UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities and Exchange
Act of 1934
2
FASHION DYNAMICS CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 88-0352465
(State of organization) (I.R.S. Employer Identification No.)
8105 Lake Hills Dr., Las Vegas, NV 89128
(Address of principal executive offices)
Registrant's telephone number, including area code (702) 256-4250
Registrant's Attorney: Daniel G. Chapman, Esq., 2080 E. Flamingo
Rd., Suite 112, Las Vegas, NV 89119 (702) 650-5660
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, $0.001 par value per share
ITEM 1. DESCRIPTION OF BUSINESS
Background
Fashion Dynamics Corporation (the "Company") is a Nevada
corporation formed on February 8, 1996. Its principal place of
business is located at 8105 Lake Hills Dr., Las Vegas, NV 89128.
The Company was organized to engage in any lawful corporate
business, including but not limited to, participating in mergers
with and acquisitions of other companies. The Company has been in
the developmental stage since inception and has no operating
history other than organizational matters.
The Company's original purpose was to serve as an employment
placement service targeting the fashion industry. The Company was
to match employers in that industry with skillfully-screened
employees who sought to work in that industry. The Company was
unable to raise sufficient funding to pursue that objective, and
therefore abandoned its original business plan.
Initially, the Company issued 200,000 shares of its common stock
to each of its three founders, the current officers and directors
of the Company. An additional 500,000 shares were sold to 35
shareholders in an offering that was exempt from registration
pursuant to Rule 504. The stock was then split 6:1, resulting in
a total of 6,600,000 shares outstanding.
The primary activity of the Company currently involves seeking a
company or companies that it can acquire or with whom it can
merge. The Company has not selected any company as an acquisition
target or merger partner and does not intend to limit potential
candidates to any particular field or industry, but does retain
the right to limit candidates, if it so chooses, to a particular
field or industry. The Company's plans are in the conceptual
stage only.
The Board of Directors has elected to begin implementing the
Company's principal business purpose, described below under "Item
2, Plan of Operation". As such, the Company can be defined as a
"shell" company, whose sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules, and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan.
The Company is filing this registration statement on a voluntary
basis, pursuant to section 12(g) of the Securities Exchange Act
of 1934 (the "Exchange Act"), in order to ensure that public
information is readily accessible to all shareholders and
potential investors, and to increase the Company's access to
financial markets. In the event the Company's obligation to file
periodic reports is suspended pursuant to the Exchange Act, the
Company anticipates that it will continue to voluntarily file
such reports.
Risk Factors
The Company's business is subject to numerous risk factors,
including the following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company
has had no operating history and has received no revenues or
earnings from operations. The Company has no significant assets
or financial resources. The Company will, in all likelihood,
sustain operating expenses without corresponding revenues, at
least until it completes a business combination. This may result
in the Company incurring a net operating loss which will increase
continuously until the Company completes a business combination
with a profitable business opportunity. There is no assurance
that the Company will identify a business opportunity or complete
a business combination.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success
of the Company's proposed plan of operation will depend to a
great extent on the operations, financial condition, and
management of the identified business opportunity. While
management intends to seek business combinations with entities
having established operating histories, it cannot assure that the
Company will successfully locate candidates meeting such
criteria. In the event the Company completes a business
combination, the success of the Company's operations may be
dependent upon management of the successor firm or venture
partner firm together with numerous other factors beyond the
Company's control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is, and will continue to be, an
insignificant participant in the business of seeking mergers and
joint ventures with, and acquisitions of small private entities.
A large number of established and well-financed entities,
including venture capital firms, are active in mergers and
acquisitions of companies which may also be desirable target
candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise,
and managerial capabilities than the Company. The Company is,
consequently, at a competitive disadvantage in identifying
possible business opportunities and successfully completing a
business combination. Moreover, the Company will also compete
with numerous other small public companies in seeking merger or
acquisition candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION - NO
STANDARDS FOR BUSINESS COMBINATION. The Company has no
arrangement, agreement, or understanding with respect to engaging
in a business combination with any private entity. There can be
no assurance the Company will successfully identify and evaluate
suitable business opportunities or conclude a business
combination. Management has not identified any particular
industry or specific business within an industry for evaluations.
The Company has been in the developmental stage since inception
and has no operations to date. Other than issuing shares to its
original shareholders, the Company never commenced any
operational activities. There is no assurance the Company will be
able to negotiate a business combination on terms favorable to
the Company. The Company has not established a specific length of
operating history or a specified level of earnings, assets, net
worth or other criteria which it will require a target business
opportunity to have achieved, and without which the Company would
not consider a business combination in any form with such
business opportunity. Accordingly, the Company may enter into a
business combination with a business opportunity having no
significant operating history, losses, limited or no potential
for earnings, limited assets, negative net worth, or other
negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While
seeking a business combination, management anticipates devoting
up to twenty hours per month to the business of the Company. The
Company's officers have not entered into written employment
agreements with the Company and are not expected to do so in the
foreseeable future. The Company has not obtained key man life
insurance on its officers or directors. Notwithstanding the
combined limited experience and time commitment of management,
loss of the services of any of these individuals would adversely
affect development of the Company's business and its likelihood
of continuing operations. See "Item 5."
CONFLICTS OF INTEREST - GENERAL. The Company's officers and
directors participate in other business ventures which compete
directly with the Company. Additional conflicts of interest and
non "arms-length" transactions may also arise in the event the
Company's officers or directors are involved in the management of
any firm with which the Company transacts business. The Company's
Board of Directors has adopted a resolution which prohibits the
Company from completing a combination with any entity in which
management serve as officers, directors or partners, or in which
they or their family members own or hold any ownership interest.
Management is not aware of any circumstances under which this
policy could be changed while current management is in control of
the Company. See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS - CONFLICTS OF INTEREST."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION.
Companies subject to Section 13 of the Securities Exchange Act of
1934 (the "Exchange Act") must provide certain information about
significant acquisitions, including certified financial
statements for the company acquired, covering one or two years,
depending on the relative size of the acquisition. The time and
additional costs that may be incurred by some target entities to
prepare such statements may significantly delay or even preclude
the Company from completing an otherwise desirable acquisition.
Acquisition prospects that do not have or are unable to obtain
the required audited statements may not be appropriate for
acquisition so long as the reporting requirements of the 1934 Act
are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company
has not conducted or received results of market research
indicating that market demand exists for the transactions
contemplated by the Company. Moreover, the Company does not have,
and does not plan to establish, a marketing organization. If
there is demand for a business combination as contemplated by the
Company, there is no assurance the Company will successfully
complete such transaction.
LACK OF DIVERSIFICATION. In all likelihood, the Company's
proposed operations, even if successful, will result in a
business combination with only one entity. Consequently, the
resulting activities will be limited to that entity's business.
The Company's inability to diversify its activities into a number
of areas may subject the Company to economic fluctuations within
a particular business or industry, thereby increasing the risks
associated with the Company's operations.
REGULATION. Although the Company will be subject to regulation
under the Securities Exchange Act of 1934, management believes
the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company will not
be engaged in the business of investing or trading in securities.
In the event the Company engages in business combinations which
result in the Company holding passive investment interests in a
number of entities, the Company could be subject to regulation
under the Investment Company Act of 1940. In such event, the
Company would be required to register as an investment company
and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal
determination from the Securities and Exchange Commission as to
the status of the Company under the Investment Company Act of
1940 and, consequently, any violation of such Act would subject
the Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination
involving the issuance of the Company's common stock will, in all
likelihood, result in shareholders of a private company obtaining
a controlling interest in the Company. Any such business
combination may require management of the Company to sell or
transfer all or a portion of the Company's common stock held by
them, or resign as members of the Board of Directors of the
Company. The resulting change in control of the Company could
result in removal of one or more present officers and directors
of the Company and a corresponding reduction in or elimination of
their participation in the future affairs of the Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS
COMBINATION. The Company's primary plan of operation is based
upon a business combination with a private concern which, in all
likelihood, would result in the Company issuing securities to
shareholders of such private company. Issuing previously
authorized and unissued common stock of the Company will reduce
the percentage of shares owned by present and prospective
shareholders, and a change in the Company's control and/or
management.
DISADVANTAGES OF BLANK CHECK OFFERING. The Company may enter into
a business combination with an entity that desires to establish a
public trading market for its shares. A target company may
attempt to avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a business
combination with the Company. The perceived adverse consequences
may include, but are not limited to, time delays of the
registration process, significant expenses to be incurred in such
an offering, loss of voting control to public shareholders, and
the inability or unwillingness to comply with various federal and
state securities laws enacted for the protection of investors.
These securities laws primarily relate to registering securities
and full disclosure of the Company's business, management, and
financial statements.
TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination
the Company may undertake. Typically, these transactions may be
structured to result in tax-free treatment to both companies,
pursuant to various federal and state tax provisions. The Company
intends to structure any business combination so as to minimize
the federal and state tax consequences to both the Company and
the target entity. Management cannot assure that a business
combination will meet the statutory requirements for a tax-free
reorganization, or that the parties will obtain the intended tax-
free treatment upon a transfer of stock or assets. A non-
qualifying reorganization could result in the imposition of both
federal and state taxes, which may have an adverse effect on both
parties to the transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY
BUSINESS OPPORTUNITIES. Management believes that any potential
target company must provide audited financial statements for
review, and for the protection of all parties to the business
combination. One or more attractive business opportunities may
forego a business combination with the Company, rather than incur
the expenses associated with preparing audited financial
statements.
BLUE SKY CONSIDERATIONS. Because the securities registered
hereunder have not been registered for resale under the blue sky
laws of any state, and the Company has no current plans to
register or qualify its shares in any state, holders of these
shares and persons who desire to purchase them in any trading
market that might develop in the future, should be aware that
there may be significant state blue sky restrictions upon the
ability of new investors to purchase the securities. These
restrictions could reduce the size of any potential market. As a
result of recent changes in federal law, non-issuer trading or
resale of the Company's securities is exempt from state
registration or qualification requirements in most states.
However, some states may continue to restrict the trading or
resale of blind-pool or "blank-check" securities. Accordingly,
investors should consider any potential secondary market for the
Company's securities to be a limited one.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and
"forward-looking statements" as that term is defined in Section
27A of the Securities Act of 1933 as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934 as
amended (the "Exchange Act"). All statements that are included in
this Registration Statement, other than statements of historical
fact, are forward-looking statements. Although Management
believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important factors
that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without
limitation, in conjunction with those forward-looking statements
contained in this Statement.
Plan of Operation - General
The Company's plan is to seek, investigate, and if such
investigation warrants, acquire an interest in one or more
business opportunities presented to it by persons or firms
desiring the perceived advantages of a publicly held corporation.
At this time, the Company has no plan, proposal, agreement,
understanding, or arrangement to acquire or merge with any
specific business or company, and the Company has not identified
any specific business or company for investigation and
evaluation. No member of Management or any promoter of the
Company, or an affiliate of either, has had any material
discussions with any other company with respect to any
acquisition of that company. The Company will not restrict its
search to any specific business, industry, or geographical
location, and may participate in business ventures of virtually
any kind or nature. Discussion of the proposed business under
this caption and throughout this Registration Statement is
purposefully general and is not meant to restrict the Company's
virtually unlimited discretion to search for and enter into a
business combination.
The Company may seek a combination with a firm which only
recently commenced operations, or a developing company in need of
additional funds to expand into new products or markets or
seeking to develop a new product or service, or an established
business which may be experiencing financial or operating
difficulties and needs additional capital which is perceived to
be easier to raise by a public company. In some instances, a
business opportunity may involve acquiring or merging with a
corporation which does not need substantial additional cash but
which desires to establish a public trading market for its common
stock. The Company may purchase assets and establish wholly-owned
subsidiaries in various businesses or purchase existing
businesses as subsidiaries.
Selecting a business opportunity will be complex and extremely
risky. Because of general economic conditions, rapid
technological advances being made in some industries, and
shortages of available capital, management believes that there
are numerous firms seeking the benefits of a publicly-traded
corporation. Such perceived benefits of a publicly traded
corporation may include facilitating or improving the terms on
which additional equity financing may be sought, providing
liquidity for the principals of a business, creating a means for
providing incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of
applicable statutes) for all shareholders, and other items.
Potentially available business opportunities may occur in many
different industries and at various stages of development, all of
which will make the task of comparative investigation and
analysis of such business opportunities extremely difficult and
complex.
Management believes that the Company may be able to benefit from
the use of "leverage" to acquire a target company. Leveraging a
transaction involves acquiring a business while incurring
significant indebtedness for a large percentage of the purchase
price of that business. Through leveraged transactions, the
Company would be required to use less of its available funds to
acquire a target company and, therefore, could commit those funds
to the operations of the business, to combinations with other
target companies, or to other activities. The borrowing involved
in a leveraged transaction will ordinarily be secured by the
assets of the acquired business. If that business is not able to
generate sufficient revenues to make payments on the debt
incurred by the Company to acquire that business, the lender
would be able to exercise the remedies provided by law or by
contract. These leveraging techniques, while reducing the amount
of funds that the Company must commit to acquire a business, may
correspondingly increase the risk of loss to the Company. No
assurance can be given as to the terms or availability of
financing for any acquisition by the Company. During periods when
interest rates are relatively high, the benefits of leveraging
are not as great as during periods of lower interest rates,
because the investment in the business held on a leveraged basis
will only be profitable if it generates sufficient revenues to
cover the related debt and other costs of the financing. Lenders
from which the Company may obtain funds for purposes of a
leveraged buy-out may impose restrictions on the future
borrowing, distribution, and operating policies of the Company.
It is not possible at this time to predict the restrictions, if
any, which lenders may impose, or the impact thereof on the
Company.
The Company has insufficient capital with which to provide the
owners of businesses significant cash or other assets. Management
believes the Company will offer owners of businesses the
opportunity to acquire a controlling ownership interest in a
public company at substantially less cost than is required to
conduct an initial public offering. The owners of the businesses
will, however, incur significant post-merger or acquisition
registration costs in the event they wish to register a portion
of their shares for subsequent sale. The Company will also incur
significant legal and accounting costs in connection with the
acquisition of a business opportunity, including the costs of
preparing post-effective amendments, Forms 8-K, agreements, and
related reports and documents. Nevertheless, the officers and
directors of the Company have not conducted market research and
are not aware of statistical data which would support the
perceived benefits of a merger or acquisition transaction for the
owners of a businesses. The Company does not intend to make any
loans to any prospective merger or acquisition candidates or to
unaffiliated third parties.
The Company will not restrict its search for any specific kind of
firms, but may acquire a venture which is in its preliminary or
development stage, which is already in operation, or in
essentially any stage of its corporate life. It is impossible to
predict at this time the status of any business in which the
Company may become engaged, in that such business may need to
seek additional capital, may desire to have its shares publicly
traded, or may seek other perceived advantages which the Company
may offer. However, the Company does not intend to obtain funds
in one or more private placements to finance the operation of any
acquired business opportunity until such time as the Company has
successfully consummated such a merger or acquisition. The
Company also has no plans to conduct any offerings under
Regulation S.
Sources of Opportunities
The Company will seek a potential business opportunity from all
known sources, but will rely principally on personal contacts of
its officers and directors as well as indirect associations
between them and other business and professional people. It is
not presently anticipated that the Company will engage
professional firms specializing in business acquisitions or
reorganizations.
Management, while not especially experienced in matters relating
to the new business of the Company, will rely upon their own
efforts and, to a much lesser extent, the efforts of the
Company's shareholders, in accomplishing the business purposes of
the Company. It is not anticipated that any outside consultants
or advisors, other than the Company's legal counsel and
accountants, will be utilized by the Company to effectuate its
business purposes described herein. However, if the Company does
retain such an outside consultant or advisor, any cash fee earned
by such party will need to be paid by the prospective
merger/acquisition candidate, as the Company has no cash assets
with which to pay such obligation. There have been no
discussions, understandings, contracts or agreements with any
outside consultants and none are anticipated in the future. In
the past, the Company's management has never used outside
consultants or advisors in connection with a merger or
acquisition.
As is customary in the industry, the Company may pay a finder's
fee for locating an acquisition prospect. If any such fee is
paid, it will be approved by the Company's Board of Directors and
will be in accordance with the industry standards. Such fees are
customarily between 1% and 5% of the size of the transaction,
based upon a sliding scale of the amount involved. Such fees are
typically in the range of 5% on a $1,000,000 transaction ratably
down to 1% in a $4,000,000 transaction. Management has adopted a
policy that such a finder's fee or real estate brokerage fee
could, in certain circumstances, be paid to any employee,
officer, director or 5% shareholder of the Company, if such
person plays a material role in bringing a transaction to the
Company.
The Company will not have sufficient funds to undertake any
significant development, marketing, and manufacturing of any
products which may be acquired. Accordingly, if it acquires the
rights to a product, rather than entering into a merger or
acquisition, it most likely would need to seek debt or equity
financing or obtain funding from third parties, in exchange for
which the Company would probably be required to give up a
substantial portion of its interest in any acquired product.
There is no assurance that the Company will be able either to
obtain additional financing or to interest third parties in
providing funding for the further development, marketing and
manufacturing of any products acquired.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by
or under the supervision of the officers and directors of the
Company (see "Item 5"). Management intends to concentrate on
identifying prospective business opportunities which may be
brought to its attention through present associations with
management. In analyzing prospective business opportunities,
management will consider, among other factors, such matters as;
1. the available technical, financial and managerial resources
2. working capital and other financial requirements
3. history of operation, if any
4. prospects for the future
5. present and expected competition
6. the quality and experience of management services which may
be available and the depth of that management
7. the potential for further research, development or
exploration
8. specific risk factors not now foreseeable but which then may
be anticipated to impact the proposed activities of the Company
9. the potential for growth or expansion
10. the potential for profit
11. the perceived public recognition or acceptance of products,
services or trades
12. name identification
Management will meet personally with management and key personnel
of the firm sponsoring the business opportunity as part of their
investigation. To the extent possible, the Company intends to
utilize written reports and personal investigation to evaluate
the above factors. The Company will not acquire or merge with any
company for which audited financial statements cannot be
obtained.
Opportunities in which the Company participates will present
certain risks, many of which cannot be identified adequately
prior to selecting a specific opportunity. The Company's
shareholders must, therefore, depend on Management to identify
and evaluate such risks. Promoters of some opportunities may have
been unable to develop a going concern or may present a business
in its development stage (in that it has not generated
significant revenues from its principal business activities prior
to the Company's participation.) Even after the Company's
participation, there is a risk that the combined enterprise may
not become a going concern or advance beyond the development
stage. Other opportunities may involve new and untested products,
processes, or market strategies which may not succeed. Such risks
will be assumed by the Company and, therefore, its shareholders.
The investigation of specific business opportunities and the
negotiation, drafting, and execution of relevant agreements,
disclosure documents, and other instruments will require
substantial management time and attention as well as substantial
costs for accountants, attorneys, and others. If a decision is
made not to participate in a specific business opportunity the
costs incurred in the related investigation would not be
recoverable. Furthermore, even if an agreement is reached for the
participation in a specific business opportunity, the failure to
consummate that transaction may result in the loss by the Company
of the related costs incurred.
There is the additional risk that the Company will not find a
suitable target. Management does not believe the Company will
generate revenue without finding and completing a transaction
with a suitable target company. If no such target is found,
therefore, no return on an investment in the Company will be
realized, and there will not, most likely, be a market for the
Company's stock.
Acquisition of Opportunities
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, reorganization, joint venture, franchise, or
licensing agreement with another corporation or entity. It may
also purchase stock or assets of an existing business. Once a
transaction is complete, it is possible that the present
management and shareholders of the Company will not be in control
of the Company. In addition, a majority or all of the Company's
officers and directors may, as part of the terms of the
transaction, resign and be replaced by new officers and directors
without a vote of the Company's shareholders.
It is anticipated that securities issued in any such
reorganization would be issued in reliance on exemptions from
registration under applicable Federal and state securities laws.
In some circumstances, however, as a negotiated element of this
transaction, the Company may agree to register such securities
either at the time the transaction is consummated, under certain
conditions, or at specified time thereafter. The issuance of
substantial additional securities and their potential sale into
any trading market which may develop in the Company's Common
Stock may have a depressive effect on such market.
While the actual terms of a transaction to which the Company may
be a party cannot be predicted, it may be expected that the
parties to the business transaction will find it desirable to
avoid the creation of a taxable event and thereby structure the
acquisition in a so called "tax free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986,
as amended (the "Code"). In order to obtain tax free treatment
under the Code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the
surviving entity. In such event, the shareholders of the Company,
including investors in this offering, would retain less than 20%
of the issued and outstanding shares of the surviving entity,
which could result in significant dilution in the equity of such
shareholders.
As part of the Company's investigation, officers and directors of
the Company will meet personally with management and key
personnel, may visit and inspect material facilities, obtain
independent analysis or verification of certain information
provided, check references of management and key personnel, and
take other reasonable investigative measures, to the extent of
the Company's limited financial resources and management
expertise.
The manner in which the Company participates in an opportunity
with a target company will depend on the nature of the
opportunity, the respective needs and desires of the Company and
other parties, the management of the opportunity, and the
relative negotiating strength of the Company and such other
management.
With respect to any mergers or acquisitions, negotiations with
target company management will be expected to focus on the
percentage of the Company which the target company's shareholders
would acquire in exchange for their shareholdings in the target
company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will, in all
likelihood, hold a lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage
ownership may be subject to significant reduction in the event
the Company acquires a target company with substantial assets.
Any merger or acquisition effected by the Company can be expected
to have a significant dilutive effect on the percentage of shares
held by the Company's then shareholders, including purchasers in
this offering.
Management has advanced, and will continue to advance, funds
which shall be used by the Company in identifying and pursuing
agreements with target companies. Management anticipates that
these funds will be repaid from the proceeds of any agreement
with the target company, and that any such agreement may, in
fact, be contingent upon the repayment of those funds.
Competition
The Company is an insignificant participant among firms which
engage in business combinations with, or financing of,
development-stage enterprises. There are many established
management and financial consulting companies and venture capital
firms which have significantly greater financial and personal
resources, technical expertise and experience than the Company.
In view of the Company's limited financial resources and
management availability, the Company will continue to be at
significant competitive disadvantage vis-a-vis the Company's
competitors.
Year 2000 Compliance
The Company is aware of the issues associated with the
programming code in existing computer systems as the year 2000
approaches. The Company has assessed these issues as they relate
to the Company. Since the Company currently has no operating
business, makes only limited use of computers, and uses only
packaged software, and since it has no customers, suppliers or
other constituents, it does not believe that there are any
material year 2000 issues to disclose in this Form 10-SB.
Regulation and Taxation
The Investment Company Act of 1940 defines an "investment
company" as an issuer which is or holds itself out as being
engaged primarily in the business of investing, reinvesting or
trading securities. While the Company does not intend to engage
in such activities, the Company may obtain and hold a minority
interest in a number of development stage enterprises. The
Company could be expected to incur significant registration and
compliance costs if required to register under the Investment
Company Act of 1940. Accordingly, management will continue to
review the Company's activities from time to time with a view
toward reducing the likelihood the Company could be classified as
an "investment company".
The Company intends to structure a merger or acquisition in such
manner as to minimize Federal and state tax consequences to the
Company and to any target company.
Employees
The Company's only employees at the present time are its officers
and directors, who will devote as much time as the Board of
Directors determine is necessary to carry out the affairs of the
Company. (See "Management").
ITEM 3. DESCRIPTION OF PROPERTY.
The Company neither owns nor leases any real property at this
time. The Company does have the use of a limited amount of office
space from one of the directors, Lee Figgins, at no cost to the
Company, and Management expects this arrangement to continue. The
Company pays its own charges for long distance telephone calls
and other miscellaneous secretarial, photocopying, and similar
expenses. This is a verbal agreement between Lee Figgins, and the
Board of Directors.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth each person known to the Company,
as of March 22, 1999, to be a beneficial owner of five percent
(5%) or more of the Company's common stock, by the Company's
directors individually, and by all of the Company's directors and
executive officers as a group. Except as noted, each person has
sole voting and investment power with respect to the shares
shown.
<TABLE>
<S> <C> <C> <C>
Title of Name/Address Shares Percentage
Class of Owner Beneficially Ownership
Owned
Common Lynda and David 2,400,000 36.36%
Wennerstrom
4803 Refugio Ave.
Carlsbad, CA 92008
Common Lee R. Figgins 1,200,000 18.18%
8105 Lake Hills Dr.
Las Vegas, NV 89128
Common All officers and 3,600,000 54.55%
directors as a group (3
individuals)
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS
The members of the Board of Directors of the Company serve until
the next annual meeting of the stockholders, or until their
successors have been elected. The officers serve at the pleasure
of the Board of Directors.
There are no agreements for any officer or director to resign at
the request of any other person, and none of the officers or
directors named below are acting on behalf of, or at the
direction of, any other person.
The Company's officers and directors will devote their time to
the business on an "as-needed" basis, which is expected to
require 5-10 hours per month.
Information as to the directors and executive officers of the
Company is as follows:
<TABLE>
<S> <C> <C>
Name/Address Age Position
Lynda Wennerstrom 32 President / CEO /
4803 Refugio Ave. Director
Carlsbad, CA 92008
David Wennerstrom 35 Vice President / Director
4803 Refugio Ave.
Carlsbad, CA 92008
Lee R. Figgins 65 Secretary / Treasurer - CFO /
8105 Lake Hills Dr. Director
Las Vegas, NV 89128
</TABLE>
Lynda Wennerstrom, age 32, President/CEO/Director.
4803 Refugio Ave,. Carlsbad, CA 92008.
Education:
Associate of Arts Degree-Design
The Fashion Institute of Design and Merchandising
Los Angeles, CA
December 1986
University of Kentucky
Lexington, Kentucky
August 1982 to May 1984
Experience:
Senior Buyer-International Male
San Diego, CA
August 1996-Present
V.P. of Merchandising-Gentlemen's Headquarters
Bell, CA
March 1995-August 1996
Lead Sales-Gateway Educational Products
May 1994-March 1995
Customer Service Manager-Goouch
April 1993-August 1994
National Sales Manager (YM Division)-Switch/W.I.P.
August 1992-June 1993
National Sales Manager (YM Division)-Maxims Collection
March 1991-August 1992
Showroom Manager-West Unity Belts
September 1987-May 1988
NOTE: (Complete resume on file with Company)
Lee R. Figgins, Secretary/Treasurer/CFO/ Director,
8105 Lake Hills Drive, Las Vegas, NV 89128
Education:
Bachelor of Science in Finance
University of Southern California
1955
Experience:
First Interstate Bank
Various Positions, Including Branch Manager
1955-1962
Downey Savings and Loan
Vice- President
1962-1964
Hayden, Stone, Ernst & Company
Joseph Sebag
Paulson Investment Company
J. Alexander Securities
1964-1991
Diamond Lane Corporation
Secretary/Treasurer/CFO
February 1995-Present
NOTE: (Complete resume on file with the Company)
David E. Wennerstrom, age 35,Vice President/Director
4803 Refugio Ave, Carlsbad, CA 92008
Education:
Associates of Arts Degree-Design
The Fashion Institute of Design and Merchandising
Los Angeles, CA
March 1986
Experience:
Sales Representative- BJD, Inc.
Bell, CA
May 1995-Present
Independent Sales Representative
Mulberry Neckwear, QNT Corp., Peter Finnie & Associates
June 1992-May 1995
Sales Manager/Merchandiser-NKL, Inc.
Los Angeles, CA
January 1991-September 1992
Western U.S. Sales Representative-Dweedo, Inc.
Los Angeles, CA
January 1990-January 1991
Sales Representative, Sales Manager, Merchandiser
BJD, Inc., Los Angeles, CA
November 1986-January 1990
Sales Assistant-Bugle Boy, Inc.
Los Angeles, CA
February 1986-November 1986
NOTE: (Complete resume on file with the Company)
Blank Check Experience
In addition to the experiences described above, Mr. Lee Figgins
has been an officer and/or director of General Products Holdings,
Inc., which was formerly known as Diamond Lane Corp., from
February 21, 1995 to November 11, 1997.
David and Lynda Wennerstrom are husband and wife. Lee Figgins is
Lynda Wennerstrom's father. The Company's Board of Directors has
not established any committees.
Conflicts of Interest
Insofar as the officers and directors are engaged in other
business activities, management anticipates it will devote only a
minor amount of time to the Company's affairs. The officers and
directors of the Company may in the future become shareholders,
officers or directors of other companies which may be formed for
the purpose of engaging in business activities similar to those
conducted by the Company. The Company does not currently have a
right of first refusal pertaining to opportunities that come to
management's attention insofar as such opportunities may relate
to the Company's proposed business operations.
The officers and directors are, so long as they are officers or
directors of the Company, subject to the restriction that all
opportunities contemplated by the Company's plan of operation
which come to their attention, either in the performance of their
duties or in any other manner, will be considered opportunities
of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this
requirement will be a breach of the fiduciary duties of the
officer or director. Subject to the next paragraph, if a
situation arises in which more than one company desires to merge
with or acquire that target company and the principals of the
proposed target company have no preference as to which company
will merge or acquire such target company, the company of which
the President first became an officer and director will be
entitled to proceed with the transaction. Except as set forth
above, the Company has not adopted any other conflict of interest
policy with respect to such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940 insofar as the Company
will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive
investment interests in a number of entities, the Company could
be subject to regulation under the Investment Company Act of
1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant
registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission
as to the status of the Company under the Investment Company Act
of 1940 and, consequently, any violation of such Act would
subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
None of the Company's officers and/or directors receive any
compensation for their respective services rendered to the
Company, nor have they received such compensation in the past.
They have agreed to act without compensation until authorized by
the Board of Directors, which is not expected to occur until the
Registrant has generated revenues from operations after
consummation of a merger or acquisition. As of the date of this
registration statement, the Company has no funds available to pay
directors. Further, none of the directors are accruing any
compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a
merger or acquisition with an unaffiliated entity, that entity
may desire to employ or retain one or more members of the
Company's management for the purposes of providing services to
the surviving entity, or otherwise provide other compensation to
such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of
management will not be a consideration in the Company's decision
to undertake any proposed transaction. Each member of management
has agreed to disclose to the Company's Board of Directors any
discussions concerning possible compensation to be paid to them
by any entity which proposes to undertake a transaction with the
Company and further, to abstain from voting on such transaction.
Therefore, as a practical matter, if each member of the Company's
Board of Directors is offered compensation in any form from any
prospective merger or acquisition candidate, the proposed
transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to
affirmatively approve such a transaction.
It is possible that persons associated with management may refer
a prospective merger or acquisition candidate to the Company. In
the event the Company consummates a transaction with any entity
referred by associates of management, it is possible that such an
associate will be compensated for their referral in the form of a
finder's fee. It is anticipated that this fee will be either in
the form of restricted common stock issued by the Company as part
of the terms of the proposed transaction, or will be in the form
of cash consideration. However, if such compensation is in the
form of cash, such payment will be tendered by the acquisition or
merger candidate, because the Company has insufficient cash
available. The amount of such finder's fee cannot be determined
as of the date of this registration statement, but is expected to
be comparable to consideration normally paid in like
transactions. No member of management of the Company will receive
any finders fee, either directly or indirectly, as a result of
their respective efforts to implement the Company's business plan
outlined herein. Persons "associated" with management is meant to
refer to persons with whom management may have had other business
dealings, but who are not affiliated with or relatives of
management.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the
Registrant for the benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors has passed a resolution which contains a
policy that the Company will not seek an acquisition or merger
with any entity in which any of the Company's Officers,
Directors, principal shareholders or their affiliates or
associates serve as officer or director or hold any ownership
interest. Management is not aware of any circumstances under
which this policy may be changed through their own initiative.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan
described herein.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Company's common stock is quoted on the over-the-counter
market in the United States under the symbol FSHD. Management has
not undertaken any discussions, preliminary or otherwise, with
any prospective market maker concerning the participation of such
market maker in the after-market for the Company's securities and
management does not intend to initiate any such discussions until
such time as the Company has consummated a merger or acquisition.
There is no assurance that a trading market will ever develop or,
if such a market does develop, that it will continue.
After a merger or acquisition has been completed, one or all of
the Company's officers and directors will most likely be the
persons to contact prospective market makers. It is also possible
that persons associated with the entity that merges with or is
acquired by the Company will contact prospective market makers.
The Company does not intend to use consultants to contact market
makers.
Market Price
The Registrant's Common Stock is not quoted at the present time.
Effective August 11, 1993, the Securities and Exchange Commission
adopted Rule 15g-9, which established the definition of a "penny
stock," for purposes relevant to the Company, as any equity
security that has a market price of less than $5.00 per share or
with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer
approve a person's account for transactions in penny stocks; and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve
a person's account for transactions in penny stocks, the broker
or dealer must (i) obtain financial information and investment
experience and objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker
or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating
to the penny stock market, which, in highlight form, (i) sets
forth the basis on which the broker or dealer made the
suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks
of investing in penny stocks in both public offerings and in
secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in
the account and information on the limited market in penny
stocks.
The National Association of Securities Dealers, Inc. (the
"NASD"), which administers NASDAQ, has recently made changes in
the criteria for initial listing on the NASDAQ Small Cap market
and for continued listing. For initial listing, a company must
have net tangible assets of $4 million, market capitalization of
$50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years.
For initial listing, the common stock must also have a minimum
bid price of $4 per share. In order to continue to be included on
NASDAQ, a company must maintain $2,000,000 in net tangible assets
and a $1,000,000 market value of its publicly-traded securities.
In addition, continued inclusion requires two market-makers and a
minimum bid price of $1.00 per share.
Management intends to strongly consider undertaking a transaction
with any merger or acquisition candidate which will allow the
Company's securities to be traded without the aforesaid
limitations. However, there can be no assurances that, upon a
successful merger or acquisition, the Company will qualify its
securities for listing on NASDAQ or some other national exchange,
or be able to maintain the maintenance criteria necessary to
insure continued listing. The failure of the Company to qualify
its securities or to meet the relevant maintenance criteria after
such qualification in the future may result in the discontinuance
of the inclusion of the Company's securities on a national
exchange. In such events, trading, if any, in the Company's
securities may then continue in the non-NASDAQ over-the-counter
market. As a result, a shareholder may find it more difficult to
dispose of, or to obtain accurate quotations as to the market
value of, the Company's securities.
Holders
There are 38 holders of the Company's Common Stock. A total of
600,000 shares were issued to the three founders in 1996. In
September, 1997, an additional 500,000 shares were issued to 35
individuals in an offering that was exempt from registration
pursuant to Rule 504 of Regulation D. In March, 1998, the stock
was split 6:1, creating a total of 6,600,000 shares outstanding.
All of the issued and outstanding shares of the Company's Common
Stock were issued in accordance with the exemption from
registration afforded by Section 4(2) of the Securities Act of
1933.
Dividends
The Registrant has not paid any dividends to date, and has no
plans to do so in the immediate future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
With respect to the sales made, the Registrant relied on Section
4(2) of the Securities Act of 1933, as amended (the "Act"). No
advertising or general solicitation was employed in offering the
shares. The securities were offered for investment only and not
for the purpose of resale or distribution, and the transfer
thereof was appropriately restricted.
An offering of 500,000 shares of the Company's common stock
pursuant to Regulation D, Rule 504, promulgated under the
Securities Act of 1933, was completed on August 27, 1997. The
sales price was $0.05 per share, for a total gross offering of
$25,000. No underwriter was used in the offering. The Company
paid out a total of $1,250 for sales commissions, and an
additional $2,500 for expenses incurred in the offering. The net
proceeds to the Company was $21,000.
Of the issued and outstanding shares, a total of 3,600,000 are
subject to resale restrictions. Unless registered under the Act,
or exempted from registration pursuant to a provision of the Act,
these shares will be ineligible for sale in the public market,
except in accordance with Rule 144 promulgated under the Act. In
general, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one year holding period, under
certain circumstances, may sell within any three-month period a
number of shares which does not exceed the greater of one percent
of the then outstanding Common Stock or the average weekly
trading volume during the four calendar weeks prior to such sale.
Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has
satisfied a two-year holding period and who is not, and has not
been for the preceding three months, an affiliate of the Company.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorizes the issuance
of 25,000,000 shares of Common Stock, $0.001 par value per share,
of which 6,600,000 are issued and outstanding. The shares are non-
assessable, without pre-emptive rights, and do not carry
cumulative voting rights. Holders of common shares are entitled
to one vote for each share on all matters to be voted on by the
stockholders. The shares are fully paid, non-assessable, without
pre-emptive rights, and do not carry cumulative voting rights.
Holders of common shares are entitled to share ratably in
dividends, if any, as may be declared by the Company from time-to-
time, from funds legally available. In the event of a
liquidation, dissolution, or winding up of the Company, the
holders of shares of common stock are entitled to share on a pro-
rata basis all assets remaining after payment in full of all
liabilities.
Management is not aware of any circumstances in which additional
shares of any class or series of the Company's stock would be
issued to management or promoters, or affiliates or associates of
either.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and its affiliates may not be liable to its
shareholders for errors in judgment or other acts or omissions
not amounting to intentional misconduct, fraud, or a knowing
violation of the law, since provisions have been made in the
Articles of incorporation and By-laws limiting such liability.
The Articles of Incorporation and By-laws also provide for
indemnification of the officers and directors of the Company in
most cases for any liability suffered by them or arising from
their activities as officers and directors of the Company if they
were not engaged in intentional misconduct, fraud, or a knowing
violation of the law. Therefore, purchasers of these securities
may have a more limited right of action than they would have
except for this limitation in the Articles of Incorporation and
By-laws.
The officers and directors of the Company are accountable to the
Company as fiduciaries, which means such officers and directors
are required to exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to institute legal
action on behalf of himself and all others similarly stated
shareholders to recover damages where the Company has failed or
refused to observe the law.
Shareholders may, subject to applicable rules of civil procedure,
be able to bring a class action or derivative suit to enforce
their rights, including rights under certain federal and state
securities laws and regulations. Shareholders who have suffered
losses in connection with the purchase or sale of their interest
in the Company in connection with such sale or purchase,
including the misapplication by any such officer or director of
the proceeds from the sale of these securities, may be able to
recover such losses from the Company.
ITEM 13. FINANCIAL STATEMENTS.
The financial statements and supplemental data required by this
Item 13 follow the index of financial statements appearing at
Item 15 of this Form 10-SB.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
The Registrant has not changed accountants since its formation,
and Management has had no disagreements with the findings of its
accountants.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
Report of Independent Auditors, Barry L. Friedman,
dated March 10, 1999.
Balance Sheet as of December 31, 1997 and December 31,
1996.
Statement of Operation for the years ended December 31,
1997 and December 31, 1996
Statement of Stockholders' Equity
Statement of Cash Flows for the years ended December
31, 1997 and December 31, 1996
Notes to Financial Statements
INDEPENDENT AUDITORS' REPORT
To Whom It May Concern: March 10,
1999
The firm of Barry L. Friedman, P.C., Certified Public Accountant
consents to the inclusion of their report of March 10, 1999, on
the Financial Statements of Fashion Dynamics Corp., as of
December 31, 1998, in any filings that are necessary now or in
the near future with the U.S. Securities and Exchange Commission.
Very truly yours,
/s/ Barry L. Friedman
Barry L. Friedman
Certified Public Accountant
INDEPENDENT AUDITORS' REPORT
Board of Directors March 10,
1999
Fashion Dynamics Corp.
Las Vegas, Nevada
I have audited the accompanying Balance Sheets of Fashion
Dynamics Corp. (A Development Stage Company), as of December 31,
1998, December 31, 1997, and December 31, 1996, and the related
statements of operations, stockholders' equity and cash flows for
the three years ended December 31, 1998, December 31, 1997, and
December 31, 1996. These financial statements are the
responsibility of the Company's management. My responsibility is
to express an opinion on these financial statements based on my
audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Fashion Dynamics Corp. (A Development Stage Company), as of
December 31, 1998, December 31, 1997, and December 31, 1996, and
the results of its operations and cash flows for the three years
ended December 31, 1998, December 31, 1997, and December 31,
1996, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note #5 to the financial statements, the Company has suffered
recurring losses from operations and has no established source of
revenue. This raises substantial doubt about its ability to
continue as a going concern. Management's plan in regard to these
matters is described in Note #5. These financial statements do
not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Barry L. Friedman
Barry L. Friedman
Certified Public Accountant
FASHION DYNAMICS CORP.
(A Development Stage Company)
BALANCE SHEET
<TABLE>
<S> <C> <C> <C>
December 31, December 31, December 31,
1998 1997 1996
ASSETS
CURRENT ASSETS:
Cash $16,255 $19,145 $2,013
TOTAL CURRENT ASSETS $16,255 $19,145 $2,013
EQUIPMENT
Computer (Net) $2,103 $2,645 $0
TOTAL EQUIPMENT $2,103 $2,645 $0
OTHER ASSETS;
Organizational Costs (Net) $94 $139 $184
TOTAL OTHER ASSETS $94 $139 $184
TOTAL ASSETS $18,452 $21,929 $2,197
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES;
Accounts Payable $0 $0 $0
TOTAL CURRENT LIABILITIES $0 $0 $0
STOCKHOLDERS' EQUITY;
Common stock, $0.001 par value, $600
authorized 25,000,000 shares
issued and outstanding
December 31, 1996 - 600,000
shares
December 31, 1997 - 1,100,000 $1,100
shares
December 31, 1998 - 6,600,000 $6,600
shares
Additional paid-in Capital $24,400 $29,900 $5,400
Deficit accumulated during -12,548 -9,071 -3,803
development stage
TOTAL STOCKHOLDERS' EQUITY $18,452 $21,929 $2,197
TOTAL LIABILITIES AND $18,452 $21,929 $2,197
STOCKHOLDERS' EQUITY
</TABLE>
FASHION DYNAMICS CORP.
(A Development Stage Company)
STATEMENT OF OPERATION
<TABLE>
<S> <C> <C> <C> <C>
Year Ended Year Ended Jan. 23 Jan. 23,
Dec. 31, Dec. 31, 1996 to 1996
1998 1997 Dec. 31, (inception)
1996 to Dec. 31,
1998
INCOME:
Revenue $0 $0 $0 $0
EXPENSES:
Accounting $675 $850 $350 $1,875
Bank Charges 0 43 70 113
Consulting Fees 200 0 0 200
Escrow Fees 0 500 0 500
Filing Fees 0 170 100 270
Legal Fees 2,000 1,905 0 3,905
Professional Fees 0 0 3,000 3,000
Sales Commissions 0 1,250 0 1,250
Transfer Fees 15 437 0 437
Travel 0 0 242 242
Depreciation 542 68 0 610
Amortization of 45 45 41 131
organization
costs
Total Expenses $3,477 $5,268 $3,803 $12,548
Net Profit/Loss(-($3,477) ($5,268) (3,803) ($12,548)
)
Net Profit/Loss ($0.0005) ($0.0008) ($.0006) ($0.0190)
(-) Per weighted
Share (Note1)
Weighted average 6,600,000 6,600,000 6,600,000 6,600,000
Number of common
Shares
outstanding
</TABLE>
See accompanying notes to financial statements & audit report
FASHION DYNAMICS CORP.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C> <C> <C>
Common Shares Stock Amount Additional paid- Accumulated
in Capital Deficit
February 6, 1996 600,000 $600 $5,400 $0
Issued for Cash
Net loss, January $ -3,803
23, 1996
(Inception) to
December 31, 1996
Balance Dec. 31, 600,000 $600 $5,400 $ -3,803
1996
August 28, 1997 500,000 500 24,500
Issued for cash
Net loss -5,268
year ended Dec. 31,
1997
Balance, Dec. 31, 1,100,000 $1,100 $29,900 -$9,071
1997
March 30, 1998 5,500,000 +5,500 -5,500
Forward Stock Split
6:1
Net loss -$3,477
year ended Dec. 31,
1998
Balance, Dec. 31, 6,600,000 $6,600 $24,400 $ -12,548
1998
</TABLE>
See accompanying notes to financial statements & audit report.
FASHION DYNAMICS CORP.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<S> <C> <C> <C> <C>
Year Ended Dec. Year Ended Dec. Jan. 23 1996 to Jan 23, 1996
31, 1998 31, 1997 Dec. 31, 1996 (inception) to
Dec. 31, 1998
Cash Flows from
Operating Activities:
Net Loss -$3,477 -$5,268 $ -3,803 -$12,548
Adjustment to
Reconcile net loss to
cash provided by
operating activities
Amortization +45 +45 +41 +131
Depreciation +542 +68 0 +610
Cash flows from
Investing activities
Equipment 0 -2,713 0 -2,713
Organization Costs 0 -225 -225
Net Cash used in -$2,890 -$7,868 $ -3,987 -$14,745
Operating Activities
Cash Flows from
Financing Activities:
Issuance of common 0 +25,000 +6,000 +31,000
stock
Net increase -2,890 +$17,132 +2,013 +$16,255
(decrease) in cash
Cash, Beginning of $19,145 $2,013 0 0
period
Cash, end of period $16,255 $19,145 $2,013 +$16,255
</TABLE>
See accompanying notes to financial statements & audit report
Fashion Dynamics Corp.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998, December 31, 1997, and December 31, 1996
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized January 23, 1996, under the laws of the
State of Nevada as Fashion Dynamics Corp. The Company currently
has no operations and in accordance with SFAS #7, is considered a
development company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
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 revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits. For
the purpose of the statements of cash flows, all highly liquid
investments with the maturity of three months or less are
considered to be cash equivalents. There are no cash equivalents
as of December 31, 1998.
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS #109) "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary
difference between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Organization Costs
Costs incurred to organize the Company are being amortized on a
straight-line basis over a sixty-month period.
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per
Share". Basic loss per share is computed by dividing losses
available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted loss per
share reflects per share amounts that would have resulted if
dilative common stock equivalents had been converted to common
stock. As of December 31, 1998, the Company had no dilative
common stock equivalents such as stock options.
Year End
The Company has selected December 31st as its year-end.
Year 2000 Disclosure
The year 2000 issue is the result of computer programs being
written using two digits rather than four to define the
applicable year. Computer programs that have time sensitive
software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a system failure or
miscalculations causing disruption of normal business activities.
Since the Company currently has no operating business and does
not use any computers, and since it has no customers, suppliers
or other constituents, there are no material Year 2000 concerns.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended
December 31, 1998, due to the net loss and no state income tax in
Nevada, the state of the Company's domicile and operations. The
Company's total deferred tax asset as of December 31, 1998 is as
follows:
Net operation loss carry forward $12,548
Valuation allowance $12,548
Net deferred tax asset $ 0
The federal net operation loss carry forward will expire in
various amounts from 2016 to 2018.
This carry forward may be limited upon the consummation of a
business combination under IRC Section 381.
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of
25,000,000 shares with a par value of $0.001 per share.
Preferred Stock
The corporation has no preferred stock.
On February 8, 1996, the Company issued 600,000 shares of its
$0.001 par value common stock in consideration of $6,000 in cash.
On August 27, 1997, the Company completed an offering of its
Common Stock under Regulation "D", Rule 504 for 500,000 Common
Shares of stock at $0.05 per share or $25,000.00.
On March 30, 1998, the company forward split its common stock
6:1, thus increasing the number of outstanding common stock
shares from 1,100,000 shares to 6,600,000 shares.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern
which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the
Company does not have significant cash or other material assets,
nor does it have an established source of revenues sufficient to
cover its operating costs and to allow it to continue as a going
concern. It is the intent of the Company to seek a merger with an
existing, operating company. Until that time, the
stockholders/officers and or directors have committed to
advancing the operating costs of the Company interest free.
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal
property. An officer of the corporation provides office services
without charge. Such costs are immaterial to the financial
statements and accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other
business activities and may, in the future, become involved in
other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict
in selecting between the Company and their other business
interests. The Company has not formulated a policy for the
resolution of such conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any
additional share of common stock.
EXHIBITS
3.1 Articles of Incorporation
3.2 By-Laws
ARTICLES OF INCORPORATION
of
Fashion Dynamics Corp.
Know all men by these present;
That the undersigned, have this day voluntary associated
ourselves together for the purpose of forming a corporation under
and pursuant to the provisions of Nevada Revised Statutes 78.010.
to Nevada Revised Statues 78.090 inclusive, as amended, and
certify that;
1. The name of this corporation is:
Fashion Dynamics Corp.
2. Offices for the transaction of any business of the
Corporation, and where meetings of the Board of Directors and of
Stockholders may be held, may be established and maintained in
any part of the State of Nevada, or in any other state,
territory, or possession of the United States.
3. The nature of the business is to engage in any lawful
activity.
4. The Capital Stock shall consist of 25,000,000 shares of
common stock, $0.001 par value.
5. The members of the governing board of the corporation shall
be styled directors, of which there shall be no less than 1. The
Directors of this corporation need not be stockholders. The
first Board of Directors is:
Lee Figgins, Secretary/ Treasurer/Director
8105 Lake Hills Drive, Las Vegas, NV 89128
6. The corporation shall have perpetual existence.
7. The name and address of each of the incorporators signing
these Articles of Incorporation are as follows: Lee Figgins whose
address is 8105 Lake Hills Drive, Las Vegas, NV 89128.
8. This Corporation shall have a president, a secretary, a
treasurer, and a resident agent, to be chosen by the Board of
Directors, any person may hold two or more offices.
9. The resident agent of this Corporation shall be Lee Figgins
whose address is 8105 Lake Hills Drive, Las Vegas, NV 89128.
10. The Capital Stock of the corporation, after the fixed
consideration thereof has been paid or performed, shall not be
subject to assessment, and the individual liable for the debts
and liabilities of the Corporation, and the Articles of
Incorporation shall never be amended as the aforesaid provisions.
11. No director or officer of the corporation shall be
personally liable to the corporation of any of its stockholders
for breach of fiduciary duty as a director or officer involving
any act or omission of any such director or officer provided,
however, that the foregoing provision shall not eliminate or
limit the liability of a director or officer for acts or
omissions which involve intentional misconduct, fraud or a
knowing violation of law, or the payment of dividends in
violation of Section 78.300 of the Nevada Revised Statutes. Any
repeal or modification of this Article of the Stockholders of the
Corporation shall be prospective only, and shall not adversely
affect any limitation on thc liability of a director or officer
of the Corporation for acts or omissions prior to such repeal or
modification.
I, the undersigned, being the Incorporator herein above named for
the purpose of' forming a corporation pursuant to the general
corporation law of the State of Nevada, do make and file these
Articles of incorporation, hereby declaring and certifying that
the facts within stated are true, and accordingly have hereunto
set my hand this 23rd day of January 1996
/s/ Lee R. Figgins
Lee Figgins
BY-LAWS
OF
Fashion Dynamics Corp.
ARTICLE I
MEETING OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of the
Company shall be held at its office in the City of Las Vegas,
Clark County, at 1 o'clock in the afternoon on the 29th day of
August in each year, if not a legal holiday, and if a legal
holiday, then on the next succeeding day not a legal holiday, for
the purpose of electing directors of the company to serve during
the ensuing year and for the transaction of such other business
as may be brought before the meeting.
At least five days' written notice specifying the time and
place, when and where, the annual meeting shall be convened,
shall be mailed in a United States Post Office addressed to each
of the stockholders of record at the time of issuing the notice
at his or her, or its address last known, as the same appears on
the books of the company.
SECTION 2. Special meetings of the stockholders may be held
at the office of the company in the State of Nevada or elsewhere,
whenever called by the President, or by the Board of Directors,
or by vote of, or by an instrument in writing signed by the
holders of 51% of the issued and outstanding capital stock of the
company. At least ten days' written notice of such meeting,
specifying the day and hour and place, when and where such
meeting shall be convened, and objects for calling the same,
shall be mailed in a United States Post Office, addressed to each
of the stockholders of record at the time of issuing the notice,
at his or her or its address last known, as the same appears on
the books of the company.
SECTION 3. If all the stockholders of the company shall
waive notice of a meeting, no notice of such meeting shall be
required, and whenever all of the stockholders shall meet in
person or by proxy, such meeting shall be valid for all purposes
without call or notice, and at such meeting any corporate action
may be taken.
The written certificate of the officer or officers calling
any meeting setting forth the substance of the notice, and the
time and place of the mailing of the same to the several
stockholders, and the respective addresses to which the same were
mailed, shall be prima facie evidence of the manner and fact of
the calling and giving such notice.
If the address of any stockholder does not appear upon the
books of the company, it will be sufficient to address any notice
to such stockholder at the principal office of the corporation.
SECTION 4. All business lawful to be transacted by the
stockholders of the company, may be transacted at any special
meeting or at any adjournment thereof. Only such business,
however, shall be acted upon at special meeting of the
stockholders as shall have been referred to in the notice calling
such meetings, but at any stockholders' meeting at which all of
the outstanding capital stock of the company is represented,
either in person or by proxy, any lawful business may be
transacted, and such meeting shall be valid for all purposes.
SECTION 5. At the stockholders' meetings the holders of more
than 50 percent (50%) in amount of the entire issued and
outstanding capital stock of the company, shall constitute a
quorum for all purposes of such meetings.
If the holders of the amount of stock necessary to
constitute a quorum shall fail to attend, in person or by proxy,
at the time and place fixed by these By-laws for any annual
meeting, or fixed by a notice as above provided for a special
meeting, a majority in interest of the stockholders present in
person or by proxy may adjourn from time to time without notice
other than by announcement at the meeting, until holders of the
amount of stock requisite to constitute a quorum shall attend. At
any such adjourned meeting at which a quorum shall be present,
any business may be transacted which might have been transacted
as originally called.
SECTION 6. At each meeting of the stockholders every
stockholder shall be entitled to vote in person or by his duly
authorized proxy appointed by instrument in writing subscribed by
such stockholder or by his duly authorized attorney. Each
stockholder shall have one vote for each share of stock standing
registered in his or her or its name on the books of the
corporation, ten days preceding the day of such meeting. The
votes for directors, and upon demand by any stockholder, the
votes upon any question before the meeting, shall be by voice
vote.
At each meeting of the stockholders, a full, true and
complete list, in alphabetical order of all the stockholders
entitled to vote at such meeting, and indicating the number of
shares held by each, certified by the Secretary of the Company,
shall be furnished, which list shall be prepared at least ten
days before such meeting, and shall be open to the inspection of
the stockholders, or their agents or proxies, at the place where
such meeting is to be held, and for ten days prior thereto. Only
the persons in whose names shares of stock are registered on the
books of the company for ten days preceding the date of such
meeting, as evidenced by the list of stockholders, shall be
entitled to vote at such meeting. Proxies and powers of Attorney
to vote must be filed with the Secretary of the Company before an
election or a meeting of the stockholders, or they cannot be used
at such election or meeting.
SECTION 7. At each meeting of the stockholders the polls
shall be opened and closed; the proxies and ballots issued,
received, and be taken in charge of, for the purpose of the
meeting, and all questions touching the qualifications of voters
and the validity of proxies, and the acceptance or rejection of
votes, shall be decided by two inspectors. Such inspectors shall
be appointed at the meeting by the presiding officer of the
meeting.
SECTION 8. At the stockholders' meetings, the regular order
of business shall be as follows:
1. Reading and approval of the Minutes of previous
meeting or meetings;
2. Reports of the Board of Directors, the President,
Treasurer and Secretary of the Company in the order named;
3. Reports of Committee;
4. Election of Directors;
5. Unfinished Business;
6. New Business;
7 Adjournment.
ARTICLE II
DIRECTORS AND THEIR MEETINGS
SECTION 1. The Board of Directors of the Company shall consist of
3 persons who shall be chosen by the stockholders annually, at
the annual meeting of the Company, and who shall hold office for
one year, and until their successors are elected and qualify.
SECTION 2. When any vacancy occurs among the Directors by
death, resignation, disqualification or other cause, the
stockholders, at any regular or special meeting, or at any
adjourned meeting thereof, or the remaining Directors, by the
affirmative vote of a majority therefor shall elect a successor
to hold office for the unexpired portion of the term of the
Director whose place shall have become vacant and until his
successor shall have been elected and shall qualify.
SECTION 3. Meeting of the Directors may be held at the
principal office of the company in the state of Nevada or
elsewhere, at such place or places as the Board of Directors may,
from time to time, determine.
SECTION 4. Without notice or call, the Board of Directors
shall hold its first annual meeting for the year immediately
after the annual meeting of the stockholders or immediately after
the election of Directors at such annual meeting.
Regular meetings of the Board of Directors shall be held at
the office of the company in the City of Las Vegas, State of
Nevada on November 1, at 3 o'clock in the P.M. Notice of such
regular meetings shall be mailed to each Director by the
Secretary at least three days previous to the day fixed for such
meetings, but no regular meeting shall be held void or invalid if
such notice is not given, provided the meeting is held at the
time and place fixed by these by-laws for holding such regular
meetings.
Special meetings of the Board of Directors may be held on
the call of the President or Secretary on at least three days
notice by mail or telegraph.
Any meeting of the Board, no matter where held, at which all
of the members shall be present, even though without or of which
notice shall have been waived by all absentees, provided a quorum
shall be present, shall be valid for all purposes unless
otherwise indicated in the notice calling the meeting or in the
waiver of notice.
Any and all business may be transacted by any meeting of the
Board of Directors, either regular or special.
SECTION 5: A majority of the Board of Directors in office
shall constitute a quorum for the transaction of business, but if
at any meeting of the Board there be less than a quorum present,
a majority of those present may adjourn from time to time, until
a quorum shall be present, and no notice of such adjournment
shall be required. The Board of Directors may prescribe rules not
in conflict with these By-laws for the conduct of its business;
provided, however, that in the fixing of salaries of the officers
of the corporation, the unanimous action of all of the Directors
shall be required.
SECTION 6. A Director need not be a stockholder of the
corporation.
SECTION 7. The Directors shall be allowed and paid all
necessary expenses incurred in attending any meeting of the
Board, but shall not receive any compensation for their services
as Directors until such time as the company is able to declare
and pay dividends on its capital stock.
SECTION 8. The Board of Directors shall make a report to the
stockholders at annual meetings of the stockholders of the
condition of the company, and shall, at request, furnish each of
the stockholders with a true copy thereof.
The Board of Directors in its discretion may submit any
contract or act for approval or ratification at any annual
meeting of the stockholders called for the purpose of considering
any such contract or act, which, it approved, or ratified by the
vote of the holders of a majority of the capital stock of the
company represented in person or by proxy at such meeting,
provided that a lawful quorum of stockholders be there
represented in person or by proxy, shall be valid and binding
upon the corporation and upon all the stockholders thereof, as if
it had been approved or ratified by every stockholder of the
corporation.
SECTION 9. The Board of Directors shall have the power from
time to time to provide for the management of the offices of the
company in such manner as they see fit, and in particular from
time to time to delegate any of the powers of the Board in the
course of the current business of the company to any standing or
special committee or to any officer or agent and to appoint any
persons to be agents of the company with such powers (including
the power to subdelegate), and upon such terms as may be deemed
fit.
SECTION 10. The Board of Directors is invested with the
complete and unrestrained authority in the management of all the
affairs of the company, and is authorized to exercise for such
purpose as the General Agent of the Company, its entire corporate
authority.
SECTION 11. The regular order of business at meetings of the
Board of Directors shall be as follows:
1. Reading and approval of the minutes of any
previous meeting or meetings;
2. Reports of officers and committeemen;
3. Election of officers;
4. Unfinished business;
5. New business;
6. Adjournment.
ARTICLE III
OFFICERS AND THEIR DUTIES
SECTION 1. The Board of Directors, at its first and after
each meeting after the annual meeting of stockholders, shall
elect a President, a Vice-President, a Secretary and a Treasurer
to hold office for one, year next coming, and until their
successors are elected and qualify. The offices of the Secretary
and Treasurer may be held by one person.
Any vacancy in any of said offices may be filled by the
Board of Directors.
The Board of Directors may from time to time by resolution,
appoint such additional Vice Presidents and additional Assistant
Secretaries, Assistant Treasurer and Transfer Agents of the
company as it may deem advisable; prescribe their duties, and fix
their compensation, and all such appointed officers shall be
subject to removal at any time by the Board of Directors. all
officers, agents, and factors of the company shall be chosen and
appointed in such manner and shall hold their office for such
terms as the Board of Directors may by resolution prescribe.
SECTION 2. The President shall be the executive officer of
the company and shall have the supervision and, subject to the
control of the Board of Directors, the direction of the Company's
affairs, with full power to execute all resolutions and orders of
the Board of Directors not especially entrusted to some other
officer of the company. He shall be a member of the Executive
Committee, and the Chairman thereof; he shall preside at all
meetings of the Board of Directors, and at all meetings of the
stockholders, and shall sign the Certificates of Stock issued by
the company and shall perform such, other duties as shall be
prescribed by the Board of Directors.
SECTION 3. The Vice-President shall be vested with all the
powers and perform all the duties of the President in his absence
or inability to act, including the signing of the Certificates of
Stock issued by the company, and he shall so perform such other
duties as shall be prescribed by the Board of Directors.
SECTION 4. The Treasurer shall have the custody of all the
funds and securities of the company. When necessary or proper he
shall endorse on behalf of the company for collection checks,
notes, and other obligations; he shall deposit all monies to the
credit of the company in such bank or banks or other depository
as the Board of Directors may designate; he shall sign all
receipts and vouchers for payments made by the company, except as
herein otherwise provided. He shall sign with the President all
bills of exchange and promissory notes of the company; he shall
also have the care and custody of the stocks, bonds,
certificates, vouchers, evidence of debts, securities, and such
other property belonging to the company as the Board of Directors
shall designate; he shall sign all papers required by law or by
those By-Laws or the Board of Directors to be signed by the
Treasurer. Whenever required by the Board of Directors, he shall
render a statement of his cash account; he shall enter regularly
in the books of the company to be kept by him for the purpose,
full and accurate accounts of all monies received and paid by him
on account of the company. He shall at all reasonable times
exhibit the books of account to any Directors of the company
during business hours, and he shall perform all acts incident to
the position of Treasurer subject to the control of the Board of
Directors.
The Treasurer shall, if required by the Board of Directors,
give bond to the company conditioned for the faithful performance
of all his duties as Treasurer in such sum, and with such
security as shall be approved by the Board of Directors, with
expense of such bond to be borne by the company.
SECTION 5. The Board of Directors may appoint an Assistant
Treasurer who shall leave such powers and perform such duties as
may be prescribed for him by the Treasurer of the company or by
the Board of Directors, and the Board of Directors shall require
the Assistant Treasurer to give a bond to the company in such sum
and with such security as it shall approve, as conditioned for
the faithful performance of his duties as Assistant Treasurer,
the expense of such bond to be borne by the company.
SECTION 6. The Secretary shall keep the Minutes of all
meetings of the Board of Directors and the Minutes of all
meetings of the stockholders and of the Executive Committee in
books provided for that purpose. He shall attend to the giving
and serving of all notices of the company; he may sign with the
President or Vice-President, in the name of the Company, all
contracts authorized by the Board of Directors or Executive
Committee; he shall affix the corporate seal of the company
thereto when so authorized by the Board of Directors or Executive
Committee; he shall have the custody of the corporate seal of the
company; he shall affix the corporate seal to all certificates of
stock duly issued by the company; he shall have charge of Stock
Certificate Books, Transfer books and Stock Ledgers, and such
other books and papers as the Board of Directors or the Executive
Committee may direct, all of which shall at all reasonable times
be open to the examination of any Director upon application at
the office of the company during business hours, and he shall, in
general, perform all duties incident to the office of Secretary.
SECTION 7. The Board of Directors may appoint an Assistant
Secretary who shall have such powers and perform such duties as
may be prescribed for him by the Secretary of the company or by
the Board of Directors.
SECTION 8. Unless otherwise ordered by the Board of
Directors, the President shall have full power and authority in
behalf of the company to attend and to act and to vote at any
meetings of the stockholders of any corporation in which the
company may hold stock, and at any such meetings, shall possess
and may exercise any and all rights and powers incident to the
ownership of such stock, and which as the new owner thereof, the
company might have possessed and exercised if present. The Board
of Directors, by resolution, from time to time, may confer like
powers on any person or persons in place of the President to
represent the company for the purposes in this section mentioned.
ARTICLE IV
CAPITAL STOCK
SECTION 1. The capital stock of the company shall be issued
in such manner and at such times and upon such conditions as
shall be prescribed by the Board of Directors.
SECTION 2. Ownership of stock in the company shall be
evidenced by certificates of stock in such forms as shall be
prescribed by the Board of Directors, and shall he under the seal
of the company and signed by the President or the Vice-President
and also by the Secretary or by an Assistant Secretary
All certificates shall be consecutively numbered; the name
of the person owning the shares represented thereby with the
number of such shares and the date of issue shall be entered on
time company's books.
No certificates shall be valid unless it is signed by the
President or Vice-President and by the Secretary or Assistant
Secretary.
All certificates surrendered to the company shall be
cancelled and no new certificate shall be issued until the former
certificate for the same number of shares shall have been
surrendered or cancelled.
SECTION 3. No transfer of stock shall be valid as against
the company except on surrender and cancellation of the
certificate therefor, accompanied by an assignment or transfer by
the owner therefor.
Whenever any transfer shall be expressed as made for
collateral security and not absolutely, the same shall be so
expressed in the entry of said transfer on the books of the
company.
SECTION 4. The Board of Directors shall have power and
authority to make all such rules and regulations not inconsistent
herewith as it may deem expedient concerning the issue, transfer
and registration of certificates for shares of the capital stock
of the company.
The Board of Directors may appoint a transfer agent and a
registrar of transfers and may require all stock certificates to
bear the signature of such transfer agent and such registrar of
transfer.
SECTION 5. The Stock Transfer Books shall be closed for all
meetings of the stockholders for the period of ten days prior to
such meetings and shall be closed for the payment of dividends
during such periods as from time to time may be fixed by the
Board of Directors, and during such periods no stock shall be
transferable.
SECTION 6. Any person or persons applying for a certificate
of stock in lieu of one alleged to have been lost or destroyed,
shall make affidavit or affirmation of the fact, and shall
deposit with the company an affidavit. Whereupon, at the end of
six months after the deposit of said affidavit and upon such
person or persons giving Bond of Indemnity to the company with
surety to be approved by the Board of Directors in double the
current value of stock against any damage, loss or inconvenience
to the company which may or can arise in consequence of a new or
duplicate certificate being issued in lieu of the one lost or
missing, the Board of Directors may cause to be issued to such
person or persons a new certificate, or a duplicate of the
certificate, or a duplicate of the certificate so lost or
destroyed. The Board of Directors may, in its discretion refuse
to issue such new or duplicate certificate save upon the order of
some court having jurisdiction in such matter, anything herein to
the contrary notwithstanding.
ARTICLE V
OFFICES AND BOOKS
SECTION 1. The principal office of the corporation, in
Nevada shall be at 2001 Spring Lake Drive, Henderson, Nevada, and
the company may have a principal office in any other state or
territory as the Board of Directors may designate.
SECTION 2. The Stock and Transfer Books and a copy of the By-
Laws and Articles of Incorporation of the company shall be kept
at the office of its Resident Agent, Robert C. Bovard, Esq. 1700
E. Desert Inn Rd. #113, Las Vegas in the County of Clark, State
of Nevada, for the inspection of all who are authorized or have
the right to see the same, and for the transfer of stock. All
other books of the company shall be kept at such places as may be
prescribed by the Board of Directors.
ARTICLE VI
MISCELLANEOUS
SECTION 1. The Board of Directors shall have power to
reserve over and above the capital stock paid in, such an amount
in its discretion as it may deem advisable to fix as a reserve
fund, and may, from time to time, declare dividends from the
accumulated profits of the company in excess of the amounts so
reserved, and pay the same to the stockholders of the company,
and may also, if it deems the same advisable, declare stock
dividends of the unissued capital stock of the company.
SECTION 2. No agreement, contract or obligation (other than
checks in payment of indebtedness incurred by authority of the
Board of Directors involving the payment of monies or the credit
of the company for more than dollars) shall he made without the
authority of the Board of Directors, or of the Executive
Committee acting as such.
SECTION 3. Unless otherwise ordered by the Board of
Directors, all agreements and contracts shall be signed by the
President and the Secretary in the name and on behalf of the
company, and shall have the corporate seal thereto attached.
SECTION 4. All monies of the corporation shall be deposited
when and as received by the Treasurer in such bank or banks or
other depository as may from time to time be designated by the
Board of Directors, and such deposits shall be made in the name
of the company.
SECTION 5. No note, draft, acceptance, endorsement or other
evidence of indebtedness shall be valid or against the company
unless the same shall be signed by the President or a Vice-
President, and attested by the Secretary or an Assistant
Secretary, or signed by the Treasurer or an Assistant Treasurer,
and countersigned by the President, Vice-President, or Secretary,
except that the Treasurer or an Assistant Treasurer may, without
countersignature, make endorsements for deposit to the credit of
the company in all its duly authorized depositories.
SECTION 6. No loan or advance of money shall be made by the
company to any stockholder or officer therein, unless the Board
of Directors shall otherwise authorize.
SECTION 7. No director nor executive officer of the company
shall be entitled to any salary or compensation for any services
performed for the company, unless such salary or compensation
shall be fixed by resolution of the Board of Directors, adopted
by the unanimous vote of all the Directors voting in favor
thereof.
SECTION 8. The company may take, acquire, hold, mortgage,
sell, or otherwise deal in stocks or bonds or securities of any
other corporation, if and as often as the Board of Directors
shall so elect.
SECTION 9. The Directors shall have power to authorize and
cause to be executed, mortgages, and liens without limit as to
amount upon the property and franchise of this corporation, and
pursuant to the affirmative vote, either in person or by proxy,
of the holders of a majority of the capital stock issued and
outstanding; the Directors shall have the authority to dispose in
any manner of the whole property of this corporation.
SECTION 10. The company shall have a corporate seal, the
design thereof being as follows:
ARTICLE VII
AMENDMENT OF BY-LAWS
SECTION 1. Amendments and changes of these By-Laws may be
made at any regular or special meeting of the Board of Directors
by a vote of not less than all of the entire Board, or may be
made by a vote of, or a consent in writing signed by the holders
of 77% of the issued and outstanding capital stock.
KNOW ALL MEN BY THESE PRESENTS: That we, the undersigned.
being the directors of the above named corporation. do hereby
consent to the foregoing By-Laws and adopt the same as and for
the By-Laws of said corporation.
IN WITNESS WHEREOF we have hereunto act our hands this 3rd.
day of October, 1995.
Fashion Dynamics Corp.
By______________________________
Howard Manoff, President
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Fashion Dynamics Corporation
By: /s/ Lee R. Figgins
Lee R. Figgins, Secretary and
Treasurer
