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
FAMOUS INTERNET MALL, INC.
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(Name of Small Business Issuer in its Charter)
NEVADA 33-0786959
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11974 Avenida Consentido, San Diego, California 92128
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(Address of principal executive offices) (zip code)
Issuer's telephone number: (619) 675-4449
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
To be so registered each class is to be registered
Common Stock OTC Bulletin Board
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Securities to be registered under Section 12(g) of the Act:
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(Title of Class)
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(Title of Class)
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TABLE OF CONTENTS
COVER PAGE 1
TABLE OF CONTENTS 2
PART 1 3
DESCRIPTION OF BUSINESS 3
DESCRIPTION OF PROPERTY
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
REMUNERATION OF DIRECTORS AND OFFICERS
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN SECURITYHOLDERS
INTEREST OF MANAGEMENT AND OTHERS IN
CERTAIN TRANSACTIONS
SECURITIES BEING OFFERED
PART II
MARKET PRICE AND DIVIDENDS ON THE REGISTRANTS
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS
LEGAL PROCEEDINGS
CHANGES IN AND DISAGREEMENTS WITH ACCOUTANTS
RECENT SALES OF UNREGISTERED SECURITIES
INDEMNIFICATION OF DIRECTORS AND OFFICERS
PART F/S
FINANCIAL STATEMENTS
PART III
INDEX TO EXHIBITS
SIGNATURES
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PART I
The issuer has elected to follow Form 10-SB, Disclosure Alternative 2.
Item 6. Description of Business
BUSINESS
The Company is a development stage company. The Company was incorporated in
Nevada on February 5, 1998, as "Mall of Fame, Inc.", with authorized capital of
fifty million (50,000,000) shares of common stock, par value $0.001 per share.
On September 15, 1998 the Company amended its Articles of Incorporation to
change the name of the Company from "Mall of Fame, Inc." to "Famous Internet
Mall, Inc.".
On February 6, 1998, the Company commenced an offering, pursuant to Regulation D
of the Securities Act of 1933 (the "Act"), Rule 504, of up to 2,000,000 shares
of its common stock at a price of $0.05 per share. This offering was conducted
in order to raise money for working capital and inventory and was broken down as
follows: $25,000 for computer and office equipment, $20,000 for consulting fees,
$20,000 for web site development, $12,000 for officers salaries, $10,000 for
legal and accounting fees, $8,000 for working capital, and $5,000 for
miscellaneous expenses. On March 17, 1998, this offering was completed with all
shares being sold and issued for a total of $100,000 being received by the
Company. A Form D was filed on March 2, 1998, and an amendment, or thhe closing
Form D, was filed on April 17, 1998.
The going opinion of the independent accountant, as disclosed in the Company's
Independent Auditors Report attached to part F/S, is as follows:
"We have audited the balance sheet of Mall of Fame, Inc. (a
development stage company) as of March 20, 1998 and the related
statements of operations, shareholders' equity, and cash flows for the
period from February 5, 1998 (inception) through March 20, 1998. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
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 financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
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In our opinion, the financial statements referred to above present
fairly, in all material aspects, the financial position of Mall of
Fame, Inc. as of March 20, 1998, and the results of its operation and
its cash flows for the period from February 5, 1998 (inception)
through March 20, 1998 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note H to
the financial statements, the Company has incurred significant
operating losses and limited supply of cash, which 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 H. The
financial statements do not include any adjustments the might result
from the outcome of this uncertainty."
The consumer may access the Company over the Internet at the Company's Web site.
To access the Company's products, a user simply visits the Company's Web site at
http:/www.themalloffame.com.
The Company was has created and designed a fully functional, interactive
Internet Web Site which allows the public to access an Internet shopping mall
that markets and sell the products and/or services of celebrities (such as movie
and television stars, professional athletes, and professional musicians).
Industry Background
Growth of the Internet. The Internet has grown rapidly in recent years, spurred
by developments such as easy-to-use Web browsers, the availability of multimedia
personal computers ("PCs"), the adoption of more robust network architectures,
and the emergence of quality Web-based content and commercial applications. The
broad acceptance of the Internet Protocol ("IP") standard has also led to the
emergence of intranets and the development of a wide range of non-PC devices
that allow consumers to access the Internet and intranets. E-Land estimates that
the number of Web consumers worldwide will increase from approximately 36
million at the end of 1997 to approximately 142 million by the end of 2002. This
represents an average annual growth rate of 79 percent. The following graph
illustrates historic and projected use of the Internet:
[GRAPHIC OMITTED]
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Much of the Internet's rapid evolution towards becoming a mass medium can be
attributed to the accelerated pace of technological innovation, which has
expanded the Web's capabilities and qualitatively improved users' on-line
experiences. Most notably, the Internet has evolved from a mass of static,
text-oriented Web pages and e-mail services to a much richer environment,
capable of delivering graphical, interactive multimedia content.
The Internet as a New Medium for Advertising.
The rapidly increasing number of Web consumers and the ubiquitous access to the
Internet, both in the United States and internationally, have resulted in the
emergence of the Web as a new mass medium for advertising. An independent study
conducted by E-land estimates that the number of Web consumers doubled during
1996 to 19 million. A high rate of growth is expected to continue over the next
few years with over 140 million consumers anticipated by the year 2002,
including 64 million consumers in the United States alone.
The proliferation of workstations and personal computers served by local
networks has also resulted in the rapid increase in the number of potential
recipients of electronically distributed information. Forester Research
estimates that electronic delivery of information to corporate desktops alone
will generate approximately $800 million in revenues by the year 2001. The
Global Internet Project estimates that the amount of information on the Internet
is doubling each year and that the number of pages currently on the Internet is
approximately 11 million.
The Web is an attractive medium for advertising because of its interactivity,
flexibility, targetability, and measurability. Advertisers can reach audiences
and target advertisements to consumers with similar demographic characteristics,
specific regional populations, and affinity groups of selected individuals. The
interactive nature of the Web enables advertisers to determine customer
preferences, using these to initiate ongoing commercial relationships with
potential customers. Advertisers can easily change their impression levels, and
demographic information concerning consumers can be tracked and reported to
advertisers. According to e-land, Web advertising in the United States in 1996
was approximately $175 million and is expected to be as high as $8 billion by
the year 2002.
The Company has attempted to design its Web site to offer a large and
comprehensive selection celebrities and their services and products. The Company
is actively engaged in negotiations with numerous other potential entities that
may fit into the Company's plans and moreover the development of the Web site,
and furthermore, believes that it has many opportunities to quickly expand its
service following its election to become a fully-reporting public company.
Initially, however, the Company has pursued a strategy of maturing, or "beta
testing", its Web site by offering all access to its products free of charge,
partially as a means of encouraging a high level of usage. The Company believes
that active usage of the Web site has meaningfully accelerated development by
identifying problem areas and promoting the testing refinements. Based on
marketing and technical evaluation, the Company is currently initiating a
commercial strategy that contains the following elements: advertising,
electronic commerce, category product scanner fees, sales, and licensing.
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Eventually, the Company expects to derive a significant portion of its revenue
from advertising on it Web site. It intends to use two methods of advertising:
"banner" advertisements and product sponsorships. Sponsorships enable the
Company to charge for focused advertising related to specific entities or
products, including inspirational novels or books written by celebrities, to
compact discs sold by recording artists. Banner advertisements allow interested
consumers to link directly to the advertisers' own Web sites.
The Company is in the process of attempting to sell short-term advertising
contracts on a per impression basis or for a fixed-fee based on a minimum number
of impressions. Advertisements currently cost $2.00 per 30-second advertisement,
while the Company 's banner advertising rates generally range from $20 to $35
per one thousand impressions.
The Company's Web site is divided by type into specialty categories. The Web
site presently organizes the content into four categories. The categories
include Actors, Athletes, Musicians, and Politicians. The Company currently
intends to expand the number of categories during the third quarter of 1999. For
each of the categories on the company's Web site, the Company offers a premier
sponsorship to an advertiser who desires to be prominently displayed on the Web
site. Category sponsorships are currently priced at $20 per one thousand
impressions.
To enable advertisers to verify the number of advertisement playbacks or visual
impressions made by their advertisements and monitor their advertisement's
effectiveness, the Company provides its advertisers with reports showing data on
impressions and categories, and then selects advertisements specifically
targeted to a particular consumer's personal profile.
The Company intends to maximize its resources by contracting 3rd parties for
order fulfillment of physical merchandise; however, the Company will collect a
commission-based fee for all sales.
Demand for access to celebrities and their product continues to grow at a
phenomenal rate. The Company estimates that over 200 million fans, in the U.S.
alone, spend almost $100 billion each year on celebrity related products: from
movies and television, to sports, to music, plus the many other forms of
entertainment. Fans have an insatiable and desire to know every possible detail
about their favorite celebrity. They want to be able to interact in some way
with the celebrity and own something that was personalized by him or her.
Additionally, certain Celebrities have developed their own line of products
which they want to promote and they would welcome a way to assist their business
growth and exposure through 24 hour a day interaction with their fans and
potential consumers.
Source Transaction Electronic Commerce
The Company has implemented electronic merchandising ("e-commerce") to address
the purchasing interests of the ever-increasing number of consumers who are
accustomed to buying products over the Internet.
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Distribution Partnerships
The Company intends to develop partnerships with strategic Internet sites to
increase the traffic to its Web site categories. The Company is capable of
delivering consumers to other companies' Web sites in order to develop
additional streams of revenue. Incremental increases in traffic generated from
partnership sites will increase the frequency of advertisement impressions on
the company's Web site. The Company believes it can significantly increase total
advertising revenue from the increased traffic generated by partnered sites.
Web Site Design and Development. The Company intends to establish a "virtual
mall" where celebrities and famous people can present and sell any of their
products and/or services. Fans will be able to visit the Mall and purchase
products from a celebrity via credit and debit card orders. The transaction will
be able to be placed on-line (via a secured transaction) or fans will have the
option of calling a toll free number. The Company's site will allow the
estimated 60 million Internet users world-wide to have continual access to their
favorite celebrities products, 24 hours a day, seven days a week! Celebrities
with large fan followings will be listed on the site at no charge. Additional
Web pages may be designed for certain celebrities if the management of the
Company determines that it is in their best interest. Management has already
begun discussions with a number of celebrities who have expressed strong
interest. The Company plans to design the site to accommodate up to 10,000
celebrities and famous people.
World Wide Web Publishing Services. The Company offers a number of Internet
publishing services to its subscribers, including; (i) Web graphic design, (ii)
User interface design, (iii) Content creation and management, and (iv) Secure
financial transactions.
Web Graphic design. The Company's user interface design service focuses on
maximizing the ease with which Internet users can navigate through and use a
customer's Web site, regardless of the particular Internet software used.
Specifically, the Company makes recommendations as to which information should
be presented and what types of layouts and information organizations should be
used.
User Interface Design. The Company's Web graphic design and content creation and
management services assist customers in translating existing text and graphics
into HTML (hypertext markup language), an Internet publishing language, or other
Internet-compatible protocols. The Company also offers assistance to its
customers in developing, planning, and implementing a management process for the
customers' publication data and its appearance on the Internet.
Marketing and Sales
The Company attracts consumers to its Web site primarily through Web-based
promotions. These can take the form of either advertisements on other targeted
Web sites or e-mail directed at selected Internet consumers. This use of e-mail
is the Internet version of direct marketing, and the Company feels it shall be
proven to be an important method by which the Company may continue to promote
its Web site to an increasing number of registered consumers. To a lesser
extent, the Company plans to attract new customers through more traditional
media, such as print advertisements and spots on drive-time radio.
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The Company's in-house sales force develops and implements its advertising
strategies, including identifying strategic accounts and developing
presentations and promotional materials. As of July 1, 1999, the Company employs
one person to carry out its sales and marketing activities. That person has been
assigned to all the product industry segments and solicits advertising contracts
from companies in those industries and their agencies. The Company plans to
increase the size of its sales force as sales increase.
The Company also enters into cross-marketing relationships with other Web sites.
By putting click-through banners on other Web sites, traffic generated on one
Web site has the ability to move easily to the Company's Web site by simply
clicking on the banner.
Manufacturing
The Company does not plan to become a manufacturer or producer of any of the
services or products of the entities listed on its Web site.
Research and Development
Since its inception, the Company has devoted significant time and some financial
resources to research and development activities to develop its current products
and services. The Company anticipates that a portion of its ongoing operations
will continue to include research and development activities due to the rapid
technological evolution of Internet-based commerce. Research and development
expenditures were less than $1,000 in 1998. There is no assurance that the
Company will successfully develop these products or services, or that
competitors will not develop products or services sooner or products or services
that are superior to the Company's product or service offerings.
Patents, Trademarks and Proprietary Rights
The Company has not filed any patent applications with respect to its business.
Although the Company does not believe that would presently provide a competitive
advantage, there is no assurance that in the future patent protection will not
be of substantial importance to the Company's business and future prospects.
There is no assurance that a court having jurisdiction over a dispute
challenging their validity will not hold patents that may be issued to the
Company in the future invalid or unenforceable. Even if patents are upheld and
are not challenged, third parties might be able to develop equivalent
technologies or products or services without infringing such patents or the
Company could be required to expend substantial funds in order to defend its
patents.
There is no assurance that any particular aspect of the Company's technology
will not be found to infringe the rights of other companies. Other companies may
hold or obtain patents on inventions or may otherwise claim proprietary rights
to technology useful or necessary to the Company's business. The extent to which
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the Company may be required to seek licenses under such proprietary rights of
third parties, and the cost or availability of such licenses, cannot be
predicted. While it may be necessary or desirable in the future to obtain
licenses relating to one or more of its proposed products or relating to current
or future technologies, there is no assurance that the Company will be able to
do so on commercially reasonable terms, if at all.
There is no assurance that the measures taken by the Company will adequately
protect the confidentiality of the Company's proprietary information or that
others will not independently develop products, services or technologies that
are equivalent or superior to those of the Company. Moreover, the Company may
also be subject to litigation to defend against claims of infringement of the
rights of others or to determine the scope and validity of the intellectual
property rights to others. If competitors of the Company prepare and file
applications in the United States that claim trademarks used or registered by
the Company, the Company may oppose those applications and be required to
participate in proceedings before the United States Patent and Trademark Office
to determine priority or rights to the trademark, which could result in
substantial costs to the Company. Similarly, actions could be brought by third
parties claiming that the Company's products infringe patents owned by others.
An adverse outcome could require the Company to license disputed rights from
third parties or to cease using such trademarks or infringing products.
Any litigation regarding the Company's proprietary rights could be costly and
divert management's attention, result in the loss of certain of the Company's
proprietary rights, require the Company to seek licenses from third parties and
prevent the Company from selling its products and services, any one of which
could have a material adverse effect on the Company's business, results of
operations and financial condition. In addition, inasmuch as the Company obtains
a substantial portion of its content and all of its products from third parties,
its exposure to copyright infringement actions may increase because the Company
must rely upon such third parties for information as to the origin and ownership
of such licensed content or products. The Company generally attempts to obtain
representations as to the origins and ownership of such licensed content or
products and generally obtains indemnification to cover any breach of any such
representations; however, there can be no assurance that such representations
will be accurate or that such indemnification will adequately protect the
Company.
Competition
The Company will face intense competition in every aspect of its business,
including competition for consumers celebrity products and services. The
business of using the Internet as a medium is currently experiencing explosive
growth and is characterized by extremely rapid technological developments, rapid
changes in consumer habits and preferences, massive infusions of capital, and
the emergence of a large number of new and established companies with
aspirations to control as much of the Web products distribution process as
possible. A relatively small number of these companies, including America On
Line and Yahoo!, currently control primary or secondary access of significant
percentages of all Internet consumers and, therefore, have a competitive
advantage in marketing to those consumers. Other large and established
companies, such as local and long distance telephone companies, cable companies,
satellite programming providers, and others, have established relationships with
large customer bases and are rapidly expanding into the provision of Internet
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services. Although the Company does not believe that any of these companies have
financial, technological, promotional and other resources that are much greater
than those available to the Company. Most larger competitors could purchase
technology to provide services directly competitive with the Company.
The Company competes with (i) other Web sites and Internet broadcasters to
acquire and provide celebrity products and/or services to attract consumers,
(ii) online services, other Web site operators and advertising networks, as well
as traditional media such as television, radio and print, for a share of
advertisers' total advertising budgets, (iii) local radio, and television
stations and national radio and television networks for sales of advertising
spots, (iv) other Web site operators engaged in e- commerce, and (v) specialty
celebrity related product/service wholesalers and retail stores.
Competition among Web sites that provide access to consumer products is intense
and is expected to increase significantly in the future. The Company competes
against a variety of businesses that sell similar interests through one or more
media, such as print, radio, television, cable television and the Internet.
Traditional media companies that have not established a significant presence on
the Internet may expend resources to establish such a presence in the future.
The Company competes generally with other celebrity related interests for the
time and attention of consumers and for advertising revenues. To compete
successfully, the Company must contract to obtain and then provide over the Web
sufficiently compelling and popular celebrity products to attract consumers and
support advertising intended to reach such consumers. The Company believes that
the principal competitive factors in attracting Internet consumers include the
quality of products offered and the relevance, timeliness, depth and breadth of
content and services offered. The Company also competes for the time and
attention of Internet consumers with thousands of Web sites operated by
businesses and other organizations, individuals, governmental agencies and
educational institutions. The Company expects competition to intensify, and the
number of competitors to increase significantly in the future. In addition, as
the Company expands the scope of its products and services, it will compete
directly with a greater number of Web sites and other media companies. Because
the operations and strategic plans of existing and future competitors are
undergoing rapid changes, it is extremely difficult for the Company to
anticipate which companies are likely to offer competitive services or products
in the future.
The Company also competes with online services, other Web site operators and
advertising networks, as well as traditional media, such as television, radio
and print, for a share of advertisers' total advertising budgets. The Company
believes that the principal competitive factors for attracting advertisers
include the number of consumers accessing the Company's Web site, the
demographics of the Company's consumers, the Company's ability to deliver
focused advertising and interactivity through its Web site, and the overall
effectiveness and value of advertising offered by the Company. There is intense
competition for the same advertising on high-traffic Web sites, which has
resulted in a wide range of rates quoted by different vendors for a variety of
advertising services, making it difficult to project levels of Internet
advertising that will be realized generally or by any specific company. Any
competition for advertisers among present or future Web sites, as well as
competition with other traditional media for advertising placements, results in
significant price competition. The Company believes that the number of companies
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selling advertising and the available inventory of advertising space have
recently increased pricing pressure for the sale of advertisements. Reduction of
the Company's Web advertising revenues would have a material adverse effect on
the Company's business results of operations and financial condition. There is
no assurance that the Company will be able to compete in its chosen market.
Government Regulation
Although there are currently few laws and regulations directly applicable to the
Internet, it is likely that new laws and regulations will be adopted in the
United States, and elsewhere, covering issues like copyrights, privacy, pricing,
sales taxes and characteristics and quality of Internet services. It is possible
that governments will enact legislation that may be applicable to the Company in
areas such as content, network security, encryption and the use of key escrow,
data and privacy protection, electronic authentication or "digital" signatures,
illegal and harmful content, account charges and retransmission activities.
Moreover, the applicability to the Internet of existing laws governing such
issues such as property ownership, content, taxation, defamation and personal
privacy and commercialization of the Internet is presently uncertain and, as a
result, do not expressly contemplate or address the unique issues of the
Internet and related technologies. As such, export or import restrictions, new
legislation or governmental enforcement of existing regulations may limit the
growth of the Internet, increase the Company's cost of doing business, or
increase the Company's legal exposure, which could have a material adverse
effect on the Company's business, financial condition and results of operations.
By distributing products over the Internet, the Company faces potential
liability claims based on the nature and content of the material that it
distributes, including claims for defamation, negligence, copyright, patent or
trademark infringement, which claims have been brought, and sometimes
successfully litigated, against Internet companies. The Company's general
liability not covered by insurance or in excess of insurance coverage could have
a material adverse effect on the Company's business, results of operations and
financial condition.
Plan of Operations
The Company has formulated a plan of operations for the next twelve months as
detailed below. The Company intends to use the net proceeds of its Internet
sales and credit line, if and when established, to improve its inventory, Web
site advertising and promotions.
In the Company's opinion, proceeds from possible future equity funding and loans
will satisfy its cash requirements for the next twelve months. The Company has
financed its operations since inception from the sale of equity. During the next
six months certain funds will need to be raised. The Company has no engineering,
management or similar report that has been prepared or provided for external use
by the issuer or underwriter.
By the end of fiscal 1999, the Company plans to have successfully introduced its
product and service lines on the Internet and eliminated any technical
complications concerning its Web Site. In order to implement the strategic plan
and meet the Company's anticipated working capital needs, the Company estimates
that it will require $100,000 in capital.
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Despite low cash reserves, additional funds may be required in order to proceed
with the business plan outlined above. These funds would be raised through
additional private placements or other financial arrangements including debt or
equity. There is no assurance that such additional financing will be available
when required in order to proceed with the business plan or that the Company's
ability to respond to competition or changes in the market place or to exploit
opportunities will not be limited by lack of available capital financing. If the
Company is unsuccessful in securing the additional capital needed to continue
operations within the time required, the Company will not be in a position to
continue operations and the stockholders may lose their entire investment.
Employees
As of July 1, 1999, the Company has one full-time employee who is primarily
engaged in marketing and sales. Because the Company is in a developmental stage,
two part-time consultants provide services to the Company in the areas of
ongoing Web site support research and development and financial consulting. The
Company makes use of additional outside consultants and independent contractors
to perform various functions, such as legal matters, programming, engineering,
development, and accounting. The Company believes this approach not only allows
it to limit expenses, but also provides maximum flexibility to react to a
changing Internet business environment. The Company's employees are not
represented by a labor union. The Company believes that its employee relations
are good.
The Company's executive offices are located at 11974 Avenida Consentido, San
Diego, California 92128 in an approximately 300 square foot space. This space,
which houses all of the Company's current operations, is leased on a
month-to-month rental agreement. The monthly base rental payment under the
agreement is approximately $300.
The Company expects to have two full-time employees by the end of 1999. The
President will perform a multitude of company functions. A full-time office
manager will be added in the second year, which would include bookkeeping, as
well as accounts receivable and payable.
Legal Proceedings
The Company is not presently a party to any material litigation.
Item 8. Directors, Executive Officers and Significant Employees
The following information sets forth the names of the officers and directors of
the Company, their present positions with the Company and certain biographical
information.
Joseph G. Lucidi, 52, is the President and Chairman of the board. Mr. Lucidi is
currently serving as President and is also a Member of the Board of Directors.
His job responsibilities include general supervision and control of all of the
business and affairs of the Corporation. Mr. Lucidi's accomplishments in the
past, financially speaking, began back in 1973, when he purchased the Bar &
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Restaurant Supply Co. for $17,000 and later sold it in 1976 for $205,000. In
1974, he started a Milwaukee Electric Tool business and within two years, built
it into the largest dealership in the State of Michigan. He started this
business with relatively no cash and some minor inventory, and sold it in 1980
for $100,000. In 1975, he started a small drywall business and ran it for two
years, before deciding to dissolve the business in 1980, and it made
approximately $20,000 a year net profit. In 1976 he purchased and A&W Restaurant
for $135,000, and later sold the business in 1979 for $270,000. In 1982, after
selling all of his assets in the State of Michigan, he moved to California and
started Zips Tummy Buster, a submarine sandwich and pizza restaurant, in Kearny
Mesa. The original Zips Tummy Buster was built for about $100,000 and later sold
for $360,000. Between 1984 and 1989, Mr. Lucidi would build and operate five (5)
more Zips Tummy Busters in the San Diego area, all of which were eventually sold
for a gross profit in excess of $550,000. In 1988 he acquired the Hamburger
Factory for a purchase price of $80,000, which at the time was grossing about
$165,000.
Christopher Q. Lucidi, 21, is the Vice-President, Secretary, Treasurer and a
Director of the Company. Mr. Lucidi is currently the Vice President and a Member
of the Board of Directors. Prior to this position, Mr. Lucidi was the Chief of
Operations Officer, Secretary, Treasurer and a member of the Board of Directors
for Celebrity Network, Inc., a full service Internet site involving celebrities,
conducting business similar to the Company's proposed plans. With this in mind,
Mr. Lucidi poses to be a valuable asset to the Company. His responsibilities
while working with Celebrity Network included setting up and maintaining all
accounting records including accounts payable, accounts receivable, payroll,
taxes, and all incorporation filings, and business licenses. He was also in
charge of supervising day to day operations of Celebrity Network including the
marketing of their web site. Mr. Lucidi will apply his past knowledge in these
fields to help make the Company a success.
Item 9. Remuneration of Directors and Officers
The following table sets forth certain information as to the compensation
awarded to the Company's executive officers and directors for the fiscal year
ended December 31, 1998 and for the fiscal year which will end on December 31,
1999. No other compensation was paid or will be paid to any such officers other
than the cash compensation set forth below.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Other Restricted
Annual Stock Options/ LTIP All Other
Name Title Year Salary Bonus Compensation Awarded SARs(#) payouts($) Compensation
- ---- ----- ---- ------ ----- ------------ ------- ------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph G. Lucidi PRES., 1998 $0 $0 $0 -0- -0- -0- $0
COB 1999 $0 $0 $0 -0- -0- -0- $0
Christopher Q. Lucidi VP, 1998 $12,000 $0 $0 -0- -0- -0- $0
TRES., 1999 $0 $0 $0 -0- -0- -0- $0
SEC.,
Director
</TABLE>
In fiscal 1998, the aggregate amount of compensation paid to all executive
officers and directors as a group for services in all capacities was
approximately $12,000.00. There is no plan to pay any sort of compensation to
the executive officers and directors for services in fiscal 1999.
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<PAGE>
Item 10. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of July 1, 1999, the beneficial ownership of
the Company's Common Stock by each person known by the Company to beneficially
own more than five percent of the Company's Common Stock, including options,
outstanding as of such date and by the officers and directors of the Company as
a group. Except as otherwise indicated, all shares are owned directly.
(1) (2) (3) (4)
Name and address of Amount and Nature
Title of Class beneficial owner of beneficial owner Percent
- -------------- ---------------- ------------------- -------
Common Stock Christopher Q. Lucidi 3,000,000 60.0%
11962 Stoney Peak Drive, #1225 Restricted
San Diego, California 92128
Item 11. Interest of Management and Others in Certain Transactions
The Company has retained the services of Entrepreneur Investments, LLC
("EILLC"), a private investment banking firm that specializes in assisting
select companies with equity investment. EILLC provides guidance and
consultation to the Company, primarily in the areas of preparing the private
placement offering memorandum, corporate finance and public market development.
The Company will pay a cash fee of $20,000 as compensation for services to be
rendered by EILLC.
Item 12. Securities Being Offered
No sale of securities is authorized by this filing. The common stock of the
Company is being registered under Section 12(b) of the Securities Exchange Act
of 1934.
The Company has 50,000,000 common shares authorized. Each share of Common Stock
is entitled to share pro rata in dividends and distributions with respect to the
Common Stock when, as and if declared by the Board of Directors from funds
legally available for any of the Company's securities. Upon dissolution,
liquidation or winding up of the Company, the assets will be divided pro rata on
a share-for-share basis among holders of the shares of Common Stock after-any
required distribution to the holders of the preferred stock. All shares of
Common Stock outstanding are fully paid and non-assessable and the shares will,
when issued upon payment therefore as contemplated hereby, be fully paid and
non-assessable.
14
<PAGE>
Each holder of Common Stock is entitled to one vote per share with respect to
all matters that are required by law to be submitted to shareholders. As
quasi-California corporation under section 2115 of the California Corporations
Code, the Company's shareholders are entitled to cumulative voting in the
election of directors. The Company has no shares reserved for its directors and
consultants under a stock option plan.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Stockholder Matters
There is currently a limited public market for the Company's stock, as it is
listed on the NQB Pink Sheets. The Company has never paid dividends. At present,
the Company does not anticipate paying any dividends on its Common Stock in the
foreseeable future and intends to devote any earnings to the development of the
Company's business.
Item 2. Legal Proceedings
There are no legal proceedings pending or threatened against the Company.
Item 3. Changes In and Disagreements With Accountants
The Company has had no changes in or disagreements with its Accountants since
inception.
Item 4. Recent Sales of Unregistered Securities
On February 6, 1998, the Company commenced an offering, pursuant to Regulation D
of the Securities Act of 1933 (the "Act"), Rule 504, of up to 2,000,000 shares
of its common stock at a price of $0.05 per share. On March 17, 1998, this
offering was completed with all shares being sold and issued for a total of
$100,000 being received by the Company, consisting of a total of 24 accredited
and 11 unaccredited investors. The proceeds from this offering were used for
working capital, legal and accounting fees, consulting fees and office
equipment.
Item 5. Indemnification of Directors and Officers
So far as permitted by the Nevada Revised Statutes, the Company's Articles of
Incorporation provide that the Company will indemnify its Directors and Officers
against expenses and liabilities they may incur and defend, settle or satisfy
any civil or criminal action brought against them on account of their being or
having been Company Directors or Officers unless, in any such action, they are
adjudged to have acted with gross negligence or to have engaged in willful
misconduct. Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, and the Securities Exchange Act of 19-314,
as amended, (collectively, the "Acts") may be permitted to directors, officers
or controlling persons pursuant to foregoing provisions, the Company has been
informed that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Acts and is,
therefore, unenforceable.
15
<PAGE>
PART F/S
Financial Statements
The issuer only has available audited financial statements for the current
fiscal year which are filed as part of this Registration Statement starting on
page F-1.
PART III
Exhibits
Item 1. Index to Exhibits
Exhibit 3
3a. Articles
3b. Bylaws
Exhibit 28
28a. Consent of Accountant
28b. Consent of Attorney
Exhibit 99
99a. Private Placement Memorandum dated February 6, 1999
Item 2. Description of Exhibits
As listed in the above Index, the appropriate exhibits are being filed. The
additional exhibits are marked and filed. The issuer is not a Canadian issuer
and is not filing a written consent and power of attorney.
16
<PAGE>
FAMOUS INTERNET MALL, INC.
--------------------------
(Formerly Mall of Fame, Inc.)
(A DEVELOPMENT STAGE COMPANY)
Index to Financial Statements
Page
----
Independent auditors' report.............................................. F-2
Balance sheets, June 1999 and December 31, 1998........................... F-3
Statements of operations, for the six months ended June 30, 1999,
February 5, 1998 (inception) through December 31, 1998 and
February 5, 1998 (inception) through June 30, 1999..................... F-4
Statement of shareholders' equity, from February 5, 1998 (inception)
through June 30, 1999.................................................. F-5
Statements of cash flows, for the six months ended June 30, 1999,
February 5, 1998 (inception) through December 31, 1998 and
February 5, 1998 (inception) through June 30, 1999..................... F-6
Summary of significant accounting policies................................ F-7
Notes to financial statements............................................. F-9
F-1
<PAGE>
To the Board of Directors and Shareholders
Famous Internet Mall, Inc.
(Formerly Mall of Fame, Inc.)
INDEPENDENT AUDITORS' REPORT
We have audited the balance sheets of Famous Internet Mall, Inc. (a development
stage company) as of June 30, 1999 and December 31, 1998, and the related
statements of operations, shareholders' equity, and cash flows for the six
months ended June 30, 1999, for the period from February 5, 1998 (inception)
through December 31, 1998, and for the period from February 5, 1998 (inception)
through June 30, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Famous Internet Mall, Inc. as
of June 30, 1999 and December 31, 1998, and the results of its operations and
its cash flows for the six months ended June 30, 1999, from February 5, 1998
(inception) through December 31, 1998, and from February 5, 1998 (inception)
through June 30, 1999 in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note I to the financial
statements, the Company has recurring operating losses and a limited supply of
cash, which raises substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note I. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Cordovano and Harvey, P.C.
Denver, Colorado
September 13, 1999
F-2
<PAGE>
<TABLE>
<CAPTION>
FAMOUS INTERNET MALL, INC.
--------------------------
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
June 30, December 31,
1999 1998
---- ----
ASSETS
<S> <C> <C>
CASH ....................................................... $ 1,621 $ 3,546
DUE FROM OFFICER (Note B) .................................. 918 918
OTHER RECEIVABLES .......................................... 405 395
FURNITURE AND EQUIPMENT, less accumulated
depreciation of $10,346 and $6,375, respectively (Note D) 14,936 18,907
-------- --------
$ 17,880 $ 23,766
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable ........................................ $ -- $ 630
Accrued payroll taxes ................................... 3,336 1,836
-------- --------
TOTAL LIABILITIES 3,336 2,466
-------- --------
COMMITMENTS (Note H) ....................................... -- --
SHAREHOLDERS' EQUITY (Note F)
Common stock, $001 par value; 50,000,000 shares
authorized; 5,000,000 shares issued and outstanding .. 5,000 5,000
Additional paid-in capital .............................. 96,000 96,000
Deficit accumulated during development stage ............ (86,456) (79,700)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 14,544 21,300
-------- --------
$ 17,880 $ 23,766
======== ========
See accompanying summary of significant accounting policies and
notes to the financial statements.
F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FAMOUS INTERNET MALL, INC.
--------------------------
(Formerly Mall of Fame, Inc.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
February 5, February 5,
1998 1998
Six Months (Inception) (Inception)
Ended Through Through
June 30, December 31, June 30,
1999 1998 1999
---- ---- ----
OPERATING EXPENSES
<S> <C> <C> <C>
Salaries and payroll taxes ............................. $ -- $ 12,918 $ 12,918
Internet and web site development,
related party (Note B) .............................. -- 6,500 6,500
Internet and web site development ...................... -- 20,000 20,000
Consulting ............................................. -- 20,000 20,000
Legal and accounting ................................... 2,500 2,500 5,000
Stock transfer fees .................................... -- 2,000 2,000
Depreciation and amortization .......................... 3,971 6,409 10,380
Other .................................................. 285 3,264 3,549
----------- ----------- -----------
OPERATING LOSS (6,756) (73,591) (80,347)
NON-OPERATING INCOME (EXPENSES)
Investment income ...................................... -- 49 49
Loss on sale of marketable securities (Note C) ......... -- (6,158) (6,158)
----------- ----------- -----------
NET LOSS BEFORE INCOME TAXES (6,756) (79,700) (86,456)
INCOME TAXES (Note E) ...................................... -- -- --
----------- ----------- -----------
NET LOSS $ (6,756) $ (79,700) $ (86,456)
=========== =========== ===========
Basic loss per common share ................................ $ * $ (002) $ (002)
=========== =========== ===========
Basic weighted average common shares outstanding ........... 5,000,000 4,818,182 4,882,353
=========== =========== ===========
Diluted loss per common share .............................. $ * $ (002) $ (002)
=========== =========== ===========
Diluted weighted average common shares outstanding ......... 5,000,000 4,818,182 4,882,353
=========== =========== ===========
* Less than $01 per share
See accompanying summary of significant accounting policies and
notes to the financial statements.
F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FAMOUS INTERNET MALL, INC.
--------------------------
(Formerly Mall of Fame, Inc.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDER'S EQUITY
February 5, 1998 (inception) through June 30, 1999
Deficit
Accumulated
Additional During the Total
Common Stock Paid-In Development Shareholders'
Shares Par Value Capital Stage Equity
------ --------- ------- ----- ------
<S> <C> <C> <C> <C> <C>
Balance, February 5, 1998 (inception) ............................ -- $ -- $ -- $ -- $ --
February 6, 1998, sale of common stock to
officers ($001/share) (Note F) ................................ 3,000,000 3,000 -- -- 3,000
March 15, 1998, sale of common stock, pursuant
to confidential offering memorandum, net of
$2,000 in offering costs ($001/share) (Note F) ................ 2,000,000 2,000 96,000 -- 98,000
Net loss for the period ended December 31, 1998 .................. -- -- -- (79,700) (79,700)
--------- --------- --------- --------- ---------
BALANCE, DECEMBER 31, 1998 5,000,000 5,000 96,000 (79,700) 21,300
Net loss for the six months ended June 30, 1999 .................. -- -- -- (6,756) (6,756)
--------- --------- --------- --------- ---------
BALANCE, JUNE 30, 1999 5,000,000 $ 5,000 $ 96,000 $ (86,456) $ 14,544
========= ========= ========= ========= =========
See accompanying summary of significant accounting policies and
notes to the financial statements.
F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FAMOUS INTERNET MALL, INC.
--------------------------
(Formerly Mall of Fame, Inc.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
February 5, February 5,
1998 1998
Six Months (Inception) (Inception)
Ended Through Through
June 30, December 31, June 30,
1999 1998 1999
---- ---- ----
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss ......................................................... $ (6,756) $ (79,700) $ (86,456)
Transactions not requiring cash:
Depreciation ................................................... 3,971 6,375 10,346
Loss on sale of marketable securities (Note C) ................. -- 6,158 6,158
Changes in current assets and current liabilities:
Due from officer and other receivables ......................... (10) (1,313) (1,323)
Accounts payable and accrued expenses .......................... 870 2,466 3,336
--------- --------- ---------
NET CASH (USED IN)
OPERATING ACTIVITIES (1,925) (66,014) (67,939)
--------- --------- ---------
INVESTING ACTIVITIES
Purchase of equipment ............................................ -- (25,282) (25,282)
Purchases of marketable securities (Note C) ...................... -- (14,797) (14,797)
Proceeds from sale of marketable securities (Note C) ............. -- 8,639 8,639
--------- --------- ---------
NET CASH (USED IN)
INVESTING ACTIVITIES -- (31,440) (31,440)
--------- --------- ---------
FINANCING ACTIVITIES
Proceeds from issuance of common stock ........................... -- 103,000 103,000
Payments for offering costs ...................................... -- (2,000) (2,000)
--------- --------- ---------
NET CASH PROVIDED BY
FINANCING ACTIVITIES -- 101,000 101,000
--------- --------- ---------
NET CHANGE IN CASH (1,925) 3,546 1,621
Cash, beginning of period ............................................ 3,546 -- --
--------- --------- ---------
CASH, END OF PERIOD $ 1,621 $ 3,546 $ 1,621
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest ......................................................... $ -- $ -- $ --
========= ========= =========
Income taxes ..................................................... $ -- $ -- $ --
========= ========= =========
See accompanying summary of significant accounting policies and notes
to the financial statements.
F-6
</TABLE>
<PAGE>
FAMOUS INTERNET MALL, INC.
--------------------------
(Formerly Mall of Fame, Inc.)
(A DEVELOPMENT STAGE COMPANY)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development stage company
Famous Internet Mall, Inc. (the Company) is in the development stage in
accordance with Statement of Financial Accounting Standard (SFAS) No. 7.
Use of estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, and
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.
Cash equivalents
For the purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.
Marketable securities
Marketable securities consist of various equity securities and are stated at
current market value. All equity securities are considered "trading" securities
under the provisions of Statement of Financial Accounting Standard No. 115,
"Accounting for Certain Investments in Debt and Equity Securities". Accordingly,
realized and unrealized gains and losses on equity securities are reflected in
the accompanying statements of operations.
Equipment and depreciation
Property and equipment are stated at cost. Expenditures for maintenance and
repairs are charged to income as incurred. Additions and improvements are
capitalized. The cost and related accumulated depreciation of property and
equipment sold or otherwise disposed of are removed from the accounts and any
gain or loss is reported in the current year's revenue or expense. Depreciation
expense is calculated by the straight-line method over the estimated useful
lives of the assets, which are five years for furniture and three years for
equipment.
Income taxes
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the recorded book basis and the tax
basis of assets and liabilities for financial and income tax reporting. The
deferred tax assets and liabilities represent the future tax return consequences
of those differences, which will either be taxable or deductible when the assets
and liabilities are recovered or settled. Deferred taxes are also recognized for
operating losses that are available to offset future taxable income and tax
credits that are available to offset future federal income taxes.
F-7
<PAGE>
FAMOUS INTERNET MALL, INC.
--------------------------
(Formerly Mall of Fame, Inc.)
(A DEVELOPMENT STAGE COMPANY)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Internet and web site development
The Company expenses all internal and external costs incurred to develop
internal-use computer software. As a development stage company, management has
determined that the web site is not expected to provide substantive service
potential to the Company.
Earnings/(loss) per share
The Company reports earnings per share using a dual presentation of basic and
diluted earnings per share. Basic earnings per share excludes the impact of
common stock equivalents. Diluted earnings per share utilizes the average market
price per share when applying the treasury stock method in determining common
stock equivalents. However, the Company has a simple capital structure for the
period presented and, therefore, there is no variance between the basic and
diluted earnings per share.
Fair value of financial instruments
SFAS 107, "Disclosure About Fair Value of Financial Instruments," requires
certain disclosures regarding the fair value of financial instruments. The
Company has determined, based on available market information and appropriate
valuation methodologies, the fair value of its financial instruments
approximates carrying value. The carrying amounts of cash, receivables, accounts
payable, and other current liabilities approximate fair value due to the
short-term maturity of the instruments.
New accounting pronouncements
The Company has adopted the following new accounting pronouncements for the year
ended December 31, 1998. There was no effect on the financial statements
presented from the adoption of the new pronouncements. SFAS No. 130, "Reporting
Comprehensive Income," requires the reporting and display of total comprehensive
income and its components in a full set of general-purpose financial statements.
The Company did not have comprehensive income for the periods presented;
therefore, comprehensive income and net income are equal. SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information," is based
on the "management" approach for reporting segments. The management approach
designates the internal organization that is used by management for making
operating decisions and assessing performance as the source of the Company's
reportable segments. SFAS No. 131 also requires disclosure about the Company's
products, the geographic areas in which it earns revenue and holds long-lived
assets, and its major customers. SFAS 131 is not applicable, as the Company had
no revenue-producing operations for the periods presented. SFAS No. 132,
"Employers' Disclosures about Pensions and Other Post-retirement Benefits,"
which requires additional disclosures about pension and other post-retirement
benefit plans, but does not change the measurement or recognition of those
plans.
F-8
<PAGE>
FAMOUS INTERNET MALL, INC.
--------------------------
(Formerly Mall of Fame, Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
Note A: Background
- ------------------
Famous Internet Mall, Inc. (the "Company") was incorporated under the laws of
Nevada on February 5, 1998. The principal activities since inception have been
organizational matters and the sale and issuance of shares of its $.001 par
value common stock. The Company was formed to create and design a fully
functional, interactive internet web site which will allow the public to access
an internet shopping mall to market and sell the products and/or services of
celebrities.
On September 15, 1998, the Company changed its name from Mall of Fame, Inc. to
Famous Internet Mall, Inc.
Note B: Related party transactions
- ----------------------------------
As of June 30, 1999 and December 31, 1998, an officer owed the Company $918 for
payroll taxes not withheld from his salary. The $918 is included in the
accompanying financial statements as due from officer.
During the period from February 5, 1998 (inception) through December 31, 1998,
the Company paid an officer $6,500 for internet and web-site development. The
$6,500 is included in the accompanying financial statements as internet and
web-site development, related party.
Note C: Marketable securities
- -----------------------------
During the period from February 5, 1998 (inception) through December 31, 1998,
the Company purchased $14,797 in marketable securities. The Company sold all of
the securities prior to December 31, 1998 for $8,639; resulting in a $6,158
realized loss on the sale of marketable securities. The Company held no
marketable securities at June 30, 1999 and December 31, 1998. The Company
conducted no marketable securities transactions during the six months ended June
30, 1999.
Note D: Furniture and Equipment
- -------------------------------
Furniture and equipment consisted of the following at June 30, 1999 and December
31, 1998:
June 30, December 31,
1999 1998
---- ----
Furniture .................................... $ 21,640 $ 21,640
Equipment .................................... 3,642 3,642
-------- --------
25,282 25,282
Less: accumulated depreciation ............... (10,346) (6,375)
-------- --------
$ 14,936 $ 18,907
======== ========
Depreciation expense for the six months ended June 30, 1999 and from February 5,
1998 (inception) through December 31, 1998 was $3,971 and $6,375, respectively.
F-9
<PAGE>
FAMOUS INTERNET MALL, INC.
--------------------------
(Formerly Mall of Fame, Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
Note E: Income taxes
- --------------------
A reconciliation of the U.S statutory federal income tax rate to the effective
rate is as follows:
June 30, December 31,
1999 1998
---- ----
U.S. federal statutory graduated rate .............. 15.00% 15.00%
State income tax rate, net of federal benefit ...... 7.00% 7.00%
Net operating loss for which no tax benefit
is currently available .......................... -22.00% -22.00%
------- -------
0.00% 0.00%
======= =======
At June 30, 1999, deferred taxes consisted of a net tax asset of $21,730 due to
operating loss carryforwards of $86,456, which was fully allowed for in the
valuation allowance of $21,730. The valuation allowance offsets the net deferred
asset for which there is no assurance of recovery. The change in the valuation
allowance for the six months ended June 30, 1999 and from February 5, 1998
(inception) through December 31, 1998 was $1,521 and $20,209, respectively. Net
operating loss carryforwards will expire in 2019.
The valuation allowance will be evaluated at the end of each year, considering
positive and negative evidence about whether the asset will be realized. At that
time, the allowance will either be increased or reduced; reduction could result
in the complete elimination of the allowance if positive evidence indicates that
the value of the deferred tax asset is no longer impaired and the allowance is
no longer required.
Note F: Common stock sales
- --------------------------
On February 6, 1998, the Company sold 3,000,000 shares of common stock to
officers for cash totaling $3,000. These shares are "restricted securities" and
may be sold only in compliance with Rule 144 of the Securities Act of 1933, as
amended (the "Act").
On March 15, 1998, the Company offered for sale 2,000,000 shares of its $.001
par value common stock for $.05 per share pursuant to Rule 504 of Regulation D
of the Act. The Company sold 2,000,000 shares for net proceeds of $98,000 after
deducting offering costs of $2,000.
Note G: Concentrations
- ----------------------
From February 5, 1998 (inception) through December 31, 1998, the Company
incurred $20,000 in consulting expenses and $26,500 for the development of an
internet web site to two vendors and an officer (see Note B). The $46,500 made
up 58.3 percent and 53.8 percent of the Company's expenses for the periods from
February 5, 1998 (inception) through December 31, 1998 and from February 5, 1998
(inception) through June 30, 1999, respectively.
F-10
<PAGE>
FAMOUS INTERNET MALL, INC.
--------------------------
(Formerly Mall of Fame, Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
Note H: Commitments
- -------------------
In accordance with its Confidential Offering Memorandum, the Company is
committed to use the proceeds from the offering for the following: computer and
office equipment ($25,000); consulting fees ($20,000); web site development
($20,000); officer salaries ($12,000); accounting and legal fees ($10,000), and;
working capital and miscellaneous expenses ($13,000).
As of June 30, 1999, the remaining commitments for these categories are as
follows: accounting and legal fees ($5,000), and; working capital and
miscellaneous expenses ($8,544).
Note I: Going concern
- ---------------------
As of June 30, 1999, the Company has recurring operating losses and a limited
supply of cash, which raises substantial doubt about its ability to continue as
a going concern.
From February 5, 1998 (inception) through June 30, 1999, the Company raised
initial working capital through a public offering of its common stock, which is
expected to permit the Company to continue its start-up operations through
October 31, 1999. The Company anticipates conducting debt financings or
additional common stock offerings, which are not yet beyond the planning stages,
to fund its proposed operations. The Company is largely dependent upon the
proceeds anticipated to be received from proposed future debt financings or
common stock offerings to carry out its proposed operations. There is no
assurance that the Company will be successful in its efforts to raise the
proceeds needed to commence its proposed operations. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
Note J: Year 2000 compliance
- ----------------------------
The Year 2000 issue (Y2K) is the result of computer programs written using two
digits rather than four to define the applicable year. Any of the Company's
computer and telecommunications programs that have date sensitive software may
recognize a date using "00" as the year 1900 instead of 2000. This could result
in system failure or miscalculations causing disruptions in operations,
including the ability to process transactions, send invoices, or engage in
similar normal business activities.
The Company cannot determine the extent to which the Company is vulnerable to
third parties' failure to remediate their own Y2K problems. As a result, there
can be no guarantee that the systems of other companies on which the Company's
business relies will be timely converted, or that failure to convert by another
company, or a conversion that is incompatible with the Company's systems, would
have a material adverse affect on the Company. In view of the foregoing, there
can be no assurance that the Y2K issue will not have a material adverse effect
on the Company's business.
F-11
<PAGE>
SIGNATURES
The issuer has duly caused this offering statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of San Diego, State of
California on October 7, 1999.
FAMOUS INTERNET MALL, INC.
/s/ Christopher Q. Lucidi
-------------------------------------
Christopher Q. Lucidi, Vice-President
ARTICLES OF INCORPORATION
(PURSUANT TO NRS 78)
STATE OF NEVADA
SECRETARY OF STATE
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
FEB 05, 1998
DEAN HELLER SECRETARY OF STATE
/S/ DEAN HELLER
(For filing office use) C2214-98
IMPORTANT: Read instructions on reverse side before completing this form
1. NAME OF CORPORATION: Mall of Fame, Inc.
2. RESIDIENT AGENT: (designated resident agent and his STREET ADDRESS in
Nevada where process may be served)
Name of Resident Agent: Jan Cabot
Street Address: 1517 Goldfield Ave., Carson City, 98701
3. SHARES: (number of shares the corporation is authorized to issue)
Number of shares with par value: 50,000,000 Par value: .001 Number of
shares without par value: _________
4. GOVERNING BOARD: shall be styled as (check one): X Directors ___Trustees
The FIRST BOARD OF DIRECTORS shall consist of 3 members and the names and
addresses are as follows:
Joseph G. Lucidi, 11974 Avenida Consentido, San Diego, CA 92128
Christopher Q. Lucidi, 11974 Avenida Consentido, San Diego, CA 92128
Karen L. Tovar, 8701 Mesa Rd., Space 67, Santee, CA 92071
5. PURPOSE (optional - see reverse side): The purpose of the corporation shall
be:
---------------------------------------------------------------------------
6. OTHER MATTERS: This form includes the minimal statutory requirements to
incorporate under NRS 78. You may attach additional information pursuant to
NRS 78.037 or any other information you deem appropriate. If any of the
additional information is contradictory to this form it cannot be filed and
will be returned to you for correction. Number of pages attached___.
7. SIGNATURES OF INCORPORATORS: The names and addresses of each of the
incorporators signing the articles: (signatures must be notarized) (Attach
additional pages if there are more than two incorporators)
Christopher Q. Lucidi
11974 Avenida Consentido, San Diego, CA 92128
/s/ Christopher Q. Lucidi
State of California County of San Diego
This instrument was acknowledged before me on January 31, 1998, by
Christopher Quirino Lucidi as incorporator of Mall of Fame, Inc. (name of
party on behalf of whom instrument was executed)
[NOTARY PUBLIC CALIFORNIA]
[SEAL]
CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT
I, Jan Cabot hereby accept appointment as Resident Agent for the above
named corporation.
/s/ Jan Cabot
Date: 01/26/98
<PAGE>
Exhibit 3b
BY-LAWS
OF
MALL OF FAME, INC.
ARTICLE I - OFFICES
-------------------
The principal office shall be located at 11423 West Bernardo Court, San Diego,
California 92127, County of San Diego. The Corporation may have such other
offices, either within or without the State of Nevada as the Board of Directors
may designate or as the business of the Corporation may require from time to
time.
ARTICLE II - SHAREHOLDERS
-------------------------
SECTION 1. Annual Meetings:
- ---------------------------
The annual meeting of the shareholders shall be held within three (3) months
after the close of the fiscal year of the Corporation, for the purpose of
electing directors, and transacting such other business as may properly come
before the meeting.
SECTION 2. Special Meetings:
- ----------------------------
Special meetings of the shareholders, for any purpose or purposes, unless
otherwise prescribed by statute, may be called by the President or by the Board
of Directors, and shall be called by the President at the request of the holders
of not less than percent ten per cent (10%) of all the outstanding shares of the
Corporation entitled to vote at the meeting.
SECTION 3. Place of Meetings:
- -----------------------------
The Board of Directors may designate any place, either within or without the
State of Nevada, unless otherwise prescribed by statute, as the place of meeting
for any annual meeting or for any special meeting. A waiver of notice signed by
all shareholders entitled to vote at a meeting may designate any place, either
within or without the State of Nevada, unless otherwise prescribed by statute,
as the place for the holding of such meeting. If no designation is made, the
place of meeting shall be the principal office of the Corporation.
SECTION 4. Notice of Meetings:
- ------------------------------
Written notice stating the place, day and hour of the meeting and, in case of a
special meeting, the purpose or purposes for which the meeting is called, shall
unless otherwise prescribed by statute, be delivered not less than ten nor more
than fifty days before the date of the meeting, to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States Mail, addressed to the shareholder
at his address as it appears on the stock transfer books of the Corporation,
with postage thereon prepaid.
1
<PAGE>
SECTION 5. Closing of Transfer Books or Fixing of Records:
- ----------------------------------------------------------
For the purpose of determining shareholders entitled to notice of or to vote at
any meeting of shareholders or any adjournment thereof, or shareholders entitled
to receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be closed for a
stated period, but not to exceed in any case fifty (50) days. If the stock
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such books shall
be closed for at least 5 days immediately preceding such meeting. In lieu of
closing the stock transfer books, the Board of Directors may fix in advance a
date as the record date for any such determination of shareholders, such date in
any case to be not more than 30 days and, in case of a meeting of shareholders,
not less than 10 days prior to the date on which the particular action requiring
such determination of shareholders is to be taken. If the stock transfer books
are not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this section, such determination shall apply to any adjournment thereof.
SECTION 6. Voting:
- ------------------
The officer or agent having charge of the stock transfer books for shares of the
corporation shall make a complete list of the shareholders entitled to vote at
each meeting of shareholders or any adjournment thereof, arranged in
alphabetical order, with the address of and the number of shares held by each.
Such list shall be produced and kept open at the time and place of the meeting
and shall be subject to the inspection of any shareholder during the whole time
of the meeting for the purposes thereof.
SECTION 7. Quorum:
- ------------------
A majority of the outstanding shares of the Corporation entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. If less than a majority of the outstanding shares are represented
at a meeting, a majority of the shares so represented may adjourn the meeting
from time to time without further notice. 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 noticed. The
shareholders present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
2
<PAGE>
SECTION 8. Proxies:
- -------------------
At all meetings of shareholders, a shareholder may vote in person or by proxy
executed in writing by the shareholder or by his duly authorized
attorney-in-fact. Such proxy shall be filed with the secretary of the
Corporation before or at the time of the meeting. A meeting of the Board of
Directors may be had by means of a telephone conference or similar
communications equipment by which all persons participating in the meeting can
hear each other, and participation in a meeting under such circumstances shall
constitute presence at the meeting.
SECTION 9. Voting of Shares:
- ----------------------------
Each outstanding share entitled to vote shall be entitled to one vote upon each
matter submitted to a vote at a meeting of shareholders.
SECTION 10. Voting of Shares by Certain Holders:
- ------------------------------------------------
(a) Shares standing in the name of another corporation may be voted by such
officer, agent or proxy as the Bylaws of such corporation may prescribe or, in
the absence of such provision, as the Board of Directors of such corporation may
determine.
(b) Shares held by an administrator, executor, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
(c) Shares standing in the name of a receiver may be voted by such receiver, and
shares held by or under the control of a receiver may be voted by such receiver
without the transfer thereof into his name, if authority to do so be contained
in an appropriate order of the court by which such receiver was appointed.
(d) A shareholder whose shares are pledged shall be entitled to vote such shares
until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
(e) Shares of its own stock belonging to the Corporation shall not be voted,
directly or indirectly, at any meeting, and shall not be counted in determining
the total number of outstanding shares at any given time.
3
<PAGE>
SECTION 11. Informal Action by Shareholders:
- --------------------------------------------
Unless otherwise provided by law, any action required to be taken at a meeting
of the shareholders, or any other action which may be taken at a meeting of the
shareholders, may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the shareholders entitled
to vote with respect to the subject matter thereof.
ARTICLE III - BOARD OF DIRECTORS
--------------------------------
SECTION 1. General Powers:
- --------------------------
The business and affairs of the Corporation shall be managed by its Board of
Directors.
SECTION 2. Number, Tenure and Qualifications:
- ---------------------------------------------
The number of directors of the Corporation shall be fixed by the Board of
Directors, but in no event shall be less than three (3). Each director shall
hold office until the next annual meeting of shareholders and until his
successor shall have been elected and qualified.
SECTION 3. Regular Meetings:
- ----------------------------
A regular meeting of the Board of Directors shall be held without other notice
than this By-Law immediately after, and at the same place as, the annual meeting
of shareholders. The Board of Directors may provide, by resolution, the time and
place for the holding of additional regular meetings without notice other than
such resolution.
SECTION 4. Special Meetings:
- ----------------------------
Special meetings of the Board of Directors may be called by or at the request of
the President or any two directors. The person or persons authorized to call
special meetings of the Board of Directors may fix the place for holding any
special meeting of the Board of Directors called by them.
SECTION 5. Notice:
- ------------------
Notice of any special meeting shall be given at least one (1) day previous
thereto by written notice delivered personally or mailed to each director at his
business address, or electronically. If mailed, such notice shall be deemed to
be delivered when deposited in the United States Mail so addressed, with postage
thereon prepaid. If notice be given electronically, such notice shall be deemed
to be delivered when the transmission is delivered to the director. Any
directors may waive notice of any meeting. The attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
4
<PAGE>
SECTION 6. Quorum:
- ------------------
A majority of the number of directors fixed by Section 2 of this Article III
shall constitute a quorum for the transaction of business at any meeting of the
Board of Directors, but if less than such majority is present at a meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice.
SECTION 7. Manner of Action:
- ----------------------------
The act of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors.
SECTION 8. Action Without a Meeting:
- ------------------------------------
Any action that may be taken by the Board of Directors at a meeting may be taken
without a meeting if a consent in writing, setting forth the action so to be
taken, shall be signed before such action by all of the directors.
SECTION 9. Vacancies:
- ---------------------
Any vacancy occurring in the Board of Directors may be filled by the affirmative
vote of a majority of the remaining directors though less than a quorum of the
Board of Directors, unless otherwise provided by law. A director elected to fill
a vacancy shall be elected for the unexpired term of his predecessor in office.
Any directorship to be filled by reason of an increase in the number of
directors may be filled by election by the Board of Directors for a term of
office continuing only until the next election of directors by the shareholders.
SECTION 10. Compensation:
- -------------------------
By resolution of the Board of Directors, each director may be paid his expenses,
if any, of attendance at each meeting of the Board of Directors, and may be paid
a stated salary as director or compensation in the form of stock in the
Corporation or a fixed sum for attendance at each meeting of the Board of
Directors or any combination thereof. No such payment shall preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.
SECTION 11. Presumption of Assent:
- ----------------------------------
A director of the Corporation who is present at a meeting of the Board of
Directors at which action on any corporate matter is taken shall be presumed to
have assented to the action taken unless his dissent shall be entered in the
5
<PAGE>
minutes of the meeting or unless he shall file his written dissent to such
action with the person acting as the Secretary of the meeting before the
adjournment thereof, or shall forward such dissent by registered mail to the
Secretary of the Corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director who voted in favor of such
action.
ARTICLE IV - OFFICERS
---------------------
SECTION 1. Number:
- ------------------
The officers of the Corporation shall be a President, one or more Vice
Presidents, a Secretary and a Treasurer, each of whom shall be elected by the
Board of Directors. Such other officers and assistant officers as may be deemed
necessary may be elected or appointed by the Board of Directors, including a
Chairman of the Board. In its discretion, the Board of Directors may leave
unfilled for any such period as it may determine any office except those of
President and Secretary.
Any two or more offices may be held by the same person, except for the offices
of President and Secretary, which may not be held by the same person. Officers
may be directors or shareholders of the Corporation.
SECTION 2. Election and Term of Office:
- ---------------------------------------
The officers of the Corporation to be elected by the Board of Directors shall be
elected annually by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the shareholders. If the election of
officers shall not be held at such meeting, such election shall be held as soon
thereafter as conveniently as it may be. Each officer shall hold office until
his successor shall have been duly elected and shall have qualified, or until
his death, or until he shall resign or shall have been removed in the manner
hereinafter provided.
SECTION 3. Removal:
- -------------------
Any officer or agent may be removed by the Board of Directors whenever, in its
judgment, the best interests of the Corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Election or appointment of an officer or agent shall not of itself
create contract rights, and such appointment shall be terminable at will.
SECTION 4. Vacancies:
- ---------------------
A vacancy in any office because of death, resignation, removal, disqualification
or otherwise, may be filled by the Board of Directors for the unexpired portion
of the term.
6
<PAGE>
SECTION 5. Chief Executive Officer:
- -----------------------------------
The Chief Executive Officer (CEO) shall be the principal executive officer of
the Corporation and, subject to the control of the Board of Directors, shall in
general supervise and control all of the business and affairs of the
Corporation. He shall, when present, preside at all meetings of the shareholders
and of the Board of Directors, unless there is a Chairman of the Board, in which
case the Chairman shall preside. He may sign, with the Secretary or any other
proper officer of the Corporation thereunto authorized by the Board of
Directors, certificates for shares of the Corporation, any deeds, mortgages,
bonds, contracts, or other instruments which the Board of Directors has
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
Bylaws to some other officer or agent of the Corporation, or shall be required
by law to be otherwise signed or executed; and in general shall perform all
duties incident to the office of President and such other duties as may be
prescribed by the Board of Directors from time to time.
SECTION 6. President and Vice President/s:
- ------------------------------------------
(a) In the absence of the CEO or in event of his death, inability or refusal to
act, the President shall perform the duties of the CEO, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
CEO. The President shall perform such other duties as from time to time may be
assigned to him by the CEO or by the Board of Directors.
(b) If there is more than one Vice President, each Vice President shall succeed
to the duties of the President in order of rank as determined by the Board of
Directors. If no such rank has been determined, then each Vice President shall
succeed to the duties of the President in order of date of election, the
earliest date having the first rank.
SECTION 7. Secretary:
- ---------------------
The Secretary shall: (a) keep the minutes of the proceedings of the shareholders
and of the Board of Directors in one or more minute books provided for that
purpose; (b) see that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law; (c) be custodian of the
corporate records and of the seal of the Corporation and see that the seal of
the Corporation is affixed to all documents, the execution of which on behalf of
the Corporation under its seal is duly authorized; (d) keep a register of the
post office address of each shareholder which shall be furnished to the
Secretary by such shareholder; (e) sign with the CEO certificates for shares of
the Corporation, the issuance of which shall have been authorized by resolution
of the Board of Directors; (f) have general charge of the stock transfer books
of the Corporation; and (g) in general perform all duties incident to the office
of the Secretary and such other duties as from time to time may be assigned to
him/her by the CEO or by the Board of Directors.
7
<PAGE>
SECTION 8. Treasurer:
- ---------------------
The Treasurer shall: (a) have charge and custody of and be responsible for all
funds and securities of the Corporation; (b) receive and give receipts for
moneys due and payable to the Corporation from any source whatsoever, and
deposit all such moneys in the name of the Corporation in such banks, trust
companies or other depositories as shall be selected in accordance with the
provisions of Article VI of these Bylaws; and (c) in general perform all of the
duties incident to the office of Treasurer and such other duties as from time to
time may be assigned to him by the CEO or by the Board of Directors. If required
by the Board of Directors, the Treasurer shall give a bond for the faithful
discharge of his duties in such sum and with such sureties as the Board of
Directors shall determine.
SECTION 9. Salaries:
- --------------------
The salaries of the officers shall be fixed from time to time by the Board of
Directors, and no officer shall be prevented from receiving such salary by
reason of the fact that he is also a director of the Corporation.
ARTICLE V - INDEMNITY
---------------------
The Corporation shall indemnify its directors, officers and employees as
follows:
(a) Every director, officer, or employee of the Corporation shall be indemnified
by the Corporation against all expenses and liabilities, including counsel fees,
reasonably incurred by or imposed upon him in connection with any proceeding to
which he may be made a party, or in which he may become involved, by reason of
his being or having been a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of the corporation, partnership, joint
venture, trust or enterprise, or any settlement thereof, whether or not he is a
director, officer, employee or agent at the time such expenses are incurred,
except in such cases wherein the director, officer, or employee is adjudged
guilty of willful misfeasance or malfeasance in the performance of his duties;
provided that in the event of a settlement the indemnification herein shall
apply only when the Board of Directors approves such settlement and
reimbursement as being for the best interests of the Corporation.
(b) The Corporation shall provide to any person who is or was a director,
officer, employee, or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of the
corporation, partnership, joint venture, trust or enterprise, the indemnity
against expenses of suit, litigation or other proceedings which is specifically
permissible under applicable law.
8
<PAGE>
(c) The Board of Directors may, in its discretion, direct the purchase of
liability insurance by way of implementing the provisions of this Article V.
ARTICLE VI - CONTRACTS, LOANS, CHECKS AND DEPOSITS
--------------------------------------------------
SECTION 1. Contracts:
- ---------------------
The Board of Directors may authorize any officer or officers, agent or agents,
to enter into any contract or execute and deliver any instrument in the name of
and on behalf of the Corporation, and such authority may be general or confined
to specific instances.
SECTION 2. Loans:
- -----------------
No loans shall be contracted on behalf of the Corporation and no evidences of
indebtedness shall be issued in its name unless authorized by a resolution of
the Board of Directors. Such authority may be general or confined to specific
instances.
SECTION 3. Checks, Drafts, etc.:
- --------------------------------
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the Corporation, shall be signed
by such officer or officers, agent or agents of the Corporation and in such
manner as shall from time to time be determined by resolution of the Board of
Directors.
SECTION 4. Deposits:
- --------------------
All funds of the Corporation not otherwise employed shall be deposited from time
to time to the credit of the Corporation in such banks, trust companies or other
depositories as the Board of Directors may select.
ARTICLE VII - CERTIFICATES FOR SHARES AND THEIR TRANSFER
--------------------------------------------------------
SECTION 1. Certificates for Shares:
- -----------------------------------
Certificates representing shares of the Corporation shall be in such form as
shall be determined by the Board of Directors. Such certificates shall be signed
by the President and by the Secretary or by such other officers authorized by
law and by the Board of Directors so to do, and sealed with the corporate seal.
9
<PAGE>
All certificates for shares shall be consecutively numbered or otherwise
identified. The name and address of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue, shall be
entered on the stock transfer books of the Corporation. All certificates
surrendered to the Corporation for transfer shall be canceled and no new
certificate shall be issued until the former certificate for a like number of
shares shall have been surrendered and canceled, except that in case of a lost,
destroyed or mutilated certificate, a new one may be issued therefor upon such
terms and indemnity to the Corporation as the Board of Directors may prescribe.
SECTION 2. Transfer of Shares:
- ------------------------------
Transfer of shares of the Corporation shall be made only on the stock transfer
books of the Corporation by the holder of record thereof or by his legal
representative, who shall furnish proper evidence of authority to transfer, or
by his attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary of the Corporation, and on surrender for cancellation
of the certificate for such shares. The person in whose name shares stand on the
books of the Corporation shall be deemed by the Corporation to be the owner
thereof for all purposes. Provided, however, that upon any action undertaken by
the shareholders to elect S Corporation status pursuant to Section 1362 of the
Internal Revenue Code and upon any shareholders agreement thereto restricting
the transfer of said shares so as to disqualify said S Corporation status, said
restriction on transfer shall be made a part of the bylaws so long as said
agreement is in force and effect.
ARTICLE VIII - FISCAL YEAR
--------------------------
The fiscal year of the Corporation shall begin on the 1st day of January and end
on the 31st day of December of each year.
ARTICLE IX - DIVIDENDS
----------------------
The Board of Directors may from time to time declare, and the Corporation may
pay, dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law and its Articles of Incorporation.
ARTICLE X - CORPORATE SEAL
--------------------------
The Board of Directors shall provide a corporate seal, which shall be circular
in form and shall have inscribed thereon the name of the Corporation and the
state of incorporation and the words, "Corporate Seal".
10
<PAGE>
ARTICLE XI - WAIVER OF NOTICE
-----------------------------
Unless otherwise provided by law, whenever any notice is required to be given to
any shareholder or director of the Corporation under the provisions of these
Bylaws or under the provisions of the Articles of Incorporation or under the
provisions of the applicable Business Corporation Act, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent to the giving of
such notice.
ARTICLE XII - AMENDMENTS
------------------------
These Bylaws may be altered, amended or repealed and new Bylaws may be adopted
by the Board of Directors at any regular or special meeting of the Board of
Directors.
The above Bylaws are certified to have been adopted by the Board of Directors of
the Corporation on the 19th Day of January, 1998.
- --------------------------------------------------------------------------------
Officer of the Corporation
11
Consent of Accountant
Famous Internet Mall, Inc.
11423 West Bernardo Court
San Diego, California 92127
RE: Form 10-SB of Famous Internet Mall, Inc. filed with the Securities and
Exchange Commission on or about August 6, 1999 ("Form 10-SB")
Gentlemen:
The undersigned hereby consents to the use of its name in the Form 10-SB
under the Heading "financial statements".
Cordavano & Company
Independent Auditors
<PAGE>
Exhibit 28b.
Consent of Attorney
Famous Internet Mall, Inc.
11423 West Bernardo Court
San Diego, California 92127
RE: Form 10-SB of Famous Internet Mall, Inc. filed with the Securities and
Exchange Commission on or about August 6, 1999 ("Form 10-SB")
Gentlemen:
The undersigned hereby consents to the use of its name in the Form 10-SB
under the Heading "legal matters".
Robert Blair Krueger II
The Krueger Group, LLP
CONFIDENTIAL OFFERING MEMORANDUM
MALL OF FAME, INC.
(A Nevada Corporation)
Up to 2,000,000 Shares
Of Common Stock, .001 Par Value
Offering Price: $.05 Per Share - Minimum purchase: 5,000 Shares
-- Total Offering: $100,000
IT IS ANTICIPATED THAT THE SECURITIES WILL BE OFFERED FOR SALE IN A NUMBER OF
STATES. THE SECURITIES LAWS OF CERTAIN STATES REQUIRE CERTAIN CONDITIONS AND
RESTRICTIONS RELATING TO THE OFFERING TO BE DISCLOSED. A DESCRIPTION OF THE
RELEVANT CONDITIONS AND RESTRICTIONS IS SET FORTH BELOW. FURTHERMORE, CERTAIN
STATES IMPOSE SUITABILITY STANDARDS ON PROSPECTIVE PURCHASERS IN ADDITION TO
THOSE GENERALLY IMPOSED BY THE COMPANY. IT SHOULD NOT BE ASSUMED BY REASON OF
THE SUMMARY BELOW OF A PARTICULAR STATE'S REQUIREMENTS THAT THE COMPANY HAS BEEN
AUTHORIZED TO OFFER OR SELL SECURITIES IN SUCH STATE.
THESE SECURITIES ARE BEING ISSUED PURSUANT TO A CLAIM OF EXEMPTION FROM THE
REGISTRATION OR QUALIFICATION PROVISION OF THE SECURITIES LAWS, SPECIFICALLY
RULE 504 OF REGULATION D UNDER THE SECURITIES ACT OF 1933, AND VARIOUS
SELF-EXECUTING LIMITED OFFERING EXEMPTIONS OR ISOLATED TRANSACTION EXEMPTIONS IN
THE STATES WHERE AN OFFERING WILL BE MADE, WHICH THE OFFER INTENDS TO FULLY
COMPLY WITH AND IS TAKING SPECIFIC INTERNAL STEPS TO DO SO. WHILE THERE ARE NO
RESTRICTIONS ON THE RESALE OF THESE SECURITIES ON THE FEDERAL LEVEL, THE VARIOUS
STATE LAW REQUIREMENTS MUST BE COMPLIED WITH FOR PURPOSES OF RESALE, WHICH MAY
BE DONE PURSUANT TO EXEMPTION WHEREVER AVAILABLE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
Price to Purchasers Proceeds to the Company
------------------- -----------------------
Per Unit $ 0.05 $ 0.05
Total Offering $ 100,000.00 $ 100,000.00
- --------------------------------------------------------------------------------
Mall of Fame, Inc.
11974 Avenida Consentido
San Diego, California 92128
This Prospectus was authorized in January of 1998
<PAGE>
TABLE OF CONTENTS
TABLE OF CONTENTS..............................................................2
THE OFFERING...................................................................3
OFFERING SUMMARY...............................................................4
THE COMPANY.................................................................4
THE OFFERING................................................................4
SELECTED FINANCIAL INFORMATION..............................................4
BALANCE SHEET DATA..........................................................4
RISK FACTORS...................................................................5
BUSINESS RISKS..............................................................6
DILUTION.......................................................................6
USE OF PROCEEDS................................................................7
PROPOSED BUSINESS OF THE COMPANY...............................................8
HISTORY AND ORGANIZATION....................................................8
THE COMPANY.................................................................8
BUSINESS OF THE COMPANY.....................................................8
MARKET......................................................................9
COMPETITION................................................................10
MANAGEMENT.................................................................10
COMPENSATION...............................................................10
INDEMNIFICATION AND EXCLUSION OF LIABILITY OF DIRECTORS AND OFFICERS.......11
RESUMES.......................................................................11
CONFLICTS OF INTEREST.........................................................12
STOCK.........................................................................13
PRINCIPAL SHAREHOLDERS.....................................................13
DESCRIPTION OF SECURITIES..................................................13
PRICING THE OFFERING..........................................................14
LITIGATION....................................................................14
LEGAL MATTERS.................................................................14
EXPERTS.......................................................................14
ADDITIONAL INFORMATION........................................................14
2
<PAGE>
THE OFFERING
This offering is being made by Mall of Fame, Inc. (the "Company") on a "best
efforts" basis. The Company is offering 2,000,000 shares of its common stock
("Shares") at a price of $0.05 per share. All funds received from subscribers
will be deposited in the treasury of the Company upon acceptance of the
subscription.
There is no market for the shares being offered and there can be no assurance
that a market will develop by reason of this offering. The offering price has
been arbitrarily determined by the Company, and has no relationship to the
Company's assets, book value, net worth, or other recognized criteria of value.
The Company has no operating history and there are significant risks that exist
concerning the Company and its proposed operations (see "RISK FACTORS").
The Company will file a Notice of Sale of Securities Pursuant to Regulation D,
Section 4(6) and/or Uniform Limited Offering Exemption (the "Notice") on Form D
with the United States Securities and Exchange Commission.
Copies of the Notice on Form D may be inspected without charge at the corporate
offices of the Company during regular business hours and copies of all or any
part thereof may be obtained from the Company at prescribed rates.
THE SHARES ARE OFFERED BY THE COMPANY AND MAY BE SOLD BY OFFICERS AND DIRECTORS
OF THE COMPANY AND ARE SUBJECT TO PRIOR SALE, WITHDRAWAL, OR CANCELLATION OR
MODIFICATION WITHOUT NOTICE. OFFERS TO PURCHASE, AND CONFIRMATIONS OF SALE,
ISSUED BY THE COMPANY ARE SUBJECT TO ACCEPTANCE BY THE COMPANY AND IT IS THE
RIGHT OF THE COMPANY TO REJECT ANY OFFER TO PURCHASE AND CANCEL ANY CONFIRMATION
OF SALE, IN WHOLE OR IN PART, WITH OR WITHOUT CAUSE, AT ANY TIME PRIOR TO
DELIVERY OF UNIT SHARES TO A SUBSCRIBER.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION, OR IN ANY JURISDICTION IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO. ALL PAYMENTS FOR THESE SECURITIES SHALL
BE MADE BY CASH, CHECK, OR MONEY ORDER PAYABLE TO "MALL OF FAME, INC."
THE TERMINATION DATE OF THIS OFFERING IS NINETY (90) DAYS AFTER THE DATE OF THIS
PROSPECTUS, UNLESS EXTENDED BY THE COMPANY FOR AN ADDITIONAL NINETY (90) DAYS.
3
<PAGE>
OFFERING SUMMARY
The following is a summary of certain information contained in this Prospectus
and is qualified in its entirety by the more detailed information and financial
statements (including notes thereto) appearing elsewhere in this Prospectus.
The Company
- -----------
Mall of Fame, Inc. (the "Company") was organized as a Nevada corporation in
January of 1998. Its principal office is currently located at 11974 Avenida
Consentido, San Diego, California 92128. The telephone number is (619) 675-4449.
The fax number is (619) 675-4443.
The Company was formed to create and design a fully functional, interactive
Internet Web Site which will allow the public to access an Internet shopping
mall to market and sell the products and/or services of celebrities (such as
movie and television stars, professional athletes, and professional musicians).
The company is a start-up enterprise in the development stage and has had no
revenues to date. (See "Proposed Business of the Company").
The Offering
- --------------------------------------------------------------------------------
Type of securities offered: 2,000,000 Shares of Common Stock
$.001 Par Value, offered at $.05 per share
- --------------------------------------------------------------------------------
Shares outstanding prior to offering: 3,000,000
- --------------------------------------------------------------------------------
Shares outstanding after offering: 5,000,000
(if all securities are sold)
- --------------------------------------------------------------------------------
Selected Financial Information
- ------------------------------
The following sets forth the selected financial information as of January 28,
1998, and is qualified in its entirety by the financials appearing elsewhere in
this Prospectus. The Company's fiscal year end is December 31.
Balance Sheet Data
- --------------------------------------------------------------------------------
Cash $0.00
- --------------------------------------------------------------------------------
Total Assets $0.00
- --------------------------------------------------------------------------------
Total Liabilities $0.00
- --------------------------------------------------------------------------------
Book Value Per Share $0.00
- --------------------------------------------------------------------------------
4
<PAGE>
RISK FACTORS
1. Arbitrary Offering Price. Prior to the offering made hereby, there has
been no market for the Company's Common Stock. The offering price of the Shares
has been arbitrarily determined by the Company and bears no relationship to
assets, book value, net worth, earnings, actual results of operations, or any
other established investment criteria. Among the factors considered in
determining such offering price were the Company's current financial condition,
the degree of control which the current shareholders desired to retain, and an
evaluation of the prospects for the Company's growth. The offering price set
forth on the cover page of this Prospectus should not, therefore, be considered
an indication of the actual value of the Common Stock of the Company.
2. Dilution. Investors participating in this offering will not incur
immediate, substantial dilution. See "DILUTION".
3. Lack of Market for Shares. There is no market for the Company's Shares
and there can be no assurance that such a market will develop by reason of this
offering. Upon completion of the offering, there is a possibility that even if a
market does develop, it would not be sustained. The investment community may
show little or no interest in the Shares offered; and, accordingly, investors
may not be readily able to liquidate their investment. Even if a purchaser
hereunder is able to find a brokerage firm to effect a transaction in the
securities of the Company, a combination of brokerage commissions, state
transfer taxes, when applicable, and any other selling costs may exceed the
offering price of the same.
4. No Underwriter. The Company will sell the Shares offered hereby without
the use of an underwriter. The Company may experience difficulty in completing
the sale of its Shares and if so, the Company may not be able to complete its
business plan as successfully as it might if the maximum number of Shares are
sold.
5. No Likelihood of Dividends. The Company has never paid dividends. At
present, the Company does not anticipate paying dividends on its Common Stock in
the foreseeable future and intends to devote any earnings to the development of
the Company's business. Investors who anticipate the need for immediate income
from their investment should refrain from the purchase of the Shares.
6. Potential for Future Stock Offerings. In the event the proceeds from
this Offering are inadequate to finance operations, the Company may conduct
future offerings of its securities. Such an offering would dilute the ownership
interests of investors in this offering.
5
<PAGE>
Business Risks
- --------------
7. Recently Organized Company. The Company was only recently organized and
may be considered a start-up company. The Company has no operating history and
has not conducted any significant business prior to its organization. The
Company, therefore, must be considered promotional and in its early formative
and developmental stage. Potential investors should be aware of the difficulties
normally encountered by a new enterprise. There is nothing at this time on which
to base an assumption that the Company's business plans will prove successful,
and there is no assurance that the Company will be able to operate profitably
(see "PROPOSED BUSINESS OF THE COMPANY").
8. Use of Proceeds Not Specific. The proceeds of this offering have been
allocated only generally. Proceeds from sale of Shares will most likely be
allocated to working capital or administrative expenses. Accordingly, investors
will entrust their funds with management in whose judgment investors must
depend, with only limited information about management's specific intentions.
(see "USE OF PROCEEDS" and "PROPOSED BUSINESS OF THE COMPANY").
9. Controlling Entities and Potential Conflicts of Interest. Upon
completion of this offering, the present directors and executive officers and
their respective affiliates, will beneficially own 70% of the outstanding Common
Stock. As a result, these stockholders will be able to exercise significant
influence over all matters requiring stockholder approval, including the
election of directors and approval of significant corporate transactions. Such
concentration of ownership may also have the effect of delaying or preventing a
change in control of the Company. Management will be engaged in transactions
with the Company that will involve potential conflicts of interest. In addition,
the officers are not required to devote all of their time and energies to the
business and affairs of the Company.
10. Competition. There are numerous corporations, firms, and individuals
that are engaged in the type of business activities contemplated by the Company.
Many of those entities are more experienced and possess substantially greater
financial, technical, and personnel resources than the Company. While the
Company hopes to be competitive with other similar companies, there can be no
assurance that such will be the case.
DILUTION
Dilution is a reduction in the net tangible book value of a purchaser's
investment measured by the difference between the purchase price and the net
tangible book value of the Shares after the purchase takes place. The net
tangible book value of Common Stock is equal to stockholders' equity applicable
to the Common Stock as shown on the Company's balance sheet divided by the
number of shares of Common Stock outstanding. As a result of such dilution, in
the event the Company is liquidated, a purchaser of Shares may receive less than
his initial investment and a present stockholder may receive more.
6
<PAGE>
The net tangible book value of the Company's Common Stock as of January 15, 1998
was $0.00 per share. After giving effect to the receipt of estimated net
proceeds of $100,000 thousand dollars from the sale by the Company of 2,000,000
shares of Common Stock the pro forma net tangible book value would then be
$100,000 thousand dollars or $0.03 per share of Common Stock. This represents an
immediate increase in net tangible book value of $0.03 per share of Common Stock
to existing holders of Common Stock from the proceeds of the Offering and
substantial dilution to the new investors (i.e., the difference between the
assumed initial offering price of $0.05 per share of Common Stock and the pro
forma net tangible book value per share) of $0.02 per share of Common Stock.
USE OF PROCEEDS
The net proceeds of the offering will be $100,000. The principal purposes and
priorities in which proceeds are to be used are as set forth below:
- --------------------------------------------------------------------------------
Gross Amount of Proceeds: $100,000.00 100.0%
- --------------------------------------------------------------------------------
Miscellaneous Expenses 5,000.00 5.0
- --------------------------------------------------------------------------------
Working Capital 8,000.00 8.0
- --------------------------------------------------------------------------------
Accounting & Legal Fees 10,000.00 10.0
- --------------------------------------------------------------------------------
Officers Salaries (1 year) 12,000.00 12.0
- --------------------------------------------------------------------------------
Web Site Development ("Mall of Fame") 20,000.00 20.0
- --------------------------------------------------------------------------------
Consulting Fees 20,000.00 20.0
- --------------------------------------------------------------------------------
Computer & Office Equipment 25,000.00 25.0
- --------------------------------------------------------------------------------
Total $100,000.00 100.0%
- --------------------------------------------------------------------------------
The amounts set forth above merely indicate the proposed use of proceeds. Actual
expenditures may vary substantially from these estimates depending upon economic
conditions and the production and sale of the products and services provided by
the Company. Accordingly the Company reserves the option to seek additional
funds through loans, other offering of the Company's securities or other
financial arrangements.
7
<PAGE>
PROPOSED BUSINESS OF THE COMPANY
History and Organization
- ------------------------
Mall of Fame, Inc. (the "Company") was organized as a Nevada corporation in
January of 1998. Its principal office is currently located at 11974 Avenida
Consentido, San Diego, California 92128. The telephone number is (619) 675-4449.
The fax number is (619) 675-4443.
The Company
- -----------
The Company was formed to create and design a fully functional, interactive
Internet Web Site which will allow the public to access an Internet shopping
mall to market and sell the products and/or services of celebrities (such as
movie and television stars, professional athletes, and professional musicians).
The Company is a start-up enterprise in the development stage and has had no
revenues to date.
Business of the Company
- -----------------------
Web Site Design and Development: The Company intends to establish a "virtual
mall" where celebrities and famous people can present and sell any of their
products and/or services. Fans will be able to visit the Mall and purchase
products from a celebrity via credit and debit card orders. The transaction will
be able to be placed on-line (via a secured transaction) or fans will have the
option of calling a toll free number. The Company's site will allow the
estimated 60 million Internet users world-wide to have continual access to their
favorite celebrities products, 24 hours a day, seven days a week! Celebrities
with large fan followings will be listed on the site at no charge. Additional
Web pages may be designed for certain celebrities if the management of the
Company determines that it is in their best interest. Management has already
begun discussions with a number of celebrities who have expressed strong
interest. The Company plans to design the site to accommodate up to 10,000
celebrities and famous people.
World Wide Web Publishing Services: The Company offers a number of Internet
publishing services to its subscribers, including; (i) Web graphic design, (ii)
User interface design, (iii) Content creation and management, and (iv) Secure
financial transactions.
Web Graphic design: The Company's user interface design service focuses on
maximizing the ease with which Internet users can navigate through and use a
customer's Web site, regardless of the particular Internet software used.
Specifically, the Company makes recommendations as to which information should
be presented and what types of layouts and information organizations should be
used.
User Interface Design: The Company's Web graphic design and content creation and
management services assist customers in translating existing text and graphics
into HTML (hypertext markup language), an Internet publishing language, or other
Internet-compatible protocols. The Company also offers assistance to its
customers in developing, planning, and implementing a management process for the
customers' publication data and its appearance on the Internet.
8
<PAGE>
Advertising: The Company also plans to sell advertising on the Mall of Fame by
means of ad banners and links to other sites. All areas of the site will be
designed to allow significant advertising space. This could, potentially,
generate significant revenue for the Company.
Secure Financial Transactions: The development of commerce over the Web has been
hampered somewhat by a shortage of "secure" transactions mechanisms. The Company
is currently programming a secure credit card payment system for its largest
Internet customers. The development of this system, and other like it, may
contribute to the use of credit card payment systems by commercial organizations
over the World Wide Web. The Company plans, and intends to market system to its
customers in general.
Market
- ------
Demand for access to celebrities and their product continues to grow at a
phenomenal rate. The Company estimates that over 200 million fans, in the U.S.
alone, spend almost $100 billion each year on celebrity related products: from
movies and television, to sports, to music, plus the many other forms of
entertainment. Fans have an insatiable and desire to know every possible detail
about their favorite celebrity. They want to be able to interact in some way
with the celebrity and own something that was personalized by him or her.
Additionally, certain Celebrities have developed their own line of products
which they want to promote and they would welcome a way to assist their business
growth and exposure through 24 hour a day interaction with their fans and
potential consumers.
At the same time, the Internet has become the latest, hottest, fastest growing
medium for communication and advertising. Current estimates are that the
Internet is growing at a rate of 20% percent a month, and that there are
currently over 60 million Internet users worldwide. Over 40% of all US
households are estimated to now have a PC, with up to 30% of those owners using
the Internet on a regular basis. The Internet's pace of growth accelerates each
month. It is spreading faster than cable television, VCRs, cellular phones, fax
machines--faster than any telecommunication product in history. Current
projections indicate that by the year 2000, 187 million host computers will be
connected to an Internet constituting 4.1 million networks dispersed around the
globe.
Now fans and potential buyers will be able to attain that next level of intimacy
with their favorite celebrity. The instant gratification they dreamed of can now
belong to them, interactively, over the Internet, 24 hours a day.
9
<PAGE>
Competition
- -----------
Management has found other Internet sites with similar concepts. The number of
such sites will, no doubt, continue to grow with the popularity of the Internet.
However, there are so many other interests and opportunities on the Internet
that the management does not expect overwhelming competition in this niche
celebrity market chosen by the Company.
Accordingly, the Company expects to remain for an indeterminate time, a small
participant in the business of marketing celebrity products over the Internet.
The Company also believes that the services to be developed by the Company will
be sufficiently unique in the content of the Web Site that the Company may
derive revenues beyond the normal expectancy for such initial services.
Management
- ----------
The directors and executive officers of the Company are as follows:
- --------------------------------------------------------------------------------
Name and Address Position
- --------------------------------------------------------------------------------
Joseph G. Lucidi President
11974 Avenida Consentido Member of the Board of Directors
San Diego, California 92128
- --------------------------------------------------------------------------------
Christopher Q. Lucidi Vice President
11974 Avenida Consentido Member of the Board of Directors
San Diego, California 92128
- --------------------------------------------------------------------------------
Karen L. Tovar Secretary & Treasurer
8701 Mesa Road, Space 67 Member of the Board of Directors
Santee, California 92071
- --------------------------------------------------------------------------------
The directors named above will serve until the first annual meeting of the
Company's shareholders. Thereafter, directors will be elected for one-year terms
at the annual shareholders' meeting. Officers will hold their positions at the
pleasure of the Board of Directors, absent any employment agreement, of which
none currently exist or are contemplated.
The directors and officers initially will devote their time to the Company's
affairs on an "as needed" basis, the amount of which is undetermined at this
time. Such time could amount to as little as ten percent of the time they devote
to their own business affairs.
There are no other persons whose activities are material to the Company's
operations.
Compensation
- ------------
The Board of Directors has adopted a salary compensation for the Directors and
Officers of the Company. Currently, only the Vice President will receive a
salary of $1,000 per month for the next twelve months. At the end of the twelve
months, the financial condition of the company will dictate the compensations of
10
<PAGE>
the Vice President and other Officers and Directors, plus the Company will
reimburse its officers and directors for any out-of pocket expenses incurred on
behalf of the Company. The Company does not have any pension, profit-sharing,
stock bonus, or other benefit plans. Such plans may be adopted in the future at
the discretion of the Board of Directors.
Indemnification and Exclusion of Liability of Directors and Officers.
- ---------------------------------------------------------------------
So far as permitted by the Nevada Business Corporation Act, the Company's
Articles of Incorporation provide that the Company will indemnify its directors
and officers against expenses and liabilities they may incur and defend, settle
or satisfy any civil or criminal action brought against them on account of their
being or having been Company directors or officers unless, in any such action,
they are adjudged to have acted with gross negligence or to have engaged in
willful misconduct. Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended, (collectively, the "Acts") may be permitted to directors, officers or
controlling persons pursuant to foregoing provisions, the Company has been
informed that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Acts and is,
therefore, unenforceable.
RESUMES
Joseph G. Lucidi
President, Member of the Board of Directors
- -------------------------------------------
Mr. Lucidi is currently serving as President and is also a Member of the Board
of Directors. His job responsibilities include general supervision and control
of all of the business and affairs of the Corporation. Mr. Lucidi's
accomplishments in the past, financially speaking, began back in 1973, when he
purchased the Bar & Restaurant Supply Co. for $17,000 and later sold it in 1976
for $205,000. In 1974, he started a Milwaukee Electric Tool business and within
two years, built it into the largest dealership in the State of Michigan. He
started this business with relatively no cash and some minor inventory, and sold
it in 1980 for $100,000. In 1975, he started a small drywall business and ran it
for two years, before deciding to dissolve the business in 1980, and it made
approximately $20,000 a year net profit. In 1976 he purchased and A&W Restaurant
for $135,000, and later sold the business in 1979 for $270,000. In 1982, after
selling all of his assets in the State of Michigan, he moved to California and
started Zips Tummy Buster, a submarine sandwich and pizza restaurant, in Kearny
Mesa. The original Zips Tummy Buster was built for about $100,000 and later sold
for $360,000. Between 1984 and 1989, Mr. Lucidi would build and operate five (5)
more Zips Tummy Busters in the San Diego area, all of which were eventually sold
for a gross profit in excess of $550,000. In 1988 he acquired the Hamburger
Factory for a purchase price of $80,000, which at the time was grossing about
$165,000. With his hard work and dedication, the Hamburger Factory currently
grosses over $1,200,000 annually, and is expected to be sold for well over one
million dollars in the future. Mr. Lucidi has a proven successful track record
in the business world and will prove to be a valuable asset to the Company.
11
<PAGE>
Karen L. Tovar
Secretary & Treasurer, Member of the Board of Directors
- -------------------------------------------------------
Ms. Tovar is currently serving as Secretary and Treasurer and is also a Member
of the Board of Directors. Ms. Tovar has had extensive experience and training
in the Secretarial and related areas in the past. In 1994 she worked with
Law/Crandall, Inc., a worldwide environmental engineering corporation based in
Phoenix, Arizona as an administrative assistant. While working there she
participated in office organization, assistance of support staff, and production
of CA documents, document control logs, Project manuals, summary logs, and
weekly progress reports. Prior to that position she worked with Danieal J.
Gatto, CPA as an accountant with job responsibilities including data entry,
client accounting system, time and billing system, depreciation and amortization
schedules, W-2, and 1099. Ms. Tovar's past experiences will prove to be a
valuable asset to the Company and its proposed future plans.
Christopher Q. Lucidi
Vice-President, Member of the Board of Directors
- ------------------------------------------------
Mr. Lucidi is currently the Vice President and a Member of the Board of
Directors. Prior to this position, Mr. Lucidi was the Chief of Operations
Officer, Secretary, Treasurer and a member of the Board of Directors for
Celebrity Network, Inc., a full service Internet site involving celebrities,
conducting business similar to the Company's proposed plans. With this in mind,
Mr. Lucidi poses to be a valuable asset to the Company. His responsibilities
while working with Celebrity Network included setting up and maintaining all
accounting records including accounts payable, accounts receivable, payroll,
taxes, and all incorporation filings, and business licenses. He was also in
charge of supervising day to day operations of Celebrity Network including the
marketing of their web site. Mr. Lucidi will apply his past knowledge in these
fields to help make the Company a success.
CONFLICTS OF INTEREST
Initially, none of the officers of the Company will devote 100% of their time to
the affairs of the Company. All of the officers have employment or business
activities outside of the Company. There will be occasions when the time
requirements of the Company conflict with the demands of the officers' other
employment. In this event, such conflicts may require that the Company attempt
to employ additional personnel. There is no assurance that the services of such
persons will be available or that they can be obtained upon terms favorable to
the Company.
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.
No such indication of interest has yet been declared. If such areas of interest
12
<PAGE>
are delineated, all business interests which may conflict with those of the
Company which come to the attention of an officer and/or director of the Company
must be promptly disclosed to the Board of Directors and made 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.
STOCK
The following table sets forth information with respect to the share ownership,
both before and after this offering, of all beneficial 5% or more shareholders,
directors, officers and the officers and directors as a group, of the Stock of
the Company.
Principal Shareholders
- --------------------------------------------------------------------------------
Owner Shares Owned Percent Before Percent After
Offering Offering
- --------------------------------------------------------------------------------
Joseph G. Lucidi
11974 Avenida Consentido 2,800,000 93.3% 56.0%
San Diego, California 92128
- --------------------------------------------------------------------------------
Christopher Q. Lucidi
11974 Avenida Consentido 100,000 3.3% 2.0%
San Diego, California 92128
- --------------------------------------------------------------------------------
Karen L. Tovar
8701 Mesa Road, Space 67 100,000 3.3% 2.0%
Santee, CA 92071
- --------------------------------------------------------------------------------
Description of Securities
- -------------------------
The Company is offering 2,000,000 Shares (the "Shares") in this offering at a
price of $.05 per share. The Company is authorized to issue 50,000,000 shares of
its Common Stock, $.001 par value. Each share of Common Stock is entitled to
share pro rata in dividends and distributions with respect to the Common Stock
when, as and if declared by the Board of Directors from funds legally available
therefor. No holder of any shares of Common Stock has any pre-emptive right to
subscribe for any of the Company's securities. Upon dissolution, liquidation or
winding up of the Company, the assets will be divided pro rata on a
share-for-share basis among holders of the shares of Common Stock after any
required distribution to the holders of the preferred stock. All shares of
Common Stock outstanding are fully paid and non-assessable and the shares will,
when issued upon payment therefore as contemplated hereby, be fully paid and
non-assessable. Each shareholder of Common Stock is entitled to one vote per
share with respect to all matters that are required by law to be submitted to
shareholders. The shareholders are not entitled to cumulative voting in the
election of directors. Accordingly, the holders of more than 50% of the shares
voting for the election of directors will be able to elect all the directors if
they choose to do so.
13
<PAGE>
PRICING THE OFFERING
There is no market for the Shares. Although the Company plans to try and develop
a market for the shares, there is no assurance that a market will develop for
such following the offering. The offering price of the Shares to be sold in the
offering was determined by the Company. In determining the offering price and
number of Shares to be offered, the Company considered such factors as the
financial condition of the Company, its net tangible book value, lack of
operating history, and general condition of the securities markets. Accordingly,
the offering price set forth on the cover page of this Prospectus should not be
considered to be an indication of the book value of the stock. The price bears
no relation to the Company's assets, book value, lack of earnings or net worth
or any other traditional criterion of value. Even in the event a market develops
for the Common Stock of the Company, it is unlikely that normal market forces
will result in a price increase of the Common Stock.
LITIGATION
The Company is not presently a party to any litigation nor, to the knowledge of
Management, is any litigation threatened.
LEGAL MATTERS
Patricia Cudd & Associates whose principle address is 1120 Lincoln Street, Suite
703, Denver, Colorado 80203 will provide legal services in rendering an opinion
with respect to the exemption to registration of the shares of common stock of
the Company offered in this offering.
EXPERTS
Sam Cordovano of Cordovano and Company whose principal address is 201 Steele
Street, Suite 300; Denver, Colorado, independent certified public accountants,
will act as auditor with respect to the financial and accounting statements of
the Company.
ADDITIONAL INFORMATION
The Company will file within 15 days of the 1st sale, with the Securities and
Exchange Commission a Notice of Sale of Securities Pursuant to Regulation D,
Section 4(6), and/or Uniform Limited Offering Exemption (the "Notice") on Form D
under the provisions of the Securities Act of 1933. Copies of the Notice on Form
D may be purchased at the Commission's principal office, upon payment of the
fees presented by the Commission, or at the Company's corporate offices during
regular business hours.
14
