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As filed with the Securities and Exchange Commission on December 27, 1999
SEC Registration No. *
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
1STOPSALE.COM HOLDINGS INC.
(Name of small business issuer in its charter)
Delaware 5961 23-3020677
(State or (Primary Standard Industrial) (I.R.S. Employer
jurisdiction of Classification Code Number) Identification
incorporation or Number.)
organization)
1422 Chestnut Street, Suite 410
Philadelphia, PA 19102
Phone: (215) 569-9175
Fax: (215) 569-4710
(Address and telephone number of registrant's principal executive offices
and principal place of business)
William Tay, President
1422 Chestnut Street, Suite 410
Philadelphia, PA 19102
Phone: (215) 569-9175
Fax: (215) 569-4710
Email: [email protected]
(Name, address, and telephone number of agent for service)
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Title of each class|Amount to be|Proposed maximum |Proposed maximum|Amount
of securities to be|registered |offering price/unit|aggregate price |of fee
registered
Common Stock 5,000,000 $0.20 $1,000,000 $264.00
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The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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PROSPECTUS
[LOGO 1STOPSALE.COM]
1STOPSALE.COM HOLDINGS INC.
Maximum of 5,000,000 shares of common stock
Price per share: $0.20.
Total proceeds if maximum sold: $1,000,000.
This is our initial public offering so there is currently no public
market for our shares. However, we hope to have prices for our shares quoted on
the bulletin board maintained by the National Association of Securities Dealers
after we complete our offering.
AN INVESTMENT IN OUR COMPANY IS RISKY, ESPECIALLY GIVEN THE YOUNG AGE
OF OUR COMPANY. ONLY PEOPLE WHO CAN AFFORD TO LOSE THE MONEY THEY INVEST IN OUR
COMPANY SHOULD INVEST IN OUR SHARES. A FULL DISCUSSION OF THE RISKS OF OWNING
OUR SHARES BEGINS AT PAGE 6 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF OUR SHARES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OF COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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Price to Commissions & Proceeds to
Public(1) Discounts(1)(2) Company (2)
Per Share $0.20 $.00 $0.20
Total Maximum $ 1,000,000 $.00 $1,000,000
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1) The offering price is payable in cash upon subscription. The offering will
be managed by us and the shares will be offered and sold by our officers,
without any discounts or other commissions
2) Proceeds to us are shown before deducting other offering expenses payable
by us for legal and accounting fees and printing costs.
We will be selling our shares using our best efforts and no one has
agreed to buy any of our shares. There is no minimum amount of shares we must
sell so no money raised from the sale of our stock will go into escrow, trust or
another similar arrangement. The offering will remain open until December 1,
2000, unless we decide to cease selling efforts prior to this date.
The information in this prospectus is not complete and may be changed.
We may not sell our shares until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell our shares and it is not soliciting an offer to buy our shares in any
state where the offer or sale is not permitted.
1STOPSALE.COM HOLDINGS INC.
1422 Chestnut Street
Suite 410
Philadelphia, Pennsylvania 19102
The date of this prospectus is *___, 1999
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TABLE OF CONTENTS
PROSPECTUS SUMMARY...........................................................5
RISK FACTORS.................................................................6
USE OF PROCEEDS..............................................................9
DETERMINATION OF OFFERING PRICE..............................................9
DILUTION....................................................................10
PLAN OF DISTRIBUTION........................................................11
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS...........................11
LEGAL PROCEEDINGS...........................................................11
LEGAL MATTERS...............................................................12
EXPERTS.....................................................................12
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS................12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..............13
DESCRIPTION OF SECURITIES...................................................13
SHARES ELIGIBLE FOR FUTURE SALE.............................................14
CERTAIN TRANSACTIONS........................................................17
BUSINESS....................................................................18
MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.....................26
FINANCIAL STATEMENTS........................................................F1
Until ___________________________, 2000, all dealers that effect
transactions in our shares, whether or not participating in this offering, may
be required to deliver a prospectus. This is in addition to the dealer's
obligation to deliver a prospectus when acting as underwriters and with respect
to their unsold allotments or subscriptions.
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PROSPECTUS SUMMARY
This summary highlights important information. As a summary, it is
necessarily incomplete and does not contain all the information you should
consider before investing. You should read the entire Prospectus carefully.
OUR COMPANY
1STOPSALE.COM HOLDINGS INC. was incorporated under the laws of the
State of Delaware on October 5, 1999. We have not commenced active business
operations and are considered a development stage enterprise.
We intend to become a holding company engaged in building a broad
network of successful Internet-based retail operating companies, joint ventures,
strategic alliances, and partnerships. We hope to become the first true Internet
commerce conglomerate. We will not be limited to a single area of electronic
commerce or e-commerce. Rather than limiting activities to books, CD's,
computers, or any other one class of product, we will aggressively pursue a
diverse range of commercial Internet activities.
Our principal office is currently located at 1422 Chestnut Street,
Suite 410, Philadelphia, Pennsylvania 19102. Our telephone number at that
location is (215) 569-9175 and our facsimile number is (215) 569-4710.
THE OFFERING
Securities offered. Up to a maximum of 5,000,000 shares of Common stock,
$.001 par value.
Offering price. The shares are offered at $0.20 per Share for total
gross offering proceeds of $1,000,000.
Terms of the offering. There is no minimum offering. Accordingly, as
shares are sold, we will use the money raised for
our activities. The offering will remain open until
December 1, 2000, or an additional 60 days in the sole
discretion of our management, unless the maximum
proceeds are earlier received or we determine, in our
sole discretion to cease selling efforts.
Use of proceeds. We intend to use the net proceeds of this offering
primarily for the development of our books and music
retail Web sites and related activities, computer and
office equipment purchases and for working capital and
general corporate purposes.
Plan of distribution. This is a best efforts offering, with no commitment
by anyone to purchase any shares. The offering will
be managed by us and the Shares will be offered and
sold by our officers, without any discounts or other
commissions.
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RISK FACTORS
Any investment in our common stock involves a high degree of risk. You
should carefully consider the following information about these risks, together
with the other information contained in this prospectus, before you decide
whether to buy our common stock. If any of the following risks actually occur,
our business, results of operations and financial condition would likely suffer.
In any such case, the market price of our common stock could decline, and you
may lose all or part of the money you paid to buy our common stock.
The risks and uncertainties described below are not the only ones we
face. Additional risks and uncertainties, including those not presently known to
us or that we currently deem immaterial, may also impair our business.
OUR COMPANY IS ONLY RECENTLY ORGANIZED, WITH NO OPERATING HISTORY. Our
company was only recently organized and is a start-up company. We have no
operating history and we have not conducted any significant business prior to
our organization. There is nothing at this time on which to base an assumption
that our business plans will prove successful, and there is no assurance that we
will be able to operate profitably.
THE SUCCESS OF OUR COMPANY IS DEPENDENT ON OUR MANAGEMENT WHO HAS
LIMITED EXPERIENCE AND WILL NOT SPEND FULL TIME WORKING WITH OUR COMPANY. As
compared to many other public companies, our company does not have a depth of
managerial and technical personnel. Our management has only limited experience
with the business proposed to be engaged in by us. Furthermore, our officers
will not be employed full time, at least initially, and are involved with other
businesses and have other interests which could give rise to conflicts of
interest with respect to the business of and amount of time devoted to our
company.
WE CURRENTLY HAVE NO SIGNIFICANT OPERATING CAPITAL AND ARE DEPENDENT
UPON THE SUCCESS OF THIS OFFERING TO BE ABLE TO IMPLEMENT OUR BUSINESS PLAN. We
presently have no significant operating capital and we are totally dependent
upon receipt of the proceeds of this offering to provide the capital necessary
to commence our proposed business. Upon completion of the offering, the amount
of capital available to us will still be extremely limited, especially if less
than the total amount of the offering is raised. We have no commitments for
additional cash funding beyond the proceeds expected to be received from this
offering. In the event that the proceeds from this offering are not sufficient,
we may need to seek additional financing from commercial lenders or other
sources, for which we presently have no commitments or arrangements.
OUR FACILITIES MAY MALFUNCTION OR BE DAMAGED CAUSING US TO BE UNABLE TO
CONTINUE TO CONDUCT BUSINESS. Our facilities will house a variety of hardware
and software computer systems. Our operations depend on our ability to protect
these systems against damage from fire, earthquakes, power loss,
telecommunications failures, break-ins and similar events. Additionally,
computer viruses, electronic break-ins or other similar disruptive problems
could harm our operations. A disaster or malfunction that disables our facility
could cause an interruption in the production and distribution of our products
and services, or limit the quantity or timeliness of updates to our productions.
Our insurance policies may not adequately compensate us for any losses that may
occur due to any failures or interruptions in our systems. We do not presently
have a formal disaster recovery plan.
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IF WE ARE UNABLE TO KEEP UP WITH TECHNOLOGY, OUR BUSINESS WILL SUFFER.
To be competitive, we must be able to enhance and improve the responsiveness,
functionality and features of our Web sites or Internet storefronts. Internet
e-commerce and other Internet-based industries are currently characterized by
rapid technological change, changes in customer requirements and preferences,
frequent new product and service introductions embodying new technologies, and
the emergence of new industry standards and practices that could render our Web
sites and enabling technologies obsolete. If we are unable, for technical,
legal, financial or other reasons, to adapt quickly to changing market
conditions and customer requirements, our business, financial condition and
results of operations would be materially adversely affected.
IF WE ARE UNABLE TO PROTECT OUR CUSTOMERS AGAINST UNAUTHORIZED CHARGES,
WE WILL NOT BE SUCCESSFUL. A significant barrier to e-commerce and
communications is the secure transmission of confidential information over
public networks. We rely on licensed third party encryption and authentication
technology to provide the security and authentication necessary to effect secure
transmission of confidential information, such as customer credit card numbers.
Advances in computer capabilities, new discoveries in the field of
cryptolography, or other events or developments may result in a compromise or
breach of the algorithms we use to protect our customers, transaction data or
our software vendors and products. Someone who is able to circumvent our
security measures could misappropriate proprietary information to cause
interruptions in our operations. We may be required to expend significant
capital and other resources to protect against such security breaches or
alleviate problems caused by such breaches. Such expenditures could have a
material adverse effect on our business, results of operations and financial
condition.
WE MUST HIRE QUALIFIED PERSONNEL TO BE ABLE TO CONDUCT OUR BUSINESS
PROPERLY. Our success will depend, in part, upon our ability to attract and
retain qualified employees, technical consultants and management personnel. We
are unable to provide any assurance or guarantee that we will be able to
attract, integrate or retain sufficiently qualified personnel. Our inability to
retain additional qualified personnel in the future could harm our business.
BECAUSE OUR COMPANY'S SUCCESS IS DEPENDENT UPON OUR COMPUTER SYSTEM,
Y2K PROBLEMS COULD DAMAGE OUR COMPANY. Many existing computer programs use only
two digits to identify a year. These programs were designed and developed
without addressing the impact of the upcoming change in the century. If not
corrected, many computer software applications could fail or create erroneous
results by, at or beyond the year 2000. We use software, computer technology and
other services internally developed and provided by third-party vendors that may
fail due to the year 2000 problem. These failures or miscalculations could cause
disruptions of our operations, including a temporary inability to process
customer orders, operate our Web sites or engage in similar ordinary business
activities.
THERE IS NO CURRENT PUBLIC MARKET FOR OUR SHARES AND THERE CAN BE NO
ASSURANCE THAT ONE WILL DEVELOP IN THE FUTURE, THUS LIMITING THE TRANSFERABILITY
OF OUR SHARES. There is currently no market for any of our Shares and no
assurances are given that a public market for such securities will develop after
the closing of this offering or be sustained if developed. While we plan
following the closing of this offering to take affirmative steps to request or
encourage one or more broker/dealers to act as a market maker for our
securities, no such efforts have yet been undertaken and no assurances are given
that any such efforts will prove successful.
WE HAVE NEVER PAID DIVIDENDS AND DO NOT ANTICIPATE PAYING DIVIDENDS IN
THE FUTURE, THUS LIMITING YOUR ABILITY TO RECOVER YOUR INVESTMENT IN THE SHARES.
We have never paid any cash dividends on our common stock and we do not
anticipate paying cash dividends in the foreseeable future. The payment of
dividends by us will depend on our earnings, financial condition and other
business and economic factors affecting us at that time, as our Board of
Directors may consider relevant. We currently intend to retain any earnings to
provide for the development and growth of our company.
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OUR MANAGEMENT'S CONTROL OF OUR COMPANY WILL LIMIT THE ABILITY OF OTHER
SHAREHOLDERS TO DIRECT THE MANAGEMENT OF OUR COMPANY. After completion of this
offering, assuming all of the shares offered hereby are sold, our management,
inclusive of our Board of Directors, will own 11,500,000 shares of our
outstanding common stock. Thus, management will control approximately 70% of the
our voting securities, if all shares offered are sold. As a result, our
management will effectively control the affairs of our company, including the
election of all of our Board of Directors, the issuance of additional shares of
Common stock for a stock option plan or otherwise, the distribution and timing
of dividends, if any, and all other matters.
OUR MANAGEMENT MAY BEGIN SELLING SHARES IN OCTOBER, 2000, POTENTIALLY
DEPRESSING THE PRICE OF OUR COMMON STOCK. All of our presently outstanding
shares of common stock, aggregating 11,500,000 shares of common stock, are
"restricted securities" as defined under Rule 144 promulgated under the
Securities Act and may only be sold pursuant thereto. Mr. William Tay, our
principal executive officer, owns an aggregate of 11,500,000 restricted shares
that he could begin to sell under Rule 144 beginning on October 7, 2000. A sale
of shares by Mr. Tay may have a depressing effect upon the price of our common
stock in any market that might develop.
THERE IS NO FIRM COMMITMENT BY AN UNDERWRITER TO PURCHASE OUR SHARES
AND NO MINIMUM AMOUNT THAT MUST BE PURCHASED SUCH THAT WE MAY NOT RAISE ENOUGH
MONEY TO BE ABLE TO EFFECTIVELY CONDUCT BUSINESS. There is no underwriter and no
firm commitment on the part of anyone to purchase all or any part of this
offering, and no assurances are given that any part of the offering will be
sold. The receipt of no or nominal proceeds will have a material adverse effect
upon our company and investors. In addition, there is no minimum amount that may
be sold under this offering. As shares are sold, we can immediately use the
funds for any legitimate business purpose. If we only sell a small number of
shares, we will not generate significant funds and will probably be unable to
fully implement our business plan.
OUR SHARES MAY BE SUBJECT TO THE PENNY STOCK RULES, THUS MAKING OUR
SHARES MORE DIFFICULT TO SELL IN ANY MARKET. Broker-dealer practices in
connection with transactions in "penny stocks" are regulated by certain rules
adopted by the Securities and Exchange Commission. Penny stocks generally are
equity securities with a price of less than $5.00. The penny stocks generally
increase the amount of disclosure that must be provided by a broker dealer,
making trades in penny stocks more cumbersome. Because it is likely that our
shares will be classified as a "penny stock", these additional rules and
restrictions may decrease the ability of a shareholder to easily sell his shares
in our company, thus potentially decreasing our shareholders' ability to easily
sell shares of our common stock.
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USE OF PROCEEDS
The net proceeds to us from the sale of the 5,000,000 Shares offered
hereby at a public offering price of $0.20 per Share will vary depending upon
the total number of Shares sold. Regardless of the number of shares sold, we
expect to incur offering expenses estimated at $55,000 for legal, accounting,
printing and other costs in connection with the offering. The following table
sets forth gross and net proceeds, under the maximum raised, and our
management's present estimate of the allocation and prioritization of net
proceeds expected to be received from this offering. Actual receipts and
expenditures may vary from these estimates.
AMOUNT PERCENTAGE
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GROSS PROCEEDS $1,000,000 100.00%
Offering Expenses (1) 55,000 5.50
NET OFFERING PROCEEDS $ 945,000 94.50
Web Site Development (1STOPSALE.COM) 200,000 21.16
Sales & Marketing 150,000 15.87
Computer & Office Equipment 100,000 10.58
Compensation to Management 80,000 8.47
Accounting & Legal Fees 70,000 7.41
Consulting Fees 50,000 5.29
Internet Access 30,000 3.18
Operating Expenses & Working Capital 265,000 28.04
TOTAL $ 945,000 100.00%
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(1) Regardless of the number of Shares sold in the offering, we will incur
offering expenses for legal and accounting fees and costs, printing and
transfer agent costs, filing fees, etc.
DETERMINATION OF OFFERING PRICE
There is no established public market for the shares of Common stock
being registered. As a result, the offering price and other terms and conditions
relative to the shares of Common stock offered hereby have been arbitrarily
determined by us and do not necessarily bear any relationship to assets,
earnings, book value or any other objective criteria of value. In addition, no
investment banker, appraiser or other independent, third party has been
consulted concerning the offering price for the Shares or the fairness of the
price used for the Shares.
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DILUTION
You will suffer substantial dilution in the purchase price of your
stock compared to the net tangible book value per share immediately after the
purchase.
Dilution is the difference between the public offering price of $0.20
per share for the Common stock offered herein, and the net tangible book value
per share of the Common stock immediately after its purchase. Our net tangible
book value per share is calculated by subtracting our total liabilities from our
total assets less any intangible assets, and then dividing by the number of
shares then outstanding.
Our net tangible book value prior to the offering, based on the
November 30, 1999 financial statements, was $11,500 or approximately $.001 per
common share. Prior to selling any shares in this offering, we had 11,500,000
shares of Common stock outstanding, which were purchased by the founding
shareholder on October 6, 1999 for $11,500 or $.001 per share. We are now
offering up to 5,000,000 shares at $0.20 per share. If all Shares offered herein
are sold, we will have 16,500,000 shares outstanding upon completion of the
offering. Our post offering pro forma net tangible book value, which gives
effect to receipt of the net proceeds from the offering assuming payment of a
sales commission on all shares sold and payment and issuance of the additional
shares of common stock in the offering, but does not take into consideration any
other changes in our net tangible book value, will be $816,500 or approximately
$0.05 per share. This would result in dilution to investors in this offering of
$.15 per share, or 75% from the public offering price of $0.20 per share. Net
tangible book value per share would increase to the benefit of our present
stockholders from $.001 prior to the offering to $.05 after the offering, or an
increase of $0.049 per share attributable to purchase of the Shares by investors
in this offering.
The following table sets forth the estimated net tangible book value
("NTBV") per share after the offering and the dilution to persons purchasing
Shares based on the foregoing maximum offering assumptions.
Public offering price/share $0.20
NTBV/share prior to offering $0.001
Increase attributable to new investors $0.049
Post offering pro forma NTBV/share $0.05
Dilution $0.15
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PLAN OF DISTRIBUTION
GENERAL
We are offering up to a maximum of 5,000,000 Shares at a price of $0.20
per Share to be sold by our executive officers and directors. The Shares will be
sold through our executive officers and directors, so no compensation will be
paid with respect to such sales, except for reimbursement of expenses actually
incurred on behalf of our company in connection with such activities. Since the
offering is conducted on a "best efforts" basis, there is no assurance that any
of the Shares offered hereby will be sold.
The offering will remain open for a period until December 1, 2000 or an
additional 60 days in our sole discretion, unless the maximum proceeds are
earlier received or we decide, in our sole discretion, to cease selling efforts.
Our officers, directors and stockholders and their affiliates may purchase
Shares in this offering.
NO ESCROW OF PROCEEDS
There is no escrow of any of the proceeds of this offering.
Accordingly, we will have use of such funds once we accept a subscription and
funds have cleared. Such funds shall be non-refundable to subscribers except as
may be required by applicable law.
PENNY STOCK REFORM ACT OF 1990
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure for trades in any stock defined as a penny stock. The SEC
has adopted regulations that generally define a penny stock to be any equity
security that has a market price of less than $5.00 per share, subject to
exceptions. Under this rule, broker/dealers who recommend these securities to
persons other than established customers and accredited investors must make a
special written suitability determination for the purchaser and receive the
purchaser's written agreement to a transaction before sale. Our shares will
probably be subject to the Penny Stock Reform Act, thus potentially decreasing
the ability to easily transfer our shares.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that reflect our
views about future events and financial performance. Our actual results,
performance or achievements could differ materially from those expressed or
implied in these forward-looking statements for various reasons, including those
in the "Risk Factors" section beginning on page 6. Therefore, you should not
place undue reliance upon these forward-looking statements.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance, or achievements.
LEGAL PROCEEDINGS
We are not a party to or aware of any threatened litigation of a
material nature.
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LEGAL MATTERS
The validity of the shares offered under this prospectus is being
passed upon for us by Hoge, Evans, Holmes, Carter & Ledbetter PLLC, Hampton
Court, Suite 600, 4311 Oaklawn, Dallas, Texas 75219.
EXPERTS
The financial statements of 1STOPSALE.COM HOLDINGS INC. for the period
from inception on October 5, 1999 through November 30, 1999, included in this
prospectus have been examined by Pritchett, Siler & Hardy, P.C., independent
certified public accountants, as indicated in their report, and are included in
this prospectus in reliance on the report given upon the authority of that firm
as experts in accounting and auditing.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth the directors and executive officers of
our company, their ages, term served and all officers and positions with our
company. A director is elected for a period of one year and thereafter serves
until his or her successor is duly elected by the stockholders and qualifies.
Officers and other employees serve at the will of the Board of Directors.
There are no arrangements or understandings regarding the length of
time a director of our company is to serve in such a capacity. Our director
holds no directorships in any other company subject to the reporting
requirements of the Securities Exchange Act of 1934.
Name of Director Age Term Served Positions with Company
- ---------------- --- --------------- ----------------------
William Tay 28 Since inception President, Secretary-
Treasurer & Director
Mr. Tay will serve as management of our company. A brief description of
his background and business experience is as follows:
WILLIAM TAY, the founder of our company. Mr. Tay has been the
President, Secretary-Treasurer and Director since our company's inception.
Previously, Mr. Tay was self-employed where he designed and programmed numerous
Web sites for searching the Internet. Besides web programming, Mr. Tay is also
the founder and sole owner of Com2000.net Inc., a Windows NT Web presence
provider based in Philadelphia, Pennsylvania. Mr. Tay has more than 5 years of
Windows NT, Network Administration, HTML, Java, and CGI Perl programming
experience. Mr. Tay has been involved in Internet technologies since 1994. Prior
to 1994, Mr. Tay was a licensed NASD Series 7 Registered Representative.
EXECUTIVE COMPENSATION
1STOPSALE.COM HOLDINGS is only recently incorporated, has not yet
commenced planned operations and has not paid any compensation to its executive
officers or director to date. In the future our officers will not be employed
full time initially and will not receive a regular salary, wage or other cash
compensation for their time, unless and until our business operations develop to
the point where a full time or other extensive time commitment is required. Our
officers will be entitled to reimbursement of any out of pocket expenses
reasonably and actually incurred on behalf of our company.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of our company's common stock with respect to each director
of our company, each person known to our company to be the beneficial owner of
more than five percent (5%) of said securities, and all directors and executive
officers of our company as a group:
Title Amount and Nature of Percent % After
Name and Address of Class Beneficial Ownership of Class Offering
- ---------------- -------- -------------------- -------- --------
William Tay Common 11,500,000 shares 100% 70%
1422 Chestnut St.
Suite 410
Philadelphia, PA 19102
All officers & directors Common 11,500,000 shares 100% 70%
as a group (1 person)
Prior to the sale of any Shares in this offering, these individuals are
the only shareholders of our company. After offering percentages are calculated
assuming sale of all Shares in this offering. The foregoing amounts include all
shares these persons are deemed to beneficially own regardless of the form of
ownership. See "Certain Transactions."
DESCRIPTION OF SECURITIES
The following statements are qualified in their entirety by reference
to the detailed provisions of our Articles of Incorporation and Bylaws. The
Shares registered pursuant to the registration statement of which this
prospectus is a part are shares of common stock, all of the same class and
entitled to the same rights and privileges as all other shares of common stock.
COMMON STOCK
Our company is presently authorized to issue 50,000,000 shares of $.001
par value common stock. The holders of common stock, including the Shares
offered hereby, are entitled to equal dividends and distributions, per share,
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 a pre-emptive right to subscribe for any securities of our
company nor are any common shares subject to redemption or convertible into
other securities of our company. Upon liquidation, dissolution or winding up of
our company, and after payment of creditors and preferred stockholders, if any,
the assets will be divided pro-rata on a share-for-share basis among the holders
of the shares of common stock. All shares of common stock now outstanding are
fully paid, validly issued and non-assessable. Each share of common stock is
entitled to one vote with respect to the election of any director or any other
matter upon which shareholders are required or permitted to vote. Holders of our
company's common stock do not have cumulative voting rights, so that the holders
of more than 50% of the combined shares voting for the election of directors may
elect all of the directors, if they choose to do so and, in that event, the
holders of the remaining shares will not be able to elect any members to the
Board of Directors.
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Our company has reserved from its authorized but unissued shares a
sufficient number of shares of common stock for issuance of the Shares offered
hereby. The shares of common stock issuable on completion of the offering will
be, when issued in accordance with the terms of the offering, fully paid and
non-assessable. During the pendency of the offering, subscribers will have no
rights as stockholders of our company until the offering has been completed and
the Shares have been issued to them.
PREFERRED STOCK
Our company is also presently authorized to issue 500,000 shares of
$.001 par value Preferred Stock. Under our company's Articles of Incorporation,
as amended, the Board of Directors has the power, without further action by the
holders of the common stock, to designate the relative rights and preferences of
the preferred stock, and issue the preferred stock in such one or more series as
designated by the Board of Directors. The designation of rights and preferences
could include preferences as to liquidation, redemption and conversion rights,
voting rights, dividends or other preferences, any of which may be dilutive of
the interest of the holders of the common stock or the Preferred Stock of any
other series. The issuance of Preferred Stock may have the effect of delaying or
preventing a change in control of our company without further shareholder action
and may adversely effect the rights and powers, including voting rights, of the
holders of common stock. In certain circumstances, the issuance of preferred
stock could depress the market price of the common stock. The Board of Directors
effects a designation of each series of Preferred Stock by filing with the
Delaware Secretary of State a Certificate of Designation defining the rights and
preferences of each such series. Documents so filed are matters of public record
and may be examined in accordance with procedures of the Delaware Secretary of
State, or copies thereof may be obtained from our company.
DIVIDEND POLICY
We have not previously paid any cash dividends on our common stock and
do not anticipate or contemplate paying dividends on our common stock in the
foreseeable future. Our present intention is to utilize all available funds for
the development of our business. There is no assurance that we will ever have
excess funds available for the payment of dividends. The only legal restrictions
that limit the ability to pay dividends on common equity or that are likely to
do so in the future, are those restrictions imposed by State laws. Under
Delaware corporate law, no dividends or other distributions may be made which
would render our company insolvent or reduce assets to less than the sum of its
liabilities plus the amount needed to satisfy any outstanding liquidation
preferences.
TRANSFER AGENT
We intend to use StockTrans, Inc., 7 East Lancaster Avenue, Ardmore,
Pennsylvania as our transfer agent for the Common stock upon completion of the
offering.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, we will have 16,500,000 shares of
Common stock outstanding, if we sell all of the shares in this offering. Of
these shares, the 5,000,000 shares to be sold in this offering will be freely
tradable without restriction or further registration under the Securities Act of
1933, except that any shares purchased by our affiliates, as that term is
defined in Rule 144 under the Securities Act, may generally only be sold in
compliance with the limitations of Rule 144 described below.
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The remaining 11,500,000 of common stock held by existing stockholders
were issued and sold by us in reliance on exemptions from the registration
requirements of the Securities Act. These shares will become eligible for sale
on October 7, 2000, subject to the limitations of either Rule 144 or Rule 701.
We cannot predict the effect, if any, that offers or sales of these shares would
have on the market price. Nevertheless, sales of significant amounts of
restricted securities in the public markets could adversely affect the fair
market price of the shares, as well as impair our ability to raise capital
through the issuance of additional equity shares.
In general, under Rule 144, a person who has beneficially owned shares
for at least one year is entitled to sell, within any three-month period, a
number of shares that does not exceed the greater of (1) one percent of the then
outstanding shares of common stock or (2) the average weekly trading volume in
the common stock in the over-the-counter market during the four calendar weeks
preceding the date on which notice of the sale is filed, provided several
requirements concerning availability of public information, manner of sale and
notice of sale are satisfied. In addition, our affiliates must comply with the
restrictions and requirements of Rule 144, other than the one-year holding
period requirement, in order to sell shares of common stock which are not
restricted securities.
Under Rule 144(k), a person who is not an affiliate and has not been an
affiliate for at least three months prior to the sale and who has beneficially
owned shares for at least two years may resell their shares without compliance
with the foregoing requirements. In meeting the one-and two-year holding periods
described above, a holder of shares can include the holding periods of a prior
owner who was not an affiliate. The one-and two-year holding periods described
above do not begin to run until the full purchase price or other consideration
is paid by the person acquiring the shares from the issuer or an affiliate. Rule
701 provides that currently outstanding shares of common stock acquired under
our employee compensation plans, and shares of common stock acquired upon
exercise of presently outstanding options granted under these plans, may be
resold beginning 90 days after the date of this prospectus:
o by persons, other than affiliates, subject only to the manner of sale
provisions of Rule 144, and
o by affiliates under Rule 144 without compliance with its one-year minimum
holding period, subject to some limitations.
There is presently no agreement by any holder, including our
"affiliates", of "restricted" shares not to sell their shares.
PENNY STOCK REGULATION
Broker-dealer practices in connection with transactions in "penny
stocks" are regulated by certain penny stock rules adopted by the Commission.
Penny stocks generally are equity securities with a price of less than $5.00.
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document that provides information about penny stocks and the risks
in the penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, and monthly account
statements showing the market value of each penny stock held in the customer's
account. In addition, the penny stock rules generally require that prior to a
transaction in a penny stock, the broker-dealer make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject to the penny
stock rules. As our shares immediately following this offering will likely be
subject to such penny stock rules, investors in this offering will in all
likelihood find it more difficult to sell their securities.
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DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Our certificate of incorporation contains provisions permitted under
the General Corporation Law of Delaware relating to the liability of directors.
The provisions eliminate a director's liability to stockholders for monetary
damages for a breach of fiduciary duty, except in circumstances involving
wrongful acts, including the breach of a director's duty of loyalty or acts or
omissions which involve intentional misconduct or a knowing violation of law.
Our certificate of incorporation also contains provisions obligating us to
indemnify our directors and officers to the fullest extent permitted by the
General Corporation Law of Delaware. We believe that these provisions will
assist us in attracting and retaining qualified individuals to serve as
directors.
Following the close of this offering, we will be subject to the State
of Delaware's business combination statute. In general, the statute prohibits a
publicly held Delaware corporation from engaging in a business combination with
a person who is an interested stockholder for a period of three years after the
date of the transaction in which that person became an interested stockholder,
unless the business combination is approved in a prescribed manner. A business
combination includes a merger, asset sale or other transaction resulting in a
financial benefit to the interested stockholder. An interested stockholder is a
person who, together with affiliates, owns, or, within three years prior to the
proposed business combination, did own 15% or more of our voting stock. The
statute could prohibit or delay mergers or other takeovers or change in control
attempts and accordingly, may discourage attempts to acquire us.
As permitted by Delaware law, we intend to eliminate the personal
liability of our directors for monetary damages for breach or alleged breach of
their fiduciary duties as directors, subject to exceptions. In addition, our
bylaws provide that we are required to indemnify our officers and directors,
employees and agents under circumstances, including those circumstances in which
indemnification would otherwise be discretionary, and we would be required to
advance expenses to our officers and directors as incurred in proceedings
against them for which they may be indemnified. The bylaws provide that we,
among other things, will indemnify officers and directors, employees and agents
against liabilities that may arise by reason of their status or service as
directors, officers, or employees, other than liabilities arising from willful
misconduct, and to advance their expenses incurred as a result of any proceeding
against them as to which they could be indemnified. At present, we are not aware
of any pending or threatened litigation or proceeding involving a director,
officer, employee or agent of ours in which indemnification would be required or
permitted. We believe that our charter provisions and indemnification agreements
are necessary to attract and retain qualified persons as directors and officers.
We have agreed to the fullest extent permitted by applicable law, to
indemnify all our officers and directors.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to our directors, officers and
controlling persons pursuant to the foregoing provisions, or otherwise, we have
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
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CERTAIN TRANSACTIONS
In connection with the organization of our company, our founding
shareholder paid an aggregate of $11,500 cash to purchase 11,500,000 shares of
Common stock of our company.
It is contemplated that we may enter into certain transactions with
officers, directors or affiliates of our company which may involve conflicts of
interest in that they will not be arms' length transactions. These transactions
include the following:
Our company presently has no office facilities but for the time being
will use as its business address the office of Mr. Tay on a rent free basis,
until such time as the business operations of our company may require more
extensive facilities and our company has the financial ability to rent
commercial office space. There is presently no formal written agreement for the
use of such facilities, and no assurance that such facilities will be available
to our company on such a basis for any specific length of time.
We have no formal written employment agreement or other contracts with
our officers, and there is no assurance that the services to be provided by
them, and facilities to be provided by Mr. Tay, will be available for any
specific length of time in the future. Mr. Tay anticipates initially devoting up
to approximately 20% of his time to the affairs of our company. If and when the
business operations of our company increase and a more extensive time commitment
is needed, Mr. Tay is prepared to devote more time to our company, in the event
that becomes necessary. The amounts of compensation and other terms of any full
time employment arrangements with our company would be determined if and when
such arrangements become necessary.
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BUSINESS
HISTORY AND ORGANIZATION
1STOPSALE.COM HOLDINGS INC. ("1STOPSALE.COM") was recently incorporated
under the laws of the State of Delaware on October 5, 1999. We have not
commenced business operations and we are considered a development stage
enterprise. To date, our activities have been limited to organizational matters,
designing of our Web sites and the preparation and filing of the registration
statement of which this prospectus is a part. In connection with the
organization of our company, the founding shareholder of our company contributed
an aggregate of $11,500 cash to capitalize our company in exchange for
11,500,000 shares of common stock. We have no significant assets, and we are
totally dependent upon the successful completion of this offering and receipt of
the proceeds therefrom, of which there is no assurance, for the ability to
commence our proposed business operations.
Our principal executive offices is currently located at 1422 Chestnut
Street, Suite 410, Philadelphia, Pennsylvania 19102. The telephone number is
(215) 569-9175. The facsimile number is (215) 569-4710.
PROPOSED BUSINESS OF OUR COMPANY
We intend to become a holding company engaged in building a broad
network of successful Internet-based retail operating companies, joint ventures,
strategic alliances, and partnerships. We hope to become the first true Internet
commerce conglomerate.
We will not be limited to a single area of electronic commerce or
e-commerce. Rather than limiting activities to books, CD's, computers, or any
other one class of product, we will aggressively pursue a diverse range of
commercial Internet activities. This approach is intended to take full advantage
of the tremendous opportunities of Internet commerce while realizing substantial
economies of scale that should allow us to achieve greater operating margins,
broader product diversification, and, ultimately, greater profitability compared
to traditional retailing.
There are no borders on the Internet, and even language barriers will
become of little importance as new Internet software now in development allows
customers around the world to view products and receive product information in
their native language. Even before that advanced technology is in place, we can
offer our full range of products to domestic and international customers in
urban or rural locations where local availability and wide selections are hard
to find.
If successful, we will have effectively:
o been recognized as a leader in one-stop Internet shopping;
o minimized our exposure and risk to the down cycles which occur in
specific industries; and
o increased site traffic and revenue-generating opportunities by
referring potential customers to other 1STOPSALE.COM storefronts owned
and operated by us rather than by third-party sites owned by others.
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GROWTH OF THE INTERNET AND ONLINE COMMERCE
The Internet has become an increasingly significant medium for
communication, information and commerce, enabling millions of people to share
information and conduct business electronically. According to International Data
Corporation (IDC), there were approximately 142 million Internet users worldwide
at the end of 1998 and this number is expected to grow to approximately 398
million Internet users by the end of 2002. The total value of services and
products purchased over the Internet grew from approximately $296 million at the
end of 1995 to approximately $50 billion at the end of 1998 according to IDC.
Although we cannot be certain of any future growth, IDC estimates that this
amount will increase to approximately $733 billion by the end of 2002. According
to IDC, worldwide business-to-consumer sales over the Internet are expected to
increase from approximately $15 billion in 1998 to approximately $116 billion by
2002. We believe that this dramatic growth presents significant opportunities
for online retailers.
The growth in the Internet represents a substantial opportunity for
companies to conduct business online. Internet retailers are able to communicate
more effectively with customers by providing:
o visual product presentations;
o up-to-date pricing and product information;
o customer support, including opportunities for customer feedback;
o product offerings tailored to customer preferences; and
o electronic billing and payment systems.
An increasing number of products and services are sold online,
including books, brokerage services, computers, music and travel services. IDC
estimates that sales to U.S. households over the Internet will increase from
approximately $12.4 billion in 1998 to approximately $60.6 billion in 2002.
Some of the specific dynamic factors leading to this growth in Internet
usage and online commerce are:
o the large and growing installed base of advanced personal computers in
the home and office;
o improvements in network infrastructure and bandwidth;
o easier and cheaper access to the Internet; and
o increased awareness of the Internet among consumer and business users
fueled by mentions in traditional media such as newspapers, radio and
television, and the rapidly expanding availability of online content
and commerce which increases the value to users of being connected to
the Internet.
CONTRAST TO TRADITIONAL RETAIL METHODS
Store and catalog-based companies make up the traditional retail
industry. These retailers' inherent structural limitations may preclude their
taking full advantage of two major characteristics of today's marketplace.
First, they cannot access the growing worldwide retail marketplace as readily as
can e-commerce companies. Second, they simply cannot be as available to each
individual customer's increasingly complex and busy daily schedules as can
e-commerce companies.
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Additionally, traditional retailers face other challenges in competing
against the new e-commerce company:
o They often incur large fixed costs of operation (building, store
personnel, and inventory holding).
o Fixed costs often dictate that these retailers cannot expand quickly
into new geographic regions.
o Manufacturers and large distributors who compete for scarce traditional
retail shelf space incur a significant expense to gain this access,
resulting in higher costs for the retailer.
o Even the very large superstores typically carry only about 4,000 items,
and thus face the risk of obsolete inventory.
o The store-based retailers' merchandising process limits the speed at
which they can change their merchandise mix and offer new products. Put
simply, they must physically obtain, set up, and display the product
before they can sell it.
o Personnel costs limit the number of hours during which store-based
retailers may operate, thereby limiting customer access and
convenience.
o Store-based retailers face challenges in hiring, training and retaining
knowledgeable sales staff conversant and up-to-date on the broad array
of products they expect to sell.
o Catalog retailers offer their customers the convenience of shopping
from home or the office and more flexible hours of operation, but they
are still constrained by catalog mailing, printing and associated
expenses, and by the number of items they can feature and the amount of
product information they can provide. A typical catalog retailer
carries up to 40,000 items, but typically only features 2,000 - 3,000
items in any single catalog.
o The entire catalog shopping experience is, in general, neither
interactive nor personalized, yet requires extensive personnel support
and manual intervention on behalf of the retailer to take and process
orders.
o Many catalog retailers focus primarily on the corporate marketplace.
We believe that the traditional retailers' business model creates
inefficiencies which are exacerbated by, for example, the large quantity of
merchandise they carry and the rapidly changing world in which they operate. It
is our belief that Internet-based retailers are in an excellent position to
capitalize on these limitations by operating a more efficient business model.
INTERNET SOLUTION
We have a good grasp of the main challenges facing the retailing
industry and are able to address those and future challenges by having adapted
to the environment offered by the Internet. We believe that the main advantages
of our Internet storefronts, and of e-commerce in general, are:
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Attractive economics of the Internet storefront -- As an Internet-only
retailer, we are not constrained by the inherent limitations of store- and
catalog-based retailers. We enjoy structural economic advantages relative to
traditional retailers, including:
o low-cost and essentially unlimited shelf space;
o flexible advertising and affordable merchandising opportunities;
o our ability to hire fewer workers;
o our ability to keep pace with a fast-growing customer base by employing
scaleable technology and systems; and
o our ability to serve customers around the world from a single, domestic
location.
We will offer our Internet storefronts, the content provided within our
Web sites, its marketing, and technology to customers worldwide. This, we
believe, should create substantial economies of scale and thereby enable us to
achieve greater operating margins and increase product diversification. The
ultimate result should be higher profits than those achieved by traditional
retailers.
Customer Convenience and Satisfaction -- We believe that greater
customer convenience will result in increased sales. Our customers will be able
to purchase a wide selection of products 24 hours a day, seven days a week from
their homes or offices. This convenience will, we believe, encourage consumers
to purchase more items, enable them to act on impulse and to easily find
products that they have found unattainable through traditional retailers.
Comprehensive Product Selections -- We will be able to offer one of the
most comprehensive ranges of products available today due to our low-cost and
virtually limitless shelf space. This gives us a significant advantage over
traditional retailers, which may find it economically and physically impractical
to offer such a large product range.
Low-Cost Manufacturer Distribution Channel -- We will offer
manufacturers "shelf space" within our Internet stores with no up-front cost,
unlike traditional retailers which often charge suppliers for space within their
stores or catalogs. This has three significant benefits:
o we will earn better margins on certain products;
o manufacturers win additional shelf space without needing to fund
up-front costs; and
o customers are able to purchase products at a competitive price.
Customer Service Availability -- Customers will benefit from improved
support, both before and after making a purchase, via e-mail and telephone. Our
Internet storefronts will allow our customers to follow the progress of their
orders, and choose to be notified when a desired back ordered product is
available for shipment.
Worldwide Customer Base -- We will be able to offer a complete range of
products to customers in domestic and international, rural and urban locations.
The worldwide nature of the Internet allows customers to purchase products which
are unobtainable in their own local market.
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1STOPSALE.COM STRATEGY
We intend to leverage our Internet storefronts, content, marketing and
technology over a growing global customer base resulting in substantial
economies of scale that we believe should enable us to achieve greater operating
margins, product diversification and, ultimately, levels of profitability
compared to traditional retailers.
Our objective is to become the first true Internet commerce
conglomerate. As our storefront design implies, we plan to be a "web within the
web" - a cluster of e-commerce Web sites that satisfy consumer needs so
completely that the consumer feels little need to venture outside the
1STOPSALE.COM banner.
We intend to capitalize on our market position as a first-mover
e-commerce company. We will start by delivering the broadest range of the
highest quality products at the best possible price and through the following
key strategies:
Building Brand Recognition -- We believe that building brand
recognition of our Internet storefronts is critical to attracting and expanding
our customer base. Brand recognition starts with the simplicity of the Internet
domain name 1STOPSALE.COM. The consumer need make only one stop. 1STOPSALE.COM.
The consumer need remember only one name when logging on to the Internet.
1STOPSALE.COM. The various marketing methods to accomplish this will include:
o developing strategic alliances with various Internet content providers
and Web sites of interest;
o the use of general and direct marketing campaigns through the Internet;
o the creation of a significant number of general and specific "links"
from other Web sites to our Internet storefronts;
o the use of targeted non-Internet marketing programs with the aim of
generating sales from consumers and businesses; and
o the creation of repeat business from customers through the use of
specialized programs, including "personalization" features.
Promoting Repeat Business -- We will use a variety of techniques to
build customer loyalty and promote repeat buying. These include providing
comprehensive information about our products, ensuring navigation of our Web
sites is efficient and includes the ability to search the entire product range,
the creation of personalized services and targeted communications and
promotions, and the immediate availability of a large range of products.
Development of Strategic Relationships -- We intend to seek strategic
relationships and strategic marketing alliances with popular portals, Internet
access providers, search engines, high traffic sites of interest, manufacturers,
and technology providers to enhance our Internet storefronts' technology and
product assortment, build brand recognition and increase site traffic, and
consequently to gain access to online customers and subsequent customer sales.
In pursuing these relationships, we will seek exclusive or semi-exclusive
positioning for the sales of our products on key screens of major Internet
sites. The alliances will include the creation of affiliate networks and linking
programs.
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Technology Focus and Expertise -- The Internet's ability to make
instant and low-cost changes to product lines and content should enable us to:
o increase the effectiveness of our merchandising;
o personalize our customers' experiences; and
o increase the efficiency of our operations.
Systems and technologies will be developed by us with the aim of
personalizing the experience of visitors, both before and after purchase. We
will aim to develop compelling promotion programs through the use of e-mail,
newsletter and store advertising. We will also use technology to reduce
transaction costs and improve the shopping experience of our customers. This
will be achieved in the following ways:
o customer service will be automated using e-mail responses and online
indicators of stock availability;
o improved product management will be achieved using automation to update
the merchandise databases, promote particular product lines and provide
links to product reviews; and
o communications with suppliers will be improved through the automation
of purchasing, payment methods and accounting.
THE 1STOPSALE.COM STOREFRONTS
In contrast to most existing e-commerce outlets, our store design will
enable purchasers to buy from a variety of products lines from differing
departments at once, using one purchase process. Other single-focus e-commerce
outlets require that the customer repeat the same purchase process for each
desired product category. Our customers will enter the storefronts through
WWW.1STOPSALE.COM or through specific sites with addresses that are both easy to
remember and relevant to the type of product offered. Examples include:
BOOKS.1STOPSALE.COM, MUSIC.1STOPSALE.COM, DVDS.1STOPSALE.COM, PCS.1STOPSALE.COM,
and MACS.1STOPSALE.COM.
All our e-commerce Web sites will be designed to accommodate new or
returning customers who want to quickly purchase a particular product at an
attractive price and customers who have more casual interests in browsing or
information but who will hopefully become regular customers. Satisfying both
classes of visitors is a challenge, but we believe Web sites that accomplish
this goal are in a strong competitive position.
1STOPSALE.COM sites will follow the Internet commerce convention of the
"shopping basket" which allows customers to select and order multiple products
without interrupting the process of browsing and searching. The "shopping
basket" environment is a familiar one to experienced Internet shoppers and, as
its name suggests, is familiar and comfortable for new users.
At any time, customers may add or remove purchases from their "basket",
and the knowledge that they can browse and select a number of products without
committing to the purchases encourages them to pick up and consider many
products during their visit.
A customer who is ready to "check out" may review and finalize the
content of their "basket" before activating the button that takes them to a
secure server area. There, they enter their shipping information and
preferences. Returning customers may be relieved, if they choose, of much of
this task, because the server remembers their personal information such as
credit card numbers and shipping addresses. Most customers will use the secure
server to enter credit card information and receive confirmation of the order
and card verification. Some may opt to give this information by telephone. They
will receive an order number to make only a brief call necessary. Customers
always have the option of ordering and receiving product information by
telephone at any time.
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The order processing server also keeps track of individual customer
buying habits and preferences such as brand and may invite customers to indicate
if they wish to receive newsletters and notification of special offers and
promotions.
Customers who have placed orders receive e-mail confirmation of the
order, as well as e-mail updates as the order progresses through processing and
shipping.
MARKETING AND PROMOTION
Our marketing strategy is to promote, advertise and increase our brand
visibility with the aim of attracting more customers. Multiple channels will be
used, including:
o the development of strategic alliances with major portal sites;
o advertising on leading Internet sites and other media worldwide;
o developing our affiliate network and linking programs; and
o direct marketing to existing and potential customers.
We will use multiple marketing channels with the aim of reducing
reliance on any one source of customers, lowering customer acquisition costs,
and maximizing brand recognition.
Strategic Alliances -- We intend to pursue strategic relationships in
order to build our presence on the Internet, increase our access to online
customers, expand brand awareness, and enhance the underlying technology of our
Internet storefronts. In pursuing these relationships, we will seek exclusive or
semi-exclusive positioning for the sales of computer related products on key
pages of major Internet sites.
Online Advertising -- We intend to utilize numerous online sales and
marketing techniques to build brand recognition and drive traffic to our
Internet storefronts. These techniques will include banner advertising on
various high-traffic Internet sites. Such banner advertisements can be
permanently displayed for designated periods of time or displayed when a user
searches for information relating to certain keywords (e.g. "Steven King" or
"the Beatles").
Direct Marketing -- We believe that the Internet provides additional
opportunities for direct marketing to our customers through a variety of
mechanisms, and we are exploring direct marketing opportunities to target new
and existing customers with customized offers such as an e-mail newsletter,
special product offers and preferred customer offers.
Internet Linking -- We believe it is important to create as many Internet
"links" to our Internet storefronts as possible. We intend to use an aggressive
linking program from search engines, manufacturers' Web sites, community,
affinity and personal home pages.
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Customer Service -- We believe the strength of our customer support and
service plays an important role in our ability to establish and maintain
long-term relationships with customers, encouraging repeat visits and purchases.
Customer support and service personnel are responsible for handling general
customer inquiries, answering questions about the ordering process, and
investigating the status of orders, shipments and payments.
DISTRIBUTION AND FULFILLMENT.
We do not carry any inventory and rely exclusively on third party
vendors for distribution and fulfillment (the "fulfillment center"). We believe
that this distribution strategy allows us to offer extensive selection while
avoiding the high costs and capital requirements associated with owning and
warehousing product inventory and the significant operational effort associated
with same-day shipment.
We transmit data to the fulfillment center through a secure network to
ensure customer security and data integrity. The fulfillment center picks, packs
and ships customer orders and charges us for merchandise, shipping and handling.
In most cases, products are shipped within a day after an order is placed with
our Internet storefronts. Customer billing is performed through a third-party
credit card processor.
COMPETITION
The electronic commerce industry is new, rapidly evolving and intensely
competitive. Competition will likely intensify in the future. Barriers to entry
are minimal; current and new competitors can launch sites at a relatively low
cost. Each storefront will compete based upon its ability to:
o establish and maintain brand recognition and trust-worthiness;
o attract and retain customers;
o maintain depth and breadth in product selection;
o accomplish low or competitive product pricing;
o provide educational and authoritative information; and
o provide responsive customer service.
Many of our current and potential competitors have longer operating
histories, larger customer or user bases, greater brand recognition and
significantly greater financial, marketing and other resources. As the use of
the Internet and other electronic services grows, online retailers may be
acquired by, receive investments from, or enter into other commercial
relationships with, larger, well-established and well-financed companies.
Competitors have and may continue to adopt aggressive polices with regard to
pricing or inventory availability. They also may devote substantially more
resources to Web site and systems development than us. Increased competition may
result in reduced operating margins, loss of market share and a diminished brand
franchise. Industry consolidation may also increase competition.
INTELLECTUAL PROPERTY.
We claim common law trademark for our logo, corporate name, and
Internet storefronts - WWW.1STOPSALE.COM, BOOKS.1STOPSALE.COM,
MUSIC.1STOPSALE.COM, DVDS.1STOPSALE.COM, PCS.1STOPSALE.COM, and
MACS.1STOPSALE.COM.
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PHYSICAL FACILITIES AND EMPLOYEES
Our company, for the time being, uses the office facilities of William
Tay, our President, in Philadelphia, Pennsylvania, on a rent free basis as its
place of business. Our management does not intend to seek other office
arrangements unless and until our business requires more extensive facilities,
which is not anticipated in the foreseeable future. Initially, our only employee
will be the President.
MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis should be read in conjunction
with our financial statements and the notes associated with them contained
elsewhere in this prospectus. This discussion should not be construed to imply
that the results discussed in this prospectus will necessarily continue into the
future or that any conclusion reached in this prospectus will necessarily be
indicative of actual operating results in the future.
The discussion represents only the best present assessment of management.
PLAN OF OPERATIONS.
Our company was only recently incorporated on October 5, 1999. We have
not commenced planned principal operations and we are considered a development
stage enterprise. We have no significant assets, no active business operations
and no results therefrom. To date, our activities have been limited to
organizational matters and the preparation and filing of the registration
statement of which this prospectus is a part.
Our management's plan of operation for the next twelve months is first
to raise funds from this offering. If the offering is successful, we intend to
use the proceeds primarily to develop several fully functional, interactive
Internet books and music retail Web sites, acquiring computer and office
equipment, and provide operating capital during the start up period of
operations until we can begin generating revenues from operations to thereafter
cover ongoing expenses.
Inasmuch as there is no assurance that this offering will be successful
and that we will receive any net proceeds therefrom, we have not entered into
any contractual commitments and will not do so unless and until the offering is
completed. Therefore there is absolutely no assurance that we will be able, with
the proceeds of this offering, to successfully commence proposed business
operations. At this time, no assurances can be given with respect to the timing
of commencement of operations or the length of time after commencement that it
will be necessary to fund operations from proceeds of this offering.
Depending on the total amount raised in the offering, we believe that
the net proceeds from the offering will provide working capital for one year
after commencement of operations, during which time our management anticipates
that we will begin generating sufficient revenues to cover ongoing expenses.
However, there is no assurance of this. If we are unsuccessful, investors will
have lost their money and we will not attempt to pursue further efforts with
respect to such business, and it is unlikely we would have the financial ability
to do so in any event. Instead management will call a shareholders meeting to
decide whether to liquidate the company or what direction our company will
pursue, if any. However, we presently have no plans, commitments or arrangements
with respect to any other potential business venture and there is no assurance
we could become involved with any other business venture, especially any
business venture requiring significant capital.
26
<PAGE>
AVAILABLE INFORMATION
We filed a registration statement on Form SB-2 with the United States
Securities and Exchange Commission, under the Securities Act of 1933, covering
the securities in this offering. As permitted by rules and regulations of the
Commission, this prospectus does not contain all of the information in the
registration statement. For further information regarding both 1STOPSALE.COM
HOLDINGS and the securities in this offering, we refer you to the registration
statement, including all exhibits and schedules, which may be inspected without
charge at the public reference facilities of the Commission's Washington, D.C.
office, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies may be obtained
upon request and payment of prescribed fees.
As of the date of this prospectus, we became subject to the information
requirements of the Securities Exchange Act of 1934. Accordingly, we will file
reports and other information with the Commission. These materials will be
available for inspection and copying at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following regional offices of the Commission: New York
Regional Office, 75 Park Place, New York, New York 10007; Chicago Regional
Office, 500 West Madison Street, Chicago, Illinois 60661. Copies of the material
may be obtained from the public reference section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains an Internet Web site located at http://www.sec.gov that contains
reports, proxy and information statements and other information regarding
issuers that file reports electronically with the Commission. The site is
accessible by the public through any Internet access service provider.
Copies of our Annual, Quarterly and other Reports filed with the
Commission, starting with the Quarterly Report for the first quarter ended after
the date of this prospectus (due 45 days after the end of the quarter) will also
be available upon request, without charge, by writing 1STOPSALE.COM HOLDINGS
INC., 1422 Chestnut Street, Suite 410, Philadelphia, PA 19102.
27
<PAGE>
1STOPSALE.COM HOLDINGS INC.
[A Development Stage Company]
FINANCIAL STATEMENTS
NOVEMBER 30, 1999
PRITCHETT, SILER & HARDY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
28
<PAGE>
1STOPSALE.COM HOLDINGS INC.
[A Development Stage Company]
CONTENTS
PAGE
----
- - Independent Auditors' Report 1
- - Balance Sheet November 30, 1999 2
- - Statement of Operations, for the period from inception
on October 5, 1999 through November 30, 1999 3
- - Statement of Stockholders' Equity, from inception
on October 5, 1999 through November 30, 1999 4
- - Statement of Cash Flows, for the period from inception
October 5, 1999 through November 30, 1999 5
- - Notes to Financial Statements 6 - 8
29
<PAGE>
[Letterhead Pritchett, Siler & Hardy, P.C.]
INDEPENDENT AUDITORS' REPORT
Board of Directors
1STOPSALE.COM HOLDINGS INC.
Philadelphia, PA
We have audited the accompanying balance sheet of 1StopSale.com Holdings Inc. [a
development stage company] at November 30, 1999 and the related statement of
operations, stockholders' equity and cash flows for the period from inception on
October 5, 1999 through November 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements audited by us present fairly, in all
material respects, the financial position of 1StopSale.com Holdings Inc. [a
development stage company] as of November 30, 1999 and the results of its
operations and its cash flows for the period from inception on October 5, 1999
through November 30, 1999 in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that
1StopSale.com Holdings Inc. will continue as a going concern. As discussed in
Note 5 to the financial statements, 1StopSale.com Holdings Inc. was only
recently formed, has incurred losses since its inception and has not yet been
successful in establishing profitable operations, raising substantial doubt
about its ability to continue as a going concern. Management's plans in regards
to these matters are also described in Note 5. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
PRITCHETT, SILER & HARDY, P.C.
December 7, 1999
Salt Lake City, Utah
30
<PAGE>
1STOPSALE.COM HOLDINGS INC.
[A Development Stage Company]
BALANCE SHEET
ASSETS
November 30,
1999
-------------
CURRENT ASSETS:
Cash in bank $ 11,500
-------------
Total Current Assets 11,500
-------------
$ 11,500
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - related party $ 103
-------------
Total Current Liabilities 103
-------------
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
500,000 shares authorized,
0 shares issued and outstanding -
Common stock, $.001 par value,
50,000,000 shares authorized,
11,500,000 shares issued
and outstanding 11,500
Capital in excess of par value -
Deficit accumulated during the
development stage (103)
-------------
Total Stockholders' Equity 11,397
-------------
$ 11,500
=============
The accompanying notes are an integral part of this financial statement.
-2-
31
<PAGE>
1STOPSALE.COM HOLDINGS INC.
[A Development Stage Company]
STATEMENT OF OPERATIONS
From Inception
on October 5,
1999 Through
November 30, 1999
-----------------
REVENUE $ -
EXPENSES
General and Administrative (103)
------------
LOSS BEFORE INCOME TAXES (103)
CURRENT TAX EXPENSE -
DEFERRED TAX EXPENSE -
------------
NET LOSS $ (103)
============
LOSS PER COMMON SHARE $ (.00)
============
The accompanying notes are an integral part of this financial statement.
-3-
32
<PAGE>
<TABLE>
1STOPSALE.COM HOLDINGS INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON OCTOBER 5, 1999
THROUGH NOVEMBER 30, 1999
<CAPTION>
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
--------------------- --------------------- Excess of Development
Shares Amount Shares Amount Par Value Stage
----------- --------- ----------- --------- ---------- -----------
<S> <C><C> <C> <C> <C> <C>
BALANCE, October 5, 1999 - $ - - $ - $ - $ -
Issuance of 11,500,000
shares common stock for
cash at $.001 per share,
October, 1999 - - 11,500,000 11,500 - -
Net loss for the period ended
November 30, 1999 - - - - - (103)
----------- --------- ----------- --------- ---------- -----------
BALANCE, November 30
1999 - - 11,500,000 11,500 - (103)
=========== ========= =========== ========= ========== ===========
</TABLE>
The accompanying notes are an integral part of this financial statement.
-4-
33
<PAGE>
1STOPSALE.COM HOLDINGS INC.
[A Development Stage Company]
STATEMENT OF CASH FLOWS
NET INCREASE (DECREASE) IN CASH
From Inception
on October 5,
1999 Through
November 30, 1999
-----------------
Cash Flows to Provided by Operating Activities:
Net loss $ (103)
Adjustments to reconcile net loss to
net cash used by operating activities:
Changes is assets and liabilities:
Increase in accounts payable related party 103
------------
Net Cash Provided (Used) by Operating Activities -
------------
Cash Flows Provided by Investing Activities -
------------
Net Cash Provided by Investing Activities -
------------
Cash Flows Provided by Financing Activities:
Proceeds from issuance of common stock 11,500
------------
Net Cash Provided by Financing Activities 11,500
------------
Net Increase in Cash 11,500
Cash at Beginning of Period -
------------
Cash at End of Period $ 11,500
============
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ -
Income taxes $ -
Supplemental Schedule of Noncash Investing and Financing Activities:
For the period ended November 30, 1999:
None
The accompanying notes are an integral part of this financial statement.
-5-
34
<PAGE>
1STOPSALE.COM HOLDINGS INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - 1StopSale.com Holdings Inc. (the Company) was organized under the
laws of the State of Delaware on October 5, 1999. The Company has not commenced
planned principal operations and is considered a development stage company as
defined in SFAS No. 7. The Company is planning to engage in building a broad
network of Internet based retail operating companies, joint ventures, strategic
alliances and partnerships. The Company has, at the present time, not paid any
dividends and any dividends that may be paid in the future will depend upon the
financial requirements of the Company and other relevant factors.
Organization Costs - Organization costs, which reflects amounts expended to
organize the Company, amounted to $103 and were expensed during the period ended
November 30, 1999.
Lost Per Share - The computation of loss per share is based on the weighted
average number of shares outstanding during the period presented in accordance
with Statement of Financial Accounting Standards No. 128, "Earnings Per Share".
[See Note 6]
Cash and Cash Equivalents - For purposes of the statement of cash flows, the
Company considers all highly liquid debt investments purchased with a maturity
of three months or less to be cash equivalents.
Accounting Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities at the date of
the financial statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from those estimated.
Recently Enacted Accounting Standards - SFAS No. 130, "Reporting Comprehensive
Income", SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information", SFAS No. 132, "Employer's Disclosure about Pensions and Other
Postretirement Benefits", SFAS No. 133, "Accounting for Derivative Instruments
and Hedging Activities", and SFAS No. 134, "Accounting for Mortgage-Backed
Securities..." were recently issued. SFAS No. 130, 131, 132, 133 and 134 have no
current applicability to the Company or their effect on the financial statements
would not have been significant.
NOTE 2 - CAPITAL STOCK
Preferred Stock - The Company has authorized 500,000 share of preferred stock,
$.001 par value, with such rights, preferences and designations and to be issued
in such series as determined by the Board of Directors. No shares are issued and
outstanding at November 30, 1999.
Common Stock - During October 1999, in connection with its organization, the
Company issued 11,500,000 shares of its previously authorized, but unissued
common stock. The shares were issued for cash of $11,500 (or $.001 per share).
35
<PAGE>
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes". FASB 109 requires
the Company to provide a net deferred tax asset/liability equal to the expected
future tax benefit/expense of temporary reporting differences between book and
tax accounting methods and any available operating loss or tax credit
carryforwards. At November 30, 1999 there were no material deferred tax assets
or liabilities, current or deferred tax expense, or net operating loss
carryforwards.
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - As of November 1999, the Company has not paid any
compensation to any officer or director of the Company.
Office Space - The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use his/her
offices as a mailing address, as needed, at no expense to the Company.
Accounts Payable - Related Party - During October 1999, an officer/shareholder
of the Company paid organizational costs in the amount of $103 on behalf of the
Company. The Company recorded a related party accounts payable in the amount of
$103.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, the Company was only recently formed, has
incurred losses since its inception and has not yet been successful in
establishing profitable operations. These factors raise substantial doubt about
the ability of the Company to continue as a going concern. In this regard,
management is proposing to raise any necessary additional funds not provided by
operations through additional sales of its common stock. There is no assurance
that the Company will be successful in raising this additional capital or
achieving profitable operations. The financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
Note 6 - LOSS PER SHARE
The following data shows the amounts used in computing loss per share:
From Inception
on October 5,
1999 Through
November 30, 1999
-----------------
Loss from continuing operations
available to common shareholders
(numerator) $ (103)
============
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 11,500,000
============
36
<PAGE>
NOTE 7 - SUBSEQUENT EVENTS
Proposed Public Offering of Common Stock - The Company is proposing to make a
public offering of 5,000,000 shares of its previously authorized but unissued
common stock. The Company plans to file a registration statement with the United
States Securities and Exchange Commission on Form SB-2 under the Securities Act
of 1933. An offering price of $.20 per share has been arbitrarily been
determined by the Company. The offering will be managed by the Company without
any underwriter. The Company plans to have officers of the Company sell the
shares without any discounts or other commissions. Licensed NASD broker dealers
may also participate in the offering and receive a commission of up to 14% on
the offering on sales made by them.
37
<PAGE>
NO DEALER, SALESPERSON OR ANY OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS PROSPECTUS AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY US. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES OFFERED
BY THIS PROSPECTUS, OR AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS
NOT AUTHORIZED OR IS UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS SHALL NOT, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE OF THE PROSPECTUS.
[LOGO 1STOPSALE.COM]
1STOPSALE.COM HOLDINGS INC.
5,000,000 Shares
Common Stock
--------------
PROSPECTUS
--------------
1STOPSALE.COM HOLDINGS INC.
1422 Chestnut Street
Suite 410
Philadelphia, Pennsylvania 19102
*___, 1999
38
<PAGE>
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The statutes, charter provisions, bylaws, contracts or other arrangements under
which controlling persons, directors or officers of the issuer are insured or
indemnified in any manner against any liability which they may incur in such
capacity are as follows:
1. Section 145 of the Delaware General Corporation Law provides that each
corporation shall have the following powers:
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made party to any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative, (other
than an action by or in the right of the corporation) by reason of the fact that
he 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 another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and that, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he 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 another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
the corporation and except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been adjudged
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
(c) To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subsections (a) and (b) of this section, or in defense
of any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
39
<PAGE>
(d) Any indemnification under subsections (a) and (b) of this section (unless
ordered by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by majority vote of directors who
were not parties to such action, suit or proceeding, even though less than a
quorum, or (2) if there are no such directors, or if such directors so direct,
by independent legal counsel in a written opinion, or (3) by the stockholders;
(e) Expenses (including attorneys' fees) incurred by an officer or director in
defending any civil, criminal, administrative or investigative action, suit or
proceeding may be paid by the corporation in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of such director or officer to repay the amount if it shall ultimately be
determined that he is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses (including attorneys' fees) incurred
by other employees and agents may be paid upon such terms and conditions, if
any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, other subsections of this section shall not be deemed exclusive of
any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain insurance on behalf
of 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 another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this section, references to "the corporation" shall include,
in addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had the power and authority
to indemnify its directors, officers, and employees or agents, so that any
person who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of the employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
40
<PAGE>
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to this section shall, unless otherwise provided when authorized or
ratified, continues as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
2. The Issuer's Articles of Incorporation limit liability of its Officers and
Directors to the full extent permitted by the Delaware General Corporation Law.
The bylaws provide for indemnification in accordance with the foregoing
statutory provisions.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
The following table sets forth all estimated costs and expenses, other than
underwriting discounts, commissions and expense allowances, payable by the
issuer in connection with the maximum offering for the securities included in
this registration statement:
Amount
SEC registration fee $ 264.00
Blue sky fees and expenses 6,000.00
Printing and shipping expenses 4,000.00
Legal fees and expenses 35,000.00
Accounting fees and expenses 5,000.00
Transfer and Miscellaneous expenses 4,736.00
------------
Total $ 55,000.00
* All expenses are estimated except the Commission filing fee.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
The following sets forth information relating to all previous sales of Common
stock by the Registrant which sales were not registered under the Securities Act
of 1933.
In connection with the organization of our company, our founding shareholder
paid an aggregate of $11,500 cash to purchase 11,500,000 shares of Common stock
of our company. These transactions were not registered under the Securities Act
of 1933 (the "Act") in reliance on the exemption from registration in Section
4(2) of the Act. The securities were offered and sold without any general
solicitation to persons affiliated with the Issuer as founding shareholders, are
subject to the resale provisions of Rule 144 and may not be sold or transferred
without registration except in accordance with Rule 144. Certificates
representing the securities bear such a legend.
41
<PAGE>
Item 27. EXHIBITS INDEX.
The following exhibits are filed with this Registration Statement:
Number Exhibit Name
- ------ ------------
1.1 Subscription Agreement
3.1 Articles of Incorporation
3.2 By-Laws
5.0 Opinion Regarding Legality
23.1 Consent of Expert
24.1 Consent of Counsel
All other Exhibits called for by Rule 601 of Regulation S-B are not applicable
to this filing. Information pertaining to our common stock is contained in our
Articles of Incorporation and By-Laws.
Item 28. UNDERTAKINGS.
The undersigned registrant undertakes:
(1) To file, during any period in which offer or sales are being made, a
post-effective amendment to this registration statement:
I. To include any prospectus required by section I 0(a)(3) of the
Securities Act of 1933;
II. To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post
effective amendment) which, individually or in the aggregate, represent
a fundamental change in the information in the registration statement;
III. To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to the information in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of securities at that time shall be deemed to be the
initial bona fide offering.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission any supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
to that section.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to our certificate of incorporation or provisions of
Delaware law, or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission the indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. If a claim for
indemnification against liabilities (other than the payment by the Registrant)
of expenses incurred or paid by a director, officer or controlling person of the
42
<PAGE>
registrant in the successful defense of any action, suit, or proceeding is
asserted by a director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of our
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether the indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of the issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form SB-2 and has duly caused this registration
statement to be signed on our behalf by the undersigned, in the City of
Philadelphia, State of Pennsylvania, on December 27, 1999.
1STOPSALE.COM HOLDINGS INC.
/s/ William Tay
- ---------------------------
President (Chief Executive and Financial Officer)
43
<PAGE>
As filed with the SEC on December 27, 1999
SEC Registration No. *_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
REGISTRATION STATEMENT
ON FORM SB-2
UNDER
THE SECURITIES ACT OF 1933
1STOPSALE.COM HOLDINGS INC.
(Consecutively numbered pages *__ through *__ of this Registration Statement)
44
<PAGE>
INDEX TO EXHIBITS
- -------------------------------------------------------------------------
SEC REFERENCE TITLE OF DOCUMENT LOCATION
NUMBER
- -------------------------------------------------------------------------
1.1 Subscription Agreement This Filing
Page __
- -------------------------------------------------------------------------
3.1 Articles of Incorporation This Filing
Page __
- -------------------------------------------------------------------------
3.2 Bylaws This Filing
Page __
- -------------------------------------------------------------------------
5 Consent of Hoge, Evans, This Filing
Holmes, Carter & Ledbetter, Page __
PLLC
- -------------------------------------------------------------------------
23 Consent of Pritchett, Siler This Filing
& Hardy, P.C. Page __
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REFERENCE 1.1
SUBSCRIPTION AGREEMENT
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1STOPSALE.COM HOLDINGS INC.
SUBSCRIPTION AGREEMENT
Gentlemen:
The Investor named below, by payment of the purchase price for such Common
Shares, by the delivery of a check payable to 1STOPSALE.COM HOLDINGS INC.,
hereby subscribes for the purchase of the number of Common Shares indicated
below (minimum of two hundred and fifty shares) of 1STOPSALE.COM HOLDINGS INC.,
at a purchase of $0.20 per Share as set forth in the Prospectus.
By such payment, the named Investor further acknowledges receipt of the
Prospectus and the Subscription Agreement, the terms of which govern the
investment in the Common Shares being subscribed for hereby.
A. INVESTMENT: (1) Number of Shares ___________
(2) Total Contribution ($0.20/Share) $__________
Date of Investor's check ___________
B. REGISTRATION:
(3) Registered owner: _____________________________
Co-Owner: _____________________________
(4) Mailing address: _____________________________
City, State & zip: _____________________________
(5) Residence Address (if different from above):
===============================================
(6) Birth Date: ______/______/______
(7) Employee or Affiliate: Yes ______ No ______
(8) Social Security: #: ______/______/______
U.S. Citizen [ ] Other [ ]
Co-Owner Social Security:
#: ______/______/______
U.S. Citizen [ ] Other [ ]
Corporate or Custodial:
Taxpayer ID #: ______/______/______
U.S. Citizen [ ] Other [ ]
(9) Telephone (H) ( ) _________________________
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C. OWNERSHIP [ ] Individual Ownership [ ] IRA or Keogh
[ ] Joint Tenants with Rights of Survivorship
[ ] Trust/Date Trust Established_______________
[ ] Pension/Trust (S.E.P.)
[ ] Tenants in Common [ ] Tenants by the
Entirety
[ ] Corporate Ownership [ ] Partnership
[ ] Other_____________________
D. SIGNATURES: By signing below, I/we represent that I/we meet the suitability
standards set forth in the Prospectus.
Registered Owner: _____________________________
Co-Owner: _____________________________
Print Name of Custodian or Trustee: _____________________________
Authorized Signature: _____________________________
Date: _____________________
Signature: ___________________________________
MAIL TO:
1STOPSALE.COM HOLDINGS INC.
1422 Chestnut Street, Suite 410
Philadelphia, Pennsylvania 19102
Telephone: 215-569-9175
Facsimile: 215-569-4710
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FOR OFFICE USE ONLY:
Date Received: ________________________________________________
Date Accepted/Rejected ________________________________________
Subscriber's Check Amount: _______________________
Check No. ___________________ Date Check ________________
Deposited ________________________________
MR #________________
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REFERENCE 3.1
ARTICLES OF INCORPORATION
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CERTIFICATE OF INCORPORATION
OF
1STOPSALE.COM HOLDINGS INC.
FIRST: The name of this corporation shall be:
1STOPSALE.COM HOLDINGS INC.
SECOND: Its registered office in the State of Delaware is to be located
at 110 W. Ninth Street, in the City of Wilmington, County of New Castle and its
registered agent at such address is Com2000.net Inc.
THIRD: The purpose or purposes of the corporation shall be:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
FOURTH: The total number of shares of stock which this corporation is
authorized to issue is:
(a) Common. 50,000,000 shares of Common stock having a par
value of $.001 per share:
(b) Preferred. 500,000 shares of Preferred stock having a par
value of $.001 per share and to be issued in such series and to have such
rights, preferences, and designation as determined by the Board of Directors of
the Corporation.
FIFTH: The name and address of the incorporator is as follows:
William Tay
Com2000.net Inc.
110 W. Ninth Street
Wilmington, DE 19801-1618
SIXTH: The Board of Directors shall have the power to amend or repeal
the by-laws.
SEVENTH: No director shall be personally liable to the Corporation or
its stockholders for monetary damages from any breach of fiduciary duty by such
director as a director. Notwithstanding the foregoing sentence, a director shall
be liable to the extent provided by applicable law, (i) for breach of the
directory's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived an
improper personal benefit. No amendment to or repeal of this Article Seventh
shall apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment.
IN WITNESS WHEREOF, the undersigned, being the incorporator
hereinbefore named, has executed, signed and acknowledged this certificate of
incorporation this thirtieth day of September, A.D., 1999.
/s/ William Tay
------------------
William Tay
Incorporator
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REFERENCE 3.2
BYLAWS
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BY-LAWS
OF
1STOPSALE.COM HOLDINGS INC.
ARTICLE I - OFFICES
Section 1. The registered office of the corporation in the State of
Delaware shall be at 110 W. Ninth Street, #134, Wilmington, Delaware 19801-1618.
The registered agent in charge thereof shall be Com2000.net Inc.
Section 2. The corporation may also have offices at such other places
as the Board of Directors may from time to time appoint or the business of the
corporation may require.
ARTICLE II - SEAL
Section 1. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Delaware".
ARTICLE III - STOCKHOLDERS' MEETINGS
Section 1. Meetings of stockholders shall be held at the registered
office of the corporation in this state or at such place, either within or
without this state, as may be selected from time to time by the Board of
Directors.
Section 2. ANNUAL MEETINGS: The annual meeting of the stockholders
shall be held on such date as is determined by the Board of Directors for the
purpose of electing directors and for the transaction of such other business as
may properly be brought before the meeting.
Section 3. ELECTION OF DIRECTORS: Elections of the directors of the
corporation shall be by written ballot.
Section 4. SPECIAL MEETINGS: Special meetings of the stockholders may
be called at any time by the President, or the Board of Directors, or
stockholders entitled to cast at least one-fifth of the votes which all
stockholders are entitled to cast at the particular meeting. At any time, upon
written request of any person or persons who have duly called a special meeting,
it shall be the duty of the Secretary to fix the date of the meeting, to be held
not more than sixty days after receipt of the request, and to give due notice
thereof. If the Secretary shall neglect or refuse to fix the date of the meeting
and give notice thereof, the person or persons calling the meeting may do so.
Business transacted at all special meetings shall be confined to the objects
stated in the call and matters germane thereto, unless all stockholders entitled
to vote are present and consent.
Written notice of a special meeting of stockholders stating the time
and place and object thereof, shall be given to each stockholder entitled to
vote thereat at least ten days before such meeting, unless a greater period of
notice is required by statute in a particular case.
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Section 5. 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 stockholders. If a majority of the
outstanding shares entitled to vote is 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 stockholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Section 6. PROXIES: Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period.
A duly executed proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A proxy may be made
irrevocable regardless of whether the interest with which it is coupled is an
interest in the stock itself or an interest in the corporation generally. All
proxies shall be filed with the Secretary of the meeting before being voted
upon.
Section 7. NOTICE OF MEETINGS: Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given which shall state the place, date and hour of the meeting, and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called.
Unless otherwise provided by law, written notice of any meeting shall
be given not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting.
Section 8. CONSENT IN LIEU OF MEETINGS: Any action required to be taken
at any annual or special meeting of stockholders of a corporation, or any action
which may be taken at any annual or special meeting of such stockholders, may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing.
Section 9. LIST OF STOCKHOLDERS: The officer who has charge of the
stock ledger of the corporation shall prepare and make, at least ten days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in the name of each
stockholder. No share of stock upon which any installment is due and unpaid
shall be voted at any meeting. The list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
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ARTICLE IV - DIRECTORS
Section 1. The business and affairs of this corporation shall be
managed by its Board of Directors, no less than one in number or such other
minimum number as is required by law. The directors need not be residents of
this state or stockholders in the corporation. They shall be elected by the
stockholders of the corporation or in the case of a vacancy by remaining
directors, and each director shall be elected for the term of one year, and
until his successor shall be elected and shall qualify or until his earlier
resignation or removal.
Section 2. REGULAR MEETINGS: Regular meetings of the Board shall be
held without notice other than this by-law immediately after, and at the same
place as, the annual meeting of stockholders. The directors may provide, by
resolution, the time and place for the holding of additional regular meetings
without other notice than such resolution.
Section 3. SPECIAL MEETINGS: Special Meetings of the Board may be
called by the President or any director upon two day notice. The person or
persons authorized to call special meetings of the directors may fix the place
for holding any special meeting of the directors called by them.
Section 4. QUORUM: A majority of the total number of directors shall
constitute a quorum for the transaction of business.
Section 5. CONSENT IN LIEU OF MEETING: Any action required or permitted
to be taken at any meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or committee.
The Board of Directors may hold its meetings, and have an office or offices,
outside of this state.
Section 6. CONFERENCE TELEPHONE: One or more directors may participate
in a meeting of the Board, of a committee of the Board or of the stockholders,
by means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other;
participation in this manner shall constitute presence in person at such
meeting.
Section 7. COMPENSATION: Directors as such, shall not receive any
stated salary for their services, but by resolution of the Board, a fixed sum
and expenses of attendance, if any, may be allowed for attendance at each
regular or special meeting of the Board provided, that nothing herein contained
shall be construed to preclude any director from serving the corporation in any
other capacity and receiving compensation therefor.
Section 8. REMOVAL: Any director or the entire Board of Directors may
be removed, with or without cause, by the holders of a majority of the shares
then entitled to vote at an election of directors, except that when cumulative
voting is permitted, if less than the entire Board is to be removed, no director
may be removed without cause if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of the entire
Board of Directors, or, if there be classes of directors, at an election of the
class of directors of which he is a part.
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ARTICLE V - OFFICERS
Section 1. The executive officers of the corporation shall be chosen by
the directors and shall be a President, Secretary and Treasurer. The Board of
Directors may also choose a Chairman, one or more Vice Presidents and such other
officers as it shall deem necessary. Any number of offices may be held by the
same person.
Section 2. SALARIES: Salaries of all officers and agents of the
corporation shall be fixed by the Board of Directors.
Section 3. TERM OF OFFICE: The officers of the corporation shall hold
office for one year and until their successors are chosen and have qualified.
Any officer or agent elected or appointed by the Board may be removed by the
Board of Directors whenever in its judgment the best interest of the corporation
will be served thereby.
Section 4. PRESIDENT: The President shall be the chief executive
officer of the corporation; he shall preside at all meetings of the stockholders
and directors; he shall have general and active management of the business of
the corporation, shall see that all orders and resolutions of the Board are
carried into effect, subject, however, to the right of the directors to delegate
any specific powers, except such as may be by statute exclusively conferred on
the President, to any other officer or officers of the corporation. He shall
execute bonds, mortgages and other contracts requiring a seal, under the seal of
the corporation. He shall be EX-OFFICIO a member of all committees, and shall
have the general power and duties of supervision and management usually vested
in the office of President of a corporation.
Section 5. SECRETARY: The Secretary shall attend all sessions of the
Board and all meetings of the stockholders and act as clerk thereof, and record
all the votes of the corporation and the minutes of all its transactions in a
book to be kept for that purpose, and shall perform like duties for all
committees of the Board of Directors when required. He shall give, or cause to
be given, notice of all meetings of the stockholders and of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors or President, and under whose supervision he shall be. He shall
keep in safe custody the corporate seal of the corporation, and when authorized
by the Board, affix the same to any instrument requiring it.
Section 6. TREASURER: The Treasurer shall have custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation, and shall keep the moneys
of the corporation in a separate account to the credit of the corporation. He
shall disburse the funds of the corporation as may be ordered by the Board,
taking proper vouchers for such disbursements, and shall render to the President
and directors, at the regular meetings of the Board, or whenever they may
require it, an account of all his transactions as Treasurer and of the financial
condition of the corporation.
ARTICLE VI - VACANCIES
Section 1. Any vacancy occurring in any office of the corporation by
death, resignation, removal or otherwise, shall be filled by the Board of
Directors. Vacancies and newly created directorships resulting from any increase
in the authorized number of directors may be filled by a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder,
or other fiduciary entrusted with like responsibility for the person or estate
of a stockholder, may call a special meeting of stockholders in accordance with
the provisions of these By-Laws.
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Section 2. RESIGNATIONS EFFECTIVE AT FUTURE DATE: When one or more
directors shall resign from the Board, effective at a future date, a majority of
the directors then in office, including those who have so resigned, shall have
power to fill such vacancy or vacancies, the vote thereon to take effect when
such resignation or resignations shall become effective.
ARTICLE VII - CORPORATE RECORDS
Section 1. Any stockholder of record, in person or by attorney or other
agent, shall, upon written demand under oath stating the purpose thereof, have
the right during the usual hours for business to inspect for any proper purpose
the corporation's stock ledger, a list of its stockholders, and its other books
and records, and to make copies or extracts therefrom. A proper purpose shall
mean a purpose reasonably related to such person's interest as a stockholder. In
every instance where an attorney or other agent shall be the person who seeks
the right to inspection, the demand under oath shall be accompanied by a power
of attorney or such other writing which authorizes the attorney or other agent
to so act on behalf of the stockholder. The demand under oath shall be directed
to the corporation at its registered office in this state or at its principal
place of business.
ARTICLE VIII - STOCK CERTIFICATES, DIVIDENDS, ETC.
Section 1. The stock certificates of the corporation shall be numbered
and registered in the share ledger and transfer books of the corporation as they
are issued. They shall bear the corporate seal and shall be signed by the
president.
Section 2. TRANSFERS: Transfers of shares shall be made on the books of
the corporation upon surrender of the certificates therefor, endorsed by the
person named in the certificate or by attorney, lawfully constituted in writing.
No transfer shall be made which is inconsistent with law.
Section 3. LOST CERTIFICATE: The corporation may issue a new
certificate of stock in the place of any certificate theretofore signed by it,
alleged to have been lost, stolen or destroyed, and the corporation may require
the owner of the lost, stolen or destroyed certificate, or his legal
representative to give the corporation a bond sufficient to indemnify it against
any claim that may be made against it on account of the alleged loss, theft or
destruction of any such certificate or the issuance of such new certificate.
Section 4. RECORD DATE: In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. If no record
date is fixed:
(a) The record date for determining stockholders entitled to notice of
or to vote at a meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting is
held.
(b) The record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no prior action
by the Board of Directors is necessary, shall be the day on which the first
written consent is expressed.
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(c) The record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating thereto.
(d) A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 5. DIVIDENDS: The Board of Directors may declare and pay
dividends upon the outstanding shares of the corporation, from time to time and
to such extent as they deem advisable, in the manner and upon the terms and
conditions provided by statute and the Certificate of Incorporation.
Section 6. RESERVES: Before payment of any dividend there may be set
aside out of the net profits of the corporation such sum or sums as the
directors, from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interests of the
corporation, and the directors may abolish any such reserve in the manner in
which it was created.
ARTICLE IX - MISCELLANEOUS PROVISIONS
Section 1. CHECKS: All checks or demands for money and notes of the
corporation shall be signed by such officer or officers as the Board of
Directors may from time to time designate.
Section 2. FISCAL YEAR: The fiscal year shall begin on the first day of
January.
Section 3. NOTICE: Whenever written notice is required to be given to
any person, it may be given to such person, either personally or by sending a
copy thereof through the mail, or by telegram, charges prepaid, to his address
appearing on the books of the corporation, or supplied by him to the corporation
for the purpose of notice. If the notice is sent by mail or by telegraph, it
shall be deemed to have been given to the person entitled thereto when deposited
in the United States mail or with a telegraph office for transmission to such
person. Such notice shall specify the place, day and hour of the meeting and, in
the case of a special meeting of stockholders, the general nature of the
business to be transacted.
Section 4. WAIVER OF NOTICE: Whenever any written notice is required by
statute, or by the Certificate or the By-Laws of this corporation 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. Except in the case of a special meeting of
stockholders, neither the business to be transacted at nor the purpose of the
meeting need be specified in the waiver of notice of such meeting. Attendance of
a person either in person or by proxy, at any meeting shall constitute a waiver
of notice of such meeting, except where a person attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting was not lawfully called or convened.
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Section 5. DISALLOWED COMPENSATION: Any payments made to an officer or
employee of the corporation such as a salary, commission, bonus, interest, rent,
travel or entertainment expense incurred by him, which shall be disallowed in
whole or in part as a deductible expense by the Internal Revenue Service, shall
be reimbursed by such officer or employee to the corporation to the full extent
of such disallowance. It shall be the duty of the directors, as a Board, to
enforce payment of each such amount disallowed. In lieu of payment by the
officer or employee, subject to the determination of the directors,
proportionate amounts may be withheld from his future compensation payments
until the amount owed to the corporation has been recovered.
Section 6. RESIGNATIONS: Any director or other officer may resign at
any time, such resignation to be in writing and to take effect from the time of
its receipt by the corporation, unless some time be fixed in the resignation and
then from that date. The acceptance of a resignation shall not be required to
make it effective.
ARTICLE X - ANNUAL STATEMENT
Section 1. The President and the Board of Directors shall present at
each annual meeting a full and complete statement of the business and affairs of
the corporation for the preceding year. Such statement shall be prepared and
presented in whatever manner the Board of Directors shall deem advisable and
need not be verified by a Certified Public Accountant.
ARTICLE XI - INDEMNIFICATION AND INSURANCE:
Section 1. (a) RIGHT TO INDEMNIFICATION. Each person who was or is made
a party or is threatened to be made a party or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer,
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
his or her heirs, executors and administrators; provided, however, that, except
as provided in paragraph (b) hereof, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation. The right to
indemnification conferred in this Section shall be a contract right and shall
include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition: provided,
however, that, if the Delaware General Corporation Law requires, the payment of
such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Section or otherwise. The
Corporation may, by action of its Board of Directors, provide indemnification to
employees and agents of the Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
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(b) RIGHT OF CLAIMANT TO BRING SUIT: If a claim under
paragraph (a) of this Section is not paid in full by the Corporation within
thirty days after a written claim has been received by the Corporation, the
claimant may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in defending any proceeding in advance of
its final disposition where the required undertaking, if any is required, has
been tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the Delaware General Corporation law for
the Corporation to indemnify the claimant for the amount claimed, but the burden
of proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard or conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard or conduct.
(c) Notwithstanding any limitation to the contrary contained
in sub-paragraphs (a) and 8 (b) of this section, the corporation shall, to the
fullest extent permitted by Section 145 of the General Corporation Law of the
State of Delaware, as the same may be amended and supplemented, indemnify any
and all persons whom it shall have power to indemnify under said section from
and against any and all of the expenses, liabilities or other matters referred
to in or covered by said section, and the indemnification provided for herein
shall not be deemed exclusive of any other rights to which those indemnified may
be entitled under any By-law, agreement, vote of stockholders or disinterested
Directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be director, officer, employee or agent and shall inure
to the benefit of the heirs, executors and administrators of such a person.
(d) INSURANCE: The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
ARTICLE XII - AMENDMENTS
Section 1. These By-Laws may be amended or repealed by the vote of
directors.
The above By-Laws are certified to have been adopted by the Board of
Directors of the Corporation on the 6th day of October, 1999.
/s/ William Tay
--------------------
William Tay
Secretary
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REFERENCE 5.0
CONSENT OF HOGE, EVANS, HOLMES, CARTER & LEDBETTER, PLLC
60
<PAGE>
HOGE, EVANS, HOLMES, CARTER & LEDBETTER, PLLC
ATTORNEYS AND COUNSELORS
HAMPTON COURT
SUITE 600
4311 OAKLAWN
DALLAS, TEXAS 75219
-----------------
Steven B. Holmes
Licensed In TELEPHONE (214) 765-6000
Texas and Oklahoma TELECOPIER (214) 765-6020
E-MAIL [email protected]
December 23, 1999
Board of Directors
1STOPSALE.COM HOLDINGS INC.
1422 Chestnut Street, Suite 410
Philadelphia, PA 19102
Re: 1STOPSALE.COM HOLDINGS INC.
Registration Statement on Form SB-2
Gentlemen:
We have been retained by 1STOPSALE.COM HOLDINGS INC. (the "Company") in
connection with the Registration Statement (the "Registration Statement") on
Form SB-2, to be filed by the Company with the Securities and Exchange
Commission relating to the offering of securities of the Company. You have
requested that we render our opinion as to whether or not the securities
proposed to be issued on terms set forth in the Registration Statement will be
validly issued, fully paid, and nonassessable.
In connection with the request, we have examined the following:
1. Articles of Incorporation of the Company;
2. Bylaws of the Company;
3. The Registration Statement; and
4. Unanimous consent resolutions of the Company's Board of Directors.
We have examined such other corporate records and documents and have made
such other examinations as we have deemed relevant.
61
<PAGE>
HOGE, EVANS, HOLMES, CARTER & LEDBETTER, PLLC
Board of Directors
December 23, 1999
Page 2
Based on the above examination, we are of the opinion that the securities
of the Company to be issued pursuant to the Registration Statement are validly
authorized and, when issued in accordance with the terms set forth in the
Registration Statement, will be validly issued, and fully paid, and
non-assessable under the corporate laws of the State of Delaware.
We consent to our name being used in the Registration Statement as having
rendered the foregoing opinion and as having represented the Company in
connection with the Registration Statement.
Sincerely,
HOGE, EVANS, HOLMES, CARTER & LEDBETTER PLLC
/s/ Steven B. Holmes
-------------------------
Steven B. Holmes
SBH
62
REFERENCE 23
CONSENT OF PRITCHETT, SILER & HARDY, P.C.
63
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form SB-2 for 1STOPSALE.COM HOLDINGS INC., of our
report dated December 7, 1999, relating to the November 30, 1999 financial
statements of 1STOPSALE.COM HOLDINGS INC., which appears in such Prospectus. We
also consent to the reference to us under the heading "Experts".
/s/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
Salt Lake City, Utah
December 23, 1999
64
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<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> OCT-05-1999
<PERIOD-END> NOV-30-1999
<CASH> 11,500
<SECURITIES> 0
<RECEIVABLES> 0
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<INVENTORY> 0
<CURRENT-ASSETS> 11,500
<PP&E> 0
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<TOTAL-ASSETS> 11,500
<CURRENT-LIABILITIES> 103
<BONDS> 0
0
0
<COMMON> 11,500
<OTHER-SE> (103)
<TOTAL-LIABILITY-AND-EQUITY> 11,500
<SALES> 0
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<CGS> 103
<TOTAL-COSTS> 103
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (103)
<INCOME-TAX> 0
<INCOME-CONTINUING> (103)
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (103)
<EPS-BASIC> (.00)
<EPS-DILUTED> (.00)
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