<PAGE>
As filed with the Securities and Exchange Commission on April 25, 2000
SEC Registration No. 333-93647
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2
to
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 19102-2510
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 and Chief Executive Officer
1422 Chestnut Street, Suite 410
Philadelphia, PA 19102-2510
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
- --------------------------------------------------------------------------------
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*
- --------------------------------------------------------------------------------
* Previously paid.
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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SUBJECT TO COMPLETION DATED, APRIL 25, 2000
PROSPECTUS
[LOGO 1STOPSALE.COM]
1STOPSALE.COM HOLDINGS INC.
5,000,000 Shares
Common Stock
Offering Price $0.20 per share
This is our initial public offering so there is currently no public
market for our shares.
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 7 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 or complete. Any representation to the contrary is a
criminal offense.
- ------------------------------------------------------------------------------
Price to Commissions & Proceeds to
Public(1) Discounts(1)(2) Company (2)
Per Share $0.20 $.00 $0.20
Total $ 1,000,000 $.00 $1,000,000
- ------------------------------------------------------------------------------
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 offer the shares ourselves and do not plan to use underwriters
or pay any commissions. We will be selling our shares in a direct participation
offering 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 March 1, 2001, 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
4th Floor, Suite 410
Philadelphia, Pennsylvania 19102-2510
The date of this prospectus is *___, 2000
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-----------------
TABLE OF CONTENTS
-----------------
Page
----
Prospectus Summary...........................................................6
Risk Factors.................................................................7
Our Company Is Only Recently Organized With No Operating History
Which Makes An Evaluation Of Us Difficult...............................7
Because Of Our Lack Of Funds And Past Losses, Our Accountants'
Audit Report Indicates There Is Substantial Doubt About Our
Ability To Continue As A Going Concern..................................7
The Success Of Our Company Is Dependent On Our Management Who Has
Limited Experience And Will Not Spend Full Time Working For Our
Company Which Makes Our Future Even More Uncertain......................7
Our Business Is Capital Intensive And We Have No Significant
Operating Capital So We Are Dependent Upon This Offering To Be
Able To Implement Our Business Plan And Our Lack Of Revenues
And Profits May Make Our Obtaining Additional Capital More
Difficult...............................................................7
Failure To Attract And Retain Qualified Personnel Could Harm Our
Business And Operating Results..........................................8
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..............................8
Our Certificate Of Incorporation Contains Provisions Limiting
The Liability Of Our Directors To Us And Our Stockholders...............8
Since We Do Not Expect To Pay Dividends, You Cannot Expect To
Receive Income From This Investment.....................................8
Our Management's Control Of Our Company Will Limit The Ability
Of Other Shareholders To Direct The Management Of Our Company...........8
Investors Will Experience Immediate And Substantial Dilution In
The Book Value Of Their Shares..........................................8
Our Management May Begin Selling Shares In October, 2000,
Potentially Depressing The Price Of The Shares In This Offering.........8
Since This Is A Direct Participation Offering And There Is No
Underwriter, We May Not Be Able To Sell Any Shares Ourselves............8
Our Common Stock May Be Classified As A "Penny Stock" Which Could
Cause Investors In This Offering To Experience Delays And Other
Difficulties In Trading The Shares In The Stock Market..................9
Use Of Proceeds.............................................................10
Determination Of Offering Price.............................................11
Dilution....................................................................11
Plan Of Distribution........................................................13
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Special Note Regarding Forward-Looking Statements...........................13
Legal Proceedings...........................................................14
Directors, Executive Officers, Promoters And Control Persons................14
Security Ownership Of Certain Beneficial Owners And Management..............15
Description Of Securities...................................................15
Shares Eligible For Future Sale.............................................17
Certain Transactions........................................................19
Business....................................................................20
Management Discussion And Analysis Or Plan Of Operation.....................28
Legal Matters...............................................................29
Experts.....................................................................29
Available Information.......................................................29
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
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 network
of successful Internet-based retail operating companies, joint ventures,
strategic alliances, and partnerships.
We hope to become the first true Internet commerce conglomerate by
not limiting 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. Our
web site can be located at http://www.1stopsale.com. The information on our
web site is not part of this prospectus.
The Offering
Securities Offered........ 5,000,000 shares of common stock.
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 March 1, 2001, or an additional 60 days in
the sole discretion of our management, unless the
total 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 direct participation 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 principal executive
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
Which Makes An Evaluation Of Us Difficult. Our company was recently
organized on October 5, 1999 and is a start-up company. We have no operating
history and we do not have any 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. You should not invest in this offering unless you
can afford to lose your entire investment.
Because Of Our Lack Of Funds And Past Losses, Our Accountants' Audit
Report Indicates There Is Substantial Doubt About Our Ability To Continue As
A Going Concern. Our independent certified public accountants have pointed
out that we have incurred losses since our inception and has not yet been
successful in establishing profitable operations, raising substantial doubt
about our ability to continue as a going concern. Therefore, our ability to
continue as a going concern is highly dependent upon obtaining additional
financing for our planned operations. If we are unable to raise additional
capital then you may lose your entire investment.
The Success Of Our Company Is Dependent On Our Management Who Has
Limited Experience And Will Not Spend Full Time Working For Our Company Which
Makes Our Future Even More Uncertain. As compared to many other public
companies, our company does not presently 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, William Tay, our sole
officer and director will not be employed full time, at least initially, as
he is involved with other businesses and have other interests which could
give rise to conflicts of interest with respect to the business of and the
amount of time devoted to our company.
Our Business Is Capital Intensive And We Have No Significant
Operating Capital So We Are Dependent Upon This Offering To Be Able To
Implement Our Business Plan And Our Lack Of Revenues And Profits May Make Our
Obtaining Additional Capital More Difficult. 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 since this is not an underwritten offering. 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 given the capital intensive nature of our business, we may
need to seek additional financing from commercial lenders or other sources,
for which we presently have no commitments or arrangements.
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Failure To Attract And Retain Qualified Personnel Could Harm Our
Business And Operating Results. 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 and operating results.
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. As such, investors may
not be able to readily dispose of any shares purchased hereby.
Our Certificate Of Incorporation Contains Provisions Limiting The
Liability Of Our Directors To Us And Our Stockholders. Our Certificate of
Incorporation contains provisions, authorized by Delaware law, which eliminate
our directors' liability for breach of fiduciary duty except under limited
circumstances. These provisions may limit our ability to have any remedy
against a director who breaches his fiduciary duty.
Since We Do Not Expect To Pay Dividends, You Cannot Expect To Receive
Income From This Investment. We expect to reinvest our income in our growth.
Therefore, an investor cannot expect to receive income from an investment in
us.
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 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.
Investors Will Experience Immediate And Substantial Dilution In The
Book Value Of Their Shares. Immediately after this offering the book value of
your shares will be approximately $0.06. This represents dilution of $0.14, or
over 70%, from the purchase price you will pay in the offering assuming all
the shares are sold.
Our Management May Begin Selling Shares In October, 2000, Potentially
Depressing The Price Of The Shares In This Offering. 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, offered hereby, in any market that might develop.
Since This Is A Direct Participation Offering And There Is No
Underwriter, We May Not Be Able To Sell Any Shares Ourselves. No underwriter
has been retained by us to sell these shares. This offering is being
conducted as a direct participation offering, meaning there is no guarantee
8
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as to how much money we will be able to raise through the sale of our shares.
Our sole officer will be selling the shares himself and has limited prior
experience in selling securities. If we fail to sell all the shares we are
trying to sell, our ability to implement our business plan will be materially
effected, and you may lose all or substantially all of your investment.
Our Common Stock May Be Classified As A "Penny Stock" Which Could
Cause Investors In This Offering To Experience Delays And Other Difficulties
In Trading The Shares In The Stock 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 our shares in this
offering are priced at $0.20 per share, 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 in the stock market.
9
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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 $55,000 for legal, accounting,
printing and other costs in connection with the offering.
The table below shows how proceeds from this offering would be used
for scenarios where our company sells various amounts of the shares(1) and the
priority of the use of net proceeds in the event actual proceeds are not
sufficient to accomplish the uses set forth. Pending use, we will invest the
net proceeds in investment-grade, short-term, interest bearing securities.
<TABLE>
<CAPTION>
Percent of total shares offered 25% 50% 75% 100%
($) ($) ($) ($)
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Shares sold 1,250,000 2,500,000 3,750,000 5,000,000
Gross proceeds from offering 250,000 500,000 750,000 1,000,000
Less: offering expenses 55,000 55,000 55,000 55,000
Net proceeds from offering 195,000 445,000 695,000 945,000
Use of net proceeds
Accounting & legal fees 15,000 40,000 55,000 70,000
Web site development (1stopsale.com) 70,000 150,000 175,000 200,000
Computer & office equipment 25,000 65,000 75,000 100,000
Internet access 10,000 18,000 25,000 30,000
Sales & marketing 30,000 75,000 100,000 150,000
Consulting fees 15,000 20,000 35,000 50,000
Compensation to management 20,000 60,000 70,000 80,000
Operating expenses & working capital(2) 10,000 17,000 160,000 265,000
--------- --------- --------- ---------
Total use of proceeds 195,000 445,000 695,000 945,000
========= ========= ========= =========
</TABLE>
- -----
(1) It is possible that no proceeds may be raised from this offering. It is
also possible that some, but not all, of the 5,000,000 shares offered
will be sold. If fewer than all of the shares are sold, we will have to
delay or modify our plan. There can be no assurance that any delay or
modification will not adversely affect our development. If we require
additional funds to develop our plan, such funds may not be available
on terms acceptable to us.
(2) Possible working capital uses include advertising and other ongoing
selling, general and administrative expenses, to be determined by our
executive officers based upon their assessment of our company's needs.
Any funds not used for the purposes indicated will be used for
general working capital. If less than the entire offering is received, funds
will be applied according to the priorities outlined above. For example, if
$105,000 is received, $15,000 will be used to pay for accounting and legal
fees, $70,000 will be used to develop and maintain the web sites and the
remaining $20,000 will be spent on purchasing computer and office equipment.
If less than $15,000 is received, the entire amount will be applied toward
legal and accounting fees.
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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.
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 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 $956,500 or approximately $0.06 per share. This would result in
dilution to investors in this offering of $.14 per share, or 70% 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 $.06 after the offering, or an increase of $0.059 per share
attributable to purchase of the shares by investors in this offering.
Dilution Table
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 upon various levels of sales achieved:
<TABLE>
<CAPTION>
1,250,000 2,500,000 3,750,000 5,000,000
shares sold shares sold shares sold shares sold
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Public offering price/share $0.20 $0.20 $0.20 $0.20
NTBV/share prior to offering $0.001 $0.001 $0.001 $0.001
Increase attributable to new investors $0.009 $0.029 $0.039 $0.059
Post offering pro forma NTBV/share $0.01 $0.03 $0.04 $0.06
Dilution to new investors $0.19 $0.17 $0.16 $0.14
</TABLE>
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Comparative Data
The following table sets forth with respect to existing shareholders
and new investors, a comparison of the number of shares of common stock
acquired from our company, the percentage ownership of such shares, the total
consideration paid, the percentage of total consideration paid and the average
price per share.
<TABLE>
<CAPTION>
Shares Purchased Total Consideration
------------------- ------------------- Average Price
Number Percent Amount Percent Per Share
---------- ------- ---------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing shareholders 11,500,000 70% $ 11,500 1.1% $0.001
New investors 5,000,000 30 1,000,000 98.9 0.20
---------- ------ ---------- -------
Total 16,500,000 100% $1,011,500 100% $0.061
========== ====== ========== =======
</TABLE>
- -----
* It is possible we may not sell any of the shares, in which case the proceeds
to our company will be $0.
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PLAN OF DISTRIBUTION
General
We are offering up to 5,000,000 shares of our common stock 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 those sales, except for reimbursement
of expenses actually incurred on behalf of our company in connection with such
activities. Since this offering is conducted as a direct participation
offering, there can be no assurance that any of the shares will be sold. A
subscription agreement, the form of which is attached to this prospectus, will
be required to be submitted by all purchasers of the shares.
The offering will remain open for a period until March 1, 2001 or
an additional 60 days in our sole discretion, unless the entire gross 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
Some of the statements under the "Prospectus Summary," "Risk Factors,"
"Management Discussion and Analysis or Plan of Operation," "Business" and
elsewhere in this prospectus constitute forward-looking statements. These
statements involve known and unknown risks, uncertainties and other factors
that may cause our actual results, levels of activity, performance, or
achievements to be materially different from any future results, levels of
activity, performance, or achievement expressed or implied by such
forward-looking statements. Such factors include, among other things, those
listed under "Risk Factors" and elsewhere in this prospectus.
In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "could," "intend", "expects,"
"plan," "anticipates," "believes," "estimates," "predicts," "potential," or
"continue" or the negative of such terms or other comparable terminology.
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. Moreover, neither we nor any
other person assumes responsibility for the accuracy and completeness of such
statements. We are under no duty to update any of the forward-looking
statements after the date of this prospectus.
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LEGAL PROCEEDINGS
We are not a party to or aware of any threatened litigation of a
material nature.
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.
<TABLE>
<CAPTION>
Name of Director Age Term Served Positions with Company
- ---------------- --- --------------- ----------------------
<S> <C> <C> <C>
William Tay 28 Since inception President, Secretary-
Treasurer & Director
</TABLE>
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 on
October 5, 1999. Previously, Mr. Tay was self-employed since 1994 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., founded on September 1997, 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.
Mr. Tay initially will devote 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, he is prepared to
devote more time to our company even on a full-time basis.
Executive Compensation
Our sole director do not currently receive and has never receive any
compensation for serving as a director to date. In addition, at present, there
are no ongoing plans or arrangements for compensation of any of our officers.
However, we expect to adopt a plan of reasonable compensation to our officers
and employees when and if we become operational and profitable.
The following table sets forth all compensation awarded to, earned by,
or paid for services rendered to us in all capacities during the period ended
December 31, 1999, by Mr. William Tay our sole executive officer whose salary
and bonus for the period exceeded $100,000.
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Summary Compensation Table
Long-Term Compensation Awards
Name and Principal Compensation - 1999 ($)Number of shares
Position Salary ($) Bonus Underlying Options (#)
- ---------------------- ---------- --------- ----------------------
William Tay, President None None None
We do not presently have a stock option plan but intend to develop
an incentive based stock option plan for our officers and directors in the
future and may reserve up to ten percent of our outstanding shares of common
stock for that purpose.
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 named
director and executive officer 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.
4th Floor, 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.
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
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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.
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.
Options and Warrants
We do not presently have any options or warrants authorized or any
securities that may be convertible into common stock. However, our board of
directors may later determine to authorize options and warrants for 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 19003 as our transfer agent and registrar for the common stock
upon completion of the offering.
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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.
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
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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.
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.
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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.
CERTAIN TRANSACTIONS
In connection with the organization of our company, William Tay,
the founding shareholder, President, Secretary-Treasurer and Director of our
company, 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
We intend to become a holding company engaged in building a network
of successful Internet-based retail operating companies, joint ventures,
strategic alliances, and partnerships.
We hope to become the first true Internet commerce conglomerate by
not limiting 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.
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
hope to be able to offer a 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 successfully implemented, 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 web site traffic and revenue-generating opportunities by
referring potential customers to other 1stopsale.com web sites or
storefronts owned and operated by us rather than by a third-party.
Growth Of The Internet And Online Commerce
The Internet is an increasingly significant global medium for
communications, content and online commerce, enabling millions of people
to share information and conduct business electronically. Growth in Internet
usage in recent years has been fueled by a number of factors, including:
o the large and growing installed base of personal computers in the
workplace and home,
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o advances in the performance and speed of personal computers and
modems,
o improvements in network infrastructure and bandwidth;
o easier and cheaper access to the Internet; and
o increased awareness of the Internet among businesses and consumers,
and the rapidly expanding availability of online content and
commerce which increases the value to users of being connected.
The resulting growth of the Internet and online commerce has created
substantial opportunity for companies to conduct business online. It is
believed that Internet retailers are able to communicate more effectively with
customers by providing the following:
o visual product presentations;
o up-to-date pricing and product information;
o better customer support, including opportunities for customer
feedback;
o product offerings tailored to customer preferences; and
o electronic billing and payment systems.
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.
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;
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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; and
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.
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.
It should be noted that many of these traditional retailers and
manufacturers are aware of the advantages of an Internet storefront as
outlined previously, and are establishing or has established their Internet
presence such as Wal-Mart, Barnes and Noble, the Gap and many others. As more
established traditional retail and manufacturing companies expand onto the
Internet, we will face greater competition which may result in reduced
operating margins, loss of market share and a diminished brand franchise.
Internet Solution
We have a good grasp of the main challenges facing the retailing
industry and we hope to be able to address those and future challenges by
adapting to the environment offered by the Internet. We believe that the main
advantages of an Internet storefront, which we currently do not have any in
operation nor being developed, and of e-commerce in general, are:
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. Internet retailers 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 ability to hire fewer workers;
o ability to keep pace with a fast-growing customer base by employing
scaleable technology and systems; and
o ability to serve customers around the world from a single, domestic
location.
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Customer Convenience and Satisfaction -- We believe that greater
customer convenience will result in increased sales. Online customers will be
able to purchase 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 hope to be able to offer a
broad range of products due to the low-cost and virtually limitless shelf
space of an Internet storefront. This we believe will give 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 intend to offer
manufacturers "shelf space" within our proposed Internet storefront 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
proposed Internet storefronts will be designed to allow customers to follow the
progress of their orders, and having the option to be notified when a desired
back ordered product is available for shipment.
Worldwide Customer Base -- We hope to 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.
1StopSale.Com Strategy
As our Internet domain name, 1stopsale.com, 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.
Our objective is to become the first true Internet e-commerce
conglomerate through the following key strategies:
Building Brand Recognition -- We believe that building brand
recognition of our proposed Internet storefronts is critical to attracting our
customer base. Brand recognition starts with the simplicity of our 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;
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o the creation of a significant number of general and specific "links"
from other web sites to our proposed 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 intend to use a variety of techniques
to build customer loyalty and promote repeat buying. These include providing
comprehensive information about the products we intend to sell, ensuring
navigation of our proposed 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
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 proposed 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 intend to 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.
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 proposed 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 also intend to 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 improving communications with suppliers through the automation of
purchasing, payment methods and accounting.
The 1StopSale.com Storefronts
In contrast to most existing e-commerce outlets, our Internet
storefront design will be developed to 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 our proposed Internet storefronts through
www.1stopsale.com or through specific sites with addresses that are both
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easy to remember and relevant to the type of product we intend to offer.
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 proposed Internet storefronts 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. We believe that 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. We will also allow customers the option of ordering and
receiving product information by telephone at any time.
The order processing server will be designed to also keep 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.
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.
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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
proposed Internet storefronts. In pursuing these relationships, we intend to
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
proposed 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 will explore direct marketing opportunities to target
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" as possible to our proposed Internet storefronts. We intend
to use an aggressive linking program from search engines, manufacturers' web
sites, community, affinity and personal home pages.
Customer Service -- We believe the strength of our customer support
and service will play an important role in our ability to establish 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.
Our distribution system will be based on our supplier's fulfillment
system. Typically, we transmit data to the fulfillment center collected by our
proposed Internet storefronts 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. We
charge our customers only after orders are shipped and verified through the
fulfillment center. Customer billing is expected to be performed through a
third-party credit card processor.
As of the date of this prospectus, we have not selected or contracted
with any suppliers to provide fulfillment services of the goods that we intend
to sell through our proposed Internet storefronts. However, we have narrowed
down several large distribution and fulfillment facilities specializing in
books, entertainment and computer products but we do not intend to contract
with any single supplier until we are able to complete this offering.
26
<PAGE>
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 Internet 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.
Regulation Of Our Business
We do not currently face direct regulation by any governmental agency,
other than laws and regulations generally applicable to businesses.
Due to the increasing popularity and use of the Internet, it is
possible that a number of laws and regulations may be adopted in the U.S. and
abroad with particular applicability to the Internet. It is possible that
governments will enact legislation that may be applicable to us in areas
including content, network security, encryption, data and privacy protection,
electronic authentication or "digital" signatures, illegal and harmful content,
access charges and retransmission activities. Moreover, the applicability to
the Internet of existing laws governing issues including property ownership,
content, taxation, defamation and personal privacy is uncertain.
The majority of laws that currently regulate the Internet were adopted
before the widespread use and commercialization of the Internet and, as a
result, do not contemplate or address the unique issues of the Internet and
related technologies. Any export or import restrictions, new legislation or
regulation or governmental enforcement of existing regulations may limit the
growth of the Internet, increase our cost of doing business or increase our
legal exposure. Any of these factors could have a material adverse effect on
our business, financial condition and results of operations.
27
<PAGE>
Violations of local laws may be alleged or charged by state or
foreign governments and we may unintentionally violate local laws and local
laws may be modified, or new laws enacted, in the future. Any of these
developments could have a material adverse effect on our business, results
of operations and financial condition.
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. The office consists of one room with approximately
300 square feet and a telephone, and access to other common areas which include
the use of a fax machine and personal computer. 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 William Tay, our President, who
anticipates spending approximately 15 hours per week of his time to the
affairs of our company.
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. Also during this time, we expect to hire several employees in the
areas of web designing, Windows NT network administration and a computer
programmer proficient in Microsoft's VisualBasic, ASP and SiteServer Commerce
technologies.
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. 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
28
<PAGE>
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.
LEGAL MATTERS
The validity of the shares offered under this prospectus is being
passed upon for us by Hoge Carter Holmes PLLC, Attorneys and Counselors,
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.
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, 4th Floor, Suite 410, Philadelphia, PA 19102-2510.
29
<PAGE>
1STOPSALE.COM HOLDINGS INC.
[A Development Stage Company]
FINANCIAL STATEMENTS
NOVEMBER 30, 1999
PRITCHETT, SILER & HARDY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
30
<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
31
<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
32
<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-
33
<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-
34
<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-
35
<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-
36
<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 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).
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
37
<PAGE>
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
============
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<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.
39
<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
$0.20 Per Share
--------------
PROSPECTUS
--------------
1STOPSALE.COM HOLDINGS INC.
1422 Chestnut Street
Suite 410
Philadelphia, Pennsylvania 19102
*___, 2000
40
<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.
(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
41
<PAGE>
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.
(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.
42
<PAGE>
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,
William Tay, paid an aggregate of $11,500 cash to purchase 11,500,000 shares of
common stock of our company on October 6, 1999. 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.
ITEM 27. EXHIBITS INDEX.
The exhibits marked with an "*" have already been filed. The remaining 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.
43
<PAGE>
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 10(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
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.
44
<PAGE>
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 April 25, 2000.
(Registrant) 1StopSale.com Holdings Inc.
By (signature and title) /s/ William Tay
----------------------------------
President, Treasurer, and Director
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
and on the dates stated.
(signature) /s/ William Tay
----------------------------------
(title) President, Chief Executive Officer,
Secretary, Chairman of the Board
(date) April 25, 2000
(signature) /s/ William Tay
----------------------------------
(title) Chief Accounting Officer
(date) April 25, 2000
45
<PAGE>
As filed with the SEC on April 25, 2000
SEC Registration No. 333-93647
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 46 through 52 of this Registration Statement)
46
<PAGE>
INDEX TO EXHIBITS
- -------------------------------------------------------------------------
SEC REFERENCE TITLE OF DOCUMENT LOCATION
NUMBER
- -------------------------------------------------------------------------
1.1 Subscription Agreement Previous Filing
- -------------------------------------------------------------------------
3.1 Articles of Incorporation Previous Filing
- -------------------------------------------------------------------------
3.2 Bylaws Previous Filing
- -------------------------------------------------------------------------
5 Consent of Hoge Carter This Filing
Holmes PLLC Page 49
- -------------------------------------------------------------------------
23 Consent of Pritchett, Siler This Filing
& Hardy, P.C. Page 52
- -------------------------------------------------------------------------
47
REFERENCE 5.0
CONSENT OF HOGE CARTER HOLMES PLLC
48
<PAGE>
HOGE CARTER HOLMES 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]
April 25, 2000
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.
49
<PAGE>
HOGE CARTER HOLMES PLLC
Board of Directors
April 25, 2000
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 CARTER HOLMES PLLC
/s/ Steven B. Holmes
-------------------------
Steven B. Holmes
SBH
50
REFERENCE 23
CONSENT OF PRITCHETT, SILER & HARDY, P.C.
51
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Amendment No. 1 to the 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.
/s/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
Salt Lake City, Utah
March 2, 2000
52
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<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> OCT-05-1999
<PERIOD-END> NOV-30-1999
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0
0
<COMMON> 11,500
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