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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Amendment 1 to
FORM 10SB
General Form for Registration of Securities of Small
Business Issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
CREATIVE BEAUTY SUPPLY, INC.
(Exact name of Small Business Issuer in its charter)
NEW JERSEY 22-3392051
(State or other jurisdiction of (IRS Employer
incorporation or organization Identification No.)
380 Totowa Road, Totawa, NJ 07512
(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code: (973-904-0004
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
Forward-Looking Statements and Associated Risk. This Registration
Statement, including the information incorporated herein by reference,
contains forward-looking statements including statements regarding,
among other items, the Company's growth strategies, and anticipated
trends in the Company's business and demographics. These forward-
looking statements are based largely on the Company's expectations and
are subject to a number of risks and uncertainties, certain of which
are beyond the Company's control. Actual results could differ
materially from these forward-looking statements.
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ITEM 1. DESCRIPTION OF BUSINESS
A. The Company was incorporated in New Jersey on August 28, 1995.
On March 15, 1996, the Company effectuated a 45,392 for 1 stock split.
There have been no other material events in the development of the
Company (including any material mergers or acquisitions) since
inception. There are no pending or anticipated mergers, acquisitions,
spin-offs or recapitalizations. On February 26, 1997, the Company's
officers surrendered 7,543,000 Common Shares. The issued and
outstanding shares were reduced from 11,348,000 to 3,805,000. On July
1, 1997, the Company effectuated a 1 for 2.5 reverse stock split
reducing the issued and outstanding shares from 4,600,000 to 1,840,000.
Corporate Operations. The Company operates as a cosmetic and beauty
supply distributor at both the retail and wholesale levels. The
Company's various beauty and cosmetic products are purchased by it from
a number of unaffiliated suppliers and manufacturers and thereafter
sold on its premises to retail "walk-in" customers or directly to
beauty salons.
Products. The Company's beauty and cosmetic products primarily
consist of the following items: Shampoos, conditioners, mousse,
setting/styling and spray gels, lotions, lipstick and nail products and
hair sprays as well as such beauty and cosmetic related appliances as
blow dryers, curling irons, mirrors, air diffusers and hair trimmers.
Many of the aforesaid products (at least 80%) may be considered to be
"national" brands bearing consumer recognition with respect to the
their respective names. Such consumer recognition of such "brand"
names is considered by the Company to be of assistance to it with
respect to sale of such products since consumer recognition is advanced
by national brand media advertising (at no cost to the Company but to
the Company's benefit) when potential customers are already familiar
with the product as a result of media advertising.
Suppliers. The above indicated products are purchased by the Company
from a number of unaffiliated suppliers and management of the Company
does not contemplate or anticipate any significant difficulties with
its ability to purchase such products from its current suppliers and/or
from replacement and/or additional suppliers if and when necessary or
advisable. The Company does not have any written agreements with any
of its suppliers nor does any one supplier or small group of suppliers
(i.e. three suppliers) account for any significant portion of the
Company's purchases. Currently, the Company utilizes approximately 50
unaffiliated suppliers, none of whom account for 5% or more of the
Company's purchases (and no group of three of who account for an
aggregate of 10% or more of such purchases). Additionally, the
Company intends to acquire new product lines. Accordingly, the Company
is not dependent, whatsoever, upon any individual supplier or small
group of suppliers.
Distribution. The Company is currently distributing its products to
approximately 200 nail and beauty salons. Its territory is
principally and almost exclusively located within the northern portion
of the State of New Jersey, in the counties of Essex, Hudson, Bergen,
Passaic, Morris and Union.
The Company sells cosmetic and beauty supplies, both on the retail and
wholesale levels to beauty salons and to the general public.
Wholesale sales consist of beauty salons of merchandise for resale.
Sales of merchandise to beauty salons for their own consumption, not
for resale, are considered retail sales. All sales to the general
public are also considered retail sales.
Sales are summarized as follows:
For year ended For year ended
March 31, March 31,
1999 1998
---------------------------------
Wholesale $118,935 $107,363
Retail 143,205 142,368
-------- --------
$262,140 $249,731
======== ========
Competition. Competition is based on price. The Company's price
ranges of its various products are within the manufacturer-suggested
prices, services and product lines. The Company will be competing with
established companies and other entities (many of which may possess
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substantially greater resources than the Company). Almost all of the
companies with which the Company competes are substantially larger,
have more substantial histories, backgrounds, experience and records of
successful operations, greater financial, technical, marketing and
other resources, more employees and more extensive facilities than the
Company now has, or will have in the foreseeable future. It is also
likely that other competitors will emerge in the near future. There is
no assurance that the Company's products will compete successfully with
other established and/or well-regarded products. Inability to compete
successfully might result in increased costs, reduced yields and
additional risks to the investors herein
Marketing. The Company intends to purchase its products in larger
quantities, resulting in larger discounts on purchases, resulting in
more profit and better competition. The Company's products will be
marketed through a combination of personal contact by sales
representatives, advertising, special promotion and some telemarketing
and by conducting product knowledge classes which current and
prospective clients are invited to attend. The salons order and
receive their products weekly. No customer accounts for more than 20%
of sales and there are no existing sales contracts.
Backlog. The Company services its accounts on two days notice. There
is no backlog. If the Company does not have a specific item, it is
back ordered until the next delivery.
Employees. The Company currently has two full-time employees and no
part-time employees. The Company intends to add one or two sales
representatives and one beauty consultant to conduct the product
knowledge classes in the near future.
The Company's operations do not depend nor are they expected to depend
upon patents, copyrights, trade secrets, know-how or other proprietary
information. No amounts have been expended by the Company for
research and development of any products nor does the Company expect to
expend any amounts this year.
The Company's business, products and properties are not subject to
material regulation (including environmental regulation) by federal,
state, or local governmental agencies.
Seasonal Nature of Business Activities. The Company's business
activities are not seasonal.
Item 2. Management's Discussion and Analysis or Plan of Operation
Trends and Uncertainties. Demand for the Company's products will be
dependent on, among other things, market acceptance of the Company's
concept and general economic conditions, which are cyclical in nature.
Inasmuch as a major portion of the Company's activities is the receipt
of revenues from the sales of its products, the Company's business
operations may be adversely affected by the Company's competitors and
prolonged recessionary periods.
Hair styles in the industry change drastically from season to season.
The recent trend away from straight hair will have a favorable impact
on the sales of the Company's hair products such as perms, etc.
although the extent of this impact is indeterminable.
Capital and Source of Liquidity. In April, 1999, the Company renewed
its lease for a term of three (3) years commencing May 1, 1999 at a
monthly rental of $1,200 per month for the first twelve (12) months and
$1,300 a month for each of the remaining twenty four (24) months.
Additionally, Management intends to lease additional warehouse space.
The increased lease amounts will have a negative effect on the cash
flow of the Company.
For the three months ended June 30, 1999, the Company had a
registration cost of $5,000 resulting in net cash used by financing
activities of $5,000.
For the three months ended June 30, 1998, the Company received $32,750
from the issuance of common stock resulting in net cash provided by
financing activities of $32,750.
For the year ended March 31, 1999, the Company issued common stock for
$47,750. As a result, the Company had net cash flow provided by
financing activities of $47,750.
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For the year ended March 31, 1998, the Company issued common stock for
$67,556. As a result, the Company had net cash flow provided by
financing activities of $67,556.
For the three months ended June 30, 1999 and 1998, the Company pursued
no investing activities.
For the years ended March 31, 1999 and 1998, the Company pursued no
investing activities.
Results of Operations.
June 30, 1999 compared to June 30, 1998. For the three months ended
June 30, 1999, the Company had a net loss of ($20,059). The Company
had net sales of $64,879 with a cost of goods sold of $51,917 resulting
in gross profit of $12,962.
For the three months ended June 30, 1999, the Company has a net loss of
($18,784). The Company had net sales of $70,321 with a cost of goods
sold of $56,491 resulting in gross profit of $13,830.
The Company sells approximately over 1,000 different products at
varying mark ups ranging from 10 to 30 percent. The Company has two
types of customers, beauty salons and the general public. The gross
profit margin on sales of merchandises to the general public ranges
from 20 to 30 percent depending on the product sold. The gross margin
on sales of merchandise to beauty salons is somewhat less ranging from
10 to 20 percent depending on the product sold and the discount given.
The gross profit percentage for the three months ended June 30, 1999
(unaudited) was 19.98% and for the three months ended June 30, 1998
(unaudited) was 19.67%.
The Company had operating expenses of $37,341 for the three months
ended June 30, 1999 compared to $36,713 for the three months ended June
30, 1998. For the three months ended June 30, 1999, these expenses
consisted of officers salaries of $15,000, auto and delivery of $4,329,
professional fees of $9,559, rent of $3,600 and other miscellaneous
expenses of $4,853. For the three months ended June 30, 1998, these
expenses consisted of officers salaries of $15,577, auto and delivery
of $2,682, professional fees of $7,596, rent of $3,600, miscellaneous
of $2,993 and other expenses of $4,265.
The increase in auto and delivery from $2,682 for the three months
ended June 30, 1998 to $4,329 for the three months ended June 30, 1999
was due to numerous repairs to the Company's dellivery van. The
decrease inmiscellaneous expenses from $2,993 for the three months
ended June 30, 1998 to $83 for the three months ended June 30, 1999 was
due to tradeshow expenses incurred in 1998 which the Company did not
incur in 1999.
March 31, 1999 compared to March 31, 1998
For the year ended March 31, 1999, the Company had a net loss of
$52,453. The Company had net sales of $262,140 with a cost of goods
sold of $212,266 resulting in gross profit of $49,874 for the year
ended March 31, 1999.
The Company had operating expenses of $119,520 for the year ended March
31, 1999. These expenses primarily consisted of officer's salaries of
$60,796, auto and delivery of $9,049, professional fees of $12,642,
rent of $14,400, telephone of $1,842, utilities of $2,047, store
supplies of $1,696, insurance of $3,097, payroll and other taxes of
2,893 and other miscellaneous expenses of $11,058.
For the year ended March 31, 1998, the Company had a net loss of
$42,353. The Company had net sales of $249,731 with a cost of goods
sold of $197,450 resulting in gross profit of $52,281 for the year
ended March 31, 1998.
The Company had operating expenses of $106,660 for the year ended March
31, 1998. These expenses primarily consisted of officers salaries of
$60,796, auto and delivery of $10,098, professional fees of $3,800,
rent of $14,400, telephone of $1,683, utilities of $1,636, store
supplies of $1,620, insurance of $2,870, payroll and other taxes of
$2,945 and other miscellaneous expenses of $6,812.
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The gross profit percentage for the year ended March 31, 1999 was 19%
as compared to 20.9% for the year ended March 31, 1998. The decrease
was due to an increase in sales to beauty salons in 1999 over 1998 at
lower gross margins while sales to the general public remained steady.
The type of product line sold may have also contributed to the
decrease. The gross profit margin for merchandise ranges from 10 to
30 percent.
The Company pays for approximately 40% of two employees'
hospitalization cost in the aggregate. Employee hospitalization cost
for the year ended March 31, 1999 was $3,143 as compared to $2,128 for
the year ended March 31, 1998, an increase of $1,015. The increase
was due to an increase in the monthly premium of approximately $90 per
month.
Professional fees for the year end March 31, 1999 consisted of legal
fees of $5,000, accounting fees of $10,025 and stock transfer agent
fees of $2,433 as compared to the year ended March 31, 1998 consisting
of accounting fees of $3,800. The legal fees paid in 1999 were for
various legal services rendered and the accounting fees consisted of
the annual audit fees and interim financial reporting and services
Miscellaneous expenses for the year ended March 31, 1999 was $3,345 as
compared to #350 for the year ended March 31, 1998, an increase of
$2,995. This increase was due to travel expense incurred for the
attendance at a trade show in June 1998 in the amount of $2,862. This
was a one-time expenditure that management does not intend to incur in
the near future.
The major cause of the Company's losses from operations have been the
low sales volume. Management is looking for new suppliers at more
favorable prices and to increase their customer base and sales volume.
Additionally, management has implemented inventory controls which has
resulted in additional profits.
Management believes that the implementation of its inventory controls
and obtaining supplies from new sources will have a favorable impact on
the Company's results of operations within the next 12 months.
Plan of Operation. During the next twelve months, the Company intends
to obtain new product lines by negotiating with various manufacturers,
hire new sales representatives and hire technician to conduct product
knowledge classes
If the Company does not achieve the milestones within the above time
schedule, their operating costs will be higher and the Company will
lose even more money.
The Company's liquidity will be decreased due to little or no increase
in revenue and higher operating costs.
The Company is not delinquent on any of its obligations even though the
Company has had limited operating revenues. The Company intends to
market its products utilizing cash made available from the sale of its
products. The Company is of the opinion that revenues from the sales
of its products and the proceeds from the sale of its securities will
be sufficient to pay its expenses.
The Company does not have nor does it intend to have pension and/or
other post-retirement benefits in the future.
The Company does not have any or intends to have any derivative
instruments or hedging activities.
Year 2000 Compliance. The Company has conducted a comprehensive review
of its computer systems to identify any business functions that could
be affected by the "Year 2000" issue. As the millennium ("Year 2000")
approaches, businesses may experience problems as the result of
computer programs being written using two digits rather than four to
define the applicable year. The Company has conducted a comprehensive
review of its computer systems to identify those areas that could be
affected by the "Year 2000" issue. Any of the Company's programs that
have time-sensitive software may recognize a date using "00" as the
year 1900 rather than the year 2000. If not corrected, this could
result in extensive miscalculations or a major system failure.
The Company relies on industry standard software. Certain
manufacturers have already provided the Company with upgraded software
to address the "Year 2000" issue. The Company believes that by
modifying existing software, the "Year 2000" issue will not pose
significant operational
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problems and is not anticipated to require additional expenditures that
would materially impact its financial position or results of operations
in any given year. The Company believes that this modification will be
completed in the latter part of 1999 at a minimal cost.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company's executive offices and showroom are located at 380 Totowa
Road, Totowa, New Jersey 07512. Telephone No. (973) 904-0004. These
offices consist of 1,400 square feet on a lease term. The Company has
a lease for a term of three (3) years commencing May 1, 1999 at a month
rental of $1,200 per month for the first twelve (12) months and $1,300
a month for each of the remaining twenty four (24) months. The
Company needs additional warehouse space and will attempt to locate
adequate warehouse space on a lease basis in the near future. The
Company owns its delivery vehicle and the computers used in the
operation of the business.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tabulates holdings of shares of the Company by each
person who, subject to the above, at the date of this registration
statement, holders of record or is known by Management to own
beneficially more than 5.0% of the Common Shares and, in addition, by
all directors and officers of the Company individually and as a group.
Each named beneficial owner has sole voting and investment power with
respect to the shares set forth opposite his name.
Shareholdings at Date of
This Prospectus
<TABLE>
<CAPTION>
Percentage of
Number & Class(1) Outstanding
Name and Address of Shares Common Shares
<S> <C> <C>
Carmine Catizone Common 808,000 43.33%
10 1/2 Walker Avenue
Morristown, NJ 07960
Daniel T. Generelli Common 80,000 4.29%
24 Kansas Street
Hackensack, NJ 07601
Pat Catizone Common 160,000 8.58%
Common 160,000(2) 8.58%
266 Cedar Street
Cedar Grove, NJ 07009
Barbara Catizone Common 160,000 8.58%
Common 160,000(2) 8.58%
266 Cedar Street
Cedar Grove, NJ 0709
Robyn Conforth Common 140,000 7.51%
266 Cedar Street
Cedar Grove, NJ 07009
David Wong Common 108,050 5.79%
300 Rector Place #41
New York, NY 10280
All Directors & Officers 888,000 47.62%
as a group (2 persons)
</TABLE>
(1)Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared
voting power (including the power to vote or direct the voting) and/or
sole or shared investment power (including the power to dispose or
direct the disposition) with respect to a security whether through a
contract, arrangement, understanding, relationship or otherwise.
Unless otherwise
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indicated, each person indicated above has sole power to vote, or
dispose or direct the disposition of all shares beneficially owned,
subject to applicable unity property laws.
(2)Pat Catizone and Barbara Catizone are husband and wife and are
deemed to be the beneficial owners of each other's shares.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Board of Directors. The following persons listed below have been
retained to provide services as directors and executive officers until
the qualification and election of his successor. All holders of Common
Stock will have the right to vote for Directors of the Company. The
Board of Directors has primary responsibility for adopting and
reviewing implementation of the business plan of the Company,
supervising the development business plan, review of the officers'
performance of specific business functions. The Board is responsible
for monitoring management, and from time to time, to revise the
strategic and operational plans of the Company. Directors receive no
cash compensation or fees for their services rendered in such capacity.
Name Position Held Term of Office
Carmine Catizone, age 54 President, Director Inception
to present
Daniel Generelli, age 36 Secretary/Treasurer Inception
Vice-President/Director to present
Resumes:
Carmine Catizone. Mr. Catizone has been President and a director of
the Company since its inception in August 1995. From June 1988 to July
1994, Mr. Catizone was President and a Director of J&E Beauty Supply,
Inc., a retail and wholesale beauty supply distributor. Mr. Catizone
served as President and a director of C&C Investments, Inc., a blank
check company (now known as T.O.P.S. Medical Corp., which provided
chemicals for transportation of organs) from July 1977 to December
1984. Mr. Catizone is not currently involved with T.O.P.S. Medical
Corp. From June 1980 to December 1985, Mr. Catizone had been district
sales manager (engaged in sales of cosmetics) for Chattem Labs. Mr.
Catizone received his Bachelor of Science degree from Fairleigh
Dickerson University in 1972.
Daniel Generelli. Mr. Generelli has been Secretary-Treasurer and a
director of the Company since inception in August 1995. From December
1989 to July 1996, Mr. Generelli was Secretary/Treasurer and a director
of J&E Beauty Supply, Inc., a retail and wholesale beauty supply
distributor. From December 1984 to December 1989, Mr. Generelli was
employed as a distribution supervisor with Tags Beauty Supply, a retail
and wholesale beauty supply distributor in Fairfield, NJ. Mr.
Generelli graduated from Ramapo College of New Jersey with a Bachelor
of Science degree in June of 1984.
ITEM 6. EXECUTIVE COMPENSATION
Remuneration. To date, the Company has not entered into employment
agreements nor are any contemplated. Mr. Generelli is paid
approximately $30,000 per year, however, all of Mr. Catizone's $30,000
salary has been accrued.
Board of Directors Compensation. Members of the Board of Directors
may receive an amount yet to be determined annually for their
participation and will be required to attend a minimum of four meetings
per fiscal year. To date, the Company has paid $0.00 in directors'
expenses.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
ITEM 8. DESCRIPTION OF SECURITIES
Qualification. The following statements constitute brief summaries of
the Company's Certificate of Incorporation and Bylaws, as amended.
Such summaries do not purport to be complete and are qualified in their
entirety by reference to the full text of the Certificate of
Incorporation and Bylaws.
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The Company's articles of incorporation authorize it to issue up to
100,000,000 Common Shares, $.001 par value per Common Share and up to
10,000,000 Preferred Shares, $.001 par value.
Common Stock. The Company's articles of incorporation authorize it to
issue up to 100,000,000 Common Shares, $.001 par value per Common
Share. All outstanding Common Shares are legally issued, fully paid and
non-assessable.
Liquidation Rights. Upon liquidation or dissolution, each outstanding
Common Share will be entitled to share equally in the assets of the
Company legally available for distribution to shareholders after the
payment of all debts and other liabilities.
Dividend Rights. There are no limitations or restrictions upon the
rights of the Board of Directors to declare dividends out of any funds
legally available therefor. The Company has not paid dividends to date
and it is not anticipated that any dividends will be paid in the
foreseeable future. The Board of Directors initially may follow a
policy of retaining earnings, if any, to finance the future growth of
the Company. Accordingly, future dividends, if any, will depend upon,
among other considerations, the Company's need for working capital and
its financial conditions at the time.
Voting Rights. Holders of Common Shares of the Company are
entitled to cast one vote for each share held at all
shareholders meetings for all purposes.
Other Rights. Common Shares are not redeemable, have no conversion
rights and carry no preemptive or other rights to subscribe to or
purchase additional Common Shares in the event of a subsequent
offering.
Preferred Stock. The Corporation is authorized to issue 10,000,000
Preferred Shares. There are currently no Preferred Shares issued and
outstanding. The Board of Directors has the right to determine the
terms of any series of Preferred Shares to be issued.
Transfer Agent. Continental Stock Transfer acts as the Company's
transfer agent.
<PAGE>10
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's intends to apply to have its common stock traded in the
over-the-counter market and listed on the NASDAQ Bulletin Board
The Company has never paid any cash dividends nor does it intend, at
this time, to make any cash distributions to its shareholders as
dividends in the near future.
As of September 30, 1999, the number of holders of Company's common
stock is 61.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any legal proceedings nor is the Company
aware of any disputes, which may result in legal proceedings.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
During the Company's two most recent fiscal years or any later interim
period, there have been no changes in or disagreements with the
Company's principal independent accountant or a significant
subsidiary's independent accountant.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
In the first quarter of 1997, the Company issued 795,000 shares of
common stock (pre-1 for 2.5 reverse) for $159,000 ($.20 per share) to
the following unaffiliated individuals and entities for cash. All
Common Share amounts reflect the 1 for 2.5 reverse stock split
effectuated July 1, 1997.
Name Number of Common Shares
- -------- -----------------------
Scott Caputo 50,000
Cashro International Holding, Ltd. 50,000
Pat Catizone 110,000
David Wong 108,000
These sales were made to sophisticated investors pursuant to an
exemption from registration provided by Section 4(2) of the Securities
Act of 1933. The Company determined the sophistication of the
investors based on its prior relationships with said investors and/or
verbal inquiries.
From March 1998 through July 1998, the Company completed an offering
under Rule 504 of Regulation D of the Securities Act of 1933 at $5.00
per Common Share to the following:
Name # of Common Shares
- --------- ------------------
C&A Stables partnership 500
John F. Agoglia 200
Richard W. Agoglia 200
John F. Agoglia, Jr. 200
Dina Anderson 1,000
Anthony Borgio 100
Carmela Borgio 100
Phyllis A. Calwhite
Custodian for John P. Coolack 200
Phyllis A. Calwhite
Custodian for Timothy Coolack 200
Phyllis A. Calwhite
Custodian for Jason A. Coolack 200
R. Scott Caputo 200
Robert G. Caputo 1,000
Catherine Corforte 200
Henry Corforte 200
John H. Corforte 400
John P. Corforte 200
Louise Corforte 200
Lyndell Corforte 200
Michael Corforte 200
Pauline S. Corforte 200
Ann Cortese 100
Carmine Cortese 100
Kathleen Doherty 100
<PAGE>11
Albert Galli 100
Marie Galli 100
Mary Giangiobre 200
Andrew L. Gioia
Custodian for Sandra Gioia 200
Andrew L. Gioia
Custodian for Christopher Gioia 200
Andrew L. Gioia 1,600
Maria A. Kolacy 100
Michele Lee 50
Betty Lim 50
Judy Lim 50
Michael Lim 50
Yak Lim 50
Yuet Ping Lim 50
Thomas Mismo 200
Maria Patierno 500
Serafina Patierno 2,000
Thomas Patierno 500
Alissa Pelliccio 200
Joseph Pelliccio 200
John Perez 1,200
Marla Regan
Custodian for Kevin Regan 500
Marla Regan
Custodian for Ryan Regan 500
Marla Regan
Custodian for Jason Regan 500
Wayne Robbins 6,000
Gregory V. St. Thomasino 200
Frank Wermick 200
Betty Wong 50
David Wong 50
Man Wai Wong 50
Richard Wong 50
Yee Wong 50
Kenneth Yeung 50
Linda Yeung 50
These sales were made pursuant to an exemption from registration
pursuant to Section 504 of Regulation D. The offering was approved
and/or exempted by the required states and the appropriate Form D was
filed with the Securities and Exchange Commission.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Indemnification. The Company shall indemnify to the fullest extent
permitted by, and in the manner permissible under the laws of the State
of New Jersey, any person made, or threatened to be made, a party to an
action or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he is or was a director or
officer of the Company, or served any other enterprise as director,
officer or employee at the request of the Company. The Board of
Directors, in its discretion, shall have the power on behalf of the
Company to indemnify any person, other than a director or officer, made
a party to any action, suit or proceeding by reason of the fact that
he/she is or was an employee of the Company.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the
Company, the Company 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 Company of expenses incurred or paid by
a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceedings) is asserted by
such director, officer, or controlling person in connection with any
securities being registered, the Company will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issues.
<PAGE>12
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE CORPORATION FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE
AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS
THEREFORE UNENFORCEABLE.
PART F/S
The following financial statements required by Item 310 of Regulation
S-B are furnished below
Independent Auditor's Report
Balance Sheet as of June 30, 1999, March 31, 1999 and 1998
Statements of Operations for the Three Months ended June 30, 1998 and
1998 and for the Years ended March 31, 1999 and 1998
Statements of Stockholders' Equity for the Three Months ended June 30,
1998 and for the Years ended March 31, 1999 and 1998
Statement of Cash Flows for the Three Months ended June 30, 1998 and
1998 and for the Years ended March 31, 1999 and 1998
Notes to Financial Statements
<PAGE>13
Bederson & Company LLP
Certified Public Accountants
405 Northfield Avenue
West Orange, New Jersey 07052
(973) 736-3333 Fax: (973) 736-3367,8786
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders of
Creative Beauty Supply, Inc.
Totawa, New Jersey
We have audited the accompanying balance sheets of Creative Beauty
Supply, Inc. as of March 31, 1999 and 1998, and the related statements
of operations, stockholders' equity and cash flows for the years then
ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Creative
Beauty Supply, Inc. at March 31, 1999 and 1998 and the results of its
operations and its cash flows for the years then ended in conformity
with generally accepted accounting principles.
BEDERSON & COMPANY LLP
West Orange. New Jersey
April 23, 1999
Member of TAG International with offices in principal cities worldwide
Affiliated with the American Institute of CPAs Division for Firms
<PAGE>14
CREATIVE BEAUTY SUPPLY, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, March 31,
----------- ----------------------
1999 1999 1998
----- ----- -----
(Unaudited)
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $322,956 $324,683 $291,674
Accounts receivable 3,055 3,263 2,541
Inventory 62,239 72,904 76,532
Prepaid expenses 1,617 2,431 2,251
--------- ---------- ----------
TOTAL CURRENT ASSETS 389,867 403,281 372,998
PROPERTY AND EQUIPMENT, net of
accumulated depreciation 3,675 4,216 6,380
OTHER ASSETS:
Organization cost, net of
Accumulated amortization 169 197 310
--------- ---------- ----------
TOTAL ASSETS $393,711 $407,694 $379,688
========= ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade $13,687 $9,863 $7,408
Payroll taxes withheld and accrued 1,048 698 720
Accrued expenses - officers' salaries 105,288 98,365 68,269
Accrued expenses 19,749 19,770 19,590
-------- --------- ----------
TOTAL CURRENT LIABILITIES 139,722 128,696 95,987
-------- --------- ----------
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.001,
authorized 10,000,000 shares issued
and outstanding -0- - - -
Common stock, par value $.001,
Authorized 100,000,000 shares;
Issued and outstanding 1,864,650
shares (1999) and
1,855,100 shares (1998) 1,865 1,865 1,855
Additional paid-in-capital 467,541 472,541 424,801
Accumulated deficit (215,467) (195,408) (142,955)
--------- --------- --------
TOTAL STOCKHOLDERS' EQUITY 253,939 278,998 283,701
--------- --------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $393,711 $407,694 $379,688
========= ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>15
CREATIVE BEAUTY SUPPLY, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Years Ended
June 30, March 31,
------------------------- -----------------------
1999 1998 1999 1998
------ ------ ------ ------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net Sales $64,879 $70,321 $262,140 $249,731
Cost of Goods Sold 51,917 56,491 212,266 197,450
-------- -------- --------- ---------
Gross Profit 12,962 13,830 49,874 52,281
-------- -------- --------- --------
Operating Expenses:
Salaries - officers 15,000 15,577 60,796 60,746
Payroll taxes 675 699 2,600 2,652
Auto and delivery 4,329 2,682 9,049 10,098
Employee welfare 849 474 3,143 2,128
Insurance 829 774 3,097 2,870
Office 332 251 2,293 2,107
Professional fees 9,559 7,596 12,642 3,800
Rent 3,600 3,600 14,400 14,400
Store supplies 304 263 1,696 1,620
Taxes 250 200 293 293
Telephone 470 432 1,842 1,683
Utilities 492 603 2,047 1,636
Miscellaneous 83 2,993 3,345 350
Depreciation and amortization 569 569 2,277 2,277
-------- -------- -------- ---------
TOTAL OPERATING EXPENSES 37,341 36,713 119,520 106,660
-------- -------- -------- ---------
LOSS FROM OPERATIONS BEFORE
OTHER INCOME (24,379) (22,883) (69,646) (54,379)
OTHER INCOME:
Interest Income 4,320 4,099 17,193 12,026
-------- -------- -------- ---------
NET LOSS $(20,059) $(18,784) $(52,453) $(42,353)
======== ======== ======== ========
LOSS PER
COMMON SHARE BASIC $(.01) $(.01) $(.03) $(.02)
======== ======== ======== =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,864,650 1,860,377 1,863,371 1,840,083
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>16
CREATIVE BEAUTY SUPPLY, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock
------------------ Additional
Number of Paid-in Accumulated
Shares Amount Capital Deficit Total
------- --------- --------- ---------- --------
<S> <C> <C> <C> <C> <C>
BALANCE, March 31, 1997 4,600,000 $4,600 $354,500 $(100,602) $258,498
July 1, 1997, 1 for 2.5
Reverse stock split (2,760,000) (2,760) 2,760 - -
March 30, 1998, issuance of
common stock for cash 15,100 15 67,541 - 67,556
Net loss for the year - - - (42,353) (42,353)
-------- ------- -------- -------- --------
BALANCE, March 31, 1998 1,855,100 1,855 424,801 (142,955) 282,701
April 17, 1998, issuance of
common stock for cash 6,200 6 30,994 - 31,000
May 12, 1998, issuance of
common stock for cash 300 1 1,499 - 1,500
June 27, 1998, issuance of
common stock for cash 50 - 250 - 250
July 27, 1998, issuance of
common stock for cash 3,000 3 14,997 - 15,000
Net loss for the year - - - (52,453) (52,453)
-------- --------- -------- -------- --------
BALANCE, March 31, 1999 1,864,650 $1,865 $472,541 $(195,408) $278,998
Registration cost - - (5,000) - (5,000)
Net loss for the period - - - (20,059) (20,059)
----------- ------- --------- --------- --------
BALANCE, June 30, 1999
(Unaudited) 1,864,650 $1,865 $467,541 $(215,467) $253,939
========== ======= ========= ========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>17
CREATIVE BEAUTY SUPPLY, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended Years Ended
June 30, March 31,
--------------------------- --------------------------
1999 1998 1999 1998
--------------------------- --------------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(20,059) $(18,784) $(52,453) $(42,353)
Adjustments to reconcile net loss to
net cash from operating activities:
Depreciation and amortization 569 569 2,277 2,277
(Increase) decrease in operating assets:
Accounts receivable 208 (2,258) (722) 967
Inventory 10,665 (5,267) 3,628 7,905
Prepaid expenses 814 764 (180) (188)
Increase (decrease) in operating liabilities:
Accounts payable 3,824 14,850 2,455 (14,456)
Payroll taxes withheld and accrued 350 352 (22) (100)
Accrued expenses - officers' salaries 6,923 7,632 30,096 30,096
Accrued expenses (21) 833 180 (4,801)
-------- ------- --------- ---------
NET CASH PROVIDED BY (USED BY) OPERATING ACTIVITIES 3,273 (1,309) (14,741) (20,653)
-------- ------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock - 32,750 47,750 67,556
Registration Cost (5,000) - - -
-------- -------- -------- ---------
NET CASH PROVIDED BY
(USED BY) FINANCING ACTIVITES (5,000) 32,750 47,750 67,556
-------- --------- ------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (1,727) 31,441 33,009 46,903
CASH AND CASH EQUIVALENTS -
beginning of period 324,683 291,674 291,674 244,771
-------- -------- -------- --------
CASH AND CASH EQUIVALENTS - end of period $322,956 $323,115 $324,683 $291,674
======== ======== ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>18
CREATIVE BEAUTY SUPPLY, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999 and 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Creative Beauty Supply, Inc. was incorporated in the State of New
Jersey on August 28, 1995 and commenced operations on January 2, 1996.
The Company sells cosmetic and beauty supplies both on the retail and
wholesale levels to the general public and beauty salons in Northern
and Central New Jersey.
The Company is located in Totowa, New Jersey and has two employees.
Accounting Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the period. Actual results could differ from
those estimates.
Basis of Accounting
The Company maintains its records on the accrual basis of accounting.
Income is recognized when customers take title to the goods and
expenses are recorded when incurred.
Cash Equivalents
The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
Provision for Doubtful Accounts
Bad debts are provided on the allowance method based on historical
experience and management's evaluation of outstanding accounts
receivable. Management considered accounts receivable at March 31,
1999 and 1998 to be fully collectible; accordingly, no allowance for
doubtful accounts was provided for June 30, 1999 (unaudtied) and at
March 31, 1999 and 1998.
Inventory
Inventory, consisting of finished goods, is valued at cost, with cost
being determined on the first-in, first-out
(FIFO) method.
Property and Equipment
Property and equipment are recorded at cost. Depreciation of property
and equipment is provided for over the estimated useful lives of the
respective assets. Depreciation is recorded based on the straight-
line method.
The major classes of assets and ranges of estimated useful lives are as
follows:
Years
---------
Delivery equipment 5
Furniture and office equipment 7
Maintenance, repairs, and minor renewals are charged to earnings when
they are incurred. When assets are retired or otherwise disposed of,
the assets and related allowance for depreciation and amortization are
eliminated from the accounts and any resulting gain or loss is
reflected in income.
Organization Costs
All costs incurred by the Company in connection with its incorporation
and organization have been capitalized. The Company has elected to
amortize these costs over sixty (60) months. The charge to operations
for the three months ended June 30, 1999 (Unaudited) and June 30, 1998
(Unaudited) was $28 each period and for the years ended March 31, 1999
and 1998 was $113 each year.
Income Taxes
Deferred tax assets and liabilities are determined on the differences
between financial statement and tax bases of assets and liabilities,
using enacted tax rates in effect for the year in which the differences
are expected to reverse. Current income taxes are based on the year's
income taxable for federal and state tax reporting purposes.
<PAGE>19
Impairment of Long-Lived Assets
The Company, in April 1997, adopted Statement of Financial Accounting
Standards ("SFAS") No. 121, Accounting for the Impairment of Long-Lived
Assets and Long-Lived Assets to be Disposed Of. In accordance with
SFAS No. 121, the Company reviews long-lived assets for impairments
whenever events or changes in business circumstances occur that
indicate that the carrying amount of the assets may not be recoverable.
The Company assesses the recoverability of long-lived assets held and
to be used based on undiscounted cash flows, and measures the
impairment, if any, using discounted cash flows. Adopting SFAS
No. 121 did not have a material impact on the Company's financial
position, operating results or cash flows.
Comprehensive Income
The Company has adopted Statement of Financial Accounting Standards
("SFAS") No. 130, Reporting Comprehensive income. Comprehensive
income includes net earnings adjusted for certain revenues, expenses,
gains and losses that are excluded from net earnings under generally
accepted accounting principles. The Company has not had any
transactions which would result in the reporting of other comprehensive
income and the adoption of this pronouncement is not expected to have
any material impact on the Company's financial statements.
Unaudited Information
The financial statements and accompanying notes as of and for the three
months ended June 30, 1999 and 1998 are unaudited, and in the opinion
of management, include all adjustments consisting of normal recurring
accounts necessary for a fair presentation.
Expenses Related to Sale, Issuance and Registration of Securities
All cost incurred in connection with the sale, issuance and
registration of the Company's common stock have been capitalized and
charged to additional paid-in-capital.
Net Loss per Common Share
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 ("SFAS No. 128"),
"Earnings Per Share", which established new standards for computation
of earnings per share. SFAS No. 128 requires the presentation on the
face of the income statement of "basic" earnings per share and
"diluted" earnings per share.
Basic earnings per share is computed by dividing the net income (loss)
available to common shareholders by the weighted average number of
outstanding common shares. The calculation of diluted earnings per
share is similar to basic earnings per share except the denominator
includes dilutive common stock equivalents such as stock options and
convertible debentures. There were no dilutive common stock
equivalents for all periods presented.
NOTE 2 - RISK ARISING FROM CASH DEPOSITS IN EXCESS OF INSURED LIMITS
The Company maintains its cash balances with a major bank. The
balances are insured by the Federal Deposit Insurance Corporation up to
$100,000 per depositor. At June 30, 1999 (unaudited), and March 31,
1999 and 1998, the Company's uninsured cash balances approximated
$224,000, $225,000 and $192,000, respectively.
NOTE 3 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company measures it financial assets and liabilities in accordance
with general accepted accounting principles. For certain of the
Company's financial instruments, including cash and cash equivalents,
trade receivables, accounts payable and accrued expenses, the carrying
amounts approximate fair value due to their short-term maturities.
<PAGE>20
NOTE 4 - PROPERTY AND EQUIPMENT
The components of property and equipment are as follows:
<TABLE>
<CAPTION>
June 30, March 31,
------- ---------------------
1999 1999 1998
-------- ------- -------
(Unaudited)
<S> <C> <C> <C>
Delivery equipment $9,750 $9,750 $9,750
Furniture and office equipment 1,500 1,500 1,500
------- -------- --------
11,250 11,250 11,250
Less: Accumulated depreciation 7,575 7,034 4,870
-------- -------- --------
TOTAL $3,675 $4,216 $6,380
======== ========= ========
</TABLE>
Depreciation expense for the three months ended June 30, 1999
(unaudited) and June 30, 1998 (unaudited) was $541 each period and for
the years ended March 31, 1999 and 1998 was $2,164 each year.
NOTE 5 - INCOME TAXES
The Company adopted Statement of Financial Accounting Standard 109
("SFAS"). SFAS 109 provides for an asset and liability approach to
accounting for income taxes that require the recognition of deferred
tax assets and liabilities for the expected future tax consequences of
events that will be recognized in the Company's financial statements or
tax returns.
In estimating future consequences, SFAS 109 generally considers all
expected future events other than proposed changes in the tax law or
rates prior to enactment.
Deferred income taxes at June 30, 1999 (unaudited) relates to federal
and state net operating losses of approximately $91,000 each, and an
accrued liability of approximately $124,000 each. The resulting
deferred income tax asset has been fully offset by a valuation
allowance. The valuation allowance has been established equal to the
full amount of the deferred tax assets, as the Company is not assured
at June 30, 1999 (unaudited) and at March 31, 1999 that it is more
likely than not that these benefits will be realized.
Net operating loss carryforwards and temporary differences between the
financial statement carrying amounts and tax bases of assets that give
rise to the net deferred assets relate to the following:
<TABLE>
<CAPTION>
Three Months Ended Years Ended
June 30, March 31,
----------------------- -------------------------
1999 1998 1999 1998
--------- -------- ------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net operating loss $5,378 $4,835 $9,637 $5,274
Accrued liabilities,
principally due to expenses not
currently deductible for
income tax purposes 3,225 3,225 12,900 12,900
------- ------- ------- -------
Net deferred income tax asset $ 8,603 $8,060 $22,537 $18,174
======== ======= ======== ========
</TABLE>
A reconciliation between the statutory federal income tax rate (34%)
and the effective income tax rates based on continuing operations is as
follows:
<PAGE>21
<TABLE>
<CAPTION>
Three Months Ended Years Ended
June 30, March 31,
----------------------- -------------------------
1999 1998 1999 1998
--------- -------- ------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Statutory federal income tax benefit $ (6,820) $ (6,387) $(17,834) $(14,384)
State income tax benefit (1,783) (1,673) (4,703) (3,790)
Valuation allowance 8,603 8,060 22,537 18,174
--------- -------- -------- ----------
Total provision for income tax $ - $ - $ - $ -
========= ======== ========= ==========
</TABLE>
Federal net operating loss carryforward of $78,972 at March 31, 1999
will expire in the year 2014 and the state net operating loss of
$78,322 at March 31, 1999 will expire in the year 2004.
NOTE 6 - SALES
The Company sells cosmetic beauty supplies both on the retail and
wholesale levels to beauty salons and to the general public.
Wholesale sales consist of sales to beauty salons of merchandise for
resale. Sales of merchandise to beauty salons for their own
consumption, not for resale, are considered retail sales. All sales
to the general public are also considered retail sales.
Sales are summarized as follows:
<TABLE>
<CAPTION>
Three Months Ended Years Ended
June 30, March 31,
----------------------- -------------------------
1999 1998 1999 1998
--------- -------- ------- --------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Wholesale $ 27,429 $33,372 $118,935 $107,363
Retail 37,450 36,949 143,205 142,368
--------- -------- -------- --------
$ 64,879 $70,321 $262,140 $249,731
======== ======== ======== ========
NOTE 7 - COMMITMENTS
In April of 1996, the Company entered into a lease agreement with a
non-related party for a term of three (3) years commencing May 1, 1996
for the rental of its executive offices, retail, wholesalee and
warehouse facilities inTotowa, New Jersey at a monthly rental of $1,200
per month. The total rent charged to operations for the three months
ended June 30, 1999 (unaudited) and June 30, 1998 (unaudited) was
$3,600 each period and for the years ended March 31, 1999 and 1998 was
$14,400 each year.
In April of 1999, the Company renewed its lease for a term of three (3)
years commencing May 1, 1999 at a month rental of $1,200 per month for
the first twelve (12) months and $1,300 a month for each of the
remaining twenty four (24) months.
The minimum annual future payments are as follows:
Years Ended
March 31,
----------
2000 $14,400
2001 $15,500
2002 $15,600
2003 1,300
NOTE 8 - COMMON STOCK
On February 26, 1997, the Company's officers surrendered 7,543,000
shares of common stock. The issued and outstanding shares were
reduced from 11,348,000 to 3,805,000 shares.
<PAGE>22
On February 26, 1997, subsequent to the surrender of 7,543,000 shares,
the Company issued 125,000 shares of common stock for $25,000 ($.20 per
share).
On March 6, 1997, the Company issued 670,000 shares of common stock for
$134,000 ($.20 per share).
On July 1, 1997, the Company effectuated a 1 for 2.5 reverse stock
split reducing the issued and outstanding shares from 4,600,000 to
1,840,000.
On March 30, 1998, the Company issued 15,100 share of common stock for
$67,556, net of related issuance cost of $7,944 ($5.00 per share).
The Company issued 9,550 shares of common stock for $47,750 ($5.00 per
share) during the fiscal year ended March 31, 1999.
<PAGE>23
PART III
ITEM 1. INDEX TO EXHIBITS
(2) Charter and By-Laws
(3) Instruments defining the rights of security holders
(5) Voting Trust Agreement - Not Applicable
(6) Material Contracts - Not Applicable
(7) Material Foreign Patents - Not Applicable
(12) Additional Exhibits - Not Applicable
ITEM 2. DESCRIPTION OF EXHIBITS
(2.1) Articles of Incorporation incorporated by reference to Form 10SB
filed June 14, 1999, file #0-26361
(2.2) Bylaws incorporated by reference to Form 10SB filed June 14,
1999, file #0-26361
(3.1) Common Stock Certificate incorporated by reference to Form 10SB
filed June 14, 1999, file #0-26361
<PAGE>24
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
Creative Beauty Supply, Inc.
/s/Carmine Catizone
Date: October 1, 1999 ----------------------------
By: Carmine Catizone, President
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> JUN-30-1999
<CASH> 322,956
<SECURITIES> 0
<RECEIVABLES> 3,055
<ALLOWANCES> 0
<INVENTORY> 62,239
<CURRENT-ASSETS> 389,867
<PP&E> 3,675
<DEPRECIATION> 2,277
<TOTAL-ASSETS> 393,711
<CURRENT-LIABILITIES> 139,772
<BONDS> 0
<COMMON> 1,865
0
0
<OTHER-SE> 252,074
<TOTAL-LIABILITY-AND-EQUITY> 393,711
<SALES> 64,879
<TOTAL-REVENUES> 64,879
<CGS> 51,917
<TOTAL-COSTS> 51,917
<OTHER-EXPENSES> 37,341
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (20,059)
<INCOME-TAX> 0
<INCOME-CONTINUING> (20,059)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (20,059)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
