SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1/A
Amendment #1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
OBSCENE JEANS CORP.
(Name of Small Business Issuer in its Charter)
Florida 2300 27-1070374
- ---------------------------- ---------------------------- -----------------
(State or Other Jurisdiction (Primary Standard Industrial (IRS Employer
of Organization) Classification Code) Identification #)
Rachel Stark-Cappelli
1522 Romallo Lane 1522 Romallo Lane
Sarasota, FL 34232 Sarasota, FL 34232
941-330-7648 941-330-7648
941-866-7550 (FAX) 941-866-7550 (FAX)
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(Address and telephone of (Name, address and telephone number
registrant's executive office) of agent for service)
Please send copies of all correspondence to:
William L. MacDonald
Macdonald Tuskey Corporate & Securities Lawyers
Suite #1210, 777 Hornby Street, Vancouver, B.C., V6Z 1S4, Canada
Telephone: (604) 648-1670, Facsimile: (604)681-4760
Approximate date of proposed sale to the public: After this registration
statement becomes effective
If the securities being registered herein will be sold by the security
shareholders on a delayed or continuous basis pursuant to Rule 415 of the
Securities Act of 1933 please check the following box. [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller Reporting Company [X]
CALCULATION OF REGISTRATION FEE
Title of Each Proposed Proposed
Class of Amount Maximum Maximum Amount of
Securities to be to be Offering Price Aggregate Registration
Registered(3) Registered Per Unit (1) Offering Price Fee (2)
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Common Stock 3,000,000 $0.0175 $52,500 $3.74(4)
by Company par
value $0.0001
(1) The offering price has been arbitrarily determined by the Company and bears
no relationship to assets, earnings, or any other valuation criteria. No
assurance can be given that the shares offered hereby will have a market value
or that they may be sold at this, or at any price.
(2) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c) of the Securities Act of 1933.
(3) An indeterminate number of additional shares of common stock shall be
issuable pursuant to Rule 416 to prevent dilution resulting from stock splits,
stock dividends or similar transactions and in such an event the number of
shares registered shall automatically be increased to cover the additional
shares in accordance with Rule 416 under the Securities Act.
(4) Previously paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
OBSCENE JEANS CORP.
3,000,000 SHARES OF COMMON STOCK
Prior to this registration, there has been no public trading market for the
common Stock of OBSCENE JEANS CORP. ("OJC", the "Company", "us", "we", "our")
and it is not presently traded on any market or securities exchange. 3,000,000
shares of common stock are being offered for sale by the Company to the public.
The offering of the 3,000,000 shares is a "best efforts" offering, which means
that our director and officers will use his best efforts to sell the common
stock and there is no commitment by any person to purchase any shares. The
shares will be offered at a fixed price of $0.0175 per share for the duration of
the offering. There is no minimum number of shares required to be sold to close
the offering. This offering will continue for the earlier of: (i) 90 days after
this registration statement becomes effective with the Securities and Exchange
Commission, or (ii) the date on which all 3,000,000 shares registered hereunder
have been sold. We may at our discretion extend the offering for an additional
90 days. Proceeds from the sale of the shares will be used to fund the initial
stages of our business development. This offering will end no later than six (6)
months from the offering date. The offering date is the date by which this
registration statement becomes effective. This is a direct participation
offering since we, and not an underwriter, are offering the stock.
SHARES OFFERED PRICE TO SELLING AGENT PROCEEDS TO
BY COMPANY PUBLIC COMMISSIONS THE COMPANY
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Per Share $0.0175 Not applicable $0.0175
Minimum Purchase None Not applicable Not applicable
Total (3,000,000 shares) $52,500 Not applicable $52,500
Neither the Securities and Exchange Commission nor any state regulatory
authority has approved or disapproved of these securities, endorsed the merits
of this offering, or determined that this Prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
AN INVESTMENT IN OUR SECURITIES IS SPECULATIVE. INVESTORS SHOULD BE ABLE TO
AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE THE SECTION ENTITLED "RISK
FACTORS" BEGINNING ON PAGE 8 OF THIS PROSPECTUS.
THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY THESE SECURITIES AND WE SHALL NOT SELL ANY OF THESE SECURITIES IN
ANY STATE WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL BEFORE
REGISTRATION OR QUALIFICATION UNDER SUCH STATE'S SECURITIES LAWS.
You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that
contained in this Prospectus. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of our common shares.
THE DATE OF THIS PROSPECTUS IS MAY 21, 2010
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The following table of contents has been designed to help you find important
information contained in this prospectus. We encourage you to read the entire
prospectus.
TABLE OF CONTENTS PAGE NO.
SUMMARY OF OUR OFFERING........................................................5
BUSINESS SUMMARY...............................................................6
SUMMARY OF OUR FINANCIAL INFORMATION...........................................7
RISK FACTORS...................................................................8
USE OF PROCEEDS...............................................................17
DETERMINATION OF OFFERING PRICE...............................................17
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES.................................18
THE OFFERING..................................................................19
PLAN OF DISTRIBUTION..........................................................19
DESCRIPTION OF SECURITIES.....................................................20
INTEREST OF NAMED EXPERTS AND COUNSEL.........................................21
BUSINESS DESCRIPTION..........................................................21
DESCRIPTION OF PROPERTY.......................................................26
LEGAL PROCEEDINGS.............................................................27
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS......................27
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS....................................................................27
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE....................................................................33
CODE OF BUSINESS CONDUCT AND ETHICS...........................................33
MANAGEMENT....................................................................34
CONFLICTS OF INTEREST.........................................................35
COMMITTEES OF THE BOARD OF DIRECTORS..........................................35
EXECUTIVE COMPENSATION........................................................36
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS...............................39
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS..........................39
DISCLOSURE OF COMMISSION'S POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES...................................................................40
REPORTS TO SECURITY HOLDERS...................................................40
WHERE YOU CAN FIND MORE INFORMATION...........................................40
STOCK TRANSFER AGENT..........................................................41
FINANCIAL STATEMENTS.........................................................F-1
Management Certification..............................................*
Net Income Per Common Share...........................................*
Revenue and Cost Recognition..........................................*
DEALER PROSPECTUS DELIVERY OBLIGATION
Until a date, which is 90 days after the date of this prospectus, all dealers
that effect transactions in these securities whether or not participating in
this offering, may be required to deliver a prospectus. This is in addition to
the dealers' obligation to deliver a prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.
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SUMMARY INFORMATION
This Prospectus, and any supplement to this Prospectus include "forward-looking
statements". To the extent that the information presented in this Prospectus
discusses financial projections, information or expectations about our business
plans, results of operations, products or markets, or otherwise makes statements
about future events, such statements are forward-looking. Such forward-looking
statements can be identified by the use of words such as "intends",
"anticipates", "believes", "estimates", "projects", "forecasts", "expects",
"plans" and "proposes". Although we believe that the expectations reflected in
these forward-looking statements are based on reasonable assumptions, there are
a number of risks and uncertainties that could cause actual results to differ
materially from such forward-looking statements. These include, among others,
the cautionary statements in the "Risk Factors" section beginning on Page 8 of
this Prospectus and the "Management's Discussion and Analysis of Financial
Position and Results of Operations" section elsewhere in this Prospectus.
This summary only highlights selected information contained in greater detail
elsewhere in this Prospectus. This summary may not contain all of the
information that you should consider before investing in our common stock. You
should carefully read the entire Prospectus, including "Risk Factors" beginning
on Page 8, and the consolidated financial statements, before making an
investment decision
All dollar amounts refer to US dollars unless otherwise indicated.
OUR OFFERING
We have 9,000,000 shares of common stock issued and outstanding. Through this
offering we will register 3,000,000 shares of common stock for offering to the
public. These shares represent additional common stock to be issued by us. We
may endeavor to sell all 3,000,000 shares of common stock after this
registration becomes effective. The price at which we offer these shares is
fixed at $0.0175 per share for the duration of the offering. There is no
arrangement to address the possible effect of the offering on the price of the
stock. We will receive all proceeds from the sale of the common stock.
Securities being offered by 3,000,000 shares of common stock, par
the Company. value $0.0001 offered by us in a direct
offering
Offering price per share. We are offering the 3,000,000 shares of
our common stock at $0.0175.
Number of shares outstanding 9,000,000 common shares are currently
before the offering of issued and outstanding.
common shares.
Number of shares outstanding 12,000,000 common shares will be issued
after the offering of common and outstanding if we sell all of the
shares. shares that we are offering.
The minimum number of shares None.
to be sold in this offering.
Market for the common shares There is no public market for the common
shares. The price per share is $0.0175.
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We may not be able to meet the
requirement for a public listing or
quotation of our common stock. Further,
even if our common stock is quoted or
granted listing, a market for the common
shares may not develop.
The offering price for the shares will
remain $0.0175 per share for the
duration of the offering.
Use of Proceeds We will receive all proceeds from the
sale of the common stock and intends to
use the proceeds from this offering to
begin implementing the business and
marketing plan. The expenses of this
offering, including the preparation of
this prospectus and the filing of this
registration statement, estimated at
$10,000.00 are being paid for by us.
Termination of the Offering This offering will terminate upon the
earlier to occur of (i) 90 days after
this registration statement becomes
effective with the Securities and
Exchange Commission, or (ii) the date on
which all 3,000,000 shares registered
hereunder have been sold. We may, at our
discretion, extend the offering for an
additional 90 days. In any event, the
offering will end within six months of
this Registration Statement being
declared effective.
Terms of the Offering Our sole officer and director will sell
the common stock upon effectiveness of
this registration statement on a BEST
EFFORTS basis.
You should rely only upon the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that which
is contained in this prospectus. We are offering to sell shares of common stock
and seeking offers to buy shares of common stock only in jurisdictions where
offers and sales are permitted.
BUSINESS SUMMARY
We are a development-stage company, incorporated in the State of Florida on
September 21, 2009, as a for-profit company, and electing a fiscal year end of
August 31. Our business and registered office is located at 1522 Romallo Lane,
Sarasota, FL 34232. Our telephone number is 941-330-7648 our fax number is
941-866-7550.
We intend to design and distribute a high-end women's collection of "Obscene
Brand Jeans" including t-shirts, jackets and sweatshirts to compliment the core
of our intended collection of jeans.
We need to raise an additional $500,000 to implement our business plan over the
next 18 months and the funds raised in this offering, even assuming we sell all
the shares being offered, will be insufficient to commercialize our product or
develop our business strategy.
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We intend to use the latest materials, newest ideas in washes and stitching
techniques, and the creative talents that were developed by Ms. Stark-Cappelli
acquired during her 15 years of experience in jean design, operations and
management in the Florence, Italy apparel industry. Ms. Stark-Cappelli intends
to utilize her appreciation and intensity for the creation of the "Obscene Brand
Jean" design execution based on her creativity and passion for details.
The product line is intended to cater to women who are seeking stylish looking
jeans that of high quality and are willing to pay an upscale price. We intend to
market and sell our product line primarily in the United States and Italy.
We intend to design our products internally and enter into outsourcing
agreements for the manufacturing, marketing, selling and distributing agreements
with independent agents, each of whom is granted exclusive rights to market and
sell "Obscene Brand Jeans" in its respective territory. We currently have no
such agreements in place with commissioned sales agents and distributors in the
United States and Italy.
We intend to support our independent sales agents and distributors through
attendance at all of the major trade and fashion industry exhibitions,
advertising in trade publications and by intending to market and sell our
collection of products via our website " obscenejeans.com ". We have registered
the domain name; however we have not yet begun development of our website. Our
intended initial strategy is to limit distribution to high-end retailers,
department stores and boutiques, building a reputation for producing fresh
innovative quality collection of products and with on-time delivery. We do not
currently plan to launch an aggressive advertising campaign to consumers.
SUMMARY OF OUR FINANCIAL INFORMATION
The following table sets forth selected financial information, which should be
read in conjunction with the information set forth in the "Management's
Discussion and Analysis of Financial Position and Results of Operations" section
and the accompanying financial statements and related notes included elsewhere
in this Prospectus.
PERIOD FROM INCEPTION ON
SEPTEMBER 21, 2009 TO
FEBRUARY 28, 2010
(AUDITED)
($)
------------------------
Revenues .............. $ -
Expenses .............. -
Net Profit (Loss) ......... -
Net Profit (Loss) per share .... $0.00
AS AT FEBRUARY 28, 2010
(AUDITED)
($)
-----------------------
Working Capital (Deficiency) ... $ 9,000
Total Assets ........... $ 9,000
Total Current Liabilities ..... $ -
As indicated in the financial statements accompanying this prospectus, we have
had no revenue to date and have incurred only losses since inception. We have
had limited operations and have been issued a "going concern" opinion by our
auditor, based upon our reliance on the sale of our common stock as the sole
source of funds for our future operations.
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RISK FACTORS
Please consider the following risk factors and other information in this
prospectus relating to our business and prospects before deciding to invest in
our common stock.
This offering and any investment in our common stock involves a high degree of
risk. You should carefully consider the risks described below and all of the
information contained in this prospectus before deciding whether to purchase our
common stock. If any of the following risks actually occur, our business,
financial condition and results of operations could be harmed. The trading price
of our common stock could decline due to any of these risks, and you may lose
all or part of your investment.
We consider the following to be the material risks for an investor regarding
this offering. Our company should be viewed as a high-risk investment and
speculative in nature. An investment in our common stock may result in a
complete loss of the invested amount. Please consider the following risk factors
before deciding to invest in our common stock.
Risks Related to our Business
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BECAUSE WE HAVE NOT PRODUCED A SAMPLE OF OUR OBSCENE BRAND JEANS AND
COMPLIMENTED PRODUCTS, THESE PRODUCTS, MAY NOT WORK OR FIT PROPERLY AND/OR THE
PRODUCTION COST CAN EXCEED EXPECTATIONS
We have not produced any samples of our products therefore, we do not know the
exact cost of production. In the case of a higher than expected cost of
production, the we will not be able to offer our products at a competitive price
in the high fashion apparel market place. Furthermore, we may find problems in
the manufacturing process and/or product function. If we are unable to develop
our products, we will have to cease our operations, resulting in the complete
loss of your investment.
OUR LACK OF AN OPERATING HISTORY GIVES NO ASSURANCE THAT OUR FUTURE OPERATIONS
WILL RESULT IN PROFITABLE REVENUES, WHICH COULD RESULT IN THE SUSPENSION OR END
OF OUR OPERATIONS
We were incorporated on September 21, 2009 and we have not realized any revenues
to date. We have very little operating history upon which an evaluation of our
future success or failure can be made. Our ability to achieve and maintain
profitability and positive cash flow is dependent upon the completion of this
offering and our ability to generate revenues through sales of our products.
Based upon current plans, we expect to incur operating losses in future periods
because we will be incurring expenses and not generating revenues. We cannot
guarantee that we will be successful in generating revenues in the future.
Failure to generate revenues may cause us to go out of business.
WE ARE A NEW COMPANY WITH NO OPERATING HISTORY AND WE FACE A HIGH RISK OF
BUSINESS FAILURE WHICH WOULD RESULT IN THE LOSS OF YOUR INVESTMENT
We are a development stage company formed recently to carry out the activities
described in this prospectus and thus have only a limited operating history upon
which an evaluation of its prospectus can be made. We were incorporated on
September 21, 2009 and to date have been involved primarily in the development
of our business plan. We have limited business operations. Thus, there is no
internal or industry-based historical financial data upon which to estimate our
planned operating expenses.
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We expect that our results of operations may also fluctuate significantly in the
future as a result of a variety of market factors including, among others, the
entry of new competitors offering a similar product; the availability of
motivated and qualified personnel; the initiation, renewal or expiration of our
customer base; pricing changes by the Company or its competitors, specific
economic conditions in the jeans market and general economic conditions.
Accordingly, our future sales and operating results are difficult to forecast.
As of the date of this prospectus, we have earned no revenue. Failure to
generate revenue will cause us to go out of business, which could result in the
complete loss of your investment.
BECAUSE OUR CURRENT OFFICER AND DIRECTOR DOES NOT HAVE SIGNIFICANT EXPERIENCE IN
STARTING A JEANS PRODUCTS COMPANY AND WE LACK CUSTOMERS AND SUPPLIERS, OUR
BUSINESS HAS A HIGHER RISK OF FAILURE
Although our Chief Executive Officer and Director has extensive business
experience, she does not have experience in developing a new company or in the
development of a Website for e-commerce. Additionally, we currently have no
contracts or agreements with customers or suppliers or manufacturers of our
intended products. Therefore, without this experience, contracts or suppliers,
our management's business experience may not be enough to effectively start-up
and maintain our company. As a result, the implementation of our business plan
may be delayed, or eventually, unsuccessful.
BECAUSE WE ARE SMALL AND DO NOT HAVE MUCH CAPITAL, WE MUST LIMIT OUR MARKETING
ACTIVITIES. AS A RESULT, OUR SALES MAY NOT BE ENOUGH TO OPERATE PROFITABLY. IF
WE DO NOT MAKE A PROFIT, WE MAY HAVE TO SUSPEND OR CEASE OPERATIONS
Due to the fact we are small and do not have much capital, we must limit our
marketing activities to potential customers having the likelihood of purchasing
our products. We intend to generate revenue through the sale of our products.
Because we will be limiting the scope of our marketing activities, we may not be
able to generate enough sales to operate profitably. If we cannot operate
profitably, we may have to suspend or cease operations.
OUR PRODUCTS MAY NOT FIND ACCEPTANCE FOR OUR PRODUCTS IN HIGH END BOUTIQUES AND
DEPARTMENT STORES.
We are a new company with no established visibility or recognition in the
clothing industry. We anticipate our jean products to be positioned as a high
end product with a corresponding price point. However, since our brand is not
established and our products are not going to be recognized within the industry,
we may have trouble placing our products with distributors who cater to high end
boutiques and department stores. If we are not able to have our products sold at
high end boutiques and department stores, we may not be able to generate
revenues and our business plan may fail.
OUR OPERATING RESULTS MAY PROVE UNPREDICTABLE WHICH COULD NEGATIVELY AFFECT OUR
PROFIT
Our operating results are likely to fluctuate significantly in the future due to
a variety of factors, many of which we have no control. Factors that may cause
our operating results to fluctuate significantly include: our inability to
generate enough working capital from future equity sales; the level of
commercial acceptance by retailers and consumers of our products; fluctuations
in the demand for Obscene Jeans products; the amount and timing of operating
costs and capital expenditures relating to expansion of our business, operations
and infrastructure and general economic conditions.
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If realized, any of these risks could have a material adverse effect on our
business, financial condition and operating results.
OUR SOLE OFFICER AND DIRECTOR MAY NOT BE IN A POSITION TO DEVOTE A MAJORITY OF
HER TIME TO OUR OPERATIONS, WHICH MAY RESULT IN PERIODIC INTERRUPTIONS AND EVEN
BUSINESS FAILURE
Ms. Stark-Cappelli, our sole officer and director, has other outside business
activities and is devoting approximately 10-25 hours per week to our operations.
Our operations may be sporadic and occur at times which are not convenient to
Ms. Stark-Cappelli, which may result in periodic interruptions or suspensions of
our business plan. Such delays could have a significant negative effect on the
success of the business.
KEY MANAGEMENT PERSONNEL MAY LEAVE THE COMPANY WHICH COULD ADVERSELY AFFECT THE
ABILITY OF THE COMPANY TO CONTINUE OPERATIONS
Because we are entirely dependent on the efforts of its sole officer and
director, her departure or the loss of other key personnel in the future, could
have a material adverse effect on the business. We believe that all commercially
reasonable efforts have been made to minimize the risks attendant with the
departure by key personnel from service.
However, there is no guarantee that replacement personnel, if any, will help the
Company to operate profitably. We do not maintain key person life insurance on
our sole officer and director.
IF OUR COMPANY IS DISSOLVED, IT IS UNLIKELY THAT THERE WILL BE SUFFICIENT ASSETS
REMAINING TO DISTRIBUTE TO OUR SHAREHOLDERS
In the event of the dissolution of our company, the proceeds realized from the
liquidation of our assets, if any, will be used primarily to pay the claims of
our creditors, if any, before there can be any distribution to the shareholders.
In that case, the ability of purchasers of the offered shares to recover all or
any portion of the purchase price for the offered shares will depend on the
amount of funds realized and the claims to be satisfied there from.
IF WE ARE UNABLE TO GAIN ANY SIGNIFICANT MARKET ACCEPTANCE FOR OUR PRODUCTS OR
ESTABLISH A SIGNIFICANT MARKET PRESENCE, WE MAY BE UNABLE TO GENERATE SUFFICIENT
REVENUE TO CONTINUE OUR BUSINESS
Our growth strategy is substantially dependent upon our ability to market our
products successfully to prospective customers. However, our planned products
may not achieve significant acceptance. Such acceptance, if achieved, may not be
sustained for any significant period of time. Failure of our products to achieve
or sustain market acceptance could have a material adverse effect on our
business, financial conditions and the results of our operations.
MANAGEMENT'S ABILITY TO IMPLEMENT THE BUSINESS STRATEGY MAY BE SLOWER THAN
EXPECTED AND WE MAY BE UNABLE TO GENERATE A PROFIT
Our plans include obtaining business from high end boutique, department store
retailers which may not occur. Our growth strategy is subject to significant
risks which you should carefully consider before purchasing the shares we are
offering.
Although we plan on designing and manufacturing products carefully, the products
may be slow to achieve profitability, or may not become profitable at all, which
will result in losses. There can be no assurance that we will succeed.
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We may be unable to enter into its intended markets successfully. The factors
that could affect our growth strategy include our success in(a) obtaining orders
from high end boutique and department store retailers and our E-Commerce
Website, (b) obtaining adequate financing on acceptable terms, and (c) adapting
our internal controls and operating procedures to accommodate our future growth.
Our systems, procedures and controls may not be adequate to support the
expansion of our business operations. Significant growth will place managerial
demands on all aspects of our operations. Our future operating results will
depend substantially upon our ability to manage changing business conditions and
to implement and improve our technical, administrative and financial controls
and reporting systems.
IF WE ARE UNABLE TO MANAGE OUR FUTURE GROWTH OUR BUSINESS COULD BE HARMED
If the Company experiences significant growth in the foreseeable future, its
growth may place a significant strain on management, financial, operating and
technical resources. Failure to manage growth effectively could have a material
adverse effect on the Company's financial condition or the results of its
operations.
Since inception on September 21, 2009 to February 28, 2010, we have spent a
total of $0 on start-up costs. We have not generated any revenue from business
operations. All proceeds currently held by us are the result of the sale of
common stock to its officers.
OUR PRODUCT MAY NOT BE ABLE TO DISTINGUISH ITSELF IN THE MARKET AND WE MAY BE
UNABLE TO ATTRACT ENOUGH CUSTOMERS TO OPERATE PROFITABLY, WITHOUT A PROFIT WE
MAY HAVE TO SUSPEND OR CEASE OPERATIONS
Our product will target the high-end market. If we are unable to demonstrate
clearly the concept that makes our products unique to potential customers, they
may not purchase the product. If the public doesn't acknowledge the singularity
and innovation of our products, we may be unable to attract enough customers.
WE MAY BE UNABLE TO MAKE NECESSARY ARRANGEMENTS AT ACCEPTABLE COST, WE MAY HAVE
TO SUSPEND OR CEASE OPERATIONS ENTIRELY WHICH COULD RESULT IN A TOTAL LOSS OF
YOUR INVESTMENT.
Because we are a small business, with limited assets, we are not in a position
to assume unanticipated costs and expenses. If we have to make changes in our
structure or are faced with circumstances that are beyond our ability to afford,
we may have to suspend operations or cease operations entirely which could
result in a total loss of your investment.
COMPETITORS MAY ENTER THIS SECTOR WITH SUPERIOR PRODUCTS, INFRINGING OUR
CUSTOMER BASE, AND AFFECTING OUR BUSINESS ADVERSELY.
We have identified a market opportunity for our products. Competitors may enter
this sector with superior products, service, conditions and/or benefits. This
would infringe on our customer base, have an adverse affect upon our business
and the results of our operations.
SINCE OUR SOLE OFFICER AND DIRECTOR CURRENTLY OWNS 100% OF THE OUTSTANDING
COMMON STOCK, INVESTORS MAY FIND THAT HER DECISIONS ARE CONTRARY TO THEIR
INTERESTS YOU SHOULD NOT PURCHASE SHARES UNLESS YOU ARE WILLING TO ENTRUST ALL
ASPECTS OF MANAGEMENT TO OUR SOLE OFFICER AND DIRECTOR, OR HER SUCCESSORS
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Our sole officer and director, Rachel Stark-Cappelli, owns 9,000,000 shares of
common stock representing 100% of our outstanding stock. Ms. Stark-Cappelli will
own 9,000,000 shares of our common stock after this offering is completed
representing 75% of our outstanding shares, assuming all securities are sold. As
a result, she will have control of us even if the full offering is subscribed
for and be able to choose all of our directors. Her interests may differ from
the ones of other stockholders. Factors that could cause her interests to differ
from the other stockholders include the impact of corporate transactions on the
timing of business operations and her ability to continue to manage the business
given the amount of time she is able to devote to us.
All decisions regarding the management of our affairs will be made exclusively
by her. Purchasers of the offered shares may not participate in our management
and, therefore, are dependent upon her management abilities. The only assurance
that our shareholders, including purchasers of the offered shares, have that our
sole officer and director will not abuse her discretion in executing our
business affairs, is her fiduciary obligation and business integrity. Such
discretionary powers include, but are not limited to, decisions regarding all
aspects of business operations, corporate transactions and financing. Ms.
Stark-Cappelli also has the ability to accomplish or ratify actions at the
shareholder level which would otherwise implicate her fiduciary duties if done
as one of the members of our board of directors.
Accordingly, no person should purchase the offered shares unless willing to
entrust all aspects of management to the sole officer and director, or her
successors. Potential purchasers of the offered shares must carefully evaluate
the personal experience and business performance of our management.
Risks Related To Our Financial Condition
- ----------------------------------------
THERE IS SUBSTANTIAL UNCERTAINTY ABOUT OUR ABILITY TO CONTINUE OUR OPERATIONS AS
A GOING CONCERN
In their audit report dated April 6, 2010; our auditors have expressed an
opinion that substantial doubt exists as to whether we can continue as an
ongoing business. Because our officers may be unwilling or unable to loan or
advance any additional capital to us, we believe that if we do not raise
additional capital within 18 months of the effective date of this registration
statement, we may be required to suspend or cease the implementation of our
business plan. Due to the fact that there is no minimum investment and no
refunds on sold shares, you may be investing in a company that will not have the
funds necessary to develop its business strategies. As such we may have to cease
operations and you could lose your entire investment. See the "February 28, 2010
Audited Financial Statements - Auditors Report". Because we have been issued an
opinion by its auditor that substantial doubt exists as to whether we can
continue as a going concern it may be more difficult to attract investors.
THE ENACTMENT OF THE SARBANES-OXLEY ACT MAY MAKE IT MORE DIFFICULT FOR US TO
RETAIN OR ATTRACT OFFICERS AND DIRECTORS, WHICH COULD INCREASE OUR OPERATING
COSTS OR PREVENT US FROM BECOMING PROFITABLE.
The Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") was enacted in
response to public concern regarding corporate accountability in the wake of a
number of accounting scandals. The stated goals of the Sarbanes-Oxley Act are to
increase corporate responsibility, provide enhanced penalties for accounting and
auditing improprieties at publicly traded companies and protect investors by
improving the accuracy and reliability of corporate disclosure pursuant to
applicable securities laws. The Sarbanes-Oxley Act applies to all companies that
file or are required to file periodic reports with the SEC under the Securities
Exchange Act of 1934 (the "Exchange Act").
- 12 -
Upon becoming a public company, we will be required to comply with the
Sarbanes-Oxley Act. Since the enactment of the Sarbanes-Oxley Act has resulted
in the imposition of a series of rules and regulations by the SEC that increase
the responsibilities and liabilities of directors and executive officers, the
perceived increased personal risk associated with these changes may deter
qualified individuals from accepting such roles. Consequently, it may be more
difficult for us to attract and retain qualified persons to serve as our
directors or executive officers, and we may need to incur additional operating
costs. This could prevent us from becoming profitable.
SINCE WE ANTICIPATES OPERATING EXPENSES WILL INCREASE PRIOR TO EARNING REVENUE,
WE MAY NEVER ACHIEVE PROFITABILITY
We anticipate an increase in our operating expenses, without realizing any
revenues from the sale of its products. Within the next 18 months, we will have
costs related to (i) creating a product line (samples), (ii) initiation of our
sales and marketing campaign, (iii) administrative expenses and (iv) the
expenses of this offering.
There is no history upon which to base any assumption as to the likelihood that
we will prove successful. We cannot provide investors with any assurance that
our products will attract customers; generate any operating revenue or ever
achieve profitable operations. If we are unable to address these risks, there is
a high probability that our business can fail, which will result in the loss of
your entire investment.
IF WE CANNOT SECURE ADDITIONAL CAPITAL, OR IF AVAILABLE CAPITAL IS TOO
EXPENSIVE, OUR BUSINESS WILL FAIL.
We require $52,500 to begin implementing the business and marketing plan. This
amount includes the $10,000 required for offering expense. We will require
additional funding of approximately $500,000 to fully execute our business plan
and bring our products to the marketplace. We intend to accomplish this in two
phases. Phase One will require additional funding of $150,000 to begin
implementing the business plan. This includes establishing and produce sample
products, development of labeling and merchandising (0-9 Months) materials.
Phase Two will require additional funding of $350,000 (9-18 Months) to execute
our production, administrative, marketing and sales strategy. As of February 28,
2010, we had cash on hand of $9,000.
No assurance can be given that we will obtain access to capital markets in the
future or that adequate financing to satisfy the cash requirements of
implementing our business strategies will be available on acceptable terms. Our
inability to gain access to capital markets or obtain acceptable financing could
have a material adverse effect upon the results of its operations and its
financial conditions.
If we are not successful in earning revenue once we have started our sales
activity, we may require additional financing to sustain our business
operations. Currently, we do not have any arrangements for financing and can
provide no assurances to investors that we will be able to obtain any when
required. Obtaining additional financing would be subject to a number of
factors, including our sales results. These factors may have an affect on the
timing, amount, terms or conditions of additional financing and make such
additional financing unavailable to us.
WE DO NOT HAVE SUFFICIENT CAPITAL TO CONTINUE MAINTAINING OUR REPORTING STATUS.
As of the date of this Prospectus, the current funds available to us will not be
sufficient to continue maintaining our reporting status with the SEC. Our
management believes that if we cannot maintain our reporting status with the SEC
we will have to cease all efforts directed towards developing our company. As
such, any investment could be lost in its entirety.
- 13 -
Risks Related To This Offering
- ------------------------------
BECAUSE THERE IS NO PUBLIC TRADING MARKET FOR OUR COMMON STOCK, YOU MAY NOT BE
ABLE TO RESELL YOUR STOCK
We intend to apply to have our common stock quoted on the OTC Bulletin Board.
This process takes at least 60 days and the application must be made on our
behalf by a market maker. Our stock may be listed or traded only to the extent
that there is interest by broker-dealers in acting as a market maker. Despite
our best efforts, it may not be able to convince any broker/dealers to act as
market-makers and make quotations on the OTC Bulletin Board. We may consider
pursuing a listing on the OTCBB after this registration becomes effective and we
have completed our offering.
If our common stock becomes listed and a market for the stock develops, the
actual price of our shares will be determined by prevailing market prices at the
time of the sale.
We cannot assure you that there will be a market in the future for our common
stock. The trading of securities on the OTC Bulletin Board is often sporadic and
investors may have difficulty buying and selling our shares or obtaining market
quotations for them, which may have a negative effect on the market price of our
common stock. You may not be able to sell your shares at their purchase price or
at any price at all. Accordingly, you may have difficulty reselling any shares
you purchase from the selling security holders.
INVESTING IN OUR COMPANY IS HIGHLY SPECULATIVE AND COULD RESULT IN THE ENTIRE
LOSS OF YOUR INVESTMENT
Purchasing the offered shares is highly speculative and involves significant
risk. The offered shares should not be purchased by any person who cannot afford
to lose their entire investment. Our business objectives are also speculative,
and it is possible that we would be unable to accomplish them. Our shareholders
may be unable to realize a substantial or any return on their purchase of the
offered shares and may lose their entire investment. For this reason, each
prospective purchaser of the offered shares should read this prospectus and all
of its exhibits carefully and consult with their attorney, business and/or
investment advisor.
INVESTING IN OUR COMPANY MAY RESULT IN AN IMMEDIATE LOSS BECAUSE BUYERS WILL PAY
MORE FOR OUR COMMON STOCK THAN THE PRO RATA PORTION OF THE ASSETS ARE WORTH
We have only been recently formed and has only a limited operating history and
no earnings, therefore, the price of the offered shares is not based on any
data. The offering price and other terms and conditions regarding our shares
have been arbitrarily determined and do not bear any relationship to assets,
earnings, book value or any other objective criteria of value. No investment
banker, appraiser or other independent third party has been consulted concerning
the offering price for the shares or the fairness of the offering price used for
the shares. Our net tangible book value per share of common stock is $0.001.
The arbitrary offering price of $0.0175 per common share as determined herein is
substantially higher than the net tangible book value per share of our common
stock. Our assets do not substantiate a share price of $0.0175. This premium in
share price applies to the terms of this offering. The offering price will not
change for the duration of the offering even if we obtain a listing on any
exchange or become quoted on the OTC Bulletin Board.
- 14 -
BECAUSE WE HAVE 100,000,000 AUTHORIZED SHARES, MANAGEMENT COULD ISSUE ADDITIONAL
SHARES, DILUTING THE CURRENT SHARE HOLDERS' EQUITY
We have 100,000,000 authorized shares, of which only 9,000,000 are currently
issued and outstanding and only 12,000,000 will be issued and outstanding after
this offering terminates. Our management could, without the consent of the
existing shareholders, issue substantially more shares, causing a large dilution
in the equity position of our current shareholders. Additionally, large share
issuances would generally have a negative impact on our share price. It is
possible that, due to additional share issuance, you could lose a substantial
amount, or all, of your investment.
AS WE DO NOT HAVE AN ESCROW OR TRUST ACCOUNT WITH SUBSCRIPTIONS FOR INVESTORS,
IF WE FILE FOR OR ARE FORCED INTO BANKRUPTCY PROTECTION, INVESTORS WILL LOSE THE
ENTIRE INVESTMENT
Invested funds for this offering will not be placed in an escrow or trust
account and if we file for bankruptcy protection or a petition for involuntary
bankruptcy is filed by creditors against us, your funds will become part of the
bankruptcy estate and administered according to the bankruptcy laws. As such,
you will lose your investment and your funds will be used to pay creditors.
WE DO NOT ANTICIPATE PAYING DIVIDENDS IN THE FORESEEABLE FUTURE, SO THERE WILL
BE LESS WAYS IN WHICH YOU CAN MAKE A GAIN ON ANY INVESTMENT IN US
We have never paid dividends and do not intend to pay any dividends for the
foreseeable future. To the extent that we may require additional funding
currently not provided for in our financing plan, our funding sources may
prohibit the declaration of dividends. Because we do not intend to pay
dividends, any gain on your investment will need to result from an appreciation
in the price of our common stock. There will therefore be fewer ways in which
you are able to make a gain on your investment.
IN THE EVENT THAT OUR SHARES ARE TRADED, THEY MAY TRADE UNDER $5.00 PER SHARE
AND THUS WILL BE A PENNY STOCK. TRADING IN PENNY STOCKS HAS MANY RESTRICTIONS
AND THESE RESTRICTIONS COULD SEVERELY AFFECT THE PRICE AND LIQUIDITY OF OUR
SHARES
In the event that our shares are traded, and our stock trades below $5.00 per
share, our stock would be known as a "penny stock", which is subject to various
regulations involving disclosures to be given to you prior to the purchase of
any penny stock. The U.S. Securities and Exchange Commission (the "SEC") has
adopted regulations which generally define a "penny stock" to be any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. Depending on market fluctuations, our common stock could be
considered to be a "penny stock". A penny stock is subject to rules that impose
additional sales practice requirements on broker/dealers who sell these
securities to persons other than established customers and accredited investors.
For transactions covered by these rules, the broker/dealer must make a special
suitability determination for the purchase of these securities. In addition, he
must receive the purchaser's written consent to the transaction prior to the
purchase. He must also provide certain written disclosures to the purchaser.
Consequently, the "penny stock" rules may restrict the ability of broker/dealers
to sell our securities, and may negatively affect the ability of holders of
shares of our common stock to resell them. These disclosures require you to
acknowledge that you understand the risks associated with buying penny stocks
and that you can absorb the loss of your entire investment. Penny stocks are low
priced securities that do not have a very high trading volume. Consequently, the
price of the stock is often volatile and you may not be able to buy or sell the
stock when you want to.
- 15 -
FINANCIAL INDUSTRY REGULATORY AUTHORITY ("FINRA") SALES PRACTICE REQUIREMENTS
MAY ALSO LIMIT YOUR ABILITY TO BUY AND SELL OUR COMMON STOCK, WHICH COULD
DEPRESS THE PRICE OF OUR SHARES.
FINRA rules require broker-dealers to have reasonable grounds for believing that
an investment is suitable for a customer before recommending that investment to
the customer. Prior to recommending speculative low-priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status and
investment objectives, among other things. Under interpretations of these rules,
FINRA believes that there is a high probability such speculative low-priced
securities will not be suitable for at least some customers. Thus, FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
shares, have an adverse effect on the market for our shares, and thereby depress
our share price.
YOU MAY FACE SIGNIFICANT RESTRICTIONS ON THE RESALE OF YOUR SHARES DUE TO STATE
"BLUE SKY" LAWS.
Each state has its own securities laws, often called "blue sky" laws, which (1)
limit sales of securities to a state's residents unless the securities are
registered in that state or qualify for an exemption from registration, and (2)
govern the reporting requirements for broker-dealers doing business directly or
indirectly in the state. Before a security is sold in a state, there must be a
registration in place to cover the transaction, or it must be exempt from
registration. The applicable broker-dealer must also be registered in that
state.
We do not know whether our securities will be registered or exempt from
registration under the laws of any state. A determination regarding registration
will be made by those broker-dealers, if any, who agree to serve as market
makers for our common stock. There may be significant state blue sky law
restrictions on the ability of investors to sell, and on purchasers to buy, our
securities. You should therefore consider the resale market for our common stock
to be limited, as you may be unable to resell your shares without the
significant expense of state registration or qualification.
- 16 -
USE OF PROCEEDS
Our offering is being made on a self-underwritten basis: no minimum number of
shares must be sold in order for the offering to proceed. The offering price per
share is $0.0175. The following table sets forth the uses of proceeds assuming
the sale of 25%, 50%, 75% and 100%, respectively, of the securities offered for
sale by us.
USE OF PROCEEDS TABLE
IF 25% OF IF 50% OF IF 75% OF IF 100% OF
SHARES SOLD SHARES SOLD SHARES SOLD SHARES SOLD
----------- ----------- ----------- -----------
GROSS PROCEEDS FROM THIS OFFERING $ 13,125 $ 26,250 $ 39,375 $ 52,500
=========== =========== =========== ===========
LESS: OFFERING EXPENSES
Accounting fees 3,500 3,500 3,500 3,500
Legal fees 4,500 4,500 4,500 4,500
Printing 500 500 500 500
Transfer Agent 1,500 1,500 1,500 1,500
TOTAL $ 10,000 $ 10,000 $ 10,000 $ 10,000
LESS: PRODUCT DEVELOPMENT $ 2,125 $ 10,000 $ 18,500 $ 29,000
LESS: MARKETING $ 500 $ 4,250 $ 7,875 $ 10,000
LESS: ADMINISTRATION EXPENSES $ 500 $ 2,000 $ 3,000 $ 3,500
----------- ----------- ----------- -----------
TOTALS $ 13,125 $ 26,250 $ 39,375 $ 52,500
=========== =========== =========== ===========
Even if we are able to sell all of the securities being offered in this
Prospectus, we will still require approximately $450,000 to cover our
anticipated expenses over the next 18 months. Please review our disclosure
titled "Plan of Operations" in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" elsewhere in this Prospectus.
Please note that there can be no assurance that we will be able to raise such
funds.
If we are only able to sell less than 25% of the securities we are offering,
substantially all of the funds raised by this offering will be spent on assuring
that we meet our corporate and disclosure obligations so that we remain in good
standing with the State of Florida and maintain our status as a reporting issuer
with the SEC.
DETERMINATION OF OFFERING PRICE
The offering price for the shares in this offering was arbitrarily determined.
In determining the initial public offering price of the shares we considered
several factors including the following:
o our start up status;
o our new business structure and operations as well as lack of client base;
o prevailing market conditions, including the history and prospects for our
industry;
o majority of denim producing companies are not public and market conditions
tend to be harder on new businesses;
o our future prospects and the experience of our management;
o our capital structure;
- 17 -
Therefore, the public offering price of the shares does not necessarily bear any
relationship to established valuation criteria and may not be indicative of
prices that may prevail at any time or from time to time in the public market
for the common stock. You cannot be sure that a public market for any of our
securities will develop and continue or that the securities will ever trade at a
price at or higher than the offering price in this offering.
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
The price of the current offering is fixed at $0.0175 per share. This price is
significantly greater than the price paid by our sole officer and director for
common equity since our inception on September 21, 2009. Our sole officer and
director paid $ 0.001 per share, a difference of $0.0165 per share lower than
the share price in this offering.
Dilution represents the difference between the offering price and the net
tangible book value per share immediately after completion of this offering. Net
tangible book value is the amount that results from subtracting total
liabilities and intangible assets from total assets. Dilution arises mainly as a
result of our arbitrary determination of the offering price of the shares being
offered. Dilution of the value of the shares you purchase is also a result of
the lower book value of the shares held by our existing stockholders. The
following tables compare the differences of your investment in our shares with
the investment of our existing stockholders.
EXISTING STOCKHOLDERS IF ALL OF THE SHARES ARE SOLD
- ---------------------------------------------------
Price per share................................................... $ 0.0175
Net tangible book value per share before offering................. $ 0.001
Potential gain to existing shareholders........................... $ 0.0165
Net tangible book value per share after offering.................. $ 0.0051
Increase to present stockholders in net tangible book value
per share after offering......................................... $ 0.05
Capital contributions............................................. $ 52,500
Capital contribution by officer & director in September 2009...... $ 9,000
Number of shares outstanding before the offering.................. 9,000,000
Number of shares after offering held by existing stockholders..... 9,000,000
Percentage of ownership after offering............................ 75.0%
PERCENTAGE OF SHARES SOLD
-----------------------------------
DILUTION TO NEW SHAREHOLDERS 25% 50% 75% 100%
- ------------------------------------------ ------- ------- -------- -------
Per share offering price ................. $0.0175 $0.0175 $0.0175 $0.0175
Net tangible book value per share before
offering ................................ $0.001 $0.001 $0.001 $0.001
Net tangible book value per share after
offering ................................ $0.0023 $0.003 $0.0043 $0.0051
Increase in book value attributable to new
shareholders ............................ $0.0013 $0.002 $0.0033 $0.0041
Dilution to new shareholders ............. $0.0152 $0.0145 $0.00132 $0.0124
- 18 -
THE OFFERING
We are registering 3,000,000 shares of our common stock for offer and sale at
$0.0175 per share.
There is currently no active trading market for our common stock, and such a
market may not develop or be sustained. We currently plan to have our common
stock listing on the OTC Bulletin Board, subject to the effectiveness of this
Registration Statement. In addition, a market maker will be required to file a
Form 211 with the Financial Industry Regulatory Authority (FINRA) before the
market maker will be able to make a market in our shares of common stock. At the
date hereof, we are not aware that any market maker has any such intention.
We may not sell the shares registered herein until the registration statement
filed with the Securities and Exchange Commission is effective. Further, we will
not offer the shares through a broker-dealer or anyone affiliated with a
broker-dealer. Upon effectiveness, all of the shares being registered herein may
become tradable. The stock may be traded or listed only to the extent that there
is interest by broker-dealers in acting as a market maker in our stock. Despite
our best efforts, it may not be able to convince any broker/dealers to act as
market-makers and make quotations on the OTC Bulletin Board. We may consider
pursuing a listing on the OTCBB after this registration becomes effective and we
have completed our offering.
The price per share will remain at $0.0175 even if we obtain a listing on any
exchange or are quoted on the Over-The-Counter (OTC) Bulletin Board, the
offering price of $0.0175 will not change for the duration of the offering.
We will receive all of the proceeds from such sales of securities and are
bearing all expenses in connection with the registration of our shares.
PLAN OF DISTRIBUTION
We are offering the shares on a "self-underwritten" basis directly through
Rachel Stark-Cappelli our Sole Officer and Director named herein. Ms.
Stark-Cappelli will not receive any commissions or other remuneration of any
kind in connection with his participation in this offering based either directly
or indirectly on transactions in securities.
This offering is a self-underwritten offering, which means that it does not
involve the participation of an underwriter to market, distribute or sell the
shares offered under this prospectus. This offering will terminate upon the
earlier to occur of (i) 90 days after this registration statement becomes
effective with the Securities and Exchange Commission, (ii) the date on which
all 3,000,000 shares registered hereunder have been sold. We may, at our
discretion, extend the offering for an additional 90 days.
Ms. Stark-Cappelli will not register as broker-dealers pursuant to Section 15 of
the Securities Exchange Act of 1934, in reliance upon Rule 3a4-1, which sets
forth those conditions under which a person associated with an issuer may
participate in the offering of the issuer's securities and not be deemed to be a
broker-dealer.
1. Ms. Stark-Cappelli is not subject to a statutory disqualification, as that
term is defined in Section 3(a)(39) of the Act, at the time of his
participation;
2. Ms. Stark-Cappelli will not be compensated in connection with his
participation by the payment of commissions or other remuneration based
either directly or indirectly on transactions in securities;
- 19 -
3. Ms. Stark-Cappelli is not, nor will he be at the time of participation in
the offering, an associated person of a broker-dealer; and
4. Ms. Stark-Cappelli meets the conditions of paragraph (a)(4)(ii) of Rule
3a4-1 of the Exchange Act, in that he (A) primarily performs, or is
intended primarily to perform at the end of the offering, substantial
duties for or on behalf of our company, other than in connection with
transactions in securities; and (B) is not a broker or dealer, or been an
associated person of a broker or dealer, within the preceding twelve
months; and (C) has not participated in selling and offering securities
for any issuer more than once every twelve months other than in reliance
on Paragraphs (a)(4)(i) or (a)(4)(iii).
Our officers, directors, control persons and affiliates do not intend to
purchase any shares in this offering.
If applicable, the shares may not be offered or sold in certain jurisdictions
unless they are registered or otherwise comply with the applicable securities
laws of such jurisdictions by exemption, qualification or otherwise. We intend
to sell the shares only in the states in which this offering has been qualified
or an exemption from the registration requirements is available, and purchases
of shares may be made only in those states.
In addition and without limiting the foregoing, we will be subject to applicable
provisions, rules and regulations under the Exchange Act with regard to security
transactions during the period of time when this Registration Statement is
effective.
We will not use public solicitation or general advertising in connection with
the offering. This offering will continue for the longer of: (i) 90 days after
this registration statement becomes effective with the Securities and Exchange
Commission, or (ii) the date on which all 3,000,000 shares registered hereunder
have been sold. We may at our discretion extend the offering for an additional
90 days.
DESCRIPTION OF SECURITIES
COMMON STOCK
Our authorized number of shares is one hundred million (100,000,000). The
authorized common stock is one hundred million (100,000,000) shares with a par
value of $0.0001. Shares of our common stock:
o have equal ratable rights to dividends from funds legally available if and
when declared by our Board of Directors;
o are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution or
winding up of our affairs;
o do not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions or rights; and
o are entitled to one non-cumulative vote per share on all matters on which
stockholders may vote.
We refer you to the Bylaws of our Articles of Incorporation and the applicable
statutes of the State of Florida for a more complete description of the rights
and liabilities of holders of our securities.
- 20 -
NON-CUMULATIVE VOTING
Holders of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the outstanding shares, voting
for the election of directors, can elect all of the directors to be elected, if
they so choose, and, in that event, the holders of the remaining shares will not
be able to elect any of our directors. After this offering is completed, present
stockholders will own approximately 75% of our outstanding shares.
CASH DIVIDENDS
As of the date of this Prospectus, we have not declared or paid any cash
dividends to stockholders. The declaration of any future cash dividend will be
at the discretion of our Board of Directors and will depend upon our earnings,
if any, our capital requirements and financial position, our general economic
conditions, and other pertinent conditions. It is our present intention not to
pay any cash dividends in the foreseeable future, but rather to reinvest
earnings, if any, in our business operations.
INTEREST OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this Prospectus as having prepared or certified
any part thereof or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of our common stock was employed on a contingency basis or had or is
to receive, in connection with the offering, a substantial interest, directly or
indirectly, in us. Additionally, no such expert or counsel was connected with us
as a promoter, managing or principal underwriter, voting trustee, director,
officer or employee.
Macdonald Tuskey Corporate and Securities Lawyers, Suite 1210, 777 Hornby
Street, Vancouver, BC, V6Z 1S4, Canada, has passed upon certain legal matters in
connection with the validity of the issuance of the shares of common stock.
Peter Messineo, CPA, Certified Public Accountant, of 1982 Otter Way , Palm
Harbor, FL 34685, 727-421-6268 has audited our Financial Statements for the
period September 21, 2009 (date of inception) through February 28, 2010 and to
the extent set forth in its report, which are included herein in reliance upon
the authority of said firm as experts in accounting and auditing. There were no
disagreements related to accounting principles or practices, financial statement
disclosure, internal controls or auditing scope or procedure from date of
appointment as our independent registered accountant through the period of audit
(inception date through February 28, 2010) and interim period.
BUSINESS DESCRIPTION
Overview
- --------
We are a development stage company and were incorporated in the State of Florida
on September 21, 2009, as a for-profit company, and an established fiscal year
end of August 31. We intend to design our woman's line of jeans branded as
"Obscene Brand Jeans" internally and enter into outsourcing agreements for the
manufacturing, marketing, selling and distributing agreements with independent
agents, each of whom is to be granted exclusive rights to market and sell
"Obscene Brand Jeans" in its respective territory. We intend to include a line
of complimentary t-shirts, jackets and sweatshirts to accent the base of our
intended collection.
- 21 -
We intend to use the latest materials, newest ideas in washes and stitching
techniques and Ms. Stark-Cappelli's creative abilities that were enhanced during
her 15 years of jean design, operations and management in the Florence, Italy
apparel industry. Ms. Stark-Cappelli intends to utilize her experience for the
creation of the "Obscene Brand Jean" collection along with the culture,
creativity and passion for detail that comes from her 15 year experience in
Florence, Italy apparel market.
The product line is intended to cater women who generally shop for high end,
boutique or specialized clothing lines. We intend to market our product line for
the United States and Italy. Our jeans are going to be designed by Ms.
Stark-Cappelli at our offices in Sarasota Florida. Ms. Stark-Cappelli served as
President of Excentrix s.r.l in Florence, Italy where she designed, tested and
sourced production of the company's jean collection as well as t-shirts, jackets
and sweat shirts for distribution throughout Europe, Asia and the USA in
Florence, Italy from January 1998 to June 2006.
We anticipate that the design and testing of "Obscene Brand" jeans will take up
to 9 months. Once the jeans are designed and tested, we can move onto engaging
companies to distribute and market our products. We do not currently have a
management or design agreement in place with Ms. Stark-Cappelli
We intend to support our independent sales agents and distributors through
attendance at all of the major trade and fashion industry exhibitions,
advertising in trade publications and by intending to market and sell our
products via our website "obscenejeans.com". We have registered the domain name
"obscenejeans.com", however we have not yet began development of our website.
Our intended initial strategy is to limit distribution to high-end boutique and
department store retailers, building a reputation for producing fresh and
innovative quality design products with on-time delivery. We do not currently
plan to launch an aggressive advertising campaign through television, radio or
print media. We intend to develop and market our high fashion jeans for sale in
the United States and Italy to upscale retailers.
We intend to produce and sell only women's styles of jeans. We expect that
Obscene Brand Jeans will be made with high quality fabrics that are gently and
naturally aged, hand finished, and accessorized with rich materials such as
medieval Florentine steel mesh as well as other types of metallic knits.
We intend to produce our products in the U.S.A., utilizing independent
contractors. Currently, we have no agreements with contract manufacturers to
produce our products. The intended product line includes a Spring/Summer and
Fall/Winter collection of Obscene Brand Jeans and complimentary t-shirts,
jackets and sweatshirts. We intend to design a total of 10-15 separate styles of
jeans.
We have not generated any revenues to date and our activities have been limited
to developing our business plan. We will not have the necessary capital to
develop our Business Plan until we are able to secure additional financing.
There can be no assurance that such financing will be available on suitable
terms. Please see "Risk Factors" elsewhere in this Prospectus for a full
discussion on this potential business risk.
We have no plans to change our business activities or to combine with another
business and are not aware of any events or circumstances that might cause us to
change our plans. We have no revenues, have incurred losses since inception,
have no operations, have been issued a going concern opinion from our auditors
and rely upon the sale of our securities to fund operations.
- 22 -
Business Strategy
- -----------------
Our strategy is to build brand recognition by marketing our products to fashion
conscious, affluent consumers who shop in high-end boutiques and department
stores and who want to wear and be seen in the latest, trendiest, jeans. We plan
to limit distribution to the more exclusive retailers, specialty stores and
department stores in an effort to maintain the intended unique nature of our
brand and sell our Obscene Jeans Brand in the range of $150.00 to $200.00 per
pair. We intend to utilize independent contract manufacturers located in the
United States so that we can truthfully brand our products as having been "made
in the U.S.A" and because, by using contract manufacturers we are better able to
control our costs and keep fixed overhead to a minimum. We plan to update our
product offerings-style, fit and washes every 6 months to be seen as a trend
setter in the contemporary better jeans market. Currently, we have no agreements
with contract manufacturers.
Sales and Marketing Strategy
- ----------------------------
We anticipate to market and distribute Obscene Jeans Brand in the United States.
and Italy by attendance at industry and trade shows and intend to enter into
sales agency or distribution agreements with independent agents, each of whom is
granted exclusive rights to market and sell Obscene Jeans Brand in their
respective territory. We currently have no agreements in place with commissioned
sales agents. We currently have no distribution agreements with distributors.
Our vision is to market the most popular casual wear in the United States and
abroad, being jeans, to fashion conscious consumers looking for a pair of jeans
with unquestionably superior fit, finish, fabric and style.
We intend to market, sell and distribute our Obscene Jeans products through
attendance at all of the major trade and fashion industry exhibitions,
advertising in trade publications and via our anticipated website:
"obscenejeans.com". We have registered the domain name, but have not yet began
the development of this website. We intend to enter into sales agency or
distribution agreements with independent agents, each of whom is granted
exclusive rights to market and sell in their respective territory. We currently
have no such agreements in place with commissioned sales agents and
distributors. Our intended initial strategy is to limit distribution to high-end
retailers, building a reputation for producing fresh and innovative quality
design products with on-time delivery. We do not currently plan to launch an
aggressive advertising campaign to the consumer.
Raw Materials and Manufacturing
- -------------------------------
We intend to purchase our fabrics where possible from United States fabric
manufacturers. We intend to purchase our thread and other materials from various
industry suppliers in the United States. Although the denim fabric that we
intend to use in the manufacture of our jeans is of the highest quality, it is
readily available from a large number of suppliers including mills in the United
States and if necessary, from abroad.
We intend to outsource all of our manufacturing to independent contractors
located in the United States. We intend for the contractor to purchase the
fabric, sew and finish our products to our design and specifications. Our
management believes that this process will enable us to manufacture our jeans
without requiring a large amount of working capital. We intend to inspect the
fabrics and the finished goods prior to shipping them as part of our quality
control program. We plan to continue to outsource most, if not all, of our
production. We intend to have other contractors developing our jackets, t-shirts
and sweatshirts. Further, we recognize that as we grow, we will require
additional contractors.
- 23 -
Products
- --------
Our intended principal products are the high fashion "Obscene Brand Jeans" that
we intend to design, manufacture, distribute, market and sell. These jeans are
intended to be sold in the United States and Italy to high-end retailers,
department stores and boutiques, as well as through a website we intend to
develop.
Our management anticipates that we will initially sell only women's styles of
jeans. The Obscene Jeans Brand products are anticipated to be made with high
quality fabrics from the United States., that are gently and naturally aged,
hand finished, and accented with rich materials such as medieval Florentine
steel mesh as well as other types of metallic knits
We intend to produce our products in the United States utilizing independent
contractors. The intended product line includes a Spring/Summer and Fall/Winter
collection of Obscene Jeans Brand complimented with t-shirts, jackets and
sweatshirts. We intend to design a total of 10-15 different styles of jeans
catering to the intended audience. The 10-15 collections are anticipated to be
named and designed to address Brooklyn, Bronx, Catskill, Chelsea, Harlem,
Lexington, Manhattan, Park Avenue, Riverside, Times Square, Tribeca, Union
Square and So Ho design looks.
The Obscene Jeans Brand is anticipated to be purchased by affluent consumers who
shop in hi-end boutiques and department stores and who want to wear and be seen
in the latest, trendiest, and stylish styles of jeans.
We anticipate that the logo and theme of the Obscene Jeans Brand will have a
silhouette of a woman that will be printed or stitched onto the jeans
representing named brand recognition. We have not yet fully developed our logo.
We have not generated any revenues to date and our activities have been limited
to developing our business plan. We will not have the necessary capital to
develop or execute our business plan until the company is able to secure
financing. There can be no assurance that such financing will be available on
suitable terms.
Market
- ------
According to the Los Angeles Times May 22, 2009, Article "Designer jeans seem
recession-proof" written by Ronald D. White
(http://articles.latimes.com/2009/may/22/business/fi-jeans22). While consumer
spending remains woefully depressed, expensive designer jeans have been one of
the few bright spots for manufacturers and retailers according to NPD Group
Inc., a market research company. Sales of premium brand jeans grew by 17% during
2008 and managed a 2.3% increase in the month period that ended in February of
2009, making premium denim one of a few "pockets of growth in an otherwise
fizzling fashion market," NPD Group said. "The denim business represents 10% of
the total apparel business" Ten years ago it was only about 7% of the business.
It's a $200 billion business. The average woman owns eight pairs of jeans,
according to Cotton Inc.'s Lifestyle Monitor research. The above information can
be viewed at: http://articles.latimes.com/2009/may/22/business/fi-jeans22.
The hi-end designer jeans market is a category we intend to pursue by designing,
producing, marketing and selling premium quality and design apparel for women.
The market is comprised of major and minor companies that provide designer jeans
and complimentary clothing which is connected with their designer collections.
- 24 -
Our management believes that based on the size of the jean market, the growth of
the high-end designer jean niche and the design experience that Ms. Rachael
Stark-Cappelli brings to the company; Obscene Jeans Corp. can become a player in
this fragmented industry.
Competition
- -----------
The apparel industry is intensely competitive. We intend to compete against
small companies like ours, as well as large companies that have similar
business. Additionally, we will be competing with large marketing companies,
importers and distributors that sell products similar to, or competitive, with
ours. Examples of companies with whom we intend to compete with include Innovo
Group Inc. (Joe's Jeans Inc.) True Religion Jeans, Levi Strauss & co., Giorgio
Armani, Polo Ralph Lauren Corporation, Calvin Klein, Nautica Enterprises, Guess,
Tommy Hilfiger Corp., Gap, Inc., Abercrombie & Fitch.
Many of our competitors have longer operating histories, better brand
recognition and greater financial resources than we do. In order for us to
successfully compete in our industry we will need to:
o develop highly marketable jean styles;
o develop relationships with major distributors; and
o increase our financial resources.
We believe that our competitive strengths consist of our director and officer's
experience, as well as the anticipated quality of the denim and the superiority
of the finish ("the wash"). Within the contemporary better jean market, where we
anticipate selling our products, jeans sell from $100 to $300 per pair and
designer label jeans can command higher prices. We believe that our intended
price range of $150 to $200 will provide superior value for the quality, style,
fit and finish of Obscene Jeans Brand.
However, there can be no assurance that even if we do these things and our jeans
are produced as intended, that we will be able to compete effectively with the
other companies in our industry.
Employees and Employment Agreements
- -----------------------------------
As of May 21, 2010, we have no employees other than Ms. Stark-Cappelli, our sole
officer and director. Ms. Stark-Cappelli has the flexibility to work on our
business up to 10 to 25 hours per week. She is prepared to devote more time to
our operations as may be required and we do not have any employment agreements
with her.
We do not presently have, pension, health, annuity, insurance, stock options,
profit sharing, or similar benefit plans; however, we may adopt plans in the
future. There are presently no personal benefits available to our sole director
and officer.
During the initial implementation of our marketing strategy, we intend to hire
independent consultants to develop and execute our business plan.
- 25 -
Government Regulation
- ---------------------
We are unaware of and do not anticipate having to expend significant resources
to comply with any governmental regulations of the jean market. We are subject
to the laws and regulations of those jurisdictions in which we plan to sell our
product, which are generally applicable to business operations, such as business
licensing requirements, income taxes and payroll taxes. In general, the
development and operation of our business is not subject to special regulatory
and/or supervisory requirements.
Our operations are subject to the effects of international trade agreements and
regulations such as the North American Free Trade Agreement (NAFTA). We are also
subject to regulation by the World Trade Organization. Generally, these
international trade agreements benefit our business rather than burden it
because they tend to reduce trade quotas, duties, taxes and similar impositions.
However, these trade agreements may also impose restrictions that could have an
adverse impact on our business, by limiting the countries from whom we can
purchase our fabric or other component materials, or limiting the countries
where we might market and sell our products.
Labeling and advertising of our products is subject to regulation by the Federal
Trade Commission. We intend to be in compliance with these regulations.
Intellectual Property
- ---------------------
We do not currently hold rights to any intellectual property and have not filed
for copyright or trademark protection for our name, website or jean design.
Research and Development
- ------------------------
Since our inception to the date of this Prospectus, we have not spent any money
on research and development activities.
Reports to Security Holders
- ---------------------------
Any member of the public may read and copy any materials filed by us with the
Securities and Exchange Commission at the Securities and Exchange Commission's
Public Reference Room at 100 F Street, N.E. Washington, D.C. 20549. Information
on the operation of the Public Reference Room may be obtained by calling the
Securities and Exchange Commission at 1-800-732-0330. The Securities and
Exchange Commission maintains an internet website (http://www.sec.gov) that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Securities and Exchange
Commission.
DESCRIPTION OF PROPERTY
We maintain our statutory registered agent's office at 1522 Romallo Loan,
Sarasota, FL 34232 and our business office is located at 1522 Romallo Lane,
Sarasota, FL, 34232. Tel: (941) 330-7648; fax: (941) 866-7550.
Our office space needs are limited at the current time and is donated free of
charge by our sole director and officer.
- 26 -
LEGAL PROCEEDINGS
We know of no material, active or pending legal proceedings against us, nor are
we involved as a plaintiff in any material proceedings or pending litigation.
There are no proceedings in which any of our directors, officers or affiliates,
or any registered beneficial shareholder are an adverse party or has a material
interest adverse to us.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
Our common stock is not traded on any exchange. We intend to apply to have our
common stock quoted on the OTC Bulletin Board once this Prospectus has been
declared effective by the SEC; however, there is no guarantee that we will
obtain a listing.
There is currently no trading market for our common stock and there is no
assurance that a regular trading market will ever develop. OTC Bulletin Board
securities are not listed and traded on the floor of an organized national or
regional stock exchange. Instead, OTC Bulletin Board securities transactions are
conducted through a telephone and computer network connecting dealers. OTC
Bulletin Board issuers are traditionally smaller companies that do not meet the
financial and other listing requirements of a regional or national stock
exchange.
To have our common stock listed on any of the public trading markets, including
the OTC Bulletin Board, we will require a market maker to sponsor our
securities. We have not yet engaged any market maker to sponsor our securities,
and there is no guarantee that our securities will meet the requirements for
quotation or that our securities will be accepted for listing on the OTC
Bulletin Board. This could prevent us from developing a trading market for our
common stock.
HOLDERS
As of the date of this Prospectus there was 1 holder of record of our common
stock.
DIVIDENDS
To date, we have not paid dividends on shares of our common stock and we do not
expect to declare or pay dividends on shares of our common stock in the
foreseeable future. The payment of any dividends will depend upon our future
earnings, if any, our financial condition, and other factors deemed relevant by
our Board of Directors.
EQUITY COMPENSATION PLANS
As of the date of this Prospectus we did not have any equity compensation plans.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This section of the prospectus includes a number of forward-looking statements
that reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words like:
"believe", "expect", "estimate", "anticipate", "intend", "project" and similar
expressions, or words that, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements, which apply only
as of the date of this prospectus. These forward-looking statements are subject
to certain risks and uncertainties that could cause actual results to differ
materially from historical results or our predictions.
- 27 -
Our financial statements are stated in United States Dollars (USD or US$) and
are prepared in accordance with United States Generally Accepted Accounting
Principles. All references to "common shares" refer to the common shares in our
capital stock.
Overview
- --------
We are a development-stage company, incorporated in the State of Florida on
September 21, 2009, as a for-profit company, and an established fiscal year of
August 31. We have not yet generated or realized any revenues from business
operations. Our auditor has issued a going concerned opinion. This means there
is substantial doubt that we can continue as an on-going business for the next
eighteen (18) months unless we obtain additional capital to pay our bills.
Accordingly, we must raise cash from sources other than loans we undertake.
From inception through our current date, May 21, 2010, our business operations
have primarily been focused on developing our business plan and design
collection sketches, design collection sketches, specifications, researching
contractors, sales agents, distributors and website designers. We have spent a
total of approximately $5,000 on start-up costs (legal, accounting and
administrative). We have not generated any revenue from business operations. All
cash currently held by us is the result of the sale of common stock to our sole
director and officer.
The proceeds from this offering will satisfy our cash requirements for up to 6
months. If we are unable to raise additional monies, we only have enough capital
to cover the costs of this offering and to begin implementing the business and
marketing plan. The expenses of this offering include the preparation of this
prospectus, the filing of this registration statement and transfer agent fees.
Implementing the business and marketing plan includes contacting suppliers,
products, and manufacturing partners. As of May 24, 2010 we had $9,000 cash on
hand. This cash will not cover the expenses of this offering or our working
capital requirements for even one month given the undertaking of this offering
and the expenses involved.
Plan of Operations
- ------------------
We believe we do not have adequate funds to satisfy our working capital
requirements for the next twelve months. We will need to raise additional
capital to continue our operations. During the 18 months following the
completion of this offering, we intend to implement our business and marketing
plan. We believe we must raise an additional $500,000 to pay for expenses
associated with our development over the next 18 months. $150,000 will be used
to finance anticipated activities during Phase One of our development plan as
described below, and $350,000 will be used to finance anticipated activities
during Phase Two of our development plan as described below.
As of February 28, 2010, we had cash on hand of $9,000.
- 28 -
PHASE ONE
- ---------
PROJECTED
TIME TO ESTIMATED
MILESTONES COMPLETION BUDGET $
- ----------------------------------------------- ---------- ---------
Complete OJC Design Collection Including 0-9 Months 25,000
Patterns, Cutting Plans
Fabric and Ornaments
Complete OJC Initial Samples of 0-9 Months 50,000
Design Jean Collection and Compliments
Complete OJC Final Samples of 0-9 Months 25,000
Design Jean Collection and Compliments
Including Specifications
Interview Sales Agents and Distributors 0-9 Months 5,000
And Sign Territorial Agreements
Complete the Operational Website of 0-9 Months 20,000
Obscenejeans.com including Hosting
Interview USA Jean Contractors and 0-9 Months 2,500
Sign Agreements
Complete Selection of OJC Consulting Team 0-9 Months 2,500
to Execute Business Plan
Additional Working Capital 0-9 Months 20,000
Including Professional Fees
TOTAL PHASE ONE $ 150,000
Note: This table above does not include costs related to commencing sales and
marketing of our products.
PHASE TWO
- ---------
PROJECTED
TIME TO ESTIMATED
MILESTONES COMPLETION BUDGET $
- ----------------------------------------------- ----------- ---------
PRODUCTION 9-18 Months 190,000
Complete OJC Finished Goods Inventory
Of Jeans and Compliment Collection and
Contracted Warehousing
MARKETING & SALES 9-18 Months 60,000
Complete Sales Literature, Displays Advertising
Website Operational "obscenejeans.com"
Complete all Sales Literature, Displays
And Advertising
MANAGEMENT & ADMINISTRATION 9-18 Months 50,000
Consultants Operational
CFO, Production, Marketing
ADDITIONAL WORKING CAPITAL 9-18 Months 50,000
TOTAL PHASE TWO $ 350,000
- 29 -
Many of the developments enumerated in Phase 2 are dependent on the completion
of objectives in Phase 1 and both Phases are dependent on us securing additional
financing even if we are able to sell all of the securities offered by this
Prospectus. There can be no assurance that we will be able to sell any of the
securities offered by this Prospectus or secure additional financing. If we are
able to raise some, but not all funds required to undertake the developments in
Phase 1 and Phase 2, our management will re-examine our proposed business
activities to use our resources most efficiently.
We intend to pursue capital through public or private financing as well as
borrowings and other sources, such as our officer and director in order to
finance our businesses activities. We cannot guarantee that additional funding
will be available on favorable terms, if at all. If adequate funds are not
available, then our ability to continue our operations may be significantly
hindered.
We have not yet begun the development of any of our anticipated products and
even if we do secure adequate financing, there can be no assurance that our
products will be accepted by the marketplace and that we will be able to
generate revenues.
Our management does not plan to hire any employees at this time. Our sole
officer and director will be responsible for business plan development. If we
develop our products and are in a position to begin sales, marketing and
distribution, we intend to hire independent consultants and sales
representatives as we deem necessary.
RESULTS OF OPERATIONS
There is no historical financial information about us upon which to base an
evaluation of our performance. We have not spent any money on our operations as
of February 28, 2010 and our only activity consisted of the sale of 9,000,000
shares of our common stock to our sole director and officer for aggregate
proceeds of $9,000.
We have not generated any revenues from our operations. We cannot guarantee we
will be successful in our business operations. Our business is subject to risks
inherent in the establishment of a new business enterprise, including the
financial risks associated with the limited capital resources currently
available to us for the implementation of our business strategies. (See "Risk
Factors"). To become profitable and competitive, we must develop the business
and marketing plan and execute the plan. Our management will attempt to secure
financing through various means including borrowing and investment from
institutions and private individuals.
Since inception, the majority of our time has been spent refining its business
plan and collection design sketches, and preparing for a primary financial
offering.
Our results of operations are summarized below:
SEPTEMBER 21, 2009
(INCEPTION) TO
FEBRUARY 28, 2010
($)
------------------
Revenue ..................................... $ 0
Cost of Revenue ............................. -
Expenses .................................... -
Net Loss .................................... -
Net Loss per Share - Basic and Diluted ...... (0.00)
Weighted Average Number Shares Outstanding
- Basic and Diluted ........................ 9,000,000
- 30 -
LIQUIDITY AND CAPITAL RESOURCES
As of the date of this prospectus, we had yet to generate any revenues from our
business operations. For the period ended February 28, 2010, we issued 9,000,000
shares of common stock to our sole officer and director for cash proceeds of
$9,000.
We anticipate needing a minimum of $150,000 for Phase One and an additional
$350,000 for Phase Two, totaling $500,000 in order to effectively execute our
business plan over the next eighteen months. Currently available cash is not
sufficient to allow us to commence full execution of our business plan. Our
business expansion will require significant capital resources that may be funded
through the issuance of common stock or of notes payable or other debt
arrangements that may affect our debt structure. Despite our current financial
status we believe that we may be able to issue notes payable or debt instruments
in order to start executing our business plan. However, there can be no
assurance that we will be able to raise money in this fashion and have not
entered into any agreements that would obligate a third party to provide us with
capital.
Through February 28, 2010, we have not spent any funds on general operating
expenses. We raised the cash amounts to be used in these activities from the
sale of common stock to our sole officer and director.
As of February 28, 2010 we had $9,000 cash on hand.
To date, the Company has managed to keep our monthly cash flow requirement low
for two reasons. First, our sole officer does not draw a salary at this time.
Second, the Company has been able to keep our operating expenses to a minimum by
operating in space owned by our sole officer and will be only paying the direct
expenses associated with our business operations.
As of the date of this registration statement, the current funds available to
the Company will not be sufficient to continue maintaining a reporting status.
Management believes if the Company cannot maintain its reporting status with the
SEC it will have to cease all efforts directed towards the Company. As such, any
investment previously made would be lost in its entirety.
The Company currently has no external sources of liquidity such as arrangements
with credit institutions or off-balance sheet arrangements that will have or are
reasonably likely to have a current or future effect on our financial condition
or immediate access to capital.
If the Company is unable to raise the funds partially through this offering the
Company will seek alternative financing through means such as borrowings from
institutions or private individuals. There can be no assurance that the Company
will be able to keep costs from being more than these estimated amounts or that
the Company will be able to raise such funds. Even if we sell all shares offered
through this registration statement, we expect that the Company will seek
additional financing in the future. However, the Company may not be able to
obtain additional capital or generate sufficient revenues to fund our
operations. If we are unsuccessful at raising sufficient funds, for whatever
reason, to fund our operations, the Company may be forced to seek a buyer for
our business or another entity with which we could create a joint venture. If
all of these alternatives fail, we expect that the Company will be required to
seek protection from creditors under applicable bankruptcy laws.
Our independent auditor has expressed substantial doubt about our ability to
continue as a going concern and believes that our ability is dependent on our
ability to implement our business plan, raise capital and generate revenues. See
Note 2 of our financial statements.
- 31 -
Recent Federal legislation, including the Sarbanes-Oxley Act of 2002, has
resulted in the adoption of various corporate governance measures designed to
promote the integrity of the corporate management and the securities markets.
Some of these measures have been adopted in response to legal requirements.
Others have been adopted by companies in response to the requirements of
national securities exchanges, such as the NYSE or The NASDAQ Stock Market, on
which their securities are listed. Among the corporate governance measures that
are required under the rules of national securities exchanges are those that
address board of directors' independence, audit committee oversight, and the
adoption of a code of ethics. Our Board of Directors is comprised of one
individual who is also our executive officer. Our executive officer makes
decisions on all significant corporate matters such as the approval of terms of
the compensation of our executive officer and the oversight of the accounting
functions.
Although the Company has adopted a Code of Ethics and Business Conduct the
Company has not yet adopted any of these other corporate governance measures
and, since our securities are not yet listed on a national securities exchange,
the Company is not required to do so. The Company has not adopted corporate
governance measures such as an audit or other independent committees of our
board of directors as we presently do not have any independent directors. If we
expand our board membership in future periods to include additional independent
directors, the Company may seek to establish an audit and other committees of
our board of directors. It is possible that if our Board of Directors included
independent directors and if we were to adopt some or all of these corporate
governance measures, stockholders would benefit from somewhat greater assurances
that internal corporate decisions were being made by disinterested directors and
that policies had been implemented to define responsible conduct. For example,
in the absence of audit, nominating and compensation committees comprised of at
least a majority of independent directors, decisions concerning matters such as
compensation packages to our senior officers and recommendations for director
nominees may be made by a majority of directors who have an interest in the
outcome of the matters being decided. Prospective investors should bear in mind
our current lack of corporate governance measures in formulating their
investment decisions.
OFF-BALANCE SHEET ARRANGEMENTS
We have no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in our financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to our
stockholders.
INFLATION
The effect of inflation on our revenues and operating results has not been
significant.
CRITICAL ACCOUNTING POLICIES
Our financial statements are affected by the accounting policies used and the
estimates and assumptions made by management during their preparation. A
complete listing of these policies is included in Note 3 of the notes to our
financial statements for the year ended February 28, 2010. We have identified
below the accounting policies that are of particular importance in the
presentation of our financial position, results of operations and cash flows,
and which require the application of significant judgment by management.
- 32 -
USE OF ESTIMATES - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
RESEARCH AND DEVELOPMENT EXPENSES - Expenditures for research,
development, and engineering of products will be expensed as incurred.
EARNINGS (LOSS) PER SHARE - Basic loss per share is computed by dividing
net loss attributable to common stockholders by the weighted average
common shares outstanding for the period. Diluted loss per share is
computed giving effect to all potentially dilutive common shares.
Potentially dilutive common shares may consist of incremental shares
issuable upon the exercise of stock options and warrants and the
conversion of notes payable to common stock. In periods in which a net
loss has been incurred, all potentially dilutive common shares are
considered antidilutive and thus are excluded from the calculation. At
February 28, 2010, the Company did not have any potentially dilutive
common shares.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
Peter Messineo, CPA, has audited our Financial Statements for the period from
September 21, 2010 (date of inception) through February 28, 2010 and to the
extent set forth in its report, which are included herein in reliance upon the
authority of said firm as experts in accounting and auditing. There were no
disagreements related to accounting principles or practices, financial statement
disclosure, internal controls or auditing scope or procedure during the two
fiscal years and interim period.
CODE OF BUSINESS CONDUCT AND ETHICS
On September 21, 2009 we adopted a Code of Ethics and Business Conduct which is
applicable to our employees and which also includes a Code of Ethics for our CEO
and principal financial officers and persons performing similar functions. A
code of ethics is a written standard designed to deter wrongdoing and to promote
o honest and ethical conduct,
o full, fair, accurate, timely and understandable disclosure in
regulatory filings and public statements,
o compliance with applicable laws, rules and regulations,
o the prompt reporting violation of the code, and
o accountability for adherence to the code.
A copy of our Code of Business Conduct and Ethics has been filed with the
Securities and Exchange Commission as an exhibit to this S-1 filing. Any person
desiring a copy of the Code of Business Conduct and Ethics, can obtain one by
going to Edgar and looking at the attachments to our this S-1 filing.
- 33 -
MANAGEMENT
Officers and Directors
- ----------------------
Our sole officer and director will serve until her successor is elected and
qualified. Our officers are elected by the board of directors to a term of one
(1) year and serve until their successor is duly elected and qualified, or until
they are removed from office. The board of directors has no nominating, auditing
or compensation committees.
The name, address, age and position of our president, secretary/treasurer, and
director and vice president is set forth below:
NAME AND ADDRESS AGE POSITION(S)
- --------------------- --- --------------------------------------------------
Rachel Stark-Cappelli 40 President, Secretary/ Treasurer
1522 Romallo Lane Principal Executive Officer
Sarasota, FL 34232 Principal Financial Officer and sole member of the
Board of Directors
The person named above has held her offices/positions since the inception of our
company and is expected to hold her offices/positions until the next annual
meeting of our stockholders.
Business Experience
- -------------------
RACHEL STARK-CAPPELLI, SOLE OFFICER AND DIRECTOR
Ms. Stark-Cappelli is our founder and has served as our sole director and
officer since our inception. Ms. Stark-Cappelli developed her management and
fashion design skills over a sixteen year period based both out of Florence,
Italy and Miami, Florida. From January 1993 to January 1998 Ms. Stark-Capelli
was the head buyer for Misuri, s.r.l. where she collaborated with multiple
buyers to facilitate the marketing efforts of new products, development of
promotional calendars, product launches and employee incentive programs as well
as buying inventory for the company's retail locations. From January 1998 to
June 2006, Ms. Stark-Capelli was the president of Excentrix s.r.l. based in
Florence, Italy. There she designed and sourced production of the company's jean
collection as well as t-shirts, jackets and sweatshirts to compliment the jean
line for distribution throughout Europe, Asia and the US. From June 2006 to the
present, Mr. Stark-Capelli has acted as the president of Stark Enterprises where
she coordinates premium market corporate gifting, casino and hotel give-aways
and corporate profit redemption programs.
Ms. Stark-Cappelli holds a bachelor of Psychology from the University of
Maryland.
OTHER DIRECTORSHIPS
Ms. Stark-Cappelli does not hold, and has not held during the past five years,
any other directorships in any company with a class of securities registered
pursuant to section 12 of the Exchange Act or subject to the requirements of
section 15(d) of such Act or any company registered as an investment company
under the Investment Company Act of 1940.
- 34 -
CONFLICTS OF INTEREST
Ms. Stark-Cappelli is not obligated to commit her full time and attention to our
business and, accordingly, she may encounter a conflict of interest in
allocating her time between our operations and those of other businesses. In the
course of her other business activities, she may become aware of investment and
business opportunities which may be appropriate for presentation to us as well
as other entities to which she owes a fiduciary duty. As a result, she may have
conflicts of interest in determining to which entity a particular business
opportunity should be presented. She may also in the future become affiliated
with entities that are engaged in business activities similar to those we intend
to conduct.
In general, officers and directors of a corporation are required to present
business opportunities to the corporation if:
o the corporation could financially undertake the opportunity;
o the opportunity is within the corporation's line of business; and
o it would be unfair to the corporation and its stockholders not to bring the
opportunity to the attention of the corporation.
COMMITTEES OF THE BOARD OF DIRECTORS
Our sole director has not established any committees, including an Audit
Committee, a Compensation Committee or a Nominating Committee, any committee
performing a similar function. The functions of those committees are being
undertaken by our sole director. Because we do not have any independent
directors, our sole director believes that the establishment of committees of
the Board would not provide any benefits to our company and could be considered
more form than substance.
We do not have a policy regarding the consideration of any director candidates
that may be recommended by our stockholders, including the minimum
qualifications for director candidates, nor has our sole director established a
process for identifying and evaluating director nominees. We have not adopted a
policy regarding the handling of any potential recommendation of director
candidates by our stockholders, including the procedures to be followed. Our
sole director has not considered or adopted any of these policies as we have
never received a recommendation from any stockholder for any candidate to serve
on our Board of Directors. Given our relative size and lack of directors and
officers insurance coverage, we do not anticipate that any of our stockholders
will make such a recommendation in the near future.
While there have been no nominations of additional directors proposed, in the
event such a proposal is made, all current members of our Board will participate
in the consideration of director nominees.
Our sole director is not an "audit committee financial expert" within the
meaning of Item 401(e) of Regulation S-K. In general, an "audit committee
financial expert" is an individual member of the audit committee or Board of
Directors who:
o understands generally accepted accounting principles and financial
statements,
o is able to assess the general application of such principles in
connection with accounting for estimates, accruals and reserves,
- 35 -
o has experience preparing, auditing, analyzing or evaluating financial
statements comparable to the breadth and complexity to our financial
statements,
o understands internal controls over financial reporting, and
o understands audit committee functions.
Our Board of Directors is comprised of solely of Ms. Stark-Cappelli who was
integral to our formation and who is involved in our day to day operations.
While we would prefer to have an audit committee financial expert on our board
of directors, Ms. Stark-Cappelli does not have a professional background in
finance or accounting. As with most small, early stage companies until such time
our company further develops its business, achieves a stronger revenue base and
has sufficient working capital to purchase directors and officers insurance, the
Company does not have any immediate prospects to attract independent directors.
When the Company is able to expand our Board of Directors to include one or more
independent directors, the Company intends to establish an Audit Committee of
our Board of Directors. It is our intention that one or more of these
independent directors will also qualify as an audit committee financial expert.
Our securities are not quoted on an exchange that has requirements that a
majority of our Board members be independent and the Company is not currently
otherwise subject to any law, rule or regulation requiring that all or any
portion of our Board of Directors include "independent" directors, nor are we
required to establish or maintain an Audit Committee or other committee of our
Board of Directors.
WE DO NOT HAVE ANY INDEPENDENT DIRECTORS AND THE COMPANY HAS NOT VOLUNTARILY
IMPLEMENTED VARIOUS CORPORATE GOVERNANCE MEASURES, IN THE ABSENCE OF WHICH,
STOCKHOLDERS MAY HAVE MORE LIMITED PROTECTIONS AGAINST INTERESTED DIRECTOR
TRANSACTIONS, CONFLICTS OF INTEREST AND SIMILAR MATTERS.
EXECUTIVE COMPENSATION
We have made no provisions for paying cash or non-cash compensation to our sole
officer and director. No salaries are being paid at the present time, no
salaries or other compensation were paid in cash, or otherwise, for services
performed prior to September 21, 2009, our date of inception, and no
compensation will be paid unless and until our operations generate sufficient
cash flows.
The table below summarizes all compensation awarded to, earned by, or paid to
our named executive officer for all services rendered in all capacities to us
for the period from inception (September 21, 2009) through February 28, 2010.
SUMMARY COMPENSATION TABLE
Name Non-Equity Nonqualified
and Stock Option Incentive Plan Deferred
principal Salary Bonus Awards Awards Compensation Compensation All Other Total
position Year ($) ($) ($) ($) ($) Earnings ($) Compensation ($)
- --------- ---- ------ ----- ------ ------ -------------- ------------ ------------ -----
Rachel
Stark-
Cappelli
President 2009 0 0 0 0 0 0 0 0
We have not paid any salaries to our sole director and officer as of the date of
this Prospectus. We do not anticipate beginning to pay salaries until we have
adequate funds to do so. There are no other stock option plans, retirement,
pension, or profit sharing plans for the benefit of our officers and director
other than as described herein.
- 36 -
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The table below summarizes all unexercised options, stock that has not vested,
and equity incentive plan awards for each named executive officer as of February
28, 2010.
OPTION AWARDS STOCK AWARDS
-------------------------------------------------------------- ----------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Equity Awards: Payout
Incentive Number of Value of
Plan Market Unearned Unearned
Number of Awards: Number of Value of Shares, Shares,
Securities Number of Number of Shares or Shares or Units or Units or
Underlying Securities Securities Units of Units of Other Other
Unexercised Underlying Underlying Stock Stock Rights Rights
Option Unexercised Unexercised Option Option That Have That Have That Have That Have
(#) Options (#) Unearned Exercise Expiration Not Not Not Not
Name Exercisable Unexercisable Options (#) Price ($) Date Vested (#) Vested ($) Vested (#) Vested (#)
- -------- ----------- ------------- ----------- --------- ---------- ---------- ---------- ---------- ----------
Rachel - - - - - - - - -
Stark-
Cappelli
There were no grants of stock options since inception to the date of this
Prospectus.
We do not have any long-term incentive plans that provide compensation intended
to serve as incentive for performance.
Our sole director has not adopted a stock option plan. We have no plans to adopt
a stock option plan, but may choose to do so in the future. If such a plan is
adopted, this may be administered by the board or a committee appointed by the
board (the "Committee"). The committee would have the power to modify, extend or
renew outstanding options and to authorize the grant of new options in
substitution therefore, provided that any such action may not impair any rights
under any option previously granted. We may develop an incentive based stock
option plan for our officers and directors and may reserve up to 10% of our
outstanding shares of common stock for that purpose.
OPTIONS GRANTS DURING THE LAST FISCAL YEAR / STOCK OPTION PLANS
We do not currently have a stock option plan in favor of any director, officer,
consultant or employee of our company. No individual grants of stock options,
whether or not in tandem with stock appreciation rights known as SARs or
freestanding SARs have been made to our sole director and officer since our
inception; accordingly, no stock options have been granted or exercised by our
sole director and officer since we were founded.
AGGREGATED OPTIONS EXERCISES IN LAST FISCAL YEAR
No individual grants of stock options, whether or not in tandem with stock
appreciation rights known as SARs or freestanding SARs have been made to our
sole director and officer since our inception; accordingly, no stock options
have been granted or exercised by our sole director and officer since we were
founded.
- 37 -
LONG-TERM INCENTIVE PLANS AND AWARDS
We do not have any long-term incentive plans that provide compensation intended
to serve as incentive for performance. No individual grants or agreements
regarding future payouts under non-stock price-based plans have been made to our
sole director and officer or any employee or consultant since our inception;
accordingly, no future payouts under non-stock price-based plans or agreements
have been granted or entered into or exercised by our sole director and officer
or employees or consultants since we were founded.
COMPENSATION OF DIRECTORS
Our sole director is not compensated by us for acting as such. She is reimbursed
for reasonable out-of-pocket expenses incurred. There are no arrangements
pursuant to which our sole director is or will be compensated in the future for
any services provided as a director.
We do not have any agreements for compensating our directors for their services
in their capacity as directors, although such directors are expected in the
future to receive stock options to purchase shares of our common stock as
awarded by our board of directors.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, CHANGE-IN-CONTROL ARRANGEMENTS
There are no employment contracts or other contracts or arrangements with our
officers or directors other than those disclosed in this report. There are no
compensation plans or arrangements, including payments to be made by us, with
respect to Ms. Stark-Cappelli that would result from her resignation, retirement
or any other termination. There are no arrangements for directors, officers or
employees that would result from a change-in-control.
INDEBTEDNESS OF DIRECTORS, SENIOR OFFICERS, EXECUTIVE OFFICERS AND OTHER
MANAGEMENT
Neither our sole director and officer nor any associate or affiliate of our
company during the last two fiscal years is or has been indebted to our company
by way of guarantee, support agreement, letter of credit or other similar
agreement or understanding currently outstanding.
DIRECTOR COMPENSATION
The table below summarizes all compensation awarded to, earned by, or paid to
our sole director for all services rendered in all capacities to us for the
period from inception (September 21, 2009) through February 28, 2010.
DIRECTOR COMPENSATION
Fees Non-Equity Non-Qualified
Earned Incentive Deferred
or Paid Stock Option Plan Compensation All Other
in Cash Awards Awards Compensation Earnings Compensation Total
Name ($) ($) ($) ($) ($) ($) ($)
- -------- ------- ------ ------ ------------ ------------- ------------ -----
Rachel 0 0 0 0 0 0 0
Stark-
Cappelli
- 38 -
At this time, we have not entered into any employment agreements with our sole
officer and director. If there is sufficient cash flow available from our future
operations, we may enter into employment agreements with our sole officer and
director or future key staff members.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of the date of this prospectus, the total
number of shares owned beneficially by our sole officer and director, and key
employees, individually and as a group, and the present owners of 5% or more of
our total outstanding shares. The table also reflects what his ownership will be
assuming completion of the sale of all shares in this offering. The stockholder
listed below has direct ownership of his shares and possesses sole voting and
dispositive power with respect to the shares.
Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner [1] Beneficial Ownership Class [2]
- -------------- --------------------- -------------------- ----------
Common Stock Rachel Stark-Cappelli 9,000,000 100%
1522 Romallo Lane
Sarasota, FL 34232
All Officers and 9,000,000 100%
Directors as a Group
(1 person)
[1] The person named above may be deemed to be a "parent" and "promoter" of our
company, within the meaning of such terms under the Securities Act of 1933, as
amended, by virtue of his direct and indirect stock holdings. Ms. Stark-Cappelli
is the only "promoter" of our company. Ms. Stark-Cappelli is also our sole
director and officer.
[2] Based on 9,000,000 shares issued and outstanding as of the date of this
Prospectus
CHANGE IN CONTROL
We are not aware of any arrangement that might result in a change in control of
our company in the future.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On September 21, 2009 we issued 9,000,000 shares of our common stock to our sole
director and officer at $0.001 per share for aggregate proceeds of $9,000.
There have been no other transactions since our audit date, February 28, 2010,
or any currently proposed transactions in which we are, or plan to be, a
participant and in which any related person had or will have a direct or
indirect material interest.
DIRECTOR INDEPENDENCE
Our securities are quoted on the OTC Bulletin Board which does not have any
director independence requirements. Once we engage further directors and
officers, we plan to develop a definition of independence and scrutinize our
Board of Directors with regard to this definition.
- 39 -
LEGAL PROCEEDINGS
We know of no material, active or pending legal proceedings against us, nor are
we involved as a plaintiff in any material proceedings or pending litigation.
There are no proceedings in which any of our directors, officers or affiliates,
or any registered beneficial shareholder are an adverse party or has a material
interest adverse to us.
We intend to furnish annual reports to stockholders, which will include audited
financial statements reported on by our Certified Public Accountants. In
addition, we will issue unaudited quarterly or other interim reports to
stockholders, as we deem appropriate or required by applicable securities
regulations.
DISCLOSURE OF COMMISSION'S POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Our Bylaws provide that we will indemnify our directors and officers to the
fullest extent not prohibited by Florida law.
The general effect of the foregoing is to indemnify a control person, officer or
director from liability, thereby making us responsible for any expenses or
damages incurred by such control person, officer or director in any action
brought against them based on their conduct in such capacity, provided they did
not engage in fraud or criminal activity.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers or control persons pursuant to the
foregoing provisions, we have been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
REPORTS TO SECURITY HOLDERS
We are not required to deliver an annual report to our stockholders but will
voluntarily send an annual report, together with our annual audited financial
statements. Any Securities and Exchange Commission filings that we do file will
be available to the public over the internet at the SEC's website at
http://www.sec.gov.
The public may read and copy any materials filed by us with the SEC at the SEC's
Public Reference Room at 100 F Street, NE, Washington DC 20549. The public may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. We are an electronic filer. The SEC maintains an internet
site that
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission, 100 F Street NE,
Washington, D.C. 20549, under the Securities Act of 1933 a registration
statement on Form S-1 of which this prospectus is a part, with respect to the
common shares offered hereby. We have not included in this prospectus all the
information contained in the registration statement, and you should refer to the
registration statement and our exhibits for further information.
- 40 -
In the Registration Statement, certain items of which are contained in exhibits
and schedules as permitted by the rules and regulations of the Securities and
Exchange Commission. You can obtain a copy of the Registration Statement from
the Securities and Exchange Commission by mail from the Public Reference Room of
the Securities and Exchange Commission at 100 F Street, NE, Washington, D.C.
20549, at prescribed rates. In addition, the Securities and Exchange Commission
maintains a Web site at http://www.sec.gov containing reports, proxy and
information statements and other information regarding registrants that file
electronically with the Securities and Exchange Commission. The Securities and
Exchange Commission's telephone number is 1-800-SEC-0330 (1-800-732-0330). These
SEC filings are also available to the public from commercial document retrieval
services.
You should rely only on the information contained in this prospectus. No finder,
dealer, sales person or other person has been authorized to give any information
or to make any representation in connection with this offering other than those
contained in this prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by Obscene
Jeans Corp. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby by anyone
in any jurisdiction in which such offer or solicitation is not authorized or in
which the person making such offer or solicitation is not qualified to do so or
to any person to whom it is unlawful to make such offer or solicitation.
DEALER PROSPECTUS DELIVERY OBLIGATION
Until a date, which is 90 days after the date of this prospectus, all dealers
that effect transactions in these securities whether or not participating in
this offering, may be required to deliver a prospectus. This is in addition to
the dealer' obligation to deliver a prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.
STOCK TRANSFER AGENT
We have not engaged the services of a transfer agent at this time. However,
within the next twelve months we anticipate doing so. Until such a time a
transfer agent is retained, we will act as our own transfer agent.
- 41 -
Obscene Jeans Corporation
(A Development Stage Corporation)
Financial Statements
For the Period from September 21, 2009 (Date of Inception)
through February 28, 2010
CONTENTS
Financial Statements:
Report of Independent Registered Public Accounting Firm ............ F-1
Balance Sheet ...................................................... F-2
Statements of Operations ........................................... F-3
Statement of Stockholder's Equity .................................. F-4
Statement of Cash Flows ............................................ F-5
Notes to Financial Statements ...................................... F-6 - F-9
Peter Messineo, CPA
1982 Otter Way Palm Harbor FL 34685
T 727.421.6268 F 727.674.0511
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders:
Obscene Jeans Corp.
I have audited the balance sheets of Obscene Jeans Corp. as of February 28, 2009
and the related statement of operations, changes in stockholder's equity, and
cash flows for the period September 21, 2009 (date of inception) through
February 28, 2010. These financial statements were the responsibility of the
Company's management. My responsibility was to express an opinion on these
financial statements based on my audits.
I conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audits to obtain reasonable assurance about whether the
financial statements were free of material misstatement. The Company was not
required to have, nor was I engaged to perform, an audit of its internal control
over financial reporting. My audit included consideration of internal control
over financial reporting as a basis for designing audit procedures that were
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, I express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provide a reasonable basis for
my opinion.
In my opinion, the financial statements, referred to above, present fairly, in
all material respects, the financial position of Obscene Jeans Corp. as of
February 28, 2010, and the results of its operations and its cash flows for the
period September 21, 2009 (date of inception) through February 28, 2010, in
conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has no revenues from operation, has not emerged from the
development stage, and is requiring traditional financing or equity funding to
commence its operating plan. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. Further information and
management's plans in regard to this uncertainty were also described in Note 2.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
/s/ Peter Messineo, CPA
Peter Messineo, CPA
Palm Harbor, Florida
April 6, 2010
F-1
Obscene Jeans Corporation
(A Development Stage Corporation)
Balance Sheet
As of
February 28, 2010
-----------------
ASSETS
Cash .......................................................... $ 9,000
-------
Total current assets ................................... 9,000
-------
Total Assets ................................................ $ 9,000
=======
LIABILITIES AND STOCKHOLDER'S EQUITY
Stockholder's Equity:
Preferred stock; $0.0001 par value; 10,000,000 shares
authorized; 0 shares issued and outstanding ................... $ -
Common stock; $0.0001 par value; 100,000,000 shares
authorized; 9,000,000 shares issued and outstanding ........... 900
Capital in excess of par value ................................ 8,100
Accumulated deficit during development stage .................. -
-------
Total stockholder's equity .................................... 9,000
-------
Total Liabilities and Stockholder's Equity .................. $ 9,000
=======
The accompanying notes are an integral part of the financial statements
F-2
Obscene Jeans Corporation
(A Development Stage Corporation)
Statements of Operations
For the Period
September 21, 2009
(Date of Inception)
through
February 28, 2010
-------------------
Revenue:
Sales .................................................. $ -
-----------
Expenses:
Selling, general and administrative .................... -
-----------
Net income (loss) ........................................... $ -
===========
Net loss per common share, basic and diluted ................ $ (0.00)
===========
Weighted average number of common shares, basic and diluted . 9,000,000
===========
The accompanying notes are an integral part of the financial statements.
F-3
Obscene Jeans Corporation
(A Development Stage Corporation)
Statements of Stockholder's Equity
For the Period from September 21, 2009 (Date of Inception) through February 28, 2010
Common Stock Capital in Total
--------------------- Excess of Accumulated Stockholder's
Shares Amount Par Value Deficit Equity
--------- --------- ---------- ----------- -------------
BALANCE, SEPTEMBER 21, 2009
(DATE OF INCEPTION) ....... - $ - $ - $ - $ -
Common stock issued for
cash on September 21, 2009 9,000,000 900 8,100 - 9,000
Net loss for the period
September 21, 2009
(Date of Inception)
through February 28, 2010 - - - - -
--------- --------- ---------- ----------- -------------
BALANCE, FEBRUARY 28, 2010 9,000,000 $ 900 $ 8,100 $ - $ 9,000
========= ========= ========== =========== =============
The accompanying notes are an integral part of the financial statements.
F-4
Obscene Jeans Corporation
(A Development Stage Corporation)
Statement of Cash Flows
For the Period from
September 21, 2009
(Date of Inception)
through
February 28, 2010
-------------------
OPERATING ACTIVITIES
Net loss .................................................... $ -
-------
Adjustments to reconcile net loss to net cash used
by operating activities:
Increase in other receivables
-------
Net cash used by operating activities ....................... -
-------
INVESTING ACTIVITIES
Net cash used by investing activities ..................... -
FINANCING ACTIVITIES
Proceeds from sale of common stock .......................... 9,000
-------
Net cash provided by financing activities ................... 9,000
-------
NET INCREASE IN CASH AND CASH EQUIVALENTS ................... 9,000
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD .............. -
-------
CASH AND CASH EQUIVALENTS, END OF PERIOD .................... $ 9,000
=======
Supplemental Cash Flow Information:
Cash paid during the year for interest ................... $ -
=======
The accompanying notes are an integral part of the financial statements.
F-5
Obscene Jeans Corporation
(A Development Stage Corporation)
Notes to Financial Statements
For the Period from September 21, 2009 (Date of Inception)
through February 28, 2010
1. BACKGROUND INFORMATION
Obscene Jeans Corporation (the "Company"), a Florida corporation, was formed to
design, develop, manufacture, wholesale, market distribute and sell a woman's
line of "Obscene Brand Jeans." The Company also will include a line of
complimentary t-shirts, jackets and sweatshirts to accent the base of the
intended collection. The Company was incorporated on September 21, 2009 (Date of
Inception) with its corporate headquarters located in Sarasota, Florida and its
year-end is August 31.
2. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. For the period ended February 28,
2010, the Company has had no operations. As of February 28, 2010, the Company
has not emerged from the development stage. In view of these matters, the
Company's ability to continue as a going concern is dependent upon the Company's
ability to begin operations and to achieve a level of profitability. The Company
intends on financing its future development activities and its working capital
needs largely from the sale of public equity securities with some additional
funding from other traditional financing sources, including term notes until
such time that funds provided by operations are sufficient to fund working
capital requirements. The financial statements of the Company do not include any
adjustments relating to the recoverability and classification of recorded
assets, or the amounts and classifications of liabilities that might be
necessary should the Company be unable to continue as a going concern.
3. SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed are:
FASB CODIFICATION - In June 2009, the FASB issued ASC 105, Generally Accepted
Accounting Principles, effective for interim and annual reporting periods
ending after September 15, 2009. This statement establishes the Codification
as the source of authoritative accounting principles used in the preparation
of financial statements in conformity with generally accepted accounting
principles. The Codification does not replace or affect guidance issued by
the SEC or its staff. As a result of the Codification, the references to
authoritative accounting pronouncements included herein in this Annual Report
on Form 10-K now refer to the Codification topic section rather than a
specific accounting rule as was past practice.
USE OF ESTIMATES - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
F-6
Obscene Jeans Corporation
(A Development Stage Corporation)
Notes to Financial Statements
For the Period from September 21, 2009 (Date of Inception)
through February 28, 2010
CASH AND CASH EQUIVALENTS - All cash, other than held in escrow, is
maintained with a major financial institution in the United States. Deposits
with this bank may exceed the amount of insurance provided on such deposits.
Temporary cash investments with an original maturity of three months or less
are considered to be cash equivalents.
RESEARCH AND DEVELOPMENT EXPENSES - Expenditures for research, development,
and engineering of products are expensed as incurred.
COMMON STOCK - The Company records common stock issuances when all of the
legal requirements for the issuance of such common stock have been satisfied.
REVENUE AND COST RECOGNITION - The Company has no current source of revenue;
therefore the Company has not yet adopted any policy regarding the
recognition of revenue or cost.
ADVERTISING COSTS - The Company's policy regarding advertising is to expense
advertising when incurred.
INCOME TAXES - Income taxes are provided for the tax effects of transactions
reported in the financial statements and consist of taxes currently due plus
deferred taxes resulting from temporary differences. Such temporary
differences result from differences in the carrying value of assets and
liabilities for tax and financial reporting purposes. The deferred tax assets
and liabilities represent the future tax consequences of those differences,
which will either be taxable or deductible when the assets and liabilities
are recovered or settled. Valuation allowances are established when necessary
to reduce deferred tax assets to the amount expected to be realized.
The Company adopted the provisions of FASB ASC 740-10 "Uncertainty in Income
Taxes" (ASC 740-10), on January 1, 2007. The Company has not recognized a
liability as a result of the implementation of ASC 740-10. A reconciliation
of the beginning and ending amount of unrecognized tax benefits has not been
provided since there is no unrecognized benefit since the date of adoption.
The Company has not recognized interest expense or penalties as a result of
the implementation of ASC 740-10. If there were an unrecognized tax benefit,
the Company would recognize interest accrued related to unrecognized tax
benefits in interest expense and penalties in operating expenses.
EARNINGS (LOSS) PER SHARE - Basic loss per share is computed by dividing net
loss attributable to common stockholders by the weighted average common
shares outstanding for the period. Diluted loss per share is computed giving
effect to all potentially dilutive common shares. Potentially dilutive common
shares may consist of incremental shares issuable upon the exercise of stock
options and warrants and the conversion of notes payable to common stock. In
periods in which a net loss has been incurred, all potentially dilutive
common shares are considered antidilutive and thus are excluded from the
calculation. At February 28, 2010, the Company did not have any potentially
dilutive common shares.
F-7
Obscene Jeans Corporation
(A Development Stage Corporation)
Notes to Financial Statements
For the Period from September 21, 2009 (Date of Inception)
through February 28, 2010
FINANCIAL INSTRUMENTS - In September 2006, the Financial Accounting Standards
Board (FASB) introduced a framework for measuring fair value and expanded
required disclosure about fair value measurements of assets and liabilities.
The Company adopted the standard for those financial assets and liabilities
as of the beginning of the 2008 fiscal year and the impact of adoption was
not significant. FASB Accounting Standards Codification (ASC) 820 "Fair Value
Measurements and Disclosures" (ASC 820) defines fair value as the exchange
price that would be received for an asset or paid to transfer a liability (an
exit price) in the principal or most advantageous market for the asset or
liability in an orderly transaction between market participants on the
measurement date.. ASC 820 also establishes a fair value hierarchy that
distinguishes between (1) market participant assumptions developed based on
market data obtained from independent sources (observable inputs) and (2) an
entity's own assumptions about market participant assumptions developed based
on the best information available in the circumstances (unobservable inputs).
The fair value hierarchy consists of three broad levels, which gives the
highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (Level 1) and the lowest priority to unobservable
inputs (Level 3). The three levels of the fair value hierarchy are described
below:
o Level 1 - Unadjusted quoted prices in active markets that are
accessible at the measurement date for identical, unrestricted assets
or liabilities.
o Level 2 - Inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly or
indirectly, including quoted prices for similar assets or liabilities
in active markets; quoted prices for identical or similar assets or
liabilities in markets that are not active; inputs other than quoted
prices that are observable for the asset or liability (e.g., interest
rates); and inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
o Level 3 - Inputs that are both significant to the fair value
measurement and unobservable.
Fair value estimates discussed herein are based upon certain market
assumptions and pertinent information available to management as of February
28, 2010. The respective carrying value of certain on-balance-sheet financial
instruments approximated their fair values due to the short-term nature of
these instruments. These financial instruments include accounts receivable,
other current assets, accounts payable, accrued compensation and accrued
expenses. The fair value of the Company's notes payable is estimated based on
current rates that would be available for debt of similar terms which is not
significantly different from its stated value.
On January 1, 2009, the Company applied ASC 820 for all non-financial assets
and liabilities measured at fair value on a non-recurring basis. The adoption
of ASC 820 for non-financial assets and liabilities did not have a
significant impact on the Company's financial statements.
F-8
Obscene Jeans Corporation
(A Development Stage Corporation)
Notes to Financial Statements
For the Period from September 21, 2009 (Date of Inception)
through February 28, 2010
RECENT ACCOUNTING PRONOUNCEMENTS
In October 2009, the FASB issued Accounting Standard Update ("ASU") No. 2009-13,
Multiple-Deliverable Revenue Arrangements ("ASU 2009-13") and No. 2009-14,
Certain Revenue Arrangements that include Software Elements ("ASU 2009-14").
These standards update FASB ASC 605, Revenue Recognition ("ASC 605") and FASB
ASC 985, Software ("ASC 985"). The amendments to ASC 605 requires entities to
allocate revenue in an arrangement using estimated selling prices of the
delivered goods and services based on a selling price hierarchy. The amendments
to ASC 985 remove tangible products from the scope of software revenue guidance
and provide guidance on determining whether software deliverables in an
arrangement that includes a tangible product are covered by the scope of the
software revenue guidance. These amendments to ASC 605 and ASC 985 should be
applied on a prospective basis for revenue arrangements entered into or
materially modified in fiscal years beginning on or after June 15, 2010, with
early adoption permitted. The Company will adopt these amendments on September
1, 2010. Management does not believe that the adoption of this standard will
have a material impact on the Company's financial statements.
In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and
Disclosures ("ASU 2010-06"). This standard updates FASB ASC 820, Fair Value
Measurements ("ASC 820"). ASU 2010-06 requires additional disclosures about fair
value measurements including transfers in and out of Levels 1 and 2 and separate
disclosures about purchases, sales, issuances, and settlements relating to Level
3 measurements. It also clarifies existing fair value disclosures about the
level of disaggregation and about inputs and valuation techniques used to
measure fair value. The standard is effective for interim and annual reporting
periods beginning after December 15, 2009 except for the disclosures about
purchases, sales, issuances and settlements which is effective for fiscal years
beginning after December 15, 2010 and for interim periods within those fiscal
years. The Company will adopt ASU 2010-06 on September 1, 2010; management does
not expect the adoption to have a material impact on the financial statements.
Other recent accounting pronouncements issued by the FASB (including its EITF),
the AICPA, and the SEC did not or are not believed by management to have a
material impact on the Company's present or future financial statements.
4. RELATED PARTY TRANSACTIONS
In September 2009, the Company sold 9,000,000 shares of common stock to its
founder for $0.001 per share.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
The Company does not own or lease property or lease office space. The office
space used by the Company was arranged by the founder of the Company to use at
no charge.
F-9
Obscene Jeans Corporation
(A Development Stage Corporation)
Notes to Financial Statements
For the Period from September 21, 2009 (Date of Inception)
through February 28, 2010
The above terms and amounts are not necessarily indicative of the terms and
amounts that would have been incurred had comparable transactions been entered
into with independent parties.
5. PREFERRED STOCK
The Company's Board of Directors has authorized 10,000,000 million shares of
preferred stock with a par value of $0.0001 to be issued in series with terms
and conditions to be determined by the Board of Directors.
6. INCOME TAXES
There are no current or deferred income tax expense or benefit for the period
ended February 28, 2010.
The provision for income taxes is different from that which would be obtained by
applying the statutory federal income tax rate to income before income taxes.
The items causing this difference are as follows:
September 21, 2009
(Date of Inception) through
February 28, 2010
---------------------------
Tax benefit at U.S. statutory rate ............... $ -
State income tax benefit, net of federal benefit . -
---------------------------
$ -
===========================
The Company did not have any temporary differences for the period from September
21, 2009 (Date of Inception) through February 28, 2010.
F-10
PART II. INFORMATION NOT REQUIRED IN THE PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under our Articles of Incorporation and Bylaws of the corporation, we may
indemnify an officer or director who is made a party to any proceeding,
including a lawsuit, because of his position, if he acted in good faith and in a
manner he reasonably believed to be in our best interest. The Company may
advance expenses incurred in defending a proceeding. To the extent that the
officer or director is successful on the merits in a proceeding as to which he
is to be indemnified, we must indemnify him against all expenses incurred,
including attorney's fees. With respect to a derivative action, indemnity may be
made only for expenses actually and reasonably incurred in defending the
proceeding, and if the officer or director is judged liable, only by a court
order. The indemnification is intended to be to the fullest extent permitted by
the laws of the State of Florida.
Regarding indemnification for liabilities arising under the Securities Act of
1933, which may be permitted to directors or officers under Florida law, we are
informed that, in the opinion of the Securities and Exchange Commission,
indemnification is against public policy, as expressed in the Act and is,
therefore, unenforceable.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The registrant will pay for all expenses incurred by this offering. Whether or
not all of the offered shares are sold, these expenses are estimated as follows:
Securities and Exchange Commission registration fee................. $ 4
Federal Taxes....................................................... $ -
State Taxes and Fees................................................ $ -
Listing Fees........................................................ $ -
Printing Fees....................................................... $ 500
Transfer Agent Fees................................................. $ 2,496
Accounting fees and expenses........................................ $ 3,000
Legal fees and expenses............................................. $ 4,000
--------
TOTAL .............................................................. $ 10,000
========
RECENT SALES OF UNREGISTERED SECURITIES
During the last three fiscal years we have had the following issuances of
unregistered securities:
o In September of 2009, we issued 9,000,000 shares to Rachel Stark-Cappelli,
the Company's founder, in exchange for cash of $9,000. We relied upon
Section 4(2) of the Securities Act, which exempts from registration
"transactions by an issuer not involving any public offering
It is our belief Ms. Stark-Cappelli had such knowledge and experience in
financial and business matters that she was capable of evaluating the merits and
risks of the investment and therefore did not need the protections offered by
registering their shares under Securities and Act of 1933, as amended. Ms.
Stark-Cappelli certified that she was purchasing the shares for their own
accounts, with investment intent. This offering was not accompanied by general
advertisement or general solicitation and the shares were issued with a Rule 144
restrictive legend.
II-1
EXHIBITS
The following exhibits are filed as part of this registration statement,
pursuant to Item 601 of Regulation K. All exhibits have been previously filed
unless otherwise noted.
EXHIBIT NO. DOCUMENT DESCRIPTION
- ----------- --------------------
3.1 Articles of Incorporation of Obscene Jeans Corp.(1)
3.2 Bylaws of Obscene Jeans Corp.(1)
4.1 Specimen Stock Certificate of Obscene Jeans Corp.
5.1 Opinion of Counsel.(1)
14.1 Code of Ethics.(1)
23.1 Consent of Accountants.
23.2 Consent of Counsel.
99.1 Subscription Agreement Obscene Jeans Corp.
(1) Included as an Exhibit to our Registration Statement on Form S-1 filed on
April 14, 2010
UNDERTAKINGS
The registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no
more than 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
2. That for the purpose of determining liability under the Securities Act,
each post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
II-2
3. To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering; and
4. That, for the purpose of determining liability of the registrant under
the Securities Act to any purchaser in the initial distribution of the
securities, the registrant undertakes that in a primary offering of
securities of the registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to
the purchaser, if the securities are offered or sold to such purchaser
by means of any of the following communications, the registrant will be
a seller to the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the registrant
relating to the offering required to be filed pursuant to Rule
424;
(ii) Any free writing prospectus relating to the offering prepared
by or on behalf of the registrant or used or referred to by
the registrant;
(iii) The portion of any other free writing prospectus relating to
the offering containing material information about the
registrant or its securities provided by or on behalf of the
registrant; and
(iv) Any other communication that is an offer in the offering made
by the registrant to the purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
Each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying on
Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be
deemed to be part of and included in the registration statement as of the date
it is first used after effectiveness. Provided, however, that no statement made
in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Sarasota, Florida, on
May 21, 2010.
OBSCENE JEANS RESOURCES CORP.
By: /s/ Rachel Stark-Cappelli
-------------------------
Rachel Stark-Cappelli
President, Chief Executive Officer,
Chief Financial Officer, Principal
Accounting Officer, Secretary,
Treasurer, Director
In accordance with the requirements of the Securities Act, this Prospectus has
been signed by the following persons in the capacities and on the dates stated.
SIGNATURES TITLE DATE
- ------------------------- ----------------------------------- --------------
/s/ Rachel Stark-Cappelli President, Chief Executive Officer, May 21, 2010
- ------------------------- Chief Financial Officer, Principal
Rachel Stark-Cappelli Accounting Officer, Secretary,
Treasurer, Director