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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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Form SB - 2
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REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
WORLDWIDE PROMOTIONAL PRODUCTS CORPORATION
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(Exact name of registrant as specified in its charter)
Nevada 65-1184627
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(State or other jurisdiction (Primary Standard Industrial (IRS Employer
of incorporation or Classification Code Number) identification No.)
organization)
3404-25th Street NE
Calgary, AB
T1Y 6C1
(403) 219-3090
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(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Guy Peckham
President
3404-25th Street NE
Calgary, AB
T1Y 6C1
(403) 219-3090
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(Name, address, including zip code, and telephone number, including
area code, of agent for service)
With copies to:
The O'Neal Law Firm, P.C.
Attention: William D. O'Neal, Esq.
17100 E. Shea Boulevard
Suite #400-D
Fountain Hills, Arizona 85268
(602) 369-2656 Fax:
(480) 816-9241
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. [X]
1
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act Registration Statement number of the earlier effective
Registration Statement 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. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
2
CALCULATION OF REGISTRATION FEE
- ----------------------- --------------------- ------------------------- ------------------------- --------------------
Title of each Proposed Proposed
Class of Maximum Maximum Amount of
Securities to Amount to be Offering Price Aggregate Registration
be Registered Registered per Share (1) Offering Price Fee
- ----------------------- --------------------- ------------------------- ------------------------- --------------------
Common Stock 10,016,000 $0.10 $1,001,600 $117.88
- ----------------------- --------------------- ------------------------- ------------------------- --------------------
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 Securities and Exchange Commission, acting
pursuant to said section 8(a), may determine.
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
(2) Fixed offering price was set by the selling shareholders until securities
are quoted on the OTC Bulletin Board or other national exchange, and
thereafter at prevailing market prices or privately negotiated prices.
3
PROSPECTUS
10,016,000 shares of common stock
WORLDWIDE PROMOTIONAL PRODUCTS CORPORATION
3404-25th Street NE
Calgary, AB
T1Y 6C1
(403) 219-3090
10,016,000 shares of common stock of Worldwide Promotional Products Corporation.
($0.10 per share)
This is an offering of 10,016,000 shares of common stock by the selling
shareholders. The shares are being registered to permit public secondary trading
of the shares that are being offered by the selling shareholders named in this
prospectus. We will not receive any of the proceeds from the sale of the shares.
There is currently no public market for our shares.
The sales price to the public was set by the selling shareholders at $0.10 per
share for a total of $1,001,600. The price of $0.10 per share is a fixed price
until the shares are listed on the OTC Bulletin Board or other national
exchange, and thereafter at prevailing market prices or privately negotiated
prices.
INVESTORS IN THE COMMON STOCK SHOULD HAVE THE ABILITY TO LOSE THEIR ENTIRE
INVESTMENT SINCE AN INVESTMENT IN THE COMMON STOCK IS SPECULATIVE AND SUBJECT TO
MANY RISKS. See "Risk Factors," which begins on page 7.
Neither the SEC nor any state securities commission has approved or disapproved
these securities, passed upon the adequacy or accuracy of this prospectus, or
made any recommendation that you buy or not buy the shares. Any representation
to the contrary is a Criminal offense.
The information in this prospectus is not complete and may be changed. The
selling shareholders 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.
The date of this prospectus is June 6, 2005.
4
TABLE OF CONTENTS
PART I - Summary Information and Risk Factors............................... 6
Prospectus Summary.......................................................... 6
The Offering................................................................ 6
Summary of Financial Information ........................................... 6
Risk Factors................................................................ 7
Forward-Looking Statements.................................................. 10
Use of Proceeds............................................................. 10
Determination of Offering Price............................................. 10
Dilution.................................................................... 10
Selling Security Holders.................................................... 10
Plan of Distribution........................................................ 15
Legal Proceedings........................................................... 17
Directors, Executive Officers, Promoters and Control Persons................ 17
Security Ownership of Certain Beneficial Owners and Management.............. 18
Description of Securities................................................... 18
Interests of Named Experts and Counsel...................................... 19
Description of Business..................................................... 19
Management's Discussion and Analysis or Plan of Operation................... 24
Description of Property..................................................... 27
Certain Relationships and Related Transactions.............................. 28
Market for Common Equity and Related Shareholder Matters.................... 28
Dividend Policy............................................................. 29
Executive Compensation...................................................... 29
Legal Matters............................................................... 29
Securities Act Indemnification Disclosure................................... 29
Experts..................................................................... 29
Transfer Agent.............................................................. 29
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosures................................................................. 30
PART II - Financial Statements.............................................. 31
5
PART I - SUMMARY INFORMATION AND RISK FACTORS
PROSPECTUS SUMMARY
Unless the context indicates otherwise, all references in this prospectus to
"we," or "Worldwide," refer to Worldwide Promotional Products Corporation., a
corporation formed under the laws of the State of Nevada on October 28, 1999.
Worldwide Promotional Products Corporation was originally incorporated in the
State of Nevada on October 28, 1999, as "Victor James, Inc." We were a dormant
corporation since our inception and had never engaged in any prior business or
financing activities prior to July 1, 2004. On June 16, 2004, we filed a
Certificate of Amendment with the Nevada Secretary of State changing our name
from Victor James, Inc. to Worldwide Promotional Products Corporation. On July
1, 2004, we entered into a Share Exchange Agreement with Globestuff.com, Inc, an
Alberta corporation ("Globestuff"), whereby we acquired 100% of the outstanding
common stock of Globestuff for 5,000,000 shares of our common stock, whereby
Globestuff became a wholly-owned subsidiary of Worldwide.
We are a membership-based sales, marketing and administrative support
organization for suppliers and distributors of promotional products.
Our executive offices are located at 3404 25th St. NE, Calgary, AB, T1Y 6C1. Our
telephone number is (403) 219-3090.
THE OFFERING
Securities Offered:....Up to 10,016,000 shares of common stock. The securities
being offered are those of the existing shareholders only.
Price per share:.......$0.10 as determined by the selling shareholders. The price
of $0.10 per share is a fixed price until the securities are
listed on the OTC Bulletin Board or other national exchange,
and thereafter at prevailing market prices or privately
negotiated prices.
Securities Issued
And Outstanding:.......22,511,000 shares of common stock were issued and
outstanding as of the date of this prospectus.
Use of Proceeds:.......We will not receive any proceeds from the sale of the common
stock by the selling shareholders.
Plan of Distribution:..We are unaware of the nature and timing of any future sales
of our common stock by existing shareholders.
Registration Costs:....We estimate our total offering registration costs to be
$28,867.88.
SUMMARY OF FINANCIAL INFORMATION
The following summary financial information for the periods stated summarizes
certain information from our financial statements included elsewhere in this
prospectus. You should read this information in conjunction with Management's
Plan of Operations and the financial statements and the related notes thereto
included elsewhere in this prospectus.
6
SUMMARY OF FINANCIAL INFORMATION - continued
Three Month Period Year Ended Year Ended
Income Statement Ended March 31, 2005 December 31, 2004 December 31, 2003
-------------------- ----------------- -----------------
Revenues $ 169,231 $ 387,834 $ 0
Net Income (Loss) $(179,630) $(271,898) $ (16,653)
Net Income (Loss per Share) $ (0.01) $ (0.02) $ a
Balance Sheet
Total Assets $ 177,874 $ 372,113 $ 852
Total Current Liabilities $ 136,039 $ 172,912 $ 0
Shareholders' Equity (Defecit) $(213,272) $ 372,113 $ 852
-------------------- ----------------- -----------------
RISK FACTORS
The securities offered are highly speculative in nature and involve a high
degree of risk. They should be purchased only by persons who can afford to lose
their entire investment. This section sets forth all material risks known to
management with respect to this offering. Therefore, each prospective investor
should, prior to purchase, consider very carefully each of the following known
material risk factors among other things, as well as all other information set
forth in this prospectus.
(1) We may need to raise additional funds to the extent that current cash flows
are insufficient to fund future on-going operations or we may be unable to fully
execute our plan of operation or continue to operate as a going concern.
We anticipate that our cash flows from operations will be adequate to satisfy
our capital requirements for current operations for the next twelve (12) months.
To the extent that the funds generated by our on-going operations are
insufficient to fund our future operating requirements, it may be necessary to
raise additional funds, through public or private financings. Any equity or debt
financings, if available at all, may be on terms that are not favorable to us.
If adequate capital is not available, we may be unable to fully execute our
business plan as set forth herein or continue to operate as a going concern.
(2) If we do not accurately forecast our membership enrollment revenues will be
negatively impacted and we may not be able to continue to operate as a going
concern.
We must correctly estimate our membership enrollment in order to effectively
project what our revenue will be. The fewer members we have, the smaller the
discount we will be able to pass along to our members. Our inability to pass
along a sufficient discount to our members could make enrollment into our
membership program cost prohibitive to the distributors. Without adequate
participation of distributors, we will be unable to generate sufficient revenues
to continue to operate as a going concern.
7
RISK FACTORS - continued
(3) Failure of suppliers to deliver our product could cause members to become
unsatisfied with us and could affect our ability to operate as a going concern.
If our suppliers do not provide us with high quality goods, our members will not
be willing to purchase products from those suppliers. Our business model allows
us to provide customer service and discounts to members who would otherwise be
competitors. We must provide them with the same quality products at a discount
that they would otherwise buy from wholesalers. We must be able to provide them
a greater array of products than they are currently offered. If these products
are not available to us, we would not be able to pass this feature of our
membership on to our members thus giving them less reason to remain with us. As
a result, we would not be able to generate sufficient revenues to continue to
operate as a going concern.
(4) We may seek to compensate providers of services by issuance of stock in lieu
of cash, which would have a dilutive effect on the ownership interests of
shareholders and could reduce the value of their shares. If we are unable to
secure further capital we may seek to compensate providers of services by
issuance of stock in lieu of cash. Any such stock issuance would dilute
ownership interests of the shareholders. For example, it is possible that we
would grant stock or stock options to compensate its executives and employees.
Whether or not our cash assets prove to be inadequate to meet its operational
needs, we may seek to compensate providers of services by issuance of stock in
lieu of cash, which would have a dilutive effect on the ownership interests of
shareholders and could reduce the value of their shares.
(5) Failure to retain and expand our existing management team could negatively
impact our revenues.
Our success depends largely on the skills of certain key management, in
particular our President, Guy Peckham and our Secretary/ Treasurer Bruce Hannan.
We do not have employment agreements with our executive officers, key management
or other employees and, therefore, they could terminate their employment at any
time without penalty. We do not maintain key person life insurance policies on
any of our employees. The loss of one or both of these individuals would cause
us a significant setback. We may not be able to recruit personnel on acceptable
terms to replace these individuals in a timely manner, or at all. Furthermore to
execute our business plan fully we will need to bring in professionals capable
of managing a strict receivables department. If we cannot retain trained
personnel in this area, then this aspect of our service to our members would be
lost. This could cause a drop off of enrollment in our membership program and a
decrease in our revenues.
(6) Our failure to sign up distributors and agents could create greater
competition and could result in a loss of business and a decrease in our
revenues.
Potential members that we have targeted could also be our competition. If we are
unsuccessful in signing these people up for our membership, they will be selling
to the same target market that our members are selling to. At any time these
sales organizations could copy our business plan and directly compete with us.
Such competition could result in a loss of business and a decrease in our
revenues.
8
RISK FACTORS - continued
(7) Our officers and directors control our operations and matters requiring
shareholder approval and therefore have the ability to significantly influence
all matters requiring shareholder approval.
Our officers and directors own approximately 22.2% of our outstanding shares of
common stock. As a result, our officers and directors will have the ability to
significantly influence all matters requiring approval by our shareholders,
including the election and removal of directors. Such control will allow our
officers and directors to control the future course of our company. Our officers
and directors do not intend to purchase any of the shares in this offering.
(8) Shareholders could experience substantial dilution if we issue additional
shares of our capital stock.
Over the next twelve (12) months, we intend to issue additional equity
securities to raise additional cash to expand our operations. If we issue
additional shares of our capital stock, shareholders will experience dilution in
their respective percentages of ownership in Worldwide.
(9) There can be no assurance that our common stock will ever be publicly traded
or appreciate significantly in value and investors may not be able to find
purchasers for their shares of our common stock.
There is no public market for shares of our common stock. We cannot guarantee
that an active public market will develop or be sustained. Therefore, investors
may not be able to find purchasers for their shares of our common stock. Should
there develop a significant market for our shares, the market price for those
shares may be significantly affected by such factors as our financial results
and introduction of new products and services. While we, in conjunction with
broker-dealers, intend to apply to the NASD to have our stock publicly traded on
the Over-the-Counter Electronic Bulletin Board, no assurance can be given that
such regulatory approval will ever be received. If our common stock becomes
publicly traded, no assurance can be given that our common stock will ever be
traded on an established national securities exchange or that our business
strategy will be well received by the investment community.
(10) We have no present intention to pay dividends.
We have never paid dividends or made other cash distributions on the common
stock, and do not expect to declare or pay any dividends in the foreseeable
future. We intend to retain future earnings, if any, for working capital and to
finance current operations and expansion of its business.
(11) Penny stock regulations may have the effect of reducing the trading
activity in the secondary market for our stock that becomes subject to those
penny stock rules.
The SEC has adopted rules that regulate broker-dealer practices in connection
with transactions in "penny stocks." Penny stocks generally are equity
securities with a price of less than $5.00 (other than securities registered on
certain national securities exchanges or quoted on the NASDAQ system, provided
that current price and volume information with respect to transactions in such
securities is provided by the exchange or system). Penny stock rules require a
9
RISK FACTORS - continued
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
those rules, to deliver a standardized risk disclosure document prepared by the
SEC, which specifies information about penny stocks and the nature and
significance of risks of the penny stock market. A broker-dealer must also
provide the customer with bid and offer quotations for the penny stock, the
compensation of the broker-dealer, and sales person in the transaction, and
monthly account statements indicating the market value of each penny stock held
in the customer's account. In addition, the penny stock rules require that,
prior to a transaction in a penny stock not otherwise exempt from those rules,
the broker-dealer must make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the trading activity in the secondary market for stock that becomes
subject to those penny stock rules. If a trading market for our common stock
develops, our common stock will probably become subject to the penny stock
rules, and shareholders may have difficulty in selling their shares.
FORWARD-LOOKING STATEMENTS
You should be aware that any forward-looking statements in this prospectus
involve risks and uncertainties as they are based on certain stated assumptions,
which may apply only as of the date of this prospectus. We use words such as
"anticipates," "believes," "plans," "expects," "future," "intends" and similar
expressions to identify these forward-looking statements and the actual results
of our operations could differ materially from those anticipated in these
forward-looking statements.
USE OF PROCEEDS
We will not receive the proceeds from the sale of any of the 10,016,000 shares
offered by the selling shareholders. We are, however, paying the costs of
registering those shares.
DETERMINATION OF OFFERING PRICE
The shareholders set the offering price of the common stock at $0.10 per share.
The shareholders arbitrarily set the offering price based upon their collective
judgment as to a price per share they were willing to accept. The price of $0.10
per share is a fixed price until the securities are listed on the OTC Bulletin
Board or other national exchange, and thereafter at prevailing market prices or
privately negotiated prices.
DILUTION
Since this offering is being made solely by the selling stockholders and none of
the proceeds will be paid to us, our net tangible book value will be unaffected
by this offering.
SELLING SECURITY HOLDERS
The following table sets forth the names of the selling shareholders and for
each selling shareholder the number of shares of common stock beneficially owned
as of June 1, 2005, and the number of shares being registered. The selling
shareholders have furnished all information with respect to share ownership. The
shares being offered are being registered to permit public secondary trading of
the shares and each selling shareholder may offer all or part of the shares
owned for resale from time to time. A selling shareholder is under no
obligation, however, to sell any shares immediately pursuant to this prospectus,
10
SELLING SECURITY HOLDERS - continued
nor is a selling shareholder obligated to sell all or any portion of the shares
at any time. Therefore, no estimate can be given as to the number of shares of
common stock that will be sold pursuant to this prospectus or the number of
shares that will be owned by the selling shareholders upon termination of the
offering made hereby.
The following table provides as of June 1, 2005, information regarding the
beneficial ownership of our common stock held by each of the selling
shareholders, including:
1. The number of shares owned by each prior to this offering;
2. The total number of shares that are to be offered for each;
3. The total number of shares that will be owned by each upon completion of
the offering;
4. The percentage owned by each; and
5. The identity of the beneficial holder of any entity that owns the shares.
To the best of our knowledge, the named parties in the table that follows are
the beneficial owners and have the sole voting and investment power over all
shares or rights to the shares reported. In addition, the table assumes that the
selling shareholders do not sell shares of common stock not being offered
through this prospectus and do not purchase additional shares of common stock.
The column reporting the percentage owned upon completion assumes that all
shares offered are sold, and is calculated based on 22,511,000 shares
outstanding on June 1, 2005.
Selling Shareholders Shares of Shares of Shares of Percentage of Percentage of
Common Stock Common Stock Common Stock Common Stock Common Stock
Owned Prior to be Owned After Owned Before Owned After
to Offering Offered the Offering the Offering the Offering
for Sale
----------- ------------ ------------ ---------------- -------------
D. Bruce Horton 625,000 0 625,000 2.8% 0
Mryna Crawford 610,000 610,000 0 2.7% 0
T. Robert Horton 525,500 300,000 225,500 2.3% 0
Jason Scharfe 525,500 300,000 225,500 2.3% 0
Brad Scharfe 600,000 600,000 0 2.7% 0
H. Nixon Scharfe 625,000 0 625,000 2.8% 0
Lucille Mao 510,500 510,500 0 2.3% 0
Tandoor Holdings Ltd. (1) 625,000 0 625,000 2.8% 0
Lancaster Pacific 625,000 0 625,000 2.8% 0
Investments Ltd.(2)
Eric Tan 40,000 40,000 0 * 0
11
SELLING SECURITY HOLDERS - continued
Selling Shareholders Shares of Shares of Shares of Percentage of Percentage of
Common Stock Common Stock Common Stock Common Stock Common Stock
Owned Prior to be Owned After Owned Before Owned After
to Offering Offered the Offering the Offering the Offering
for Sale
----------- ------------ ------------ ---------------- -------------
Bryan Dear 610,000 610,000 0 2.7% 0
Kim Foster 485,500 200,000 285,500 2.2% 0
Jacqueline Mcclure 625,000 0 625,000 2.8% 0
Jim Mochoruk 735,000 735,000 0 3.3% 0
Korena Bleile 745,500 325,500 420,000 3.3% 0
Tammy Seibel 230,000 75,000 155,000 1.0% 0
Daryl Turner 50,000 0 50,000 * 0
Aaron Toth 625,000 625,000 0 2.8% 0
Rich Bergen 505,500 200,000 305,500 2.3% 0
Ed Robb 645,000 20,000 625,000 2.9% 0
Jason Sundar 610,000 610,000 0 2.7% 0
Peter Dunfield 675,000 50,000 625,000 2.8% 0
Jeff Sundar 572,500 350,000 222,500 2.5% 0
Joel Dumaresq 807,000 807,000 0 3.3% 0
Keith Ebert 505,500 0 505,500 2.3% 0
David Dumaresq 625,000 0 625,000 2.8% 0
Founders Cup Charity Classic 10,000 10,000 0 * 0
Electronic Relationship 1,000,000 1,000,000 0 4.4% 0
Marketing (3)
Guy Peckham (4) 2,500,000 0 2,500,000 11.1% 0
Bruce Hannan (5) 2,500,000 0 2,500,000 11.1% 0
Wes Dry 50,000 0 50,000 * 0
Paul Olmstead 50,000 0 50,000 * 0
Dr. Keith Lim, Inc. 75,000 75,000 0 * 0
James Barton 50,000 50,000 0 * 0
Craig Barton 50,000 50,000 0 * 0
Andrew Cloutier 50,000 50,000 0 * 0
12
SELLING SECURITY HOLDERS - continued
Selling Shareholders Shares of Shares of Shares of Percentage of Percentage of
Common Stock Common Stock Common Stock Common Stock Common Stock
Owned Prior to be Owned After Owned Before Owned After
to Offering Offered the Offering the Offering the Offering
for Sale
----------- ------------ ------------ ---------------- -------------
Tana Cloutier 50,000 50,000 0 * 0
Marko Ferenc 50,000 50,000 0 * 0
Andras Romoki 50,000 50,000 0 * 0
Michael Wood 50,000 50,000 0 * 0
Rick Jeffery 50,000 50,000 0 * 0
Wayne Osteiriecher 50,000 50,000 0 * 0
Derek Puttick 50,000 50,000 0 * 0
Silverback Management (6) 50,000 50,000 0 * 0
W.R. Stewart 50,000 50,000 0 * 0
B. Cole 50,000 50,000 0 * 0
Andrew Bilon 50,000 50,000 0 * 0
James Ericksteen 1,000 1,000 0 * 0
Kevin Ericksteen (7) 25,000 25,000 0 * 0
Mike Howlet 25,000 25,000 0 * 0
Everett Sponagle 1,000 1,000 0 * 0
Robert Olsen 1,000 1,000 0 * 0
Beverly Shultak 1,000 1,000 0 * 0
Deanna Olsen 1,000 1,000 0 * 0
Mike Newman 1,000 1,000 0 * 0
Marvin Munro 1,000 1,000 0 * 0
Edwin Gouin 1,000 1,000 0 * 0
Jo-Ann Ericksteen 1,000 1,000 0 * 0
Palmesa Investments, Inc. (8) 50,000 50,000 0 * 0
Paul Doherty 15,000 15,000 0 * 0
Jim Osterreicher 10,000 10,000 0 * 0
Cari Brown 15,000 15,000 0 * 0
13
SELLING SECURITY HOLDERS - continued
Selling Shareholders Shares of Shares of Shares of Percentage of Percentage of
Common Stock Common Stock Common Stock Common Stock Common Stock
Owned Prior to be Owned After Owned Before Owned After
to Offering Offered the Offering the Offering the Offering
for Sale
----------- ------------ ------------ ---------------- -------------
Mike Schutz 50,000 50,000 0 * 0
Wayne Hannon 35,000 35,000 0 * 0
Newport Capital (9) 200,000 200,000 0 * 0
Verona Capital International(10) 200,000 200,000 0 * 0
Pezzente Holdings(11) 5,000 5,000 0 * 0
Marcus Johnson 16,000 16,000 0 * 0
Coastal Asset Management (12) 160,000 160,000 0 * 0
Nadia Botteselle 5,000 5,000 0 * 0
Gerrard B. Kelly 5,000 5,000 0 * 0
Vaughn Biberdorf 20,000 20,000 0 * 0
Andoni Paleologos 160,000 160,000 0 * 0
Gordon D.Rough 20,000 20,000 0 * 0
Charles Leonard Clarke 5,000 5,000 0 * 0
Dimitrios Georgas 5,000 5,000 0 * 0
Kevin Clarke 5,000 5,000 0 * 0
Alec McDonald 20,000 20,000 0 * 0
Terry Schmidt 6,000 6,000 0 * 0
Mark A. Hayward 36,000 36,000 0 * 0
Shauna Matyas 1,000 1,000 0 * 0
Allen Basler 20,000 20,000 0 * 0
Daren Sello 20,000 20,000 0 * 0
Sean Duncan 20,000 20,000 0 * 0
Peter Lafuente 20,000 20,000 0 * 0
Leo Kwok 20,000 20,000 0 * 0
James Paleologos 60,000 60,000 0 * 0
----------- ------------ ------------ ---------------- -------------
Total 22,511,000 10,016,000 12,495,000 100% 0
14
SELLING SECURITY HOLDERS - continued
* = less than 0.1%
(1) Tandoor Holdings, Ltd. is controlled by Rosa Cheung.
(2) Lancaster Pacific Investments, Ltd. is controlled by Paul Chan.
(3) Electronic Relationship Marketing is controlled by John Rizzo.
(4) Guy Pechkam is an officer and director of Worldwide.
(5) Bruce Hannan is an officer and director of Worldwide.
(6) Silverback Management is controlled by Nadia Traversa.
(7) Kevin Ericksteen is a former officer and director of Worldwide.
(8) Palamesa Investments, Inc. is controlled by Kevin Ericksteen, a former
officer and director of Worldwide.
(9) Newport Capital is controlled by Brent Pierce.
(10) Verona Capital is controlled by Gerold Hoop.
(11) Pezzente Holdings is controlled by Alfonzo Pezzente. (12) Coastal Asset
Management is controlled by Jason Sundar.
Except as disclosed in footnotes 4,5,7 and 8 above, to our knowledge, none of
the selling shareholders:
1. Has had a material relationship with Worldwide other than as a shareholder
as noted above at any time within the past three (3) years;
2. Has ever been an officer or director of Worldwide; or 3. Are broker-dealers
or affiliated with broker-dealers.
PLAN OF DISTRIBUTION
The selling shareholders have not informed us of how they plan to sell their
shares. However, they may sell some or all of their common stock in one or more
transactions:
1. on such public markets or exchanges as the common stock may from time to time
be trading; 2. in privately negotiated transactions; or 3. in any combination of
these methods of distribution.
The sales price to the public has been determined by the shareholders to be
$0.10 per share. The price of $0.10 per share is a fixed price until the
securities are listed on the OTC Bulletin Board or other national exchange, and
thereafter at prevailing market prices or privately negotiated prices.
The shares may also be sold in compliance with the Securities and Exchange
Commission's Rule 144. Under Rule 144, several provisions must be met with
respect to the sales of control securities at any time and sales of restricted
securities held between one and two years. The following is a summary of the
provisions of Rule 144: (a) Rule 144 is available only if the issuer is current
in its filings under the Securities Exchange Act of 1934. Such filings include,
but are not limited to, the issuer's quarterly reports and annual reports; (b)
Rule 144 allows resale of restricted and control securities after a one year
holding period, subjected to certain volume limitations, and resale's by
non-affiliates holders without limitations after two years; (c) The sales of
securities made under Rule 144 during any three-month period are limited to the
greater of: (i) 1% of the outstanding common stock of the issuer; or (ii) the
average weekly reported trading volume in the outstanding common stock reported
on all securities exchanges during the four calendar weeks preceding the filing
of the required notice of the sale under Rule 144 with the SEC.
15
PLAN OF DISTRIBUTION - continued
The selling shareholders may also sell their shares directly through market
makers acting in their capacity as broker-dealers. We will apply to have our
shares of common stock listed on the OTC Bulletin Board immediately after the
date of this prospectus. We anticipate once the shares are trading on the OTC
Bulletin Board the selling shareholders will sell their shares directly into any
market created. Selling shareholders will offer their shares at a fixed price of
$0.10 per share until the common stock is trading on the OTC Bulletin Board at
which time the prices the selling shareholders will receive will be determined
by market conditions. Selling shareholders may also sell in private
transactions. We cannot predict the prices at which shares may be sold or
whether the common stock will ever trade on any market. The selling shareholders
may sell the shares, as the case may be, from time to time, in one or more
transactions. We do not intend to enter into any arrangements with any
securities dealers concerning solicitation of offers to purchase the shares.
Commissions and discounts paid in connection with the sale of the shares by the
selling shareholders will be determined through negotiations between them and
the broker-dealers through or to which the securities are to be sold and may
vary, depending on the broker-dealer's fee schedule, the size of the transaction
and other factors. The separate costs of the selling shareholders will be borne
by them. The selling shareholders will, and any broker-broker dealer or agent
that participates with the selling shareholders in the sale of the shares by
them may be deemed an "underwriter" within the meaning of the Securities Act,
and any commissions or discounts received by them and any profits on the resale
of shares purchased by them may be deemed to be underwriting commissions under
the Securities Act. In the event any selling shareholder engages a broker-dealer
to distribute its shares, and the broker-dealer is acting as underwriter, we
will be required to file a post-effective amendment containing the name of the
underwriter.
The selling shareholders must comply with the requirements of the Securities Act
of 1933 and the Securities Exchange Act of 1934 in the offer and sale of their
common stock. In particular, during times that the selling shareholders may be
deemed to be engaged in a distribution of the common stock, and therefore be
considered to be underwriters, they must comply with applicable law. Regulation
M prohibits certain market activities by persons selling securities in a
distribution. To demonstrate their understanding of those restrictions and
others, selling shareholders will be required, prior to the release of
unlegended shares to themselves or any transferee, to represent as follows: that
they have delivered a copy of this prospectus, and if they are effecting sales
on the Electronic Bulletin Board or inter-dealer quotation system or any
electronic network, that neither they nor any affiliates or persons acting on
their behalf, directly or indirectly, has engaged in any short sale of our
common stock; and for a period commencing at least five (5) business days before
their first sale and ending with the date of their last sale, bid for,
purchased, or attempted to induce any person to bid for or purchase our common
stock.
We can provide no assurance that all or any of the common stock offered will be
sold by the selling shareholders.
We are bearing all costs relating to the registration of the common stock. Any
commissions or other fees payable to brokers or dealers in connection with any
sale of the common stock, however, will be borne by the selling shareholders or
other party selling the common stock. We will use our best efforts to update the
registration statement and maintain its effectiveness for one year.
16
LEGAL PROCEEDINGS
We are not currently involved in any legal proceedings and we are not aware of
any pending or potential legal actions.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The directors and executive officers currently serving Worldwide are as follows:
Name Age Position Term Commenced Term Expires
- ----------------------------------- --- -------------------- --------------- -------------
Guy Peckham 41 Director/President July 26, 2004 July 26, 2005
1203-1005 Beach Ave Vancouver, B.C.
V6E 3W2
Bruce Hannan 35 Director/Secretary/ July 26, 2004 July 26, 2005
125 Sommerset Park SW Calgary, AB Treasurer
T2Y 3H5
Wally Marcolin 43 Director June 17, 2004 June 17, 2005
128 Sunharbour Crescent S.E
Calgary, AB
T2X 3B3
The foregoing persons may be deemed "promoters" of Worldwide, as that term is
defined in the rules and regulations promulgated under the Securities and
Exchange Act of 1933.
Directors are elected to serve until the next annual meeting of stockholders and
until their successors have been elected and qualified. Officers are appointed
to serve until the meeting of the board of directors following the next annual
meeting of stockholders and until their successors have been elected and
qualified.
The directors and officers are full time employees of Worldwide.
No executive officer or director of Worldwide has been the subject of any order,
judgment, or decree of any court of competent jurisdiction, or any regulatory
agency permanently or temporarily enjoining, barring, suspending or otherwise
limiting him or her from acting as an investment advisor, underwriter, broker or
dealer in the securities industry, or as an affiliated person, director or
employee of an investment company, bank, savings and loan association, or
insurance company or from engaging in or continuing any conduct or practice in
connection with any such activity or in connection with the purchase or sale of
any securities.
No executive officer or director of Worldwide has been convicted in any criminal
proceeding (excluding traffic violations) or is the subject of a criminal
proceeding, which is currently pending.
No executive officer or director of Worldwide is the subject of any pending
legal proceedings.
Guy Peckham, Director/President, Age 41: Mr. Peckham is a Director and President
of our company. His term expires on July 26, 2005. From 1999 to 2001, Mr.
Peckham was the Owner and President of Goodlife Brands, Inc., a company formerly
known as Schwans Canada that offered Western Canada customers direct to home
gourmet frozen, entries, desserts and ice cream. Mr. Peckham has also been
17
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS - continued
president of Peckham Enterprises Ltd. since 1992. From 2001 to present Mr.
Peckham has been a private investor and consultant. Mr. Peckham has not served
as an officer or director in any other public company. Bruce Hannan,
Director/Secretary/Treasurer, Age 36: Mr. Hannan is a Director, Secretary and
Treasurer of our company. His term expires on July 26, 2005. From 1999 to 2002,
Mr. Hannan was the National Sales Manager for McSweeney Plus Distribution/
Direct Plus Food Group . He oversaw 125 + supervisory and sales personnel across
Canada . Mr. Hannan implemented programs and procedures to maintain certain
controls for sales growth from $3,000,000 to over $65,000,000 in five years .
From 2003 to 2004, Mr. Hannan served as President of Globestuff.com, Inc., our
wholly-owned subsidiary, a company engaged in the sales of promotional products,
awards and incentive programs, uniform programs and solutions providers for
corporations, small businesses, schools and sports teams. Mr. Hannan has not
served as an officer or director in any other public company. Wally Marcolin,
Director, Age 43: Mr. Marcolin is a Director of our company. His term expires on
June 17, 2005. From 1999 to 2002, Mr. Marcolin served as the Vice President of
Operations for Goodlife Brands, Inc. where he managed and coordinated all in and
out bound logistics with an annual operating budget of over $2.8 million. From
2002 to the present, Mr. Marcolin has been an owner and operator of Olivier's
Candies Ltd., an old fashion candy and chocolate manufacturer located in
Calgary, Alberta Canada. In 1983, Mr. Marcolin earned a Diploma in Business
Administration from Camosun College in Victoria, British Columbia. In 1999, Mr.
Marcolin earned an Executive Masters of Business Administration Program
(E.M.B.A.) from the University of Calgary in Calgary Alberta. Mr. Marcolin has
not served as an officer or director in any other public company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth, as of December 15, 2004, certain information
with respect to the beneficial ownership of our common and preferred stock by
(i) each director and officer of Worldwide, (ii) each person known to Worldwide
to be the beneficial owner of 5% or more of the outstanding shares of common
stock, with such person's address, and (iii) all of the directors and officers
as a group. Unless otherwise indicated, the person or entity listed in the table
is the beneficial owner of the shares and has sole voting and investment power
with respect to the shares indicated.
Name of Beneficial Owner
or Name of Officer or Director Common Shares Beneficially Owned Percent
- ------------------------------- -------------------------------- ----------
Guy Peckham 2,500,000 11.1%
Bruce Hannan 2,500,000 11.1%
Wally Marcolin 0 0
Total Director/Officer/ 5,000,000 22.2%
5% Owners
DESCRIPTION OF SECURITIES
The following description is a summary of the material terms of our capital
stock. This summary is subject to and qualified in its entirety by our Articles
of Incorporation, as amended, and Bylaws, as amended, and by the applicable
provisions of Nevada law.
18
DESCRIPTION OF SECURITIES - continued
The authorized capital stock of Worldwide consists of 100,000,000 shares of
common stock having a par value of $.001 per share.
Common Stock
Each outstanding share of common stock entitles the holder thereof to one vote
per share on all matters. The Articles of Incorporation do not permit cumulative
voting for the election of directors which means that the holders of more than
50% of such outstanding shares voting for the election of directors can elect
all of the directors to be elected, if they so choose; in such event, the
holders of the remaining shares will not be able to elect any of our directors.
Shareholders do not have preemptive rights to purchase shares in any future
issuance of our common stock.
The holders of shares of common stock are entitled to dividends out of funds
legally available when and as declared by the Board of Directors. The Board of
Directors has never declared a dividend and does not anticipate declaring a
dividend in the foreseeable future. In the event of liquidation, dissolution or
winding up of the affairs of the company, holders are entitled to receive,
ratably, the net assets available to shareholders after payment of all
creditors.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No "Expert" or "Counsel" as defined by Item 509 of Regulation S-B promulgated
pursuant to the Securities Act of 1933, whose services were used in the
preparation of this Form SB-2 was hired on a contingent basis or will receive a
direct or indirect interest in the Company.
DESCRIPTION OF BUSINESS
The Company
Worldwide Promotional Products Corporation was originally incorporated in the
State of Nevada on October 28, 1999, as "Victor James, Inc.". We were a dormant
corporation since our inception and had never engaged in any prior business or
financing activities prior to July 1, 2004. On June 16, 2004, we filed a
Certificate of Amendment with the Nevada Secretary of State changing our name
from Victor James, Inc. to Worldwide Promotional Products Corporation. On July
1, 2004, we entered into a Share Exchange Agreement with Globestuff.com, Inc, an
Alberta corporation ("Globestuff"), whereby we acquired 100% of the outstanding
common stock of Globestuff for 5,000,000 shares of our common stock, whereby
Globestuff became a wholly-owned subsidiary of Worldwide.
On April 19, 2004, we accepted the return of 400,000 shares from our former sole
officer and director. Kevin Ericksteen, to treasury. Concurrently, we forward
split our common stock 39 for 1.
On June 17, 2004, we accepted the return of 5,025,000 shares from Mr. Ericksteen
to treasury. Thereafter, we had 15,165,000 shares of our common stock
outstanding. We then issued 5 million shares to the shareholders of
Globestuff.com,Inc. After this acquisition, we had 20,165,000 shares of common
stock issued and outstanding.
19
DESCRIPTION OF BUSINESS - continued
The Business
We are a membership-based sales, marketing and administrative support
organization for suppliers and distributors of promotional products.
We offer our member distributors:
1) Marketing and administrative support - Providing the marketing
solutions such as e-solution technology, mass mail-outs, and
convenient tools to ease the burden of additional marketing and
administration expenses to our members.
2) Accesses to a larger variety of suppliers - Many Suppliers do not have
marketing representatives that build their brand awareness. Their
marketing program consists of a catalogue and hope that a distributor
will show it. Worldwide will offer the facilities and promote these
lines for a commission-based fee that will also include a member
incentive program.
3) Receivable factoring - Entering into strategic alliances with
factoring agents and providing A/R service will allow the distributor
to reduce administration and improve cash flow. This also decreases
the system requirements for the distributor.
4) Member specials - Worldwide will negotiate member specials with
suppliers to promote certain products to be featured throughout the
year.
5) Ease of ordering - Worldwide's online catalogue will allow distributor
members to browse through products and place their orders online 24
hours a day.
6) Multi-line showrooms - this provides distributors same day sampling to
their customers, with no re-stocking charge for returned samples.
7) Industry trends and knowledge - will provide member distributors with
the latest industry news and information to help gain knowledge to
grow their business.
8) Product sourcing - through our list of preferred suppliers, Worldwide
will source out products that will best suit the needs of the
distributor and their client.
We offer our member suppliers:
1) Marketing and promotion - increased sales through line representation.
Worldwide will offer full time marketing personnel to work with
preferred suppliers to focus on marketing materials for e-solution
marketing, mass mail-outs and cutting edge marketing programs.
2) Showroom and lending library - space is provided for a fee to showcase
product ensuring it is attractively displayed. Samples are managed
ensuring that they are ready to go for distributor pick-up, as well as
returned as agreed.
3) Cost savings - major reduction in maintaining a physical presence; as
well as reduced shipping and tracking costs.
20
DESCRIPTION OF BUSINESS - continued
4) Increased exposure - access to currently over 270 distributor
companies with over 500 members. A national marketing campaign to
rapidly expand the Worldwide membership.
5) Customer service - full-time staff in the Tradepointe galleries to
book appointments, manage inventory, catalogues and flyers, as well as
assist with product sourcing.
6) Membership requirement of qualified promotional product distributors
with loyalty incentive program to further drive sales and increased
market share.
7) Participation in scheduled forums and intra-organization
communications and networking amongst members through the showroom and
online bulletin board of industry related topics.
8) Simplified order process- standard order form marked clearly with the
Worldwide Distributor membership number.
We have built an easy to use website for members that gives them more selection
and better pricing opportunities to purchase promotional products through buying
into an organization that offers pricing normally reserved only for the largest
of corporations. Our plan is to approach the existing 2000 small to mid-size
promotional products sales people and organizations in Canada and offer them a
trial of our services, website, showroom, and accounting. Our goal is to
establish Worldwide as the leading marketing organization of promotional
products in North America by consolidating the buying and selling strengths of
each of the over 2000 small sales organizations. Currently Canada and the USA do
not have a marketing and sales organization that offers the solutions we intend
to offer under one roof. This proposed business will benefit both the suppliers
and the distributors throughout Canada by providing better margins and
decreasing administration support for the distributor, and increased sales
market share for the supplier. The industry's competitors provide the
possibility of becoming members, which in turn provides a large opportunity for
a promotional solutions company.
We provide a professional business setting that allows customers, members and
suppliers to see the business in full production. Our approach is to have them
visit the office and understand what their membership fees are doing for them.
We currently have two facilities, one in Calgary, Alberta, which is our main
facility, and one in Vancouver. The Calgary facility offers 3000 square feet and
the Vancouver facility offers 2000 square feet of showroom, displaying different
products that are offered. There is also 3000 square feet of office space in the
Calgary facility to carry on the day-to-day operations of our organization. We
have a further 3000 square feet of silk screening and embroidery services.
Members can come directly to see what their dues are going towards versus simply
logging on to a database. We will also have a small portion of these spaces
dedicated to customer service. This will allow our members direct service at our
facility. We plan to expand our level of services as we expand our membership
and cash flow.
21
DESCRIPTION OF BUSINESS - continued
Competition
Pricing and service will be major factors in competition. If we can provide
superior service, such as our showrooms, we expect to obtain many of our
potential competitors as members. Also, members will be provided with volume
based incentives that are not usually available to most of the distributors
within Canada. A percentage of sales will be charged to our customers for our
added benefits such as back end accounting and collections that we plan to roll
out as we are established. Large distributors may pressure suppliers to not
participate in the program. We will need to sell the fact that over 50% of their
sales come from the segmented market of small to medium sized independent
distributors that will see the advantages of what we offer. Concord Promotions -
also provides an informational website that offers various promotional products
to distributors. The major strength that these companies have is current members
or clients. They have been established for a period of time and their members
are accustomed to doing business with them. Management also believes that having
the embroidery equipment housed in the same office as the sales staff will
provide a large advantage that many of the current distributors are not able to
offer, such as quality control. The greatest amount of space will be needed to
accommodate the staff that will provide the services to the members. We will
offer a walk-in retail area that will provide us the area to exhibit our
suppliers' products.
Dependence on One or a Few Major Customers
We do not depend on any one or a few major customers.
Patents, Trademarks, Franchises, Concessions, Royalty Agreements, or
Labor Contracts
We have no current plans for any registrations such as patents, trademarks,
copyrights, franchises, concessions, royalty agreements or labor contracts. We
will assess the need for any copyright, trademark or patent applications on an
ongoing basis.
Need For Government Approval for its Products or Services
We are not required to apply for or have any government approval for our
products or services.
Effect of Governmental Regulations on our Business
We will be subject to common business and tax rules and regulations pertaining
to the operation of our business in the State of Nevada, as well as federal
securities laws and regulations after the effective date of this registration
statement. Our business will be subject to import and export regulations of
Canada and the United States. In complying with these laws and regulations, we
will incur additional legal and accounting costs and expenses, but we do not
believe such costs and expenses shall have a material effect on our operations
or liquidity.
Research and Development Costs for the Past Two Years
We have not expended funds for research and development costs in the past two
years.
22
DESCRIPTION OF BUSINESS - continued
Costs and Effects of Compliance with Environmental Laws and Regulations
Environmental regulations have had no materially adverse effect on our
operations to date, but no assurance can be given that environmental regulations
will not, in the future, result in a curtailment of service or otherwise have a
materially adverse effect on our business, financial condition or results of
operation. Public interest in the protection of the environment has increased
dramatically in recent years. The trend of more expansive and stricter
environmental legislation and regulations could continue. To the extent that
laws are enacted or other governmental action is taken that imposes
environmental protection requirements that result in increased costs, our
business and prospects could be adversely affected.
Bankruptcy
We have not been involved in any bankruptcy, receivership or similar
proceedings.
Equity Incentive Plan
We currently have no equity incentive or option plan in place.
Number of Employees
We currently have sixteen (16) full time employees and two independent
contractors. We will add more employees in the future as membership grows. Many
of the employees will be sales, customer support and administrative staff. We
will also have staff members trained in negotiating skills. These people will
also be used as collections agents. None of the employees are subject to
collective bargaining agreements. There has not been a strike and one is not
currently contemplated. Our staff structure is as follows:
o Sales personnel - Currently we have one full-time sales manager handling
supplier relations in Vancouver and one sales manager on contract handling
distributor relations also in Vancouver.
o Embroidery Staff - staffing will be determined by the business that is
sourced, but currently we have two silkscreeners/ embroiderers plus a
manager and one person that does contract work for us.
o Credit Department - 2 to 3 individuals that would be responsible for
running credit applications and collection calls of which we now have one
person on staff.
o IT Department - 1 to 2 individuals that will service the website and keep
it up to date. They will also be able to offer customer support. We have
one person at the present time.
o Purchasing/Customer Service - 2 to 3 individuals to do product sourcing and
work closely with the suppliers of which have one on staff now. We may need
another person depending on the orders and capacity to process them.
o Accounting - 2 individuals to do Accounts Payable and general accounting.
We currently have one Accounting Assistant/Collections plus a manger.
23
DESCRIPTION OF BUSINESS - continued
Reports to Securities Holders
We intend to provide an annual report that includes audited financial
information to our shareholders. We will make our financial information equally
available to any interested parties or investors through compliance with the
disclosure rules of Regulation S-B for a small business issuer under the
Securities Exchange Act of 1934. We will become subject to disclosure filing
requirements once our SB-2 registration statement becomes effective, including
filing Form 10-KSB annually and Form 10-QSB quarterly. In addition, we will file
Forms 8-K and other proxy and information statements from time to time as
required. We do not intend to voluntarily file the above reports in the event
that our obligation to file such reports is suspended under the Exchange Act.
The public may read and copy any materials that we file with the Securities and
Exchange Commission, ("SEC"), at the SEC's Public Reference Room at 450 Fifth
Street NW, Washington D. C. 20549. The public may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy
and information statements, and other information regarding issuers that file
electronically with the SEC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion is intended to provide an analysis of our financial
condition and Plan of Operation and should be read in conjunction with our
financial statements and the notes thereto set forth herein. The matters
discussed in this section that are not historical or current facts deal with
potential future circumstances and developments. Our actual results could differ
materially from the results discussed in the forward-looking statements. Factors
that could cause or contribute to such differences include those discussed
below.
Plan of Operation
Expanding our distributor membership and supplier base, as well as growing
direct sales is our primary objective over the next twelve months.
We have consolidated our current operations in Calgary from three different
locations into one larger facility with a significantly larger and more
professional showroom. Our business is divided into three distinct categories of
which we intend to grow all three areas over the next year. The divisions are
direct sales, membership, and manufacturing.
Direct sales - We now have two dedicated professionals selling to our current
customer base and increasing sales by adding more customers. We have plans to
rapidly expand this division through acquisitions of other promotional product
distributors. We have identified several potential acquisitions and will be
performing our due diligence to determine which companies will provide the best
opportunity for us. Acquisitions will require cash, shares, or a combination of
both.
Membership - This division provides a unique opportunity for us to become the
leader in promotional products. Additional suppliers are being solicited and
added to our growing supplier base. An aggressive sales and marketing approach
has also been launched to enable suppliers to see the overall benefit that
Worldwide will provide for their company. The website for our members is
approaching completion and will be marketed to potential members within the next
month. Professional information packages for members outlining the concepts and
24
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - continued
benefits of membership have been developed and are being distributed to our
member base.
Manufacturing - Our silk screening, embroidery, and embossing division will
achieve growth and profitability as our customer base increases. As more members
sign up there will be an increased need for the services of our manufacturing
business.
Results of Operations.
Fiscal Year Ended December 31, 2004 as compared to fiscal year ended December
31, 2003.
Total revenues for fiscal 2004 were $387,834 as compared to $0 in fiscal 2003,
an increase of $387,834 reflecting increased sales in fiscal 2004 as compared to
fiscal 2003.
We had total assets of $372,113 at December 31, 2004, compared to total assets
of $852 at December 31, 2003, an increase of $371,261 primarily attributable to
an increase in sales and investment resulting in an increase in cash and
accounts receivable.
We had total current liabilities of $172,912 at December 31, 2004 compared to
total current liabilities of $0 at December 31, 2003, an increase of $172,912
resulting from expenses related to the commencement of our operations beginning
in fiscal 2004.
Cost of goods sold for fiscal 2004 increased to $216,144 from $0 for fiscal
2003, due to the commencement of our operations and a significant increase in
our overall sales volume.
Interest expense for fiscal 2004 was $6,873 compared to $0 for fiscal year 2003.
We had a net loss of $(271,898) for fiscal 2004 compared to a net loss of
$(16,653) for fiscal 2003, an increase in net loss of $(255,245). The increase
is primarily due to the expenses related to the commencement of our operations,
including salaries, general and administrative, professional fees and rent.
At December 31, 2004, we had $112,247 in cash and cash equivalents, compared to
$852 in cash and cash equivalents at the year ended December 31, 2003, an
increase of $111,395, resulting primarily from additional capital investment and
increased sales.
General and administrative expenses were $98,752 for the year ended December 31,
2004, compared to $16,653 for the year ended December 31, 2003, an increase of
$82,099. The increase is attributable to increased overhead related to the
commencement of our operations in fiscal 2004.
The Period Ended March 31, 2005 Compared to the Period Ended March 31, 2004
Total revenues for the period ending March 31, 2005 were $169,231 as compared to
$0 for the same period in 2004, an increase of $169,231 reflecting our
commencement of operations and sales.
We had total assets of $177,874 at March 31, 2005, compared to total assets of
$0 for the same period in 2004, reflecting our commencement of operations and
sales.
25
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - continued
We had total current liabilities of $136,039 at March 31, 2005 compared to total
current liabilities of $0 for the same period in 2004, resulting from the
payment of certain accounts payable.
Cost of goods sold for the period ending March 31, 2005 increased to $88,038
from $0 for the same period in 2004, due to the commencement of our operations
and a significant increase in our overall sales volume.
Interest expense for the period ending March 31, 2005 was $5,449 compared to $0
for the same period in 2004.
We had a net loss of $(179,630) for the period ending March 31, 2005 compared to
a net loss of $0 for the same period in 2004. The increase is primarily due to
the expenses related to the commencement of our operations, including salaries,
general and administrative, professional fees and rent.
At March 31, 2005 we had $11,736 in cash and cash equivalents, compared to $0 in
cash and cash equivalents at the same period in 2004, resulting primarily from
additional capital investment and increased sales.
General and administrative expenses were $58,165 for the period ended March 31,
2005, compared to $0 for the same period in 2004. The increase is attributable
to increased overhead related to the commencement of our operations in fiscal
2004.
Liquidity and Capital Resources
At March 31, 2005, we had approximately $11,763 in cash and cash equivalents, as
compared to a balance of $0 at March 31, 2004. The net increase of $11,763 in
cash is primarily due to capital investment and increased sales.
At March 31, 2005, our current assets of $120,879 were exceeded by our current
liabilities of $136,039.
Our sources of liquidity are currently generated by current sales and will
require no additional capital to continue our current operations, including the
ability to grow within the market. Strong additional growth through the
expansion into other markets is possible if we are successful in bringing in
additional equity capital. Failure to raise capital when needed could adversely
impact our business, operating results and liquidity. If we raise additional
funds through the issuance of equity securities, the percentage of ownership of
existing stockholders would be reduced. Furthermore, these equity securities
might have rights, preferences or privileges senior to our Common Stock.
Additional sources of financing may not be available on acceptable terms, if at
all.
Our liquidity and operating results are not materially affected by seasonal
fluctuations in our sales.
We are operating our business on an accrual basis. Based upon management's
belief that we can sustain our current level of sales and growth, we project
that we will have sufficient cash flow to cover current operations for the next
twelve (12) months without taking into account any expansion into other markets.
We can continue current operations with reasonable annual growth from existing
sales, cash flows and profits.
We currently offer a 1% incentive to member distributors in connection with the
purchase of products from preferred suppliers.
26
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - continued
Critical Accounting Policies
Below is a listing of the most recent accounting standards and their effect on
our company.
SFAS 148 Accounting for Stock-Based Compensation-Transition and Disclosure
Amends FASB 123 to provide alternative methods of transition for an entity that
voluntarily changes to the fair value based method of accounting for stock-based
employee compensation.
SFAS 149 Amendment of Statement 133 on Derivative Instruments and Hedging
Activities This Statement amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities under FASB Statement NO. 133, Accounting for Derivative
Instruments and Hedging Activities.
SFAS 150 Financial Instruments with Characteristics of both Liabilities and
Equity
This Statement requires that such instruments be classified as liabilities in
the balance sheet. SFAS 150 is effective for financial instruments entered into
or modified after June 6, 2003.
Interpretation No. 46 (FIN 46)
Effective January 31, 2003, The Financial Accounting Standards Board requires
certain variable interest entities to be consolidated by the primary beneficiary
of the entity if the equity investors in the entity do not have the
characteristics of a continuing financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. We have not invested in any
such entities, and do not expect to do so in the foreseeable future.
The adoption of these new Statements is not expected to have a material effect
on our financial position, results or operations, or cash flows.
DESCRIPTION OF PROPERTY
There are four (4) leases, two for buildings and two for equipment.
Office Facilities
The building lease is for 3404-25th Street, NE, Calgary, Alberta, Canada. It is
a 5-year term for $6067.33 per month. The lease commenced on October 1, 2004 and
ends September 30, 2009. The premises is 9,101 square feet, making the lease
eight dollars ($8.00) per square foot per year. The first and last months rent
were paid upon signing the lease. There is no provision to renew at this time.
The second building lease is for 3687 1st Avenue, Vancouver, British Columbia,
Canada. It is a 2-year and 8-month term for $2070.75 per month. The lease
commenced on March 1, 2003 and ends October 31, 2005. The premises is 2,761
square feet, making the lease nine dollars ($9.00) per square foot per year.
There is no provision to renew at this time.
27
DESCRIPTION OF PROPERTY - continued
Equipment Leases
The first equipment lease was made June 30, 2004, between Deep Designs and
Apparel, Inc. and Globestuff.com, Inc. The lease is for a period of five years
and terminates June 30, 2009. The lease calls for monthly payments of $1259.38
inclusive of all Goods & Services tax on the first day of each month. The
machinery included on this lease is as follows: Happy Embroidery Machine, Ipunch
Digitizing Software, Embroidery Learning Guides, DRA Wings Digitizing Software,
Hopkins Press, Excalibur Press, Artwave Dryer, Atlas 5 Way Exposure Unit, Wash
Bay, Black Flash Spot Dryer, Ranar Spot Dryer, Light Table, Printa Pad Printer,
Rotary Attachment, Press-A-Print Pad Printer, Pad Printing Supplies, Epson
Printer, Dell Computer, Lexmark all in one, Techtronics Computer, Hix Heat
Press, Corell Draw Program, Illustrator Program, Digital Art Solutions and
accompanying inventory.
The second equipment lease is between Custom Trends Inc., and Globestuff.com,
Inc. The lease commenced on July 1, 2004 and terminates on June 30, 2009, also a
five year term. The payments are seventeen hundred dollars per month payable on
the first of each month. The equipment is as follows: three Amaya Single Head
Embroidery Machines, one operating system for Amaya, one Dell Computer system,
one Permaboss Model TEM-705, Brother Industrial Sewing Machine, Power Converter,
Cansew Industrial Waste Band Machine, Union Special Serger, Castman BB-125 Blade
Machine, and one Industrial Steamer.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Principal Market or Markets
Our common stock is not listed on any exchange and there is no public trading
market for the common stock.
Approximate Number of Common Stock Holders
As of June 1, 2005, we had 22,511,000 shares of common stock issued and
outstanding, held by approximately 104 shareholders. We have no outstanding
warrants or options to purchase our securities.
Shares Eligible for Future Sale.
Upon completion of the offering, we will have 22,511,000 shares of common stock
outstanding. A current shareholder who is an "affiliate" of Worldwide, defined
in Rule 144 as a person who directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
Worldwide, will be required to comply with the resale limitations of Rule 144.
Purchasers of shares in the offering, other than affiliates, may resell their
shares immediately. Sales by affiliates will be subject to the volume and other
limitations of Rule 144, including certain restrictions regarding the manner of
sale, notice requirements, and the availability of current public information
about Worldwide. The volume limitations generally permit an affiliate to sell,
within any three month period, a number of shares that does not exceed the
greater of one percent of the outstanding shares of common stock or the average
weekly trading volume during the four calendar weeks preceding his sale. A
28
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS - continued
person who ceases to be an affiliate at least three months before the sale of
restricted securities beneficially owned for at least two years may sell the
restricted securities under Rule 144 without regard to any of the Rule 144
limitations.
DIVIDEND POLICY
We have never declared or paid cash dividends on our common stock and anticipate
that future earnings, if any, will be retained for development of our business.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the compensation
paid by Worldwide for services rendered in all capacities to Worldwide from
January 1, 2004 through the fiscal year ended December 31, 2004, of all officers
and directors of the Company.
Name and Principal
Underlying
Positions at Salary Bonus Compensation Options
- ---------------------------------------------------------------------------
Guy Peckham 49,914.00
Bruce Hannan 45,962.48
Wally Marcolin 0
LEGAL MATTERS
The O'Neal Law Firm, P.C., Shea Boulevard, Suite #400-D, Fountain Hills, Arizona
85268, will pass upon the validity of the shares offered hereby for Worldwide.
SECURITIES ACT INDEMNIFICATION DISCLOSURE
Worldwide's By-Laws allow for the indemnification of company officers and
directors in regard to their carrying out the duties of their offices. We have
been advised that in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act 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 is asserted by one of our directors, officers, or other controlling
persons in connection with the securities registered, we will, unless in the
opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether such indemnification is against public
policy to a court of appropriate jurisdiction. We will then be governed by the
court's decision.
EXPERTS
The financial statements of Worldwide as of December 31, 2004 and 2003, included
in this prospectus have been audited by Shelley International CPA, independent
certified public accountants, as stated in the opinion, which has been rendered
upon the authority of said firm as experts in accounting and auditing.
TRANSFER AGENT
Our transfer agent is First American Transfer Company, 706 East Bell Road, #202,
Phoenix, Arizona 85022.
29
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
There have been no changes in and/or disagreements with Shelley International,
C.P.A. on accounting and financial disclosure matters.
30
PART II - FINANCIAL STATEMENTS
Table of Contents Page
Fianancial Statements Year Ended December 31, 2004 and 2003 ............... 32
Report of Independent Registered Public Accountant ................ 32
Consolidated Balance Sheets Year Ended December 31, 2004
and 2003 ....................................................... 33
Consolidated Statements of Operations Year Ended December
31, 2004 and 2003 .............................................. 34
Statement of Stockholders' Equity October 28, (Inception) to
December 31, 2004 .............................................. 35
Colsolidated Statements of Cash Flows Year Ended December
31, 2004 and 2003 ................................................. 36
Notes to Financial Statements ..................................... 37
Fianancial Statements Three Months Ended March 31, 2005 ................... 41
Consolidated Balance Sheets Three Months March 31, 2005
(Unaudited) and December 31, 2004 .............................. 41
Consolidated Statements of Operations Three Months March 31,
2005 (Unaudited) and December 31, 2004 ......................... 42
Statement of Stockholders' Equity (Unaudited) October 28,
1999 (Inception) to March 31, 2005 ............................. 43
Consolidated Statements of Cash Flows Three Months March 31,
2005 (Unaudited) and Three Months March 31, 2004 ............... 44
Notes to Financial Statements ..................................... 45
31
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANT
--------------------------------------------------
To the Board of Directors/Audit Committee
Worldwide Promotional Products Corporation
We have audited the accompanying balance sheet of Worldwide Promotional Products
Corporation (a Nevada corporation) as of December 31, 2004 and 2003 and the
related statement of operations, stockholders' equity, and cash flows for years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on my audit.
We conducted our audit in accordance with the auditing standards of the Public
Company Accounting Oversight Board in the (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Worldwide Promotional Products
Corporation as of December 31, 2004 and 2003 and the results of its operations
and cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in the Note 7 to the
financial statements, the Company has sustained a loss in the year ended
December 31, 2004. This raises substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from this uncertainty.
Shelley International CPA
March 31, 2005
Mesa, Arizona
32
Worldwide Promotional Products Corporation
CONSOLIDATED BALANCE SHEETS
---------------------------
December 31, 2004 and 2003
ASSETS
------
December 31, December 31,
2004 2003
--------- ---------
CURRENT ASSETS
Cash $ 112,247 $ 852
Accounts Receivable - Net 148,959
Prepaid Expense 36,340
Inventory 21,481
--------- ---------
Total Current Assets 319,027 852
--------- ---------
EQUIPMENT, net 29,626 --
--------- ---------
OTHER ASSETS
Goodwill 23,460
--------- ---------
Total Long Term Assets 23,460 --
--------- ---------
TOTAL ASSETS $ 372,113 $ 852
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
Current Liabilities
Accounts Payable and Accrued Expenses $ 139,236
Other Liabilities 29,684
Accrued Interest 3,992
--------- ---------
Total Current Liabilities 172,912 --
Non-Current Liabilities
Notes Payable 173,435
GM Card Payable 13,592
Notes Payable - Shareholder 60,102
--------- ---------
Total Non-Current Liabilities 247,129 --
--------- ---------
TOTAL LIABILITIES 420,041 --
--------- ---------
STOCKHOLDERS' EQUITY
Common Stock, authorized
100,000,000 shares, $0.001 par value;
Issued and outstanding December 31, 2004,
21,665,000 shares; December 31, 2003
39,000,000 shares 21,665 39,000
Paid in Capital 203,718 (21,495)
Accumulated Translation Gain/(Loss) 15,240
Retained Earnings/(Deficit) (288,551) (16,653)
--------- ---------
Total Stockholders' Equity/(Deficit) (47,928) 852
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 372,113 $ 852
========= =========
The accompanying notes are an integral part of these statements
33
Worldwide Promotional Products Corporation
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
Year Year
Ended Ended
December 31, December 31,
2004 2003
------------ ------------
INCOME
Sales $ 387,699 $ --
Other Income 135 --
------------ ------------
Gross Income 387,834 --
COST OF GOODS SOLD 216,144 --
------------ ------------
Gross Profit / (Loss) 171,690 --
------------ ------------
EXPENSES
Compensation 256,825
Professional and Consulting Fees 10,354
General and Administrative 98,752 16,653
Depreciation/Amortization 7,047
Rent Expense 39,104
Bad Debt Expense 21,432
Advertising & Promotions 3,201
Interest Expense 6,873 --
------------ ------------
Total Expense 443,588 16,653
------------ ------------
(LOSS) BEFORE INCOME TAXES (271,898) (16,653)
Provision for Income Taxes
------------ ------------
NET (LOSS) $ (271,898) $ (16,653)
============ ============
BASIC AND DILUTED
Net (Loss) per Common Share $ (0.02) a
------------ ------------
Weighted Average Number of
Common Shares Outstanding 14,886,899 39,000,000
============ ============
a = less than $0.01 per share
The accompanying notes are an integral part of these statements
34
Worldwide Promotional Products Corporation
Statement of Stockholders' Equity
---------------------------------
October 28, (Inception) to December 31, 2004
Common Stock
-------------------------- Paid in Currency Accumulated Total
Shares Amount Capital Translation Deficit Equity
----------- ----------- ----------- ----------- ----------- -----------
Common Shares issued for
cash 10,140,000 $ 10,140 $ (7,540) $ -- -- $ 2,600
Common Shares issued for
service 28,860,000 28,860 $ (13,955) 14,905
Net (Loss) (16,653) (16,653)
----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 2003 39,000,000 39,000 (21,495) -- (16,653) 852
Shares cancelled (15,600,000) (15,600) 15,600 --
Shares cancelled (8,235,000) (8,235) 8,235 --
Shares issued for purchase of
subsidiaries 5,100,000 5,100 2,778 7,878
Shares issued for cash 1,400,000 1,400 198,600 200,000
Currency Translation 15,240 15,240
Net (Loss) (271,898) (271,898)
----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 2004 21,665,000 $ 21,665 $ 203,718 $ 15,240 $ (288,551) $ (47,928)
=========== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of these statements
35
Worldwide Promotional Products Corporation
COLSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
Year Year
Ended Ended
December 31, December 31,
2004 2003
--------- ---------
Operating Activities
Net (Loss) $(271,898) $ (16,653)
Significant Non-Cash Transactions
Common Stock for Services 14,905
Currency Translation 15,240
Depreciation/Amortization Expense 7,047
Changes in assets and liabilities
(Increase)/Decrease in Receivables (148,959)
(Increase)/Decrease in Inventory (21,481)
(Increase)/Decrease in Prepaid Expense (36,340)
Increase/(Decrease) in Accounts Payable 139,236
Increase/(Decrease) in Other Liabilities 29,684
Increase/(Decrease) in Accrued Interest 3,992
--------- ---------
Net Cash (Used) by Operating Activities (283,479) (1,748)
--------- ---------
Investing Activities
Purchase of Assets (36,673)
Purchase of Subsidiary (15,582)
--------- ---------
Net Cash (Used) by Investing Activities (52,255) --
--------- ---------
Financing Activities
Proceeds from Sale of Common Stock 200,000 2,600
Proceeds from Notes Payable 173,435
Proceeds from GM Card 13,592
Proceeds from Shareholder Loan 60,102
--------- ---------
Cash Provided by Financing Activities 447,129 2,600
--------- ---------
Net Increase/(Decrease) in Cash 111,395 852
Cash, Beginning of Period 852 --
--------- ---------
Cash, End of Period $ 112,247 $ 852
========= =========
Significant Non-Cash Transactions
See Note pertaining to Stocholders' Equity
Supplemental Information:
Period Interest $ 6,873 $ --
Income Taxes Paid -- --
The accompanying notes are an integral part of these statements
36
WORLDWIDE PROMOTIONAL PRODUCTS CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
Worldwide Promotional Products Corporation (the Company) was organized in the
state of Nevada on November 1, 1999 under the name Victor James, Inc. On June
16, 2004 the Company changed its name to Worldwide Promotional Products
Corporation and increased its authorized common stock to 100,000,000 shares with
a par value of $.001 and 15,165,000 shares issued and outstanding. On July 1,
2004 the company issued 5,000,000 common shares to purchase all of the
outstanding shares, assets and liabilities of GLOBESTUFF.COM, INC. The Company
operates GLOBESTUFF as a wholly-owned subsidiary. On September 1, 2004 the
Company paid $28,000 and issued 100,000 common shares to acquire TRADEPOINTE
INC. The company received the assets, right to the trade-name "TRADEPOINTE" and
the associated goodwill. The Company operates on a December 31 fiscal year end.
The Company provides sales and marketing solutions in the form of products and
services to businesses.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
The relevant accounting policies and procedures are listed below.
Accounting Basis
The statements were prepared following generally accepted accounting principles
of the United States of America consistently applied.
Earnings per Share
The basic earnings (loss) per share is calculated by dividing the Company's net
income available to common shareholders by the weighted average number of common
shares during the year. The diluted earnings (loss) per share is calculated by
dividing the Company's net income (loss) available to common shareholders by the
diluted weighted average number of shares outstanding during the year. The
diluted weighted average number of shares outstanding is the basic weighted
number of shares adjusted as of the first of the year for any potentially
dilutive debt or equity.
The Company has not issued any options, warrants or similar securities since
inception.
Dividends
The Company has not yet adopted any policy regarding payment of dividends. No
dividends have been paid during the periods shown.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
37
NOTE 1. GENERAL ORGANIZATION AND BUSINESS - continued
Translation of Currency
The company operates in Canada and maintains it financial records in $CDN. For
the sake reporting the Balance Sheet amounts were converted to $US using a
December 31, 2004 rate. Income statement amounts were converted using an average
rate for the period resulting in a Translation gain of $15,240. All amounts
reported in the accompanying financial statements are expressed in $US.
Inventory
The company inventories promotional products it has purchased.
Revenue Recognition
The Company recognizes revenue on the shipment of orders or when service is
provided.
Advertising Expense
Advertising, promotion and marketing costs are expensed as incurred and for the
period ended December 31, 2004 was $3,201.
Income Taxes
The provision for income taxes is the total of the current taxes payable and the
net of the change in the deferred income taxes. Provision is made for the
deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.
NOTE 3. STOCKHOLDERS' EQUITY
Common Stock
Worldwide Promotional Products Corporation (the Company) was organized in the
state of Nevada on November 1, 1999 under the name Victor James, Inc. On June
16, 2004 the Company changed its name to Worldwide Promotional Products
Corporation and increased its authorized common stock to 100,000,000 shares with
a par value of $.001 and 15,165,000 shares issued and outstanding. On July 1,
2004 the company issued 5,000,000 common shares to purchase all of the
outstanding shares, assets and liabilities of GLOBESTUFF.COM, INC. The Company
operates GLOBESTUFF as a wholly-owned subsidiary. On September 1, 2004 the
Company paid $28,000 and issued 100,000 common shares to acquire TRADEPOINTE
INC. The company received the assets, right to the trade-name "TRADEPOINTE" and
the associated goodwill.
The Company was capitalized on November 1, 1999 when it issued 260,000 common
shares for $2,600. Then on April 29,2003 the Company issued 740,000 common
shares for services valued at $740.
On April 19, 2004, 400,000 shares were returned to the Company and cancelled
leaving 600,000 common shares issued and outstanding. At that time the company
issued an additional 22,800,000 common shares in a 39:1 forward stock split.
On June 17, 2004 an additional 8,235,000 common shares were returned to the
Company and cancelled leaving 15,165,000 common shares issued and outstanding.
38
NOTE 3. STOCKHOLDERS' EQUITY - continued
On July 1, 2004 the Company issued 5,000,000 common shares to acquire all the
assets and liabilities of GLOBESTUFF.COM, INC. with a net equity of $7,878.
On September 1, 2004 the Company issued 100,000 common shares valued at $100 and
$23,400 to obtain the assets and goodwill of TRADEPOINTE INC.
During November and December 2004 the company issued 1,000,000 common shares for
$100,000 and an additional 400,000 common shares for $100,000.
NOTE 4. NOTES PAYABLE
Notes payable details follow:
12/31/04
-----------
Unsecured 8% Note, Dated August 18, 2004 Final
interest and principle Due March 31, 2004. $94,601
Unsecured 8% Note, Dated November 11, 2004 Final
interest and principle Due March 31, 2004. 78,834
Accrued Interest to December 31, 2004 3,992
-----------
Total Notes Payable $177,427
===========
NOTE 5. PROVISION FOR INCOME TAXES
The Company provides for income taxes under Statement of Financial Accounting
Standards NO. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect when these differences are expected to reverse.
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset. Accordingly, a
valuation allowance equal to the deferred tax asset has been recorded. The total
deferred tax asset is $55,916, which is calculated by multiplying a 22%
estimated tax rate by the items making up the deferred tax account (Net
Operating Loss $254,165). The total valuation allowance is a comparable
$(55,916). The provision for income taxes is comprised of the net changes in
deferred taxes less the valuation account plus the current taxes payable as
shown in the chart below.
12/31/04
-----------
Net changes in Deferred Tax Benefit $55,916
Valuation account (55,916)
Current Taxes Payable 0
-----------
Net Provision for Income Taxes $ 0
===========
39
NOTE 6. OPERATING LEASES AND OTHER COMMITMENTS:
The Company has two equipment leases that it acquired with its purchase of
GLOBESTUFF that expire on June 1, 2009 with a total monthly rental of $2,424
$US, for a yearly total of $29,088.
NOTE 7. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. The Company has sustained a $271,898
loss in the period ended December 31, 2004. This raises substantial doubt about
the Company's ability to continue as a going concern. The financial statements
do not include any adjustments that might result from this uncertainty.
Management continues to seek funding from its shareholders and other qualified
investors to pursue its business plan.
NOTE 8. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Below is a listing of the most recent accounting standards and their effect on
the Company.
SFAS 148 Accounting for Stock-Based Compensation-Transition and Disclosure
Amends FASB 123 to provide alternative methods of transition for an entity that
voluntarily changes to the fair value based method of accounting for stock-based
employee compensation.
SFAS 149 Amendment of Statement 133 on Derivative Instruments and Hedging
Activities This Statement amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities under FASB Statement NO. 133, Accounting for Derivative
Instruments and Hedging Activities.
SFAS 150 Financial Instruments with Characteristics of both Liabilities and
Equity
This Statement requires that such instruments be classified as liabilities in
the balance sheet. SFAS 150 is effective for financial instruments entered into
or modified after May 31, 2003.
Interpretation No. 46 (FIN 46)
Effective January 31, 2003, The Financial Accounting Standards Board requires
certain variable interest entities to be consolidated by the primary beneficiary
of the entity if the equity investors in the entity do not have the
characteristics of a continuing financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. The Company has not invested
in any such entities, and does not expect to do so in the foreseeable future.
The adoption of these new Statements is not expected to have a material effect
on the Company's financial position, results or operations, or cash flows.
40
FIANANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2005
Worldwide Promotional Products Corporation
CONSOLIDATED BALANCE SHEETS
---------------------------
ASSETS
------
March 31,
2005 December 31,
(Unaudited) 2004
---------- ------------
CURRENT ASSETS
Cash $ 11,736 $ 112,247
Accounts Receivable - Net 77,932 148,959
Prepaid Expense 12,656 36,340
Inventory 18,556 21,481
--------- ---------
Total Current Assets 120,879 319,027
--------- ---------
EQUIPMENT, net 33,682 29,626
--------- ---------
OTHER ASSETS
Goodwill 23,313 23,460
--------- ---------
Total Long Term Assets 23,313 23,460
--------- ---------
TOTAL ASSETS $ 177,874 $ 372,113
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
Current Liabilities
Accounts Payable and Accrued Expenses $ 101,568 $ 139,236
Other Liabilities 26,875 29,684
Accrued Interest 7,596 3,992
--------- ---------
Total Current Liabilities 136,039 172,912
Non-Current Liabilities
Notes Payable 181,874 173,435
GM Card Payable 13,508 13,592
Notes Payable - Shareholder 59,727 60,102
--------- ---------
Total Non-Current Liabilities 255,108 247,129
--------- ---------
TOTAL LIABILITIES 391,147 420,041
--------- ---------
STOCKHOLDERS' EQUITY
Common Stock, authorized
100,000,000 shares, $0.001 par value;
Issued and outstanding March 31, 2005,
21,836,000 shares; December 31, 2004
21,665,000 shares 21,836 21,665
Paid in Capital 227,547 203,718
Accumulated Translation Gain/(Loss) 5,525 15,240
Retained Earnings/(Deficit) (468,181) (288,551)
---------
Total Stockholders' Equity/(Deficit) (213,272) (47,928)
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 177,874 $ 372,113
========= =========
The accompanying notes are an integral part of these statements
41
Worldwide Promotional Products Corporation
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(Unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
2005 2004
------------ ------------
INCOME
Sales $ 169,206 $ --
Other Income 25 --
------------ ------------
Gross Income 169,231 --
COST OF GOODS SOLD 88,038 --
------------ ------------
Gross Profit / (Loss) 81,194 --
------------ ------------
EXPENSES
Compensation 165,595 --
Professional and Consulting Fees 127 --
General and Administrative 58,165 --
Depreciation/Amortization 2,909 --
Rent Expense 25,774 --
Bad Debt Expense -- --
Advertising & Promotions 2,804 --
Interest Expense 5,449 --
------------ ------------
Total Expense 260,824 --
------------ ------------
(LOSS) BEFORE INCOME TAXES (179,630) --
Provision for Income Taxes
------------ ------------
NET (LOSS) $ (179,630) $ --
============ ============
BASIC AND DILUTED
Net (Loss) per Common Share $ (0.01) $ --
------------ ------------
Weighted Average Number of
Common Shares Outstanding 21,807,500 1,000,000
============ ============
The accompanying notes are an integral part of these statements
42
Worldwide Promotional Products Corporation
Statement of Stockholders' Equity
---------------------------------
(Unaudited)
October 28, 1999 (Inception) to March 31, 2005
Common Stock
-------------------------- Paid in Currency Accumulated Total
Shares Amount Capital Translation Deficit Equity
----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 2004 21,665,000 $ 21,665 $ 203,718 $ 15,240 $ (288,551) $ (47,928)
Shares issued for cash 171,000 171 23,829 24,000
Currency Translation (9,715) (9,715)
Net (Loss) (179,630) (179,630)
----------- ----------- ----------- ----------- ----------- -----------
Balance, March 31, 2005 21,836,000 $ 21,836 $ 227,547 $ 5,525 $ (468,181) $ (213,272)
=========== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of these statements
43
Worldwide Promotional Products Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
Three Months Three Months
Ended Ended
March 31, March 31,
2005 2004
----------- -----------
Operating Activities
Net (Loss) $(179,630) $ --
Significant Non-Cash Transactions
Common Stock for Services
Currency Translation (9,715) --
Depreciation/Amortization Expense 2,909 --
Changes in assets and liabilities
(Increase)/Decrease in Receivables 71,027 --
(Increase)/Decrease in Inventory 2,925 --
(Increase)/Decrease in Prepaid Expense 23,684 --
(Increase)/Decrease in Goodwill 147 --
Increase/(Decrease) in Accounts Payable (37,668) --
Increase/(Decrease) in Other Liabilities (2,809) --
Increase/(Decrease) in Accrued Interest 3,604 --
----------- -----------
Net Cash (Used) by Operating Activities (125,526) --
----------- -----------
Investing Activities
Purchase of Assets (6,965) --
Purchase of Subsidiary -- --
----------- -----------
Net Cash (Used) by Investing Activities (6,965) --
----------- -----------
Financing Activities
Proceeds from Sale of Common Stock 24,000 --
Proceeds from Notes Payable 8,439 --
Proceeds from GM Card (84) --
Proceeds from Shareholder Loan (375) --
----------- -----------
Cash Provided by Financing Activities 31,980 --
----------- -----------
Net Increase/(Decrease) in Cash (100,511) --
Cash, Beginning of Period 112,247 --
----------- -----------
Cash, End of Period $ 11,736 $ --
=========== ===========
Significant Non-Cash Transactions
See Note pertaining to Stocholders' Equity
Supplemental Information:
Period Interest $ 5,449 $ --
Income Taxes Paid -- --
The accompanying notes are an integral part of these statements
44
WORLDWIDE PROMOTIONAL PRODUCTS CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
Worldwide Promotional Products Corporation (the Company) was organized in the
state of Nevada on November 1, 1999 under the name Victor James, Inc. On June
16, 2004 the Company changed its name to Worldwide Promotional Products
Corporation and increased its authorized common stock to 100,000,000 shares with
a par value of $.001 and 15,165,000 shares issued and outstanding. On July 1,
2004 the company issued 5,000,000 common shares to purchase all of the
outstanding shares, assets and liabilities of GLOBESTUFF.COM, INC. The Company
operates GLOBESTUFF as a wholly-owned subsidiary. On September 1, 2004 the
Company paid $28,000 and issued 100,000 common shares to acquire TRADEPOINTE
INC. The company received the assets, right to the trade-name "TRADEPOINTE" and
the associated goodwill. The Company operates on a December 31 fiscal year end.
The Company provides sales and marketing solutions in the form of products and
services to businesses.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
The relevant accounting policies and procedures are listed below.
Accounting Basis
The statements were prepared following generally accepted accounting principles
of the United States of America consistently applied.
Earnings per Share
The basic earnings (loss) per share is calculated by dividing the Company's net
income available to common shareholders by the weighted average number of common
shares during the year. The diluted earnings (loss) per share is calculated by
dividing the Company's net income (loss) available to common shareholders by the
diluted weighted average number of shares outstanding during the year. The
diluted weighted average number of shares outstanding is the basic weighted
number of shares adjusted as of the first of the year for any potentially
dilutive debt or equity.
The Company has not issued any options, warrants or similar securities since
inception.
Dividends
The Company has not yet adopted any policy regarding payment of dividends. No
dividends have been paid during the periods shown.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
45
NOTE 1. GENERAL ORGANIZATION AND BUSINESS - continued
Translation of Currency
The company operates in Canada and maintains it financial records in $CDN. For
the sake reporting the Balance Sheet amounts were converted to $US using a March
31, 2005 rate. Income statement amounts were converted using an average rate for
the period resulting in a Translation gain of $5,525. All amounts reported in
the accompanying financial statements are expressed in $US.
Inventory
The company inventories promotional products it has purchased.
Revenue Recognition
The Company recognizes revenue on the shipment of orders or when service is
provided.
Advertising Expense
Advertising, promotion and marketing costs are expensed as incurred and for the
period ended March 31, 2005 was $2,804.
Income Taxes
The provision for income taxes is the total of the current taxes payable and the
net of the change in the deferred income taxes. Provision is made for the
deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.
NOTE 3. STOCKHOLDERS' EQUITY
Common Stock
Worldwide Promotional Products Corporation (the Company) was organized in the
state of Nevada on November 1, 1999 under the name Victor James, Inc. On June
16, 2004 the Company changed its name to Worldwide Promotional Products
Corporation and increased its authorized common stock to 100,000,000 shares with
a par value of $.001 and 15,165,000 shares issued and outstanding. On July 1,
2004 the company issued 5,000,000 common shares to purchase all of the
outstanding shares, assets and liabilities of GLOBESTUFF.COM, INC. The Company
operates GLOBESTUFF as a wholly-owned subsidiary. On September 1, 2004 the
Company paid $28,000 and issued 100,000 common shares to acquire TRADEPOINTE
INC. The company received the assets, right to the trade-name "TRADEPOINTE" and
the associated goodwill.
The Company was capitalized on November 1, 1999 when it issued 260,000 common
shares for $2,600. Then on April 29, 2003 the Company issued 740,000 common
shares for services valued at $740.
On April 19, 2004, 400,000 shares were returned to the Company and cancelled
leaving 600,000 common shares issued and outstanding. At that time the company
issued an additional 22,800,000 common shares in a 39:1 forward stock split.
On June 17, 2004 an additional 8,235,000 common shares were returned to the
Company and cancelled leaving 15,165,000 common shares issued and outstanding.
46
NOTE 3. STOCKHOLDERS' EQUITY - continued
On July 1, 2004 the Company issued 5,000,000 common shares to acquire all the
assets and liabilities of GLOBESTUFF.COM, INC. with a net equity of $7,878.
On September 1, 2004 the Company issued 100,000 common shares valued at $100 and
$23,400 to obtain the assets and goodwill of TRADEPOINTE INC.
During November and December 2004 the company issued 1,000,000 common shares for
$100,000 and an additional 400,000 common shares for $100,000.
During January 2005 the company issued 171,000 common shares for $24,000.
NOTE 4. NOTES PAYABLE
Notes payable details follow:
03/31/05
-----------
Unsecured 8% Note, Dated August 18, 2004 Final
interest and principle Due March 31, 2005. $99,204
Unsecured 8% Note, Dated November 11, 2004 Final
interest and principle Due March 31, 2005. 82,670
Accrued Interest to March 31, 2005 7,596
-----------
Total Notes Payable $189,470
===========
NOTE 5. PROVISION FOR INCOME TAXES
The Company provides for income taxes under Statement of Financial Accounting
Standards NO. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect when these differences are expected to reverse.
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset. Accordingly, a
valuation allowance equal to the deferred tax asset has been recorded. The total
deferred tax asset is $55,916, which is calculated by multiplying a 22%
estimated tax rate by the items making up the deferred tax account (Net
Operating Loss $254,165). The total valuation allowance is a comparable
$(55,916). The provision for income taxes is comprised of the net changes in
deferred taxes less the valuation account plus the current taxes payable as
shown in the chart below.
12/31/04
----------
Net changes in Deferred Tax Benefit $55,916
Valuation account (55,916)
Current Taxes Payable 0
----------
Net Provision for Income Taxes $ 0
==========
47
NOTE 6. OPERATING LEASES AND OTHER COMMITMENTS:
The Company has two equipment leases that it acquired with its purchase of
GLOBESTUFF that expire on June 1, 2009 with a total monthly rental of $2,424
$US, for a yearly total of $29,088.
NOTE 7. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. The Company has sustained a $179,630
loss in the period ended March 31, 2005. This raises substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments that might result from this uncertainty.
Management continues to seek funding from its shareholders and other qualified
investors to pursue its business plan.
NOTE 8. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Below is a listing of the most recent accounting standards and their effect on
the Company.
Statement No. 150 Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity (Issued 5/03)
This Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity.
Statement No. 151 Inventory Costs-an amendment of ARB No. 43, Chapter 4 (Issued
11/04)
This statement amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing,
to clarify the accounting for abnormal amounts of idle facility expense,
freight, handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43,
Chapter 4, previously stated that "...under some circumstances, items such as
idle facility expense, excessive spoilage, double freight and re-handling costs
may be so abnormal ass to require treatment as current period charges...." This
Statement requires that those items be recognized as current-period charges
regardless of whether they meet the criterion of "so abnormal." In addition,
this Statement requires that allocation of fixed production overheads to the
costs of conversion be based on the normal capacity of the production
facilities.
Statement No. 152 Accounting for Real Estate Time-Sharing Transactions (an
amendment of FASB Statements No. 66 and 67)
This Statement amends FASB Statement No. 66, Accounting for Sales of Real
Estate, to reference the financial accounting and reporting guidance for real
estate time-sharing transactions that is provided in AICPA Statement of Position
(SOP) 04-2, Accounting for Real Estate Time-Sharing Transactions.
This Statement also amends FASB Statement No. 67, Accounting for Costs and
Initial Rental Operations of Real Estate Projects, states that the guidance for
(a) incidental operations and (b) costs incurred to sell real estate projects
does not apply to real estate time-sharing transactions. The accounting for
those operations and costs is subject to the guidance in SOP 04-2.
48
NOTE 8. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS - continued
Statement No. 153 Exchanges of Non-monetary Assets (an amendment of APB Opinion
No. 29)
The guidance in APB Opinion No. 29, Accounting for Non-monetary Transactions, is
based on the principle that exchanges of non-monetary assets should be measured
based on the fair value of the assets exchanged. The guidance in that Opinion,
however, includes certain exceptions to the principle. This Statement amends
Opinion 29 to eliminate the exception for non-monetary exchanges of similar
productive assts and replaces it with a general exception for exchanges of
non-monetary assets that do not have commercial substance. A non-monetary
exchange has commercial substance if the future cash flows of the entity are
expected to change significantly as a result of the exchange.
The adoption of these new Statements is not expected to have a material effect
on the Company's current financial position, results or operations, or cash
flows.
49
PART III - INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Our Articles of Incorporation provide that we must indemnify our directors and
officers to the fullest extent permitted under Nevada law against all
liabilities incurred by reason of the fact that the person is or was a director
or officer or a fiduciary of Worldwide. The effect of these provisions is
potentially to indemnify our directors and officers from all costs and expenses
of liability incurred by them in connection with any action, suit or proceeding
in which they are involved by reason of their affiliation with us. Pursuant to
Nevada law, a corporation may indemnify a director, provided that such indemnity
shall not apply on account of:
(a) acts or omissions of the director finally adjudged to be intentional
misconduct or a knowing violation of law;
(b) unlawful distributions; or
(c) any transaction with respect to which it was finally adjudged that such
director personally received a benefit in money, property, or services to
which the director was not legally entitled.
Our Bylaws provide that we will indemnify our officers and directors for costs
and expenses incurred in connection with the defense of actions, suits, or
proceedings against them on account of their being or having been directors or
officers of Worldwide, absent a finding of negligence or misconduct in office.
Our Bylaws also permit us to maintain insurance on behalf of our officers,
directors, employees and agents against any liability asserted against and
incurred by that person whether or not we have the power to indemnify such
person against liability for any of those acts.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Expenses incurred or (expected) relating to this Registration Statement and
distribution are as follows: The amounts set forth are estimates except for the
SEC registration fee:
Amount
-------------
SEC registration fee $ 117.88
Printing and engraving expenses $ 500.00
Legal fees and expenses $ 20,000.00
Accountants' fees and expenses $ 7,500.00
Transfer agent's and registrar's fees $ 750.00
and expenses
Miscellaneous $ 0.00
-------------
Total $ 28,867.88
Worldwide will bear all of the expenses shown above.
RECENT SALES OF UNREGISTERED SECURITIES
Set forth below is information regarding the issuance and sales of our
securities without registration for the past three (3) years from the date of
this Registration Statement. No such sales involved the use of an underwriter,
no advertising or public solicitation were involved, the securities bear a
restrictive legend and no commissions were paid in connection with the sale of
any securities.
50
RECENT SALES OF UNREGISTERED SECURITIES - continued
From November 2004 through January 2005, we issued 1,185,000 shares of our
common stock to approximately 24 investors for an aggregate cash price of
$118,500, or $0.10 per share.
From January 2005 through May 2005, we issued 1,061,000 shares of our common
stock to approximately 25 investors for an aggregate cash price of $265,250, or
$0.25 per share.
We relied upon Section 4(2) of the Securities Act of 1933, as amended (the
"Act"). Our officers and directors determined the sophistication of our
investors, as the investors were either business associates of, or personally
known to, our officer and director. Each investor completed a subscription
agreement whereby the investors certified that they were 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.
EXHIBITS
The following exhibits are filed as part of this Registration Statement:
Exhibit
Number Description
- -------- ------------------------------------------------------------------
3.1 Articles of Incorporation of Worldwide
3.2 Certificate of Amendment of Articles of Incorporation of Worldwide
3.3 Bylaws of Worldwide
3.4 Articles of Incorporation of Globestuff.com, Inc.
3.5 Bylaws of Globestuff.com, Inc.
3.6 Globestuff Articles of Amendment.
4.1 Share Exchange Agreement
5.1 Legal Opinion and Consent of Counsel
23.1 Consent of Independent Auditors
UNDERTAKINGS
The undersigned registrant hereby undertakes:
1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which is
being registered) any deviation from the high or low end of the
estimated maximum range may be reflected in the form of prospectus
filed with the commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
51
UNDERTAKINGS - continued
(c) To include any additional or changed material information on the plan
of distribution.
2) For determining liability under the Securities Act, treat each post-effective
amendment as a new registration statement of the securities offered and the
offering of the securities at that time to be the initial bona fide offering.
3) File a post-effective amendment to remove from registration any of the
securities being registered, which remain unsold at the end of the offering.
4) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling Worldwide
pursuant to provisions of the State of Nevada or otherwise, we have been advised
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in that Act and is,
therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by us of expenses incurred or paid by a director, officer or
controlling person of us 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, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
us is against public policy as expressed in the Securities Act and we will be
governed by the final adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, we certify
that we have reasonable grounds to believe that we meets all of the requirements
for filing on Form SB-2 and authorized this registration statement to be signed
on our behalf by the undersigned, thereunto duly authorized, in the City of
Calgary, Province of Alberta, Canada.
Worldwide Promotional Products, Inc.
By: /s/Guy Peckham Date: June 6, 2005
--------------
Guy Peckham
Principal Executive Officer
By: /s/ Bruce Hannan Date: June 6, 2005
----------------
Bruce Hannan
Principal Financial Officer
By: /s/ Bruce Hannan Date: June 6, 2005
----------------
Bruce Hannan
Principal Accounting Officer
52
In accordance with the requirements of the Securities Act of 1933, the following
persons in the capacities and on the date stated have signed this registration
statement.
By: /s/ Guy Peckham Date: June 6, 2005
-----------------
Guy Peckham
Director
By: /s/ Bruce Hannan Date: June 6, 2005
----------------
Bruce Hannan
Director
By: /s/ Wally Marcolin Date: June 6, 2005
------------------
Wally Marcolin
Director
53