SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
DURA TRACK ENTERPRISES, INC.
(Name of small business issuer in its charter)
Nevada 2591 80-0106888
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State or Other Primary Standard IRS Employer
Jurisdiction of Industrial Classification Identification #
Organization
DURA TRACK ENTERPRISES, INC. CAPITAL CORPORATE SERVICES, INC.
3638 North Rancho Drive, Suite 6-D 202 S. Minnesota Street
Las Vegas, NV 89130 Carson City, NV 89703
(702) 243-6896 . (775) 884-0490
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(Address and telephone of registrant's (Name, address and telephone number
executive office) of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional common stock for an offering
under Rule 462(b) of the Securities Act, please check the following box and
list the Securities Act Registration Statement number of the earlier
effective Registration Statement for the same offering. [ ]
If this Form is a post-effective amendment filed under Rule 462(c) of the
Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]
If this Form is a post-effective amendment filed under Rule 462(d) of the
Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]
If delivery of the Prospectus is expected to be made under Rule 434, please
check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
Securities
to be Amount To Be Offering Price Aggregate Registration
Registered Registered Per Share[1] Offering Price Fee[2]
- ---------- ------------ -------------- -------------- ------------
Common Stock 4,000,000 $ 0.025 $ 100,000 $ 11.76
Common Stock by
Selling Shareholders 3,200,000 $ 0.025 $ 80,000 $ 9.42
(1) The Offering price has been arbitrarily determined by Dura Track
Enterprises, Inc. ("Dura Track") and bears no relationship to assets,
earnings, or any other valuation criteria. No assurance can be given that
the shares offered hereby will have a market value or that they may be
sold at this, or at any price.
(2) The portion of the shares which are being offered by the Selling
Shareholders has been calculated based upon Rule 457(c) under the
Securities Act.
(3) Dura Track will not receive any of the proceeds from the sale of common
stock by Selling Shareholders.
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON 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 DATES AS THE COMMISSION, ACTING UNDER SAID SECTION 8(a), MAY
DETERMINE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
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PROSPECTUS
----------
DURA TRACK ENTERPRISES, INC.
SHARES OF COMMON STOCK
NO MINIMUM TO 4,000,000 MAXIMUM BEING SOLD BY US TO THE PUBLIC
AND
DURA TRACK ENTERPRISES, INC.
SHARES OF COMMON STOCK
3,200,000 SHARES OF COMMON STOCK BEING SOLD BY SELLING SHAREHOLDERS
Prior to this Offering, there has been no public trading market for the
common stock. Dura Track Enterprises, Inc. ("Dura Track," "Company," "us,"
"we," "our") common stock is presently not traded on any market or securities
exchange.
Dura Track is registering up to 4,000,000 shares of common stock at an
Offering price of $0.025 per share. The maximum amount to be raised is
$100,000. There will be no underwriter or broker/dealer involved in the
transaction and no commissions paid to any individuals from the proceeds of
this sale. The shares are being offered by Dura Track through its sole
Officer and Director. There will be no minimum amount of shares sold and Dura
Track will not create an escrow account into which the proceeds from any
shares will be placed. The proceeds from all shares sold by Dura Track will
be placed into the corporate account and such funds shall be non-refundable
to subscribers, except as may be required by applicable law. Dura Track will
pay all expenses incurred in this Offering.
Concurrent with Dura Track's registration and Offering of up to 4,000,000
common shares to be sold by the Company, the Company is also registering, on
behalf of certain Selling Shareholders, an additional 3,200,000 shares at an
Offering price of $0.025 per share for the duration of the Offering, on a
best efforts basis, no minimum, 3,200,000 shares maximum. There is no escrow
account. The Offering by the Selling Shareholders will be for a maximum
period of 90 days from ___________________ and may be extended for an
additional 90 days if the Company so chooses to do so. Dura Track will not
receive any proceeds from the sale of any of the shares that may be sold by
the Selling Shareholders.
Since there is no minimum number of shares that may or must be sold by the
Company, we may receive no proceeds or very minimal proceeds from the
Offering.
The following table sets forth the information for the share Offering:
Underwriting
Discounts,
Price to Discounts or Proceeds to
Public Commissions Company
-------- ----------- -----------
Per Share as Offered By Company $ 0.025 None $ 100,000
Total # of Shares
Offered by Company 4,000,000 None 100%
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<PAGE
PRIOR TO THIS OFFERING, THERE HAS BEEN NO PUBLIC TRADING MARKET FOR THE
COMMON STOCK. DURA TRACK ENTERPRISES, INC. ("DURA TRACK") COMMON STOCK IS
PRESENTLY NOT TRADED ON ANY MARKET OR SECURITIES EXCHANGE.
THE QUOTED PRICE IS THE INITIAL ASKING PRICE BY THE SELLING SHAREHOLDERS
AND THE COMPANY IN THEIR OFFERING OF SHARES. IN THE EVENT THAT A MARKET IS
CREATED TO TRADE THESE SHARES, THE SHARES WILL BE OFFERED AT THE FIXED PRICE
OF $0.025 PER SHARE FOR THE DURATION OF THE OFFERING. AT PRESENT, THE
SELLING SHAREHOLDERS HAVE NO AGREEMENTS WITH ANY BROKER/DEALER TO SELL THESE
SHARES. IN THE EVENT THAT THE EXISTING SELLING SHAREHOLDERS' SHARES ARE SOLD
THROUGH A BROKER/DEALER, A STANDARD COMMISSION MAY BE PAID FROM THE PROCEEDS
TO THAT BROKER/DEALER.
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is ___________________.
INVESTING IN THE COMPANY'S COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING AT PAGE 9 OF THIS PROSPECTUS.
PLEASE READ THIS PROSPECTUS CAREFULLY.
The information in this Prospectus is not complete and may be changed. We
may not sell these securities until this Registration Statement being 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.
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TABLE OF CONTENTS
-----------------
SUMMARY OF OUR PROSPECTUS............................................
RISK FACTORS............................................
USE OF PROCEEDS............................................
DETERMINATION OF OFFERING PRICE............................................
DILUTION OF OFFERING PRICE............................................
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES..............................
SELLING SHAREHOLDERS............................................
PLAN OF DISTRIBUTION............................................
LEGAL PROCEEDINGS............................................
DESCRIPTION OF PROPERTY............................................
BUSINESS...............................................................
COMPANY HISTORY............................................
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION..................
MANAGEMENT............................................
EXECUTIVE COMPENSATION............................................
PRINCIPAL STOCKHOLDERS............................................
DESCRIPTION OF SECURITIES............................................
CERTAIN TRANSACTIONS............................................
LITIGATION............................................
EXPERTS............................................
FINANCIAL STATEMENTS............................................
PART II - INFORMATION NOT REQUIRED IN THE PROSPECTUS...................
EXHIBITS............................................
UNDERTAKINGS............................................
SIGNATURES............................................
DEALER PROSPECTUS DELIVERY OBLIGATION
"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 dealer obligation to deliver
a Prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions."
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SUMMARY OF OUR PROSPECTUS
-------------------------
This summary provides an overview of selected information contained elsewhere
in this Prospectus. It does not contain all the information you should
consider before making a decision to purchase the shares we are Offering. You
should very carefully and thoroughly read the more detailed information in
this Prospectus and review our financial statements contained herein.
Summary Information About Dura Track Enterprises, Inc.
Dura Track Enterprises, Inc. was incorporated in the State of Nevada as a
for-profit company on March 19, 2004 and established a fiscal year end of
December 31. The Company is a development-stage company organized to
manufacture and distribute drapery hardware, primarily composed of
engineering plastics. The Company intends to offer more competitive pricing
for its drapery components as compared to the traditional metal components
currently available in the market. The Company will focus on providing its
products in bulk to companies that are involved in the contract drapery
business, known as "soft window treatments" in the industry. The Company has
entered into an exclusive global License Agreement with the owner of the
product line for the next 36 months, with a 36-month extension at the
Company's option.
Under the terms of the License Agreement, the Company has the global rights
to manufacture and distribute the Dura Track product line and use any and all
trademarks. The Company has agreed to pay a minimum royalty of $50,000 per
annum for these product rights, based on a 20% royalty of gross revenues
generated by the licensed products. The Company may also choose to develop
its own product line within the 72-month license period in order to further
reduce costs and increase profit.
Dura Track's core focus will be to manufacture and provide low-cost,
wholesale drapery hardware components to the commercial drapery industry that
specialize in providing soft window coverings for new construction and
renovations of apartment buildings and condominiums. Dura Track products will
be packaged and shipped bulk.
Our business office is located at 3638 North Rancho Drive, Suite 6-D, Las
Vegas, NV 89130. Our telephone number is (702) 839-2573 and fax is (702) 243-
6896. Our United States and registered statutory office is located at 202 S.
Minnesota Street, Carson City, NV 89703, telephone number is (775) 884-0490,
and the fax number is (775)884-0493. Our fiscal year end is December 31st.
As of March 31, 2005, the end of the most recent fiscal quarter, Dura Track
had raised $23,000 through the sale of its common stock. There is presently
$16,411 of cash on hand in the corporate bank account. The Company currently
has liabilities of $6,255, represented by expenses accrued during its start-
up to date. In addition, the Company anticipates it will incur costs
associated with this Offering totaling approximately $4,427. As of the date
of this Prospectus, we have not yet generated or realized any revenues from
business operations. The following financial information summarizes the more
complete historical financial information as indicated on the audited
financial statements of the Company filed with this Prospectus.
Concurrent Offering By Selling Shareholders
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Certain Selling Shareholders may endeavor to sell their shares of common
stock at the same time Dura Track is conducting this Offering. The percentage
of total outstanding common stock being offered by these Selling Shareholders
is 31.3%. The price at which the Selling Shareholders offer their shares is a
fixed price of $0.025 per share for the duration of the Offering. There is no
arrangement to address the possible effect of the concurrent primary and
secondary Offerings on the price of the stock. Dura Track will not receive
any proceeds from the sale of the common stock by the Selling Shareholders.
Summary Information About The Offering
Securities being Offered Up to 7,200,000 shares of common stock. 3,200,000
common shares being offered by Selling Shareholders and
4,000,000 shares of common stock being offered by Dura Track.
by Selling Shareholders,
Common Stock, par value
$0.001
Offering Price Per Share $0.025 per share for the duration of the
by Dura Track and Selling Offering
Shareholders
Number of Shares 10,200,000 common shares are currently issued
Outstanding and outstanding. 3,200,000 of the issued and
Before the Offering outstanding shares are being offered for sale
of Common Shares under this Prospectus by certain Selling
Shareholders.
Number of Shares 14,200,000 common shares (if maximum is sold).
Outstanding After the
Offering
Minimum Number of None
Shares to be Sold
in this Offering
Use of Proceeds Dura Track will not receive any proceeds from the
sale of the common stock by the Selling
Shareholders. If all 4,000,000 common shares
being offered by Dura Track are sold, the total
gross proceeds to Dura Track would be $100,000.
The Company intends to use the proceeds of this
Offering (i) to continue to develop its current
products and manufacture initial inventory; (ii)
for the expansion of the Company's marketing and
sales capabilities; (iii) for other general
corporate and working capital purposes. The
Company anticipates administrative expenses of
approximately $4,427 over the next twelve months
associated with this Offering, including legal,
accounting, and SEC filing ($2,077);
printing/mail ($250); and transfer agent fees
($2,100). The remaining proceeds will be
allocated as described above.
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Offering Period The shares are being offered for a period not to
exceed 90 days from the date this Prospectus is
effective with the Securities and Exchange
Commission, unless extended by the Company for an
additional 90 days.
Terms of the Offering The Selling Shareholders will determine when and
how they will sell the common stock offered in
this Prospectus.
Summary of Financial Information
Balance Sheet As of March 31, 2005
------------- --------------------
Total Assets $16,586
Total Liabilities $ 6,255
Shareholder's Equity $10,331
Operating Data Through March 31, 2005
-------------- ----------------------
Revenue $ 0
Net Loss ($ 5,680)
Net Loss Per Share ($ 0.01)
Dura Track has had no revenues to date and has incurred only losses since its
inception. The Company has had no operations and has been issued a "going
concern" opinion from their accountants, based upon the sole reliance of the
Company on the sale of its common stock to fund future operations.
RISK FACTORS
Please consider the following risk factors before deciding to invest in our
common stock.
1. BECAUSE THE COMPANY LACKS AN OPERATING HISTORY, THE COMPANY FACES A HIGH
RISK OF BUSINESS FAILURE, WHICH MAY RESULT IN THE LOSS OF YOUR INVESTMENT.
The Company was recently formed to carry out the activities described in this
Prospectus and has only a limited operating history upon which an evaluation
of its prospects can be made. The Company's prospects must be considered
keeping in mind the risks, expenses, and difficulties frequently encountered
during the development stage of a business in an ever-changing industry and
the research, development, manufacture, commercialization, distribution, and
commercialization of technology, procedures, products, and related
technologies. There can be no assurance that unanticipated technical or other
problems will not occur which would result in material delays in product
commercialization or that the efforts of the Company will result in
successful product commercialization. There can be no assurance that the
Company will be able to achieve profitable operations.
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2. KEY MANAGEMENT PERSONNEL MAY LEAVE THE COMPANY WHICH COULD ADVERSELY
AFFECT THE ABILITY OF THE COMPANY TO CONTINUE OPERATIONS.
The Company is dependent on the efforts and abilities of its senior
management. The loss of any member of that management could have a material
adverse effect on the Company's business and its prospects. The Company
believes that all commercially reasonable efforts have been made to minimize
the risks attendant with the departure by key personnel from service;
however, there can be no assurances that replacement personnel, if any, will
cause the Company to operate profitably. All decisions regarding management
of the Company's affairs will be made exclusively by its officers and
directors. Purchasers of the offered shares may not participate in the
management of the Company and, therefore, are dependent upon the management
abilities of the officers and directors. The only assurance that the
shareholders of the Company (including purchasers of the offered shares) have
that the officers and directors will not abuse their discretion in making
decisions with respect to its affairs and other business decisions is the
fiduciary obligations and business integrity of the officers and directors.
Accordingly, no person should purchase offered shares unless that person is
willing to entrust all aspects of management to the officers and directors,
or their successors. Potential purchasers of the offered shares must
carefully evaluate the personal experience and business performance of the
officers and directors. The officers and directors may retain independent
contractors to provide services to the Company. Those contractors have no
fiduciary duty to the shareholders of the Company and may not perform as
expected. The Company does not maintain key person life insurance on any of
its senior management.
3. INVESTING IN THE COMPANY IS A HIGHLY SPECULATIVE INVESTMENT AND COULD
RESULT IN THE LOSS OF YOUR ENTIRE INVESTMENT.
A purchase of the offered shares is significantly speculative and involves
significant risks. The offered shares should not be purchased by any person
who cannot afford the loss of his or her entire purchase price. A purchase of
the offered shares would be "unsuitable" for a person who cannot afford to
lose his or her entire purchase price. The business objectives of the Company
must also be considered speculative, and there is no assurance the Company
will satisfy those objectives. No assurance can be given that the
shareholders of the Company will realize a substantial return on their
purchase of the offered shares, or any return whatsoever, or the shareholders
of the Company will not lose their investments in the Company completely. For
this reason, each prospective purchaser of offered shares should read this
Prospectus and all exhibits to this Prospectus carefully and consult with
that purchaser's attorney, business advisor, and/or investment advisor.
4. BECAUSE THE OFFICERS AND DIRECTORS OF THE COMPANY HAVE OTHER OUTSIDE
BUSINESS INTERESTS AND ACTIVITIES, THEY MAY NOT BE IN A POSITION TO DEVOTE AN
ADEQUATE AMOUNT OF THEIR TIME TO THE COMPANY'S ACTIVITIES WHICH MAY RESULT IN
BUSINESS FAILURE.
The officers and directors of the Company may engage in other business
activities. The persons serving as officers and directors may have conflicts
of interests in allocating time, services, and functions between the other
business ventures in which those persons may be or become involved. The
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officers and directors, however, believe that the Company will have
sufficient staff, consultants, employees, agents, contractors, and managers
to adequately conduct the Company's business.
5. IF THE COMPANY DOES NOT GENERATE ENOUGH SALES IT MIGHT LOSE THE RIGHT TO
MANUFACTURE AND DISTRIBUTE THE PRODUCT LINE WHICH WOULD MATERIALLY AFFECT THE
ABILITY OF THE BUSINESS TO CONTINUE TO OPERATE.
Under the terms of the exclusive global license agreement with the owner of
the product line, Dura Track has the rights to manufacture and distribute the
Dura Track product line and has the rights to use and control the plastic-
injection molds used in the manufacturing of the product line. The Company
has agreed to pay a royalty of 20% of the Company's gross revenues generated
by the licensed products, with an annual minimum royalty of $50,000 to retain
the product rights. The royalty is payable annually on the anniversary date
of the license agreement (dated May 1, 2004). In the event that the Company
does not generate enough sales to cover the minimum royalty, the Company
could lose its rights to manufacture and distribute the product line. The
term of the agreement is for 36 months with a 36-month renewal, under the
same terms, at the Company's option. The Company may develop its own product
line during the licensing period to increase its profit margins. This does
not conflict with any of the terms and conditions of the existing license
agreement.
6. THERE IS NO ESTABLISHED MARKET FOR SHARES OF THE COMPANY'S COMMON STOCK,
WHICH COULD MAKE MARKETS FOR THESE SHARES EXTREMELY ILLIQUID.
At present, there is no established public market for the Company's shares.
As a result, the Offering price and other terms and conditions relative to
the Company's shares have been arbitrarily determined by the Company and do
not bear any relationship to assets, earnings, book value, or any other
objective criteria of value. Additionally, because the Company has recently
formed and has only a limited operating history and no earnings, the price of
the offered shares is not based on its past earnings, and no investment
banker, appraiser, or other independent third party has been consulted
concerning the Offering price for the shares or the fairness of the Offering
price used for the shares.
7. IN THE EVENT OF THE DISSOLUTION OF THE COMPANY IT IS UNLIKELY THAT THERE
WILL BE SUFFICIENT ASSETS REMAINING TO DISTRIBUTE TO THE SHAREHOLDERS.
In the event of dissolution of the Company, the proceeds realized from the
liquidation of its assets, if any, will be distributed to the shareholders
only after satisfaction of claims of the Company's creditors. The ability of
a purchaser of offered shares to recover all or any portion of his or her
purchase price for the offered shares in that case will depend on the amount
of funds realized and the claims to be satisfied therefrom.
8. THE SHARES OF THE COMPANY ARE CONSIDERED "PENNY STOCKS" WHICH MAY IMPACT
ON AN INVESTOR'S ABILITY TO RE-SELL THEIR SHARES ON THE PUBLIC MARKET.
The Securities and Exchange Commission ("Commission") has adopted rules that
regulate broker-dealer practices in connection with transactions in "penny
stocks". Penny stocks generally are equity securities with a price of less
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than $5.00 (other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and
volume information with respect to transactions in such securities is
provided by the exchange or system). The penny stock rules require a broker-
dealer, prior to a transaction in a penny stock not otherwise exempt from
those rules; deliver a standardized risk disclosure document prepared by the
Commission, which specifies information about penny stocks and the nature and
significance of risks of the penny stock market. The broker-dealer also must
provide the customer with bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, and
monthly account statements indicating the market value of each penny stock
held in the customer's account. In addition, the penny stock rules require
that, prior to a transaction in a penny stock not otherwise exempt from those
rules; the broker-dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure
requirements may have the effect of reducing the trading activity in the
secondary market for a stock that becomes subject to the penny stock rules.
If any of the Company's securities becomes subject to the penny stock rules,
holders of those securities may have difficulty selling those securities.
9. THERE IS NO EXISTING MARKET FOR THE COMPANY'S SHARES AND THERE IS NO
ASSURANCE THAT THE COMPANY WILL RAISE ENOUGH CAPITAL THROUGH THIS SHARE
OFFERING TO MEET ITS OBLIGATIONS.
The offered shares are being offered on a 'best efforts" basis and no person,
firm, or corporation has agreed to purchase any of the offered shares. No
assurance can be given that any or all of the offered shares will be sold.
10. BECAUSE THE COMPANY DOES NOT HAVE AN ESCROW OR TRUST ACCOUNT FOR
INVESTORS SUBSCRIPTIONS, IF THE COMPANY FILES FOR BANKRUPTCY PROTECTION OR
ARE FORCED INTO BANKRUPTCY PROTECTION, INVESTORS WILL LOSE THEIR ENTIRE
INVESTMENT.
The terms of this Offering do not establish a minimum amount of funds that
the Company must receive in order to utilize the proceeds from the Offering;
therefore, no provisions have been made to deposit in escrow any of the funds
received from the purchase of the offered shares. Even if the Company is
successful in selling all of the offered shares, the funds available for
operation may not be adequate to carry out its business objectives for an
extended period of time and additional funds may be required. There is no
assurance that additional funds will be available from any source; and, if
not available, the Company may not be able to continue to operate, in which
event, purchasers of the offered shares may lose their entire investment.
11. INVESTORS MAY FIND DECISIONS MADE BY MANAGEMENT CONTRARY TO THEIR
INTERESTS.
The officers of the Company have complete discretion in the allocation of
proceeds in the Offering; therefore, purchasers of the offered shares must
entrust the ultimate allocation of those proceeds to the judgment of those
officers. While the Company anticipates that the proceeds of the Offering
will be used for working capital, infrastructure development, marketing, and
general corporate purposes, the Company may also utilize the Offering
proceeds for any purpose that it sees fit for its business purpose.
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12. EXISTING SHAREHOLDERS COULD LOSE EFFECTIVE CONTROL OF THE COMPANY AND
NOT BE ABLE TO ELECT A REPRESENTATIVE TO THE BOARD OF DIRECTORS.
Upon consummation of this Offering, the pre-Offering shareholders of the
Company will not beneficially own a majority of the issued and outstanding
shares of the Company's common stock. Because of such ownership, the post-
Offering shareholders may effectively control the election of all members of
the Board of Directors of the Company and determine all corporate actions.
Purchasers of the offered shares may be entitled to accumulate their votes
for the election of directors or otherwise. Accordingly, the holders of a
majority of the common shares of the Company present at a meeting of
shareholders of the Company may be able to elect all of the directors of the
Company and the minority shareholders of the Company may not be able to elect
a representative to the Board of Directors.
13. THE COMPANY DOES NOT EXPECT TO PAY CASH DIVIDENDS WHICH MAY LOWER
EXPECTED RETURNS FOR INVESTORS.
The Company does not anticipate paying dividends on its common stock in the
foreseeable future; but, rather, the Company plans to retain earnings, if
any, for the operation and expansion of its business.
14. THE COMPANY MAY NOT BE SUCCESSFUL IN IMPLEMENTING ITS BUSINESS STRATEGY
WHICH COULD RESULT IN THE LOSS OF AN INVESTOR'S ENTIRE INVESTMENT.
Although the Company intends to pursue a strategy of aggressively marketing
its products and services, implementation of this strategy will depend in
large part on its ability to (i) establish a significant customer base and
maintain favorable relationships with those customers; (ii) effectively
introduce acceptable products and services to its customers; (iii) obtain
adequate financing on favorable terms to fund its business; (iv) maintain
appropriate procedures, policies, and systems; (v) hire, train, and retain
skilled employees; and (vi) continue to operate within an environment of
increasing competition. The inability of the Company to obtain or maintain
any or all of these factors could impair its ability to implement its
business strategy successfully, which could have a material adverse effect on
its results of operations and financial condition.
15. THERE IS NO ASSURANCE THAT THE COMPANY CAN CREATE OR SUSTAIN A MARKET
FOR ITS SHARES.
There is currently no traded public market for the Company's common stock.
There are no assurances that any public market will be established or
maintained for the Company's stock.
16. UNCERTAINTY EXISTS AS TO WHETHER THE COMPANY WILL HAVE SUFFICIENT FUNDS
TO CARRY OUT ITS BUSINESS STRATEGY THEREBY MAKING AN INVESTMENT IN THE
COMPANY EXTREMELY SPECULATIVE.
The Company will likely be required to raise substantial funds in addition to
the proceeds from this Offering. The Company's forecast of the period of time
through which its financial resources will be adequate to support its
operations is a forward-looking statement that involves risks and
uncertainties, and actual results could vary as a result of a number of
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factors, including those described in these Risk Factors and elsewhere in
this Prospectus.
The Company may require additional cash to implement its business strategies,
including cash for (i) payment of increased operating expenses and (ii)
further implementation of those business strategies. Such additional capital
may be raised through public or private financings, as well as borrowings
and/or other resources. To the extent that additional capital is raised
through the sale of equity or equity-related securities, the issuance of such
securities could result in dilution to the Company's stockholders. If
adequate funds are not available, the Company may be required to curtail
operations significantly or to obtain funds through entering into
arrangements with collaborative partners or others that may require it to
relinquish rights to certain of its technologies or product candidates that
the Company would not otherwise relinquish. No assurance can be given,
however, that the Company will have access to the capital markets in the
future, or that financing will be available on acceptable terms to satisfy
the cash requirements of the Company to implement its business strategies.
The inability of the Company to access the capital markets or obtain
acceptable financing could have a material adverse effect on its results of
operations and financial conditions.
Risks Related to the Company's Market and Strategy
17. BECAUSE OF THE COMPANY'S DEPENDENCE ON RAW PLASTIC TO MANUFACTURE ITS
PRODUCT, A DISRUPTION IN PLASTIC SUPPLY, AN INCREASE IN THE MARKET PRICE, OR
A SHORTAGE OF CRUDE OIL WOULD AFFECT THE COMPANY'S COSTS OF DOING BUSINESS
AND COULD CAUSE THE BUSINESS TO FAIL.
The Company's success will be dependent in large part on its continued supply
of raw materials composing mostly of engineering plastics from major
manufacturers such as BASF Corporation and Dow Chemical Company. The Company
is also reliant upon stable raw plastic pricing. Plastics are a petroleum-
based product and market availability of crude oil and market price
fluctuation could have a significant negative impact on the cost of
manufacturing the Company's drapery hardware components.
18. BECAUSE THE COMPANY'S ENTIRE PRODUCT LINE IS MADE FROM INJECTION MOLDS,
THE BUSINESS WOULD LIKELY FAIL IF THE MOLDS BECOME LOST, DAMAGED OR
DESTROYED.
The Company's product line is manufactured entirely of engineering plastics,
made through an injection molding process. The Company's injection molds
could be damaged or even destroyed during the manufacturing process. The
Company anticipates making significant efforts in the maintenance and safe
guard of its molds, but there can be no assurances that the Company will be
successful in maintaining the operational status of its molds, the temporary
or permanent loss of which, resulting from physical damage or operating
malfunction, could have a material adverse effect on the its business.
-13-
19. BECAUSE THE COMPANY'S PRODUCT IS INTENDED FOR USE BY THE CONSTRUCTION
INDUSTRY, A DOWNTURN IN THE HOUSING MARKET WOULD REDUCE THE DEMAND FOR WINDOW
COVERINGS AND COULD MAKE THE BUSINESS UNPROFITABLE.
The majority of the Company's products and services will be provided through
dealers and distributors who provide wholesale products to companies involved
in supplying soft window coverings to the construction industry. The market
for new apartment buildings and condominium construction is heavily tied to
the state of the general economy. Increased interest rates and any other
factors resulting in a drop in the new housing market could have an adverse
effect on the market's demand for the Company's products.
20. IF THE COMPANY FAILS TO BE INNOVATIVE AND/OR THE PRODUCT DOES NOT MEET
CUSTOMER QUALITY STANDARDS, IT COULD FAIL TO OBTAIN A SUSTAINABLE SHARE OF
THE MARKET AND NOT BE ABLE TO CONTINUE IN BUSINESS.
The Company's success may also depend partially on the its ability to
introduce new products, and services, continually and on a timely basis and
to continue to improve the performance, features, and reliability of its
products and services in response to both evolving demands of prospective
customers and competitive products.
21. THE COMPANY WOULD BE DETRIMENTALLY HARMED TO THE POINT OF BEING UNABLE
TO CONTINUE DOING BUSINESS IF LITIGATION OVER COPYRIGHT INFRINGEMENT OR
PRODUCT LIABILITY WERE INITIATED ON ITS OWN ACCOUNT OR IN RESPONSE TO THE
CLAIMS OF OTHERS.
There has been substantial litigation in the construction industry regarding
legislation on new housing warranties, builders' liabilities, and product
defects. There can be no assurance that third parties will not, in the
future, claim infringement by the Company with respect to current or future
products, trademarks, or other proprietary rights, or that the Company will
not counterclaim against any such parties in such claims. There is also no
assurance that the Company will not be forced to initiate costly and time-
consuming litigation against third parties in order to protect against the
infringement or misappropriation of the Company's products and trade marks.
Any such claims or counterclaims could be time-consuming, result in costly
litigation, cause product release delays, require the Company to redesign or
reproduce its products, or require the Company to enter into royalty or
licensing agreements, any of which could have a material adverse effect upon
its business, operating results, and financial condition. Such royalty or
licensing agreements, if required, may not be available on terms acceptable
to the Company, or at all.
22. BECAUSE THE COMPANY IS NEW IN THE MARKET, THERE IS NO ASSURANCE THAT THE
DURA TRACK PRODUCT LINE WILL BE ACCEPTED OR THAT IT CAN ESTABLISH ANY MARKET
PRESENCE AT ALL. IF THE COMPANY CANNOT CREATE A MARKET FOR ITS PRODUCTS IN
AN EXTREMELY COMPETITIVE INDUSTRY IT WILL FAIL.
The market for window coverings in new construction and renovation market is
rapidly changing and significantly competitive. The Company expects
competition for window covering products to continue to increase, and, if it
cannot compete effectively, its business could be harmed. Moreover, the
-14-
Company expects the number of smaller companies competing for the commercial
window covering business to increase due to the low cost of entry in
providing hard window coverings such as venetian blinds or mini blinds.
Competition will probably increase significantly as new companies enter the
market and current competitors expand their services. Some of the Company's
competitors may enjoy substantial competitive advantages, including (i)
larger number of distributors; (ii) long term, established business
relationships; (iii) greater brand name recognition; (iv) more fully-
developed marketing plans (v) larger production and service staff; and (vi)
substantially greater financial, marketing, technical, and other resources.
If the Company does not compete effectively, or if the Company experiences
any pricing pressures, reduced margins or loss of market share resulting from
increased competition, its business could be adversely affected. Competition
may include companies that are larger and better capitalized than the Company
and that have expertise and established name recognition. There can be no
assurance that competitors will not develop Internet-related products and
services that are superior or that achieve greater market acceptance than the
Company's.
Although the Company believes that the diverse segments of the window
covering market will and do provide opportunities for more than one supplier
of window covering products and services similar to those of the Company, it
is possible that a single supplier may dominate one or more market segments.
If competition increases from these and other sources, the Company might have
to respond to competitive pressures by implementing pricing, marketing, and
other programs, or seeking additional strategic alliances or acquisitions
that may be less favorable than would otherwise be established or obtained.
Any such response to competition could materially affect the Company's
business, results of operations, and financial conditions. The Company also
has significant competition from other competitors in international markets,
including competition from Asian-based competitors, in addition to companies
that are already well established in foreign markets. Many of the existing
competitors, in addition to a number of potential new competitors, have or
may have significantly greater financial, technical, and marketing resources
that the Company.
23. THE COMPANY MAY REQUIRE ADDITIONAL FUNDING TO CARRY OUT TECHNICAL
RESEARCH AND DEVELOPMENT ON ITS PRODUCT LINE IN ORDER TO BECOME COMPETITIVE.
THERE IS NO ASSURANCE THAT THIS FUNDING WILL BE SECURED AND IF FUNDING IS NOT
PROVIDED THE COMPANY MAY HAVE TO DISCONTINUE ITS OPERATIONS.
The market for the products and technology deployed by the Company is
characterized by rapidly changing technology in the field of engineering
plastics that could result in product obsolescence or short product life
cycles. Each of the Company's products is dependent on specific engineering
plastics with certain characteristics that make them viable in their shape
and use. There can be no assurance that the raw materials the Company uses to
manufacture its products will always be available from its current suppliers
or that a similar type of plastic will be available from another
manufacturer.
The Company may be required to adapt to technological changes in the
injection molding industry and develop products and technology to satisfy
evolving industry or customer requirements, any of which could require the
-15-
expenditure of significant funds and resources. The Company does not have a
source or commitment for any such funds and resources. Development efforts
relating to the technological aspects of the various products to be developed
by the Company are not substantially completed. Accordingly, the Company may
have to continue to refine and improve those products. Continued refinement
and improvement efforts remain subject to the risks inherent in new product
development, including unanticipated technical or other problems that could
result in material delays in product commercialization or significantly
increase costs. In addition, there can be no assurance that those products
and technologies will prove to be sufficiently reliable or durable in wide
spread commercial application.
The products and technologies to be used in manufacturing by the Company are
the result of significant research and development. Although management
believes that such research and development will continue satisfactorily,
such research and development may result in errors that may become apparent
subsequent to significant and substantial commercial utilization. In such
event, the Company would be required to modify such products or technologies
and continue with additional research and development, which may delay its
plans and cause it to incur additional costs.
24. THE COMPANY'S BUSINESS MAY BE NEGATIVELY AFFECTED IF THE COMPANY BECOMES
SUBJECT TO BURDENSOME GOVERNMENT REGULATIONS.
The Company is, and will continue to be, subject to governmental regulation
and laws of general application in the various governmental jurisdictions in
which it operates or has offices. The Company believes it is currently in
material compliance with all applicable regulations. Any future cost of
compliance with future regulations could have a material adverse effect on
the Company's business, financial condition, and results of operation.
The Company is not currently subject to direct regulation by any government
agency in the United States, other than regulations applicable to businesses
in general.
25. BECAUSE THE COMPANY IS A NEW COMPANY AND LACKS AN OPERATING HISTORY, THE
COMPANY FACES A HIGH RISK OF BUSINESS FAILURE, WHICH MAY RESULT IN THE LOSS
OF YOUR INVESTMENT.
As a result of the Company's limited operating history, as well as the
possibility of higher interest rates and other factors which may cause a slow
down in the construction industry, the Company has neither internal nor
industry-based historical financial data for any significant period of time
upon which to base planned operating expenses.
The Company expects that its results of operations may also fluctuate
significantly in the future as a consequence of a variety of factors,
including the continued rate of growth of the North American economy; the
introduction and acceptance of new or enhanced products or services by the
Company or by competitors; its ability to anticipate and effectively adapt to
developing markets and rapidly changing manufacturing technologies; the
Company's ability to attract, retain, and motivate qualified personnel;
initiation, renewal, or expiration of significant distributors or dealers;
pricing changes by the Company or its competitors; specific economic
-16-
conditions; general economic conditions and other factors. Accordingly,
future sales and operating results are difficult to forecast. The Company's
anticipated expenses are based, in part, on its expectations as to future
revenues and to a significant extent are relatively fixed, at least in the
short term. The Company may not be able to adjust spending in a timely manner
to compensate for any unexpected revenue shortfall. Accordingly, any
significant shortfall in relation to its expectations would have an immediate
adverse impact on the Company's business, results of operations, and
financial condition. In addition, the Company may decide from time to time to
make certain pricing, service, or marketing decisions or acquisitions that
could have a short-term material adverse effect on business results of
operations and financial condition, and may not result in the long-term
benefits intended. Due to all of the foregoing factors, it is probable that
in some future period the Company's operating results may be less than the
expectations of public market analysis and investors. In such event, the
price of the Company's securities, including its common stock, would probably
be materially adversely affected.
26. COMPENSATION MAY BE PAID TO OFFICERS, DIRECTORS AND EMPLOYEES REGARDLESS
OF THE COMPANY'S PROFITABILITY. SUCH PAYMENTS MAY NEGATIVELY AFFECT CASH FLOW
AND THE ABILITY OF THE COMPANY TO FINANCE ITS BUSINESS PLAN WHICH WOULD CAUSE
IT TO FAIL.
The officers, directors, and employees of the Company may be entitled to
receive compensation, payments, and reimbursements regardless of whether the
Company operates at a profit or a loss. Any compensation received by
officers, directors, and management personnel will be determined from time to
time by the board of directors. Officers, directors, and management personnel
are expected to be reimbursed for any direct out-of-pocket expenses they have
incurred on behalf of the Company.
27. THERE IS A LIMITATION ON LIABILITY OF OFFICERS AND DIRECTORS OF THE
COMPANY. INVESTORS IN THIS OFFERING MAY NOT FEEL COMFORTABLE INVESTING IN A
COMPANY WHERE DIRECTORS AND OFFICERS HAVE LIMITED OR NO LIABILITY TO ITS
SHAREHOLDERS FOR DAMAGES.
The Articles of Incorporation of the Company include a provision eliminating
or limiting the personal liability of the Company's officers and directors
and its shareholders for damages for breach of fiduciary duty as a director
or officer. Accordingly, the officers and directors may have no liability to
the shareholders for any mistakes or errors of judgment or for any act of
omission, unless such act or omission involves intentional misconduct, fraud,
or a knowing violation of law or results in unlawful distributions to the
shareholders.
DISCLOSURE OF THE OPINION OF THE COMMISSION REGARDING INDEMNIFICATION FOR
SECURITIES ACT OF 1933 LIABILITIES:
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING PURSUANT TO THE ACT MAY BE
PERMITTED TO DIRECTORS, OFFICERS, OR PERSONS CONTROLLING THE COMPANY PURSUANT
TO THE FOREGOING PROVISIONS, THE COMPANY HAS BEEN INFORMED THAT IN THE
OPINION OF THE SECURITIES AND EXCHANGE COMMISSION SUCH INDEMNIFICATION IS
AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS, THEREFORE,
UNENFORCEABLE.
-17-
28. THERE IS NO GUARANTEE THAT THERE WILL BE ANY MARKET ACCEPTANCE FOR THE
COMPANY'S PRINCIPAL PRODUCTS AND SERVICES. IF THE COMPANY'S PRODUCTS ARE NOT
ACCEPTED, THE COMPANY MAY FAIL AND THE SHAREHOLDERS MAY LOSE THEIR ENTIRE
INVESTMENT.
The strategy of the Company for growth is substantially dependent upon its
ability to market its related products and services successfully to its
customers. There can be no assurance that its products and services will
achieve significant market acceptance, and that such acceptance, if achieved,
will be sustained for any significant period or that product life cycles will
be sufficient (or substitute products developed) to permit the Company to
recover associated costs. Failure of the products of the Company to achieve
or sustain market acceptance could have a material adverse effect on the
business, financial conditions, and results of operations.
29. THE COMPANY MAY NOT BE ABLE TO CONTINUE OPERATING IF IT IS UNABLE TO
MANAGE ITS FUTURE GROWTH.
The Company expects to experience growth and expects such growth to continue
for the foreseeable future. The Company's growth may place a significant
strain on its management, financial, operating, and technical resources.
Failure to manage this growth effectively could have a material adverse
effect on the Company's financial condition or results of operations.
30. THERE MAY BE ADDITIONAL COSTS THAT WERE NOT ANTICIPATED AND THERE IS NO
CERTAINTY THAT THE COMPANY WILL BE ABLE TO RAISE THE ADDITIONAL FINANCING
NECESSARY TO COVER THESE COSTS.
Management has used reasonable efforts to assess and predict costs and
expenses. However, there can be no assurance that implementing the Company's
business plan may not require more employees, capital equipment, supplies, or
other expenditure items than management has predicted. Similarly, the cost of
compensating additional management, employees, and consultants, or other
operating costs may be more than management's estimates, which could result
in sustained losses.
31. THERE IS A RISK THAT CASH FLOWS WILL BE NEGATIVELY IMPACTED IF THE
COMPANY IS UNABLE TO COLLECT ITS ACCOUNTS RECEIVABLE.
The Company expects that most of its customers will require standard credit
terms of net 30 days. The Company will use reasonable efforts to assess the
credit risks of its customers, which includes engaging the professional
services of companies such as Dunn & Bradstreet. The Company may encounter
customers that default on payment for product orders and such default could
have an adverse effect on the Company's cash flow and net profits.
32. THE COMPANY CANNOT OFFER ANY ASSURANCES THAT IT WILL RECEIVE REVENUES OR
CAN ACHIEVE OPERATING PROFITS. IF THE COMPANY CANNOT MAKE A PROFIT,
SHAREHOLDERS MAY LOSE THEIR ENTIRE INVESTMENT.
There can be no assurance that the Company will be able to develop consistent
revenue or that its operations will become profitable.
-18-
33. THERE IS A RISK THE COMPANY COULD LOSE ITS ABILITY TO MANUFACTURE ITS
PRODUCT LINE OR DISCONTINUE OPERATIONS IF IT EXPERIENCES UNINSURED LOSSES OR
AN ACT OF GOD.
The Company may, but is not required to, obtain comprehensive liability and
other business insurance of the types customarily maintained by similar
businesses. There are certain types of extraordinary occurrences, however,
which may be either uninsurable or not economically insurable. For example,
in the event of a major earthquake, the Company's molds and manufacturing
facility could be rendered inoperable for protracted periods of time, which
would adversely affect its financial condition. In the event of a major civil
disturbance, the Company's operations could be adversely affected. Should
such an uninsured loss occur, the Company could lose significant revenues and
financial opportunities in amounts that would not be partially or fully
compensated by insurance proceeds.
34. THE COMPANY'S ENTIRE BUSINESS STRATEGY IS DEPENDENT ON PRODUCT SALES AND
NEW PRODUCT INTRODUCTIONS. IF THE COMPANY IS UNABLE TO ACHIEVE ITS SALES
ESTIMATES IT MAY FAIL AND SHAREHOLDERS MAY LOSE THEIR INVESTMENT.
The strategy of the Company for growth may be substantially dependent upon
its ability to market and distribute products successfully and may require it
to introduce successful new products. Other companies, including those with
substantially greater financial, marketing, and sales resources, compete with
the Company. There can be no assurance that the Company will be able to
market and distribute its products on acceptable terms, or at all. There can
be no assurance that the Company will be able to develop new products that
will be commercially successful. Failure to market its products successfully,
or develop, introduce, and market new products successfully, could have a
material adverse effect on the Company's business, financial condition, or
results of operations.
35. THE COMPANY IS DEPENDANT ON THIRD-PARTY PROVIDERS FOR CERTAIN PRODUCTS
AND SERVICES AND MAY NOT BE ABLE TO CONTINUE OPERATIONS IF THERE IS A
DISRUPTION IN THE SUPPLY OF PRODUCTS AND SERVICES.
The Company may be dependent upon various third parties for significant
services and products, which services and products may be provided pursuant
to agreements with such providers. Inasmuch as the capacity for certain
services and products by certain third parties may be limited, the inability
of those third parties, for economic or other reasons, to provide services or
products could have a material adverse effect.
36. THE COMPANY MAY BE REQUIRED TO OBTAIN CERTAIN LICENSES AND THERE IS NO
ASSURANCE THAT THE COMPANY WILL BE ABLE TO ACQUIRE SUCH LICENSES. THE COMPANY
ALSO FACES THE RISK OF LOSING CERTAIN PROPRIETARY INFORMATION TO ITS
COMPETITORS.
The utilization or other exploitation of the products developed or offered by
the Company may require it to obtain licenses or consents from the producers
or other holders of copyrights or other similar rights relating to its
products and technologies. In the event the Company is unable, if so
required, to obtain any necessary license or consent on terms which
management of the Company considers to be reasonable, it may be required to
-19-
cease developing, utilizing, or exploiting products or technologies affected
by those copyrights or similar rights. In the event that the Company is
challenged by holders of such copyrights, or other similar rights, there can
be no assurance that it will have the financial or other resources to defend
any resulting legal action, which could be significant.
The Company may develop certain proprietary technologies, trade secrets, and
know-how that are not patentable. The Company's proprietary technologies
constitute, or may constitute proprietary information and are important to
its success. Although the Company may attempt to protect its unpatented trade
secrets, its technology, and its proprietary information, in part by the use
of confidentiality agreements with its employees, consultants, and certain
contractors, there can be no assurance that (i) these agreements will not be
breached, (ii) the Company would have adequate remedies for any breach of the
proprietary trade secret, and (iii) know-how of the Company will not be
otherwise become known or be independently developed or discovered by
competitors. There is also no assurance that the Company's actions will be
sufficient to prevent the development or discovery by its competitors. There
is also no assurance that its actions will be sufficient to prevent imitation
of its products by others or to prevent others from claiming violations of
their trade secrets and proprietary rights.
37. THE COMPANY MAY NOT BE ABLE TO MARKET ITS PRODUCTS VIA THE INTERNET AND
LOSE MARKET SHARE AS A RESULT.
The Internet has changed traditional marketing patterns in a wide variety of
industries. The significance of personal computer usage may lead to entirely
new methods of marketing and sales of services and products. The Company may
not be able to keep pace with the rate of change in its markets brought about
by the Internet and may need to move towards Internet-based marketing and
sales.
Risks Related to this Offering
------------------------------
38. THE COMPANY CANNOT PROVIDE ANY GUIDANCE AS TO THE FEDERAL TAX
IMPLICATIONS OR CONSEQUENCES OF THE PURCHASE OR SALE OF THESE SHARES.
The Company has obtained no ruling from the Internal Revenue Service and no
opinion of counsel with respect to the federal income tax consequences of
this Offering. Consequently, purchasers of the offered shares must evaluate
for themselves the income tax implications that result from their purchase
and possible subsequent sale of the offered shares.
39. THE COMPANY'S BUSINESS STRATEGY ANTICIPATES INTERNATIONAL SALES. THERE
IS SIGNIFICANT RISK ASSOCIATED WITH DOING BUSINESS IN INTERNATIONAL MARKETS
AND THE COMPANY MAY FAIL TO MEET SALES LEVELS REQUIRED IN ORDER TO REMAIN IN
BUSINESS.
An aspect of the Company's strategy is to promote and commercially exploit
its products and services in international markets. There can be no assurance
that the Company will be able to market and operate its products and services
in foreign markets successfully. In addition to the uncertainty as to the
Company's ability to generate revenues from foreign operations and create an
-20-
international presence, there are certain risks inherent in doing business
internationally, such as unexpected changes in regulatory requirements,
export restrictions, trade barriers, difficulties in staffing and managing
foreign operations, longer payment cycles, problems in collecting accounts
receivable, political instability, fluctuations in currency exchange rates,
seasonal reductions in business activity in certain parts of the world, and
potentially adverse tax consequences, which could adversely impact the
success of the Company's international operations. There can be no assurance
that one or more of such factors will not have a material adverse effect on
the Company's potential future international operations and, consequently, on
the Company's business, operating results and financial condition. In order
to attract and retain users, the Company plans significant expenditures on
sales and marketing, content development, technology and infrastructure. Many
of these expenditures may be planned or committed in advance and in
anticipation of future revenues. If the Company's revenues in a particular
period are less than it anticipates, it may be unable to reduce spending in
that period. As a result, any shortfall in revenues would likely adversely
affect the Company's operating results.
The Company anticipates that revenue from the sale of the products may be
derived from customers located primarily in the United States of America and
Canada. Because a number of the principal customers of the Company may be
located in other countries as well, the Company anticipates that
international sales may account for a portion of its revenues. There can be
no assurance that the Company will be able to manage these operations
effectively or that the Company's activities will enable it to compete
successfully in international markets or to satisfy the service and support
requirements of its customers. There can be no assurance that any of these
factors will not have a material adverse effect on the Company's business,
financial condition, and results of operations.
The Company may sell its products and services in currencies other than the
United States dollar, which would make the management of currency
fluctuations difficult and expose the Company to risks in this regard. The
Company's results of operations may be subject to fluctuations in the value
of various currencies against the United States dollar. Although management
will monitor the Company's exposure to currency fluctuations, there can be no
assurance that exchange rate fluctuations will not have a material adverse
effect on the Company's results of operations, or financial condition.
The products and services of the Company may be subject to numerous foreign
government standards and regulations that are continually being amended.
Although the Company will endeavor to satisfy foreign technical and
regulatory standards, there can be no assurance that the products of the
Company will be able to comply with foreign government standards and
regulations, or changes thereto, or that it will be cost effective for the
Company to redesign its products or technologies to comply with such
standards or regulations. The inability of the Company to design or redesign
products to comply with foreign standards could have a material adverse
effect on the Company's business, financial condition and results of
operations.
-21-
USE OF PROCEEDS
The Company intends to use the proceeds of this Offering (i) to continue
enhance its current products and technologies, specifically related to the
Company's line of drapery hardware; (ii) for the expansion of the Company's
marketing and sales capabilities; (iii) for other general corporate and
working capital purposes. The Company can give no assurance that its research
and development will provide technologies or products that will be
commercially feasible or acceptable. Although the Company presently intends
to use the proceeds of this Offering as described in this section, management
of the Company has absolute discretion to adjust the application and
allocation of the net proceeds of this Offering in order to accommodate
various circumstances and opportunities. As a result of the foregoing, the
success of the Company may be affected by the discretion and judgment of the
management of the Company with respect to the application and allocation of
the net proceeds of this Offering. In the event that the Company's plans
change, its assumptions change or prove to be inaccurate, or the proceeds of
the Offering prove to be insufficient, the Company may find it necessary or
advisable to reallocate proceeds within the above-described categories or to
use proceeds for other purposes, or it may be required to seek additional
financing or curtail its operations.
The Company anticipates administrative expenses of approximately $4,427 over
the next twelve months associated with this Offering, including legal,
accounting, and SEC filing ($2,077); printing/mail ($250); and transfer agent
fees ($2,100). The remaining proceeds will be allocated as described in the
preceding paragraph.
The net proceeds of this Offering that are not expended immediately may be
deposited, at the Company's discretion, in interest or non-interest bearing
accounts, or invested in government obligations, certificates of deposit,
commercial paper, money market accounts or similar investments, which may not
be insured.
This Offering is being made on a self-underwritten basis - no minimum of
shares must be sold in order for the Offering to proceed. The Offering price
per share is $0.025. The following table below sets forth the uses of
proceeds assuming the sale of 25%, 50%, 75% and 100% of the securities
offered for sale in this Offering by the Company.
If 25% of If 50% of If 75% of If 100% of
Shares Sold Shares Sold Shares Sold Shares Sold
----------- ----------- ----------- -----------
GROSS PROCEEDS FROM
THIS OFFERING $25,000 $50,000 $75,000 $100,000
======= ======= ======= ========
Less: OFFERING EXPENSES
Legal and Accounting 2,062 2,062 2,062 2,062
SEC Filing 15 15 15 15
Printing 250 250 250 250
Transfer Agent 2,100 2,100 2,100 2,100
------- ------- ------- --------
TOTAL 4,427 4,427 4,427 4,427
-22-
Less: MANUFACTURING EXPENSES
Initial Tooling Charge/Setup 600 600 600 600
Initial Production Run 3,000 7,000 11,000 15,000
Product Packaging 1,000 2,000 4,000 5,000
------- ------- ------- --------
TOTAL 4,600 9,600 15,600 20,600
Less: SALES & MARKETING
Web Site Development 700 2,000 3,000 4,000
Computer Hardware 500 2,000 2,000 2,500
Direct Mail Campaign 300 1,000 2,000 3,000
------- ------- ------- --------
TOTAL 1,500 5,000 7,000 9,500
Less: ADMINISTRATION EXPENSES
Office, Stationery,
Telephone, Internet 500 2,000 3,000 4,000
Legal and Accounting 1,000 2,500 5,000 6,000
Secretary 0 1,000 2,000 5,000
------- ------- ------- --------
TOTAL 1,500 5,500 10,000 15,000
------- ------- ------- --------
TOTAL EXPENSES 12,027 24,527 37,027 49,527
------- ------- ------- --------
NET WORKING CAPITAL $12,973 $25,473 $37,973 $50,473
======= ======= ======= =======
Note: The above figures represent estimated costs.
DETERMINATION OF OFFERING PRICE
The price of the shares we are Offering was arbitrarily determined in order
for us to raise up to a total of $100,000 in this Offering. The Offering
price bears no relationship whatsoever to our assets, earnings, book value or
other criteria of value. Among the factors considered were:
- our lack of operating history,
- the proceeds to be raised by the Offering,
- the amount of capital to be contributed by purchasers in this
Offering in proportion to the amount of stock to be retained by
our existing stockholders, and
- our relative cash requirements.
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
Dilution represents the difference between the Offering price and the net
tangible book value per share immediately after completion of this Offering.
Net tangible book value is the amount that results from subtracting total
liabilities and intangible assets from total assets. Dilution arises mainly
as a result of our arbitrary determination of the Offering price of the
shares being offered. Dilution of the value of the shares you purchase is
also a result of the lower book value of the shares held by our existing
stockholders.
-23-
Existing Stockholders if All of the Shares are Sold
Price per share $0.025
Net tangible book value per share before the Offering $0.005
Potential gain to existing shareholders $100,000
Net tangible book value per share after the Offering $0.005
Increase to present stockholders in net tangible book
value per share after the Offering $0.00
Capital contributions $23,000
Number of shares outstanding before the Offering 10,200,000
Number of shares after the Offering held by existing
stockholders 7,000,000
Percentage of ownership after the Offering 49.2 %
Purchasers of Shares in this Offering if All the Shares are Sold
Price per share $0.025
Dilution per share $0.018
Capital contributions $100,000
Percentage of Capital Contributions 81 %
Number of shares after Offering held by public investors 7,200,000
Percentage of ownership after the Offering 51.8 %
Purchasers of Shares in this Offering if 75% of Shares Sold
Price per share $0.025
Dilution per share $0.019
Capital contributions $75,000
Percentage of Capital Contributions 76.5 %
Number of shares after Offering held by public investors 6,200,000
Percentage of ownership after the Offering 46.9 %
Purchasers of Shares in this Offering if 50% of Shares Sold
Price per share $0.025
Dilution per share $0.021
Capital contributions $50,000
Percentage of Capital Contributions 68.4 %
Number of shares after Offering held by public investors 5,200,000
Percentage of ownership after the Offering 42.6 %
Purchasers of Shares in this Offering if 25% of Shares Sold
Price per share $0.025
Dilution per share $0.022
Capital contributions $25,000
Percentage of Capital Contributions 52 %
Number of shares after Offering held by public investors 4,200,000
Percentage of ownership after the Offering 37.5 %
SELLING SECURITY HOLDERS
The following table sets forth information, as of the date of this Offering,
with respect to the beneficial ownership of our common stock both before and
after the Offering. The table includes all those who beneficially own any of
our outstanding common stock AND are registering their shares in the
concurrent Offering. NOTE: Our sole Officer and Director, Darrel Crimeni, as
of the date of this Prospectus, owns 7,000,000 common shares, which are
subject to Rule 144 restrictions.
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There are currently nine shareholders of our common stock.
The percentages determined in these calculations are based upon the 3,200,000
of our common shares issued and outstanding as of the date of this
Prospectus. The following table shows the number of shares and percentage
before and after this Offering:
Total Total
Name of Beneficial Ownership % Before Shares Shares % Owned
Owners of Before Offering Offered After After
Common Stock Offering (1) for Sale Offering Offering
- ------------------ --------- --------- -------- -------- --------
Roy Silver 380,000 3.7% 380,000 0 0%
Robert Weston 420,000 4.1% 420,000 0 0%
Sharon Proudfoot 380,000 3.7% 380,000 0 0%
Tiberio Faedo 420,000 4.1% 420,000 0 0%
Richard A. Haney 400,000 3.9% 400,000 0 0%
Roland Phillips 400,000 3.9% 400,000 0 0%
Joseph J. DeChellis 400,000 3.9% 400,000 0 0%
Naomi Glass 400,000 3.9% 400,000 0 0%
(1)(1) Based on 10,200,000 common shares outstanding prior to the primary
Offering
Except as pursuant to applicable community property laws,
persons named in this table have sole voting and
investment power with respect to all shares of common stock.
PLAN OF DISTRIBUTION
We are Offering 4,000,000 shares on a self-underwritten basis. The Offering
price is $0.025 per share for the duration of the Offering.
In addition, certain Selling Shareholders are concurrently registering shares
of common stock fro possible resale at the same time we are conducting this
Offering. The percentage of the total outstanding common stock being offered
by the Selling Shareholders is approximately 31.3% based upon the 10,200,000
common shares that are issued and outstanding as of the date of this
Prospectus. There is no arrangement to address the possible effect of the
concurrent primary and secondary Offerings on the price of the stock.
The Company will sell its shares only through Darrel Crimeni, our President
and Director. Mr. Crimeni will receive no commission from the sale of any
shares. He will not register as a broker/dealer under Section 15 of the
Securities Exchange Act of 1934 in reliance upon Rule 3a4-1. Rule 3a4-1 sets
forth those conditions under which a person associated with an issuer may
participate in the Offering of the issuer's securities and not be deemed to
be a broker/dealer. The conditions are that:
1. 1. The person is not subject to a statutory disqualification, as that
term is defined in Section 3(a)(39) of the Act, at the time of his
participation;
2. 2. The person is not compensated in connection with his participation
by
the payment of commissions or other remuneration based either directly
or indirectly on transactions in securities;
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3. 3. The person is not at the time of their participation, an associated
person of a broker/dealer; and,
4. 4. The person meets the conditions of Paragraph (a)(4)(ii) of Rule 3a4-
1
of the Exchange Act, in that he (A) primarily performs, or is intended
primarily to perform at the end of the Offering, substantial duties
for or on behalf of the Issuer otherwise than in connection with
transactions in securities; and (B) is not a broker or dealer, or an
associated person of a broker or dealer, within the preceding twelve
(12) months; and (C) do not participate in selling and offering of
securities for any Issuer more than once every twelve (12) months
other than in reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).
Mr. Crimeni is not statutorily disqualified, not being compensated, and not
associated with a broker/dealer. He is and will continue to be our President
and a Director at the end of the Offering and has not been during the last
twelve months and is currently not a broker/dealer or associated with a
broker/dealer. Mr. Crimeni has not during the last twelve months and will not
in the next twelve months offer or sell securities for another corporation.
Mr. Crimeni is not selling any of his shares in this Offering and has not
sold any during the last twelve months.
Only after our Prospectus is effective by the SEC, do we intend to advertise,
possibly through tombstones, and hold investment meetings in various states
or provinces where the Offering may be registered. We will not use the
Internet to advertise our Offering. We may also distribute the Prospectus to
potential investors at the meetings and to our friends and relatives who are
interested in us and are considering a possible investment in the Offering.
We confirm that we have not engaged and will not be engaging a "finder" in
connection with this Offering.
Offering Period and Expiration Date
This Offering will start on the effective date of this Prospectus and
continue for a period of 90 days. We may extend the Offering period for an
additional 90 days, or unless the Offering is completed or otherwise
terminated by us.
Procedures for Subscribing
No payment for the shares will be accepted until after Dura Track's Form SB-2
Registration Statement for this Offering has been approved and deemed
effective by the Securities and Exchange Commission.
If you decide to subscribe for any shares in this Offering, you must:
1. 1. Execute and deliver a subscription agreement.
2. 2. Deliver a check or certified funds to us for acceptance or
rejection,
in our sole discretion.
All checks for subscriptions must be made payable to "Dura Track Enterprises,
Inc."
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Right to Reject Subscriptions
We have the right to accept or reject subscriptions in whole or in part, for
any reason or for no reason. All moneys from rejected subscriptions will be
returned immediately by us to the subscriber, without interest or deductions.
Subscriptions for securities will be accepted or rejected within 48 hours
after we receive them.
LEGAL PROCEEDINGS
We are not a party to any material legal proceedings and to our knowledge; no
such proceedings are threatened or contemplated by any party.
DESCRIPTION OF PROPERTY
The Company does not own any real estate or other properties. The Company's
office is located at 3638 North Rancho Drive, Suite 6-D, Las Vegas, NV 89130
and our telephone number is (702) 839-2573 and the fax is (702) 243-6896.
BUSINESS
Company History
Dura Track Enterprises, Inc. ("Dura Track") is a development stage Company,
organized on March 19, 2004, in the State of Nevada, to enter into
manufacturing and supply of a line of drapery hardware components, entirely
composed of engineering plastics, used in the commercial window covering
industry.
On May 1, 2004, the Company signed a 36-month exclusive license to
manufacture and distribute certain drapery hardware components under the Dura
Track name. The license carries a 36-month renewal at the option of Dura
Track. Under the terms of the license, the Company must pay 20% of its gross
revenues generated by the licensed products, with a minimum annual royalty of
$50,000, to retain its exclusivity to the product rights. To date, the
Company has no operating history and has not yet implemented any of its
manufacturing or marketing initiatives. On February 22, 2005, the Company
signed an amendment to the license agreement whereby the minimum annual
royalty payments have been waived until May 1, 2007.
The Company signed a "Consulting Services Agreement" with Altres Group, LLC,
effective April 23, 2004, whereby Altres Group will assist the Company in the
creation of the corporate entity, provide consulting services, assistance to
become a United States reporting company, and other related matters regarding
the preparation and filing of materials related to "public company" filings.
The Company has agreed to pay Altres Group a total of $45,000 for its
services, of which $5,000 has been paid and the remaining $40,000 balance to
be payable immediately upon filing of a Form 15(c)211 package with a
securities broker/dealer and acceptance of same by the NASD or similar
approval authority.
Dura Track has provided the following information concerning the Company and
its business for inclusion in this Offering. The information contained herein
does not purport to be all-inclusive or to contain all the information that a
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prospective investor may desire. This information contains statements that
constitute "forward-looking statements" within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995. Any statements that express
or involve discussions with respect to predictions, business strategy,
budgets, developments opportunities or projects, the expected timing of
transactions or other expectations, beliefs, plans, objectives, assumptions
or future events or performance are not statements of historical fact and may
be "forward-looking statements". Forward-looking statements are based on
expectations, estimates and projections at the time the statements are made
that involve a number of known and unknown risks and uncertainties which
could cause actual results or events to differ materially from those
anticipated by Dura Track Enterprises, Inc.
Company Description
Dura Track intends to offer plastic drapery hardware components, which
generally are stronger and less expensive than their metal counterparts,
through a network of distributors and dealers. The Company's initial market
focus will be in North America with possible expansion internationally in the
mid term.
The Company has the exclusive use of seven plastic-injection molds that will
be used to manufacture the six drapery hardware components that the Company
will offer for sale. The molds are located at Leone Industries Inc. in
Burnaby, British Columbia, Canada. Leone Industries has been in the plastic-
injection mold and product assembly business for over 25 years and has a
reputation for quality manufacturing. Some of the Dura Track product line
components will be fully complete after the plastic-injection mold process
and require no assembly. Two of the components (end pulleys and floor
pulleys) require assembly. The end pulleys have two plastic wheels that must
be inserted and the floor pulleys have a wheel and a spring that must be
inserted. Leone Industries has verbally agreed to provide all manufacturing,
assembly, and packaging of the Dura Track product line and warehouse the
product for direct shipping to Dura Track's customers.
Market Opportunity
The commercial window covering industry is influenced by two major factors:
one being current fashion trends and the second being cost.
From early 1900's to the early 1980's, the bulk of all commercial window
coverings had been soft (being draperies and drapery tracks). In the early
1980's, a shift to hard window covering began (hard window covering being
venetian blinds or mini blinds). By the end of the 1980's, the majority of
commercial window coverings became hard with mini blinds covering the
majority of new apartment and condominium windows. Mini blinds remained
popular from both a fashion and price point until the late 1990's, when their
installation on a new construction site became regarded as substandard. Over
the past few years, new apartment and condominium construction has been
installing more soft window covering (draperies and track). As more housing
becomes available in urban areas, the competition for buyer and renter has
increased and developers are now seeking ways of differentiating their
products from their competitors and more soft window treatments are currently
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being installed. Dura Track, with its stronger lighter and less expensive
drapery hardware components, is poised to take advantage of this trend. The
cost of supplying the hardware components for commercial window coverings can
be 40% of the total price. In a competitive bid circumstances, Dura Track's
plastic components can be installed for approximately 50% less than
traditional metal components - giving bidders a significant cost advantage,
resulting in a very competitive bid.
Product Description
Dura Track will manufacture up to six separate components that are used in
the assembly of a drapery tracks. A metal "c" channel type track is still
used, although all of the Company's components are injection molded using the
latest in engineering plastics.
Each of the Company's components has been engineered to out-perform their
metal counter parts while providing significant cost savings. Each of the
components will be packaged in bulk, with minimum quantities being between
200 and 500 units per box.
There are two types of drapery hardware used in the commercial industry that
Dura Track products are designed for. One type is called "cord drawn" where
there is a drapery cord to operate the opening and closing of the draperies.
The second type is called "hand drawn" where an 18-inch rod (called a fling
rod) is attached to the leading edge of the drape and the drape is closed
manually by grasping the rod. Both styles of drapery tracks are fastened to
the wall using a wall bracket.
Dura Track Products:
Item Quantity
Number Per Box Name Description
- ------ -------- ---- -----------
D15 500 End Lock Product is used to snap on to the
end of a hand drawn drapery track
for two purposes. One, to stop the
glides on the drapery track from
slipping off the end and second,
to provide a fastener for the last
pin on the outside edges of each
drape.
D17 200 Wall Bracket Product is used to fasten the
drapery rod to the wall above the
window. Once the bracket is
fastened, a "c" channel drapery
track snaps into the bracket. Used
for both hand drawn and cord drawn
drapery tracks.
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D21 200 Pairs End Pulley These components are usually used
in pairs attached to the ends of a
cord drawn drapery track. These
components service two purposes:
they have a set of wheels that
allow the drapery cord to operate
smoothly and they provide a
fastener for the last pin on the
outside edges of each drape.
D23 200 Floor Pulley This component used for cord drawn
drapery tracks and is either
fastened to the wall or the floor.
It contains a wheel and is spring
loaded to help keep tension on the
operating cord for the drapery
track.
D25 200 Fling Rod This component is used with hand
drawn drapery tracks and is
attached to the leading glide or
fastener of the drapery to allow
hand closing and opening of a
drape.
D27 200 Pairs Master Glides These components are usually used
in pairs for both hand drawn and
cord drawn drapery tracks. The
master glides have overlapping
arms that allow the draperies in
the center of a pair to overlap
for privacy.
Competitive Advantages
Dura Track components will have multiple competitive advantages over their
metal counterparts. These advantages include price, strength, durability,
weight and resistance to rust.
Price: Unlike their metal counterparts, Dura Track components are
manufactured by an injection molding process and require little assembly and
no painting, as the raw materials are colored prior to manufacturing. This
basic "one-step" manufacturing process requires less physical labor and
machinery than metal stamping, resulting in significant cost saving in
manufacturing.
Strength: With the advancement in polymer technologies, a new class of
plastic materials known as "engineering plastics" has been developed. In many
applications, from aerospace to automobiles, these new materials have proven
to be stronger and less expensive than metal and in some cases perform a
function that metal cannot compete with. Dura Track has taken advantage of
these new space age materials and their physical properties in the design and
manufacturing of its products. The end result is that the Dura Track product
line out performs its metal counterparts in strength and durability in a
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commercial application where normal wear and tear is greater than in a
domestic setting.
Durability: There are three physical factors that make up the durability of
almost every commercial product: impact resistance, flexural modulus, and
creep. Impact resistance is essentially how the product will perform or fail
when hit with a hammer. Metal components do fairly well in this test. Even
though there is some bending and chipping of paint, complete product failure
is rare. Dura Track's components in this test also fare well, except for the
wall mount bracket that is made from a very stiff engineering plastic that
has a tendency to shatter under an impact test. However, impact resistance is
not as an important physical factor required in the use of drapery hardware
components as flexural modulus and creep. Flexural modulus measures how an
item reacts under short-term load or stress when functioning as designed. For
example, a wall bracket holding a drapery track may experience increased load
if tugging the draperies occurs while trying to open or close them.
Traditional wall metal brackets fail when the load becomes between 30 and 50
pounds, while Dura Track wall brackets have proven to perform on loads in
excess of 250 pounds. The failure of wall brackets in commercial
installations is one of the most common occurring problems (i.e. brackets
bending and causing draperies to drag on the floor). Dura Track has all but
eliminated this problem by using engineering plastics. Creep measures how a
product performs long-term under load while performing its function. Many of
the traditional metal drapery components suffer from metal fatigue under
constant load. Dura Track's components, especially the overlap masters and
wall brackets, have shown to be superior in retaining their functionality
over a longer period of time under stress.
Product Weight: As Dura Track components are manufactured with plastic, their
weight compared to their metal counterparts is fractional. This reduction in
weight allows for lower shipping costs for the Company and its distributors
and their customers, which assists in the overall price performance ratio of
the Company's products.
Marketing
The commercial window covering industry is a long-time and well-established
industry, with established marketing channels from distribution to dealers to
wholesalers and retailers. Dura Track's prime focus will be that of a
manufacturer supplying various distributors who already have established
relationships with providers of commercial window covering in their
geographical area.
The Company will likely deploy an exclusive geographical distribution model
on a city-by-city basis throughout North America. Each Dura Track distributor
will likely be required to maintain certain minimum inventory levels while
meeting annual sales volumes with minimum quantity purchase orders.
Initially, the Company plans to use a direct marketing campaign to reach
distributors throughout North America. The Company will produce a price list
and brochure that will accompany shipments of product samples to targeted
distributors identified through telemarketing, the Internet, industry SIC
codes, and related trade shows.
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Direct Competition
There are several large, well-established competitors in the commercial
drapery hardware business globally. The largest of these competitors is
Kirsch, a global Company established in 1907 in Germany. The founder of
Kirsch is credited with the invention of the modern "c" channel drapery rod.
By the time Kirsch had reached its 50th anniversary in 1957 it had over 1800
employees and grossed over $30 million in annual sales.
Other direct competitors in the marketplace like Kirsch, who supply a wide
range of drapery hardware products for both the residential and commercial
markets, are OB-Masco Drapery Hardware Ogura of America Inc. and the Graber
Corporation. Unlike Dura Track, these competitors supply mainly metal
components and do not solely focus on the commercial aspect of the drapery
hardware business.
Staffing
As of March 31, 2005, Dura Track has no permanent staff other than its sole
Officer and Director, Mr. Darrel Crimeni, who is the President and Chairman
of the Company. Mr. Crimeni is employed full time elsewhere, but has the
flexibility to work on Dura Track up to 10 hours per week and is prepared to
devote more time, as may be required. He is not being paid at present.
Employees and Employment Agreements
At present, Dura Track has no employees other than its current Officer and
Director, Mr. Crimeni, who has not been compensated. There are no employment
agreements in existence. The Company presently does not have, pension,
health, annuity, insurance, stock options, profit sharing, or similar benefit
plans; however, the Company may adopt plans in the future. There are
presently no personal benefits available to the Company's Director.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This section of the Prospectus includes a number of forward- looking
statements that reflect our current views with respect to future events and
financial performance. Forward-looking statements are often identified by
words like: believe, expect, estimate, anticipate, intend, project and
similar expressions, or words which, by their nature, refer to future events.
You should not place undue certainty on these forward-looking statements,
which apply only as of the date of this Prospectus. These forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical results or our
predictions.
We are a development stage Company organized to enter into the manufacturing
and distribution of drapery hardware primarily composed of engineering
plastics. We have not yet generated or realized any revenues from business
operations.
Our auditors have issued a "going concern" opinion. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
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because we have not generated any revenues and no revenues are anticipated
until we begin manufacturing and selling our products. Accordingly, we must
raise cash from sources other than the sale of our product line. Our only
other source for cash at this time is investments by others in this Offering.
We must raise cash to implement our business strategy and stay in business.
The amount of the Offering will likely allow us to operate for at least one
year. Our success or failure will be determined by our ability to begin the
manufacturing process.
To meet our need for cash we are attempting to raise money from this
Offering. Whatever money we do raise, will be applied to the items set forth
in the Use of Proceeds section of this Prospectus.
MANAGEMENT
Officers and Directors
Our sole Director serves until his successor is elected and qualified. Our
sole Officer is elected by the Board of Directors to a term of one (1) year
and serves until his successor is duly elected and qualified, or until he is
removed from office. The Board of Directors has no nominating or compensation
committees. The Company's current Audit Committee consists of our sole
Officer and Director.
The name, address, age, and position of our present Officer and Director is
set forth below:
Name and Address Age Position(s)
---------------- --- -----------
Darrel Crimeni 55 President, Secretary/ Treasurer, Chief
6505 - 138th Street Financial Officer and Chairman of the
Surrey, BC, Canada V3W 5G5 Board of Directors
The person named above has held his offices/positions since inception of our
Company and is expected to hold his offices/positions at least until the next
annual meeting of our stockholders.
Background of Officers and Directors
Mr. Darrel Crimeni has spent the past 30 years of his professional career in
the contract window covering industry. Throughout his career in commercial
window coverings, Mr. Crimeni has successfully overseen the bidding,
awarding, manufacturing, and installation of window coverings for hundreds of
very large and prestigious construction projects including many Four Seasons
Hotels in Canada, The Pan Pacific Hotel and The Hotel Vancouver located in
Vancouver, British Columbia, Canada. Since 1995 until April 30, 2005, Mr.
Crimeni has been the Manager of Contract Sales for Aftex Products (Western)
Ltd. in Richmond, B.C., one of western Canada's largest suppliers of contract
window coverings. Aftex Products (Western) Ltd. is currently the distributor
of Kirsch drapery hardware components, a competitive product line to Dura
Track's drapery hardware components.
-33-
Prior to Aftex, Mr. Crimeni was Manager of Contract Sales for Tritex Fabrics
Ltd. of Vancouver. From 1976 to 1993, Mr. Crimeni was General Manager of
Adrians Interiors Ltd. and Crestwood Draperies Ltd., both located in
Richmond, B.C., where he was responsible for all aspects of their commercial
window covering divisions.
As of May 1, 2005 to present, Mr. Crimeni is the General Manager of Canadian
Blind Manufacturing, Inc. located in Richmond, B.C.
Conflicts of Interest
At the present time, the Company does not foresee any direct conflict of
interest between Mr. Crimeni's current position with Canadian Blind
Manufacturing, Inc. and his involvement in Dura Track.
EXECUTIVE COMPENSATION
Summary of Compensation
Dura Track has made no provisions for cash compensation or for non-cash
compensation to its officers and directors. No salaries are being paid at the
present time, and will not be paid unless, and until, there is available cash
flow being generated from operations to pay salary.
Employment Agreements
At this time, Dura Track has not entered into any employment agreements with
its Officer or Director. The Company may in the future, if there is available
cash flow from operations, enter into employment agreements with its officers
and directors and key staff members.
Stock Option Plan
The Board of Directors of Dura Track has not adopted a stock option plan
("Stock Option Plan"). The Company has no plans to adopt a stock option plan
but may choose to do so in the future. If such a plan is adopted, this plan
may be administered by the board or a committee appointed by the board (the
"Committee"). The committee would have the power to modify, extend or renew
outstanding options and to authorize the grant of new options in substitution
therefore, provided that any such action may not, without the written consent
of the optionee, impair any rights under any option previously granted. Dura
Track may develop an incentive based stock option plan for its officers and
directors and may reserve up to 10% of its outstanding shares of common stock
for that purpose.
Stock Awards Plan
The Company has not adopted a Stock Awards Plan, but may do so in the future.
The terms of any such plan have not been determined.
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PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the date of this Prospectus, the total
number of shares owned beneficially by each of our officers, directors, and
key employees, individually and as a group, and the present owners of 5% or
more of our total outstanding shares. The table also reflects what their
ownership will be assuming completion of the sale of all shares in this
Offering. The stockholder listed below has direct ownership of his shares and
possesses sole voting and dispositive power with respect to the shares.
Name and Address
Beneficial Ownership [1] Number of Shares Before the Offering Number of
Shares After Offering Assuming all of the Shares are Sold Percentage of
Ownership After the Offering Assuming all of the Shares are Sold
Number of % of
Shares After Ownership After
Name and Address Number of Offering Assuming Offering Assuming
Beneficial Shares Before All of the All of the
Ownership (1) the Offering Shares are Sold Shares are Sold
- ---------------- ------------ --------------- ---------------
Darrel Crimeni, 7,000,000 7,000,000 62.5%
6505 138th Street
Surrey, British Columbia
Canada V3W 5G5
All Officers and
Directors
as a Group (1 person) 7,000,000 7,000,000 62.5%
(1) The person named above may be deemed to be a "parent" and "promoter" of
our Company, within the meaning of such terms under the Securities Act of
1933, as amended, by virtue of his direct and indirect stock holdings.
Mr. Crimeni is the only "promoter" of our Company.
Future Sales by Existing Stockholders
A total of 7,000,000 shares of common stock were issued to our sole Officer
and Director, all of which are restricted securities, as defined in Rule 144
of the Rules and Regulations of the SEC promulgated under the Securities Act.
Under Rule 144, the shares can be publicly sold, subject to volume
restrictions and restrictions on the manner of sale, commencing one year
after their acquisition commencing on July 6, 2005. Under Rule 144, a
shareholder can sell up to 1% of total outstanding shares every three months
in brokers' transactions. Shares purchased in this Offering, which will be
immediately resalable, and sales of all of our other shares after applicable
restrictions expire, could have a depressive effect on the market price, if
any, of our common stock and the shares we are Offering.
Because our sole Officer and Director will continue to retain majority
control of us after the Offering, regardless of the number of 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 gone. This could
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result in a reduction in value to the shares you own because of the
ineffective voting power. No common stock is subject to outstanding options,
warrants, or securities convertible into common stock.
DESCRIPTION OF SECURITIES
Common Stock
Our authorized capital stock consists of 75,000,000 shares of common stock,
par value $0.001 per share. The holders of our common stock:
- have equal ratable rights to dividends from funds legally available if
and when declared by our Board of Directors;
- are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution or
winding up of our affairs;
- do not have preemptive, subscription or conversion rights and there are
no redemption or sinking fund provisions or rights;
- and are entitled to one non-cumulative vote per share on all matters on
which stockholders may vote.
We refer you to our Articles of Incorporation, Bylaws, and the applicable
statutes of the State of Nevada for a more complete description of the rights
and liabilities of holders of our securities.
Non-cumulative Voting
Holders of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the outstanding shares,
voting for the election of directors, can elect all of the directors to be
elected, if they so choose, and, in that event, the holders of the remaining
shares will not be able to elect any of our directors. After this Offering is
completed, present stockholders will own approximately 63% of our outstanding
shares.
Cash Dividends
As of the date of this Prospectus, we have not declared or paid any cash
dividends to stockholders. The declaration of any future cash dividend will
be at the discretion of our Board of Directors and will depend upon our
earnings, if any, our capital requirements and financial position, our
general economic conditions, and other pertinent conditions. It is our
present intention not to pay any cash dividends in the foreseeable future,
but rather to reinvest earnings, if any, in our business operations.
Anti-Takeover Provisions
There are no Nevada anti-takeover provisions that may have the affect of
delaying or preventing a change in control. 78.378 through 78.3793 of the
Nevada Revised Statutes relates to control share acquisitions that may delay
to make more difficult acquisitions or changes in our control, however, they
only apply when we have 200 or more stockholders of record, at least 100 of
whom have addresses in the State of Nevada appearing on our stock ledger and
we do business in this state directly or through an affiliated corporation.
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Neither of the foregoing events seems likely to occur. Currently, we at
present have no Nevada shareholders. Further, we do not do business in Nevada
directly or through an affiliate corporation and we do not intend to do
business in the State of Nevada in the future. Accordingly, there are no
anti-takeover provisions that have the affect of delaying or preventing a
change in our control.
Reporting
After we complete this Offering, we will not be required to furnish you with
an annual report. Further, we will not voluntarily send you an annual report.
We will be required to file reports with the SEC under section 15(d) of the
Securities Act. The reports will be filed electronically. The reports we will
be required to file are Forms 10-KSB, 10-QSB, and 8-K. You may read copies of
any materials we file with the SEC at the SEC's Public Reference Room at 450
Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The SEC also maintains an Internet site that will contain copies of the
reports we file electronically. The address for the Internet site is
www.sec.gov.
Stock Transfer Agent
We have not engaged the services of a Transfer Agent at this time, however,
within the next twelve months we anticipate doing so. Until such a time a
Transfer Agent is retained, Dura Track will act as its own Transfer Agent.
CERTAIN TRANSACTIONS
In July 2004, we issued a total of 7,000,000 shares of common stock to Darrel
Crimeni, our sole Officer and Director, for total cash consideration of
$7,000. This was accounted for as a purchase of common stock. In October and
December 2004, we issued a total of 2,400,000 common shares for consideration
of $12,000, which was accounted for as a purchase of common stock. In January
2005, we issued 800,000 common shares for total consideration of $4,000,
which was accounted for as a purchase of common stock.
LITIGATION
We are not a party to any pending litigation and none is contemplated or
threatened.
EXPERTS
Our financial statements for the period from inception to March 31, 2005,
included in this Prospectus have been audited by Dale Matheson Carr-Hilton
LaBonte, Chartered Accountants, 1700 - 1140 West Pender Street, Vancouver,
British Columbia, Canada V6E 4G1 as set forth in their report included in
this Prospectus. Their report is provided on their authority as experts in
accounting and auditing.
-37-
Jeffrey Nichols, Attorney at Law, Suite 500, 388 Market Street, San
Francisco, CA 94111 has acted as our legal counsel. Mr. Nichols has provided
his opinion on the legality of the 3,200,000 shares of common stock being
registered on behalf of certain Selling Shareholders by way of this
Prospectus.
FINANCIAL STATEMENTS
Our fiscal year end is December 31st. We will provide audited financial
statements to our stockholders on an annual basis; as prepared by an
Independent Certified Public Accountant.
Our financial statements immediately follow:
FINANCIAL STATEMENTS Page
-------------------- ----
Auditors Report F-1
Balance Sheets F-2
Statements of Operations F-3
Statement of Stockholders' Equity F-4
Statements of Cash Flows F-5
Notes to the Financial Statements F-6 thru F-9
-38-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors of Dura Track Enterprises, Inc.
We have audited the balance sheet of Dura Track Enterprises, Inc. (a
development stage company) as at March 31, 2005 and December 31, 2004 and the
statements of operations, changes in stockholders' equity and cash flows for
the periods from March 19, 2004 (inception) to December 31, 2004, the three
month period ended March 31, 2005 and the period March 19, 2004 (inception) to
March 31, 2005. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the Standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at March 31, 2005 and
December 31, 2004 and the results of its operations and cash flows and the
changes in stockholders' equity for the periods from March 19, 2004 (inception)
to December 31, 2004, the three month period ended March 31, 2005 and the
period March 19, 2004 (inception) to March 31, 2005, in accordance with
generally accepted accounting principles in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is in the development stage and has incurred
losses since inception and has limited working capital available raising
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
"Dale Matheson Carr-Hilton LaBonte"
CHARTERED ACCOUNTANTS
/s/ Dale Matheson Carr-Hilton LaBonte
- -------------------------------------
Vancouver, B.C.
April 29, 2005
F-1
DURA TRACK ENTERPRISES, INC.
(A Development Stage Company)
BALANCE SHEETS
March 31, December 31,
2005 2004
- -------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash $ 16,411 $ 13,091
Prepaid expenses 175 175
------- -------
$ 16,586 $ 13,266
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 5,000 $ -
Due to related party (Note 7) 1,255 1,255
------- -------
6,255 1,255
------- -------
GOING CONCERN CONTINGENCY (Note 1)
STOCKHOLDERS' EQUITY
Capital stock (Note 4)
Authorized
75,000,000 shares of common stock, $0.001 par value,
Issued and outstanding
10,200,000 shares of common stock
(2004 - 9,400,000 shares) 10,200 9,400
Additional paid in capital 12,800 9,600
Deficit accumulated during development stage (12,669) (6,989)
------- -------
10,331 12,011
------- -------
$ 16,586 $ 13,266
======= =======
The accompanying notes are an integral part of these financial statements.
F-2
DURA TRACK ENTERPRISES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Three months March 19, 2004
Ended (Inception) to March 19,
2004
March 31, December 31, (Inception)
to
2005 2004 March 31,
2005
- -----------------------------------------------------------------------------
- -
GENERAL AND ADMINISTRATIVE EXPENSES
Office and general $ 555 $ 6,444 $ 6,999
Professional fees 5,125 545 5,670
----------- ------------ ------------
NET LOSS FOR THE PERIOD $ (5,680) $ (6,989) $ (12,669)
========== ============
============
BASIC NET LOSS PER SHARE $ (0.01) $ (0.01)
========== ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 9,757,875 4,546,597
========== ============
The accompanying notes are an integral part of these financial statements.
F-3
DURA TRACK ENTERPRISES, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM MARCH 19, 2004 (INCEPTION) TO MARCH 31, 2005
Deficit
Accumulated
---Common Stock--- Additional During
Number of Paid In Development
Shares Amount Capital Stage Total
- ----------------------------------------------------------------------------
Balance, March 19, 2004 - $ - $ - $ - $ -
Common stock issued for
cash at $0.001 per share
July 6, 2004 7,000,000 7,000 - - 7,000
Common stock issued for
cash at $0.005 per share
October 25, 2004 420,000 420 1,680 - 2,100
October 27, 2004 380,000 380 1,520 - 1,900
December 30, 2004 1,600,000 1,600 6,400 - 8,000
Net loss for the period - - - (6,989) (6,989)
--------- ------ ------ ------- -------
Balance,
December 31, 2004 9,400,000 9,400 9,600 6,989) 12,011
Common stock issued for
cash at $0.005 per share
January 28, 2005 800,000 800 3,200 - 4,000
Net loss for the period - - - (5,680) (5,680)
--------- ------ ------ ------- -------
Balance,
March 31, 2005 10,200,000 $ 10,200 $ 12,800 $ (12,669) $10,331
========= ===== ====== ======= ======
The accompanying notes are an integral part of these financial statements.
F-4
DURA TRACK ENTERPRISES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
March 19,
2004
Three months (Inception) to March 19, 2004
ended March December 31, (Inception) to
31,2005 2004 March 31, 2005
- ------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (5,680) $ (6,989) $ (12,669)
Adjustments to reconcile net
loss to net cash from operating
activities:
- Prepaid expenses - (175) (175)
- accounts payable and
accrued liabilities 5,000 1,255 6,255
------ ------ ------
NET CASH USED IN OPERATING
ACTIVITIES (680) (5,909) (6,589)
------ ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds on sale of common stock 4,000 19,000 23,000
------ ------ ------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 4,000 19,000 23,000
------ ------ ------
INCREASE IN CASH 3,320 13,091 -
CASH, BEGINNING OF PERIOD 13,091 - -
------ ------ ------
CASH, END OF PERIOD $ 16,411 $ 13,091 $ 16,411
====== ====== ======
Supplemental disclosures with respect to cash flows:
Interest paid $ - $ - $ -
====== ====== ======
Income taxes paid $ - $ - $ -
====== ====== ======
The accompanying notes are an integral part of these financial statements.
F-5
DURA TRACK ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2005 AND DECEMBER 31, 2004
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Dura Track Enterprises, Inc. (the "Company") is in the initial development
stage and has incurred losses since inception totalling $12,669. The Company
was incorporated on March 19, 2004 in the State of Nevada. The Company's
fiscal year end is December 31. The Company was organized to enter into the
manufacturing and supply of a unique line of drapery hardware components,
entirely composed of engineering plastics that are used in the commercial
window covering industry. The Company signed a 36 month exclusive license
agreement to manufacture and distribute certain drapery hardware components
under the Dura Track name. The license carries a 36 month renewal at the
option of The Company. The Company's initial market focus will be in North
America with possible expansion internationally in the mid term. To date the
Company has had no business operations. The ability of the Company to
continue as a going concern is dependent on raising capital to fund its
business plan and ultimately to attain profitable operations. Accordingly,
these factors raise substantial doubt as to the Company's ability to continue
as a going concern. The Company is funding its initial operations by way of
issuing Founders' shares and a Private Placement Offering Memorandum for
10,000,000 shares at $.005 per share. As of March 31, 2005 the Company had
sold 10,200,000 shares and had received $23,000 in proceeds from the sale of
the Company's common stock of which 7,000,000 Founders' shares were issued at
$.001 per share for net proceeds of $7,000 and 3,200,000 shares were issued
at $.005 per share for net proceeds of $16,000 pursuant to the Private
Placement Offering Memorandum.
NOTE 2 _ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These financial statements are presented in United States dollars and have
been prepared in accordance with United States generally accepted accounting
principles.
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual
results could differ from those estimates.
Income taxes
The Company follows the liability method of accounting for income taxes.
Under this method, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax balances. Deferred tax assets and liabilities are measured
F-6
using enacted or substantially enacted tax rates expected to apply to the
taxable income in the years in which those differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
date of enactment or substantive enactment. As at March 31, 2005 the Company
had net operating loss carryforwards; however, due to the uncertainty of
realization the Company has provided a full valuation allowance for the
deferred tax assets resulting from these loss carryforwards.
Net Loss per Share
Basic loss per share includes no dilution and is computed by dividing loss
available to common stockholders by the weighted average number of common
shares outstanding for the period. Dilutive losses per share reflects the
potential dilution of securities that could share in the losses of the
Company. Because the Company does not have any potentially dilutive
securities, the accompanying presentation is only of basic loss per share.
Foreign Currency Translation
The financial statements are presented in United States dollars. In
accordance with SFAS No. 52, "Foreign Currency Translation", foreign
denominated monetary assets and liabilities are translated to their United
States dollar equivalents using foreign exchange rates which prevailed at the
balance sheet date. Revenue and expenses are translated at average rates of
exchange during the period. Related translation adjustments are reported as
a separate component of stockholders' equity, whereas gains or losses
resulting from foreign currency transactions are included in results of
operations.
Stock-based Compensation
The Company has not adopted a stock option plan and has not granted any stock
options. Accordingly no stock-based compensation has been recorded to date.
Recent accounting pronouncements
In December 2004, the FASB issued SFAS No. 153, Exchanges of Non-monetary
Assets, an amendment of APB Opinion No. 29, Accounting for Non-monetary
Transactions ("SFAS 153"). SFAS 153 requires that exchanges of non-monetary
assets are to be measured based on fair value and eliminates the exception
for exchanges of non-monetary, similar productive assets, and adds an
exemption for non-monetary exchanges that do not have commercial substance.
SFAS 153 will be effective for fiscal periods beginning after June 15, 2005.
Management does not believe that the adoption of this standard will have a
material impact on the Company's financial condition or results of
operations.
In December 2004, the FASB issued SFAS No. 123R, "Share Based Payment". SFAS
123R is a revision of SFAS No. 123 "Accounting for Stock-Based Compensation",
and supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees"
and its related implementation guidance. SFAS 123R establishes standards for
the accounting for transactions in which an entity exchanges its equity
instruments for goods or services. It also addresses transactions in which an
entity incurs liabilities in exchange for goods or services that are based on
the fair value of the entity's equity instruments or that may be settled by
the issuance of those equity instruments. SFAS 123R focuses primarily on
F-7
accounting for transactions in which an entity obtains employee services in
share-based payment transactions. SFAS 123R does not change the accounting
guidance for share-based payment transactions with parties other than
employees provided in SFAS 123 as originally issued and EITF Issue No. 96-18,
"Accounting for Equity Instruments That Are Issued to Other Than Employees
for Acquiring, or in Conjunction with Selling, Goods or Services". SFAS 123R
does not address the accounting for employee share ownership plans, which are
subject to AICPA Statement of Position 93-6, "Employers' Accounting for
Employee Stock Ownership Plans". SFAS 123R requires a public entity to
measure the cost of employee services received in exchange for an award of
equity instruments based on the grant-date fair value of the award (with
limited exceptions). That cost will be recognized over the period during
which an employee is required to provide service in exchange for the award -
the requisite service period (usually the vesting period). SFAS 123R requires
that the compensation cost relating to share-based payment transactions be
recognized in financial statements. That cost will be measured based on the
fair value of the equity or liability instruments issued. The scope of SFAS
123R includes a wide range of share-based compensation arrangements including
share options, restricted share plans, performance-based awards, share
appreciation rights, and employee share purchase plans. Public entities
(other than those filing as small business issuers) will be required to apply
SFAS 123R as of the first interim or annual reporting period that begins
after June 15, 2005. Public entities that file as small business issuers will
be required to apply SFAS 123R in the first interim or annual reporting
period that begins after December 15, 2005. For nonpublic entities, SFAS 123R
must be applied as of the beginning of the first annual reporting period
beginning after December 15, 2005. Management is currently evaluating the
impact, which the adoption of this standard will have on the Company's
results of operations or financial position.
NOTE 3 - FAIR VALUE OF FINANCIAL INSTRUMENTS
In accordance with the requirements of SFAS No. 107, the Company has
determined the estimated fair value of financial instruments using available
market information and appropriate valuation methodologies. The fair value
of financial instruments classified as current assets or liabilities
approximate their carrying value due to the short-term maturity of the
instruments.
NOTE 4 - CAPITAL STOCK
The Company's capitalization is 75,000,000 common shares with a par value of
$0.001 per share.
As at March 31, 2005 the Company has not granted any stock options and has
not recorded any stock-based compensation.
During the period ended December 31, 2004, a director purchased 7,000,000
shares of common stock in the Company at $0.001 per share with proceeds to
the Company totalling $7,000.
Private Placement: On August 30, 2004 the Company issued a Private Placement
Offering Memorandum offering 10,000,000 shares of common stock at a price of
$0.005 per share. The total amount to be raised in this financing is $50,000.
F-8
As of March 31, 2005 the Company had sold 3,200,000 shares and had received
$16,000 in proceeds from the sale of the Company's common stock.
NOTE 5 - INTERNATIONAL DISTRIBUTOR AGREEMENT
On May 1, 2004 the Company entered in to a 36 month International Distributor
Agreement with Adele Paulsen (refer to Note 7) whereby the Company may
distribute and manufacture certain drapery components under the Dura Track
name. The Agreement carries a 36 month renewal at the option of the Company.
Under the terms of the license, the Company must pay a twenty percent royalty
on its gross revenues generated by the licensed products, with a minimum
annual royalty of $50,000, to retain its exclusivity to the product rights.
On February 22, 2005 an amendment to the Paulsen International Distributor
Agreement was made. By agreement of both parties, the twenty percent royalty
of the gross sales amount and the minimum $50,000 royalty payment have been
waived and shall not become effective until May 1, 2006.
NOTE 6 _ COMMITMENTS
On April 23, 2004 the Company entered into a Consulting Services Agreement
with the Altres Group LLC ("Altres") to assist in the creation of the
corporate entity, provide consulting services, assistance to become a United
States reporting company and other related matters regarding the preparation
and filings of materials related to a public company filing.
The Company has agreed to pay Altres a total of $45,000 for its services of
which $5,000 has been paid on July 19, 2004 and the remaining $40,000 balance
to be payable immediately upon filing of a Form 15 (C) 211 package with a
securities broker/dealer and acceptance of same by the NASD.
NOTE 7 - RELATED PARTY TRANSACTIONS
A director of the Company is relative of Adele Paulsen, the Licensor of the
Company. Refer to Note 5.
The Company owes a director of the Company $1,255. The amounts payable are
non-interest bearing with no set terms of repayment.
NOTE 8 - INCOME TAXES
The Company has adopted FASB No. 109 for reporting purposes. As of March 31,
2005, the Company had net operating loss carry forwards of approximately
$13,000 that may be available to reduce future years' taxable income and will
expire commencing 2015. Availability of loss usage is subject to change of
ownership limitations under Internal Revenue Code 382. Future tax benefits
which may arise as a result of these losses have not been recognized in these
financial statements, as their realization is determined not likely to occur
and accordingly, the Company has recorded a valuation allowance for the
deferred tax asset relating to these tax loss carryforwards.
F-9
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
Dale Matheson Carr-Hilton LaBonte, Chartered Accountants, from their
Vancouver, British Columbia, Canada office, are our auditors. There have not
been any changes in or disagreements with accountants on accounting and
financial disclosure or any other matter.
Part II. INFORMATION NOT REQUIRED IN THE PROSPECTUS
Other Expenses of Issuance and Distribution
The estimated expenses of the Offering, whether or not all shares are sold,
all of which are to be paid by the registrant, are as follows:
Legal and Accounting $ 2,062
SEC Filing Fee 15
Printing 250
Transfer Agent 2,100
-----
TOTAL $ 4,427
Recent Sales of Unregistered Securities
(a) Prior sales of common shares
Dura Track is authorized to issue up to 75,000,000 shares of common stock
with a par value of $0.001. As of March 31, 2005, we had issued 7,000,000
common shares to our sole Officer and Director for total consideration of
$7,000. In addition, we have issued 3,200,000 common shares for total
consideration of $16,000 to a total of eight registered shareholders, four of
whom reside outside the United States.
Dura Track is not listed for trading on any securities exchange in the United
States and there has been no active market in the United States or elsewhere
for the common shares.
During the past year, the Company has sold the following securities, which
were not registered under the Securities Act of 1933, as amended:
On July 6, 2004, we issued 7,000,000 common shares to Darrel Crimeni, the
sole Officer and Director of the Company, at an offering price of $0.001 per
share for gross offering proceeds of $7,000 in an offshore transaction
pursuant to Rule 903 of Regulation S of the Securities Act of 1933. Darrel
Crimeni is not a U.S. person as that term is defined in Regulation S. No
directed selling efforts were made in the United States by the Company, any
distributor, any of their respective affiliates or any person acting on
behalf of any of the foregoing. We are subject to Category 3 of Rule 903 of
Regulation S and accordingly we implemented the offering restrictions
required by Category 3 of Rule 903 of Regulation S by including a legend on
all offering materials and documents which stated that the shares have not
been registered under the Securities Act of 1933 and may not be offered or
sold in the United States or to US persons unless the shares are registered
under the Securities Act of 1933, or an exemption from the registration
requirements of the Securities Act of 1933 is available. The offering
-39-
materials and documents also contained a statement that hedging transactions
involving the shares may not be conducted unless in compliance with the
Securities Act of 1933.
On the dates listed below, we issued a total of 1,600,000 common shares to
four shareholders at an offering price of $0.005 per share for gross offering
proceeds of $8,000 in offshore transactions pursuant to Rule 903 of
Regulation S of the Securities Act of 1933. None of the shareholders are U.S.
persons as that term is defined in Regulation S. No directed selling efforts
were made in the United States by the Company, any distributor, any of their
respective affiliates or any person acting on behalf of any of the foregoing.
We are subject to Category 3 of Rule 903 of Regulation S and accordingly we
implemented the offering restrictions required by Category 3 of Rule 903 of
Regulation S by including a legend on all offering materials and documents
which stated that the shares have not been registered under the Securities
Act of 1933 and may not be offered or sold in the United States or to U.S.
persons unless the shares are registered under the Securities Act of 1933, or
an exemption from the registration requirements of the Securities Act of 1933
is available. The offering materials and documents also contained a statement
that hedging transactions involving the shares may not be conducted unless in
compliance with the Securities Act of 1933.
October 25, 2004 - 420,000 common shares to one individual investor.
October 27, 2004 - 380,000 common shares to one investor.
January 28, 2005 - 800,000 common shares to two individual investors.
On December 30, 2004, we issued 1,600,000 common shares to four shareholders
at an offering price of $0.005 per share for gross offering proceeds of
$8,000 pursuant to an exemption from registration under Rule 504 of
Regulation D. The appropriate filings were made at the federal and state
level. The share transactions took place within the United States and were
offered and subject at all times to the restrictions on the sale and resale
of the offered shares specified in WAC 460-44A-504 and California Corporate
Code 25102 (f) and according to Rule 144 promulgated pursuant to the Act by
the Securities and Exchange Commission.
(b) Use of proceeds
We have spent a portion of the above proceeds to pay for costs associated
with this Prospectus and expect the balance of the proceeds to be mainly
applied to further costs of this Prospectus and administrative costs.
We shall report the use of proceeds on our first periodic report filed
pursuant to sections 13(a) and 15(d) of the Exchange Act after the effective
date of this Registration Statement and thereafter on each of our subsequent
periodic reports through the later of 1) the disclosure of the application of
the Offering proceeds, or 2) disclosure of the termination of this Offering.
-40-
EXHIBITS
The following Exhibits are filed as part of this Registration Statement,
pursuant to Item 601 of Regulation K.
Exhibit No. Document Description
----------- --------------------
3.1 Articles of Incorporation of Dura Track
Enterprises, Inc.
3.2 Bylaws of Dura Track Enterprises, Inc.
4.1 Specimen Stock Certificate of Dura Track
Enterprises, Inc.
5.1 Opinion of Jeffrey Nichols regarding the legality
of the securities being registered
10.1 Dura Track Enterprises, Inc. International
Distributor Agreement
10.2 Amendment to the Dura Track Enterprises
International, Inc. International Distributor
Agreement
10.3 Altres Group, LLC Consulting Services Agreement
23.1 Consent of Dale Matheson Carr-Hilton LaBonte,
Chartered Accountants
99.1 Subscription Agreement of Dura Track Enterprises,
Inc.
Description of Exhibits
Exhibit 3.1 Articles of Incorporation of Dura Track Enterprises, Inc.,
dated March 3, 2004.
Exhibit 3.2 Bylaws of Dura Track Enterprises, Inc., approved and adopted
on March 26, 2004.
Exhibit 4.1 Specimen Stock Certificate of Dura Track Enterprises, Inc.
Exhibit 5.1 Opinion of Jeffrey Nichols, Attorney at Law, Suite 500, 388
Market Street, San Francisco, CA 94111, dated August 5,
2005, regarding the legality of the securities being
registered.
Exhibit 10.1 Dura Track Enterprises, Inc. International Distributor
Agreement, effective May 1, 2004.
Exhibit 10.2 Amendment to the Dura Track Enterprises, Inc. International
Distributor Agreement, effective February 22, 2005.
Exhibit 10.3 Altres Group, LLC Consulting Services Agreement, effective
April 23, 2004.
-41-
Exhibit 23.1 Consent of Dale Matheson Carr-Hilton LaBonte, Chartered
Accountants, 1700 - 1140 West Pender Street, Vancouver,
British Columbia, Canada V6E 4G1, dated August 8, 2005,
regarding the use in this Registration Statement of their
report of the auditors and financial statements of Dura
Track Enterprises, Inc. for the period ending March 31,
2005.
Exhibit 99.1 Subscription Agreement of Dura Track Enterprises, Inc.
UNDERTAKINGS
Presently the sole Officer and Director of Dura Track Enterprises, Inc. is
not covered by liability insurance. However, Dura Track's Articles of
Incorporation state that the Company may indemnify its officers, directors,
employees, and agents to the full extent permitted by the laws of the State
of Nevada. No other statute, charter provision, by-law, contract, or other
arrangement to insure or indemnify a controlling person, officer, or director
of Dura Track exists which would affect his liability in that capacity.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to officers, directors, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities, other than the payment by
the registrant of expenses incurred or paid by an officer, director, or
controlling person of the registrant in the successful defense of any action,
suit or proceeding, is asserted by such officer, director, or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by itself is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes:
1. To file, during any period in which it offers or sells securities, a post-
effective amendment to this Registration Statement:
a. To include any Prospectus required by Section 10(a)(3) of the
Securities Act;
b. To reflect in the Prospectus any facts or events which, individually or
together, represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered, if the total dollar value of
securities offered would not exceed that which is registered, any deviation
from the low or high end of the estimated maximum Offering range may be
reflected in the form of Prospectus filed with the Commission pursuant to
Rule 424 (b) if, in the aggregate, the changes in volume and price represent
-42-
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 the Registration Statement or any
change to such information in the Registration Statement.
2. That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
Offering of such securities at that time shall be deemed to be the initial
bona fide Offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
Offering.
SIGNATURES
Pursuant to 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 of filing on this Form SB-2 and authorized this Registration
Statement and has duly caused this Form SB-2 Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
Vancouver, British Columbia, on this 3rd day of August, 2005.
Dura Track Enterprises, Inc.
BY: /s/ Darrel Crimeni
----------------
Darrel Crimeni,
President, CFO
-43-
Know all men by these present, that each person whose signature appears below
constitutes and appoints Darrel Crimeni, as agent, with full power of
substitution, for his and in his name, place, and stead, in any and all
capacities, to sign any and all amendments, including post-effective
amendments, to this Registration Statement, and to file the same, therewith,
with the Securities and Exchange Commission, and to make any and all state
securities law or blue sky filings, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and
thing requisite or necessary to be done in about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying
the confirming all that said attorney-in-fact and agent, or any substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Form SB-2
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
/s/ Darrel Crimeni President, Chief Executive Officer August 3, 2005
- ------------------ Principal Executive Officer,
Chief Financial Officer and a
member of the Board of Directors.
-44-
EXHIBIT 3.1 Articles of Incorporation
ARTICLES OF INCORPORATION
OF
DURA TRACK ENTERPRISES, INC.
The undersigned, being the original incorporator herein named, for the
purpose of forming a corporation under the General Corporation Laws of the
State of Nevada, to do business both within and without the State of Nevada,
do make and file these Articles of Incorporation, hereby declaring and
certifying that the facts herein stated are true.
ARTICLE I
The name of the corporation, which is hereinafter referred to as "the
corporation" is:
DURA TRACK ENTERPRISES, INC.
ARTICLE II
The name and address of the Resident Agent for the service of process is:
CAPITOL CORPORATE SERVICES, INC.
202 S. MINNESOTA STREET
CARSON CITY, NEVADA 89703
ARTICLE III
The corporation is organized for the purpose of engaging in Any Lawful
Activity, within or without the State of Nevada.
ARTICLE IV
The total number of shares of authorized capital stock of the Corporation
shall consist of seventy-five million (75,000,000) shares of common stock at
$0.001 par value.
The Board of Directors may issue such shares of Common Stock in one or more
series, with such voting powers, designations, preferences and rights or
qualifications, limitations or restrictions thereof as shall be stated in
Resolutions or Bylaws adopted by them.
Stockholders of the corporation have a preemptive right, granted on uniform
terms and conditions prescribed by the Board of Directors to provide a fair and
reasonable opportunity to exercise the right, to acquire proportional
amounts the corporation's unissued shares upon the decision of the board of
directors to issue them limited by the provisions of NRS 78.267.
The Common Stock of the corporation, after the amount of the subscription price
has been paid, in money, property or services, as the directors shall
determine, shall not be subject to assessment to pay the debts of the
corporation, nor for any other purpose, and no stock issued as fully paid
shall ever be assessable or assessed, and the Articles of Incorporation shall
not be amended in this particular.
ARTICLE V
The name and address of the one member of the Board of Directors is as follows:
1. Darrel Crimeni, 6505 - 138th Street, Surrey, BC,
Canada V3W 5G5.
ARTICLE VI
The liability of the directors, officers or stockholders for damages for
breach of fiduciary duty as a director or officer is hereby eliminated
pursuant to NRS 78.037 except for acts or omissions which involve intentional
misconduct, fraud or knowing violation of law; or the payments of
distributions in violation of NRS 78.300.
ARTICLE VII
Every person who was or is a party to or is threatened to be made a party to,
or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he, or a person
of whom he is the legal representative, is or was a director or officer of
the corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise, shall be indemnified
and held harmless to the fullest extent legally permissible under the laws of
the State of Nevada from time to time against all expenses, liability and loss
(including attorneys' fees, judgments, fines and amounts paid or to be paid in
settlement) reasonably incurred or suffered by him in connection therewith.
Such right of indemnification shall be a contract right which may be enforced
in any manner desired by such person. The expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking
by or on behalf of the director or officer to repay the amount if it is
ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. Such right of indemnification
shall not be exclusive of any other right which such directors, officers or
representatives may have or hereafter acquire, and without limiting the
generality of such statement, they shall be entitled to their respective
rights of indemnification under any by-law, agreement, vote of stockholders,
provision of law, or otherwise, as well as their rights under this Article.
ARTICLE VIII
The name and address of the incorporator of DURA TRACK ENTERPRISES, INC., is:
Darrel Crimeni
6505 - 138th Street
Surrey, BC, Canada V3W 5G5
Dated: March 3, 2004 /s/ Darrel Crimeni
------------------
CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT
I hereby accept appointment as Resident Agent for DURA TRACK ENTERPRISES, INC.
Dated: March 3, 2004 /s/ Lee Ann Brooks
-------------------
On Behalf of CAPITOL CORPORATE SERVICES, INC.
EXHIBIT 3.2 By-Laws
BY-LAWS
OF
DURA TRACK ENTERPRISES, INC.
A Nevada Corporation
ARTICLE I - OFFICES
The registered office of the Corporation in the State of Nevada shall be
located in the City and State designated in the Articles of Incorporation.
The Corporation may also maintain offices at such other places within or
without the State of Nevada as the Board of Directors may, from time to time,
determine.
ARTICLE II - MEETING OF SHAREHOLDERS
Section 1 - Annual Meetings
The annual meeting of the shareholders of the Corporation shall be held at
the time fixed, from time to time, by the Directors.
Section 2 - Special Meetings
Special meetings of the shareholders may be called by the Board of Directors
or such person or persons authorized by the Board of Directors and shall be
held within or without the State of Nevada.
Section 3 - Place of Meetings
Meetings of shareholders shall be held at the registered office of the
Corporation, or at such other places, within or without the State of Nevada as
the Directors may from time to time fix. If no designation is made, the
meeting shall be held at the Corporation's registered office in the state of
Nevada.
Section 4 - Notice of Meetings
(a) Written or printed notice of each meeting of shareholders, whether annual
or special, signed by the president, vice president or secretary, stating the
time when and place where it is to be held, as well as the purpose or
purposes for which the meeting is called, shall be served either personally
or by mail, by or at the direction of the president, the secretary, or the
officer or the person calling the meeting, not less than ten or more than
sixty days before the date of the meeting, unless the lapse of the prescribed
time shall have been waived before or after the taking of such action, upon
each shareholder of record entitled to vote at such meeting, and to any other
shareholder to whom the giving of notice may be required by law. If mailed,
such notice shall be deemed to be given when deposited in the United States
mail, addressed to the shareholder as it appears on the share transfer
records of the Corporation or to the current address, which a shareholder has
delivered to the Corporation in a written notice.
(b) Further notice to a shareholder is not required when notice of two
consecutive annual meetings, and all notices of meetings or of the taking of
action by written consent without a meeting to him or her during the period
between those two consecutive annual meetings; or all, and at least two
payments sent by first-class mail of dividends or interest on securities
during a 12-month period have been mailed addressed to him or her at his or her
address as shown on the records of the Corporation and have been returned
undeliverable.
Section 5 - Quorum
(a) Except as otherwise provided herein, or by law, or in the Articles of
Incorporation (such Articles and any amendments thereof being hereinafter
collectively referred to as the "Articles of Incorporation"), a quorum shall
be present at all meetings of shareholders of the Corporation, if the holders
of a majority of the shares entitled to vote on that matter are represented
at the meeting in person or by proxy.
(b) The subsequent withdrawal of any shareholder from the meeting, after the
commencement of a meeting, or the refusal of any shareholder represented in
person or by proxy to vote, shall have no effect on the existence of a
quorum, after a quorum has been established at such meeting.
(c) Despite the absence of a quorum at any meeting of shareholders, the
shareholders present may adjourn the meeting.
Section 6 - Voting and Acting
(a) Except as otherwise provided by law, the Articles of Incorporation, or
these Bylaws, any corporate action, the affirmative vote of the majority of
shares entitled to vote on that matter and represented either in person or by
proxy at a meeting of shareholders at which a quorum is present, shall be the
act of the shareholders of the Corporation.
(b) Except as otherwise provided by statute, the Certificate of
Incorporation, or these bylaws, at each meeting of shareholders, each
shareholder of the Corporation entitled to vote thereat, shall be entitled to
one vote for each share registered in his name on the books of the
Corporation.
(c) Where appropriate communication facilities are reasonably available, any
or all shareholders shall have the right to participate in any shareholders'
meeting, by means of conference telephone or any means of communications by
which all persons participating in the meeting are able to hear each other.
Section 7 - Proxies
Each shareholder entitled to vote or to express consent or dissent without a
meeting, may do so either in person or by proxy, so long as such proxy is
executed in writing by the shareholder himself, his authorized officer,
director, employee or agent or by causing the signature of the stockholder to
be affixed to the writing by any reasonable means, including, but not limited
to, a facsimile signature, or by his attorney-in-fact there unto duly
authorized in writing. Every proxy shall be revocable at will unless the
proxy conspicuously states that it is irrevocable and the proxy is coupled
with an interest. A telegram, telex, cablegram, or similar transmission by
the shareholder, or a photographic, photostatic, facsimile, shall be treated
as a valid proxy, and treated as a substitution of the original proxy, so long
as such transmission is a complete reproduction executed by the shareholder.
If it is determined that the telegram, cablegram or other electronic
transmission is valid, the persons appointed by the Corporation to count the
votes of shareholders and determine the validity of proxies and ballots or
other persons making those determinations must specify the information upon
which they relied. No proxy shall be valid after the expiration of six months
from the date of its execution, unless otherwise provided in the proxy. Such
instrument shall be exhibited to the Secretary at the meeting and shall be
filed with the records of the Corporation. If any shareholder designates two
or more persons to act as proxies, a majority of those persons present at the
meeting, or, if one is present, then that one has and may exercise all of the
powers conferred by the shareholder upon all of the persons so designated
unless the shareholder provides otherwise.
Section 8 - Action Without a Meeting
Unless otherwise provided for in the Articles of Incorporation of the
Corporation, any action to be taken at any annual or special shareholders'
meeting, may be taken without a meeting, without prior notice and without a
vote if written consents are signed by a majority of the shareholders of the
Corporation, except however if a different proportion of voting power is
required by law, the Articles of Incorporation or these Bylaws, than that
proportion of written consents is required. Such written consents must be
filed with the minutes of the proceedings of the shareholders of the
Corporation.
ARTICLE III - BOARD OF DIRECTORS
Section 1 - Number, Term, Election and Qualifications
(a) The first Board of Directors and all subsequent Boards of the Corporation
shall consist of one, not less than 1 nor more than 9, unless and until
otherwise determined by vote of a majority of the entire Board of Directors.
The Board of Directors or shareholders all have the power, in the interim
between annual and special meetings of the shareholders, to increase or
decrease the number of Directors of the Corporation. A Director need not be a
shareholder of the Corporation unless the Certificate of Incorporation of the
Corporation or these Bylaws so require.
(b) Except as may otherwise be provided herein or in the Articles of
Incorporation, the members of the Board of Directors of the Corporation shall
be elected at the first annual shareholders' meeting and at each annual
meeting thereafter, unless their terms are staggered in the Articles of
Incorporation of the Corporation or these Bylaws, by a plurality of the votes
cast at a meeting of shareholders, by the holders of shares entitled to vote
in the election.
(c) The first Board of Directors shall hold office until the first annual
meeting of shareholders and until their successors have been duly elected and
qualified or until there is a decrease in the number of Directors.
Thereinafter, Directors will be elected at the annual meeting of shareholders
and shall hold office until the annual meeting of the shareholders next
succeeding his election, unless their terms are staggered in the Articles of
Incorporation of the Corporation (so long as at least one - fourth in number
of the Directors of the Corporation are elected at each annual shareholders'
meeting) or these Bylaws, or until his prior death, resignation or removal.
Any Director may resign at any time upon written notice of such resignation
to the Corporation.
(d) All Directors of the Corporation shall have equal voting power unless the
Articles of Incorporation of the Corporation provide that the voting power of
individual Directors or classes of Directors are greater than or less than
that of any other individual Directors or classes of Directors, and the
different voting powers may be stated in the Articles of Incorporation or may
be dependent upon any fact or event that may be ascertained outside the
Articles of Incorporation if the manner in which the fact or event may
operate on those voting powers is stated in the Articles of Incorporation. If
the Articles of Incorporation provide that any Directors have voting power
greater than or less than other Directors of the Corporation, every reference
in these Bylaws to a majority or other proportion of Directors shall be
deemed to refer to majority or other proportion of the voting power of all
the Directors or classes of Directors, as may be required by the Articles of
Incorporation.
Section 2 - Duties and Powers
The Board of Directors shall be responsible for the control and management of
the business and affairs, property and interests of the Corporation, and may
exercise all powers of the Corporation, except such as those stated under
Nevada state law, are in the Articles of Incorporation or by these Bylaws,
expressly conferred upon or reserved to the shareholders or any other person
or persons named therein.
Section 3 - Regular Meetings, Notice
(a) A regular meeting of the Board of Directors shall be held either within
or without the State of Nevada at such time and at such place as the Board
shall fix.
(b) No notice shall be required of any regular meeting of the Board of
Directors and, if given, need not specify the purpose of the meeting; provided,
however, that in case the Board of Directors shall fix or change the time or
place of any regular meeting when such time and place was fixed before such
change, notice of such action shall be given to each director who shall not
have been present at the meeting at which such action was taken within the
time limited, and in the manner set forth in these Bylaws with respect to
special meetings, unless such notice shall be waived in the manner set forth
in these Bylaws.
Section 4 - Special Meetings; Notice
(a) Special meetings of the Board of Directors shall be held at such time and
place as may be specified in the respective notices or waivers of notice
thereof.
(b) Except as otherwise required statute, written notice of special meetings
shall be mailed directly to each Director, addressed to him at his residence
or usual place of business, or delivered orally, with sufficient time for the
convenient assembly of Directors thereat, or shall be sent to him at such
place by telegram, radio or cable, or shall be delivered to him personally or
given to him orally, not later than the day before the day on which the
meeting is to be held. If mailed, the notice of any special meeting shall be
deemed to be delivered on the second day after it is deposited in the United
States mails, so addressed, with postage prepaid. If notice is given by
telegram, it shall be deemed to be delivered when the telegram is delivered
to the telegraph company. A notice, or waiver of notice, except as required
by these Bylaws, need not specify the business to be transacted at or the
purpose or purposes of the meeting.
(c) Notice of any special meeting shall not be required to be given to any
Director who shall attend such meeting without protesting prior thereto or at
its commencement, the lack of notice to him, or who submits a signed waiver
of notice, whether before or after the meeting. Notice of any adjourned
meeting shall not be required to be given.
Section 5 - Chairperson
The Chairperson of the Board, if any and if present, shall preside at all
meetings of the Board of Directors. If there shall be no Chairperson, or he
or she shall be absent, then the President shall preside, and in his absence,
any other director chosen by the Board of Directors shall preside.
Section 6 - Quorum and Adjournments
(a) At all meetings of the Board of Directors, or any committee thereof, the
presence of a majority of the entire Board, or such committee thereof, shall
constitute a quorum for the transaction of business, except as otherwise
provided by law, by the Certificate of Incorporation, or these Bylaws.
(b) A majority of the directors present at the time and place of any regular
or special meeting, although less than a quorum, may adjourn the same from
time to time without notice, whether or not a quorum exists. Notice of such
adjourned meeting shall be given to Directors not present at time of the
adjournment and, unless the time and place of the adjourned meeting are
announced at the time of the adjournment, to the other Directors who were
present at the adjourned meeting.
Section 7 - Manner of Acting
(a) At all meetings of the Board of Directors, each director present shall
have one vote, irrespective of the number of shares of stock, if any, which
he may hold.
(b) Except as otherwise provided by law, by the Articles of Incorporation, or
these bylaws, action approved by a majority of the votes of the Directors
present at any meeting of the Board or any committee thereof, at which a
quorum is present shall be the act of the Board of Directors or any committee
thereof.
(c) Any action authorized in writing made prior or subsequent to such action,
by all of the Directors entitled to vote thereon and filed with the minutes
of the Corporation shall be the act of the Board of Directors, or any
committee thereof, and have the same force and effect as if the same had been
passed by unanimous vote at a duly called meeting of the Board or committee
for all purposes.
(d) Where appropriate communications facilities are reasonably available, any
or all directors shall have the right to participate in any Board of
Directors meeting, or a committee of the Board of Directors meeting, by means
of conference telephone or any means of communications by which all persons
participating in the meeting are able to hear each other.
Section 8 - Vacancies
(a) Unless otherwise provided for by the Articles of Incorporation of the
Corporation, any vacancy in the Board of Directors occurring by reason of an
increase in the number of directors, or by reason of the death, resignation,
disqualification, removal or inability to act of any director, or other
cause, shall be filled by an affirmative vote of a majority of the remaining
directors, though less than a quorum of the Board or by a sole remaining
Director, at any regular meeting or special meeting of the Board of Directors
called for that purpose except whenever the shareholders of any class or
classes or series thereof are entitled to elect one or more Directors by the
Certificate of Incorporation of the Corporation, vacancies and newly created
directorships of such class or classes or series may be filled by a majority
of the Directors elected by such class or classes or series thereof then in
office, or by a sole remaining Director so elected.
(b) Unless otherwise provided for by law, the Articles of Incorporation or
these Bylaws, when one or more Directors shall resign from the board and such
resignation is effective at a future date, a majority of the directors, then
in office, including those who have so resigned, shall have the power to fill
such vacancy or vacancies, the vote otherwise to take effect when such
resignation or resignations shall become effective.
Section 9 - Resignation
A Director may resign at any time by giving written notice of such
resignation to the Corporation. Section 10 - Removal
Unless otherwise provided for by the Articles of Incorporation, one or more
or all the Directors of the Corporation may be removed with or without cause
at any time by a vote of two-thirds of the shareholders entitled to vote
thereon, at a special meeting of the shareholders called for that purpose,
unless the Articles of Incorporation provide that Directors may only be
removed for cause, provided however, such Director shall not be removed if
the Corporation states in its Articles of Incorporation that its Directors
shall be elected by cumulative voting and there are a sufficient number of
shares cast against his or her removal, which if cumulatively voted at an
election of Directors would be sufficient to elect him or her. If a Director
was elected by a voting group of shareholders, only the shareholders of that
voting group may participate in the vote to remove that Director.
Section 11 - Compensation
The Board of Directors may authorize and establish reasonable compensation of
the Directors for services to the Corporation as Directors, including, but not
limited to attendance at any annual or special meeting of the Board.
Section 12 - Committees
Unless otherwise provided for by the Articles of Incorporation of the
Corporation, the Board of Directors, may from time to time designate from
among its members one or more committees, and alternate members thereof, as
they deem desirable, each consisting of one or more members, with such powers
and authority (to the extent permitted by law and these Bylaws) as may be
provided in such resolution. Unless the Articles of Incorporation or Bylaws
state otherwise, the Board of Directors may appoint natural persons who are
not Directors to serve on such committees authorized herein. Each such
committee shall serve at the pleasure of the Board and, unless otherwise
stated by law, the Certificate of Incorporation of the Corporation or these
Bylaws, shall be governed by the rules and regulations stated herein
regarding the Board of Directors.
ARTICLE IV - OFFICERS
Section 1 - Number, Qualifications, Election and Term of Office
(a) The Corporation's officers shall have such titles and duties as shall be
stated in these Bylaws or in a resolution of the Board of Directors which is
not inconsistent with these Bylaws. The officers of the Corporation shall
consist of a president, secretary and treasurer, and also may have one or
more vice presidents, assistant secretaries and assistant treasurers and such
other officers as the Board of Directors may from time to time deem
advisable. Any officer may hold two or more offices in the Corporation.
(b) The officers of the Corporation shall be elected by the Board of
Directors at the regular annual meeting of the Board following the annual
meeting of shareholders.
(c) Each officer shall hold office until the annual meeting of the Board of
Directors next succeeding his election, and until his successor shall have
been duly elected and qualified, subject to earlier termination by his or her
death, resignation or removal.
Section 2 - Resignation
Any officer may resign at any time by giving written notice of such
resignation to the Corporation. Section 3 - Removal
Any officer elected by the Board of Directors may be removed, either with or
without cause, and a successor elected by the Board at any time, and any
officer or assistant officer, if appointed by another officer, may likewise
be removed by such officer.
Section 4 - Vacancies
(a) A vacancy, however caused, occurring in the Board and any newly created
Directorships resulting from an increase in the authorized number of
Directors may be filled by the Board of Directors.
Section 5 - Bonds
The Corporation may require any or all of its officers or Agents to post a
bond, or otherwise, to the Corporation for the faithful performance of their
positions or duties.
Section 6 - Compensation
The compensation of the officers of the Corporation shall be fixed from time
to time by the Board of Directors.
ARTICLE V - SHARES OF STOCK
Section 1 - Certificate of Stock
(a) The shares of the Corporation shall be represented by certificates or
shall be uncertificated shares.
(b) Certificated shares of the Corporation shall be signed, (either manually
or by facsimile), by officers or agents designated by the Corporation for
such purposes, and shall certify the number of shares owned by him in the
Corporation. Whenever any certificate is countersigned or otherwise
authenticated by a transfer agent or transfer clerk, and by a registrar, then
a facsimile of the signatures of the officers or agents, the transfer agent
or transfer clerk or the registrar of the Corporation may be printed or
lithographed upon the certificate in lieu of the actual signatures. If the
Corporation uses facsimile signatures of its officers and agents on its stock
certificates, it cannot act as registrar of its own stock, but its transfer
agent and registrar may be identical if the institution acting in those dual
capacities countersigns or otherwise authenticates any stock certificates in
both capacities. If any officer who has signed or whose facsimile signature
has been placed upon such certificate, shall have ceased to be such officer
before such certificate is issued, it may be issued by the Corporation with
the same effect as if he were such officer at the date of its issue.
(c) If the Corporation issues uncertificated shares as provided for in these
Bylaws, within a reasonable time after the issuance or transfer of such
uncertificated shares, and at least annually thereafter, the Corporation
shall send the shareholder a written statement certifying the number of
shares owned by such shareholder in the Corporation.
(d) Except as otherwise provided by law, the rights and obligations of the
holders of uncertificated shares and the rights and obligations of the
holders of certificates representing shares of the same class and series
shall be identical.
Section 2 - Lost or Destroyed Certificates
The Board of Directors may direct a new certificate or certificates to be
issued in place of any certificate or certificates theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed if the owner:
(a) so requests before the Corporation has notice that the shares have been
acquired by a bona fide purchaser,
(b) files with the Corporation a sufficient indemnity bond; and
(c) satisfies such other requirements, including evidence of such loss, theft
or destruction, as may be imposed by the Corporation.
Section 3 - Transfers of Shares
(a) No share or other security may be sold, transferred or otherwise disposed
of without the consent of the directors or until the Corporation is a
reporting issuer, as defined under the Securities Exchange Act of 1934. The
directors are not required to give any reason for refusing to consent to any
such sale, transfer or other disposition.
(b) Shares of the Corporation shall be transferable on the record of
shareholders upon presentment to the Corporation of a transfer agent of a
certificate or certificates representing the shares requested to be
transferred, with proper endorsement on the certificate or on a separate
accompanying document, together with such evidence of the payment of transfer
taxes and compliance with other provisions of law as the Corporation or its
transfer agent may require.
Section 4 - Record Date
(a) The Board of Directors may fix, in advance, which shall not be more than
sixty days before the meeting or action requiring a determination of
shareholders, as the record date for the determination of shareholders
entitled to receive notice of, or to vote at, any meeting of shareholders, or
to consent to any proposal without a meeting, or for the purpose of
determining shareholders entitled to receive payment of any dividends, or
allotment of any rights, or for the purpose of any other action. If no record
date is fixed, the record date for shareholders entitled to notice of meeting
shall be at the close of business on the day preceding the day on which
notice is given, or, if no notice is given, the day on which the meeting is
held, or if notice is waived, at the close of business on the day before the
day on which the meeting is held.
(b) The Board of Directors may fix a record date, which shall not precede the
date upon which the resolution fixing the record date is adopted for
shareholders entitled to receive payment of any dividend or other
distribution or allotment of any rights of shareholders entitled to exercise
any rights in respect of any change, conversion or exchange of stock, or for
the purpose of any other lawful action.
(c) A determination of shareholders entitled to notice of or to vote at a
shareholders' meeting is effective for any adjournment of the meeting unless
the Board of Directors fixes a new record date for the adjourned meeting.
Section 5 - Fractions of Shares/Scrip
The Board of Directors may authorize the issuance of certificates or payment
of money for fractions of a share, either represented by a certificate or
uncertificated, which shall entitle the holder to exercise voting rights,
receive dividends and participate in any assets of the Corporation in the
event of liquidation, in proportion to the fractional holdings; or it may
authorize the payment in case of the fair value of fractions of a share as of
the time when those entitled to receive such fractions are determined; or it
may authorize the issuance, subject to such conditions as may be permitted by
law, of scrip in registered or bearer form over the manual or facsimile
signature of an officer or agent of the Corporation or its agent for that
purpose, exchangeable as therein provided for full shares, but such scrip
shall not entitle the holder to any rights of shareholder, except as therein
provided. The scrip may contain any provisions or conditions that the
Corporation deems advisable. If a scrip ceases to be exchangeable for full
share certificates, the shares that would otherwise have been issuable as
provided on the scrip are deemed to be treasury shares unless the scrip
contains other provisions for their disposition.
ARTICLE VI - DIVIDENDS
(a) Dividends may be declared and paid out of any funds available therefor,
as often, in such amounts, and at such time or times as the Board of
Directors may determine and shares may be issued pro rata and without
consideration to the Corporation's shareholders or to the shareholders of one
or more classes or series.
(b) Shares of one class or series may not be issued as a share dividend to
shareholders of another class or series unless:
(i) so authorized by the Articles of Incorporation;
(ii) a majority of the shareholders of the class or series to be issued
approve the issue; or
(iii) there are no outstanding shares of the class or series of shares that
are authorized to be issued.
ARTICLE VII - FISCAL YEAR
The fiscal year of the Corporation shall be fixed, and shall be subject to
change by the Board of Directors from time to time, subject to applicable law.
ARTICLE VIII - CORPORATE SEAL
The corporate seal, if any, shall be in such form as shall be prescribed and
altered, from time to time, by the Board of Directors. The use of a seal or
stamp by the Corporation on corporate documents is not necessary and the lack
thereof shall not in any way affect the legality of a corporate document.
ARTICLE IX - AMENDMENTS
Section 1 - By Shareholders
All Bylaws of the Corporation shall be subject to alteration or repeal, and
new Bylaws may be made, by a majority vote of the shareholders at the time
entitled to vote in the election of Directors even though these Bylaws may
also be altered, amended or repealed by the Board of Directors.
Section 2 - By Directors
The Board of Directors shall have power to make, adopt, alter, amend and
repeal, from time to time, Bylaws of the Corporation.
ARTICLE X - WAIVER OF NOTICE
Whenever any notice is required to be given by law, the Articles of
Incorporation or these Bylaws, a written waiver signed by the person or
persons entitled to such notice, whether before or after the meeting by any
person, shall constitute a waiver of notice of such meeting.
ARTICLE XI - INTERESTED DIRECTORS
No contract or transaction shall be void or voidable if such contract or
transaction is between the corporation and one or more of its Directors or
Officers, or between the Corporation and any other corporation, partnership,
association, or other organization in which one or more of its Directors or
Officers, are directors or officers, or have a financial interest, when such
Director or Officer is present at or participates in the meeting of the
Board, or the committee of the shareholders which authorizes the contract or
transaction or his, her or their votes are counted for such purpose, if:
(a) the material facts as to his, her or their relationship or interest and
as to the contract or transaction are disclosed or are known to the Board of
Directors or the committee and are noted in the minutes of such meeting, and
the Board or committee in good faith authorizes the contract or transaction
by the affirmative votes of a majority of the disinterested Directors, even
though the disinterested Directors be less than a quorum; or
(b) the material facts as to his, her or their relationship or relationships
or interest or interests and as to the contract or transaction are disclosed
or are known to the shareholders entitled to vote thereon, and the contract
or transaction is specifically approved in good faith by vote of the
shareholders; or
(c) the contract or transaction is fair as to the Corporation as of the time
it is authorized, approved or ratified, by the Board of Directors, a
committee of the shareholders; or
(d) the fact of the common directorship, office or financial interest is not
disclosed or known to the Director or Officer at the time the transaction is
brought before the Board of Directors of the Corporation for such action.
Such interested Directors may be counted when determining the presence of a
quorum at the Board of Directors' or committee meeting authorizing the
contract or transaction.
ARTICLE XII - ANNUAL LIST OF OFFICERS, DIRECTORS AND REGISTERED AGENT
The Corporation shall, within sixty days after the filing of its Articles of
Incorporation with the Secretary of State, and annually thereafter on or
before the last day of the month in which the anniversary date of
incorporation occurs each year, file with the Secretary of State a list of
its president, secretary and treasurer and all of its Directors, along with
the post office box or street address, either residence or business, and a
designation of its resident agent in the state of Nevada. Such list shall be
certified by an officer of the Corporation.
APPROVED AND ADOPTED on this 26th day of March, 2004.
/s/ Darrel Crimeni
------------------
Darrel Crimeni
President
EXHIBIT 4.1 Specimen Stock Certificate
FORM OF STOCK CERTIFICATE
TEXT ON FACE
NUMBER SHARES
________ ________
DURA TRACK ENTERPRISES, INC.
Incorporated Under the Laws of the State of Nevada
PAR VALUE $0.001 CUSIP NO. ___________
COMMON STOCK
This Certifies that _________________________________________________________
is the owner of ___________________________________________________________
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK PAR VALUE OF $0.001
EACH OF
DURA TRACK ENTERPRISES, INC.
transferable on the books of the Corporation in person or by duly authorized
attorney upon surrender of this Certificate properly endorsed. This
Certificate is not valid until countersigned by the Transfer Agent and
registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
DATED:
Countersigned and Registered:
_________________________ The transfer agent, Inc.
President (City, State) Transfer Agent
By:_________________________
Authorized Signature
[Corporate Seal]
TEXT ON REVERSE
The Corporation will furnish to any shareholder upon request and without
charge, a full statement of the designations, preferences, limitation, and
relative rights of the shares of each class or series authorized to be
issued, so far as they will have been determined, and the authority of the
Board of Directors to determine the relative rights and preferences of
subsequent classes or series.
For value received ________________ hereby sell, assign and transfer unto
____________________________________________________________________________
Shares represented by the within Certificate, and do hereby irrevocably
constitute and appoint
________________________________________________________________________
Attorney to transfer the said shares on the Books of the within named
Corporation with full power of substitution in the premises.
Dated _________________, 20____
IN PRESENCE OF________________________________________________________
EXHIBIT 5.1 Opinion of Counsel
August 5, 2005
Dura Track Enterprises, Inc.
3638 North Rancho Drive, Suite 6-D
Las Vegas, NV 89130
Re: Registration Statement on Form SB-2 for sale of up to 4,000,000
Common Shares by the Company and 3,200,000 Common Shares by Selling
Shareholders.
Ladies and Gentlemen:
We have been engaged as counsel to Dura Track Enterprises, Inc., a Nevada
corporation (the "Company"), for the purpose of supplying this opinion
letter, which is to be filed as an Exhibit to the Company's Registration
Statement (the "Registration Statement") for the offer and sale by the
Company of up to an aggregate of 4,000,000 shares and the offer and sale by
eight selling shareholders of up to an aggregate of 3,200,000 shares the
Company's Common Stock, $.001 par value per share, as described in the
Registration Statement (the "Shares").
We have made ourselves familiar with the corporate actions taken and
proposed to be taken by the Company in connection with the authorization,
issuance and sale of the Shares and have made such other legal and factual
inquiries as we have deemed necessary for the purpose of rendering this
opinion.
We have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents
of all documents submitted to us as copies, the authenticity of the originals
of such copied documents, and except with respect to the Company, that all
individuals executing and delivering such documents were duly authorized to
do so.
Based on the foregoing and in reliance thereon, and subject to the
qualification and limitations set forth below, we are of the opinion that (1)
the Shares offered by the Company to be issued have been duly authorized and
reserved and when issued upon payment will be validly issued, fully paid and
non-assessable and (2) the Shares offered by the selling shareholders were
validly issued, fully paid and non-assessable.
This opinion is limited to the laws of the State of Nevada and federal law
as in effect on the date hereof, exclusive of state securities and blue-sky
laws, rules and regulations, and to all facts as they presently exist.
We hereby consent to the use of our name under the appropriate sections in
the Prospectus forming a part of the Registration Statement and to the filing
of this opinion as an Exhibit to the Registration Statement. In providing
this consent, we do not admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the General Rules and Regulations of the Securities and Exchange
Commission.
Very truly yours,
/s/ Jeffrey A. Nichols
- ----------------------
Jeffrey A. Nichols
Attorney at Law
EXHIBIT 10.1 International Distributor Agreement
International Distributor Agreement
This Authorized International Distributor Agreement (the "Agreement") is made
between Adele Paulsen, business woman, of 7744 Morley Street, Burnaby, B.C.,
Canada V2P 2K5 (hereinafter referred to as "PAULSEN" ) and Dura Track
Enterprises, Inc., a company duly incorporated in the State of Nevada, of
Suite 6-D, 3638 North Rancho Drive, Las Vegas, Nevada, USA 89130 (hereinafter
referred to as "DT").
a) PAULSEN owns certain injection molds, including the products listed in
Exhibit A hereto (hereinafter referred to as "PAULSEN Products"). This
Agreement pertains to PAULSEN Products as defined in this Agreement and to
any other products that are now, or may hereafter be, published, manufactured
or distributed by PAULSEN.
b) PAULSEN Products are distributed under trademarks and trade names having
a valuable reputation and goodwill that belong exclusively to PAULSEN.
c) DT Products are distributed under trademarks and trade names having a
valuable reputation and goodwill that belong exclusively to DT.
d) PAULSEN and DT recognize that in order for PAULSEN Products and DT
Products to compete effectively in the marketplace, it is believed necessary
that they be marketed through Dealers (as that term is defined herein). DT
and PAULSEN further recognize that successful marketing of PAULSEN Products
and DT Products depend upon the ability of DT to select and maintain Dealers
to provide PAULSEN Products and DT Products, and to provide a high level of
support, training and assistance to such Dealers in marketing PAULSEN
Products and DT Products.
e) PAULSEN and DT desire that DT act as an independent exclusive distributor
of PAULSEN Products and DT Products whereby PAULSEN shall be paid 20% (twenty
percent) of the gross proceeds for DT'S acquiring a right to distribute
PAULSEN Products under the terms and conditions set forth below.
f) Both PAULSEN and DT warrant that each of the signatories each have the
due authority and capacity to represent their respective organization in this
Agreement. PAULSEN further warrants that it is the owner or exclusive
licensee of all intellectual property and proprietary rights in and has the
right to grant the DT the rights contemplated in the Agreement.
g) NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants and agreements hereinafter set forth, PAULSEN and DT agree as
follows:
2) DEFINITIONS
Whenever used in this Agreement, the following terms shall have the following
specified meanings:
a) "Dealer" means the Person or organization to which DT promotes and sells
PAULSEN Products and/or DT Products, and who then promotes and sells to end
customers. DT may classify a sub-distributor as a Dealer or visa-versa.
b) "DT Documentation" means any and all user licenses, licenses, manuals,
specifications, user guides and other documentation regarding the DT Drapery
Hardware prepared by or on behalf of DT in connection with the DT Hardware.
c) "DT Products" means DT drapery hardware (but does not include any other
items which DT is precluded from distributing to or through DT by virtue of
any existing license or distribution agreement with any other Person.)
d) "DT Hardware" means retail/wholesale drapery hardware systems and
individual components as set forth in Schedule A. DT Hardware includes all
products custom developed by PAULSEN at the request of DT. PAULSEN, at all
times, remains the sole owner of the molds and products.
e) "PAULSEN Documentation" means any and all manuals, specifications, user
guides and other documentation pertaining to the PAULSEN Hardware prepared by
or on behalf of PAULSEN in connection with the PAULSEN Hardware.
f) "PAULSEN Products" means PAULSEN Hardware and PAULSEN Documentation, but
does not include any drapery hardware, or documentation or other items which
PAULSEN is precluded from distributing to or through DT by virtue of any
existing license or distribution agreement with any other Person.
h) "PAULSEN Hardware" means retail/wholesale drapery hardware systems and
individual components as set forth in Schedule A produced and/or distributed
by PAULSEN which may be modified or amended from time to time.
i) "Market" shall mean the retail/wholesale drapery hardware.
j) "Person" means an individual, corporation, partnership, trust,
association, entity, governmental authority of any other person.
k) "Territory" are those countries, regions and/or languages described in
Exhibit B, attached to this Agreement.
3) Basic Transaction
Subject to the terms and conditions of this Agreement, DT wishes to obtain
exclusive marketing to all drapery hardware components owned by PAULSEN and
right to use PAULSEN moulds to produce such products. DT shall pay PAULSEN a
royalty of 20% (twenty percent) of the gross sales amount with an annual
minimum royalty of $50,000 (fifty thousand dollars) in legal US currency.
4) Appointment as Authorized PAULSEN Distributor
a) Exclusive Appointment
Subject to the terms and conditions of this Agreement, PAULSEN hereby
appoints DT, and DT hereby accepts such appointment, as an independent,
exclusive distributor of PAULSEN Products in the Market for the Territory as
set forth in Exhibit B to this Agreement. Subject to the terms and conditions
of this Agreement, PAULSEN hereby appoints DT, and DT hereby accepts such
appointment, as an independent, exclusive distributor of DT Products in the
Territory.
b) Nature of Distribution
DT'S appointment only grants to DT a right to distribute PAULSEN Products and
DT Products to DT'S Dealers, end users and customers, and does not transfer
any title or claim of ownership in any PAULSEN Product to DT, except as
provided in this license.
c) Limitations
DT's appointment is limited to distribution of PAULSEN Products and DT
Products to Dealers, end users and customers in the Market for the Territory.
DT may appoint a Dealer(s) or other Person(s) to distribute PAULSEN Products
and/or DT Products in the Territory.
d) Hardware Distribution License
PAULSEN hereby grants to DT, and DT hereby accepts, subject to the terms and
conditions of this Agreement, the exclusive right to manufacture, copy,
distribute, sell, market, lease, rent, operate, service and otherwise
commercialize and exploit the PAULSEN Product in the Market, directly and
through Dealers, in the Territory.
e) Obligations of DT
DT warrants and represents that DT has and will maintain, the capacity,
facilities and personnel necessary to carry out its obligations under this
agreement and in particular that:
i) DT will conduct business in a manner that reflects favorably on the
goodwill and reputation of PAULSEN.
ii) DT will avoid deceptive, misleading or unethical practices detrimental
to PAULSEN, PAULSEN Products, Dealer(s) or the public, including but not
limited to making representations, warranties or guarantees to customers or
to the trade with respect to the specifications, features or capabilities of
PAULSEN Products that are inconsistent with the literature distributed by
PAULSEN, including all warranties and disclaimers contained in PAULSEN
Documentation.
iii) DT will use its reasonable efforts to market PAULSEN Products both
vigorously and aggressively to Dealers within the Territory and to distribute
PAULSEN Products within the Territory.
iv) DT will not market PAULSEN Products or DT Products outside the Territory
without the prior express written consent of PAULSEN, which consent must be
received from PAULSEN prior to any sale of PAULSEN Product or DT Product.
v) DT shall be responsible for translating PAULSEN Product advertising and
promotional materials into the languages of the Territory.
vi) DT will authorize and maintain Dealers that it believes have the
financial capacity, facilities, technical capacity and desire to competently
market and support PAULSEN Products.
vii) Prior to engaging in any transaction with a Dealer involving any
PAULSEN Products and/or DT Products, DT and the Dealer shall execute an
agreement. DT will ensure that such agreement with the Dealer will include
language necessary to enforce any sections of this Agreement which pertain to
a Dealer's distribution of PAULSEN or DT Products.
DT shall ensure direct and indirect compliance with this Agreement by itself
and all Dealers obtaining the agreement of such parties for the benefit of DT
and PAULSEN to be bound by these sections and to obtain such covenants from
any further Dealers within all agreements with such parties.
viii) DT will not sell, giveaway, loan or otherwise provide PAULSEN Products
and/or DT Products to any Dealer or organization that engages in illegal
trade practices.
ix) DT will not to add to, delete or otherwise vary any of the terms and
conditions of this Agreement without the prior written consent of PAULSEN.
x) DT will not distribute any PAULSEN Products or DT Products under any
trade names or trademarks other than those employed by PAULSEN with respect
thereto, except where agreed to in writing by PAULSEN. DT may distribute
PAULSEN Products or DT Products where:
(a) All PAULSEN Products containing or labeled with trademarks, trade names
or copyrights owned or managed by PAULSEN will be manufactured under the
management of PAULSEN to strict quality assurance of PAULSEN.
(b) All DT Products containing or labeled with trademarks, trade names or
copyrights owned or managed by PAULSEN will be manufactured under the
management of PAULSEN to strict quality assurance of PAULSEN.
(c) All DT Products manufactured solely containing or labeled with
trademarks, trade names or copyrights owned or managed by DT will be
manufactured under the management of PAULSEN to strict quality assurance of
PAULSEN, and no such trademarks, trade names or copyrights may be used by
PAULSEN without prior written approval of DT. Said manufacturer and
manufacturer's terms and conditions shall be approved by DT.
(d) Should DT desire PAULSEN to develop a new product or modify the current
packaging on behalf of the DT, said development and modifications will be
subject to terms and conditions as the parties may agree to as set out in a
separate contract.
xi) DT shall comply with PAULSEN programs for in-warranty replacement and
post-warranty support for PAULSEN Products and for DT Products which contain
any PAULSEN trademarks, trade names or copyrights.
xii) DT will comply with applicable international, national, state, regional
and local laws and regulations in performing its duties hereunder and in any
of its dealing with Dealers and with respect to PAULSEN Products and DT
Products.
xiii) DT will distribute PAULSEN Products and DT Products with all
packaging, warranties, and disclaimers intact as shipped from PAULSEN, and
will instruct each of its Dealers as to the nature and terms of such as
applicable to the PAULSEN Hardware and/or DT Hardware.
xiv) DT acknowledges that PAULSEN'S export of the PAULSEN Products and DT
Products may be subject to compliance with the Export Administration Act
Regulations of the Department of Commerce of the United States, as amended,
and other export controls of the United States ("Export Laws"), which
restrict the export and re-export of drapery hardware ("Direct Product" as
used hereafter means the immediate product, including processes and services,
derived from the use of PAULSEN Products and DT Products). DT agrees and
shall cause each of its Dealers, employees, agents, representatives and
assignees to agree not to export or re-export any PAULSEN Products and/or DT
Products to any prohibited country, as such is defined by the Export Laws,
provided PAULSEN has advised DT which countries are prohibited countries. DT
agrees to indemnify PAULSEN against any claim, demand, action, proceeding,
investigation, loss, liability, cost and expense, including, without
limitation attorney's fees, suffered or incurred by PAULSEN and arising out
of or related to any violation (whether intentional or unintentional) by DT
its employees, agents, representatives and Dealers of any of the warranties
or covenants of this Section 4(e)(xiii).
xv) DT acknowledges that exclusive and non-exclusive distribution is subject
to all current and future OEM (Original Equipment Manufacturer) or Bundle
agreements executed by PAULSEN. The identity of the other parties, and all
discussion and forms of agreements are specifically excluded from this
agreement.
xvi) DT will advise PAULSEN promptly concerning any market information that
comes to DT'S attention regarding PAULSEN Products or DT Products, PAULSEN'S
market position or the continued competitiveness of PAULSEN Products or DT
Products in the marketplace.
xvii) Advertising and marketing of PAULSEN Products and DT Products in the
Territory will be the sole responsibility of the DT. DT may not advertise or
promote PAULSEN Products in any form or media, including all print and
electronic medium, which may be deemed in the reasonable opinion of PAULSEN,
taking into account cultural difference in the Territory, inappropriate and
subject PAULSEN to ridicule, scandal reproach, scorn or degrade.
5) Inspections, Records and Reporting
a) Reports
DT will provide to PAULSEN, within one hundred and twenty (120) days of
signing this Agreement and on an annual basis thereafter, written reports, in
electronic format, showing:
i) A summary of the marketing plan relating to PAULSEN Products and DT
Products, including summary of advertising, public relations and other
promotional efforts completed or in progress by the DT.
ii) Any other information PAULSEN reasonably requests relating to sales made
or forecasted sales of PAULSEN Products and DT Products.
b) Notification
DT will notify PAULSEN in writing of any claim or proceeding involving
PAULSEN Products or DT Products within thirty (30) days after DT learns of
such claim or proceeding. DT will also report promptly to PAULSEN all claimed
or suspected product defects.
c) Records
DT will maintain, for at least two (2) years after termination of this
Agreement, its records, contracts and accounts relating to distribution of
PAULSEN Products and DT Products and will permit examination thereof by
authorized representatives of PAULSEN at all reasonable times at PAULSEN'S
sole expense.
6) Trademarks, Trade Names and Copyrights
a) During the term of this Agreement, DT is authorized by PAULSEN to use the
trademarks PAULSEN uses for PAULSEN Products in connection with DT'S
advertisement, promotion and distribution of PAULSEN Products and DT
Products. Such usage is subject to approval by PAULSEN before use of said
trademark.
b) As both a covenant by DT and a condition of PAULSEN'S authorization of
DT'S distribution, DT will include on each copy of the PAULSEN Products
and/or DT Products that it distributes, and on all containers and storage
media therefore, all trademark, copyright and other notices of proprietary
rights included by PAULSEN on such PAULSEN Products and/or DT Products unless
such products are manufactured under the DT'S trademarks solely. DT agrees
not to alter, erase, deface or overprint any such notice on anything provided
by PAULSEN.
c) DT has paid no consideration for the use of PAULSEN'S trademarks, logos,
copyrights, trade secrets, trade names or designations, and nothing contained
in this Agreement shall give DT any interest in any of them. DT acknowledges
that PAULSEN owns and retains all proprietary rights in all PAULSEN Products
and DT Products, and agrees that it will not at any time during or after this
Agreement assert or claim any interest in or do anything that may adversely
affect the validity or enforceability of any trademark, trade name, trade
secret, copyright or logo belonging to or licensed to PAULSEN (including,
without limitation, any act, or assistance to any act, which may infringe or
lead to the infringement of any copyright in the PAULSEN Products), except as
provided for herein. DT agrees not to attach any additional trademarks, logos
or trade designations to any PAULSEN Product or DT Product, unless such DT
Product is manufactured without the use of any PAULSEN trademarks, trade
names or copyrights.
d) Upon expiration or termination of this Agreement, DT will forthwith cease
all display, advertising and use of all PAULSEN names, marks, logos and
designations.
e) DT agrees to use reasonable efforts to protect PAULSEN'S proprietary
rights and to cooperate fully in PAULSEN'S effort to protect its proprietary
rights. Such efforts do not however include any payment for enforcement of
such rights.
f) DT understands and agrees that PAULSEN will suffer irreparable harm in
the event that DT fails to materially comply with any of its obligations
pursuant to this Section 6, and that monetary damages in such event would be
substantial and inadequate to compensate PAULSEN. Consequently, in such event
PAULSEN shall be entitled, in addition to such monetary relief as may be
recoverable by law, to such temporary, preliminary and/or permanent
injunctive relief as may be necessary to restrain any continuing or further
material breach by DT, without showing or proving any actual damages
sustained by PAULSEN.
g) DT shall promptly report to PAULSEN any known breach by any Person, of
the Agreement, of which DT becomes aware, and of the known making by any
Person of any unauthorized copy of any PAULSEN Products. PAULSEN shall have
the right, but not the obligation, to pursue any of all such infringements.
h) PAULSEN agrees that all trade names and trademarks owned by DT and used
on PAULSEN Products and/or DT Products shall remain the property of DT and
may not at any time during or after termination of this agreement be used by
PAULSEN in connection with PAULSEN Products or otherwise.
7) Assignment
a) DT is appointed an authorized PAULSEN distributor because of DT'S
commitments in this Agreement, and further because of PAULSEN'S confidence in
DT, which confidence is personal in nature. DT may assign this Agreement, in
whole but not in part, to corporations or other business entities controlled,
directly or indirectly, where there is a minimum 51% (fifty-one percent)
controlling interest by DT. Such assignment must receive prior written
approval by PAULSEN and such approval cannot be unreasonably withheld. Such
assignment is automatically revoked and returned to DT where the controlling
interest, DT, in the assignee, is reduced below 51% (fifty-one percent).
b) DT and/or any and all assignees may not delegate its duties hereunder
without the prior written consent of PAULSEN and any attempted delegation
without the required consent shall be void. Further, any assignment shall not
relieve DT from its duties and obligations under this Agreement.
c) PAULSEN may assign this Agreement to a subsidiary or entity controlling,
controlled by or under common control with PAULSEN. Written notice will be
made to DT in the event that PAULSEN assigns this Agreement.
d) The provisions hereof shall be binding upon and inure to the benefit of
the parties, their successors and permitted assigns.
8) Duration and Termination of Agreement
a) Term
This Agreement is for a term as defined in Exhibit B from the effective date
as outlined in Section 14(d). Nothing contained herein shall be interpreted
as requiring either party to renew or extend this Agreement. Notwithstanding
the provisions of this Section 8(a), or any other provisions of this
Agreement, this Agreement may be terminated prior to the expiration of its
stated term as set forth below.
b) Renewal Term
This Agreement may be renewed for a renewal term as defined in Exhibit B. The
option to renew this Agreement must be agreed in writing by both parties
sixty (60) days prior to the expiration of its stated term. All terms of this
Agreement, except financial, shall remain in effect during any renewal terms,
unless agreed to in writing by both parties to this Agreement.
c) PAULSEN Termination for Cause
PAULSEN may terminate this Agreement at any time prior to the expiration of
its stated term in the event that DT fails to perform any material
obligation, warranty, duty or responsibility or is in default with respect to
any term or condition under this Agreement and such failure or default
continues unremedied for a period of thirty (30) days after notice of failure
or default from PAULSEN.
d) Automatic Termination
This Agreement terminates automatically, with no further act or action of
either party, if a receiver is appointed for DT or its property, DT makes an
assignment for the benefit of its creditors, any proceedings are commenced
by, for or against DT under any bankruptcy, insolvency or debtor's relief
law, or DT is liquidated or dissolved.
e) Effect of Termination
i) Upon termination of this Agreement:
ii) PAULSEN, at its option, may reacquire any or all PAULSEN Products and/or
DT Products then in DT'S possession at DT'S cost.
iii) For a period of two (2) years after the date of termination, DT shall
make available to PAULSEN for inspection and copying all books and records of
DT that pertain to DT'S performance of and compliance with its obligations,
warranties and representations under this Agreement.
iv) DT shall cease using any PAULSEN trademark, logo or trade name, and
PAULSEN shall cease any manufacturing or other use of the DT'S trademarks,
logos or trade names.
f) No Damage for Termination
i) NEITHER PAULSEN NOR DT SHALL BE LIABLE TO THE OTHER FOR DAMAGES OF ANY
KIND, INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGES, ON ACCOUNT OF THE
TERMINATION OR EXPIRATION OF THIS AGREEMENT. Neither PAULSEN nor DT shall be
liable to the other on account of termination or expiration of this Agreement
for reimbursement or damages for loss of goodwill, prospective profits or
anticipated orders, or on account of any expenditures, investments, leases or
commitments made by either PAULSEN or DT or for any other reason whatsoever
based upon or growing out of such termination or expiration.
ii) DT acknowledges and agrees that (1) DT has no expectation and has
received no assurances that its business relationship with PAULSEN will
continue beyond the stated term of this Agreement or its earlier termination
in accordance with this Section 8, that any investment by DT in the promotion
of PAULSEN Products and/or DT Products will be recovered or recouped, or that
DT shall obtain any anticipated amount of profits by virtue of this
Agreement; and (2) DT shall not have or acquire by virtue of this Agreement
or otherwise any vested, proprietary or other right in the promotion of
PAULSEN Products or in any goodwill created by its efforts hereunder.
iii) THE PARTIES ACKNOWLEDGE THAT THIS SECTION 8(f) HAS BEEN INCLUDED AS A
MATERIAL INDUCEMENT FOR PAULSEN AND DT TO ENTER INTO THIS AGREEMENT AND THAT
NEITHER PAULSEN NOR DT WOULD HAVE ENTERED INTO THIS AGREEMENT BUT FOR THE
LIMITATIONS OF LIABILITY AS SET FORTH HEREIN.
g) Survival
PAULSEN'S rights and DT'S obligations under Section 4(e)(ii) and 4(e)(x),
5(c), 6, 10, 11, 13 and 14 shall survive termination of this Agreement.
9) Relationship of the Parties
DT'S relationship with PAULSEN during the term of this Agreement will be that
of an independent distributor. DT will not have, and will not represent that
it has, any power, right or authority to bind PAULSEN, or to assume or create
any obligation or responsibility express or implied, on behalf of PAULSEN or
in PAULSEN'S name, except as herein expressly provided. Nothing stated in
this Agreement shall be construed as making DT and PAULSEN partners, nor as
creating the relationships of employer/employee, franchiser/franchisee, or
principal/agent between the parties. In all matters relating to this
Agreement, neither DT nor its employees or agents are, or shall act as,
employees of PAULSEN within the meaning or application of any obligations or
liabilities to PAULSEN by reason of an employment relationship. DT shall
reimburse PAULSEN for and hold it harmless from any liabilities or
obligations imposed or attempted to be imposed upon PAULSEN by virtue of any
such law with respect to employees of DT in performance of this Agreement.
Payment to employees of DT employed or utilized by PAULSEN are payable by DT
to the extent funds are available in DT.
10) Indemnification
a) Indemnification of DT
PAULSEN agrees to defend, indemnify and hold DT harmless for any loss, damage
or liability for any claimed infringement of any U.S.A. patent right,
copyright and trade secrets, or other proprietary rights asserted by any
third person arising out of DT'S improper use of any PAULSEN Products,
provided (1) that PAULSEN is promptly notified in writing by DT of any such
claim against DT, (2) that DT authorizes PAULSEN to assume sole control over
the defense of any such claim thereafter, together with the right to settle
or compromise such claim, and (3) that DT makes available to PAULSEN such
information, assistance and authority as may be reasonably requested by
PAULSEN in order to enable PAULSEN to defend any such claim.
In the event any such claim is asserted, PAULSEN shall have the right without
limitation, at its option either (a) to obtain such rights and/or licenses
from the claimant as may be necessary to enable DT to continue using and/or
marketing the PAULSEN Products which are the subject of the claim, and/or (b)
to modify the PAULSEN Products with respect to which such claim is asserted
so as to avoid further claimed infringement by such Person. PAULSEN further
agrees to indemnify and hold harmless DT or any Dealer from and against any
and all liabilities, costs, damages and expenses (including legal costs)
arising out of or in connection with any issue for warranty.
b) No Combination Claims
Notwithstanding Section 10(a), PAULSEN shall not be liable to DT for any
claim arising from or based upon the combination, operation or use of any
PAULSEN Product or DT Product with equipment, data or programming supplied by
or not supplied by PAULSEN, or arising from any alteration or modification of
PAULSEN Products or DT Products.
c) Indemnification of PAULSEN
DT agrees to indemnify PAULSEN (including reasonable attorneys' fees and
costs of litigation) against and hold PAULSEN harmless from any and all
claims by any other party resulting from DT'S improper acts (other than the
mere marketing of PAULSEN Products), omissions or representations, regardless
of the form of action.
11) Disclaimer of Warranties; Limited Liability
a) Disclaimer of Warranties
TO THE EXTENT PERMITTED BY APPLICABLE LAW AND EXCEPT AS PROVIDED IN SECTION
11(b), ALL PAULSEN HARDWARE AND DT HARDWARE IS DELIVERED "AS IS'' AND WITHOUT
EXPRESS OR IMPLIED WARRANTY OF ANY KIND BY EITHER PAULSEN OR ANYONE ELSE WHO
HAS BEEN INVOLVED IN THE CREATION, PRODUCTION OR DELIVERY OF SUCH HARDWARE,
INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY,
NONINFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE.
b) Limited Warranty
PAULSEN warrants to DT that it shall fully and faithfully honor its
obligations to all users pursuant to its warranty agreement. Satisfaction by
PAULSEN of its obligations pursuant thereto shall be PAULSEN'S sole
liability, and DT'S sole remedy against PAULSEN on account of any claim
relating to the quality or performance of any PAULSEN Hardware and/or DT
Hardware, whether such claim shall be based upon principles of contract, or
warranty, negligence or other tort, breach of any statutory duty, or
otherwise. If for any reason PAULSEN should fail to meet its obligations
pursuant hereto, PAULSEN'S liability to DT nevertheless shall be limited to
the fee paid by DT to PAULSEN with respect to the product or products with
respect to which any such claim is asserted.
c) Limitation of Liability
UNDER NO CIRCUMSTANCES SHALL PAULSEN BE LIABLE TO DT ON ACCOUNT OF ANY CLAIM
(WHETHER BASED UPON PRINCIPLES OF CONTRACT, WARRANTY, NEGLIGENCE OR OTHER
TORT, BREACH OF ANY STATUTORY DUTY, PRINCIPLES OF INDEMNITY, THE FAILURE OF
ANY LIMITED REMEDY TO ACHIEVE ITS ESSENTIAL PURPOSE, OR OTHERWISE) FOR ANY
SPECIAL, CONSEQUENTIAL INCIDENTAL OR EXEMPLARY DAMAGES, INCLUDING BUT NOT
LIMITED TO LOST PROFITS, OR FOR ANY DAMAGES OR SUMS PAID BY DT TO THIRD
PARTIES, EVEN IF PAULSEN HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
d) DT Warranty
DT will make no warranty, guarantee or representation, whether written or
oral, on PAULSEN'S behalf.
12) Failure of Trademark Protection
In the event PAULSEN is unable to secure trademark registration in the
Territory, this Agreement shall continue in full force and effect and DT
shall make no claim whatsoever against PAULSEN.
13) Confidentiality
DT acknowledges that in the course of performing its obligations hereunder it
will receive information which is confidential and proprietary to PAULSEN. DT
agrees not to use such information except in performance of this Agreement
and not to disclose such information to third parties. PAULSEN acknowledges
that over the term of the Agreement it will receive information which is
confidential and proprietary to the DT and PAULSEN agrees not to use such
information except in performance of this Agreement and not to disclose such
information to third parties.
14) General
a) Waiver and Modification
No waiver or modification of the Agreement shall be effective unless in
writing and signed by the party against whom such waiver or modification is
asserted. Waiver by either party in any instance of any breach of any term or
condition of this Agreement shall not be construed as a waiver of any
subsequent breach of the same of any other term or condition hereof. None of
the terms or conditions of this Agreement shall be deemed to have been waived
by course of dealing or trade usage.
b) Notices
All notices and demands hereunder shall be in writing and shall be served by
personal delivery or by mail at the address of the receiving party set forth
in this Agreement (or at such different address as may be designated by such
party by written notice to the other party). All notices or demands by mail
shall be by certified or registered airmail, return receipt requested, and
shall be deemed complete upon receipt. If receipt of such notice or demand is
refused or a party has changed its address without informing the other, the
notice shall be deemed to have been given and received upon the fourteenth
(14th) day following the date upon which it is first postmarked by the postal
service of the sender's nation. All notices and demands hereunder will be in
the English language and will control when interpreting the notice or demand.
c) Attorney's Fee
In the event any litigation is brought by either party in connection with
this Agreement, the prevailing party in such litigation shall be entitled to
recover from the other party all the costs, attorney's fees and other
expenses incurred by such prevailing party in the litigation.
d) Effective Date
This Agreement shall become effective only after DT has signed it and it is
accepted by PAULSEN, and its effective date shall be the date on which it is
signed by PAULSEN.
e) Choice of Law, Jurisdiction
This Agreement shall be governed by and construed in accordance with the laws
of the Province of British Columbia, Canada. The parties agree that any claim
asserted in any legal proceeding by one party against the other shall be
commenced and maintained in any provincial or federal court located within
the Province of British Columbia, having subject matter jurisdiction with
respect to the dispute between the parties. Both parties hereby submit to the
jurisdiction of such courts over each of them personally in connection with
such litigation, and waive any objection to venue in such courts and any
claim that such forum is an inconvenient forum. The English language version
of this Agreement controls when interpreting this Agreement.
f) Severability
In the event that any provision of this Agreement shall be held by a court or
other tribunal of competent jurisdiction to be unenforceable, such provision
will be enforced to the maximum extent permissible and the remaining portions
of this Agreement shall remain in full force and effect.
g) Force Majeure
PAULSEN shall not be responsible for any failure to perform due to unforeseen
circumstances or to cause beyond PAULSEN'S control, including but not limited
to acts of God, war, riot, embargoes, acts of civil or military authorities,
fire, floods, accidents, strikes, or shortages of transportation facilities,
fuel, energy, labor or materials.
h) Entire Agreement
This Agreement constitute the entire agreement between the parties pertaining
to the subject matter hereof, and supersedes in their entirety any and all
written or oral agreement previously existing between the parties with
respect to such subject matter.
i) Benefits of Agreement
The term of this Agreement are intended solely for the benefit of the parties
hereto. They are not intended to confer upon any third party the status of a
third party beneficiary. Except as otherwise provided for by this Agreement,
the terms hereto shall inure to the benefit of, and be binding upon, the
respective successors and assign of the parties hereto.
j) Titles and Headings
All titles and headings in this Agreement are for clarification and
assistance to the reader, and do not form a part of the interpretation of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date specified below.
PAULSEN
Signature: /s/ Adele Paulsen
-----------------
Printed Name: Adele Paulsen
Date Signed: May 1, 2004
Dura Track Enterprises, Ltd.
Signature: /s/ Darrel Crimeni
------------------
Printed Name: Darrel Crimeni
Date Signed: May 1, 2004
Effective Date: May 1, 2004
Exhibit A - Paulsen Products
Products
Item No Quantity per Box Name Description
D15 500 End Lock Product is used to snap
on to the end of a hand
drawn drapery track for
two purposes. One, to
stop the glides on the
drapery track to not
slip off the end and
second, to provide a
fastener for the last
pin on the out side
edges of each drape.
D17 200 Wall Bracket Product is used to
fasten the drapery rod
to the wall above the
window. Once the
bracket is fastened the
"c" channel drapery
track snaps into the
bracket. Used for both
hand drawn and cord
drawn drapery tracks.
D21 200 Pairs End Pulley These components are
usually used in pairs
attached to the ends of
a cord drawn drapery
track. These components
service two purposes,
they have a set of
wheels that allow the
drapery cord to operate
smoothly and provide a
fastener for the last
pin on the out side
edges of each drape.
D23 200 Floor Pulley This component used for
cord drawn drapery
tracks and is either
fastened to the wall or
the floor. It contains
a wheel and is spring
loaded to help keep
tension on the
operating cord for the
drapery track.
D25 200 Fling Rod This component is used
with hand drawn drapery
tracks and is attached
to the leading glide or
fastener of the drapery
to allow hand closing
and opening of a drape.
D27 200 Pairs Master Glides These components are
usually used in pairs
for both hand drawn and
cord drawn drapery
tracks. The master
glides have overlapping
arms that allow the
draperies in the center
of a pair to overlap for
privacy.
Exhibit B - Territory and Respective Appointment ("Territory")
Territory
The World market
Term
The term of this Agreement shall be thirty-six (36) months from the Effective
Date.
Renewal Option
This Agreement may be renewed at the DT'S sole option for a subsequent term
of up to thirty-six (36) months.
EXHIBIT 10.2 Amendment to Distributor Agreement
Amendment to
Dura Track Enterprises International Distributor Agreement
This Amendment is made between Adele Paulsen, business woman, of 7744 Morley
Street, Burnaby, B.C., Canada V2P 2K5 (hereinafter referred to as "PAULSEN" )
and Dura Track Enterprises, Inc., a company duly incorporated in the State of
Nevada, of Suite 6-D, 3638 North Rancho Drive, Las Vegas, Nevada, USA 89130
(hereinafter referred to as "DT").
Both parties agree to waive the royalty of 20% (twenty percent) of the gross
sales amount with an annual minimum royalty of $50,000 (fifty thousand
dollars) in legal US currency as set forth in Clause 3 (Basic Transaction) of
the International Distributor Agreement dated May 1, 2004. Such waiver shall
be in effect until May 1, 2006.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the
date specified below.
PAULSEN
Signature: /s/ Adele Paulsen
-----------------
Printed Name: Adele Paulsen
Date Signed: February 22, 2005
Dura Track Enterprises, Ltd.
Signature: /s/ Darrel Crimeni
------------------
Printed Name: Darrel Crimeni
Date Signed: February 22, 2005
EXHIBIT 10.3 Consulting Services Agreement
This Consulting Services Agreement ("Agreement") sets forth the terms and
conditions upon which ALTRES GROUP, LLC ("ALTRES") is engaged by DURA TRACK
ENTERPRISES, INC., including successors or assigns (collectively "DURA
TRACK") to effect certain transactions ("the Transactions") intended to (1)
assist and/or facilitate in the creation of the corporate entity to be called
DURA TRACK; (2) provide consulting services and/or assistance to the company
so that it is in a position to become a United States reporting company; (3)
assist in the preparation and/or making the appropriate filings to effectuate
the company as a publicly-traded entity; (4) assist and/or facilitate the
registration for sale of either existing shareholder shares or shares to be
issued in a public offering; and, for related matters.
1.0 Services Provided.
Following its engagement, ALTRES and its affiliates will:
1.1 Advise DURA TRACK on the structure of Transactions and actions to be
taken by DURA TRACK in preparation for the completion of the Transactions;
1.2 Take such steps as may be appropriate to organize DURA TRACK in
preparation for becoming a United States reporting company;
1.3 Effectuate such filings as are necessary to allow DURA TRACK to become a
trading company;
1.4 Help prepare and file with the Securities and Exchange Commission a Form
10SB or SB-2 describing the DURA TRACK business and registering the company
as a reporting company with the SEC;
1.5 Introduce the Company to one or more market makers for the purpose of
making an orderly and efficient market in the Company's securities;
1.6 Assist the Company with listing its securities on the NASD "Pink Sheets"
or OTC-Bulletin Board;
1.7 Prepare and file with the Securities and Exchange Commission a Form SB-2,
or other such form as the situation may require, to register either (1) the
"restricted" shares held by existing shareholders for sale or (2) new shares
for issuance by the Company.
1.8 Take any other actions reasonably required of it to complete the
Transactions as may be contemplated by this agreement.
2.0 Payments.
2.1 DURA TRACK will pay ALTRES a total of $45,000 for its services and the
services of its affiliates in regard to the Transactions. Payment of this
amount will be made $5,000 on execution of this agreement, with the remaining
$40,000 balance payable immediately upon filing of a Form 15(c)211 package
with a securities broker/dealer and acceptance of same by the NASD as part of
DURA TRACK's effort to have its securities become publicly traded. Payments
hereunder are deemed accrued when payable and are non-refundable. Any
payments not paid timely as set forth herein shall accrue at an annual rate
of 15%, payable monthly, until such time as they are paid in full
3.0. Expenses.
3.1 ALTRES will bear its expenses incurred in regard to the Transactions,
including, without limitation, travel, telephone, duplication costs, and
postage.
3.2 DURA TRACK will pay its own and any third-party expenses (other than
those expenses of ALTRES) including without limitation, SEC, Federal, State,
and Nasdaq filing fees, underwriting and market making costs, corporate
financial relations, accounting fees, and duplicating costs and other
expenses of the Company. ALTRES will not incur any expenses on behalf of the
Company unless permitted by it to do so in writing.
4.0. Agreement to Complete Transactions.
4.1 DURA TRACK agrees that it will timely take all steps necessary to
complete the Transactions to include, without limitation, causing audited
financial statements to be prepared in proper form for DURA TRACK; obtaining
consents of the Board of Directors and the shareholders of DURA TRACK, as
required; causing all necessary documents to be properly and timely prepared,
executed, approved or ratified, and filed, as appropriate, making timely and
fully all required payments related to the registration and listing of the
Company's securities for public trading, including filing fees; and timely
taking all other actions reasonably required of it to complete the
Transactions.
4.2 In the event that at any time DURA TRACK determines not to continue with
the Transactions, ALTRES hereby grants to DURA TRACK the right to buyout the
interest of ALTRES in this agreement on the terms contained herein, in which
case ALTRES agrees not to seek specific enforcement of this agreement. In the
event that DURA TRACK elects not to continue with the Transactions (or if
DURA TRACK does not timely take all such steps and do all such things as may
be reasonably required of it to complete the Transactions) ALTRES will be
entitled to receive, in full, all payments to be due to it or its affiliates
through and upon completion of the Transactions as though those events had
occurred provided, however, that DURA TRACK will not be obligated to make any
payment under this paragraph if the failure to complete the Transactions is
due to any actions or failure to act by ALTRES or its affiliates. Upon
payment of the buyout fee provided for herein, all obligations of the parties
under this agreement will cease except for obligations which expressly or by
their nature survive termination.
4.3 ALTRES represents and warrants that it will timely take all steps
reasonab1e and necessary to complete the Transactions and to cause the
securities of the Company to trade in the United States secondary market, and
for the Company to become a registered reporting company with the United
States Securities and Exchange Commission by way of a filing of a Form 10SB
or Form SB-2 to register either the shares held by existing shareholders or
to register shares to be issued by the Company in a public offering.
5.0 Performance of Services by Others.
From time to time, the achievement of certain results desired by the Company,
including the promotion of interest in its public securities, may be enhanced
by the services of other parties. These parties may include consultants,
advertising agencies, financial analysts, and similar persons who may,
directly or indirectly, assist in creating interest in the Company's
securities. All compensation, costs and expenses of such parties, if engaged
by the Company will be borne by it.
6.0 Actions and Understandings.
6.1 DURA TRACK understands the obligations and responsibilities that will
arise in regard to its becoming a reporting company and the trading of its
securities in the public market. DURA TRACK understands that in order to
achieve the greatest market interest in its securities, it, its officers, and
its directors, all or some, will be required to continuously interact with
the financial community. This interaction will include, without limitation,
timely filing of reports under the Securities Exchange Act of I934, including
audited financial statements; annual reports to shareholders and shareholder
meetings; issuing periodic press releases; and meetings and discussions with
existing and prospective investment bankers and institutions.
6.2 DURA TRACK understands that the completion of the Transactions will not,
in itself, result in capital investment in the Company. The public status of
the Company and its introduction to market makers and others in the financial
community may result in investment interest. However, investment interest
will depend upon the success of the Company, market conditions, and other
factors over which neither ALTRES nor its affiliates have any control.
6.3 DURA TRACK understands that the ultimate judgement of the financial
community of the investment merits of the Company will depend upon the
Company's ability to successfully carry out its business p1ans and
operations, to operate at a profit and similar business considerations. DURA
TRACK represents in good faith that it currently has no reason to believe
that it will not be able to complete the Transactions and to achieve its
business objectives.
6.4 DURA TRACK understands that the first trading in the Company's securities
may be limited, and that to increase the amount, depth, and market price of
its securities will require both time and effort by the Company to develop
relations with market makers and to create strong and stable trading of the
Company's securities.
6.5. During the Transactions and so long as ALTRES or an affiliate may be a
Shareholder of the Company, it will provide ALTRES continuing and reasonable
access as requested to all information concerning the Company's operations,
past, current, and intended, including, without limitation, full access to
the financial records of the Company as any other shareholder of record upon
15 days written notice at the expense of ALTRES.
7.0. Compliance with Securities Law.
Now and following the Transactions, as applicable, DURA TRACK represents and
warrants that:
7.1 DURA TRACK and its affiliates will at all times observe and comply with
Federal and State securities laws, rules, and regulations incident to the
issuance and trading of the securities of the Company and will take all steps
reasonably required within its control to prohibit any persons, whether or
nor affiliated with DURA TRACK, from engaging in any transactions in
contravention of such laws, rules, and regulations.
7.2 DURA TRACK and its affiliates will furnish all information and documents
concerning it and its affiliates required for the preparation and filing of a
Form 10-SB or Form SB-2 by the Company and will assure that all such
information is complete and accurate and does not contain any material
misstatement or omit any material information. Toward that end, DURA TRACK
and its affiliates will timely provide all requested information and
documents, including officers and directors questionnaires.
7.3 DURA TRACK and its affiliates will not at any time knowingly engage in
any activity which would constitute a prohibited market manipulation of the
securities of the Company and will take all steps reasonably required within
is control to prohibit my officer, director, other affiliate; agent or
emp1oyee from engaging in such conduct.
7.4 The Company will not issue any securities to any person for the promotion
or maintenance of a trading market in the Company's securities without first
receiving an opinion of qualified counsel that such issuance will be in
accord with securities 1aws, rules, and regulations and wil1 not, directly or
indirectly, receive from such persons any capital by loan, investment or
otherwise resulting from the sale or pledge of such securities.
7.5 For not less than 36 months following execution of this agreement, and
when applicable, the Company will timely make all required Federal, State,
and other filings necessary to allow the public trading of the Company's
securities and, if the Company's securities are then quoted on the Nasdaq
Stock Market or listed on any regional or national exchange, will take all
actions necessary to maintain such status for the Company's securities
8.0 Notices.
Any notices required or permitted under this agreement shall be deemed to
have been given when delivered in writing by hand, certified mail (return
receipt requested) or commercial courier, such as FedEx, to the following
addresses or to such other addresses as may have been given to each party in
the mariner provided for in this paragraph.
In the case of DURA TRACK or the Company to:
DURA TRACK ENTERPRISES, INC.
6505 138th Street
Surrey, BC Canada V3W 5G5
Or to:
DURA TRACK ENTERPRISES, INC.
3638 North Rancho Drive, Suite 6-D
Las Vegas, NV 89130
In the case of ALTRES to:
ALTRES GROUP LLC
7011 S Brookshire Ct.
Spokane, WA 99223
9.0 Arbitration.
9.1 Scope. The parties hereby agree that any and all claims (except only for
requests for injunctive or other equitable relief) whether existing now, in
the past, or in the future as to which the parties or any affiliates may be
adverse parties, and whether arising out of this agreement or from any other
cause will be resolved by arbitration before the American Arbitration
Association within the state of California.
9.2 Consent to Jurisdiction, Situs, and Judgement. The parties hereby
irrevocably consent to the jurisdiction of the American Arbitration
Association and the situs of the arbitration within the State of California.
Any award in arbitration may be entered in any domestic or foreign court
having jurisdiction over the enforcement of such awards.
9.3 Applicable Law. The law applicable to the arbitration and this agreement
shall be that of the State of California, determined without regard to its
provisions which would otherwise apply to a question of conflict of laws
9.4 Disclosure and Discovery. The arbitrator may, in its discretion, allow
the parties to make reasonable disclosure and discovery in regard to any
matters that are the subject of the arbitration and to compel compliance with
such disclosure and discovery order. The arbitrator may order the parties to
comply with all or any of the disclosure and discovery provisions of the
Federal Rules of Civil Procedure, as they then exist, as may be modified by
the arbitrator consistent with the desire to simplify the conduct and
minimize the expense of the arbitration.
9.5 Rules of Law. Regardless of any practices of arbitration to the
contrary, the arbitrator will apply the rules of contract and other law of
the jurisdiction whose law applies to the arbitration so that the decision of
the arbitrator will be, as much as possible, the same as if the dispute had
been determined by a court of competent jurisdiction.
9.6 Finality and Fees. Any award or decision by the American Arbitration
Association shall be final, binding, and non-appealable except to errors of
law or the failure of the arbitrator to adhere to the arbitration provisions
contained in this agreement. Each Party to the arbitration shall pay its own
costs and counsel fees.
9.7 Measure of Damages. In any adverse action, the parties shall restrict
themselves to claims for compensatory damages and/or securities issued or to
be issued and no claims shall be made by any party or affiliate for lost
profits, punitive, or multiple damages.
9.8 Covenant not to Sue. The parties covenant that under no conditions will
any party or any affiliate file any action against the other (except only
requests for injunctive or other equitable relief) in any forum other than
before the American Arbitration Association, and the parties agree that any
such action, if filed, shall be dismissed upon application and shall be
referred for arbitration hereunder with costs and attorney's fees to the
prevailing party.
9.9 Intention. It is the intention of the parties and their affiliates that
all disputes of any nature between them, whenever arising, whether in regard
to this agreement or any other matter, from whatever cause, based on whatever
law, rule or regulation, whether statutory or common law, and however
characterized, be decided by arbitration as provided herein and that no party
or affiliate be required to litigate in any other forum any disputes or other
matters except for requests for injunctive or equitable relief. This
agreement shall be interpreted in conformance with this stated intent of the
parties and their affiliates.
9.10 Survival. The provisions for arbitration contained herein shall survive
the termination of this agreement for any reason.
10.0 Assignment.
In order to better carry out the Transactions, ALTRES may assign all or parts
of this agreement provided that the assignee agrees to all the terms and
conditions of this agreement pertaining to such assignment. An assignment
will not relieve ALTRES of any of its obligations under this agreement.
11.0 Confidentiality.
As a result of entering in to this agreement, DURA TRACK will have access to
information which ALTRES regards as confidential and proprietary regarding
ALTRES' methods of carrying out the Transactions (collectively the "Business
of ALTRES"). DURA TRACK agrees that it will not, except as reasonably
required pursuant to this Agreement, use itself, or divulge, furnish, or make
accessible to any person any knowledge, know-how, techniques, or information
with respect to ALTRES or the Business of ALTRES without the prior written
consent of ALTRES.
12.0 Termination.
ALTRES may terminate this agreement, without further obligation or liability,
at any time (i) that ALTRES has a reasonable basis to believe that any aspect
of the transactions covered by this agreement would constitute a fraud or
deception on the market or (ii) that the Company fails to meet its
obligations under this agreement in a manner which would constitute a
material breach. In any such case, ALTRES will be entitled to retain all
payments to it made or accrued prior to such termination. All fees will be
refunded to DURA TRACK if it becomes evident that ALTRES can not or will not
perform under the terms of this agreement.
13.0 Miscellaneous.
13.1 Covenant of Further Assurances. The parties agree to take any further
actions and to execute any further documents that may from time to time be
necessary or appropriate to carry out the purposes of this agreement.
13.2 Scope of Agreement. This agreement and any attached pooling agreement
constitute the entire understanding of the parties. No undertakings,
warranties, or representations have been made other than as contained herein,
and no party shall assert otherwise. This agreement may not be changed or
amended orally.
13.3 Currency. All references to currency in this agreement are to United
States Dollars.
13.4. Review of Agreement. Each party acknowledges that it has had time to
review this agreement and, as desired, consult with counsel. In the
interpretation of this agreement, no adverse presumption shall be made
against any party on the basis that it has prepared, or participated in the
preparation of, this agreement.
14.0 Effective Date.
The effective date of this agreement is April 23, 2004.
IN WITNESS WHEREOF, the parties have approved and executed this agreement.
ALTRES Group, LLC
/s/ Kevin Nichols
Managing Member
DURA TRACK ENTERPRISES, INC.
/s/ Darrel Crimeni
President
Warranties by Officers, Directors, and Other Affiliates.
Each of the undersigned officers, directors, and other affiliates of DURA
TRACK agree that they have read this agreement and that they (i) will not
violate any of the provisions of this agreement relating to compliance
with securities laws, rules, and regulations (ii) will not violate any
provision of this agreement relating to confidentiality of the business of
ALTRES and (iii) consent to be governed by the provisions of this
agreement relating to arbitration in the case of any claims arising from
their warranties herein.
EXHIBIT 23.1 Consent of Accountants
August 8, 2005
U.S. Securities and Exchange Commission
Division of Corporate Finance
100 F Street, N.E.
Washington, D.C. 20549
RE: Dura Track Enterprises, Inc. - Form SB-2 Registration Statement
Dear Sirs:
As independent registered public accountants, we hereby consent to the
inclusion or incorporation by reference in this Form SB-2 Registration
Statement dated August 3, 2005, of the following:
Our report to the Stockholders and Board of Directors of Dura Track
Enterprises, Inc., dated April 29, 2005 on the financial statements of the
Company as at March 31, 2005 and December 31, 2004 and for the periods
from March 19, 2004 (inception) to December 31, 2004, and the three month
period ended March 31, 2005 and for the period March 19, 2004 (inception)
to March 31, 2005.
In addition, we also consent to the reference to our firm included under the
heading "Experts" in this Registration Statement.
Yours truly,
/s/ Dale Matheson Carr-Hilton LaBonte
- -------------------------------------
Dale Matheson Carr-Hilton LaBonte
Chartered Accountants
Vancouver, British Columbia
EXHIBIT 99.1 Subscription Agreement
HOW TO SUBSCRIBE
A. Instructions.
Each person considering subscribing for the Shares should review the
following instructions:
Subscription Agreement: Please complete, execute and deliver to the Company
the enclosed copy of the Subscription Agreement. The Company will review the
materials and, if the subscription is accepted, the Company will execute the
Subscription Agreement and return one copy of the materials to you for your
records.
The Company shall have the right to accept or reject any subscription, in
whole or in part.
An acknowledgment of the acceptance of your subscription will be returned to
you promptly after acceptance.
Payment: Payment for the amount of the Shares subscribed for shall be made by
delivery by the earlier of _______________, 2005 or such date as the Company
shall specify by written notice to subscribers (unless such period is
extended in the sole discretion of the President of the Company), of a check
or wire transfer of immediately available funds to the Company at the address
set forth below or an account specified by the Company. The closing of the
transactions contemplated hereby (the "Closing") will be held on
_______________, 2005 or such earlier date specified in such notice (unless
the closing date is extended in the sole discretion of the President of the
Company). There is no minimum aggregate amount of Shares which must be sold
as a condition precedent to the Closing, and the Company may provide for one
or more Closings while continuing to offer the Shares that constitute the
unsold portion of the Offering.
B. Communications.
All documents and cheques should be forwarded to:
DURA TRACK ENTERPRISES, INC.
3638 North Rancho Drive, Suite 6-D
Las Vegas, NV 89130
Attention: Darrel Crimeni
THE PURCHASE OF SHARES OF DURA TRACK ENTERPRISES, INC. INVOLVES A HIGH DEGREE
OF RISK AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN BEAR THE RISK OF THE
LOSS OF THEIR ENTIRE INVESTMENT.
DURA TRACK ENTERPRISES, INC.
3638 North Rancho Drive, Suite 6-D
Las Vegas, NV 89130
SUBSCRIPTION AGREEMENT
The undersigned (the "Subscriber") hereby irrevocably subscribes for that
number of Shares set forth below, upon and subject to the terms and
conditions set forth in the Corporation's SB-2 Registration Statement dated
_______________, 2005.
Total Number of Shares to be Acquired: _____________________________________.
Amount to be Paid (price of $0.025 per Share): _____________________________.
IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement
this ___ day of _________, 2005.
Signature: ________________________
Subscriber's Social Security or Tax Identification Number: ______________
Print Name: _________________________________
Signature of Co-owners if applicable:_________________________________
Print Title: __________________________________
Address: Number and Street: ________________________________________
City, State, Zip: ___________________________________________________
Name as it should appear on the Certificate:_______________________________
If Joint Ownership, check one (all parties must sign above):
|_| Joint Tenants with Right of Survivorship
|_| Tenants in Common
|_| Community Property
If Fiduciary or Business Organization, check one:
|_| Trust
|_| Estate
|_| Power of Attorney
Name and Type of Business Organization:_____________________________________
ACCEPTANCE OF SUBSCRIPTION
The foregoing Subscription is hereby accepted for and on behalf of DURA TRACK
ENTERPRISES, INC. this ___ day of __________, 2005.
DURA TRACK ENTERPRISES, INC.
By ________________________________________________
Darrel Crimeni, President