for
inclusion in the Proxy Statement shall not, at the time
the Proxy Statement is mailed to the stockholders of
KidsToysPlus.com, Inc., contain any untrue statement of
material fact or omit to state any material fact required
to be stated therein or necessary in order to make the
statements therein not misleading. If at any time prior
to the Closing, any event or circumstance relating to
KidsToysPlus.com, Inc. or any of its affiliates, or its
officers or directors, is discovered by KidsToysPlus.com,
Inc. that should be set forth in a supplement to the Proxy
Statement, KidsToysPlus.com, Inc. shall promptly inform
FYI thereof in writing. All documents that
KidsToysPlus.com, Inc. is responsible for filing with the
SEC in connection with the transactions contemplated
herein shall comply as to form in all material respects
with the applicable requirements of the Securities Act and
the rules and regulations thereunder and the Exchange Act
and the rules and regulations thereunder.
(c) The information supplied for inclusion in the Proxy
Statement shall not, at the time the Proxy Statement is
mailed to the stockholders of KidsToysPlus.com, Inc.,
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary in order to make the statements therein not
misleading. If at any time prior to the Closing, any
event or circumstance relating to FYI or any of its
affiliates, or to its officers or directors, is discovered
by FYI that should be set forth in a supplement to the
Proxy Statement, FYI shall promptly inform
KidsToysPlus.com, Inc. thereof in writing.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
Section 5.01 Conditions Precedent to the Obligations of the
Parties. The obligations of each party under the terms of this Agreement
are subject to the satisfaction, at or before the Closing Date, of the
following conditions:
(a) All required third-party consents to this Agreement and
the transactions contemplated hereby shall have been
received, unless waived by the parties.
(b) There shall not be any action or threatened action before
any court or governmental body to restrain, prohibit, or
invalidate the transactions contemplated by this Agreement
or which in the judgment of the board of directors of any
party, made in good faith and based on the advice of legal
counsel, makes it inadvisable to proceed with the
transactions contemplated by this Agreement.
Section 5.02 Conditions Precedent to the Obligations of FYI.
The obligations of FYI under the terms of this Agreement are subject to
the satisfaction, at or before the Closing Date, of the following
conditions:
(a) The representations and warranties made by Timcke and
KidsToysPlus.com, Inc. in this Agreement were true when
made and shall be true at the Closing Date with the same
force and effect as if such representations and warranties
were made at and as of the Closing Date.
(b) Timcke and KidsToysPlus.com, Inc. shall have performed or
complied with all covenants and conditions required by
this Agreement to be performed or complied with by such
parties prior to or at the Closing.
(c) No litigation, proceeding, investigation, or inquiry is
pending or, to the best knowledge of Timcke or
KidsToysPlus.com, Inc., threatened, which might result in
an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement or which might
result in a material adverse change in the assets,
properties, or business of Timcke or KidsToysPlus.com,
Inc.
(d) The closing of the transfer of all of the assets and the
assumption of all of the liabilities of KidsToysPlus.com,
Inc. by Timcke pursuant to section 1.05, above shall have
been completed, subject to waiver or partial waiver by the
parties.
(e) Timcke and KidsToysPlus.com, Inc. shall have taken all
corporate or other action necessary to approve the
transactions contemplated by this Agreement. FYI shall
have been furnished with certified copies of resolutions
adopted by the board of directors of KidsToysPlus.com,
Inc., and the stockholders of KidsToysPlus.com, Inc., in
form and substance reasonably satisfactory to counsel for
FYI, approving the transactions contemplated by this
Agreement.
(f) KidsToysPlus.com, Inc. shall have amended its articles of
incorporation to change its name to a name designated by
FYI prior to Closing.
(g) There shall be no existing agreements between
KidsToysPlus.com, Inc. and any stockholder, any relative
of any director, officer, broker, underwriter, employee,
agent or any stockholder, or any affiliates of the
stockholder for any wages, fees, advances, expense
reimbursement, options, warrants, or other rights to
acquire securities from KidsToysPlus.com, Inc.
(h) There shall not be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed
applicable to the transactions contemplated hereby by any
governmental entity in connection with the grant of any
regulatory approval necessary, in the reasonable business
judgment of KidsToysPlus.com, Inc., to the continuing
operation of the current or future business of
KidsToysPlus.com, Inc., which imposes any condition or
restriction upon KidsToysPlus.com, Inc. or its proposed
future business or operations which, in the reasonable
business judgment of FYI, would be materially burdensome
in the context of the transactions contemplated by this
Agreement.
(i) KidsToysPlus.com, Inc. shall not have received notice of
or otherwise have knowledge of any pending inquiry, matter
under investigation, formal order of investigation, or
other possible enforcement action from the SEC or any
provincial or state securities or other regulatory
authority involving or possibly involving, whether or not
actually threatened, any violation of any law administered
by such agency or authority by either KidsToysPlus.com,
Inc. or any of its present or former affiliates or in
concert with any of them.
Section 5.03 Conditions Precedent to the Obligations of Timcke
and KidsToysPlus.com, Inc. The obligations of Timcke and
KidsToysPlus.com, Inc. under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
(a) The representations and warranties made by FYI in this
Agreement were true when made and shall be true as of the
Closing Date except for changes permitted by this
Agreement or made in the ordinary course of business.
(b) FYI shall have performed and complied with all covenants
and conditions required by this Agreement to be performed
or complied with by FYI prior to or at the Closing.
(c) No litigation, proceeding, investigation, or inquiry is
pending or, to the best knowledge of FYI, threatened,
which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this
Agreement or which might result in any adverse material
change in the assets, properties, or business operations
of FYI.
Section 5.04 Other Items. The parties hereto shall have
received such further documents, certificates, or instruments relating to
the transactions contemplated hereby as they may reasonably request.
ARTICLE VI
TERMINATION
Section 6.01 Termination. Anything contained in this Agreement
to the contrary notwithstanding, this Agreement may be terminated at any
time prior to the Closing Date:
(a) by the mutual consent of Timcke and the boards of
directors of FYI and KidsToysPlus.com, Inc.
(b) by any party, if the Closing shall not have occurred on or
before April 30, 2001 (or such later date as may be
mutually agreed to by the parties);
(c) by FYI in the event of any material breach by Timcke or
KidsToysPlus.com, Inc., of any of the agreements,
representations, or warranties of such parties contained
herein and the failure of such parties to cure such breach
within seven days after receipt of notice from FYI
requesting such breach to be cured: or
(d) by Timcke or KidsToysPlus.com, Inc., in the event of any
material breach by FYI of any of the agreements,
representations, or warranties of FYI contained herein and
the failure of FYI to cure such breach within seven days
after receipt of notice from Timcke or KidsToysPlus.com,
Inc., requesting such breach to be cured.
Section 6.02 Notice of Termination. Any party desiring to
terminate this Agreement pursuant to section 6.01 shall give notice of
such termination to the other parties to this Agreement.
Section 6.03 Effect of Termination. In the event that this
Agreement shall be terminated pursuant to this Article VI, all further
obligations of the parties under this Agreement (other than sections 7.01
and 7.02 shall be terminated without further liability of any party to
the other; provided that, nothing herein shall relieve any party from
liability for its willful breach of this Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Confidential Nature of Information. Each party
agrees that it will treat in confidence the content of all discussions,
negotiations, documents, materials and other information, including but
not limited to operational, economic, or financial information or data of
any nature whatsoever relating to the future, present or past business
operations, plans or assets, which either party shall have obtained
regarding the other parties during the course of the discussions and
negotiations leading to the consummation of the transactions contemplated
hereby (whether obtained before or after the date of this Agreement), the
investigation provided for herein pursuant to section 4.01 and the
preparation of this Agreement and other related documents, and, in the
event the transactions contemplated hereby shall not be consummated, each
party will return to the other party all copies of non-public documents
and materials which have been furnished in connection therewith. Such
documents, materials and information shall not be communicated to any
third person (other than to their respective counsel, accountants,
financial advisors or lenders) and shall not be used for any purpose to
the detriment of the other party. No other party shall use any
confidential information in any manner whatsoever except solely for the
purpose of evaluating the proposed purchase and sale of the assets
hereunder; provided, however, that the obligation of each party to treat
such documents, materials and other information in confidence shall not
apply to any information which (i) is or becomes available to such party
from a source other than the other party, except from insiders and
affiliates of such other party, (ii) is or becomes available to the
public other than as a result of disclosure by such party or its agents,
(iii) is required to be disclosed under applicable law or judicial
process, but only to the extent it must be disclosed, or (iv) such party
reasonably deems necessary to disclose to obtain any of the consents or
approvals contemplated hereby.
Section 7.02 Expenses. FYI will pay all costs and expenses
incident to its negotiation and preparation of this Agreement and to its
performance and compliance with all agreements and conditions contained
herein on its part to be performed or complied with, including the fees,
expenses and disbursements of its counsel and accountants. Timcke will
pay all costs and expenses incident to his and KidsToysPlus.com, Inc.'s
negotiation and preparation of this Agreement and to their performance
and compliance with all agreements and conditions contained herein on
their part to be performed or complied with, including the fees, expenses
and disbursements of their counsel and accountants.
Section 7.03 No Brokers. Each party hereto agrees that no third
person has in any way brought the parties together or been instrumental
in the negotiation, execution, or consummation of this Agreement other
than as disclosed to or known by the parties. Each party agrees to
indemnify the others against any claim by any third person for any
commission, brokerage, finder's fee, or other payment with respect to
this Agreement or the transactions contemplated hereby based upon any
alleged agreement or understanding between such party and such third
person, whether expressed or implied, arising from the actions of such
party. The covenants set forth in this section 7.03 shall survive the
Closing Date and the consummation of the transactions herein
contemplated.
Section 7.04 Governing Law. This Agreement shall be governed
by, enforced and construed under and in accordance with, the laws of the
United States of America, and, with respect to other matters of state
law, the laws of the state of Nevada shall apply.
Section 7.05 Notices. All notices, demands, requests, or other
communications required or authorized hereunder shall be deemed given
sufficiently if in writing and if personally delivered; if sent by
facsimile transmission, confirmed with a written copy thereof sent by
overnight express delivery; if sent by registered mail or certified mail,
return receipt requested and postage prepaid; or if sent by overnight
delivery:
If to FYI, to: FYI Corporation
c/o Michael L. Labertew, Attorney at Law
4685 South Highland Drive #202A
Salt Lake City, Utah 84117
Fax: (801) 274-1099
If to Timcke or
KidsToysPlus.com, Inc. 2924 Cliffe Avenue
Courtenay, British Columbia, Canada
V9N 2L7
Fax: (877) 897-0403
or such other addresses and facsimile numbers as shall be furnished in
writing by any party in the manner for giving notices hereunder, and any
such notice, demand, request, or other communication shall be deemed to
have been given as of the date so delivered or sent by facsimile
transmission, three days after the date so mailed, or one day after the
date so sent by overnight delivery.
Section 7.06 Attorney's Fees. In the event that any party
institutes any action or suit to enforce this Agreement or to secure
relief from any default hereunder or breach hereof, the breaching party
or parties shall reimburse the nonbreaching party or parties for all
costs, including reasonable attorney's fees, incurred in connection
therewith and in enforcing or collecting any judgment rendered therein.
Section 7.07 Schedules; Knowledge. Whenever in any section of
this Agreement reference is made to information set forth in the
schedules, such reference is to information specifically set forth in
such schedules and clearly marked to identify the section of this
Agreement to which the information relates. Whenever any representation
is made to the "knowledge" of any party, it shall be deemed to be a
representation that no officer or director of such party, after
reasonable investigation, has any knowledge of such matters.
Section 7.08 Entire Agreement. This Agreement and the
Environmental Indemnity Agreement, together with the documents to be
delivered pursuant hereto, represent the entire agreement between the
parties relating to the subject matter hereof. There are no other
courses of dealing, understanding, agreements, representations, or
warranties, written or oral, except as set forth herein.
Section 7.09 Survival; Termination. The representations,
warranties, and covenants of the respective parties shall survive the
Closing.
Section 7.10 Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original and all
of which taken together shall be but a single instrument.
Section 7.11 Amendment or Waiver. Every right and remedy
provided herein shall be cumulative with every other right and remedy,
whether conferred herein, at law, or in equity, and may be enforced
concurrently herewith, and no waiver by any party of the performance of
any obligation by the other shall be construed as a waiver of the same or
any other default then, theretofore, or thereafter occurring or existing.
At any time prior to the Closing Date, this Agreement may be amended by a
writing signed by all parties hereto, with respect to any of the terms
contained herein, and any term or condition of this Agreement may be
waived or the time for performance thereof may be extended by a writing
signed by the party or parties for whose benefit the provision is
intended.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
FYI CORPORATION
By__________________________________
Pete Falvo, President
KidsToysPlus.com, Inc.
By____________________________________
Albert R. Timcke
____________________________________
Albert R. Timcke
Appendix B.1
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
(Expressed in United States Dollars)
JANUARY 31, 2000
A
Partnership of
Incorporated
Professionals
DAVIDSON & COMPANY=========Chartered
Accountants================================
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Directors of
Kidstoysplus.com, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Kidstoysplus.com,
Inc. as at January 31, 2000 and the related statements of
operations, changes in stockholders' equity and cash flows for the
period from incorporation on February 4, 1999 to January 31, 2000.
These financial statements, expressed in United States dollars, 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 in the United States of America. 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
Kidstoysplus.com, Inc. as at January 31, 2000 and the results of its
operations, changes in stockholders' equity and its cash flows for the
period from incorporation on February 4, 1999 to January 31, 2000 in
conformity with generally accepted accounting principles in the United
States of America.
The accompanying financial statements have been prepared
assuming that Kidstoysplus.com, Inc. will continue as a going concern.
As discussed in Note 2 to the financial statements, unless the
Company attains future profitable operations and/or obtains additional
financing, there is substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regards to these
matters are discussed in Note 2. The financial statements do not
include any adjustments that might result from the outcome of
this uncertainty.
/s/ Davidson & Company
Vancouver, Canada
Chartered Accountants
April 18, 2000
A Member of
Accounting Group International
======================================
Suite 1270, Stock Exchange Tower, 609
Granville Street, P.O. Box 10372,
Pacific Centre, Vancouver,
B.C., Canada V7Y 1G6
Telephone (604) 687-0947
Fax (604) 687-6172
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
BALANCE SHEET
(Expressed in United States Dollars)
AS AT JANUARY 31, 2000
=========================================================================
ASSETS
Current
Cash and equivalents $ 11,372
Prepaid expenses and deposits 8,017
------
Total current assets 19,389
Capital assets (Note 5) 10,323
------
Total assets $ 29,712
=========================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 56,419
------
Total current liabilities 56,419
------
Stockholders' equity
Capital stock (Note 6)
Authorized
25,000,000 common shares with a
par value of $0.001
Issued and outstanding
9,968,084 common shares 9,968
Additional paid-in capital 239,274
Stock subscriptions receivable (Note 8) (5,500)
Deficit, accumulated during the
development stage (270,449)
-------
Total stockholders' equity (26,707)
-------
Total liabilities and stockholders' equity $ 29,712
=========================================================================
The accompanying notes are an integral part of these financial statements.
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
(Expressed in United States Dollars)
PERIOD FROM INCORPORATION ON FEBRUARY 4, 1999 TO JANUARY 31, 2000
=========================================================================
INTEREST INCOME $ 4,389
------
EXPENSES
Amortization 828
Consulting fees 116,853
Entertainment and promotion 6,234
Equipment rental 3,013
Investor relations 2,680
Legal and accounting 44,656
Management fees 2,800
Office and miscellaneous 28,638
Rent 9,258
Telephone and utilities 9,301
Transfer agent and filing fees 5,708
Travel and automobile 14,842
Website design and maintenance 30,027
-------
274,838
-------
Loss for the period $ (270,449)
=========================================================================
Basic and diluted loss per share $ (0.03)
=========================================================================
Weighted average number of shares
of common stock outstanding 8,259,140
=========================================================================
The accompanying notes are an integral part of these financial statements.
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Expressed in United States Dollars)
=========================================================================
Deficit,
Accumulated
Common Shares Issued Additional Stock During the
--------------------- Paid-in Subscriptions Development
Number Amount Capital Receivable Stage Total
- ----------------------------------------------------------------------------
Balance,
February 4,
1999 - $ - $ - $ - $ - $ -
Shares
issued for
cash
at $0.001
per share
100,000 100 - - - 100
Shares
subscribed
for cash
at $0.001
per share
5,500,000 500 - (5,500) - -
Shares
issued
for cash
at $0.01
per share
3,960,000 3,960 35,640 - - 39,600
at $0.50
per share
408,084 408 203,634 - - 204,042
Loss for
the period - - - - (270,449) (270,449)
__________ _____ _______ _______ _______ _______
Balance,
January 31,
2000 9,968,084 $ 9,968 $ 239,274 $ (5,500) $(270,449) $(26,707)
============================================================================
The accompanying notes are an integral part of these financial statements.
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(Expressed in United States Dollars)
PERIOD FROM INCORPORATION ON FEBRUARY 4, 1999 TO JANUARY 31, 2000
=========================================================================
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (270,449)
Item not affecting cash:
Amortization 828
Changes in other operating assets and liabilities:
Increase in prepaid expenses and deposits (8,017)
Increase in accounts payable and accrued liabilities 56,419
--------
Net cash used in operating activities (221,219)
--------
CASH FLOWS FROM INVESTING ACTIVITY
Capital assets acquired (11,151)
--------
CASH FLOWS FROM FINANCING ACTIVITY
Capital stock issued for cash 243,742
--------
Cash and equivalents, end of period $ 11,372
===========================================================================
Cash paid during the period for interest $ -
===========================================================================
Cash paid during the period for income taxes $ -
===========================================================================
Supplemental disclosure with respect to cash flows (Note 10)
The accompanying notes are an integral part of these financial statements.
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
JANUARY 31, 2000
=========================================================================
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was incorporated on February 4, 1999 under the laws
of the state of Nevada. The Company is considered a development stage
company, in accordance with SFAS #7.
The Company is currently developing a retail web site
specializing in children's toys and collectible products.
2. GOING CONCERN
The Company's financial statements are prepared using the
generally accepted accounting principles applicable to a going
concern, which contemplates the realization of assets and liquidation
of liabilities in the normal course of business. However, the company
has no current source of revenue. Without realization of additional
capital, it would be unlikely for the Company to continue as a going
concern. It is management's plan to seek additional capital through a
private placement.
========================================================================
2000
________________________________________________________________________
Deficit accumulated during the development stage $ (270,449)
Working capital deficiency (37,030)
=========================================================================
3. SIGNIFICANT ACCOUNTING POLICIES
Cash and equivalents
Cash and equivalents include highly liquid investments with
original maturities of three months or less.
Revenue recognition
Revenues from products and services are recognized at the time
the goods are shipped or services provided to the customer, with an
appropriate provision for returns and allowances.
Stock-based compensation
Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation", encourages, but does not
require, companies to record compensation cost for stock-based
employee compensation plans at fair value. The Company has chosen to
account for stock-based compensation using Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees".
Accordingly, compensation cost for stock options is measured as the
excess, if any, of the quoted market price of the Company's stock at the
date of the grant over the amount an employee is required to pay for
the stock.
Capital assets
Capital assets are recorded at cost. Amortization is provided
over the estimated useful life using the following methods:
Computer equipment 3 years straight-line
Furniture and fixtures 5 years straight-line
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
JANUARY 31, 2000
=========================================================================
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd.....)
Income taxes
Income taxes are provided in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary
differences between financial and tax reporting and net operating loss
carryforwards. Deferred tax expenses (benefit) results from the net
change during the year of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some
portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment.
Use of estimates
The preparation of 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.
Reporting comprehensive income
The Company adopted Statement of Financial Accounting Standards
No. 130 ("SFAS 130"), "Reporting Comprehensive Income". This statement
establishes rules for the reporting of comprehensive income and its
components. The adoption of SFAS 130 had no impact on total
stockholders' equity as at January 31, 2000.
Disclosure about segments of an enterprise and related information
Statement of Financial Accounting Standards No. 131 ("SFAS
131"), "Disclosure About Segments of an Enterprise and Related
Information" requires use of the "management approach" model for segment
reporting. The management approach model is based on the way a
company's management organizes segments within the company for making
operating decisions and assessing performance. Reportable segments
are based on products and services, geography, legal structure,
management structure, or any other manner in which management
disaggregates a company. Currently, SFAS 131 has no effect on the
Company's financial statements as substantially all of the Company's
operations are conducted in one industry segment in Canada.
Accounting for derivative instruments and hedging activities
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133 ("SFAS
133"),"Accounting for Derivative Instruments and Hedging Activities"
which establishes accounting and reporting standards for derivative
instruments and for hedging activities. SFAS 133 is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999. In
June 1999, FASB issued SFAS 137 to defer the effective date of SFAS No.
133 to fiscal quarters of fiscal years beginning after June 15, 2000.
The Company does not anticipate that the adoption of the statement
will have a significant impact on its financial statements.
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
JANUARY 31, 2000
=========================================================================
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd.....)
Reporting on costs of start-up activities
The American Institute of Certified Public Accountant's issued
Statement of Position 98-5 "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5") which provides guidance on the financial
reporting of start-up costs and organization costs. It requires
costs of start-up activities and organization costs to be expensed
as incurred. The Company adopted SOP 98-5 during the current period.
Foreign currency translation
The Company accounts for foreign currency transactions under
Statement of Financial Accounting Standards No. 52, "Foreign Currency
Translation". Transaction amounts denominated in foreign currencies
are translated at exchange rates prevailing at transaction dates.
Carrying values of monetary assets and liabilities are adjusted at each
balance sheet date to reflect the exchange rate at that date. Non monetary
assets and liabilities are translated at the exchange rate on the original
transaction date. Gains and losses from restatement of foreign
currency monetary and non-monetary assets and liabilities are
included in income. Revenues and expenses are translated at the rates of
exchange prevailing on the dates such items are recognized in earnings.
Loss per share
Statement of Financial Accounting Standards No. 128 ("SFAS 128"),
"Earnings Per Share" requires basic and diluted earnings per share to
be presented. Basic earnings per share is computed by dividing income
available to common shareholders by the weighted average number of
shares of common stock outstanding during the period. Diluted
earnings per share takes into consideration shares of common
stock outstanding (computed under basic earnings per share) and
potentially dilutive shares of common stock.
4. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and
equivalents and accounts payable. Unless otherwise noted, it is
management's opinion that the Company is not exposed to significant
interest, currency or credit risks arising from these financial
instruments. The fair value of these financial instruments approximate
their carrying values, unless otherwise noted.
5. CAPITAL ASSETS
======================================================================
Accumulated Net
Cost Amortization Book Value
____________________________________________________________________
Computer equipment $ 4,438 $ 380 $ 4,058
Furniture and fixtures 6,713 448 6,265
_______ _______ _______
$ 11,151 $ 828 $ 10,323
=========================================================================
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
JANUARY 31, 2000
=========================================================================
6. CAPITAL STOCK
On April 6, 1999, the Company issued 5,600,000 and 3,960,000
shares of common stock under Rule 504 of Regulation D of the Securities
Act of 1933 for total proceeds of $5,600 and $39,600, respectively.
On April 7, 1999, the Company issued 408,084 shares of common
stock under Rule 504 of Regulation D of the Securities Act of 1933 for
total proceeds of $204,042.
Common shares
The common shares of the Company are of the same class, voting and
entitle shareholders to dividends. Upon liquidation, dissolution or
wind-up, shareholders are entitled to the residual business proceeds of
the Company after all of its debts, obligations and liabilities are
settled.
Additional paid-in capital
The excess of proceeds received for common shares over their par
value of $0.001, less share issue costs, is credited to additional paid
in capital.
Escrow shares
Included in issued capital stock as at January 31, 2000, are
1,980,000 common shares held in escrow pursuant to a pooling agreement
dated April 6, 1999. Under the terms of the agreement, 330,000 shares of
common stock are being released from escrow monthly.
7. STOCK-BASED COMPENSATION
On May 1, 1999, pursuant to Consulting Agreements, the Company
granted options to directors and employees to acquire up to 1,000,000
shares of common stock of the Company at an exercise price of $0.10 per
share and up to 1,000,000 shares of common stock of the Company at an
exercise price of $0.25 per share.
Following is a summary of the status of the plan during the period:
=========================================================================
Weighted
Average
Number Exercise
of Shares Price
_________________________________________________________________________
Outstanding, February 4, 1999 - $ -
Granted 2,000,000 0.17
_________ ______
Outstanding, January 31, 2000 2,000,000 $ 0.17
========= ======
Weighted average fair value of
options granted during the period $ Nil
=========================================================================
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
JANUARY 31, 2000
=========================================================================
7. STOCK-BASED COMPENSATION (cont'd.....)
Following is a summary of the status of options outstanding at
January 31, 2000:
=========================================================================
Outstanding Options Exercisable Options
Weighed Average
Remaining Exercise Exercise
Number Contractual Life Price Number Price
_________________________________________________________________________
2,000,000 5.26 years $ 0.17 2,000,000 $ 0.17
=========================================================================
The Company applies Accounting Principles Board Opinion No.
25 in accounting for its stock option plan which follows the
intrinsic value based method for accounting for compensation resulting
from the granting of options. There was no compensation expense
incurred based on options granted. Since the fair value of these
options was $Nil upon granting, net loss and loss per share would
not have been adjusted had compensation cost been recognized on the
basis of fair value pursuant to Statement of Financial Accounting
Standards No. 123. The fair value of each option granted is estimated
on the grant date using the Black Scholes Model.
The assumptions used in calculating fair value are as follows:
==================================================================
1999
Risk-free interest rate 7.0%
Expected life of options 6 years
Expected volatility 0.001%
Expected dividend yield 0.0%
==================================================================
The Company has also approved a Stock Option Plan for officers,
employees and consultants of the Company. The Company has reserved
1,500,000 common shares of its unissued share capital for this plan.
No options have been granted under the plan. The plan provides for
vesting of options granted pro-rata over four years from the date of
grant.
The exercise price of options granted under the plan will be as
follows:
i) not less than the fair market value per common share at
the date of grant.
ii) not less than 110% of the fair market value per common
share at the date of grant for options granted to shareholders
owning greater than 10% of the Company.
Options granted under the plan will expire the earlier of:
i) ten years from the date of grant.
ii) five years from the date of grant for options
granted to shareholders owning greater than 10% of the Company.
iii) the termination of the officer, employee or
consultants upon cause.
iv) three months after the termination of the officer,
employee or consultant other than by cause, death or disability. v) one
year after the date of termination of the officer, employee or
consultant due to death or disability.
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
JANUARY 31, 2000
=========================================================================
8. STOCK SUBSCRIPTIONS RECEIVABLE
Pursuant to Stock Subscription Agreements dated March 9, 1999, the
Company issued 5,600,000 shares of common stock for proceeds of
$5,600. As at January 31, 2000, $100 of the proceeds have been
received. The remaining $5,500 is due from the president of the Company.
The $5,500 was paid to the Company by the president subsequent to January
31, 2000.
9. RELATED PARTY TRANSACTIONS
During the period ended January 31, 2000, the Company entered
into the following transactions with related parties:
a) Paid $2,800 in management fees to the president of the Company.
b) Paid consulting fees of $51,600 to the president and
$18,000 to a director of the Company.
Included in accounts payable as at January 31, 2000 is $18,000
due to a director of the Company.
10. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
The significant non-cash transaction for the period ended January
31, 2000 consisted of the Company issuing 5,500,000 shares of common
stock in the amount of $5,500 in exchange for a stock subscription
receivable.
11. COMMITMENTS
a) The Company entered into Consulting Agreements with
directors and employees of the Company, effective May 1, 1999, for
terms of five years. The agreements call for consulting fees totaling
$9,000 per month to be paid. Monthly hours worked by the directors or
employees in excess of the base hourly commitments in the agreements
will be paid at a rate of $100 per hour.
Subsequent to January 31, 2000, the Company terminated one
of the Consulting Agreements described above, with a director of the
Company. The agreement called for consulting fees totaling $2,000 per
month to be paid.
b) The Company has stock option plans as disclosed in Note 7.
c) The Company is committed to future minimum lease
payments for operating leases for premises and office equipment of:
Year ended January 31, 2001 $ 20,365
Year ended January 31, 2002 1,485
________
$ 21,850
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
JANUARY 31, 2000
=========================================================================
12. INCOME TAXES
The Company's total deferred tax asset is as follows:
Tax benefits of net operating loss carryforward $ 101,586
Valuation allowance (101,586)
________
$ -
========
The Company has a net operating loss carryforward of
approximately $267,332. The valuation allowance increased to
$101,586 for the period ended January 31, 2000 since the
realization of the operating loss carryforwards are doubtful. It is
reasonably possible that the Company's estimate of the valuation
allowance will change. The operating loss carryforwards will expire
in the 2007 fiscal year.
13. SUBSEQUENT EVENTS
The following transactions occurred subsequent to January 31, 2000:
a) The Company completed a private placement financing of
590,400 units at $1.25 per unit for total proceeds of $738,000. Each
unit consists of one share of common stock and one non-transferable
share purchase warrant. Each warrant entitles the holder to purchase
one share of common stock of the Company at $1.625 per common share
for one year from the date of issuance.
b) Options to purchase 400,000 shares of common stock at $0.10
per share and 400,000 shares of common stock at $0.25 per share were
exercised.
c) Pursuant to its Stock Option Plan, the Company granted
options to a director and employee of the Company to acquire 350,000
shares of common stock at a price of $1.00 per share, exercisable to
April 5, 2010.
14. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
recognize the year 2000 as 1900 or some other date, resulting in
errors when information using year 2000 dates is processed. In
addition, similar problems may arise in some systems which use
certain dates in 1999 to represent something other than a date.
Although the change in date has occurred, it is not possible to
conclude that all aspects of the Year 2000 Issue that may affect the
entity, including those related to customers, suppliers, or other
third parties, have been fully resolved.
Appendix B.2
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
UNAUDITED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
OCTOBER 31, 2001
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
BALANCE SHEETS
(Expressed in United States Dollars)
(Unaudited)
=========================================================================
October 31, January 31,
2000 2000
----------- -----------
ASSETS
Current
Cash and cash equivalents $ 119,647 $ 11,372
Accounts receivable 14,616 -
Inventory 72,855 -
Prepaid expenses and deposits 16,709 8,017
Due from related parties (Note 4) 47,634 -
-------- --------
Total current assets 271,461 19,389
Capital assets 25,290 10,323
-------- --------
Total assets $ 296,751 $ 29,712
============================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 34,747 $ 56,419
-------- ---------
Total current liabilities 34,747 56,419
Stockholders' equity
Common stock (Note 5)
Authorized
25,000,000 shares with a
par value of $0.001
Issued and outstanding
10,980,884 shares
(January 31, 2000 - 9,968,084) 10,980 9,968
Additional paid-in capital 948,062 239,274
Stock subscriptions receivable - (5,500)
Deficit, accumulated during the
development stage (697,038) (270,449)
------- -------
Total stockholders' equity 262,004 (26,707)
------- -------
Total liabilities and stockholders' equity $ 296,751 $ 29,712
=========================================================================
The accompanying notes are an integral part of these financial statements.
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
(Unaudited)
=========================================================================
Cumulative
Amounts
From Period From
February 4, Three Month Three Month Nine Month February 4,
1999 to Period Ended Period Ended Period Ended 1999 to
October 31, October 31, October 31, October 31, October 31,
2000 2000 1999 2000 1999
- -----------------------------------------------------------------------------
REVENUE
Sales $ 4,333 $ 2,624 $ - $ 4,333 $ -
COST OF SALES 3,595 3,595 - 3,595 -
------- ------- -------- -------- -------
738 (971) - 738 -
EXPENSES
Consulting fees 290,780 46,584 48,390 173,927 85,167
Depreciation 6,507 2,246 86 5,679 86
Entertainment
and promotion 13,126 752 1,114 6,892 1,828
Equipment rental 5,128 1,088 - 2,115 -
Investor
relations 63,332 35,665 - 60,652 -
Legal and
accounting 84,233 15,486 7,923 39,577 26,983
Management fees 2,800 - - - 2,800
Marketing and
advertising 13,883 9,247 - 13,883 -
Office and
miscellaneous 97,226 20,147 16,265 68,588 24,024
Rent and
security 25,930 5,029 3,683 16,672 3,683
Telephone and
utilities 23,668 3,753 4,213 14,367 5,524
Transfer agent
and filing fees 10,881 3,801 5,338 5,173 5,338
Travel and
automobile 35,565 8,805 6,806 20,723 9,205
Web-site design
and maintenance 39,304 7,370 7,094 9,277 7,094
------- ------ ------ ------ ------
712,363 159,973 100,912 437,525 171,732
------- ------- ------- ------- -------
Loss before
other item (711,625) (160,944) (100,912) (436,787) (171,732)
OTHER ITEM
Interest 14,587 3,014 1,458 10,198 3,964
------- ------- ------- ------- -------
Loss for
the period $ (697,038) $ (157,930) $ (99,454) $ (426,589) $(167,768)
============================================================================
Basic and diluted
loss per share $ (0.01) $ (0.01) $ (0.04) $ (0.02)
============================================================================
Weighted average number
of shares of common
stock outstanding 10,955,179 9,968,084 10,587,434 8,311,443
=============================================================================
The accompanying notes are an integral part of these financial statements.
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Expressed in United States Dollars)
(Unaudited)
=========================================================================
Deficit,
Accumulated
Common Shares Additional Stock During the Total
__________________ Paid-in Subscriptions Development Stockholders'
Shares Amount Capital Receivable Stage Equity
- -----------------------------------------------------------------------------
Balance,
February 4,
1999 - $ - $ - $ - $ - $ -
Shares
issued
for cash
at $0.001
per share
100,000 100 - - - 100
Shares
subscribed
for cash
at $0.001
per share
5,500,000 5,500 - (5,500) - -
Shares
issued
for cash:
at $0.01
per share
3,960,000 3,960 35,640 - - 39,600
at $0.50
per share
408,084 408 203,634 - - 204,042
Loss for
the period - - - - (270,449) (270,449)
_________ ______ _______ ______ _______ _______
Balance,
January 31,
2000 9,968,084 9,968 239,274 (5,500) (270,449) (26,707)
Shares
issued
for cash
at $1.25
per share
590,400 590 737,410 - - 738,000
Share
issuance
costs - - (73,800) - - (73,800)
Stock
subscriptions
received - - - 5,500 - 5,500
Shares
issued
for cash
at $0.10
per share
400,000 400 39,600 - - 40,000
Shares
issued
for cash
at $0.25
per share
22,400 22 5,578 - - 5,600
Loss for
the period - - - - (426,589) (426,589)
__________ _____ _______ _____ _______ _______
Balance,
October 31,
2000 10,980,884 $ 10,980 $ 948,062 $ - $ (697,038) $ 262,004
===========================================================================
The accompanying notes are an integral part of these financial statements.
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
(Unaudited)
=========================================================================
Cumulative
Amounts
From Period From
February 4, Nine Month February 4,
1999 Period Ended 1999 to
to October 31, October 31, October 31,
2000 2000 1999
- --------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (697,038) $ (426,589) $ (167,768)
Item not affecting cash:
Amortization 6,507 5,679 86
Changes in non-cash
working capital items
Increase in accounts receivable (14,616) (14,616) -
Increase in inventory (72,855) (72,855) -
Increase in prepaid expenses
and deposits (16,709) (8,692) (18,885)
Increase in due from related
parties (47,634) (47,634) (424)
Increase (decrease) in accounts
payable and accrued liabilities 34,747 (21,672) 34,316
------- ------- -------
Net cash used in
operating activities (807,598) (586,379) (152,675)
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital assets acquired (31,797) (20,646) (9,120)
------- ------- -------
Net cash used in
investing activities (31,797) (20,646) (9,120)
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Stock subscriptions received 5,500 5,500 -
Capital stock issued for cash 1,027,342 783,600 243,742
Share issuance costs (73,800) (73,800) -
--------- ------- --------
Net cash provided by
financing activities 959,042 715,300 243,742
--------- ------- -------
Change in cash and cash
equivalents for the period 119,647 108,275 81,947
Cash and cash equivalents,
beginning of period - 11,372 -
-------- ------- -------
Cash and cash equivalents,
end of period $ 119,647 $ 119,647 $ 81,947
=========================================================================
Cash paid during the period
for interest $ - $ - $ -
=========================================================================
Cash paid during the period
for income taxes $ - $ - $ -
=========================================================================
The accompanying notes are an integral part of these financial statements.
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
OCTOBER 31, 2000
=========================================================================
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was incorporated on February 4, 1999 under the laws
of the state of Nevada. The Company is considered a development stage
company, in accordance with SFAS #7.
In the opinion of management, the accompanying financial statements
contain all adjustments necessary (consisting only of normal recurring
accruals) to present fairly the financial information contained
therein. These statements do not include all disclosures required by
generally accepted accounting principles and should be read in
conjunction with the audited financial statements of the Company for
the year ended January 31, 2000. The results of operations for the nine
month period ended October 31, 2000 are not necessarily indicative of
the results to be expected for the year ending January 31, 2001.
2. GOING CONCERN
The Company's financial statements are prepared using the
generally accepted accounting principles applicable to a going
concern, which contemplates the realization of assets and liquidation
of liabilities in the normal course of business. Without realization
of additional capital, it would be unlikely for the Company to continue
as a going concern. It is management's plan to seek additional
capital through equity financings.
=========================================================================
October 31, January 31,
2000 2000
__________ __________
Deficit accumulated during
the development stage $ (697,038) $ (270,449)
Working capital (deficiency) 236,714 (37,030)
===========================================================================
3. SIGNIFICANT ACCOUNTING POLICIES
Inventory
Inventory is valued at the lower of cost and net realizable value.
4. DUE FROM RELATED PARTIES
=========================================================================
October 31, January 31,
2000 2000
__________ __________
Due from the president of the Company $ 29,189 $ -
Due from an officer of the Company 18,445 -
-------- --------
$ 47,634 $ -
==========================================================================
Amounts due from related parties are unsecured, non-interest bearing
with no terms of repayment.
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
OCTOBER 31, 2000
=========================================================================
5. COMMON STOCK
On April 7, 2000, the Company completed a private placement
whereby it issued 590,400 units under Rule 506 of Regulation D and S of
the Securities Act of 1933 at $1.25 per unit for total proceeds of
$738,000. Each unit consists of one restricted share of common stock and
one non-transferable share purchase warrant. Each warrant entitles the
holder to purchase one restricted share of common stock of the Company at
a price of $1.625 per common share until April 7, 2001.
On August 4, 2000, the Company issued 400,000 shares of common stock
on the exercise of stock options under Rule 504 of Regulation D of the
Securities Act of 1933 for total proceeds of $40,000.
On September 21, 2000, the Company issued 22,400 shares of common
stock on the exercise of stock options under Rule 504 of Regulation D of
the Securities Act of 1933 for total proceeds of $5,600.
6. STOCK OPTIONS
Following is a summary of stock option activity during the nine
month period ended October 31, 2000:
=========================================================================
Weighted
Average
Number Exercise
Of Shares Price
______________________________________________________________________
Outstanding, January 31, 2000 2,000,000 $ 0.17
Granted 955,000 0.61
Exercised (422,400) 0.11
Cancelled (477,600) 0.22
---------
Outstanding, October 31, 2000 2,809,400 0.38
=========================================================================
The weighted average fair value of options granted during the
nine month period ended October 31, 2000 was $0.76 per share.
7. RELATED PARTY TRANSACTIONS
During the nine month period ended October 31, 2000, the Company
entered into the following transactions with related parties:
a) The Company paid consulting fees of $59,000 (October 31,
1999 - $30,000) to the president of the Company, and $18,066 (October
31, 1999 - $18,000) to a former director of the Company.
b) The Company paid $Nil (October 31, 1999 - $2,800) in
management fees to the president of the Company.
Included in accounts payable as at October 31, 2000 is an amount
of $Nil (January 31, 2000 - $18,000) due to a director of the Company.
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
OCTOBER 31, 2000
=========================================================================
8. COMMITMENTS
During the nine month period ended October 31, 2000, the Company
terminated Consulting Agreements with a director and consultant of the
Company. The agreements called for consulting fees of $4,000 per month
to be paid.
9. SEGMENTED INFORMATION
The Company currently conducts substantially all of its operations
in Canada in one business segment.
10. SUBSEQUENT EVENT
The Company entered into an agreement effective November 1, 2000 for
a term of 6 months with Renmark Financial Communications ("Renmark")
whereby Renmark will provide investor relations and communication
services to the Company in return for fees of $5,000 per month
and the issue 150,000 restricted shares of common stock of the Company.
Appendix B.3
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
UNAUDITED FINANCIAL STATEMENTS
(Expressed in United States Dollars)
JANUARY 31, 2001
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
BALANCE SHEETS
(Expressed in United States Dollars)
AS AT JANUARY 31
(Unaudited)
=========================================================================
2001 2000
--------- ---------
ASSETS
Current
Cash and cash equivalents $ 28,403 $ 11,372
Accounts receivable 15,406 -
Inventory 73,801 -
Prepaid expenses and deposits 850 8,017
Due from related parties 47,850 -
-------- --------
Total current assets 166,310 19,389
Capital assets 23,044 10,323
-------- --------
Total assets $ 189,354 $ 29,712
==========================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 29,902 $ 56,419
-------- --------
Total current liabilities 29,902 56,419
-------- --------
Stockholders' equity
Common stock
Authorized
25,000,000 Shares with a par value of $0.001
Issued and outstanding
11,130,884 Shares (January 31, 2000 -
9,968,084) 11,130 9,968
Additional paid-in capital 968,912 239,274
Stock subscriptions receivable - (5,500)
Deficit, accumulated during the development stage (820,590) (270,449)
-------- --------
Total stockholders' equity 159,452 (26,707)
-------- --------
Total liabilities and stockholders' equity $ 189,354 $ 29,712
=========================================================================
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
(Unaudited)
==========================================================================
Cumulative
Amounts
From Period From
February 4, Three Month Three Month February 4,
1999 to Period Ended Period Ended Year Ended 1999 to
January 31, January 31, January 31, January 31, January 31,
2001 2001 2000 2001 2000
- ------------------------------------------------------------------------------
REVENUE
Sales $ 48,952 $ 44,619 $ - $ 48,952 $ -
COST OF SALES 37,403 33,808 - 37,403 -
------- -------- -------- -------- --------
11,549 10,811 - 11,549 -
------- -------- -------- -------- --------
EXPENSES
Consulting fees 319,863 29,083 31,686 203,010 116,853
Depreciation 8,753 2,246 742 7,925 828
Entertainment
and promotion 13,866 740 4,406 7,632 6,234
Equipment
rental 5,360 232 3,013 2,347 3,013
Investor
relations 91,228 27,896 2,680 88,548 2,680
Legal and
accounting 97,439 13,206 17,673 52,783 44,656
Management fees 2,800 - - - 2,800
Marketing and
advertising 28,576 14,693 - 28,576 -
Office
administration 38,349 7,481 - 38,349 -
Office and
miscellaneous 75,136 13,449 4,614 46,498 28,638
Rent and
security 29,622 3,692 5,575 20,364 9,258
Shareholder
costs 6,386 1,699 - 6,386 -
Telephone and
utilities 26,569 2,901 3,777 17,268 9,301
Transfer agent
and filing fees 10,865 - 370 5,157 5,708
Travel and
automobile 46,169 10,604 5,637 31,327 14,842
Web-site design
and maintenance 46,759 7,455 22,933 16,732 30,027
------- ------ ------ ------ ------
847,740 135,377 103,106 572,902 274,838
------- ------- ------- ------- -------
Loss before
other item (836,191) (124,566) (103,106) (561,353) (274,838)
OTHER ITEM
Interest 15,601 1,014 425 11,212 4,389
------- ------- ------- ------- -------
Loss for the
period $ (820,590) $(123,552) $(102,681) $(550,141) $(270,449)
=============================================================================
Basic and diluted
loss per share $ (0.01) $ (0.01) $ (0.05) $ (0.03)
=============================================================================
Weighted average
number of shares of common
stock outstanding 10,980,884 9,968,084 10,655,205 8,259,140
=============================================================================
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Expressed in United States Dollars)
(Unaudited)
============================================================================
Deficit,
Accumulated
Common Shares Additional Stock During the Total
----------------- Paid-in Subscriptions Development Stockholders'
Shares Amount Capital Receivable Stage Equity
- ------------------------------------------------------------------------------
Balance,
February 4,
1999 - $ - $ - $ - $ - $ -
Shares
issued
for cash
at $0.001
per share
100,000 100 - - - 100
Shares
subscribed
for cash
at $0.001
per share
5,500,000 5,500 - (5,500) - -
Shares
issued
for cash:
at $0.01
per share
3,960,000 3,960 35,640 - - 39,600
at $0.50
per share
408,084 408 203,634 - - 204,042
Loss for
the period - - - - (270,449) (270,449)
--------- ------ ------- ------- ------- -------
Balance,
January 31,
2000 9,968,084 9,968 239,274 (5,500) (270,449) (26,707)
Shares
issued
for cash
at $1.25
per share
590,400 590 737,410 - - 738,000
Share
issuance
costs - - (73,800) - - (73,800)
Stock
subscriptions
received - - - 5,500 - 5,500
Shares
issued
for cash
at $0.10
per share
400,000 400 39,600 - - 40,000
Shares
issued
for cash
at $0.25
per share
22,400 22 5,578 - - 5,600
Shares
issued in
Exchange for
services
at $0.14
per share
150,000 150 20,850 - - 21,000
Loss for
the period - - - - (550,141) (550,141)
--------- ------ ------ ------ ------- -------
Balance,
January 31,
2001 11,130,884 $11,130 $968,912 $ - $(820,590) $ 159,452
============================================================================
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
(Unaudited)
============================================================================
Cumulative
Amounts
From Period From
February 4, February 4,
1999 to Year Ended 1999 to
January 31, January 31, January 31,
2001 2001 2000
- -----------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (820,590) $ (550,141) $ (270,449)
Item not affecting cash:
Amortization 8,753 7,925 828
Changes in non-cash working capital
items
Increase in accounts receivable (15,406) (15,406) -
Increase in inventory (73,801) (73,801) -
(Increase) decrease in prepaid
expenses and deposits (850) 7,167 (8,017)
Increase in due from related parties (47,850) (47,850) -
Increase (decrease) in accounts
payable and accrued liabilities 29,902 (26,517) 56,419
------- ------ ------
Net cash used in operating activities (919,842) (698,623) (221,219)
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital assets acquired (31,797) (20,646) (11,151)
------- ------- -------
Net cash used in investing activities (31,797) (20,646) (11,151)
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Stock subscriptions received 5,500 5,500 -
Capital stock issued for cash 1,048,342 804,600 243,742
Share issuance costs (73,800) (73,800) -
--------- ------- -------
Net cash provided by financing
activities 980,042 736,300 243,742
--------- ------- -------
Change in cash and cash equivalents for
the period 28,403 17,031 11,372
Cash and cash equivalents, beginning of
period - 11,372 -
------- ------- ------
Cash and cash equivalents, end of period $ 28,403 $ 28,403 $ 11,372
=============================================================================
Cash paid during the period for interest $ $ $
=============================================================================
Cash paid during the period for income
taxes $ $ $
=============================================================================
Appendix B.4
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
PRO FORMA FINANCIAL STATEMENTS
(Expressed in United States Dollars)
JANUARY 31, 2001
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
PRO FORMA BALANCE SHEETS
(Expressed in United States Dollars)
AS AT JANUARY 31, 2001
(Unaudited)
===========================================================================
Actual Pro forma
- ---------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents $ 28,403 $ -
Accounts receivable 15,406 -
Inventory 73,801 -
Prepaid expenses and deposits 850 -
Due from related parties 47,850 -
------- ------
Total current assets 166,310 -
Capital assets 23,044 -
------- ------
Total assets $ 189,354 $ -
==========================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 29,902 $ -
------- ------
Total current liabilities 29,902 -
------- ------
Stockholders' equity
Common stock
Authorized
25,000,000 Shares with a par value of $0.001
Issued and outstanding
11,130,884 11,130 11,130
Additional paid-in capital 968,912 968,912
Stock subscriptions receivable - -
Deficit, accumulated during the development
stage (820,590) (980,042)
------- -------
Total stockholders' equity 159,452 -
------- -------
Total liabilities and stockholders' equity $ 189,354 $ -
===========================================================================
Appendix C
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is entered into as
of the ____ day of April, 2001, by and between Mikim, Inc., (the
"Company"), and FYI Corporation (the "Consultant").
Whereas, the Consultant has expertise and knowledge regarding
securities promotion and sales, media and public relations, financing
sources and investor relations; and
Whereas, the Company has need for the services of the Consultant.
Agreement
NOW, THEREFORE, for and in consideration of the mutual promises
and covenants hereinafter set forth, the benefits to the parties to be
derived therefrom and other good and valuable consideration the receipt
and adequacy of which is hereby acknowledged, it is agreed as follows:
Services. The Company hereby retains Consultant and Consultant hereby
agrees to serve the Company as an independent consultant providing
advice and services to the Company in connection with promotion of its
company and stock at conventions, "road shows" and related events
throughout the Unites States, strategic planning, developing capital
markets, and assisting in public and media relationships; and other
related business consulting. Consultant agrees to provide such
services to the Company as the Company may from time to time reasonably
request, including, without limitation, advice and services with
respect to those matters as to which it has special competence by
reason of its expertise. Consultant shall make himself available
during reasonable business hours to perform services requested by the
Company that fall within the scope of this Agreement and Consultant's
expertise. Additionally, Consultant shall provide quarterly reports at
the Company's request to the Company outlining his activities on behalf
of the Company for the prior quarter. Consultant represents and
warrants to the Company that Consultant's execution and performance of
this Agreement will not violate the Securities Act of 1933 (as
amended), the Exchange Act of 1934 (as amended), SEC regulations, NASD
regulations, Blue Sky laws, or any other securities laws and
regulations.
Term. This Agreement shall remain in full force and effect for two
years from the date hereof. This Agreement may be renewed for
additional periods upon the mutual written consent of the parties.
This Agreement may be terminated following the reorganization of Mikim
with a private company with sales and operations.
Compensation. The Company shall pay, and Consultant shall accept, a
fee of one hundred thousand dollars ($100,000 USD) paid on the execution
of this Agreement, in cash or in marketable securities having a market
value as of the date of this Agreement of at least $100,000 USD.
Independent Contractor. Consultant is retained under the terms of this
Agreement as an independent contractor and nothing herein shall be
construed as creating an employer/employee relationship, partnership or
joint venture between the parties. Consultant shall be solely liable
for the payment of any taxes imposed or arising out of the payment of
the compensation to it by the Company as set forth in this Agreement
including taxes imposed by Internal Revenue Code Sections 3508; 6153 and
sections 1401 through 1403. The Company agrees to the following rights
of Consultant consistent with an independent contractor relationship:
1. Consultant has the rights to perform services for others
during the term of this Agreement;
2. Consultant will furnish all equipment and materials used
to provide the services required by this Agreement;
3. Consultant has the right to hire assistants as
subcontractors, or to use its employees to provide the
services required by this Agreement, provided that the
Company is not liable for resulting cost; and
4. Neither Consultant nor its employees or agents shall be
required to devote full time to performing the services
required by this Agreement.
Authority to Act. The Consultant shall not have the authority to act
on behalf of the Company or to enter into agreements on behalf of the
Company.
Non-broker Activities. The parties acknowledge that Consultant is not
registered or licensed as a broker-dealer, and is acting as a
seller/finder in the intended transactions. Consultant may not engage
in any broker related activities, including the offering or selling of
securities for or on behalf of the Company, or related activities which
require broker-dealer registration.
Nondisclosure of Information. Consultant agrees that during the term of
this Agreement, Consultant will not, nor will it allow its employees or
agents to directly or indirectly, disclose to any person not authorized
by the Company to receive or use such information, any of the Company's
confidential or proprietary data, information, or techniques, or give to
any person not authorized by the Company to receive it any information
that is not generally known to anyone other than the Company or that is
designated by the Company as "limited," "private," "confidential," or
otherwise marked to indicate its confidential nature.
Assignment. The Consultant may not assign the obligations set forth
herein.
Entire Agreement. This Agreement is supersedes and supplants all prior
agreements between the parties. This Agreement is the only agreement or
understanding between the parties hereto with respect to the advice and
services to be provided by Consultant to the Company. All negotiations,
commitment, and understandings of both parties have been incorporated
herein. This Agreement cannot be modified except by a written document
signed by both parties to this Agreement.
Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the state of Utah and venue shall be in the
State of Utah.
Severability. If, and to the extent that, any court of competent
jurisdiction holds any provision of this Agreement to be invalid or
unenforceable, such holding shall in no way affect the validity of the
remainder of this Agreement.
Waiver. No failure by any party to insist on the strict performance of
any convenient, duty, agreement, or condition of this Agreement, or to
exercise any right or remedy consequent on a breach thereof, shall
constitute a waiver of any such breach or any other covenant, agreement,
term, or condition.
Mikim, Inc.
By_________________________
, President
FYI Corporation
By_________________________
Pete Falvo, President
[Proxy Form Appendix]
KidsToysPlus.com, Inc.
2924 Cliffe Avenue
Courtenay, British Columbia, Canada
V9N 2L7
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints __________________ and/or
________________ as Proxies, each with the power to appoint his
substitute, and hereby authorizes each of them to represent and to
vote, as designated below, all the shares of Common Stock of
KidsToysPlus.com, Inc. (the "Company") held of record by the
undersigned on ______________ 2001, at the Special Meeting of
Stockholders to be held on April 30, 2001, and at any adjournment or
postponement thereof.
Proposal No. 1 To transfer all or substantially all of the Company's
assets to Albert R. Timcke.
[ ] For [ ] Against [ ] Abstain
Proposal No. 2 The election of each of the following persons as
directors of the Company; Justeene Blankenship and Christopher J. Nielsen
(1) Justeene Blankenship (2) Christopher J. Nielsen
[ ] For all nominees
[ ] Withhold all nominees
[ ] Withhold authority to vote for any individual nominee.
Write number(s) of nominee(s) ____
Proposal No. 3 Approve change of the Company's corporate name to
"Mikim, Inc." by amending Articles of Incorporation
[ ] For [ ] Against [ ] Abstain
Proposal No. 4 To approve the Company's Consulting Agreement with
FYI Corporation
[ ] For [ ] Against [ ] Abstain
Proposal No. 5 Approval of all other matters by the persons named in
the proxies in accordance with their Judgment
[ ] For [ ] Against [ ] Abstain
Note The proxies are authorized to vote in accordance with their
judgment on any matters other than those referred to herein that
are properly presented for consideration and action at the
Special Meeting.
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. If no direction is
given, this proxy will be voted for Proposal No.'s 1, 2, 3, 4, and 5.
All other proxies heretofore given by the undersigned to vote shares
of stock of the Company, which the undersigned would be entitled to
vote if personally present at the Special Meeting or any adjournment
or postponement thereof, are hereby expressly revoked.
Dated:___________________, 2001
__________________________________
Print Name
__________________________________
Signature
__________________________________
Print Name (if second signer required)
___________________________________
Signature (if required)
Please print and sign exactly as name appears on stock certificate.
When shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation or partnership,
please sign in full corporate or partnership name by an authorized
officer or person.
Please mark, sign, date and promptly return the proxy card. If your
address is incorrectly shown, please print changes.