SECURITIES AND EXCHANGE COMMISSION
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FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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UNIVERSAL FLIRTS, CORP.
(Exact Name of Small Business Issuer in its Charter)
DELAWARE 20-1198142
(State of Incorporation) (Primary Standard (IRS Employer ID No.)
Classification Code)
142 Mineola Avenue, Suite 2-D
Roslyn Heights, New York 11577
(516) 359-5619
(Address and Telephone Number of Registrant's Principal
Executive Offices and Principal Place of Business)
Darrell Lerner
142 Mineola Avenue, Suite 2-D
Roslyn Heights, New York 11577
(516) 359-5619
(Name, Address and Telephone Number of Agent for Service)
Copies of communications to:
GREGG E. JACLIN, ESQ.
ANSLOW & JACLIN, LLP
195 Route 9 South, Suite 204
Manalapan, NJ 07726
TELEPHONE NO.: (732) 409-1212
FACSIMILE NO.: (732) 577-1188
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective. 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 of 1933, check
the following box. |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act of 1933, please check the following box
and list the Securities Act registration Statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act of 1933, 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 of 1933, 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,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
Amount to be Proposed Maximum Proposed Maximum
Registered Aggregate Aggregate Amount of
Title of Each Class Of Offering Price Offering Price Registration fee
Securities to be Registered per share
Common Stock, par value $0.001 1,939,000 $0.05 $ 96,950 $ 12.28
The offering price has been estimated solely for the purpose of computing the
amount of the registration fee in accordance with Rule 457(c). Our common stock
is not traded and any national exchange and in accordance with Rule 457, the
offering price was determined by the price shareholders were sold to our
shareholders in a private placement memorandum. The price of $0.05 is a fixed
price at which the selling security holders may sell their shares until our
common stock is quoted on the OTC Bulletin Board at which time the shares may be
sold at prevailing market prices or privately negotiated prices.
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED JULY 26, 2004
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
securities act of 1933 or until the registration statement shall become
effective on such date as the commission, acting pursuant to said section 8(a),
may determine.
UNIVERSAL FLIRTS, CORP.
1,939,000 SHARES
COMMON STOCK
The selling shareholders named in this prospectus are offering all of the shares
of common stock offered through this prospectus. Our common stock is presently
not traded on any market or securities exchange. The 1,939,000 shares of our
common stock can be sold by selling security holders at a fixed price of $.05
per share until our shares are quoted on the OTC Bulletin Board and thereafter
at prevailing market prices or privately negotiated prices. We have agreed to
bear the expenses relating to the registration of the shares for the selling
security holders.
The Purchase Of The Securities Offered Through This Prospectus Involves A High
Degree Of Risk. You Should Carefully Consider The Factors Described Under The
Heading "Risk Factors" Beginning On Page 4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed. The
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: July 26, 2004
TABLE OF CONTENTS
PAGE
Summary Financial Data Schedule 1
Risk Factors 2
Use of Proceeds 5
Determination of Offering Price 6
Dilution 6
Selling Shareholders 7
Plan of Distribution 8
Legal Proceedings 9
Directors, Executive Officers, Promoters and Control Persons 9
Security Ownership of Certain Beneficial Owners and Management 9
Description of Securities Interests of Named Experts and Counsel 10
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities 12
Organization Within Last Five Years 12
Description of Business 12
Plan of Operation 15
Description of Property 18
Certain Relationships and Related Transactions 19
Market for Common Equity and Related Stockholder Matters 19
Executive Compensation 20
Available Information 20
Index to Financial Statements F
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Until cleared, all dealers that effect transactions in these securities whether
or not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealer's obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions. Dealers should deliver the prospectus for 90 days after the first
date upon which the security was offered to the public.
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ABOUT OUR COMPANY
We were incorporated under the laws of the State of Delaware on May 25, 2004. We
commenced operations for the purposes of evaluating, structuring, and completing
a merger with or acquisition of, prospect consisting of private companies,
partnerships, or sole proprietorships in the United States. On May 27, 2004, we
acquired all of the shares of Universal Flirts, Inc., a New York corporation,
from Darrell Lerner, the sole shareholder of Universal Flirts, Inc.
in consideration for the issuance of 8,500,000 shares of our common stock to the
Universal Flirts, Inc. shareholder pursuant to a stock purchase agreement and
share Exchange between Universal Flirts, Inc. and us. Pursuant to the stock
purchase Agreement and share exchange, Universal Flirts, Inc. became our wholly
owned subsidiary. Until this merger our activities had been limited to actions
related to our organization and we conducted virtually no business operations.
Now, through our subsidiary, we own and operate an online dating service.
Our subsidiary, Universal Flirts, Inc. was incorporated on August 22, 2003, and
launched their first website, www.Americanflirts.com, in late 2003. American
Flirts is an online dating service dedicated towards helping American Singles
find love and romance. We presently offer complete access to all of the site's
features for free. Although we cater towards American singles, singles from all
over the world are welcome to use our service. Singles can register for free and
gain access to all features offered by American Flirts including personal ads,
instant messaging, advanced search features, hot lists, cupid report, instant
flirts, public or private photos (for members you specify can view them) and
e-mail. A new and unique American Flirts feature is the "hotties" section, which
lists the most popular singles by state.
The online dating industry is one of the few sectors of the Internet that
consistently produces profitable companies. The industry continues to grow at an
accelerating rate while being highly profitable as the medium becomes more and
more accepted by society as a tool for finding a mate. In the fall of 2002,
online dating passed Financial Content to become the leading paid content
category on the internet and the industry has continued to grow since then.
In addition to AmericanFlirts.com, Universal Flirts has also secured the
following domain names for potential expansion:
o UniversalFlirts.Com - General site aggregating the standard members
from partner sites.
o UniversityFlirts.Com - Geared towards college students, allowing users
to search by specific colleges in addition to standard search tools.
o CasualFlirts.com - "Edgier" site catering to a more "adults only"
audience.
o DiscreetFlirts.com
Ultimately, we plan to offer a number of niche sites catering to specific
audiences, while aggregating all of these sites under the overall "flirts"
banner.
Terms of the Offering
The selling shareholders named in this prospectus are offering all of the shares
of common stock offered through this prospectus. The selling stockholders are
selling shares of common stock covered by this prospectus for their own account.
We will not receive any of the proceeds from the resale of these shares. The
offering price of $.05 was determined by the price shareholders were sold to our
shareholders in a private placement memorandum and is a fixed price at which the
selling security holders may sell their shares until our common stock is quoted
on the OTC Bulletin Board at which time the shares may be sold at prevailing
market prices or privately negotiated prices. We have agreed to bear the
expenses relating to the registration of the shares for the selling security
holders.
Summary Financial Data
The following summary financial data should be read in conjunction with
"Management's Discussion and Analysis or Plan of Operation" and the Financial
Statements and Notes thereto, included elsewhere in this prospectus.
The following summary financial data should be read in conjunction with
"Management's Discussion and Analysis or Plan of Operation" and the Financial
Statements and Notes thereto, included elsewhere in this prospectus. The
statement of operations and balance sheet data from inception (May 25, 2004)
through June 30, 2004 are derived from our audited financial statements.
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<Page>
From Inception-
May 25, 2004 through
June 30, 2004
STATEMENT OF OPERATIONS
Revenues 0
Net Income (10,451)
Total Operating Expenses 10,451
Accumulated Deficit (10,451)
As of
June 30, 2004
BALANCE SHEET DATA
Cash 44,799
Total Assets 53,299
Total Liabilities 750
Stockholders' Equity (Deficiency) 52,817
WHERE YOU CAN FIND US
Our corporate offices are located at 142 Mineola Avenue, Suite 2-D, Roslyn
Heights, New York 11577. Our telephone number is (516) 359-5619. We have an
Internet website is located at www.AmericanFlirts.com.
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. Please note that throughout this prospectus, the words "we",
"our" or "us" refer to the Company and not to the selling stockholders.
WE HAVE A LIMITED OPERATING HISTORY THAT YOU CAN USE TO EVALUATE US, AND THE
LIKELIHOOD OF OUR SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES,
DIFFICULTIES, COMPLICATIONS AND DELAYS FREQUENTLY ENCOUNTERED BY A SMALL
DEVELOPING COMPANY.
We were incorporated in Delaware in 2004. We have no significant assets or
financial resources. The likelihood of our success must be considered in light
of the problems, expenses, difficulties, complications and delays frequently
encountered by a small developing company starting a new business enterprise and
the highly competitive environment in which we will operate. To address these
risks, we must, among other things, respond to competitive developments;
continue to attract, retain and motivate qualified persons, research and develop
new technology; and commercialize services incorporating such technologies.
There can be no assurance we will be successful in addressing these risks or any
other risks. We have not been in business long enough to make a reasonable
judgment as to our future performance. There can be no assurance that we will be
able to successfully implement our business plan, generate sufficient revenue to
meet our expenses, operate profitably or be commercially successful. Since we
have a limited operating history of marketing our services to the public over
the Internet, we cannot assure you that our business will be profitable or that
we will ever generate sufficient revenues to meet our expenses and support our
anticipated activities. Even if we do achieve profitability, we may be unable to
sustain or increase profitability on a quarterly or annual basis in the future.
We expect to have quarter to quarter fluctuations in revenues, expenses, losses
and cash flow, some of which could be significant. Results of operations will
depend upon numerous factors, some of which are beyond our control, including:
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o regulatory actions;
o market acceptance of our products and services;
o new product and service introductions; and
o competition.
As we have such a limited history of operation, you will be unable to assess our
future operating performance or our future financial results or condition by
comparing these criteria against our past or present equivalents.
WE WILL REQUIRE ADDITIONAL FUNDS TO ACHIEVE OUR CURRENT BUSINESS STRATEGY AND
OUR INABILITY TO OBTAIN ADDITIONAL FINANCING COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR ABILITY TO MAINTAIN BUSINESS OPERATIONS.
Even with the proceeds from this offering we will need to raise additional funds
through public or private debt or sale of equity to achieve our current business
strategy. Such financing may not be available when needed. Even if such
financing is available, it may be on terms that are materially adverse to your
interests with respect to dilution of book value, dividend preferences,
liquidation preferences, or other terms. Our capital requirements to implement
our business strategy will be significant. However, at this time, we can not
determine the amount of additional funding necessary to implement such plan. We
intend to assess such amount at the time we will implement the business plan.
We anticipate requiring additional funds in order to fully implement our
business plan to significantly expand our operations. No assurance can be given
that such funds will be available or, if available, will be on commercially
reasonable terms satisfactory to us. There can be no assurance that we will be
able to obtain financing if and when it is needed on terms we deem acceptable.
If we are unable to obtain financing on reasonable terms, we could be forced to
delay, scale back or eliminate certain product and service development programs.
In addition, such inability to obtain financing on reasonable terms could have a
material adverse effect on our business, operating results, or financial
condition to such extent that we are forced to restructure, file for bankruptcy,
sell assets or cease operations, any of which could put your investment dollars
at significant risk.
Our Future Success Is Dependent, In Part, On the Performance And Continued
Service Of Our Managers and Officers.
We are presently dependent to a great extent upon the experience, abilities and
continued services of our managers and officers. The loss of services of any of
the management staff could have a material adverse effect on our business,
financial condition or results of operation.
OUR SUCCESS DEPENDS UPON THE EFFORTS OF DARRELL LERNER AND OUR FAILURE TO RETAIN
HIM AND TO ATTRACT KEY PERSONNEL WILL NEGATIVELY AFFECT OUR BUSINESS.
Our business is greatly dependent on the efforts of Darrell Lerner, our Chairman
and President, and on our ability to attract key personnel. Also, our success
will depend in large part upon our ability to attract, develop, motivate and
retain highly skilled technical employees. Competition for qualified personnel
is intense and we may not be able to hire or retain qualified personnel.
As an Internet Company, We Are in an Intensely Competitive Industry and Any
Failure to Timely Implement Our Business Plan Could Diminish or Suspend our
Development and Possibly Cease Our Operations.
The internet industry is highly competitive, and has few barriers to entry. We
can provide no assurance that additional competitors will not enter markets that
we intend to serve. If we are unable to efficiently and effectively institute
our business plan as a result of intense competition or a saturated market, we
may not be able to continue the development and enhancement of our web site and
become profitable.
If We Are Unable to Establish a Large User Base We May Have Difficulty
Attracting Advertisers to Our Web Site, Which Will Hinder Our Ability to
Generate Advertising Revenues, Which May Affect Our Ability to Expand Our
Business Operations and OUR USER BASE.
An integral part of our business plan and marketing strategy requires us to
establish a large user base. Once we are able to establish a large user base and
a demand for our online services, we will be able to attract advertisers to our
web site and possibly begin to generate advertising revenues. If for any reason
our web site is ineffective at attracting consumers or if we are unable to
continue to develop and update our web site to keep consumers satisfied with our
service, our user base may decrease and our ability to generate advertising
revenues may decline.
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Our Market Is Characterized by Rapid Technological Change, and If We Fail to
Develop and Market New Technologies Rapidly, We May Not Become Profitable in the
Future.
The internet and the online commerce industry are characterized by rapid
technological change that could render our existing web site obsolete. The
development of our web site entails significant technical and business risks. We
can give no assurance that we will successfully use new technologies effectively
or adapt our web site to customer requirements or needs. If our management is
unable, for technical, legal, financial, or other reasons, to adapt in a timely
manner in response to changing market conditions or customer requirements, we
may never become profitable which may result in the loss of all or part of your
investment.
WE OPERATE IN AN INDUSTRY THAT MAY BECOME HEAVILY REGULATED AND COMPLIANCE
FAILURES COULD ADVERSELY AFFECT OUR BUSINESS.
Due to the increasing popularity of the Internet, it is possible that new laws
and regulations may be adopted dealing with such issues as user privacy, content
and pricing. Such laws and regulations might increase our cost of using, or
limit our ability to use, the Internet, which in turn could have a material
adverse effect on our business, financial condition and operating results.
Government regulation and legal uncertainties could add additional costs to
doing business on the Internet. There are currently few laws or regulations that
specifically regulate communications or commerce on the Internet. However, laws
and regulations may be adopted in the future that address issues such as user
privacy, pricing and the characteristics and quality of products and services.
For example, the Telecommunications Act of 1996 sought to prohibit transmitting
various types of information and content over the Internet. Several
telecommunications companies have petitioned the Federal Communications
Commission to regulate Internet service providers and on-line service providers
in a manner similar to long distance telephone carriers and to impose access
fees on those companies. This could increase the cost of transmitting data over
the Internet. Moreover, it may take years to determine the extent to which
existing laws relating to issues such as intellectual property ownership, libel
and personal privacy are applicable to the Internet. Any new laws or regulations
relating to the Internet or any new interpretations of existing laws could
adversely affect our business.
The Shares Sold In This Offering Have Not Been Registered Under The Securities
Act, And Therefore The Shareholders Must Be Prepared To Hold Such Shares For An
Indefinite Period Of Time.
Our common shares offered are "restricted securities" as defined under the
Securities Act. The resale of such securities may not be made without
registration under the Securities Act and state securities laws or the existence
of an exemption from such registration requirements.
THE OFFERING PRICE OF THE SHARES WAS ARBITRARILY DETERMINED AND THEREFORE SHOULD
NOT BE USED AS AN INDICATE OF THE FUTURE MARKET PRICE OF THE SECURITIES.
Since our shares are not listed or quoted on any exchange or quotation system,
the offering price of $.05 for the shares of common stock was arbitrarily
determined. The facts considered in determining the offering price were our
financial condition and prospects, our limited operating history and the general
condition of the securities market. The offering price is not an indication of
and is not based upon the actual value of Universal Flirts, Corp. The offering
price bears no relationship to the book value, assets or earnings of our company
or any other recognized criteria of value. The offering price should not be
regarded as an indicator of the future market price of the securities.
WE DO NOT EXPECT TO PAY DIVIDENDS AND INVESTORS SHOULD NOT BUY OUR COMMON STOCK
EXPECTING TO RECEIVE DIVIDENDS.
We have not paid any dividends on our common stock in the past, and do not
anticipate that we will declare or pay any dividends in the foreseeable future.
Consequently, you will only realize an economic gain on your investment in our
common stock if the price appreciates. You should not purchase our common stock
expecting to receive cash dividends.
There Is No Assurance of a Public Market and that the Common Stock Will Ever
Trade on a Recognized Exchange.
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There is no established public trading market for our securities. We currently
intend to seek a market maker to apply for a listing on the OTC Electronic
Bulletin Board in the United States. Our shares are not and have not been listed
or quoted on any exchange or quotation system. There can be no assurance that a
market maker will agree to file the necessary documents with the National
Association of Securities Dealers, which operates the OTC Electronic Bulletin
Board, nor can there be any assurance that such an application for quotation
will be approved or that a regular trading market will develop or that if
developed, will be sustained. In the absence of a trading market, an investor
may be unable to liquidate its investment.
USE OF PROCEEDS
The selling stockholders are selling shares of common stock covered by this
prospectus for their own account. We will not receive any of the proceeds from
the resale of these shares. We have agreed to bear the expenses relating to the
registration of the shares for the selling security holders.
DETERMINATION OF OFFERING PRICE
Since our shares are not listed or quoted on any exchange or quotation system,
the offering price of the shares of common stock was arbitrarily determined. The
offering price was determined by the price shares were sold to our shareholders
in our Regulation D Rule 506 private placement in June 2004.
The offering price of the shares of our common stock has been determined
arbitrarily by us and does not necessarily bear any relationship to our book
value, assets, past operating results, financial condition or any other
established criteria of value. Although our common stock is not listed on a
public exchange, we will be filing to obtain a listing on the Over The Counter
Bulletin Board (OTCBB) concurrently with the filing of this prospectus. However,
there is no assurance that our common stock, once it becomes listed on a public
exchange, will trade at market prices in excess of the initial public offering
price as prices for the common stock in any public market which may develop will
be determined in the marketplace and may be influenced by many factors,
including the depth and liquidity of the market for the common stock, investor
perception of us and general economic and market conditions.
DILUTION
The common stock to be sold by the selling shareholders is common stock that is
currently issued and outstanding. Accordingly, there will be no dilution to our
existing shareholders.
PENNY STOCK CONSIDERATIONS
Broker-dealer practices in connection with transactions in "penny stocks" are
regulated by certain penny stock rules adopted by the Securities and Exchange
Commission. 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). Penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document that provides
information about penny stocks and the risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. The
broker-dealer must also 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 requirements may have the effect of
reducing the level of trading activity, if any, in the secondary market for a
security that becomes subject to the penny stock rules.
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SELLING SHAREHOLDERS
The shares being offered for resale by the selling stockholders consist of the
1,939,000 shares of our common stock held by 46 shareholders. Such shareholders
include the holders of the share sold in our Regulation D Rule 506 offering in
June 2004. Such shares were issued in reliance on an exemption from registration
under Section 4(2) of the Securities Act of 1933. In addition, included in that
amount are 5,000 shares received by David Liss, 8,000 shares received by Mark
Belletiere, and 5,000 shares received by Judy Alpert pursuant to consulting
agreements and issued pursuant to an exemption from registration at Section 4(2)
of the Securities Act of 1933, and 250,000 shares issued to Anslow & Jaclin, LLP
for legal services rendered to us and issued pursuant to an exemption from
registration at Section 4(2) of the Securities Act of 1933. We are also
registering a total of 200,000 shares of our common stock held by Darrell
Lerner, our sole officer and director.
The following table sets forth the name of the selling stockholders, the number
of shares of common stock beneficially owned by each of the selling stockholders
as of July 26, 2004 and the number of shares of common stock being offered by
the selling stockholders. The shares being offered hereby are being registered
to permit public secondary trading, and the selling stockholders may offer all
or part of the shares for resale from time to time. However, the selling
stockholders are under no obligation to sell all or any portion of such shares
nor are the selling stockholders obligated to sell any shares immediately upon
effectiveness of this prospectus. All information with respect to share
ownership has been furnished by the selling stockholders.
Shares of
Name of selling stockholder Shares of common common Shares of common Percent of
Stock owned prior stock to be stock owned common stock
to offering sold after offering owned after offering
- --------------------------------------------------------------------------------------------------------------
Judy Alpert (1) 5,000 5,000 0 0
AM&PM, LLC 5,000 5,000 0 0
Anslow & Jaclin, LLP (2) 250,000 250,000 0 0
Mark Belletiere (3) 8,000 8,000 0 0
Melvin Bernstein 10,000 10,000 0 0
Alison Bernstein 90,000 90,000 0 0
Alice Bolocan 20,000 20,000 0 0
David Bolocan 10,000 10,000 0 0
Angelo Cipriano 5,000 5,000 0 0
Rodney Cutler 20,000 20,000 0 0
Gregory Frantz 5,000 5,000 0 0
David Gavrin 50,000 50,000 0 0
Drew Goldberg 60,000 60,000 0 0
Alan Golomb 10,000 10,000 0 0
Emily Hamamoto 20,000 20,000 0 0
Michael Hartman 40,000 40,000 0 0
Thelma Hartman 40,000 40,000 0 0
Robert Hartman 40,000 40,000 0 0
Danielle Hartman 40,000 40,000 0 0
Mary Hartman 40,000 40,000 0 0
Cynthia A. Indelicato 5,000 5,000 0 0
William & Shirley Lau 10,000 10,000 0 0
Darrell Lerner 9,000,000 200,000 8,800,000 81.94%
David Liss (4) 5,000 5,000 0 0
Andrew Meyers 5,000 5,000 0 0
Philip D. Mazzella 8,000 8,000 0 0
Martin Miller 90,000 90,000 0 0
Dolores Miller 100,000 100,000 0 0
Dolores Miller 5,000 5,000 0 0
Juan C. Morales 5,000 5,000 0 0
a/c/f Dillion Engel
Karen Pasteressa 5,000 5,000 0 0
a/c/f Samantha Pasteressa
Roberta & Robert Riesenberg 100,000 100,000 0 0
Sheldon Shalom 10,000 10,000 0 0
Victor Shalom 5,000 5,000 0 0
Cecilia Soh 10,000 10,000 0 0
James Supple 180,000 180,000 0 0
Mary Supple 20,000 20,000 0 0
Beth Sussman 100,000 100,000 0 0
Meg Sussman 100,000 100,000 0 0
Amy Sussman 100,000 100,000 0 0
Billy Tsim, Tak Piu 10,000 10,000 0 0
Eric Tjaden 8,000 8,000 0 0
James Tubbs 40,000 40,000 0 0
Richard V. Volpe 5,000 5,000 0 0
Jeffrey Wenzel 40,000 40,000 0 0
Richard J. Zapolski 5,000 5,000 0 0
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(1) Judy Alpert received these shares in exchange for consulting services. She
is an artist/art teacher who will help with art and design related matters
on the website, brochures, advertisements etc.
(2) Anslow & Jaclin, LLP received these shares in exchange for legal fees.
(3) Mark Belletiere received these shares in exchange for consulting services.
He is a CPA and will assist internal financial record keeping and preparing
financial projections.
(4) David Liss received these shares in exchange for consulting services. He is
an NYC bar/lounge manager and formerly owned his own restaurant. He will
assist with planning live parties and events.
To our knowledge, except for Darrell Lerner, our sole officer and director, none
of the selling shareholders or their beneficial owners:
- has had a material relationship with us other than as a shareholder at
any time within the past three years; or
- has ever been one of our officers or directors or an officer or
director of our predecessors or affiliates
- are broker-dealers or affiliated with broker-dealers.
PLAN OF DISTRIBUTION
The selling security holders may sell some or all of their shares at a fixed
price of $.05 per share until our shares are quoted on the OTC Bulletin Board
and thereafter at prevailing market prices or privately negotiated prices. Sales
by selling security holder must be made at the fixed price of $.05 until a
market develops for the stock.
Once a market has been developed for our common stock, the shares may be sold or
distributed from time to time by the selling stockholders directly to one or
more purchasers or through brokers or dealers who act solely as agents, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, at negotiated prices or at fixed prices, which may be
changed. The distribution of the shares may be effected in one or more of the
following methods:
o ordinary brokers transactions, which may include long or short sales,
o transactions involving cross or block trades on any securities or
market where our common stock is trading,
o through direct sales to purchasers or sales effected through agents,
o through transactions in options, swaps or other derivatives (whether
exchange listed or otherwise), or
o any combination of the foregoing.
In addition, the selling stockholders may enter into hedging transactions with
broker-dealers who may engage in short sales, if short sales were permitted, of
shares in the course of hedging the positions they assume with the selling
stockholders. The selling stockholders may also enter into option or other
transactions with broker-dealers that require the delivery by such
broker-dealers of the shares, which shares may be resold thereafter pursuant to
this prospectus.
Brokers, dealers, or agents participating in the distribution of the shares may
receive compensation in the form of discounts, concessions or commissions from
the selling stockholders and/or the purchasers of shares for whom such
broker-dealers may act as agent or to whom they may sell as principal, or both
(which compensation as to a particular broker-dealer may be in excess of
customary commissions). Neither the selling stockholders nor we can presently
estimate the amount of such compensation. We know of no existing arrangements
between the selling stockholders and any other stockholder, broker, dealer or
agent relating to the sale or distribution of the shares. We do not anticipate
that either our shareholders or we will engage an underwriter in the selling or
distribution of our shares.
We will not receive any proceeds from the sale of the shares of the selling
security holders pursuant to this prospectus. We have agreed to bear the
expenses of the registration of the shares, including legal and accounting fees,
and such expenses are estimated to be approximately $10,000.
7
LEGAL PROCEEDINGS
There are no legal proceedings pending or threatened against us.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our sole executive officer and director and his age as of July 26, 2004 is as
follows:
NAME AGE POSITION
- ---- --- -------------------------------
Darrell Lerner 30 President, Chief Executive Officer,
Chairman of the Board of Directors
Set forth below is a brief description of the background and business experience
of our executive officers and directors for the past five years.
DARRELL LERNER is our founder and will serve as President and Chief Executive
Officer as well as Board Chairman. Darrell has extensive experience with the
start-up process as well as with all aspects of operating and maintaining a
public company. Darrell was the President and Chief Executive Officer of
Relocate411.com, Inc. from January 2000 to May 2004. For 3 years Darrell served
as CEO of FantasySports Net, Inc. ("FSN"), an interactive fantasy sports site
that he founded in 1998. FSN created and ran nationwide fantasy sports games for
itself and for known partners including WFAN Sports Radio in NY and Daily Racing
Form. The company had approximately 12 employees and endorsement deals with Hall
of Fame athletes Johnny Bench, Bill Walton, John Davidson as well as Dr. Ruth
Westheimer. Darrell has also been involved in various capacities with several
other Internet start-ups and public companies. Darrell holds a law degree from
Hofstra University and is a Cum Laude graduate of the same university with an
undergraduate degree in Business Administration/Finance. Additionally, Darrell
maintains a Series 7 license (General Securities Representative) and Series 66
license (Investment Advisory Representative), as well as various insurance
licenses.
Term of Office
Our directors are appointed for a one-year term to hold office until the next
annual general meeting of our shareholders or until removed from office in
accordance with our bylaws. Our officers are appointed by our board of directors
and hold office until removed by the board.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides the names and addresses of each person known to us
to own more than 5% of our outstanding common stock as of July 26, 2004, and by
the officers and directors, individually and as a group. Except as otherwise
indicated, all shares are owned directly.
Name and Address Amount and Nature Percent
Title of Class of Beneficial Owner of Beneficial Owner of Class
- -------------- ------------------- ------------------- --------
Common Stock Darrell Lerner 9,000,000 83.81%
Common Stock All executive officers 9,000,000 83.81%
and directors as a group
The percent of class is based on 10,739,000 shares of common stock issued and
outstanding as of July 26, 2004.
DESCRIPTION OF SECURITIES
General
Our authorized capital stock consists of 100,000,000 shares of common stock at a
par value of $0.001 per share and 10,000,000 shares of preferred stock at a par
value of $0.001 per share.
Common Stock
As of July 26, 2004, 10,739,000 shares of common stock are issued and
outstanding and held by 46 shareholders. Holders of our common stock are
entitled to one vote for each share on all matters submitted to a stockholder
vote.
8
Holders of common stock do not have cumulative voting rights.
Therefore, holders of a majority of the shares of common stock voting for the
election of directors can elect all of the directors. Holders of our common
stock representing a majority of the voting power of our capital stock issued
and outstanding and entitled to vote, represented in person or by proxy, are
necessary to constitute a quorum at any meeting of our stockholders. A vote by
the holders of a majority of our outstanding shares is required to effectuate
certain fundamental corporate changes such as liquidation, merger or an
amendment to our Articles of Incorporation.
Holders of common stock are entitled to share in all dividends that the board of
directors, in its discretion, declares from legally available funds. In the
event of a liquidation, dissolution or winding up, each outstanding share
entitles its holder to participate pro rata in all assets that remain after
payment of liabilities and after providing for each class of stock, if any,
having preference over the common stock. Holders of our common stock have no
pre-emptive rights, no conversion rights and there are no redemption provisions
applicable to our common stock.
Preferred Stock
Our articles of incorporation also provide that we are authorized to issue up to
10,000,000 shares of preferred stock with a par value of $.001 per share. As of
the date of this prospectus, there are no shares of preferred stock issued and
outstanding. Our Board of Directors has the authority, without further action by
the shareholders, to issue from time to time the preferred stock in one or more
series for such consideration and with such relative rights, privileges,
preferences and restrictions that the Board may determine.
The preferences, powers, rights and restrictions of different series of
preferred stock may differ with respect to dividend rates, amounts payable on
liquidation, voting rights, conversion rights, redemption provisions, sinking
fund provisions and purchase funds and other matters. The issuance of preferred
stock could adversely affect the voting power or other rights of the holders of
common stock.
Dividends
Since inception we have not paid any dividends on our common stock. We currently
do not anticipate paying any cash dividends in the foreseeable future on our
common stock, when issued pursuant to this offering. Although we intend to
retain our earnings, if any, to finance the exploration and growth of our
business, our Board of Directors will have the discretion to declare and pay
dividends in the future. Payment of dividends in the future will depend upon our
earnings, capital requirements, and other factors, which our Board of Directors
may deem relevant.
Warrants
There are no outstanding warrants to purchase our securities.
Options
There are no options to purchase our securities outstanding. We may in the
future establish an incentive stock option plan for our directors, employees and
consultants.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Except for Anslow & Jaclin, LLP, no expert or counsel named in this prospectus
as having prepared or certified any part of this prospectus or having given an
opinion upon the validity of the securities being registered or upon other legal
matters in connection with the registration or offering of the common stock was
employed on a contingency basis, or had, or is to receive, in connection with
the offering, a substantial interest, direct or indirect, in the registrant or
any of its parents or subsidiaries. Nor was any such person connected with the
registrant or any of its parents or subsidiaries as a promoter, managing or
principal underwriter, voting trustee, director, officer, or employee. Anslow &
Jaclin, LLP owns a total of 250,000 shares of our common stock which is being
registered as part of this registration statement.
9
The financial statements included in this prospectus and the registration
statement have been audited by Gately & Associates, LLC, certified public
accountants, to the extent and for the periods set forth in their report
appearing elsewhere herein and in the registration statement, and are included
in reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our directors and officers are indemnified as provided by the Delaware Statutes
and our Bylaws. 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 controlling
persons in connection with the securities being 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.
ORGANIZATION WITHIN LAST FIVE YEARS
We were incorporated on May 25, 2004 in the State of Delaware. Our wholly-owned
subsidiary, Universal Flirts, Inc. was organized as a corporation in the State
of New York on August 22, 2003. On May 27, 2004, we acquired all of the shares
of Universal Flirts, Inc., a New York corporation, from Darrell Lerner, the sole
shareholder of Universal Flirts, Inc. in consideration for the issuance of
8,500,000 shares of our common stock to the Universal Flirts, Inc. shareholders
pursuant to a stock purchase agreement and share exchange between Universal
Flirts, Inc. and us. Pursuant to the stock purchase agreement and share
exchange, Universal Flirts, Inc. became our wholly owned subsidiary. The purpose
for this merger with Universal Flirts, Inc. was to acquire an operating company
which we believed has a successful business plan.
DESCRIPTION OF BUSINESS
General
The online dating industry is one of the few sectors of the Internet that
consistently produces profitable companies. The industry continues to grow at an
accelerating rate while being highly profitable as the medium becomes more and
more accepted by society as a tool for finding a mate. In the fall of 2002
online dating passed financial content to become the leading paid content
category on the internet and the industry has continued to grow since then.
We were incorporated under the laws of the State of Delaware on May 25, 2004. We
commenced operations for the purposes of evaluating, structuring, and completing
a merger with or acquisition of, prospect consisting of private companies,
partnerships, or sole proprietorships in the United States. On May 27, 2004, we
acquired all of the shares of Universal Flirts, Inc., a New York corporation,
from Darrell Lerner, the sole shareholder of Universal Flirts, Inc.
in consideration for the issuance of 8,500,000 shares of our common stock to the
Universal Flirts, Inc. shareholder pursuant to a stock purchase agreement and
share Exchange between Universal Flirts, Inc. and us. Pursuant to the stock
purchase Agreement and share exchange, Universal Flirts, Inc. became our wholly
owned subsidiary. Until this merger our activities had been limited to actions
related to our organization and we conducted virtually no business operations.
Now, through our subsidiary, we own and operate an online dating service.
Our subsidiary, Universal Flirts, Inc. was incorporated on August 22, 2003, and
launched their first website, www.Americanflirts.com, in late 2003. American
Flirts is an online dating service dedicated towards helping all American
Singles find love and romance and presently offers complete access to all of the
site's features for free. Although we cater towards American singles, singles
from all over the world are welcome to use our service. Singles can register for
free and gain access to all features offered by American Flirts including
personal ads, instant messaging, advanced search features, hotlists, cupid
report, instant flirts, public or private photos (only for members you specify
to view) and e-mail. A new and unique American Flirts feature is the "hotties"
section, which lists the most popular singles by state.
10
On a very limited budget, and with no money spent on advertising,
AmericanFlirts.com now has in excess of 1,900 members. The majority of our
member base has been obtained from two sources: search engine results and links
placed in online dating directories via link exchange programs. We have just
completed a private placement where we have raised $ 73,550 to devote primarily
to advertising, working capital and site enhancements, as well as professional
fees, thereby giving us the opportunity to gain members at a faster rate,
further differentiate and brand our product, and ultimately generate revenue
through membership fees and advertising income.
In addition the AmericanFlirts.com, we have also secured the following domain
names for potential expansion:
o UniversalFlirts.Com - General site aggregating the standard members
from partner sites.
o UniversityFlirts.Com - Geared towards college students, allowing users
to search by specific colleges in addition to standard search tools.
o CasualFlirts.com - "Edgier" site catering to a more "adults only"
audience.
o DiscreetFlirts.com
Ultimately, we plan to offer a number of niche sites catering to specific
audiences, while aggregating all of these sites under the overall "flirts"
banner.
In subsequent phases of operations, we anticipate generating revenue from the
following sources:
o Subscription fees from website members - a "pay" model
o Advertising and sponsorship revenue
o Implementing a "partnership" model whereby we build a custom look &
feel online dating sites for partners with large member bases,
integrate their subscribers into our database, and share revenues
o Leveraging our member base by throwing parties and other offline
events for singles in major cities
Since inception, we have spent a total of $5,000 on research and development
costs to develop our website.
Marketing
We expect to implement a comprehensive marketing plan in the fourth quarter of
2004, primarily in the areas of Keyword Advertising and Sponsored Links through
Google, FindWhat, and other similar targeted keyword programs that employ a
"cost-per-click" model. We will continue to devote resources to link exchange
programs where we can create additional links for americanflirts.com in online
dating and online personals directories throughout the web.
Another area that we will continue to vigorously pursue as part of our marketing
and branding program is search engine placement. We have gone to great lengths
to optimize the search for priority search engine placement and are seeing our
efforts paying off as we are now on the front page of several major search
engine sites under the keyword "American singles." On MSN.com,
americanflirts.com is presently in the sixth position on the front page of
search results. By continuing to work to optimize the site, and by increasing
the number of links to the site, we feel we can receive better and better search
results and search engine saturation, which in turn directs more traffic to the
website.
Competition
We believe that its primary competition will most likely be from other online
dating services. Presently the market is very segmented with Match.Com widely
considered the industry leader. Match.com's personals businesses claim more than
800,000 paying subscribers and more than 10 million members with profiles posted
or who are active users. Other big players include Yahoo!, Date.Com,
Matchmaker.Com, MatchNet plc. and Udate.com. Overall there are about 30-50
"known" sites in the industry. Achieving critical mass with respect to market
share is critical for our business. Competitors who already have an established
market share will, therefore, be in a better competitive position than us. We
hope to offset any such competitive advantages by offering products and services
which are superior in quality to and more appealing than those of our
competitors, and by launching an effective marketing campaign. We also believe
that the industry offers substantial room for growth as the internet becomes
more and more of an acceptable tool for finding a mate.
Employees
We currently have one full-time employee. We also pay three consultants and a
computer programmer for their work on an hourly basis.
11
MANAGEMENT DISCUSSION AND ANALYSIS
Plan of Operations
During the next twelve months, we expect to take the following steps in
connection with the further development of our business and the implementation
of our plan of operations:
* Prepare and execute a marketing plan to increase our member base. We
presently have over 1900 members and have spent no money on
advertising to date. The majority of our member base has been obtained
from two sources: search engine results and links placed in online
dating directories via link exchange programs. We anticipate that
within thirty to sixty days, a comprehensive marketing plan will be
developed. We expect to spend approximately $5,000 on marketing in the
fourth quarter of 2004, primarily in the areas of Keyword Advertising
and Sponsored Links through Google, FindWhat, and other similar
targeted keyword programs that employ a "cost-per-click" model. We
will continue to devote resources to link exchange programs where we
can create additional links for americanflirts.com in online dating
and online personals directories throughout the web.
Another area that we will continue to vigorously pursue as part of our
marketing and branding program is search engine placement. We have
gone to great lengths to optimize the search for priority search
engine placement and are seeing our efforts paying off as we are now
on the front page of several major search engine sites under the
keyword "American singles." On MSN.com, americanflirts.com is
presently in the sixth position on the front page of search results.
By continuing to work to optimize the site, and by increasing the
number of links to the site, we feel we can receive better and better
search results and search engine saturation, which in turn directs
more traffic to the website.
* In ninety days we anticipate implementing a major upgrade to the
Americanflirts.com website. We have already had some initial
discussions with our primary programmer about enhancements that can be
made to the website including an improved instant messenger feature.
We believe these enhancements can be made for between $1,000 and
$2,000.
* In the fourth quarter of 2004 we expect to begin developing additional
websites that will fall under the "Universal Flirts" banner. We
presently own the following domain names: Americanflirts.com,
Universalflirts.com, Universityflirts.com, Casualflirts.com, and
Discreetflirts.com. While keeping the look and feel of
Americanflirts.com, we hope to launch several other websites designed
to cater to different niches of the dating world. We believe we can
launch one to three additional websites within six to nine months for
a cost of $5,000 to $10,000. We will focus on the sites related to the
domain names that we presently own, as well as any other niche areas
that we feel are underdeveloped in the online dating industry.
* By early 2005 we hope to implement an affiliate partnership program
whereby we will have the ability to create online dating sites for
partners on a revenue- share basis. The sites would use our software,
but be customized to reflect the look and feel of the partner company.
We will seek to form partnerships with companies that have a large
existing member base from which we can draw members. Costs and
revenues associated with this program will be determined on a case-by-
case basis.
* By early 2005 we hope to be able to hire a programmer on a dedicated
basis in order to execute our plans for additional websites and
partnerships in a more expedient manner. We anticipate paying either
an annual salary, or hourly fee to a dedicated programmer depending
upon the workload required.
* We hope to convert our website(s) to a subscription-based pay model in
early to mid 2005, or at such time as our member base has grown to the
point where it can support the implementation of a pay model.
Americanflirts.com is already configured to accept credit cards and be
a pay site, so such a conversion will only require a credit card
processor. It is anticipated that member subscriptions will be the
primary source of revenue generation for Universal Flirts in the
future.
12
* In early 2005 we hope to be able to begin offering offline events and
speed dating events. Such events would be local and likely begin in
the New York City area. These events would generate revenue from an
admission fee. The implementation of these events is dependent upon
the growth of the member base as we will only begin hosting events at
such a time as our member base is large enough to support a full
turnout. We don't anticipate any material costs associated with
hosting events as advertising will be done through the website and via
emails to our members and we would seek facilities that are willing to
operate on a revenue share arrangement with us thereby eliminating any
upfront costs.
DESCRIPTION OF PROPERTY
Our executive offices are located at 142 Mineola Avenue, Suite 2-D, Roslyn
Heights, New York 11577. This office space is subleased to us for $300 per month
from Byron Lerner, the father of Darrell Lerner, our sole officer and director.
We believe that this space is sufficient and adequate to operate our current
business.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We currently use space at 142 Mineola Avenue, Suite 2-D, Roslyn Heights, New
York 11577. We sublease such space for $300 per month from Byron Lerner, the
father of DarrellLerner, our sole officer and director.
On May 27, 2004, we acquired all of the shares of Universal Flirts, Inc., a New
York corporation, from Darrell Lerner, our sole officer and director, in
consideration for the issuance of 8,500,000 shares of our common stock to
Darrell Lerner, the sole Universal Flirts, Inc. shareholder pursuant to a stock
purchase agreement and share exchange between Universal Flirts, Inc. and us.
Pursuant to the stock purchase agreement and share exchange, Universal Flirts,
Inc. became our wholly owned subsidiary. The purpose for this merger with
Universal Flirts, Inc. was to acquire an operating company which we believed has
a successful business plan.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No Public Market for Common Stock
There is presently no public market for our common stock. We anticipate applying
for trading of our common stock on the over the counter bulletin board upon the
effectiveness of the registration statement of which this prospectus forms a
part. However, we can provide no assurance that our shares will be traded on the
bulletin board or, if traded, that a public market will materialize.
Holders of Our Common Stock
As of the date of this registration statement, we had 46 registered
shareholders.
Rule 144 Shares
As of July 26, 2004, there are no shares of our common stock which are currently
available for resale to the public and in accordance with the volume and trading
limitations of Rule 144 of the Act. After May 27, 2005, 9,000,000 shares owned
by Mr. Darrell Lerner will become available for resale to the public and in
accordance with the volume and trading limitations of Rule 144 of the Act. After
June 2005, the 1,471,000 shares held by the shareholders who purchased their
shares in the offering by us will become available for resale to the public and
in accordance with the volume and trading limitations of Rule 144 of the Act.
After June 2005, the 250,000 shares held by Anslow & Jaclin, LLP and the will
become available for resale to the public and in accordance with the volume and
trading limitations of Rule 144 of the Act. After June 2005, the 5,000 shares
held by Judy Alpert, the 8,000 shares held by Mark Belletiere, and the 5,000
shares held by David Liss for consulting services will become available for
resale to the public and in accordance with the volume and trading limitations
of Rule 144 of the Act. In general, under Rule 144 as currently in effect, a
person who has beneficially owned shares of a company's common stock for at
least one year is entitled to sell within any three month period a number of
shares that does not exceed 1% of the number of shares of the company's common
stock then outstanding which, in our case, would equal approximately 10,739,000
shares as of the date of this prospectus.
Sales under Rule 144 are also subject to manner of sale provisions and notice
requirements and to the availability of current public information about the
company. Under Rule 144(k), a person who is not one of the company's affiliates
at any time during the three months preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least two years, is entitled to sell
shares without complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144.
Stock Option Grants
To date, we have not granted any stock options.
Registration Rights
We have not granted registration rights to the selling shareholders or to any
other persons.
13
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to
our executive officers by any person for all services rendered in all capacities
to us from the date of our inception until July 26, 2004.
ANNUAL COMPENSATION LONG TERM COMPENSATION
ANNUAL COMPENSATION LONG TERM COMPENSATION
RESTRICTED OPTION
OTHER ANNUAL STOCKS/PAYOUTS SARS LTIP ALL OTHER
NAME TITLE YEAR SALARY BONUS COMPENSATION AWARDED ($) COMPENSATION COMPENSATION
- ---- ----- ---- ------ ----- ------------ ------- --- ------------ ------------
Darrell Lerner President 2004 $18,000(1) 0 0 0 0 0 0
CEO and
Chairman
(1) We currently pay our sole officer and director a monthly sum of $1,500 per
month as salary and to cover various business related expenses.
Stock Option Grants
We have not granted any stock options to our executive officers since our
incorporation.
Employment Agreements
We do not have an employment or consultant agreement with Mr. Darrell Lerner,
our Chief Executive Officer, President, and Chairman of the Board of Directors.
AVAILABLE INFORMATION
We have filed a registration statement on Form SB-2 under the Securities Act of
1933 with the Securities and Exchange Commission with respect to the shares of
our common stock offered through this prospectus. This prospectus is filed as a
part of that registration statement and does not contain all of the information
contained in the registration statement and exhibits. Statements made in the
registration statement are summaries of the material terms of the referenced
contracts, agreements or documents of the company and are not necessarily
complete. We refer you to our registration statement and each exhibit attached
to it for a more complete description of matters involving us, and the
statements we have made in this prospectus are qualified in their entirety by
reference to these additional materials. You may inspect the registration
statement and exhibits and schedules filed with the Securities and Exchange
Commission at the Commission's principal office in Washington, D.C. Copies of
all or any part of the registration statement may be obtained from the Public
Reference Section of the Securities and Exchange Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for
further information on the operation of the public reference rooms. The
Securities and Exchange Commission also maintains a web site at
http://www.sec.gov that contains reports, proxy statements and information
regarding registrants that file electronically with the Commission. In addition,
we will file electronic versions of our annual and quarterly reports on the
Commission's Electronic Data Gathering Analysis and Retrieval, or EDGAR System.
Our registration statement and the referenced exhibits can also be found on this
site as well as our quarterly and annual reports. We will not send the annual
report to our shareholders unless requested by the individual shareholders.
14
UNIVERSAL FLIRTS CORP.
(a development stage company)
FINANCIAL STATEMENTS
As Of June 30, 2004
INDEPENDENT AUDITORS REPORT F-1
BALANCE SHEET F-2
STATEMENT OF OPERATIONS F-3
STATEMENT OF STOCKHOLDERS' EQUITY F-4
STATEMENT OF CASH FLOWS F-5
FINANCIAL STATEMENT FOOTNOTES F-6
Gately & Associates, LLC
1248 Woodridge Court
Altamonte Springs, FL 32714
(407) 341-6942
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
The Board of Directors and Shareholders
Universal First Corp.
Gentlemen:
We have audited the accompanying balance sheet of Universal Flirts Corp.
(a development stage company) as of June 30, 2004 and the related statements of
operations, stockholder's equity and cash flows from inception (May 25, 2004)
through June 30, 2004. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on the audit.
We conducted the audit in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that the 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 Universal Flirts
Corp. as of December 31, 2003, and the statement of operations and cash flows
from inception (May 25, 2004) through June 30, 2004 in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 8 to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raise substantial doubt about its ability
to continue as a going concern. Management's plan in regard to these matters are
also described in Note 11. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Gately & Associates, LLC
July 7, 2004
F-1
UNIVERSAL FLIRTS CORP.
(an development stage company)
BALANCE SHEET
As of June 30, 2004
ASSETS
------
CURRENT ASSETS 6/30/2004
- -------------- ---------------
Cash $ 44,799
---------------
Total Current Assets 44,799
PROPERTY AND EQUIPMENT
- ----------------------
Internet Website 8,500
---------------
TOTAL ASSETS $ 53,299
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
- -------------------
Accounts payable $ -
Accrued expenses 750
---------------
Total Current Liabilities 750
LONG-TERM LIABILITIES
- ---------------------
None -
---------------
TOTAL LIABILITIES 750
---------------
STOCKHOLDERS' EQUITY
- --------------------
Common Stock, $.001 par value
Authorized: 100,000,000 Issued 10,348,000 10,348
Additional paid in capital 66,052
Preferred stock, $.001 par value
Authorized: 10,000,000 Issued: none -
Accumulated deficit during exploration stage (23,851)
---------------
Total Stockholders' Equity 52,549
---------------
TOTAL LIABILITIES AND EQUITY $ 53,299
===============
The accompanying notes are an integral part of these financial statements.
UNIVERSAL FLIRTS CORP.
(an development stage company)
STATEMENT OF OPERATIONS
For the 37 days ending June 30, 2004 and
from inception (May 25, 2004) through June 30, 2004
FROM
6/30/2004 INCEPTION
------------------------------
REVENUE $ - $ -
- -------
COST OF SERVICES - -
- ----------------
------------------------------
GROSS PROFIT OR (LOSS) - -
- ----------------------
GENERAL AND ADMINISTRATIVE EXPENSES 23,851 23,851
- -----------------------------------
------------------------------
OPERATING INCOME (23,851) (23,851)
- ----------------
------------------------------
ACCUMULATED DEFICIT $ (23,851) $ (23,851)
- -------------------
==============================
Earnings (loss) per share, basic and diluted $ (0.00)
- --------------------------------------------
Weighted average number of common shares 5,215,667
- ----------------------------------------
The accompanying notes are an integral part of these financial statements.
UNIVERSAL FLIRTS CORP.
(an development stage company)
STATEMENT OF STOCKHOLDERS' EQUITY
As of June 30, 2004
ADDITIONAL
COMMON PAR PAID IN ACCUM. TOTAL
STOCK VALUE CAPITAL DEFICIT EQUITY
--------------------------------------------------------------------------
Common stock issued upon incorporation 500,000 $ 500 $ - $ - $ 500
on May 25, 2004 at $0.001 per share
Common stock issued in exchange 8,500,000 8,500 8,500
of shares to acquire subsidiary
effective June 1, 2004 at $0.001 per share
Common stock issued as compensation for 250,000 250 12,250 12,500
legal services on June 15, 2004 at $0.05 per share
Common stock issued as compensation for 18,000 18 882 900
consulting services on June 21, 2004
Common stock issued for cash 1,080,000 1,080 52,920 54,000
July, 2004 at $0.05 per share
in a private placement
Net income (loss) (23,851) (23,851)
--------------------------------------------------------------------------
Balance, June 30, 2004 10,348,000 $ 10,348 $ 66,052 $ (23,851) $ 52,549
==========================================================================
The accompanying notes are an integral part of these financial statements.
UNIVERSAL FLIRTS CORP.
(an development stage company)
STATEMENTS OF CASH FLOWS
For the 37 days ending June 30, 2004 and
from inception (May 25, 2004) through June 30, 2004
FROM
CASH FLOWS FROM OPERATING ACTIVITIES 6/30/2004 INCEPTION
- ------------------------------------
------------------------------
Net income (loss) $ (23,851) $ (23,851)
------------------------------
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Stock issued as compensation 13,900 13,900
(Increase) Decrease in accounts receivable - -
Increase (Decrease) in accounts payable - -
Increase (Decrease) in accrued expenses 750 750
------------------------------
Total adjustments to net income 14,650 14,650
------------------------------
Net cash provided by (used in) operating activities (9,201) (9,201)
------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
None - -
------------------------------
Net cash flows provided by (used in) investing activities - -
------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stock issuance 54,000 54,000
------------------------------
Net cash provided by (used in) financing activities 54,000 54,000
------------------------------
CASH RECONCILIATION
Net increase (decrease) in cash 44,799 44,799
Cash - beginning balance - -
------------------------------
CASH BALANCE END OF PERIOD $ 44,799 $ 44,799
==============================
The accompanying notes are an integral part of these financial statements.
UNIVERSAL FLIRTS CORP.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
Business
Universal Flirts Corp. (the Company), was organized under the laws of the State
of Delaware on May 25, 2004 and has adopted a fiscal year ending December 31.
The Company is considered to be in the development stage (a development stage
company) since it is devoting substantially all of its efforts to establishing a
new business. Its planned principal operations are in the online dating
industry. There have been no revenues to date. The Company currently has a web
site that it plans to use to generate revenues.
Organization
On June 1, 2004, the Company acquired, in a stock purchase agreement and share
exchange, Universal Flirts, Inc. (a New York corporation incorporated on August
22, 2003). The share exchange called for the Company to issue 8,500,000 common
shares in exchange for 200 common shares (100%) of Universal Flirts, Inc. The
Company makes use of the internet website that Universal Flirts, Inc. has title.
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development Stage Activities and Operations:
All costs incurred in development activities are charged to operations as
incurred. The Company has not produced any revenues from operations.
Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those amounts.
F-6
UNIVERSAL FLIRTS CORP.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
Accounts Receivable, deposits, Accounts Payable and accrued Expenses:
Accounts receivable have historically been immaterial and therefore no allowance
for doubtful accounts has been established. Normal operating refundable Company
deposits are listed as Other Assets. Accounts payable and accrued expenses
consist of trade payables created from the normal course of business.
Property and Equipment:
Property and equipment purchased by the Company are recorded at cost.
Depreciation is computed by the straight-line method based upon the estimated
useful lives of the respective assets. Expenditures for repairs and maintenance
are charged to expense as incurred as are any items purchased which are below
the Company's capitalization threshold of $1,000.
For assets sold or otherwise disposed of, the cost and related accumulated
depreciation are removed from accounts, and any related gain or loss is
reflected in income for the period.
Income Taxes:
The Company accounts for income taxes using the liability method which requires
recognition of deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Deferred tax assets and liabilities are determined based on the
difference between the financial statements and tax basis of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. The Company's management determines if a
valuation allowance is necessary to reduce any tax benefits when the available
benefits are more likely than not to expire before they can be used.
Stock Based Compensation:
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," (SFAS 123), which is effective for periods beginning after
December 15, 1995. SFAS 123 requires that companies either recognize
compensation expense for grants of stock, stock options, and other equity
instruments based on fair value or provide pro-forma disclosure of the effect on
net income and earnings per share in the Notes to the Financial Statements. The
Company has adopted SFAS 123 in accounting for stock-based compensation.
Cash and Cash Equivalents, and Credit Risk:
For purposes of reporting cash flows, the Company considers all cash accounts
with maturities of 90 days or less and which are not subject to withdrawal
restrictions or penalties, as cash and cash equivalents in the accompanying
balance sheet.
The portion of deposits in a financial institution that insures its deposits
with the FDIC up to $100,000 per depositor in excess of such insured amounts are
not subject to insurance and represent a credit risk to the Company.
F-7
UNIVERSAL FLIRTS CORP.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
Fair Value of Financial Instruments:
SFAS No. 107, "Disclosures About Fair Value of Financial Instruments", requires
disclosure of the fair value information whether or not recognized in the
balance sheet, where it is practicable to estimate that value. The carrying
value of cash, cash equivalents, accounts receivable and notes payable
approximates fair value.
Impairment of Long-Lived Assets:
Company's management believes that any evaluation necessitated through the
adoption of SFAS 121, "Accounting for the Impairment Long-Lived Assets and for
Long-Lived Assets to be Disposed of." will not be material.
Loss Per Common Share:
The Company has adopted Financial Accounting Standards Board (FASB) Statement
No. 128, "Earnings per Share". The Statement establishes standards for computing
and presenting earnings per share (EPS). It replaced the presentation of primary
EPS with a presentation of basic EPS and also requires dual presentation of
basic and diluted EPS on the face of the income statement. The statement was
retroactively applied to the prior loss per share but did not have any effect.
Basic loss per share was computed by dividing the Company's net loss by the
weighted average number of common shares outstanding during the period. There is
no presentation of diluted loss per share as the effect of common stock options,
warrants and convertible debt amount are antidilutive
NOTE 3 - ORGANIZATION COSTS
The requirements set forth in accordance to SOP 98-5. SOP 98-5 requires the
costs of organization expenses to be expensed as incurred for fiscal years
beginning after December 15, 1998. The organization costs have been expensed
accordingly.
F-8
UNIVERSAL FLIRTS CORP.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - STOCKHOLDERS EQUITY
PREFERRED STOCK:
The Company has authorized 10,000,000 preferred shares with a par value of
$.001, none of which are issued or outstanding.
COMMON STOCK:
The Company has authorized 100,000,000 common shares with a par value of $.0001
of which 10,348,000 shares were issued and outstanding.
On May 25, 2004, the Company issued 500,000 common shares as compensation to an
Officer of the Company, a value of $500, for the incorporation of the Company.
The stock is restricted from sale for one year in accordance with section 144 Of
the securities act.
On June 1, 2004, the Company issued 8,500,000 common shares in a stock purchase
agreement and share exchange. The Company exchanged these shares for 200 common
shares (100%) of Universal Flirts, Inc., a New York corporation incorporated on
August 22, 2003. The stock is restricted from sale for one year in accordance
with section 144 Of the securities act.
During June of 2004, the Company issued 1,080,000 shares of its common stock for
a consideration of $54,000 cash, or $.05 per share, in reliance on the exemption
under Section 4(2) of the Securities Act of 1933, as amended (the "Act"). The
stock is restricted from sale for one year in accordance with section 144 Of the
securities act.
On June 15, 2004, the Company issued 250,000 common shares as compensation for
Legal services for a value of $12,500, or $0.05 per share.
On June 21, 2004, the Company issued 18,000 common shares as compensation for
Consulting services for a value of $900, or $0.05 per share.
NOTE 5 - CONFLICTS OF INTEREST
Certain conflicts of interest have existed and will continue to exist between
management, their affiliates and the Company. Management have other interests
including business interests to which they devote their primary attention.
Management may continue to do so notwithstanding the fact that management time
should be devoted to the business of the Company and in addition, management may
negotiate an acquisition resulting in a conflict of interest.
NOTE 6 - CASH FLOW STATEMENT DISCLOSURE
The Company did not pay in cash any income tax or interest on debt financing.
Non-cash transactions included the issuance of 268,500 common shares of the
Company's stock in consideration for services and the issuance of 8,500,000
Common shares in the acquisition of Universal First, Inc.
F-9
UNIVERSAL FLIRTS CORP.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - LITIGATION, CONTINGENCIES, OPERATING AND CAPITAL LEASES
From time to time in the normal course of business the Company may be involved
in litigation. The Company's management is not aware of any asserted or
unasserted claims and therefore feels any such proceedings to have an immaterial
effect on the financial statements.
The Company's management has not bound the Company with any contingencies other
than those through the normal course of business.
The Company has no operating or capital leases, but will account for such leases
in accordance with Generally Accepted Accounting Principles when entered into
which would require operating leases to be expensed and capital leases to be
capitalized and amortized over the lease term.
NOTE 8 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As a development stage company, the
Company has no revenue from operations and limited financing. The Company's
continued existence is dependent upon its ability to meet its financing
requirements on a continuing basis, and to succeed in its future operations. The
financial statements do not include any adjustments that might result from this
uncertainty.
Because of uncertainties surrounding the Company's development and limited
operating history, management anticipates incurring development stage losses in
the foreseeable future. Management's ability to achieve the Company's business
objectives is contingent upon its success in raising additional capital until
adequate revenues are realized from operations. Management believes that the
Company has sufficient cash to meet the minimum development and operating costs
for the next 12 months. The Company will need to raise additional capital to
continue operations past 12 months, and there is no assurance that the Company
will be successful in raising the needed capital.
F-10
UNIVERSAL FLIRTS, CORP.
1,939,000 Shares Common Stock
PROSPECTUS
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE
HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON
STOCK AND IS NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED.
Until _____________, all dealers that effect transactions in these securities
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
<Page>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS II-1
Section of the Delaware Statutes provides for the indemnification of officers,
directors, employees, and agents. A corporation shall have power to indemnify
any person who was or is a party to any proceeding (other than an action by, or
in the right of, the corporation), by reason of the fact that he or she is or
was a director, officer, employee, or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise against liability incurred in connection with such proceeding,
including any appeal thereof, if he or she acted in good faith and in a manner
he or she reasonably believed to be in, or not opposed to, the best interests of
the corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The termination of
any proceeding by judgment, order, settlement, or conviction or upon a plea of
nolo contendere or its equivalent shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation or, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
We have agreed to indemnify each of our directors and certain officers against
certain liabilities, including liabilities under the Securities Act of 1933.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers and controlling persons
pursuant to the provisions described above, 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 the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than our payment of expenses
incurred or paid by our director, officer or controlling person 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 it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Securities and Exchange Commission $ 6.77
registration fee
Federal Taxes $ 0
State Taxes and Fees $ 0
Transfer Agent Fees $ 5,000.00
Accounting fees and expenses $ 5,000.00
Legal fees and expenses $ 10,000.00
Blue Sky fees and expenses $ 0
Miscellaneous $ 0
Total $ 20,006.77
All amounts are estimates other than the Commission's registration fee. We are
paying all expenses of the offering listed above. No portion of these expenses
will be borne by the selling shareholders. The selling shareholders, however,
will pay any other expenses incurred in selling their common stock, including
any brokerage commissions or costs of sale.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
Universal Flirts, Inc. was incorporated in the State of Delaware on May 25, 2004
and 500,000 shares were issued to Darrell Lerner in reliance on the exemption
under Section 4(2) of the Securities Act of 1933, as amended (the "Act"). Such
shares were issued to Darrell Lerner as founders shares. On May 27, 2004, we
issued a total of 8,500,000 shares of our common stock to Darrell Lerner. Such
shares were issued pursuant to the stock purchase agreement and share exchange
between us and Universal Flirts, Inc. and were issued in reliance on an
exemption from registration under Section 4(2) of the Securities Act of 1933.
These shares of our common stock qualified for exemption under Section 4(2) of
the Securities Act of 1933 since the issuance shares by us did not involve a
public offering. The offering was not a "public offering" as defined in Section
4(2) due to the insubstantial number of persons involved in the deal, size of
the offering, manner of the offering and number of shares offered. We did not
undertake an offering in which we sold a high number of shares to a high number
of investors. In addition, Mr. Lerner had the necessary investment intent as
required by Section 4(2) since he agreed to and received a share certificate
bearing a legend stating that such shares are restricted pursuant to Rule 144 of
the 1933 Securities Act. This restriction ensures that these shares would not be
immediately redistributed into the market and therefore not be part of a "public
offering." Based on an analysis of the above factors, we have met the
requirements to qualify for exemption under Section 4(2) of the Securities Act
of 1933 for this transaction.
On June 15, 2004, we issued 250,000 shares to Anslow & Jaclin, LLP as payment
for legal services provided to us, and were issued in reliance on an exemption
from registration under Section 4(2) of the Securities Act of 1933.
These shares of our common stock qualified for exemption under Section 4(2) of
the Securities Act of 1933 since the issuance shares by us did not involve a
public offering. The offering was not a "public offering" as defined in Section
4(2) due to the insubstantial number of persons involved in the deal, size of
the offering, manner of the offering and number of shares offered. We did not
undertake an offering in which we sold a high number of shares to a high number
of investors. In addition, Anslow & Jaclin, LLP had the necessary investment
intent as required by Section 4(2) since they agreed to and received a share
certificate bearing a legend stating that such shares are restricted pursuant to
Rule 144 of the 1933 Securities Act. This restriction ensures that these shares
would not be immediately redistributed into the market and therefore not be part
of a "public offering." Based on an analysis of the above factors, we have met
the requirements to qualify for exemption under Section 4(2) of the Securities
Act of 1933 for this transaction.
On June 21, 2004, we issued 5,000 shares to Judy Alpert, 8,000 shares to Mark
Belletiere, and 5,000 shares to David Liss for consulting services. These shares
were issued in reliance on an exemption from registration under Section 4(2) of
the Securities Act of 1933.
These shares of our common stock qualified for exemption under Section 4(2) of
the Securities Act of 1933 since the issuance shares by us did not involve a
public offering. The offering was not a "public offering" as defined in Section
4(2) due to the insubstantial number of persons involved in the deal, size of
the offering, manner of the offering and number of shares offered. We did not
undertake an offering in which we sold a high number of shares to a high number
of investors. In addition, Judy Alpert, Mark Belletiere, and David Liss had the
necessary investment intent as required by Section 4(2) since they agreed to and
received a share certificate bearing a legend stating that such shares are
restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction
ensures that these shares would not be immediately redistributed into the market
and therefore not be part of a "public offering." Based on an analysis of the
above factors, we have met the requirements to qualify for exemption under
Section 4(2) of the Securities Act of 1933 for this transaction.
In June 2004, we issued a total of 1,471,000 shares of our common stock to 41
shareholders at a price per share of $.05 for an aggregate offering price of
$73,550. Such shares were issued in reliance on an exemption from registration
under Section 4(2) of the Securities Act of 1933.
The following sets forth the identity of the class of persons to whom we sold
these shares and the amount of shares for each shareholder:
AM&PM, LLC 5,000
Melvin Bernstein 10,000
Alison Bernstein 90,000
Alice Bolocan 20,000
David Bolocan 10,000
Angela Cipriano 5,000
Rodney Cutler 20,000
Gregory Frantz 5,000
David Gavrin 50,000
Drew Goldberg 60,000
Alan Golomb 10,000
Emily Hamamoto 20,000
Michael Hartman 40,000
Thelma Hartman 40,000
Robert Hartman 40,000
Danielle Hartman 40,000
Mary Hartman 40,000
Cynthia A. Indelicato 5,000
William & Shirley Lau 10,000
Philip D. Mazzella 8,000
Andrew Meyers 5,000
Martin Miller 90,000
Dolores Miller 100,000
Juan C. Morales 5,000
Dolores Miller a/c/f
Dillion Engel 5,000
Karen Pasteressa a/c/f
Samantha Pasteressa 5,000
Roberta and Robert Riesenberg 100,000
Sheldon Shalom 10,000
Victor Shalom 5,000
Cecilia Soh 10,000
James Supple 180,000
Mary Supple 20,000
Beth Sussman 100,000
Meg Sussman 100,000
Amy Sussman 100,000
Billy Tsim, Tak Piu 10,000
Eric Tjaden 8,000
James Tubbs 40,000
Richard V. Volpe 5,000
Jeffrey Wenzel 40,000
Richard J. Zapolski 5,000
These shares of our common stock qualified for exemption under Section 4(2) of
the Securities Act of 1933 since the issuance shares by us did not involve a
public offering. The offering was not a "public offering" as defined in Section
4(2) due to the insubstantial number of persons involved in the deal, size of
the offering, manner of the offering and number of shares offered. We did not
undertake an offering in which we sold a high number of shares to a high number
of investors. We sold to a total of 41 investors, we only issued a total of
1,489,000 shares in the offering and we only sold the shares at $.05 per share
for a total of $73,550.In addition, these shareholders had the necessary
investment intent as required by Section 4(2) since he agreed to and received a
share certificate bearing a legend stating that such shares are restricted
pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that
these shares would not be immediately redistributed into the market and
therefore not be part of a "public offering." These investors received a
memorandum disclosing information on us similar to this prospectus. Each
investor also completed a questionnaire to confirm that there were sophisticated
and could bear the economic risk of their investment. Each of these investors
had some form of prior relationship with Mr. Lerner in that these investors were
all either friends or family of Mr. Lerner or friends of the family and friends
of Mr. Lerner.
Therefore this offering was done with no general solicitation or advertising by
Mr. Lerner. Based on an analysis of the above factors, we have met the
requirements to qualify for exemption under Section 4(2) of the Securities Act
of 1933 for this transaction.
We have never utilized an underwriter for an offering of our securities. Other
than the securities mentioned above, we have not issued or sold any securities.
II-3
ITEM 27. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
3.1 Articles of Incorporation
3.2 By-Laws
5.1 Opinion of Anslow & Jaclin, LLP
10.1 Stock Purchase Agreement and Share Exchange
21 Subsidiaries
23.1 Consent of Gately & Associates
ITEM 28. 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 this registration statement, or most recent
post-effective amendment, which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement; and Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation From the low or high end of the
estimated maximum offering range may be reflected in the form of
prospects filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in the 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
(c) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement
or any material change to such information in the registration
statement.
2. That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered hereby which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
provisions above, 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 the Securities 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 one of our directors, officers, or
controlling persons in the successful defense of any action, suit or proceeding,
is asserted by one of our directors, officers, or controlling persons 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 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, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Roslyn
Heights, State of New York on July 26, 2004.
By: /s/ Darrell Lerner
---------------------------------
DARRELL LERNER
President, Chief Executive
Officer and Chairman of the Board of Directors
POWER OF ATTORNEY
ALL MEN BY THESE PRESENT, that each person whose signature appears below
constitutes and appoints Joseph Hess, true and lawful attorney-in-fact and
agent, with full power of substitution and re-substitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all pre- or
post-effective amendments to this registration statement, and to file the same
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any one
of them, or their or his substitutes, may lawfully do or cause to be done by
virtue hereof. In accordance with the requirements of the Securities Act of
1933, this registration statement was signed by the following persons in the
capacities and on the dates stated.
By: /s/ Darrell Lerner President, Chief Executive Officer
- ------------------------ and Chairman of the Board of Directors
Darrell Lerner
Dated: July 28, 2004
II-5