SECURITIES AND EXCHANGE COMMISSION
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AMENDMENT NO. 2 TO 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 OCTOBER 19, 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: October 19, 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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ABOUT OUR COMPANY
We were incorporated under the laws of the State of Delaware on May 25, 2004. On
June 1, 2004, we obtained all of the shares of Universal Flirts, Inc., a New
York corporation, from Darrell Lerner, the sole shareholder of Universal Flirts,
Inc. 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. Now,
through our subsidiary, we own and operate an online dating service. Mr. Lerner
is our sole officer and director, as well as our controlling stockholder. We
currently have no other employees, although we utilize three consultants and a
programmer, who are paid on an hourly basis.
Our subsidiary, Universal Flirts, Inc. was incorporated on August 22, 2003, and
launched its first website, www.Americanflirts.com, in late 2003. American
Flirts is an online dating service dedicated to helping American Singles find
love and romance. We presently offer complete access to all of the sites
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.
We have generated $34.35 in revenues since our inception, and we have a total
accumulated deficit of $50,793. Therefore, our auditors have raised substantial
doubt about our ability to continue as a going concern.
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 shares 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," "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-
August 23, 2003 through
September 30, 2004
STATEMENT OF OPERATIONS
Revenues 0
Net Income (50,793)
Total Operating Expenses 50,793
Accumulated Deficit (50,793)
As of
September 30, 2004
BALANCE SHEET DATA
Cash 46,918
Total Assets 58,407
Total Liabilities 13,250
Stockholders' Equity (Deficiency) 45,157
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 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 May of 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.
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.
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WE WILL REQUIRE FINANCING TO ACHIEVE OUR CURRENT BUSINESS STRATEGY AND OUR
INABILITY TO OBTAIN SUCH FINANCING COULD PROHIBIT US FROM EXECUTING OUR
BUSINESS PLAN AND CAUSE US TO SLOW DOWN OUR EXPANSION OF OPERATIONS.
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. We
will need a minimum of $25,000 to continue operations over the next twelve
months, which we currently have in our cash reserve. However, we anticipate
requiring additional funds in order 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 or scale back our plans for expansion. In addition, such inability to
obtain financing on reasonable terms could have a material adverse effect on our
business, operating results, or financial condition.
OUR AUDITOR HAS EXPRESSED SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A
GOING CONCERN.
Based on our financial history since inception, our auditor has expressed
substantial doubt as to our ability to continue as a going concern. We are a
development stage company that has only generated $34.35 in revenues to date. We
have incurred a net loss of $50,793, and an accumulated deficit of $50,793. If
we cannot generate sufficient revenues from our services, we may not be able to
implement our business plan and may be forced to cease our business activities.
OUR FUTURE SUCCESS IS DEPENDENT, IN PART, ON THE PERFORMANCE AND CONTINUED
SERVICE OF DARRELL LERNER, OUR SOLE OFFICER AND DIRECTOR. WITHOUT HIS CONTINUED
SERVICE, WE MAY BE FORCED TO INTERRUPT OR EVENTUALLY CEASE OUR OPERATIONS.
We are presently dependent to a great extent upon the experience, abilities and
continued services of Darrell Lerner, our sole officer and director. We
currently do not have an employment agreement with Mr. Lerner. The loss of his
services could have a material adverse effect on our business, financial
condition or results of operation.
DARRELL LERNER'S CONTROL MAY PREVENT YOU FROM CAUSING A CHANGE IN THE COURSE OF
OUR OPERATIONS AND MAY AFFECT THE PRICE OF OUR COMMON STOCK.
Darrell Lerner beneficially owns approximately 82% of our common stock.
Accordingly, for as long as Mr. Lerner continues to own more than 50% of our
common stock, he will be able to elect our entire board of directors, control
all matters that require a stockholder vote (such as mergers, acquisitions and
other business combinations) and exercise a significant amount of influence over
our management and operations. Therefore, regardless of the number of our common
shares sold, your ability to cause a change in the course of our operations is
eliminated. As such, the value attributable to the right to vote is limited.
This concentration of ownership could result in a reduction in value to the
common shares you own because of the ineffective voting power, and could have
the effect of preventing us from undergoing a change of control in the future.
OUR SOLE OFFICER HAS A CONFLICT OF INTEREST IN THAT HE IS AN OFFICER AND
DIRECTOR OF ANOTHER COMPANY WHICH WILL PREVENT HIM FROM DEVOTING FULL-TIME TO
OUR OPERATIONS WHICH MAY AFFECT OUR OPERATIONS.
Our sole officer, Darrell Lerner has a conflict of interest in that he is 100%
owner and an officer and director of eTwine.com, a website that focuses on
social networking, event planning and management features. It is possible that
there may be a conflict of interest in providing the same management services to
two companies. Mr. Lerner is also a registered representative of PMG Securities
Corp., a registered broker-dealer. It is possible that although Mr. Lerner plans
on devoting at least 40 hours a week to our business, the time he must spend on
his duties to the other companies may delay our operations and may reduce our
financial results because of the slow down in operations.
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Darrell Lerner's ownership of eTwine.com may be a conflict of interest as
eTwine.com may become a competitor in our industry.
Darrell Lerner owns 100% of eTwine.com, a website that offers social networking,
event planning and management features. Currently, eTwine.com is a website that
allows people to socialize on an international level. Although we market our
services to a different target audience, eTwine.com may compete with our
services and reduce our membership, which may reduce our financial results.
OUR SUCCESS DEPENDS UPON OUR ABILITY TO ATTRACT AND HIRE KEY PERSONNEL. OUR
INABILITY TO HIRE QUALIFIED INDIVIDUALS WILL NEGATIVELY AFFECT OUR BUSINESS, AND
WE WILL NOT BE ABLE TO IMPLEMENT OR EXPAND OUR BUSINESS PLAN.
Our business is greatly dependent on our ability to attract key personnel. We
will need 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. If we are unable to retain such
employees, we will not be able to implement or expand our business plan.
AS AN INTERNET DATING 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 online dating industry is highly competitive, and has few barriers to entry.
We can provide no assurance that additional competitors will not enter into the
online dating industry. There are numerous other online dating companies that
currently offer similar services, that have established user bases that are
significantly larger than ours, and that have access to greater capital. 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. We currently have 2189 members. We will only be
able to attract advertisers to our web site and possibly begin to generate
advertising revenues if we can obtain a large enough user base. The number of
users necessary to attract advertisers will be determined though discussions
with the potential advertisers and their input as to whether we can obtain
revenues from advertisements based upon the total members at that time. 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.
IN ORDER TO IMPLEMENT OUR BUSINESS PLAN, WE WILL REQUIRE OUR USERS TO PAY
MONTHLY FEES FOR OUR SERVICES, ALTHOUGH WE CURRENTLY ALLOW OUR CUSTOMERS TO
UTILIZE OUR SERVICES FOR FREE. IF OUR USERS ARE NOT WILLING TO PAY FOR THESE
SERVICES, WE WILL BE FORCED TO SUSPEND AND EVENTUALLY TO CEASE OUR BUSINESS
ACTIVITIES.
We do not currently charge our members to utilize our services. However, in
order to implement our business plan, we will require our users to pay monthly
fees for the use of our services. We cannot guarantee that either our current
users or prospective users will be willing to pay for our services. If we are
unable to generate sufficient revenues from our user fees, we will be forced to
suspend and possible cease all operations.
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.
THE OFFERING PRICE OF THE SHARES WAS ARBITRARILY DETERMINED, AND THEREFORE
SHOULD NOT BE USED AS AN INDICATOR OF THE FUTURE MARKET PRICE OF THE SECURITIES.
THEREFORE, THE OFFERING PRICE BEARS NO RELATIONSHIP TO THE ACTUAL VALUE OF THE
COMPANY, AND MAY MAKE OUR SHARES DIFFICULT TO SELL.
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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.
THERE IS NO ASSURANCE OF A PUBLIC MARKET OR THAT THE COMMON STOCK WILL EVER
TRADE ON A RECOGNIZED EXCHANGE. THEREFORE, YOU MAY BE UNABLE TO LIQUIDATE YOUR
INVESTMENT IN OUR STOCK.
There is no established public trading market for our securities. 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 their investment.
OUR COMMON STOCK IS CONSIDERED A PENNY STOCK, WHICH IS SUBJECT TO RESTRICTIONS
ON MARKETABILITY, SO YOU MAY NOT BE ABLE TO SELL YOUR SHARES.
If our common stock becomes tradable in the secondary market, we will be subject
to the penny stock rules adopted by the Securities and Exchange Commission that
require brokers to provide extensive disclosure to their customers prior to
executing trades in penny stocks. These disclosure requirements may cause a
reduction in the trading activity of our common stock, which in all likelihood
would make it difficult for our shareholders to sell their securities.
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 private placement held in June 2004 pursuant to an exemption under Rule
506 of Regulation D.
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. 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. 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. In order to be quoted on the Bulletin Board, a market maker must
file an application on our behalf in order to make a market for our common
stock. There is no assurance that our common stock 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.
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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
Our common stock will be penny stock; therefore, trading in our securities is
subject to 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. The additional burdens imposed upon broker-dealers by
such requirements may discourage broker-dealers from effecting transactions in
our securities, which could severely limit their market price and liquidity of
our securities. These requirements may restrict the ability of broker-dealers to
sell our common stock and may affect your ability to resell our common stock.
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. 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 October 19, 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.
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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 (2) 5,000 5,000 0 0
Anslow & Jaclin, LLP (3) 250,000 250,000 0 0
Mark Belletiere (4) 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 (5) 5,000 5,000 0 0
Andrew Meyers (6) 10,000 10,000 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
a/c/f Dillion Engel
Juan C. Morales 5,000 5,000 0 0
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
(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) AM & PM, LLC is controlled by Andrew Meyers, who is also a subscriber in
the private placement as an individual.
(3) Anslow & Jaclin, LLP is controlled by Richard Anslow and Gregg Jaclin, our
legal counsel. They received these shares in exchange for legal fees.
(4) 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.
(5) 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.
(6) This amount includes the 5,000 shares that Mr. Meyers controls under AM &
PM, LLC.
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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.
Darrell Lerner holds a series 7 and 66 license and is a registered
representative with PMG Securities Corp., a registered broker/dealer. He
currently devotes less than one hour per week to PMG Securities Corp.
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. Prior
to being quoted on the OTCBB, shareholders may sell their shares in private
transactions to other individuals. However, 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. Neither Darrell Lerner
nor PMG Securities Corp. will receive any discounts, concessions or commissions
in connection with this offering.
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.
8
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 October 19, 2004 is as
follows:
NAME AGE POSITION
- ---- --- -------------------------------
Darrell Lerner 30 President, Chief Executive Officer,
Chief Financial 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 currently serves as our President, Chief
Executive Officer, and Chief Financial Officer as well as our Chairman of the
Board of Directors. Darrell has extensive experience with the start-up process
as well as with all aspects of operating and maintaining a public company.
Darrell currently also runs a website eTwine.com which offers social networking,
event planning and management features. 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 October 19, 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%
141 Great Neck Road, Apt. 2H
Great Neck, NY 11021
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 October 19, 2004.
9
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. There are no provisions in our charter or by-laws
that would delay, defer or prevent a change in our control.
Common Stock
As of October 19, 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.
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.
Although there are no provisions in our charter or by-laws that may delay, defer
or prevent a change in control, we are authorized, without shareholder approval,
to issue shares of preferred stock that may contain rights or restrictions that
could have this effect. Certain provisions of the Delaware General Corporate Law
may serve to delay, defer or prevent a change in control of the company.
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.
10
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.
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 director and officer is 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 June 1, 2004, we acquired all of the shares
of Universal Flirts, Inc., from Darrell Lerner, the sole shareholder 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 reorganization with Universal Flirts,
Inc. was to obtain an operating company which we believed has a successful
business plan.
11
DESCRIPTION OF BUSINESS
General
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, prospects consisting of private companies,
partnerships, or sole proprietorships in the United States. On June 1, 2004, we
acquired all of the shares of Universal Flirts, Inc., a New York corporation,
from Darrell Lerner, the sole shareholder, 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
reorganization 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 its 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.
We hope to benefit from the recent success that online dating industries have
had. According to Michael Zimbalist, executive director of Online Publishers
Association, a trade organization of online media companies, "for the full year
of 2002, the personals and dating category was the largest single paid content
category overall," as noted on FoxNews.com in an article entitled "Online Dating
Is Net Success." (www.foxnews.com/story/0,2933,87256,00.html, May 21, 2003, p.
1)
In addition to AmericanFlirts.com, Universal Flirts has also secured the
following domain names for expansion:
* UniversalFlirts.Com - General site aggregating the standard members
from partner sites. We will use this domain name to construct a site
that will serve as the primary site database and location for
integrating the member bases of companies that we build online dating
sites for. We expect this site to be fairly generic in content as it
must appeal to members of all different age groups, ethnicities,
backgrounds, and locations.
* UniversityFlirts.Com - Geared towards college students. We will
implement several features designed to make this site appeal
specifically to college students including:
- All profiles will list the college that the user is attending;
- Advanced Search Tool will allow users to search for members who
attend a particular college or colleges within an overall
advanced search; and
- Registration Form & Profiles will be altered to add fields
relevant specifically to college students including year of
graduation and fraternity/sorority.
* CasualFlirts.com and/or Discreet Flirts.com - "Edgier" site catering
to a more "adults only" audience. Here we will create a site that
serves as a tool for members to make connections and find partners for
dating, romance, and a variety of personal encounters. To help members
find a match, we offer several features which will narrow a search so
that users can find exactly the kind of match they are looking for.
This site will be devoted to those who are interested in advancing to
personal encounters soon after initial contact, rather than exchanging
a series of emails or slowly getting to know one another over a period
of time.
12
On a very limited budget, and with no money spent on advertising, we have
generated 2,189 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. Online dating directories have link exchange
programs whereby they list AmericanFlirts.com in their directory in exchange for
placing a link to their directory on our site. The links to these other
directories can be found under the "Links" section of the AmericanFlirts.com
website. There are no costs involved with any of the link exchange programs that
we have participated in. We have just completed a private placement in which 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.
We began generating revenue on September 28, 2004 through the implementation of
Google's AdSense Program. Google AdSense(TM) delivers ads targeted to our
content pages and, by adding Google WebSearch to our site, AdSense delivers
targeted ads to our search results pages too. At no cost to us, we are paid a
minimal amount every time a user clicks on one of the targeted ads on our site.
As of October 19, 2004, we have generated a total of $34.35 as a result of our
participation in Google's AdSense program.
In subsequent phases of operations, we anticipate generating additional revenue
from the following sources(further discussed in our "Management Discussion and
Analysis" section below):
o Subscription fees from website members - a "pay" model
o Implementing a model whereby we build a custom look and feel online
dating site for other sites with large member bases, integrate their
subscribers into our database, and share revenues
This model would apply to any website that currently possesses a large
user base, but does not have an online dating application on its
website or an affiliation with any such entity. Newspapers, magazines,
or even websites for popular music groups may consider this type of
relationship because we could offer them the ability to generate
revenue from their current member base through an online dating
application for little or no cost. We would provide them with the
online dating application and design, program the site, and handle all
administration and technical aspects of the feature. An example of a
company presently employing this model is Spring Street Networks
(http://www.springstnet.com/spring.asp).
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.
We currently are not involved in or contemplating any acquisition or merger with
any business or company in which our promoters, shareholders, management, or
affiliates or associates directly or indirectly, have an ownership interest.
However, the potential exists for a business combination with eTwine.com which
offers complimentary services and which management has an interest in. Such a
business combination with eTwine.com would benefit our shareholders by
increasing our value by offering a superior product and increasing the size of
our member base. ETwine.com has several features that our website does not have
such as social networking and blogs; therefore, the combination would increase
the overall product offering.
Marketing
We expect to implement a comprehensive marketing plan in the fourth quarter of
2004, focusing primarily in the areas of Keyword Advertising and Sponsored Links
through targeted keyword programs that employ a "cost-per-click" model such as
Google, Overture, and Findwhat. In these programs, we will create advertisements
for AmericanFlirts.com that will appear at the top of search results for
particular keywords. In a cost-per-click model, we pay a fee (generally 5 to 10
cents or greater) each time the ad is clicked. When the ad is clicked, the user
is taken directly to the AmericanFlirts.com homepage. We will also 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. Link exchange programs are generally free and involve only
placing a link of the partner sites on our website in the "links" section in
return for placement of a link to AmericanFlirts.com in their directory. These
programs serve to increase our exposure to potential new members.
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 website for priority search engine placement and are seeing our
efforts paying off as we are now on the front page of search results listings on
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 for that keyword.
Search engine placement is generally determined by several factors including the
number of links to a website and the text and page content on a website. The
more links there are to a site on the internet, the more advantageous it is for
search engine placement. In terms of page content, search engines analyze the
content of each page and the text and keywords in order to generate results that
most match a user's search query. We have devoted a great deal of time to
expanding the number of links to AmericanFlirts.com as well as to editing the
text throughout the site to try to make it as relevant as possible for searches
related to our industry.
By continuing to work to optimize the site, and by increasing the number of
links to the site, we feel that we can receive better and better search results
and search engine saturation, which in turn directs more traffic to our website.
13
Competition
We believe that our primary competition is from other online dating services.
There are approximately 30 to 50 major online dating websites, and several
hundred sites overall. Based on membership totals, we are a small site in the
industry. Presently the market is very segmented with Match.Com widely
considered the industry leader. Match.com's personals 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. 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 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.
Judy Alpert is an artist/art teacher who will help with art and design related
matters on the website, brochures, advertisements etc. We will seek her
assistance and recommendations with design and graphics on a planned website
upgrade this fall. We also anticipate calling upon her to design various
advertisements, flyers, and promotions in conjunction with offline events when
we begin holding them.
Mark Belletiere is a Certified Public Accountant and will assist internal
financial record keeping and preparing financial projections. We will call upon
him to assist us with our financial controls, and setting up any related
accounting software programs, as well as for preparing financial projections and
financial data in conjunction with any future business plans or investor
presentations.
David Liss is presently the manager of a bar/lounge located in New York City and
formerly owned his own restaurant in Long Island, New York. David is very
familiar with the bar and restaurant industry and has extensive experience
setting up private events at bars and clubs. He will be called upon to assist
with the planning, structuring, and execution of live parties and events for us.
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 2189 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.
14
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. Our
decision to convert to a pay model is dependent upon a variety of
factors within the overall member total. Such factors include how much
activity there is on the site, as well as the success and popularity
of new features we add in the coming months. We will begin considering
imposing subscription fees for our services when our member base
reaches the 5,000-10,000 member range. Americanflirts.com is already
configured to accept credit cards and to 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.
* 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 do not 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.
15
We currently have enough cash to satisfy our minimum cash requirements for the
next twelve months to maintain our operations. However, we may require
additional funds to increase marketing, to expand operations, and for further
development of our website. No significant purchases of equipment are
anticipated; however, a substantial surge in traffic and/ or membership could
necessitate the purchase of additional servers.
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 Darrell Lerner, our sole officer and director.
On June 1, 2004, we obtained 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.
Using the 5 cent per share price that was used for the private placement,
Universal Flirts, Inc. was valued at $425,000. Americanflirts.com had
approximately 1800 members at the time of the reorganization which would
conservatively value each non-paying user at $235 per member in conjunction with
the value of the software and the overall website. Based on industry metrics we
felt this was a fair and conservative valuation to place on the company.
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 June 1, 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 Regulation D 506 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.
16
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.
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 October 19, 2004.
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 0 500,000 shares 0 0 0
CEO and of common stock (2)
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.
(2) The 500,000 shares issued to Darrell Lerner are valued at $.001 per share,
for a total value of $500.
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. 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.
17
UNIVERSAL FLIRTS CORP.
(a development stage company)
FINANCIAL STATEMENTS
As Of September 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 REGISTERED PUBLIC ACCOUNTANTING FIRM
The Board of Directors and Shareholders
Universal Flirts Corp.
Gentlemen:
We have audited the accompanying balance sheet of Universal Flirts
Corp. (a development stage company) as of September 30, 2004 and December 31,
2003 and the related statements of operations, stockholder's equity and cash
flows for the nine months ending September 30, 2004, from August 23, 2003
through December 31, 2003 and from inception (August 23, 2003) through September
30, 2003. 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 the standards of the Public
Company Accounting Oversight Board (United States). 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 September 30, 2004 and December 31, 2003 and the results and its
cash flows for the nine months ending September 30, 2004, from August 23, 2003
through December 31, 2003 and from inception (August 23, 2003) through September
30, 2003 in conformity with U.S. 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 8. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Gately & Associates, LLC
Altamonte Springs, Florida
October 11, 2004
UNIVERSAL FLIRTS CORP.
(a development stage company)
BALANCE SHEET
As of September 30, 2004 and December 31, 2003
ASSETS
------
CURRENT ASSETS 9/30/2004 12/31/2003
- -------------- ------------------------------
Cash $ 46,918 $ -
------------------------------
Total Current Assets 46,918 -
PROPERTY AND EQUIPMENT
- ----------------------
Internet Website 8,500 8,500
Computer equipment and software 3,039 -
Less accumulated depreciation (50) -
------------------------------
Total Property and Equipment 11,489 8,500
TOTAL ASSETS $ 58,407 $ 8,500
==============================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
- -------------------
Accounts payable $ - $ -
Accrued expenses 13,250 2,500
------------------------------
Total Current Liabilities 13,250 2,500
LONG-TERM LIABILITIES
- ---------------------
None - -
------------------------------
TOTAL LIABILITIES 13,250 2,500
------------------------------
STOCKHOLDERS' EQUITY
- --------------------
Common Stock, $.001 par value
Authorized: 100,000,000 Issued: 10,348,000 and 8,500,000 10,739 8,500
Additional paid in capital 85,211
Preferred stock, $.001 par value
Authorized: 10,000,000 Issued: none - -
Accumulated deficit (50,793) (2,500)
------------------------------
Total Stockholders' Equity 45,157 6,000
------------------------------
TOTAL LIABILITIES AND EQUITY $ 58,407 $ 8,500
==============================
The accompanying notes are an integral part of these financial statements.
F-1
UNIVERSAL FLIRTS CORP.
(a development stage company)
STATEMENT OF OPERATIONS
For the nine months ending September 30, 2004, from
August 23, 2003 through December 31, 2003 and
from inception (August 23, 2003) through September 30, 2004
FROM
9/30/2004 12/31/2003 INCEPTION
--------------- ------------------------------
REVENUE $ - $ - $ -
- -------
COST OF SERVICES - - -
- ----------------
--------------- ------------------------------
GROSS PROFIT OR (LOSS) - - -
- ----------------------
GENERAL AND ADMINISTRATIVE EXPENSES 48,293 2,500 50,793
- -----------------------------------
--------------- ------------------------------
OPERATING INCOME (48,293) (2,500) (50,793)
- ----------------
--------------- ------------------------------
ACCUMULATED DEFICIT $ (48,293) $ (2,500) $ (50,793)
- -------------------
=============== ==============================
Basic Earnings Per Share $ (0.01) $ (0.00)
- ------------------------
Weighted average number of common shares 9,628,584 8,500,000
- ----------------------------------------
The accompanying notes are an integral part of these financial statements.
F-2
UNIVERSAL FLIRTS CORP.
(a development stage company)
STATEMENT OF STOCKHOLDERS' EQUITY
As of September 30, 2004
COMMON PAR PAID IN ACCUM. TOTAL
STOCK VALUE CAPITAL DEFICIT EQUITY
--------------------------------------------------------------------------
Common stock issued upon incorporation 200 $ 8,500 $ - $ 8,500
of Universal Flirts, Inc. on August 23, 2003
Net income (loss) (2,500) (2,500)
--------------------------------------------------------------------------
Balance, December 31, 2003 200 8,500 - (2,500) 6,000
Common stock issued upon incorporation 500,000 500 500
of Universal Flirts, Corp. As compensation
on May 25, 2004 at $0.001 per share
Common stock issued in exchange (200) -
of shares with Universal Flirts, Inc. 8,500,000 -
and Universal Flirts, Corp.
effective June 1, 2004 at $0.001 par value
accounted for as a stock split of 200 shares
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 at $0.05
Common stock issued for cash 1,471,000 1,471 72,079 73,550
June & July, 2004 at $0.05 per share
in a private placement
Net income (loss) (48,293) (48,293)
--------------------------------------------------------------------------
Balance, September 30, 2004 10,739,000 $10,739 $ 85,211 $ (50,793) $ 45,157
==========================================================================
The accompanying notes are an integral part of these financial statements.
F-3
UNIVERSAL FLIRTS CORP.
(a development stage company)
STATEMENTS OF CASH FLOWS
For the nine months ending September 30, 2004, from
August 23, 2003 through December 31, 2003 and
from inception (August 23, 2003) through June 30, 2004
FROM
CASH FLOWS FROM OPERATING ACTIVITIES 6/30/2004 12/31/2003 INCEPTION
- ------------------------------------
--------------- ------------------------------
Net income (loss) $ (48,293) $ (2,500) $ (50,793)
--------------- ------------------------------
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Stock issued as compensation 13,900 - 13,900
Depreciation 50 - 50
(Increase) Decrease in accounts receivable - - -
Increase (Decrease) in accounts payable - - -
Increase (Decrease) in accrued expenses 10,750 2,500 13,250
--------------- ------------------------------
Total adjustments to net income 24,700 2,500 27,200
--------------- ------------------------------
Net cash provided by (used in) operating activities (23,593) - (23,593)
--------------- ------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
- ------------------------------------
Purchase of computer equipment and software (3,039) - (3,039)
--------------- ------------------------------
Net cash flows provided by (used in) investing activities (3,039) - (3,039)
--------------- ------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- ------------------------------------
Proceeds from stock issuance 73,550 - 73,550
--------------- ------------------------------
Net cash provided by (used in) financing activities 73,550 - 73,550
--------------- ------------------------------
CASH RECONCILIATION
- -------------------
Net increase (decrease) in cash 46,918 - 46,918
Cash - beginning balance - - -
--------------- ------------------------------
CASH BALANCE $ 46,918 $ - $ 46,918
- ------------
=============== ==============================
The accompanying notes are an integral part of these financial statements.
F-4
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 31st.
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-5
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-6
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-7
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 10,739,000 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, or $0.001 per share, 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 and July of 2004, the Company issued 1,471,000 shares of its common
stock for a consideration of $73,550 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 shares of common stock to Anslow &
Jaclin, LLP for legal services for a value of $12,500, or $0.05 per share. The
stock is restricted from sale for one year in accordance with section 144 of the
securities act.
On June 21, 2004 the Company issued 5,000 shares of common stock to Judy Alpert,
8,000 shares to Mark Belletiere and 5,000 shares to David Liss for consulting
services. These 18,000 common shares were issued for a value of $900, or $0.05
per share. The stock is restricted from sale for one year in accordance with
section 144 of the securities act.
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 500,000 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 Flirts, Inc.
F-8
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-9
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 $ 12.28
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 $ 20,012.28
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.
II-1
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 June 1, 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 completed a Regulation D, Rule 506 Offering in which 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.
II-2
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
The Common Stock issued in our Regulation D, Rule 506 Offering was issued in a
transaction not involving a public offering in reliance upon an exemption from
registration provided by Rule 506 of Regulation D of the Securities Act of 1933.
In accordance with Section 230.506 (b)(1) of the Securities Act of 1933, these
shares qualified for exemption under the Rule 506 exemption for this offerings
since it met the following requirements set forth in Reg. ss.230.506:
(A) No general solicitation or advertising was conducted by us in connection
with the offering of any of the Shares.
(B) At the time of the offering we were not: (1) subject to the reporting
requirements of Section 13 or 15 (d) of the Exchange Act; or (2) an
"investment company" within the meaning of the federal securities laws.
(C) Neither we, nor any of our predecessors, nor any of our directors, nor any
beneficial owner of 10% or more of any class of our equity securities, nor
any promoter currently connected with us in any capacity has been convicted
within the past ten years of any felony in connection with the purchase or
sale of any security.
(D) The offers and sales of securities by us pursuant to the offerings were not
attempts to evade any registration or resale requirements of the securities
laws of the United States or any of its states.
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(E) None of the investors are affiliated with any of our directors, officers or
promoters or any beneficial owner of 10% or more of our securities.
Please note that pursuant to Rule 506, all shares purchased in the Regulation D
Rule 506 offering completed in June 2004 were restricted in accordance with Rule
144 of the Securities Act of 1933.
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.
ITEM 27. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
3.1 Articles of Incorporation *
3.2 By-Laws *
4.1 Specimen Stock Certificate
5.1 Opinion of Anslow & Jaclin, LLP
10.1 Stock Purchase Agreement and Share Exchange *
21 Subsidiaries *
23.1 Consent of Gately & Associates
23.2 Consent of Counsel, as in Exhibit 5.1
* Filed with the original Form SB-2 on July 28, 2004 (SEC File No.
333-117718)
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.
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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.
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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 October 19, 2004.
By: /s/ Darrell Lerner
---------------------------------
DARRELL LERNER
President, Chief Executive Officer,
Chief Financial 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,
- ------------------------ Chief Financial Officer and
Darrell Lerner Chairman of the Board of Directors
Dated: October 19, 2004
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