FORM 10-SB
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB/A
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under section 12(b) or (g) of the Securities Exchange Act of 1934
Commission File Number: 0-30180
FRESH BREATH INDUSTRIES, INC.
(Name of small business issuer in its charter)
NEVADA 88-0404404
(States of other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
# 7-2316 27th Ave. N.E., Calgary, Alberta Canada T2E7A7
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (403) 259-6838
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
to be so registered each class is to be registered
N/A N/A
Securities registered under Section 12 (g) of the Exchange Act:
Common stock, par value $.001 per share
(Title of class)
(Title of class)
At December 31, 1998, the aggregate market value of the
voting stock held by non affiliates is undeterminable and
is considered to be 0.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Not applicable
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
As of December 31, 1998, the registrants had 7,800,000 shares of
common stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference
and the part of the form 10-KSB (e.g., part I, part II, etc.) into
which the document is incorporated: (1) Any annual report to security
holders; (2) any proxy or other information statement; and (3) Any
prospectus filed pursuant to rule 424 (b) or (c ) under the Securities
Act of 1933: None
FRESH BREATH INDUSTRIES, INC.
FORM 10 - SB
TABLE OF CONTENTS
PAGE
PART I
ITEM 1. Description of Business . . . . . . . . . . . 3
ITEM 2. Management's Discussion and Analysis or
Plan of Operation . . . . . . . . . . . . . . . 6
ITEM 3. Description of Property . . . . . . . . . . . . 8
ITEM 4. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . 8
ITEM 5. Directors, Executive Officers,
Promoters and Control Persons . . . . . . . . . 9
ITEM 6. Executive Compensation .. . . . . . . . . . . 10
ITEM 7. Certain Relationships and
Related Transactions . . . . . . . . . . . . . 10
ITEM 8. Description of Securities. . . . . . . . . . . 10
PART II
ITEM 1. Market Price of and Dividends on
Registrant's Common Equity and
Other Shareholder Matters . . . . . . . . . . . 11
ITEM 2. Legal Proceedings . . . . . . . . . . . . . . 13
ITEM 3. Changes in and Disagreements with Accountants . 13
ITEM 4. Recent Sales of Unregistered Securities . . . 13
ITEM 5. Indemnification of Directors and Officers . . 14
PART F / S
Financial Statements . . . . . . . . . . . . . . . . . . A - 1
PART III
ITEM 1. Index to Exhibits . . . . . . . . . . . . . . . . . . S - 1
ITEM 2. Description of Exhibits . . . . . . . . . . . . . . . S - 1
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . S - 2
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FORM 10 - SB
PART I
ITEM 1. Description of Business
Fresh Breath Industries, Inc. (the "Company") is a development stage
Company incorporated under the laws of Nevada on September 1, 1998,
to engaged in the marketing of cigars and cigar related products. As
a start up enterprise the Company had no significant business operations
in 1998.
The Company has entered into various agreements with related companies
to acquire the distribution rights of breath freshening products and cigars
and cigar accessories. The Company entered into asset purchase agreements;
(1) on October 16, 1998, the exclusive Canadian distribution rights to
Irvine Breath Products and Gel Cap Breath Freshener products for $135,590
which consisted of $130,950 note and 500,000 shares of common stock, (2)
on October 21, 1998, bought for the sum of $130,000 the product line c
one, Coffee Gone and other breath related products, and (3) on October
25, 1998, the Company bought for the sum of $50,000 and 100,000 shares
of common stock the product lines and promotional materials of J&D Cigar
Company, Ltd. On April 21, 1999 100,000 shares were issued to Irvine
Breath Products for the cancellation of a $13,500.00 debt. 502,000
shares were issued to Irvine June 30, 1999 in lieu of debt of $125,500.
J&D Cigar 160,000 shares in lieu of debt of $40,000.00 to complete the
asset purchase of the companies.
During the month of December 1998, the Company sold 4,250,000 shares
for $0.01, the gross proceeds were $42,500 of which $5,515 was received
subsequent to December 31, 1998. The offering under the provisions of
Regulation D, Rule 504 of the Securities Act of 1934, as amended (the
"Act"). The proceeds were used for working capital.
Prior to June 30, 1999 the Company sold an additional 186,000 shares
for $46,500 pursuant to Regulation D, Rule 504 of the Securities Act
of 1934, as amended. The Company issued 662,000 in lieu of debt.
The Company also issued 100,000 shares of stock in lieu of a $13,500.00
debt. These funds were also used for working capital.
Products
Breath Freshener: Cigar-Gone, a sugarless, all natural chewable gel-cap
breath freshener, considered one of the accessories, is being successfully
marketed and sold through major retail tobacco and convenience stores in
North America by Quantum Cigar in Canada, J&D Cigar Company in Canada and
the United States and by the Company in the United States. The product
Cigar Gone was first introduced at the Cigar Expo in Las Vegas, Nevada in
April 1997 and is now being distributed and marketed by several wholes
over 10,000 different retail outlets throughout North America. The
Company has three other breath products market ready, Coffee Gone,
Garlic Gone and an all natural breath spray will be available in four
flavors.
Cigars and Accessories: J&D Cigar, a subsidiary of the Company, is
located in Alberta Calgary Canada. J&D is currently carrying 45 different
cigars manufactured by 12 different companies including a full line of Cuban
Cigars. In its prior seven years in business its been able to secure
exclusive Canadian rights to many of these cigars. As a major Canadian
importer of cigars and accessories, J&D has established a client base of
about 100 wholesale and retail customers throughout Canada.
Fresh Breath Industries, Inc., will wholesale the Breath products and the
cigar products and other accessories in the United States and through its
divisions in Canada.
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Production
The breath freshener products will be initially manufactured in two
locations (1) Irvine Breath Products of Irvine, California (2) REON,
San Diego, California. REON has also contracted to package, warehouse,
ship and distribute the product in a percentage basis.
The Company has a line of cigar humidors manufactured for it in Alberta,
Canada and the accessories are handled on a manufacturers representative
basis for sale wholesale.
Manufacturer of Gel-Caps Packaging, Sales and Distribution
Irvine Breath Products REON
7700 Irvine Center Suite 510 1177 Knoxville Street
Irvine, California 92718 San Diego, California 92110
Marketing
Cigar smoking has always been an integral part of North American culture
with a phenomenal surge in popularity in the last few year. In the last
two years cigar sales have increased 43% from 1994 to 1995 and even larger
increased experienced from 1996 to 1997. Over 240 million cigars were sold
in the USA in 1995 and over 300 million sold in 1996. By 1997, cigars were
being sold in a variety of locations including grocery, drug and convenience
stores. Total cigars sold in 1997 were over 350 million. Cigar sales
have increased 18% from 1994 to 1995 with an equal increase in 1996.
Overall the accessory industry exploded in 1997 with an increase of 23%.
Hollywood and sports celebrities of both genders have now adopted the
cigar as a symbol of success and fashion in the 90's. Cigar bars and
emporiums have sprung up across the United States and Canada at an amazing
rate. Cigar friendly restaurants are now becoming the norm. The "Stogie"
once a bastion of the rich American male has now become a true phenomenon
for men and women across wide spectrums of North American society. Dropping
into the local cigar emporium to enjoy a night of fine cigars, to tran
or simply to be part of the cigar culture in now considered a very
fashionable thing to do.
Cigar products took off in 1995 and kept up an even faster pace through
1996 and 1997. Overall cigar sales are being sparked by the popularity of
premium hand made cigars. while sales of premium cigars jumped 65% in 1996,
they still account for just 6.4% of all cigars sold in the United States.
It is estimated that there are 10 million cigar smokers in the United
States, many of them being occasional smokers. Less than 4% are women and
they tend to smoke the premium cigars. The highest concentration in
40 year old category. However, more men in their mid-20's are taking
to the phenomena. Reasons for the resurgence points to the fact that
cigars have recaptured their traditional image of success, achievement
and celebration.
The current popularity of cigars can be seen in the birth of several
Cigar magazines. Although only a few years old the magazine "Cigar
Aficionado" has risen from 40,000 circulation to 440,000 paid circulation.
An estimated two million read this bible of the cigar business, which gained
its popularity by using big name stars on the cover. "Smoke" is the newest
magazine to hit the cigar market and already boasts of a paid circulation of
over 160,000 copies in less than one year.
Cigars, cigar accessories, and breath fresheners are generally sold on an
indirect basis, e.g., through jobbers and wholesalers to the retail outlets.
Some are sold in a direct basis to national accounts Cigar Gone are now
being distributed and marketed by several wholesalers and in over 10,000
different retail outlets including 7-Eleven, Circle K and AM/PM stores.
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Competition
Breath Assure is the market leader for gel-cap breath cleansers. It has
approximately $40,000,000 in sales (1996) world wide, and is in 30 35
countries. Breath Assure is mostly known for its single action gel-cap
formula that is swallowed and takes up to 30 minutes to take effect.
Although Breath Assure is a very good product it does not work instantly,
thus the consumer has to wait 30 minutes before the product takes effect.
Quite often the individual does not want to wait for this length of time
before the relief of fresh breath.
Breath Assure is relatively unchallenged in its dominance of the market
place; being a premium product at a premium price. Fresh Breath, Inc., is
able to beat Breath Assure's pricing and still maintain good profit margins.
As it stands now Breath Assure sells at retail up to $7.95 for 50 gel-caps.
Cigar Gone sells at retail for $5.95 for 50 gel-caps. It allows Fresh
Breath, Inc., to sell a premium product at a more reasonable price to the
consumer. This trend will also continue with " " Gone product.
To be able to effectively combat Breath Assure and other similar products
that will undoubtedly be coming onto the market place, Fresh Breath, Inc.,
must establish a very aggressive marketing and advertising campaign. Cigar
Gone and Coffee Gone are presently in approximately in ten thousand (10,000)
accounts across North America and is expected to be in a minimum of 30,000
stores across North American by the end of 1999. Although Fresh Breath,
Inc., has been very successful in marketing its products to make
distributors throughout North America we have not had the opportunity
to market the products directly to the consumer, with the exception of a
few cigar trade magazines. We are looking forward to creating this product
awareness in the near future.
Research and Development
The Company has not allocated funds for conducting research and
development, however, with minimum funds the Company and its affiliates
have developed four (4) additional niche breath products. Garlic Gone,
Coffee Gone, Alcohol Gone in gel-caps and a line of flavor sprays.
Tobacco accessory sales have increased 188% in food stores, 192% in drug
stores and 292% with mass merchandisers.
Patents and Trademarks
All cigar products handled have trademark protected by their
manufacturers. To the issuers knowledge none of the accessory
items handled are patented.
Employees
Presently, the Company has 2 employees. Management intends to hire
additional employees in the United States and Canada only as needed and
as funds are available. In such cases compensation to management and
employees will be consistent with prevailing wages for service rendered.
The Company also will use contract services that will preclude the necessity
of hiring for packaging and processing.
Facilities
The Company has a statutory office at 1905 South Eastern Avenue,
Las Vegas, Nevada and sales office in Calgary, Alberta, Canada,
Vancouver, B.C., Canada and sales and product office in Irvine and
San Diego, California. The Company will maintain a headquarter office
in Vancouver at 510 Burrard St., Suite 910 in the mid quarter of 1999.
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Legal
The Company is not a party to any material pending legal proceedings and
no such action by, or to the best of its knowledge, against the Company has
been threatened.
ITEM 2. Management's Discussion and Analysis or Plan of Operation
Overview
The Company became incorporated in September 1998. The Company began
operations by consolidating a distribution operation and acquiring
various rights and licenses. Although, the Company did not realize
revenues as of the date hereof, management anticipates sales to start
by the end of first quarter or early in the second quarter of 1999.
The Company's current capital was provided by the founders of the Company
and by two private placements for sale of common stock. Management believes
that the Company's cash requirement can be satisfied with existing capital
for ninety days, if sales are sufficient to handle current operating costs.
Management anticipates the Company will require further capital of
approximately $400,000 within the next Ninety days in order to properly
facilitate production and distribution channels. This additional cap
f products in inventory or already ordered, however, if initial marketing
is delayed or revenues are not adequate to satisfy its capital needs, the
Company will have to explore other alternatives for funding.
In the event, outside funding is necessary, the Company will investigate
the possibility of interim financing, either debt or equity, to provide
capital. Although, management has not made any arrangements or definitive
agreements, the Company would consider private funding or the private
placements of its securities and/or a public offering. If the Company
experiences a substantial delay in marketing revenues and is unable to
secure public financing from the sale of its securities or from private
lenders of the Company as a going concern would be seriously jeopardized.
Most of the research and development of the Breath Fresheners additional
products has been completed. Management does not intend to consider new
products until such time as revenues are realized from the sale of the
existing products and lines of cigars and accessories. All of the present
lines have an established line of distribution, therefore, no immediate
funds have to be expended in that area. Management would consider products
that would fit in their distribution channel, but are manufactured by others
The Company has an inventory of 1700 units with wholesale value of
tements issued for periods ending after December 15, 1997. Their
implementation is not expected to have a material effect on the
financial statements.
The Financial Accounting Standards Board has also issued SFAS No. 131,
No. 130, "Reporting Comprehensive Income" and SFAS no. 131, "Disclosures
about Segments of an Enterprise and Related Information." SFAS No. 130
establishes standards for reporting and display of comprehensive income,
its components and accumulated balances. Comprehensive income is defined
to include all changes in equity except those resulting from investments
by owners and distributors to owners. Among other disclosures, SFAS no. 130
ecognized under current accounting standards as components of comprehensive
income be reported in a financial statement that displays with the same
prominence as other financial statements. SFAS no. 131 supersedes SFAS
no. 14 "Financial Reporting for SegRecent Accounting Pronouncements
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standard ("SFAS") No. 128, "Earnings Per Share"
and Statement of Financial Accounting Standards No. 129 "Disclosures of
Information About an Entity's Capital Structure." SFAS No. 128 provides
a different method of calculating earnings per share than is currently
used in accordance with Accounting Principles Board Opinion No. 15,
"Earnings Per Share." SFAS No. 128 provides for the calculation of
"Basic" and "Dilutive" share. Basic earnings per share includes no
dilution and is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding
for the period. Diluted earnings per share reflects the potential dilution
of securities that could share in the earnings of an entity, similar to
fully diluted earnings per share. SFAS no. 129 establishes standards for
disclosing information about an entity's capital structure. SFAS no. 128
and SFAS no. 129
statements issued for periods ending after December 15, 1997. Their
implementation is not expected to have a material effect on the financial
statements.
Risk Factors and Cautionary Statements
This Registration Statement contains certain forward-looking statements.
The Company wishes to advise readers that actual results may differ
substantially from such forward-looking statements. Forward-looking
statements involve risks and uncertainties that could cause actual results
to differ
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materially from those expressed in or implied by the statements, including,
but not limited to, the following: the ability of the Company to meet its
cash and working capital needs, the ability of the Company to successfully
market its product, and other risks detailed in the Company's periodic
report filings with the Securities and Exchange Commission.
ITEM 3. Description of Property
The information required by this Item 3, Description of Property, is set
forth in Item 1, Description of Business, of this Form 10-SB/A.
ITEM 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information, to the best of the Company's
knowledge, as of March 31, 1999, with respect to each person known by the
Company to own beneficially more than 5% of the outstanding Common Stock,
each director and all directors and officers as a group.
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership of Class (1)
Kenneth Trociuk* 1,000,000 12.5%
Ste. 910-510 Burrard St.
Vancouver, B.C., Canada
V6C 3A8
Jeff Walter* 1,050,000 13.5%
139 Sackville Dr. S.W
Calgary, Albert, Canada
T2W 0W4
Frank Baroudi* 275,000 3.5%
1177 Knoxville St.
San Diego, CA 92110
Catherine Edwards* 900,000 11%
40 Hymar Place
Vernon, B.C., Canada
V1B 2X5
Doug McPhee* 50,000 .006%
#3 Sierra Vista Circle
Calgary, Alberta, Canada
T2W 0W4
*Management As A Group 3,550,000 45%
Mounier Sallman 450,000 5.6%
1860 Crois Salvador
Brossard, Quebec
V4X 1V2
Peter Shield 400,000 5%
1757 N. 40th Avenue
Vancouver, B.C. Canada
V6M 1W3
* Director and/or Officer
(1) Based upon 8,748,000 shares of Common Stock
outstanding on June 30, 1999.
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ITEM 5. Directors, Executive Officers, Promoters and Control Persons
Executive Officers and Directors
The executive officers and directors of the Company are as follows:
Name Age Position
Kenneth Trociuk 44 Chief Executive Officer/Director
Jeffery Walters 42 President/Director
Catherine Edwards 39 Secretary/Treasuer/Director
Frank Baroudi 34 Vice President/Director
Ken Ochetti 39 Director
All directors hold office until the next annual meeting of stockholders
and until their successors have been duly elected and qualified. Directors
will be elected at the annual meetings to serve for one year terms. There
are no agreements with respect to the election of directors. The Company
has not compensated its directors for service on the Board of Directors or
any committee thereof. Any non-employee director of the Company shall be
reimbursed for expenses incurred for attendance at meetings of the directors
and any committee of the Board of Directors. The Executive Committee of the
Board of Directors, to the extent permitted under Nevada law, consists of
the two directors and exercises all of the power and authority of the Board
of Directors in the management of the business and affairs of the Company
between meetings of the Board of Directors. Each executive officer is
appointed by and serves at the discretion of the Board of Direct
directors.
None of the officers and/or directors of the Company are officers or
directors of any other publicly traded corporation, nor have any of the
affiliates or promoters of the Company filed any bankruptcy petition, been
convicted in or been the subject of any pending criminal proceedings, or
the subject or any order, judgment, or decree involving the violation of
any state or federal securities laws within the past five years.
The directors will initially devote their time to the Company'srectors.
None of the officers and/or directors of the Company are officers or
directors of any other publicly traded corporation, nor have any of the
affiliates or promoters of the Company filed any bankruptcy petition, been
convicted in or been the subject of any pending criminal proceedings, or
the subject or any order, judgment, or decree involving the violation of
any state or federal securities laws within the past five years.
The directors will initially devote their time to the Company's affairs
on an "as needed" basis, the exact amount of which is undetermined at this
time. Jeff Walters approximately to hours per week to the Company's
business. If the Company begins to generate revenues, the Company's
Secretary/Treasurer, Catherine Edwards, will devote approximately 20 to
30 hours a week primarily as the Company's Controller persons are prepared
to increase the time they devote to the Company should such a need arise.
There are no other persons whose activities are material to the Company's
operations other than the Company's corporate counsel.
The business experience of each of the persons listed above during the
past five years is as follows:
Kenneth Trociuk, age 44, is the president and CEO of three companies,
Kenrich Mining (V.S.E.),and Blue Gold. He has a Business Diploma in
Administration, Economics and Advertising. As a co-owner of Canadian
Oilfield Directory until 1996, and Sales manager for Parklane Publications
for five years, Mr. Trociuk brings valued marketing experience to the
company. Mr. Trociuk is an avid super-pro quarter mile drag racer.
Frank Baroudi, age 42, has a Masters in Electrical Engineering and another
Masters in Computer Science from the University of Southern California. He
worked for United Telecommunications as a software consultant for one year
after which he went to Xerox for five years
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working briefly in technical support for CAD-CAM design workstations and
then, moved into technical sales. He was then recruited by AST Research
to head up their sales and marketing operations in Sydney, Australia where
he brought sales from $50k/mo. to $600k/mo. within six months. Mr. Baroudi
started REON of San Diego, California in 1987 with his wife. They have made
REON a multi-million dollar housewares importation, distribution and
manufacturing operation. Mr. Baroudi has invented a few items including
Incredible Soda Machine which has sold 7.5 million units through stores such
as K Mart and Wal Mart. REON also manufactures and distributes products
for the cigar industry at two manufacturing facilities in Mexico. Mr.
Baroudi and REON will be directly responsible for manufacturing, marketing,
sales and distribution.
Catherine Edwards, age 39, has worked in the medical profession for ten
years, and more recently manages commercial real estate. She has run her
own business for the past 10 years. First a cattle ranch, and then a retail
wholesale business which she is currently operating. She has been involved
in financing for public companies. Ms. Edwards is a director of Thorlow
Resources, and is currently serving her sixth year on the board of a
non-profit society. Ms. Edwards has a College Business Diploma and a
Science degree form the University of British Columbia.
Jeffrey Walters, age 34, has an extensive and varied business background.
He is the founder and owner of several businesses in Canada. He has been an
entrepreneur throughout his career with over seven years experience in the
tobacco and liquor industry. Mr. Walters brings his varied experience along
with several designations to Fresh Breath Inc. Mr. Walters was born in
Calgary, Alberta where he completed high school and attended the University
of Calgary. He is the owner of several retail and wholesale
in the province of Alberta. Jeff will manage all aspects of the
breath freshener and cigar business.
Ken Ochetti, age 49, is President and Founder of Irvine Breath Products
and has been an entrepreneur for most of his career. He has started many
companies including Octus Sports which merchandised and produced calendars,
videos, CD ROM's for the National Football League. He also founded Peer
Records and Video which was a national distribution company for the music
industry with 3,500 accounts and was the District Manager for a chain of
convenience stores in Southern California. He attended Arizona State
here he studied Business Administration and Communication. Ken will
have a contract with the new public company to continue to market and
sell the breath freshener lines and make referrals to the cigar entity.
He will also become a director once the new company acquires Irvine Breath
Products.
ITEM 6. Executive Compensation
The Company does not have a bonus, profit sharing, or deferred
compensation plan for the benefit of its employees, officers or
directors. Since the Company's inception, it has not paid any
salaries or other compensation to its officers, directors or employees.
Further, the Company has not entered into an employment agreement with
any of its officers, directors or any other persons and no such agreements
are anticipated in the immediate future.
ITEM 7. Certain Relationships and Related Transactions
The Company has entered into various agreements with related companies to
purchase the distribution rights of breath freshening products.
On October 16, 1998, the Company bought for the sum of $135,590 which
consists of $130,590 and 500,000 shares of its Common Stock equaling
$5,000, the exclusive Canadian distribution rights to Irvine Breath
Products and Gel Cap Breath Freshener product-lines. On October 21,
1998, the Company
bought for the sum of $130,000 the product-line called Cigar Gone,
Coffee Gone and other breath-related
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products. October 25, 1998, the Company bought for the sum of $50,000
and 100,000 shares of its Common Stock, the product-line rights which
include the assets, exclusive distributor rights, and promotional materials
of J&D Cigar Company, Ltd.
The Company's officers and directors are subject to the doctrine of
corporate opportunities only insofar as it applies to business
opportunities in which the Company has indicated an interest, either
through its proposed business plan or by way of an express statement
of interest contained in the Company's minutes. If directors are presented
with business opportunities that may conflict with business interests
identified by the Company, such opportunities must be promptly disclosed
to the Board of Directors available to the Company. In the event the
Board shall reject an opportunity so presented and only in that event,
any of the Company's officers and directors may avail themselves of such
an opportunity. Every effort will be made to resolve any conflicts that
may arise in favor of the Company. There can be no assurance, however,
that these efforts will be successful.
ITEM 8. Description of Securities
Common Stock
The Company is authorized to issue 50,000,000 shares of Common Stock, par
value $.001 per share, of which 7,800,000 shares were issued and outstanding
as of December 31, 1998 and 8,748,000 as of June 30, 1999 respectively.
All shares of Common Stock have equal rights and privileges with respect
to voting, liquidation and dividend rights. Each share of Common Stock
entitles the holder thereof to (i) one non-cumulative vote for each share
held of record on all matters submitted to a vote of the stockholder
articipate equally and to receive any and all such dividends as may
be declared by the Board of Directors out of funds legally available
therefor; and (iii) to participate pro rata in any distribution of
assets available for distribution upon liquidation of the Company.
Stockholders of the Company have no preemptive rights to acquire additional
shares of Common Stock or any other securities. The Common Stock is not
subject to redemption and carries no subscription or conversion rights.
All outstanding shares of common Stock are fully paid and non-assessable.
PART II
ITEM 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters
Prior to the filing of this registration statement, no shares of the
Company's Common Stock have been registered with the Securities and
Exchange Commission (the "Commission") or any state securities agency
of authority. The Company's Common Stock is eligible to be traded in
the over-the-counter market upon the filing of this Form 10SB and the
clearings and comments thereto by the Commission.
The ability of an individual shareholder to trade their shares in a
particular state may be subject to various rules and regulations of
that state. A number of states require that an issuer's securities be
registered in their state or appropriately exempted from registration
before the securities are permitted to trade in that state. Presently,
the Company has no plans to register its securities in any particular
state. Further, most likely the Company's shares will be subject to
the provisions of Section 15(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), commonly referred to as the "penny stock"
rule. Section 15(g) sets forth certain requirements for transactions in
penny stocks and rule 15g-9(d)(1) incorporates the definition of penny
stock as that used in Rule 3a51-1 of the d that used in Rule 3a51-1 of
the Exchange Act.
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The Commission generally defines penny stock to be any equity security
that has a market price less than $5.00 per share, subject to certain
exception. Rule 3a51-1 provides that any equity security is considered
to be a penny stock unless that security is: registered and traded on a
national securities exchange meeting specified criteria set by the
Commission; authorized for quotation on the NASDAQ stock Market; issued
by a registered investment company; excluded from the definition on the
basis of price (at least 5.00 per share) or the issuer's net tangible
assets; or exempted from the definition by the Commission. If the
Company's shares are deemed to be a penny stock, trading in the shares
will be subject to additional sales practice requirements on broker-dealers
who sell penny stocks to persons other than established customers and
accredited investors, generally persons with assets in excess of $1,000,000
or annual income exceeding $200,000, or $300,000 together with their spouse.
For transactions covered by these rules, broker-dealers must make a
special suitability determination for the purchase of such security and
must have received the purchaser's written consent to the transaction prior
to the purchase. Additionally, for any transaction involving a penny
stock, unless exempt, the rules require the delivery, prior to the first
transaction, of a risk disclosure document relating to the penny stock
market. A broker-dealer also must disclose the commissions payable to
both the broker-dealer the registered representative, and current
quotations for the securities. Finally, monthly statements must be
sent disclosing recent price information for the penny stocks held in
the account and information on the limited market in penny stocks.
Consequently, these rules may restrict the ability of broker-dealers
to trade and/or maintain a market in the Company's Common Stock and
may affect the ability of shareholders to sell their shares.
As of December 31, 1998 and June 30, 1999 there were 21 and 26 holders
respectfully of record of the Company's Common Stock. Because the Company
does not presently trade, no trading history is presented herein.
As of December 31, 1998 and June 30, 1999, the Company had issued and
outstanding 7,800,000 and 7,986,000 shares respectfully. Of this total,
3,550,000 shares were issued in private transactions in the third and
fourth quarter of 1998. These 3,550,000 shares are deemed "restricted
securities" as defined by the Act and certificates representing such
shares bear an appropriate restrictive legend. The remaining 4,250,000
shares were issue in December 1998 following the Company's offering
pursuant to Regulation D, Rule 504 of the Act. An additional 186,000
shares were issued, pursuant to Rule 504 in March of 1999. These
4,436,000 shares do not bear a restrictive legend.
Of the Company's total shares outstanding, 4,436,000 shares may be sold,
transferred or otherwise traded in the public market, should one develop,
unless held by an affiliate or controlling shareholder of the Company. Of
these 4,428,000 shares, the Company has identified no shares as being held
by affiliates of the Company.
The 3,550,000 shares considered restricted securities are held presently
by affiliates and/or controlling shareholders of the Company. These
shares may be sold pursuant to Rule 144 in the future, subject to the
volume and other limitations set forth under Rule 144. In general,
under Rule 144 as currently in effect, a person (or persons whose shares
are aggregated) who has beneficially owned restricted shares of the Company
for at least one year, including any person who may be deemed to be an
"affiliate" of the Company (as the term "affiliate" is defined under the
Act), is entitled to sell, within any three-month period, an amount of
shares that does not exceed the greater of (i) the average weekly trading
volume in the Company's Common Stock, as reported through the automated
quotation system of a registered securities association, during the four
calendar weeks preceding such sale or (ii) 1% of the shares then
outstanding. A person who is not deemed to be an "affiliate" of the
Company and has not has not been an affiliate for the most recent three
months, and who has held restricted shares for a least two years would be
entitled to sell such shares without regard to the resale limitations of
Rule 144.
- -12-
Generally, the shares of restricted stock may not be sold or otherwise
transferred unless first registered under the Act or unless there is an
appropriate exemption from registration available.
Dividend Policy
The Company has not declared or paid cash dividends or made distributions
in the past, and has not been an affiliate
recent three months, and who has held restricted shares for a least
two years would be entitled to sell such shares without regard to the
resale limitations of Rule 144.
- -12-
Generally, the shares of restricted stock may not be sold or otherwise
transferred unless first registered under the Act or unless there is an
appropriate exemption from registration available.
Dividend Policy
The Company has not declared or paid cash dividends or made distributions
in the past, and the Company does not anticipate that it will pay cash
dividends or make distributions in the foreseeable future. The Company
currently intends to retain and invest future earnings to finance its
operations.
ITEM 2. Legal Proceedings
There are presently no material pending legal proceedings to which the
Company or any of its subsidiaries in a party or to which any of its
property is subject and, to the best of its knowledge, no such actions
against the Company are contemplated or threatened.
ITEM 3. Changes in and Disagreements with Accountants
There have been no changes in or disagreements with accountants.
ITEM 4. Recent Sales of Unregistered Securities
On December 31, 1998 and March 31, 1999, the Company completed an
offering of its Common Stock pursuant to the provisions of Regulation
D, Rule 504 of the Act. Under the offerings, the Company sold 4,250,000
share to 15 people for $42,500 in December 1999 and 186,000 shares for
$46,500 in March 1999. This offering was not registered under the Act,
or registered or qualified under the securities laws of any state. All
purchasers of the shares reside outside the United States. The offering
of the shares was made reliance upon the limited offering exemption from
registration with the Securities and Exchange Commission as set forth in
Rule 504 of Regulation D.
Each purchaser was required to complete and sign a written subscription
Agreement representing that they had read the Disclosure Statement and
that the offering was subject to various risks. Pursuant to Rule 504(b)
(1) of Regulation D, the provisions of Rule 502(c) and (d) shall not
apply to offers and sales made under Rule 504. Generally, Rule 502(d)
provides that: "exempt as provided in Rule 504(b)(1), securities acquired
in a transaction under Regulation D shall have the status of securities
acquired in a transaction under Section 4(2) of the Act and cannot be
resold without registration under the Act or an exemption therefrom . . . ."
Because the Company's intent and good faith belief was that the offering
qualified under Rule 504(b)(1) of Regulation D, purchasers of the Company's
Common Stock may be permitted to resell their shares without registration
under the Act pursuant to Rule 502(d). As such, certificates representing
these shares do not bear any restrictive legends.
The Company also issued 100,000 shares, of its Common Stock, to two
individual related parties in the asset acquisition of J&D Cigar on
October 25, 1998 and 500,000 shares to one individual related party
for the acquisition of the exclusive distribution rights for Canada of
Irvine Breath Products and Gel Caps breath freshener product lines on
October 16, 1998. With respect to the issuance of the 600,000 shares,
the holders would be affiliates.
The Company relied on the exemption from registration under the Act
provided by Sections 4(2) and 4(6) of the Act in the issuance of the
total of 3,350,000 share issued in the fourth quarter of 1998 said 3,550,000
being all the restricted share issued.
- -13-
ITEM 5. Indemnification of Directors and Officers
As permitted by the provisions of the Nevada Revised Statutes (the "NRS"),
the Company has the power to indemnify any person made a party to an action,
suit or proceeding by reason of the fact that they are or were a director,
officer, employee or agent of the Company, against expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
them in connection with any such action, suit or proceeding if they acted
in good faith and in a manner which they reasonably believed to be
opposed to, the best interest of the Company and, in any criminal
action or proceeding, they had no reasonable cause to believe their
conduct was unlawful. Termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, does not, of itself, create a presumption that the
person did not act in good faith and in a manner which they reasonably
believed to be in or not opposed to the best interests of the Company,
and, in any criminal proceeding, they had no reasonable cause to believe
their conduct was unlawful.
The Company must indemnify a director, officer, employee or agent of the
Company who is successful, on the merits or otherwise, in the defense of
any action, suit or proceeding, or in defense of any claim, issue, or
matter in the proceeding, to which they are a party because they are or
were a director, officer employee or agent of the Company against expenses
actually and reasonably incurred by them in connection with the defense.
The Company may provide to pay the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding as
the expenses are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf
of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that they are not
entitled to be indemnified by the Company.
The NRS also permits a corporation to purchase and maintain liability
insurance or make other financial arrangements on behalf of any person
who is or was a director, officer, employee or agent of the Company, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise for any liability asserted against them and liability
and expenses incurred by them in their capacity as a director, officer,
gent, or arising out of their status as such, whether or not the Company
has the authority to indemnify them against such liability and expenses.
Presently, the Company does not carry such insurance.
Transfer Agent
The Company has designated Holladay Stock Transfer, Inc., 2939 North 67th
Place, Scottsdale, Arizona 85251, as its transfer agent.
PART F / S
The Company's financial statements for the fiscal year ended December 31,
1998 and December 31, 1999 have been examined to the extent indicated in
their reports by Jones, Jensen & Company, independent certified public
accountants, and have been prepared in accordance with generally accepted
accounting principles and pursuant to Regulation S-B as promulgated by the
Securities and Exchange Commission and are included herein in response to
Item 15 of this Form 10-SB.
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
September 30, 1999 and December 31, 1999
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
September 30, December 31,
1999 1998
(Unaudited)
CURRENT ASSETS
Cash $ 4,006 $ 39,673
Inventory 28,212 -
Accounts receivable 14,275 -
Total Current Assets 46,493 39,673
FIXED ASSETS (NET) 4,917 -
OTHER ASSETS
Distribution rights (net) 229,971 307,558
Total Other Assets 229,971 307,558
TOTAL ASSETS $ 281,381 $ 347,231
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,169 $ 5,000
Notes payable -
related parties 130,790 130,790
Accrued interest 7,037 5,982
Notes payable - 170,000
Total Current Liabilities 138,996 311,772
Total Liabilities 138,996 311,772
STOCKHOLDERS' EQUITY
Common stock, $0.001
par value, authorized
50,000,000 shares; 8,748,000
and 7,800,000 shares issued
and outstanding,
respectively 8,748 7,800
Additional paid-in capital 298,126 70,200
Stock subscription receivable (15) (5,515)
Deficit accumulated
during the development stage (164,474) (37,026)
Total Stockholders' Equity 142,385 35,459
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 281,311 $ 347,231
The accompanying notes are an integral part of these financial statements.
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
Statements of Operations
From
For the Inception on
Nine Month September 1,
Ended 1998 Through
September 30, December 31, September 30,
1998 1999 1998 1999
(Unaudited) (Unaudited (Unaudited)
REVENUE $ - $ 1,513 $ - $ 1,513
COST OF GOODS SOLD - 1,592 - 1,592
GROSS PROFIT - (79) - (79)
OPERATING EXPENSES
Amortization and
depreciation expenses - 49,727 9,032 58,759
Professional services - 22,295 5,787 28,082
General and administrative - 45,418 16,225 61,643
Total Operating Expenses - 117,440 31,044 148,484
LOSS FROM OPERATIONS - 117,519 31,044 148,563
OTHER EXPENSES
Interest expense - (9,929) (5,982) (15,911)
Total Other Expenses - (9,929) (5,982) (15,911)
NET LOSS $ - $ (127,448) $ (37,026) $ (164,474)
BASIC LOSS PER SHARE $ (0.00) $ (0.02) $ (0.01)
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 1,573,333 8,376,000 7,800,000
The accompanying notes are an integral part of these financial statements.
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
Deficit
Accumulated
Additional Stock During the
Common Stock Paid-in Subscriptions Development
Shares Amount Capital Recieved Stage
From inception of
development stage,
August 31, 1998 - $ - $ - $ - $ -
September 15,1998,
common stock issued
for cash at $0.01
per share 400,000 400 3,600 - -
September 15,1998,
common stock issued
for services at $0.01
per share 2,550,000 2,550 22,950 - -
November 15,1998,
common stock issued
for services at $0.01
per share 600,000 600 5,400 - -
December 1, 1998,
common stock issued
for cash at $0.01
per share 4,250,000 4,250 387,250 (5,515) -
Net loss for the
year ended
December 31,
1998 - - - - (37,026)
Balance,
December 31,
1998 7,800,000 7,800 70,200 (5,515) (37,026)
Contributed
capital
(unaudited) - - 3,374 - -
January 5, 1999,
stock subscription
received
(unaudited) - - - 5,500 -
February 26, 1999,
common stock issued
through a 504
offering for
cash at $0.25
per share
(unaudited) 150,000 150 37,350 - -
Balance
Forward 7,950,000 $ 7,950 $110,924 $ (15) $ (37,026)
The accompanying notes are an integral part of these financial statements.
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Continued)
Deficit
Accumulated
Additional Stock During the
Common Stock Paid-in Subscriptions Development
Shares Amount Capital Received Stage
Balance
Forward 7,950,000 $ 7,950 $110,924 $ (15) $ (37,026)
April 1, 1999,
common stock
issued through
a 504 offering
for cash at
$0.25 per share
(unaudited) 36,000 36 8,964 - -
April 29, 1999,
common stock
issued at $0.23
per share for
payment on note
(unaudited) 762,000 762 178,238 - -
Net loss for
the nine months
ended September
30, 1999
(unaudited) - - - - (127,448)
Balance,
September 30,
1999
(unaudited) 8,748,000 $ 8,748 $ 298,126 $ (15) $ (164,474)
The accompanying notes are an integral part of these financial statements.
FRESH BREATH INDISTRIES
(A Development Stage Company)
Statement of Cash Flows
From
For the Inception on
Nine Months September 1
Ended 1998 through
September 30, December 31 September 30
1998 1999 1998 1999
(unaudited) (unaudited) (unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES
(Loss) from operations $ - $ (127,448) $ (37,026) $ (164,474)
Adjustments to reconcile
net (loss) to net cash
used by operating
activities:
Depreciation and
amortization expense - 49,727 9,032 28,759
Common stock issued
for services - - 31,500 31,500
Changes in operating
assets and liabilities:
(increase) decrease in
accounts receivable - (14,475) - (14,275)
Increase (decrease) in
accounts payable - (3,831) 5,000 1,169
Increase (decrease) in
interest payable - 10,055 5,982 16,037
Increase (decrease) in
inventory - 7,939 - 7,939
Net Cash Provided
(Used) by Operating
Activities - (77,833) 14,488 (63,345)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of
office equipment - (13,208) - (13,208)
Purchase of
distribution rights - - (15,800) (15,800)
Net Cash (Used) by
Investing Activites - (13,208) (15,800) (29,008)
CASH FLOWS FROM FINANCING ACTIVITIES
Contributed capital - 3,374 - 3,374
Proceeds from
common stock - 52,000 40,985 92,985
Net Cash Provided by
Financing Activities - 55,374 40,985 96,359
INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS - (35,667) 39,673 4,006
CASH AND CASH
EQUIVALENTS AT BEGINNING
OF PERIOD - 39,673 - -
CASH AND CASH
EQUIVALENTS AT
END OF PERIOD $ - $ 4,006 $ 39,673 $4,006
The acompanying notes are an integral part of these financial statements
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
Statements of Cash Flows (Continued)
From
For the Inception on
Nine Months September 1,
Ended 1998 Through
September 30, December 31, September 30
1998 1999 1998 1999
(Unaudited) (Unaudited) (Unaudited)
NON-CASH FINANCING ACTIVITIES:
Issuance of stock for
payment on notes payable
and interest $ - $ 179,000 $ - $ 179,000
Purchase of assets
for notes payable $ - $ - $ 300,790 $ 300,790
Common stock
issued for services $ - $ - $ 31,500 $ 31,500
Cash Paid For
Interest $ - $ - $ - $ -
Income taxes $ - $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 1999
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the
Company without audit In the opinion of management all adjustments
(which include only normal recurring adjustments) necessary to present
fairly the financial position, results of operations and cash flows at
September 30, 1999 and 1998 and for all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and note thereto included in the Company's December 31, 1998
audited financial statements. The results of operations for periods ended
September 30, 1999 and 1998 are not necessarily indicative of the operating
results for the full years
NOTE 2 - 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. Until that time, the stockholders have committed to covering
the operating costs of the Company
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1998
CONTENTS
Independent Auditors' Report
Balance Sheet .
Statement of Operations .....
Statement of Stockholders' Equity
Statement of Cash Flows .........
Notes to the Financial Statements . .
Jones, Jesen&
Company, LLC
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS
INDEPENDENT AUDITORS'REPORT
To the Board of Directors
Fresh Breath Industries, Inc.
Vernon, British Columbia
We have audited the accompanying balance sheet of Fresh Breath
Industries, Inc. (a development stage company) as of December 31,
1998 and the related statements of operations, stockholders' equity
and cash flows from inception on September 1, 1998 through December
31, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our 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 our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Fresh Breath Industries,
Inc. (a development stage company) as of December 31, 1998 and the results
of its operations and its cash flows from inception on September 1, 1998
through December 31, 1998 in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company is a development stage company with no
significant operating revenues to date which together raise substantial
doubt about its ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 3. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainlty
Jones, Jensen & Company
Salt Lake City, Utah
February 22, 1999
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
December 31,
1998
CURRENT ASSETS
Cash $ 39,673
Total Current Assets 39,673
OTHER ASSETS
Distribution rights
(net) (Note 4) 307,558
Total Other Assets 307,558
TOTAL ASSETS $ 347,231
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 5,000
Notes payable -
related parties 130,790
Accrued interest 5,982
Notes payable
(Note 4) 170,000
Total Current
Liabilities 311,772
Total Liabilities 311,772
COMMITMENTS (Note 7)
STOCKHOLDERS' EQUITY
Common stock, $0.001
par value, authorized
50,000,000
shares; 7,800,000
shares issued and
outstanding 7,800
Stock subscription
receivable (5,515)
Additional paid-in
capital 70,200
Deficit accumulated
during the development
stage (37,026)
Total Stockholders'
Equity 35,459
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 347,231
The accompanying notes are an integral part of these financial statements.
4
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
Statement of Operations
From
Inception on
September 1
1998 through
December 31
1998
REVENUE $ -
OPERATING EXPENSES
Amortization expenses 9,032
Professional services 5,787
General and administrative 16,225
Total Operating Expenses 31,044
OTHER EXPENSES
Interest expense 5,982
Total Other Expenses 5,982
NETLOSS (37,026)
BASIC LOSS PER SHARE (0.01)
The accompanying notes are an integral part of these financial statements.
5
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
Statement of Stockholders' Equity
Deficit
Accumulated
Additional Stock During the
Common Stock Paid-in Subscriptions Development
Shares Amount Capital Received Stage
From inception of
development
stage, August 31,
1998 - $ - $ - $ - $ -
September 15, 1998,
common stock issued
for cash at $0.01
per share 400,000 400 3,600 - -
September 15, 1998,
common stock issued
for services at
$0.01 per
share 2,550,000 2,550 22,950 - -
November 15, 1998,
common stock issued
for services at
$0.01 per
share 600,000 600 5,400 - -
December 1, 1998,
common stock issued
for cash at
$0.01 per
share 4,250,000 4,250 38,250 (5,515) -
Net loss for
the year ended
December 31,
1998 - - - - (37,026)
Balance, December
31, 1998 7,800,000 $ 7,800 $ 70,200 $ (5,515) $ (37,026)
The accompanying notes are an integral part of these financial statements.
6
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
Statement of Cash Flows
From
Inception on
September 1
1998 through
December 31,
1998
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) from operations $ (37,026)
Adjustments to reconcile
net (loss) to net cash
used by operating activities:
Amortization expense 9,032
Common stock issued for services 31,500
Changes in operating assets and
liabilities:
Increase (decrease) in
accounts payable 5,000
Increase (decrease) in
interest payable 5,982
Net Cash Provided by Operating Activities 14,488
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of distribution rights (15,800)
Net Cash (Used) by Investing Activities (15,800)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from common stock 40,985
Net Cash Provided by Financing Activities 40,985
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 39,673
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD -
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 39,763
NON-CASH FINANCING ACTIVITIES:
Purchase of distribution rights
for notes payable $ 300,790
Cash Paid For:
Interest -
Income taxes -
The accompanying notes are an integral part of these financial statements.
7
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
On September 1, 1998, Fresh Breath Industries, Inc. (the Company) was
incorporated under the laws of Nevada to engage in marketing cigars and
cigar-related products.
The Company has authorized 50,000,000 shares of $0.001 par value
common stock. The Company has elected a calendar year end.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a December 31 year end.
b. Cash Equivalents
The Company considers all highly liquid investment with a maturity of
three months or less when purchased to be cash equivalents.
c. 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 and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
d. Income Taxes
No provision for federal income taxes has been made at December 31, 1998
due to accumulated operating losses. The minimum state franchise tax has
been accrued.
The Company has accumulated approximately $31,000 of net operating losses
as of December 31, 1998, which may be used to reduce taxable income and
income taxes in future years through 2013. The use of these losses to
reduce future income taxes will depend on the generation of sufficient
taxable income prior to the expiration of the net operating loss
carryforwards.
In the event of certain changes in control of the Company, there will
be an annual limitation on the amount of net operating loss carryforwards
which can be used. The potential tax benefits of the net operating loss
carryforwards have been offset by a valuation allowance of the same amount.
8
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998
NOTE 3 - 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. The Company has not established revenues sufficient to cover
its operating costs and allow it to continue as a going concern. Management
believes that the Company will soon be able to generate revenues sufficient
to cover its operating costs through the sales of products under its
distribution rights. Currently, management is committed to covering
all operating and other costs until sufficient revenues are generated.
NOTE 4 - DISTRIBUTION RIGHTS
The Company has entered into various agreements with related companies
to purchase the distribution rights of breath freshening products. The
distribution rights are amortized over the estimated useful life of 7
years using the straight-line method of amortization.
December 31,
1998
On October 25, 1998, the Company bought for
the sum of $50,000 and 100,000 shares of its common
stock, the product-line rights which include the assets,
exclusive distributor rights, and promotional materials of
J&D Cigar Company, Ltd. $ 51,000
On October 21, 1998, the Company bought for the sum
of $130,000 the product-line called Cigar Gone, Coffee
Gone and other breath-related products. 130,000
On October 16, 1998, the Company bought for the sum of
$135,590 which consists of $130,590 and 500,000 shares
of its common stock equaling $5,000, the exclusive Canadian
distribution rights to Irvine Breath Products and Gel Cap
Breath Freshener product-lines. 135,590
Total 316,540
Less: accumulated amortization 9,032
Total Distribution Rights 307,558
Notes payable related to distribution 6ghts equaled $300,790 notes and
interest is imputed at 10% per annum. All amounts are current payables
and due before December 31, 1999.
9
FRESH BREATH INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998
NOTE 5 - COMMON STOCK TRANSACTIONS
During the month of December 1998, the Company had a 504 Common Stock
issuance. 4,250,000 shares were issued at $0.01; the gross proceeds of
which totaled $42,500. $5,515 was received subsequent to December 31,
1998. In September 1998, 2,550,000 shares were issued at $0.01 for
services, and 400,000 shares were issued for cash at $0.01. In November
1998, 600,000 additional shares were issued at $0.01 for services rendered,
totaling 7,800,000 shares outstanding at December 31, 1998.
NOTE 6 - RELATED PARTY TRANSACTIONS
An officer of Quantum Cigar Corporation and 545-205 B.C. Ltd., who is
also an officer of the Company, which held the distribution rights of
Irvine Breath Products, sold these rights to the Company (Note 4). The
officer is owed $130,790 at December 31, 1998.
NOTE 7 - COMMITMENTS
The Company has agreed to purchase from the licensor of some of its
products, inventory at a cost of $16,000 and packaging at a cost of $4,000.
10
PART III
ITEM 1. Index to Exhibits
The following exhibits are filed with this Registration Statement.
Exhibit Number Exhibit Name
3.1 Article of Incorporation
3.2 By-Laws of Registrant
10.1 Acquisition Agreements
27. Financial Data Schedule
2. Description of Exhibits
10.1(a) October 16, 1998 - Canadian Distribution Agreement
(b) October 21, 1998 - Product Line Acquisitions
Cigar Gone and other related products
(c) October 25, 1998, Product Line Rights
Inventory and other assets of J&D Cigar Company, Ltd.
A-1
SIGNATURES
In accordance with Section 12 of the Securities and Exchange
Act of 1934, the registrant caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly organized.
FRESH BREATH INDUSTRIES, INC.
(Registrant)
Dated 6/2/99 By:Kenneth Trociuk
President
By:Frank Baroudi
Vice President
By: Cathtrine Edwards
Secretary
. FILED
IN THE OFFICE OFTHE
SECRETARY OFSTATE OF THE
STATEOFNEVADA
Articles ofIncorporation
for
FRESH BREATH INDUSTRIES INC.
DEAN HELLER, SECRETARY OF STATE
Know all men by these presents:
That the undersigned, have this day voluntarily 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 Statutes 78.090 inclusive, as amended, and certify that;
1. The name of the corporation is FRESH BREATH INDUSTRIEES, INC.
2. Offices for the transaction of any business of the corporation,
and where meetings of the board of Directors and 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:
50,000,000 shares of common stock, $0.001 par value.
5. The members of the goveming board of the corporation shall be
styled directors, of which there shall be one or more, with the
exact number to be fixed by the by-laws of the corporation, provided
the number so fixed by the by-laws may be increased or decreased from
time to time. Directors of the corporation need not be stockholders.
The FIRST BOARD OF DIRECTORS shall consist of TWO director(s) and the
names and addresses are as follows:
(1) JEFF WALTERS, 139 SACKVILLE DRIVE SW, CALGARY, ALBERTA CANADA T2W OW4
(2) DOUG McPHEE, #3 SIERRA VISTA CIRCLE, CALGARY, ALBERTA, CANADA T311 3A6
6. This corporation shall have perpetual existence.
7. This corporation shall have a President , Secretary, a treasurer,
and a resident agent, to be chosen by the
Board of Directors. Any person may hold two or more offices.
8. The Resident Agent of this corporation shall be:
RITE, INC., 1905 S. Eastern Ave., Las Vegas, NV 89104
9. The stock of this corporation, after the fixed consideration
thereof has been paid orperformed, shall not
be subject to assessment, and no individual stockholder
shall be liable for the debts and liabilities of the
Corporation. The Articles of Incorporation shall never be
amended as to the aforesaid provisions.
10. No Director or Officer of this Corporation shall be personally
liable to the Corporation or to any of its stockholders for damages
for breach of fiduciary duty as a director or officer involving any act or
commission 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 of 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 by the Stockholders
shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director or officer of
the Corporation for acts or omissions prior to such repeal or modification.
SIGNATURE OF INCORPORATOR:
FOR
FRESH BREATH INDUSTRIES, INC.
1, the undersigned, being the incorporator 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 31 ST day August, 1998
Dolores J. Passaretti 1905 S. Eastern Ave., Las Vegas, NV 89104
State of Nevada )
County of Clark)
On the 31st day of Augus 1998, personally known to me to be the person whose
names are subscribed to the within ument and ac ed to me that they
executed the same in their authorized capacity.
Noal D. Farmer
NOTARY PUBLIC
STATE OF NEVADA
County ot Ciark
NOAL D. FARMER
Commission Expires July 8, 2000
BY-LAWS
OF
FRESH BREATH INDUSTRIES, INC.
A NEVADA CORPORATION
ARTICLE ONE
OFFICES
Section 1. 1. Registered Office - The registered office of this
corporation shall be in the County of CLARK State of Nevada.
Section 1.2. Other Offices - The corporation may also have
offices at such other places both within and without the State
of Nevada as the Board of Directors may from time to time determine
or the business of the corporation may require.
ARTICLE TWO
MEETINGS OF STOCKHOLDERS
Section 2. 1. Place - All annual meetings of the stockholders shall
be held at the registered office of the corporation or at such other
place within or without the State of Nevada as the directors shall
deterniine. Special meetings of the stockholders may be held at such
time and place within or without the State of Nevada as shall be stated
in the notice of the meeting, or in a duly executed waiver of notice
thereof
Section 2.2. Annual Meetings Annual meetings of the stockholders,
commencing with the year 1999 shall be held on the 15th- day of
AUGUST each year if not a legal holiday and, if a legal holiday,
then on the next secular day following, or at such other time as
may be set by the Board of Directors from time to time, at which
the stockholders shall elect by vote a Board of Directors and transact
such other business as may properly be brought before the meeting
Section 2.3. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the Articles of
Incorporation, may be called by the President or the Secretary by
resolution of the Board of Directors or at the request in writing of
stockholders owning a majority in amount of the entire capital stock
of the corporation issued and outstanding and entitled to vote. Such
request shall state the purpose of the proposed meeting.
Section 2.4. Notices of Meeting - Notices of meetinas shall be in
writing and signed by the President or a Vice-President or the Secretary
or an Assistant Secretary or by such other person or persons as the
directors shall designate. Such notice shall state the purpose or
purposes for which the meeting is called and the time and the place,
which may be within or without this State, where it is to be held. A
copy of such notice shall be either delivered personally to or shall
be mailed, postage prepaid, to each stockholder of record entitled to
vote at such meeting not less than ten nor more than sixty days before
such meeting. If mailed, it shall be directed to a stockholder at his
address as it appears upon the records of the corporation and upon such
mailing of any such notice, the service thereof shall be complete and the
time of the notice shall being to run from the date upon which such notice
is deposited in the mail for transmission to such stockholder. Personal
delivery of any such notice to any officer of a corporation or association
or to any member of a partnership shall constitute delivery of such notice
to such corporation, association or partnership. In the event of the
transfer of stock after delivery of such notice of and prior to the
holding of the meeting it shall not be necessary to deliver or mail
notice of the meeting to the transferee.
Section 2.5. Purpose of Meetings - Business transacted at any special
meeting of stockholders shall be limited to the purposes stated in the
notice.
Section 2.6. Qourom - The holders of a majority of the stock issued and
outstandincy and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings
of the stockholders for the transaction of business except as otherwise
provided by statute or by the Articles of Incorporation. If, however.
such quorum shall not be present or represented at any meeting, of the
stockholders, the stockholders entitled to vote thereat, present in person
or represented by proxy, shall have power to adjourn the meeting from time
to time, without noti announcement at the meetincy, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall
be present or represented, any business may be transacted which might have
been transacted at the meeting as originally notified.
Section 2.7. Voting - When a quorum is present or represented at any
meetin, the vote of the holders of a majority of the stock having voting
power present in person or represented by proxy shall be sufficient to
elect directors or to decide any questions brought before such meeting,
unless the question is one upon which by express provision of the statutes
or of the Articles of Incorporation, a different vote is required in which
case such express provision shall govern and control the decision of such
question
Section 2.8. Share Votin - Each stockholder of record of the corporation
shall be entitled at each meeting of stockholders to one vote for each share
of stock standing 'in his name on the books of the corporation. Upon the
demand of any stockholder, the vote for directors and the vote upon any
question before the meeting shall be by ballot.
Section 2.9. RLoxy - At any meeting of the stockholders any
stockholder may be represented and vote by a proxy or proxies
appointed by an instrument in writing. In the event that any such
instrument in writing shall designate two or more persons to act as
proxies, a majority of such persons present at the meeting, or, if
only one shall be present, then that one shall have and may exercise
all of the powers conferred by such written instrument upon all of the
persons so designated unless the instrument shall
o proxy or power of attorney to vote shall be used to vote at a
meeting of the stockholders unless it shall have been filed with
the secretary of the meeting when required by the inspectors of
election. All questions regarding the qualification of voters, the
validity of proxies and the acceptance or rejection of votes shall
be decided by the inspectors of election who shall be appointed by
the Board of Directors, or if not so appointed, then by the presiding
officer of the meeting
Section 2. 10. Written Consent in Lieu of Meqiqg - Any action which
may be taken by, even if successors are not el
s on the Board of Directors resulting therefrom shall be filled only by the
stockholders.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in case of the death, resionation or removal of any directors,
or if the authorized number of directors be increased, or if the
stockholders fail at any annual or special meeting of stockholders
at which any director or directors are elected to elect the full
authorized number of directors to be voted for at that meeting.
The stockholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. If the Board of
Directors accepts the resignation of a director tendered to take effect
at a future time, the Board or the stockholders shall have power to elect
a successor to take office when the resignaconstitute the whole board shall
be not I ess 3 - (-L). The number of
directors may from time to time be increased or decreased to not less
than one nor more than fifteen by action of the Board of Directors. The
directors shall be elected at the annual meeting of the stockholders and
except as provided in Section 2 of this Article, each director elected
shall hold office until his successor is elected and qualified. Directors
need not be.
Section 3.3. Vacancies - Vacancies in the Board of Directors including those
caused by an increase in the number of directors, may be filled by a
majority of the remainina directors, though less than a quorum or by a
sole remaining director, and each director so elected shall hold office
until his successor is elected at an annual or a special meeting of the
stockholders. The holders of a two-thirds of the outstanding shares of
stock entitled to vote may at any time peremptorily terminate the term of
office of all or any of the directors by vote at a meeting called for such
purpose or by a written statement filed with the secretary or, in his
absence, with any other officer. Such removal shall be effective
immediately, for special meetings of the Board of Directors.
Section 4.3. Regular Meting - Regular meetings of the Board of Directors
may be held without call or notice at such time and at such place as shall
from time to time be fixed and determined by the Board of Directors.
Section 4.4. Special Meetings - Special Meetings of the Board of Directors
may be called by the Chairman or the President or by any Vice-President or
by any two directors.
Written notice of the time and place of special meetings shall be delivered
personally to each director, or sent to each director by mail or by other
form of written communication, charges prepaid, addressed to him at his
address as it is shown upon the records or is not readily ascertainable,
at the place in which the meetings of the directors are regularly held. In
case such notice is mailed or telegraphed, it shall be deposited in the
United States mail or delivered to the telegraph company at lease for
hours prior to the time of the holding of the meeting. In case such notice
is delivered as above provided, it shall be so delivered at lease
twenty-four (24) hours prior to the time of the holding of the meeting.
Such mailing, telegraphing or delivery as above provided shall be due,
legal and personal notice to such director.
Section 4.5. Notice - Notice of the time and place of holding an adjourned
meeting need not be given to the absent directors if the time and place be
fixed at the meeting adjourned.
Section 4.6. Waiver - The transactions of any meeting of the Board of
Directors, however called and noticed or wherever held, shall be as valid
as though had at a meeting duly held after regular call and notice, if a
quorum be present, and if, either before or after the meeting, each of the
directors not present signs a written waiver of notice, or a consent to
holdinc, such meeting, or an approval of the minutes thereof. All such
waivers, consents or approvals shall be filed with the corporate records or
of the minutes of the meeting
Section 4.7. Quorum - A majority of the authorized number of directors shall
be necessary to cs or alternate members shall constitut
r the transaction of business, and the act of a majority of the members or
alternate members at any meeting at which there is a quorum shall be the
act of the committee.
Section 5.2. Regular Minutes - The cornmittees shall keep regular minutes
of their proceedings and report the same to the Board of Directors.
Section 5.3. Written Consent - Any action required or permitted to be
taken at any meeting of the Board of Directors or of any conunittee thereof
may be taken without a meeting if a written consent thereto is signed by all
members of the Board of Directors or of such committee, as the case may be,
and such written consent is filed with the minutes of proceedings of the
Board or commitee.
ARTICLE SIX
COMPENSATION OF DIRECTORS
Section 6. 1. Compensation - The directors may be paid their expenses
of attendance at each meetina of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors or
COMMITTEES OF DIRECTORS
Section 5. 1. Power to Designat - The Board of Directors may, by
resolution adopted by a majority of the whole Board, designate one
or more committees of the Board of Directors, each conuriittee to
consist of one or more of the directors of the corporation which,
to the extent provided in the resolution, shall have and may exercise
the power of the Board of Directors in the management of the business
and affairs of the corporation and may have power to authorize the seal
of the corporation to be affixed to hich may require it. Such coninuittee
or committees shall have such name or names as may be determined from time
to time by the Board of Directors. The members of any such committee present
at any meeting and not disqualified from voting may, whether or not they
constitute a quorum, unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any absent or disqualified
member. At meetings of such committees, a majority of the members or
alternate members shall constitut as if had at a meeting regularly
called and noticed, and at such meeting any business may be transacted
which is not excepted from the written consent or to the consideration
of which no objection for want of notice is made at the time, and if any
meeting be irregular for want of notice or of such consent, provided a
quorum was present at such meeting, the proceedings of said meeting may
be ratified and approved and rendered likewise valid and the irregularity
or defect the having the right to vote at such meeting; and such consent
or approval of stockholders may be by proxy or attorney, but all such
proxies and powers of attorney must be in writing.
Section 7.3. Waiver of Notice - Whenever any notice whatever is
required to be given under the provisions of the statutes, of the
Articles of Incorporation or of these Bylaws, a waiver thereof in
writing, slianed by the person or persons entitled to said notice,
whether befos having the right
to vote at such meeting; and such consent or approval of stockholders
may be by proxy or attorney, but all such proxies and powers of attorney
must be in writing.
Section 7.3. Waiver of Notice - Whenever any notice whatever is required
to be given under the provisions of the statutes, of the Articles of
Incorporation or of these Bylaws, a waiver thereof in writing, slianed
by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent thereto.
ARTICLE EIGHT
OFFICERS
Section 8. 1. Appointment of Officers - The officers of the corporation
shall be chosen by the Board of Directors and shall be a President, a
Secretary and a Treasurer. Any person may hold two or more offices.
Section 8.2. Time of Appointment - The Board of Directors at its first
meeting after each annual meeting of stockholders shall choose a Chairman
of the Board who shall be a director, and shall choose a President, a
Secretary and a Treasurer, none of whom need be directors.
Section 8.3. Additional Officers - The Board of Directors may appoint a
ViceChairman of the Board, Vice-Presidents and one or more Assistant
Secretaries and Assistant Treasurers and such other officers and agents
as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board of Directors.
Section 8.4. Salaries - The salaries and compensation of all officers of
the corporation shall be fixed by the Board of Directors.
Section 8.5. Vacancies - The officers of the corporation shall hold
office at the pleasure of the Board of Directors. Any officer elected
or appointed by the Board of Directors may be removed at any time by
the Board of Directors. Any vacancy occurring in any office of the
corporation by death, resionation, removal or otherwise shall be filled
by the Board of Directors.
Section 8.6. Chairman of the Board - The Chairman of the Board shall
preside at meetings of the stockholders and the Board of Directors, and
shall see that all orders
and resolutions of the Board of Directors are carried into effect.
Section 8.7. Vice-Chairman - The Vice-Chairman shall, in the absence or
disability of the Chairman of the Board, perform the duties and exercise
the powers of the Chairman of the Board and shall perform such other duties
as the Board of Directors may from time to time prescribe.
Section 8.8. President - The President shall be the chief executive officer
of the corporation and shall have active management of the business of the
corporation. He shall execute on behalf of the corporation all instruments
requiring such execution except to the extent the signing and execution
thereof shall be expressly designated by the Board of Directors to some
other officer or agent of the corporation.
Section 8.9. Vice-President - The Vice-President shall act under the
direction of the President and in the absence or disability of the
President shall perform the duties and exercise the powers of the
President. They shall perform such other duties and have such other
powers as the President or the Board of Directors may from time to
time prescribe. The Board of Directors may designate one or more Executive
VicePresidents or may otherwise specify the order of seniority of the Vice-
Presidents. The duties of the President shall descend to the Vice-Presidents
in such specified order of seniority.
Section 8.10. Secret - The Secret shall act under the direction of the
President. Subject to the direction of the President he shall attend an
meetings of the Board of Directors and all meetinas of the stockholders
and record the proceedings. He shall perform like duties for the standing
committees when required. He shall give, or cause to be given, notice of
all meetinas of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by
the President of Board of Directors.
Section 8.11. Assistant Secretaries - The Assistant Secretaries shall act
under the direction of the President. In order of their seniority, unless
otherwise determined by the President or the Board of Directors, they shall,
in the absence or disability of the Secretary, perform the duties and
exercise the powers of the Secretary. They shall perform such other duties
and have such other powers as the President or the Board of Directors may
from time to time prescribe.
Section 8.12. Treasurer - The Treasurer shall act under the direction of
the President. Subject to the direction of the President he shall have
custody of the corporate funds and securities and shall keep full and
accurate accounts of receipts and disbursements in books belonging to
the corporation and shall deposit all monies and other valuable effects
in the name and to the credit of the corporation in such depositories as
may be designated by the Board of Directors. He shall disburse the funds
of the comay be ordered by the President or the Board of Directors, taking
proper vouchers for such disbursements, and shall render to the President
and the Board of Directors, at its regular meetings, or when the Board of
Directors so requires, an account of all his transactions as Treasurer and
of the financial condition of the corporation.
Section 8.13. Suret - If required by the Board of Directors, he shall
give the corporation a bond in such sum and with such surety or sureties
as shall be satisfactory to the Board of Directors for the faithful
performance of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
corporation.
Section 8.14. Assistant Treasurer - The Assistant Treasurer in the order
of their seniority, unless otherwise determined by the President or the
Board of Directors, shall, in the absence or disability of the Treasurer,
perform the duties and exercise the powers of the Treasurer. They shall
perform such other duties and have such other powers as the President or
the Board of Directors may from time to time prescribe.
ARTICLE NINE
CERTIFICATES OF STOCK
Section 9. 1. Share Certificates - Every stockholder shall be entitled to
have a certificate si-ned by the President or a Vice-President and the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary of the corporation, certifying the number of shares owned by
him in the corporation. If the corporation shall be authorized to issue
more than once class of stock or more than one series of any class, the
designations, preferences and relative, participating, optional or other
special various classes of stock or series thereof and the qualifications,
limitations or restrictions of such rlcrhts, shall be set forth in full or
sun-imarized on the face or back of the certificate which the corporation
shall issue to represent such stock.
Section 9.2. Transfer Agents - If a certificate is signed (a) by a
transfer agent other than the corporation or its employees or (b) by a
registrar other than the corporation or its employees, the signatures of
the officers of the corporation may be facsimiles. In case any officer who
has signed or whose facsimile signature has been placed upon a certificate
shall cease to be such officer before such certificate is issued, such
certificate may be issued with the same effect as though the person had
not cea
h officer. The seal of the corporation, or a facsimile thereof, may, but
need not be, affixed to certificates of stock.
Section 9.3. Lost or Stolen Certificates - The Board of Directors may
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the corporation alleged
to have been lost or destroyed upon the making of an affidavit o that fact
by the person claiming the certificate of stock to be lost or destroyed.
When authorizing such issue of a new certificate or certificates, the Board
of Directors may, in its discretion and as a condition precedent to the i
of, require the owner of such lost or destroyed certificate or certificates,
or his legal representative, to advertise the same in such manner as it shall
require and/or give the corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost or destroyed.
Section 9.4. Share Transfers - Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority
to transfer, it shall be the duty of the corporation, if it is satisfied
that all provisions of the laws and regulations applicable to the
corporation regarding transfer and ownership of shares have been complied
with, to issue a new certificate to the person entitled thereto, cancel
the record the transaction upon its books.
Section 9.5. Voting Shareholder - The Board of Directors may fix in
advance a date not exceeding sixty (60) days nor less than ten (10) days
preceding the date of any meetin g of stockholders, or the date for the
payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go
into effect, or a date in connection with obtaining the consent of In
stockholders for any purpose, as a record date for the detem-iination of
the stockholders entitled to notice of and to vote at any such meeting,
and any adjournment thereof, or entitled to receive payment of any such
dividend, or to give such consent, and in such case, such stockholders.
and only such stockholders as shall be stockholder of record on the date
so fixed, shall be entitled to notice of and to vote at such meeting, or
any adjournment thereof, or to receive payment of such dividend, or to
receive of rights, or to exercise such rights, or to give such consent,
as the case may be, notwithstanding any transfer of any stock on the books
of the corporation after any such record date fixed as aforesaid.
Section 9.6. Shareholders Record - The corporation shall be entitled
to recognize the person registered on its books as the owner of shares
to be the exclusive owner for all purposes including voting, and dividends,
and the corporation shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person
, whether or not it shall have express or other notice thereof, except as
other wise provided by the laws of Nevada.
ARTICLE TEN
GENERAL PROVISIONS
Section 10.1. Dividends - Dividends upon the capital stock of the
corporation, subject to the provisions of the Articles of Incorporation,
if any, may be declared by the Board of Directors at any recrular or
special meeting, pursuant to law. Dividends may be paid in cash, in
property or in shares of the capital stock, subject to the provisions
of the Articles of Incorporation.
Section 10.2. Reserves - Before payment of any dividend, there may be
set aside out of any funds of the corporation available for dividends
such sum or sums as the directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies,
or for equalizing dividends or for repairing or maintaining any property
of the corporation or for such other purpose as the directors shall think
conducive to the interest of the corporation, and the directors may modify
or reserve in the manner in which it was created.
Section 10.3. Checks - All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time designate.
Section 10.4. Fiscal Year - The fiscal year of the corporation shall be
fixed by resolution of the Board of Directors.
Section 10.5. CoMprate Seal - The corporation may or may not have a
corporate seal, as may from time to time be determined by resolution
of the Board of Directors. If a corporate seal is adopted, it shall
have inscribed thereon the name of the Corporation and the words
"Corporate Seals" and "Nevada". The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or in any manner
reproduced.
ARTICLE ELEVEN
INDEMNMCATION
Every person who was or is a party or is threatened to be made a party
to or is involved in any action, suit or proceeding-, whether civil,
criminal, administrative or investigative, by reason of the fact that
he or a person of whom he is the legal representative is or was a
director or officer of the corporation or is or was serving at the
request of the corporation or for its benefit as a director or officer
of another corporation, or as its representative in a partnership, joint
venture, trust or other
hall be indemnified and held harmless to the fullest extent legally
permissible under the General Corporation Law of the State of Nevada
from time to time against all expenses, liability and loss (including
attorneys' fees, judgments, fines and amounts paid or to be paid in
settlement) reasonably incurred or suffered by him in connection
therewith. The expenses of officers and directors incurred in defending
a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred
of the final disposition of the action, suit or proceeding upon receipt
of an undertaking by or on behalf of the director or officer to repay the
amount if it is ultimately deterriiined by a court of competent
jurisdiction that he is not entitled to be indemnified by the corporation.
Such right of indemnification shall be a contract right which may be
enforced in any manner desired by such person. Such right of
indemnification shall not be exclusive of any other right which such
directors, officers or represtative
may have or hereafter acquire and, without limiting the generality of
such statement, they shall be entitled to their respective rights of
indemnification under any bylaw, agreement, vote of stockholders, provision
of law or otherwise, as well as their rights under this Article.
The Board of Directors may cause the corporation to purchase and
maintain insurance on behalf of any person who is or was a director
or officer of the corporation, or is or was serving at the request of
the corporation as a director or officer of another corporation, or as
its representative in a partnership, joint venture, trust or other
enterprise against any liability asserted against such person and
incurred in any such capacity or arising out of such status, whether
or not the corporation would have to
indemnify such person.
The Board of Directors may from time to time adopt further Bylaws
with respect to indemnification and may amend these and such Bylaws
to provide at all times the ful.lest indemnification permitted by the
General Corporation Law of the State of Nevada.
ARTICLE TWELVE
AMENDMENTS
Section 121.1. By Shareholder - The Bylaws may be amended by a majority
vote of all the stock issued and outstanding and entitled to vote at any
annual or special meeting of the stockholders, provided notice of intention
to amend shall have been contained in the notice of the meeting.
Section 12.2. By Board of Directors - The Board of Directors by a majority
vote of the whole Board at any meeting may amend these Bylaws, including
Bylaws adopted by the stockholders, but the stockholders may from time to
time specify particular provisions of the Bylaws which shall not be amended
by the Board of Directors.
October APPROVED AND ADOPTED this 28th day of
'1998
Secretary
CERTIFICATE OF SECRETARY
I hereby certify that I am the Secretary of FRESH BREATH INDUSTRIES INC.
and that the foreaoing Bylaws, consisting of
pages, constitute the code of
Bylaws of FRFSH BREATH INDUSTRIES, INC, as duly adopted at a regular
meeting of
the Board of Directors of the corporation held Ortaher 28 1998
IN WITNESS WBEREOF, I have hereunto subscribed my name this
28th day of October 1998.
Secretary
Cathrine Edwards
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