OFFERING DOCUMENT NO.
-------------
<P>
DIAMOND INTERNATIONAL GROUP, INC.
(a Delaware Corporation)
<P>
400,000 Units
(Each Unit Consists of 2 Common Shares
and 1 Stock Purchase Warrant)
Offering Price: $.40 Per Unit
<P>
DIAMOND INTERNATIONAL GROUP , INC. (THE "COMPANY") HEREBY
OFFERS FOR SALE 400,000 UNITS (THE "UNITS") AT $.40 PER
UNIT. EACH UNIT SHALL CONSIST OF 2 SHARES OF COMMON STOCK
($.001 PAR VALUE) AND 1 STOCK PURCHASE WARRANT. THE WARRANT
ENTITLES THE HOLDER TO PURCHASE 5 SHARES OF THE COMMON STOCK
OF THE COMPANY AT A PURCHASE PRICE OF $.42 PER SHARE. THE
WARRANTS SHALL EXPIRE ON AUGUST 31, 1999. THE COMPANY MAY
CALL IN THE WARRANTS SHOULD THE COMPANY'S COMMON STOCK'
TRADE AT OR ABOVE A $5.00 REPORTED CLOSING BID OR TRADE
PRICE FOR 10 CONSECUTIVE TRADING DAYS, ON 15 DAYS WRITTEN
NOTICE OF THE COMPANY'S INTENTION TO DO SO, IF SUCH WARRANTS
HAVE NOT BEEN EXERCISED BY THE HOLDER THEREOF PRIOR TO THE
END OF THE 15-DAY NOTICE PERIOD.
<P>
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE AND
INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE DILUTION, AND
SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE
THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" FOR SPECIAL
RISKS CONCERNING THE COMPANY.
<P>
PRIOR TO THIS OFFERING, THERE HAS BEEN NO PUBLIC MARKET FOR
THE COMMON STOCK ("COMMON STOCK" OR "SHARES") OF THE
COMPANY. THERE CAN BE NO ASSURANCE THAT ANY SUCH TRADING
MARKET IN THESE SECURITIES WILL DEVELOP HEREAFTER, OR THAT
SUCH MARKET, IF DEVELOPED, WILL CONTINUE. THE COMPANY IS
NOT SUBJECT TO THE REPORTING REQUIREMENTS OF SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE
ACT"), MEANING THAT IT IS NOT REQUIRED TO FILE ANNUAL OR
QUARTERLY REPORTS WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE COMPANY IS CONDUCTING THIS OFFERING PURSUANT
TO AN EXEMPTION FROM REGISTRATION FOR LIMITED OFFERINGS (NOT
EXCEEDING $1,000,000) PROVIDED BY RULE 504 OF REGULATION D
UNDER THE SECURITIES ACT OF 1933 (THE "ACT").
<P>
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HA YE ANY OF
THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS
O F THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
====================================================================================
<S> <C> <C>
Price to Purchasers Proceeds to the Company
--------------------- ------------------------
Per Unit $2.50 $2.50
Total Offering $1,000,000.00 $1,000,000.00
<P>
====================================================================================
</TABLE>
<P>
DIAMOND INTERNATIONAL GROUP , INC.
7633 East 63rd Place, Suite 220
Tulsa, Oklahoma 74133
Phone: (918) 459-9689
<P>
The date of this OFFERING DOCUMENT is January 25. 1999
----------------
<P>
TABLE OF CONTENTS
<P>
Section Page
----------------- ----
Offering Summary 10
<P>
Risk Factors 11
<P>
Dilution 14
<P>
Use of Proceeds 15
<P>
Proposed Business of the Company 16
<P>
Management 17
<P>
Conflicts of Interest 19
<P>
Principal Shareholders 18
<P>
Description of Securities 19
<P>
CERTAIN STATE RESTRICTIONS
<P>
IT IS ANTICIPATED THAT THE SHARES DESCRIBED HEREIN WILL BE
OFFERED FOR SALE IN CERTAIN STATES. THE SECURITIES ("BLUE
SKY") LAWS OF SOME OF THOSE STATES REQUIRE THAT CERTAIN
CONDITIONS AND RESTRICTIONS RELATING TO THIS OFFERING BE
DISCLOSED. A DESCRIPTION OF THE RELEVANT CONDITIONS AND
RESTRICTIONS REQUIRED BY THE STATES IN WHICH THE SHARES MAY
BE OFFERED FOR SALE IS SET FORTH BELOW.
<P>
NOTICE TO ALABAMA RESIDENTS:
----------------------------
<P>
THESE SECURITIES ARE OFFERED PURSUANT TO A CLAIM OF
EXEMPTION UNDER THE ALABAMA SECURITIES ACT. A REGISTRATION
STATEMENT RELATING TO THESE SECURITIES HAS NOT BEEN FILED
WITH THE ALABAMA SECURITIES COMMISSION. THE COMMISSION DOES
NOT RECOMMEND OR ENDORSE THE PURCHASE OF THESE SECURITIES.
NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF THIS
OFFERING. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<P>
NOTICE TO CALIFORNIA RESIDENTS:
-------------------------------
<P>
THESE SECURITIES HAVE NOT BEEN REGISTERED UND ER THE
SECURITIES ACT OF 1933, AS AMENDED OR THE CALIFORNIA
CORPORATIONS CODE BY REASON OF SPECIFIC EXEMPTIONS
THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE
OFFERING. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS
SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED OR THE CALIFORNIA CORPORATIONS CODE, IF SUCH
REGISTRATION IS REQUIRED.
<P>
NOTICE TO COLORADO RESIDENTS:
-----------------------------
<P>
THE SECURITIES OFFERED HA YE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE COLORADO
SECURITIES ACT OF 1981. BY REASON OF SPECIFIC EXEMPTIONS
THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE
OFFERING. THE SECURITIES CANNOT BE SOLD, TRANSFERRED, OR
OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS THEY
ARE SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES ACT OF 1981, IF SUCH
REGISTRATION ( IS REQUIRED).
<P>
NOTICE TO CONNECTICUT RESIDENTS:
--------------------------------
<P>
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 336-
485 OF THE CONNECTICUT UNIFORM SECURITIES ACT AND CANNOT BE
SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT
UNDER THE ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR IN A TRANSACTION WHICH IS
OTHERWISE IN COMPLIANCE WITH SUCH ACT.
<P>
NOTICE TO FLORIDA RESIDENTS:
---------------------------
<P>
FLORIDA RESIDENTS ARE ADVISED THAT THE SHARES HAVE NOT BEEN
REGISTERED WITH THE STATE OF FLORIDA. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL. PURSUANT TO FLORIDA STATUTES,
SECTION 517.061 (11) (A)(5), THE SALE. OF A SECURITY TO A
FLORIDA RESIDENT SHALL BE VOIDABLE BY THE PURCHASER EITHER
(i) WITHIN THREE DAYS AFTER THE FIRST TENDER OF
CONSIDERATION IS MADE BY THE PURCHASER TO THE ISSUER, AN
AGENT OF THE ISSUER OR AN ESCROW AGENT, OR (ii) WITHIN THREE
DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE HAS BEEN
COMMUNICATED TO THE PURCHASER, WHICHEVER OCCURS FIRST,
PROVIDED HOWEVER, THAT THERE ARE MORE THAN FIVE FLORIDA
PURCHASERS.
<P>
NOTICE TO GEORGIA RESIDENTS:
----------------------------
<P>
THE SECURITIES ARE BEING SOLD IN RELIANCE ON PARAGRAPH (13)
OF CODE SECTION 10-5-9 OF "THE GEORGIA ACT OF 1973", AND
MAY NOT BE SOLD OR TRANSFERRED OR TRANSFERRED EXCEPT IN A
TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER SUCH ACT.
<P>
NOTICE TO ILLINOIS RESIDENTS:
------------------------------
<P>
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OR THE SECURITIES LAWS OF THE STATE OF
ILLINOIS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND SUCH LA WS. THE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. THE SECURITIES HA YE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION,
ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED
UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY
OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
<P>
NOTICE TO KANSAS RESIDENTS:
---------------------------
<P>
THESE SECURITIES HA YE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE KANSAS SECURITIES
ACT, BY REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO
THE LIMITED AVAILABILITY OF THE OFFERING. THESE SECURITIES
CANNOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF TO ANY
PERSON OR ENTITY UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR
AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
<P>
NOTICE TO MASSACHUSETTS RESIDENTS:
----------------------------------
<P>
EACH NON-ACCREDITED MASSACHUSETTS PURCHASER OF THESE
SECURITIES MUST HAVE A NET WORTH (EXCLUSIVE OF HOME,
FURNISHINGS THEREIN AND AUTOMOBILES) EQUAL TO AT LEAST THREE
(3) TIMES SUCH INVESTOR'S INVESTMENT HEREIN .
<P>
NOTICE TO NEW HAMPSHIRE RESIDENTS:
----------------------------------
<P>
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN
APPLICATION FOR A LICENSE HAS BEEN FILED NOR THE FACT THAT A
SECURITY IS EFFECTIVELY REGISTERED ORA PERSON IS LICENSED
CONSTITUTES A FIND IN G BY THE DIRECTOR OF THE OFFICE OF
SECURITIES REGULATION OF NEW HAMPSHIRE THAT ANY DOCUMENT
FILED UNDER THE LAWS OF THE STATE OF NEW HAMPSHIRE IS TRUE,
COMPLETE AND NOT MISLEADING.
<P>
NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR
EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS
THAT THE DIRECTOR OF THE NEW HAMPSHIRE OFFICE OF SECURITIES
REGULATION HAS PASSED IN ANY WAY UPON THE MERITS OR
QUALIFICATIONS OF, OR J RECOMMENDED OR GIVEN APPROVAL TO ANY
PERSON, SECURITY, OR TRANSACTION. IT IS UNLAWFUL TO MAKE,
OR CAUSE TO BE MADE TO ANY PROSPECTIVE PURCHASER, CUSTOMER,
OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE
PROVISIONS OF THE ABOVE.
<P>
NOTICE TO NEW JERSEY RESIDENTS:
-------------------------------
<P>
THE ATTORNEY GENERAL OF THE STATE OF NEW JERSEY HAS NOT
PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. THE
FILING OF THE WITHIN OFFERING WITH THE BUREAU OF SECURITIES
OF THE STATE OF NEW JERSEY DOES NOT CONSTITUTE APPROVAL OF
THE ISSUE OR THE SALE THEREOF BY THE BUREAU OF SECURITIES OF
THE STATE OF NEW JERSEY OR THE DEPARTMENT OF LAW AND PUBLIC
SAFETY OF THE STATE OF NEW JERSEY. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
<P>
NOTICE TO NEW YORK RESIDENTS:
-----------------------------
<P>
THIS DOCUMENT HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL
OF THE STATE OF NEW YORK PRIOR TO ITS ISSUANCE AND USE. THE
ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON
OR ENDORSES THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
<P>
NOTICE TO NORTH CAROLINA RESIDENTS:
-----------------------------------
<P>
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON
THEIR OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE
SECURITIES AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN
RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR
REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES
HA VE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY
OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE A w ARE THAT THEY WILL BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
<P>
NOTICE TO OKLAHOMA RESIDENTS:
----------------------------
<P>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE OKLAHOMA
SECURITIES ACT .THE SECURITIES HA VE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE IN
THE ABSENCE OF A REGISTRATION UNDER THE ACT AND/OR THE
OKLAHOMA SECURITIES ACT, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR ACTS.
<P>
NOTICE TO PENNSYLVANIA RESIDENTS:
---------------------------------
<P>
UNDER PROVISIONS OF THE PENNSYLVANIA SECURITIES ACT OF 1972,
EACH PENNSYLVANIA RESIDENT SHALL HAVE THE RIGHT TO WITHDRAW
HIS ACCEPTANCE WITHOUT INCURRING ANY LIABILITY, TO THE
SELLER, UNDERWRITER (IF ANY) OR ANY PERSONS, WITHIN TWO (2)
BUSINESS DAYS FROM THE DATE OF RECEIPT BY THE ISSUER OF HIS
WRITTEN BINDING CONTRACT OF PURCHASE OR IN THE CASE OF A
TRANSACTION IN WHICH THERE IS NOT WRITTEN BINDING CONTRACT
OF PURCHASE, WITHIN (2) BUSINESS DAYS AFTER HE MAKES THE
INITIAL PAYMENT FOR THE SECURITIES BEING OFFERED.
<P>
ALL RESIDENTS OF PENNSYLVANIA WHO SUBSCRIBE FOR SECURITIES
MUST SIGN A STATEMENT AS FOLLOWS:
<P>
EACH PENNSYLVANIA RESIDENT WHO SUBSCRIBES FOR THE SECURITIES
BEING OFFERED HEREBY AGREES NOT TO SELL THESE SECURITIES FOR
A PERIOD OF TWELVE MONTHS AFTER THE DATE OF PURCHASE.
<P>
TO WITHDRAW A SUBSCRIPTION TO PURCHASE SECURITIES, A
SUBSCRIBER NEED ONLY SEND A LETTER OR TELEGRAM AT THE
ADDRESS SET FORTH IN THE TEXT OF THE MEMORANDUM, INDICATING
HIS OR HER INTENTION TO WITHDRAW. SUCH LETTER OR TELEGRAM
SHOULD BE SENT AND POSTMARKED PRIOR TO THE END OF THE
AFOREMENTIONED SECOND BUSINESS DAY. IT IS PRUDENT TO SEND
SUCH LETTER BY CERTIFIED MAIL, RETURN RECEIPT ; REQUESTED,
TO ENSURE THAT IT IS RECEIVED AND ALSO TO EVIDENCE THE TIME
WHEN IT WAS MAILED. IF THE REQUEST IS MADE O RALLY (IN
PERSON O R BY TELEPHONE AT THE NUMBER LISTED IN THE TEXT OF
THE MEMORANDUM). A WRITTEN CONFIRMATION THAT THE REQUEST HAS
BEEN RECEIVED SHOULD BE REQUESTED.
<P>
NOTICE TO TEXAS RESIDENTS:
--------------------------
<P>
THE UNDERSIGNED IS AWARE OF THE FACT THAT SALES OF THESE
SECURITIES IN 'THE STATE OF TEXAS WILL BE MADE IN RELIANCE
UPON THE EXEMPTION PROVIDED IN THE SECURITIES ACT OF TEXAS.
SUCH SECURITIES MUST BE HELD INDEFINITELY UNLESS THEY ARE
SUBSEQUENTLY REGISTERED UNDER SUCH ACT OR UNLESS, IN THE
OPINION OF COUNSEL FOR THE ISSUER, A SALE OR TRANSFER MAY BE
MADE WITHOUT REGISTRATION THEREUNDER. THE UNDERSIGNED AGREES
THAT ANY CERTIFICATE EVIDENCING THE SECURITIES WILL BEAR A
LEGEND RESTRICTING THE TRANSFER THEREOF CONSISTENT WITH THE
FOREGOING AND THAT A MOTION WILL BE MADE IN THE RECORDS j OF
THE ISSUER RESTRICTING THE TRANSFER OF ANY OF THE SECURITIES
IN A , MANNER CONSISTENT WITH THE FOREGOING.
<P>
NOTICE TO WASHINGTON RESIDENTS:
--------------------------------
<P>
THE ADMINISTRATOR OF SECURITIES OF THE STATE OF WASHINGTON
HAS NOT REVIEWED THE OFFERING OR THIS MEMORANDUM AND THE
SECURITIES HA VE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF WASHINGTON, CHAPTER 21.20 RCW, AND, THEREFORE, CANNOT
BE RESOLD UNLESS THEY ARE REGISTERED UNDER THE SECURITIES
ACT OF WASHINGTON, CHAPTER 21.20 RCW OR UNLESS AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. PROSPECTIVE INVESTORS MUST
RELY ON THE INVESTOR'S OWN EXAMINATION OF THE PERSON OR
ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING
INCLUDING THE MERITS AND RISKS INVOLVED, IN MAKING AN
INVESTMENT DECISION ON THESE SECURITIES.
<P>
ALL STATES:
-----------
<P>
THE PRESENCE OF A LEG END FOR ANY GIVEN ST A TE REFLECTS
ONLY THAT A LEGEND MAY BE REQUIRED BY THAT STATE AND SHOULD
NOT BE CONSTRUED TO MEAN AN OFFER OR SALE MAY BE MADE IN ANY
STATE. THIS MEMORANDUM MAY BE SUPPLEMENTED BY ADDITIONAL
STATE LEGENDS. IF YOU ARE UNCERTAIN AS TO WHETHER OR NOT
OFFERS OR SALES MAY BE LAWFULLY MADE IN ANY GIVEN STATE, YOU
ARE ADVISED TO CONTACT THE COMPANY FOR A CURRENT LIST OF
STATES IN WHICH OFFERS OR SALES MAY BE LAWFULLY MADE.
<P>
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
<P>
THE OFFERING
<P>
This offering is being made by Diamond International Group,
Inc. ("Diamond" or the "Company") on a "best efforts" basis.
All funds received from subscribers will be deposited in the
treasury of the Company by noon of the next business day
after receipt.
<P>
ADDITIONAL INFORMATION
<P>
Presently, there is no market for the shares of Common Stock
being offered and there can be no assurance that a viable
market will develop by reason of this offering. The offering
price has been arbitrarily determined by the Company, and
has no relationship to the Company's assets, book value, net
worth, or other recognized criteria of value.
<P>
The Company will file a Notice of Sale of Securities
Pursuant to Regulation D, Section 4(6), and/or Uniform
Limited offering Exemption (the "Notice") on Form D with the
United States Securities and Exchange Commission.
<P>
Upon filing, copies of the Notice on Form D may be inspected
without charge at the corporate offices of the Company
during regular business hours and copies of all or any part
thereof "1 may be obtained from the Company at prescribed
rates.
<P>
THE SHARES ARE OFFERED BY THE COMPANY AND MA Y BE SOLD BY
OFFICERS AND DIRECTORS OF THE COMPANY SUBJECT TO PRIOR SALE,
WITHDRAWAL, CANCELLATION OR MODIFICATION WITHOUT NOTICE.
OFFERS TO PURCHASE AND CONFIRMATIONS OF SALE ISSUED BY THE
COMPANY ARE SUBJECT TO ACCEPTANCE BY THE COMPANY ANY AND THE
RIGHT OF THE COMPANY ANY TO REJECT ANY OFFER TO PURCHASE AND
CANCEL ANY CONFIRMATION OR SALE, IN WHOLE OR IN PART, WITH
OR WITHOUT CAUSE, AT ANY TIME PRIOR TO DELIVERY OF SHARES TO
A SUBSCRIBER.
<P>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENT OTHER THAN THOSE CONTAINED IN THIS
OFFERING DOCUMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS OFFERING DOCUMENT DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER IN SUCH OFFER, OR IN ANY JURISDICTION IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO.
<P>
ALL PAYMENTS FOR THESE SECURITIES SHALL BE MADE BY CASH,
CHECK OR MONEY ORDER PAY ABLE TO "DIAMOND INTERNATIONAL
GROUP , INC."
<P>
THE TERMINATION DATE OF THIS OFFERING IS NINETY (90) DAYS T
AFTER THE DATE OF THIS OFFERING DOCUMENT, UNLESS EXTENDED BY
THE COMPANY FOR AN ADDITIONAL NINETY (90) DAYS:
<P>
OFFERING SUMMARY
<P>
The following is a summary of certain information contained
in this OFFERING DOCUMENT and is qualified in its entirety
by the more detailed infom1ation and financial statements
(including notes thereto) appearing elsewhere in this
OFFERING DOCUMENT.
<P>
The Company
-----------
<P>
DIAMOND INTERNATIONAL GROUP , INc. (the "Company" or
"Diamond") was incorporated in the State of Delaware on
November 5, 1998. The Company has entered into an agreement
to purchase 100% of the issued and outstanding shares of H.
Y. APPLIED INTER-DATA SERVICES, INC., a New York corporation
("HY AID"), in exchange for 18,462,404 shares of the
Company's common stock (the "Acquisition"). As a result of
this transaction, HY AID will become a wholly; owned
subsidiary of the Company.
<P>
Because the company has no assets, liabilities or business
activities prior to its acquisition of HY AID, the
discussion below will focus on the business operations of HY
AID which continues to be in; business and has been since
its incorporation in November, 1969.
<P>
HY AID, which will become a wholly-owned subsidiary of the
Company after the Acquisition, is a service provider to
companies engaged in direct mail solicitation of products.
HY AID provides integrated and complex processing services
for mail order providers through its unique and proprietary
software. Its software systems include services for
processing, data entry, shipment planning and inventory
analysis.
<P>
The Offering
------------
<P>
Type of Securities Offered: 100,000,000 Authorized Shares of
Common Stock, $.0001 par value.
<P>
Shares of the Company owned by present shareholders
prior to offering: 1,737,596
<P>
Shares to be outstanding after the offering and
Acquisition if all shares are sold: 23,000,000
<P>
Net proceeds to Company after offering: $985,000 (See
"Use of Proceeds")
<P>
Selected Financial Information
------------------------------
<P>
The following sets forth selected financial information of
HY AID as of September 30, 1998, and is qualified in its
entirety by the financial statements appearing elsewhere in
this Offering Document. (See attached Exhibit " A ") HY
AID's fiscal year end is December 31.
<P>
H.Y. APPLIED INTER-DATA SERVICES, INC.
Financial Data For Nine Months Ended September 30, 1998
(Unaudited)
<P>
Cash $ 23,361
Total Assets 2,156,414
Total Liabilities 2,129,919
Stockholders' Equity 26,495
Revenues 4,119,071
Income (Loss) Before Taxes <203,696>
<P>
RISK FACTORS
<P>
AN INVESTMENT IN THE COMPANY IS HIGHLY SPECULATIVE AND
SHOULD BE CONSIDERED ONLY BY PERSONS ABLE TO BEAR THE
ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD.
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE
FOLLOWING RISK FACTORS RELATING TO THE COMPANY.
<P>
Risks of Offering:
------------------
<P>
1. Arbitrary Offering Price. Prior to the offering made
hereby, there has been no liquid market for the Company's
Common Stock. The offering price of the Shares has been
arbitrarily determined by the Company and bears no
relationship to assets, book value, net worth, earnings,
actual results of operations or any other established
investment criteria. Among the factors considered in
determining such offering price were HY AID's current
financial condition, the degree of control which the current
Shareholders desired to retain, and an evaluation of the
prospects for HY AID's growth. The offering price set forth
on the cover page of this OFFERING DOCUMENT should not,
therefore, be considered an indication of the actual value
of the Common Stock of the Company.
<P>
2. Dilution. The purchasers of the Shares offered
hereby will incur immediate and substantial dilution in the
book value of their shares. In addition, the Company's
current shareholders will have acquired and maintained a
significant interest in the Company which was obtained at a
cost significantly below the offering price. Accordingly, a
proportionately greater risk of loss will be borne by
investors purchasing Shares in this offering, who will
contribute most of the Company's additional capital, than by
existing shareholders. (See "Dilution")
<P>
3. Lack of Liquid Market for Shares. There is no liquid
market for the Company's Shares, and there can be no
assurance that such a market will develop by reason of this
offering. Upon completion of the offering, there is a
possibility that even if a liquid market does develop, it
would not be sustained. The investment community may show
little or no interest in the Shares offered; and,
accordingly, investors may not be readily able to liquidate
their investment. Even if a purchaser hereunder is able to
find a brokerage firm to effect a transaction in the
securities of the Company, a combination of brokerage
commissions, state transfer taxes, when applicable, and any
other selling costs may exceed the offering price of the
same.
<P>
4. No Underwriter. The Company will sell the Shares
offered hereby without the services of an underwriter. The
Company may experience difficulty in completing the sale of
its Shares and if so, the Company may not be able to
complete its business plan as successfully as it j might if
the maximum number of Shares are sold.
<P>
5. No Likelihood of Dividends. The Company has never
paid dividends. At present, the Company does not anticipate
paying dividends on its Common Stock in the foreseeable
future and intends to devote any earnings to the
development of the Company's business. Investors who
anticipate the need for immediate income from their
investment should refrain from the purchase of the Shares.
<P>
Business Risks
---------------
<P>
6. Use of Proceeds. The Company plans to use the net
proceeds from the Offering for working capital and general
corporate purposes. If less than all of the Units offered
are sold, the Company will have to delay or modify its
plans. There can be no assurance that any delay or
modification of the Company's p1ans would not adversely
affect the Company's development. If the Company requires
additional funds, such funds may not be available on terms
acceptable to the Company.
<P>
9 .Control of the Company .The Certificate of
Incorporation of the Company prohibits cumulative voting for
the Board of Directors. Following the Acquisition and the
sale of the Shares offered, the Post Acquisition
Shareholders will own 80% of the outstanding shares of
Common Stock giving them absolute control of the Company.
<P>
10. Dependence on Key Executive. The Company will be
highly dependent upon the efforts of Richard Levinson. The
loss of the services of Richard Levinson could have material
adverse effect on the Company. At present, HY AID does not
have any key man insurance to compensate it for any such
loss through death.
<P>
11. Competition. HY AID is in a highly competitive
market and has developed a unique niche in this market. It
is the most well known company in this industry possessing
unique software internally developed in the three major
direct mail service categories:
<P>
1. Negative option and annual clubs
2. Continuity clubs
3. Catalogue systems
<P>
Due to its limited resources, there can be no guarantee that
HY AID will continue to maintain state- of-the-art software
in these niche markets or be able to compete with other
companies that have substantially greater financial
resources enabling them to develop similar software.
<P>
HY AID is, therefore, in a highly competitive market which
will require it to develop niche markets in order to
Increase its clientele. Due to its limited resources, there
can be no guarantee that HY AID will be successful in
developing any niche markets, or be able to compete with
other agencies that already have a substantial share of the
market and have substantially greater financial resources
and capabilities.
<P>
12. Risks Relating to Expansion of Business: Uses of
Excess Proceeds. Although the Company is not presently
engaged in negotiations to acquire other businesses, it may,
as part of its growth strategy, consider making future
acquisitions of certain related businesses. The Company may
make such acquisitions with cash or with stock or a
combination thereof If the Company does make any such
acquisitions, various associated risks may be encountered,
including potential dilution to shares of Common Stock then
outstanding, due to additional shares of Common Stock being
issued in connection with the acquisitions, possible
goodwill amortization, diversion of management's attention,
possible regulatory costs and unanticipated problems or
liabilities, some or all of which could have a materially
adverse effect on the Company's financial projections of the
Company. (See "Safe Harbor Provision).
<P>
13. Failure to Successfully Upgrade Proprietary
Hardware. Although Management has the expertise to upgrade
its software at little extra expense, it may not be able to
upgrade its J hardware and marketing efforts in order to
experience a gross revenue increase of any volume that
exceeds twice its current level without the ability to
acquire the infusion of investment capital possible by this
offering.
<P>
14. Need for Additional Financing If the Maximum
Offering is sold, HY AID will derive net cash proceeds of
$985,000. There is no assurance that the net proceeds will
provide the working capital necessary to support HY AID's
operations arid the completion of upgrading of its state-of-
the-art hardware to implement a volume growth of levels
higher than twice its existing level.
<P>
15 .Technology Protection and Proprietary Rights. HY
AID has not patented nor does it intend to patent its
technology and processes. HY AID intends to copyright its
software but that will not necessarily protect HY AID from
outside use of technology developed or employed by HY AID.
HY AID is exposed to the risk that its technology and
processes may be used by others without redress. In
addition, there is no assurance that HY AID's technology or
processes will not be found to infringe on other existing
patents or copyrights in claims against HY AID.
<P>
16. No Dividends. No dividends have been paid on the
Common Shares and the Company does not anticipate the
payment of cash dividends in the foreseeable future. If the
operations of the Company become profitable, it is
anticipated that, for the foreseeable future, any income
received therefrom would be devoted to the Company's future
operations and that cash dividends would not be paid to the
Company's Shareholders.
<P>
17. Exempt Offering. The Memorandum has not been
reviewed by the SEC or by any state regulatory agency .The
Offering is being made pursuant to an exemption from
registration with the SEC. (See "Terms of the Offering.")
<P>
18. State Law Violations. The Company will use its best
efforts to ensure that sales of Units will only occur in
those states in which such sales would not be a violation of
any of said state's laws.
<P>
19. Employment and Consulting Agreements. The Company
will enter into certain employment and consulting
agreements (see "Management" and "Certain Transactions").
The Company's obligations under the agreements are
significant and could affect the profitability of the
Company.
<P>
20. Unaudited Financial Statements. The financial
statements included in the Offering Circular are unaudited,
and investors will be relying upon the management of HY AID
with respect to the accuracy and adequacy of all information
of a financial nature included in the Offering Circular and
the financial statements.
<P>
FOR ALL OF THE AFORESAID REASONS, AND OTHERS, INCLUDING
THOSE SET FORTH HEREIN, THESE SECURITIES INVOLVE A HIGH
DEGREE OF RISK. ANY PERSON CONSIDERING AN INVESTMENT IN THE
SECURITIES OFFERED HEREBY SHOULD BE AWARE OF THESE AND OTHER
FACTORS SET FORTH IN THIS MEMORANDUM. THESE SECURITIES
SHOULD ONLY BE PURCHASED BY PERSONS WHO CAN AFFORD A TOTAL
LOSS OF THEIR INVESTMENT IN THE COMPANY AND HAVE NO
IMMEDIATE NEED FOR A RETURN ON THEIR INVESTMENT.
<P>
DILUTION
<P>
Dilution is a reduction in the net tangible book value of a
purchaser's investment measured by the difference between
the purchase price and the net tangible book value of the
Shares after the purchase takes place. The net tangible
book value of Common Stock is equal to stockholders' equity
applicable to the Common Stock as shown on the Company's
balance sheet divided by the number of shares of Common
Stock outstanding. As a result of such dilution, in the
event the Company is liquidated, a purchaser of Shares may
receive less than his initial investment and a present
stockholder may receive more.
<P>
As of September 30, 1998, the Company had $26, 495 in
shareholder equity. Assuming that all of the Shares offered
hereby are sold, 23,000,000 shares of common stock will be
issued and outstanding with a net tangible book value of
$1,011,495 or $.04 per share .
<P>
Assuming that all of the Shares offered hereby are sold, the
new shareholders will have paid an average price $.36 per
share for their shares and will incur a dilution ill value
of their shares of $.32 per share, or 89%; and the present
shareholders will experience an increase in the value of
their shares from $.0.00 per share to $.04 per share,
constituting an increase in value of$.05 per share.
<P>
USE OF PROCEEDS
<P>
After payment of approximately $15,000 ill expenses of the
offering including accounting and legal fees, the net
proceeds of the offering will be $985,000. The principal
purposes and priorities in which proceeds are to be used
are as set forth below:
<P>
Gross Amount of Proceeds: $1,000,000
<P>
Offering Expenses:
Accounting 2,000
Legal 12,000
Printing 1,000
Acquisition Costs 45,000
Computer Equipment 100,000
Working Capital 840,000
<P>
Amounts set forth above indicate the proposed use of
proceeds. Actual expenditures may vary substantially from
these estimates depending upon economic conditions and the
production and sale of the products and services provided
by the Company.
<P>
The Company nevertheless reserves the option to seek
additional funds through loans or other financial
arrangements. No such arrangements exist or are currently
contemplated and there can be no assurance that they may be
obtained in the future should the need arise.
<P>
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
<P>
BUSINESS OF H. Y. APPLIED INTER-DATA SERVICES, INC.
<P>
History and Organization.
-------------------------
<P>
The Business.
-------------
<P>
H. Y. APPLIED INTER-DAT A SERVICES, 1NC. ("HY AID"), is a
mail order service provider to companies which offers its
products for sale through infomercials, direct mail and the
Internet. Through HY AID's proprietary software, BY AID is
able to coordinate promotions, process consumer orders,
collect payments and provide clients a detailed analysis
which outlines costs, profits, accounts receivable, market
penetration and inventory turn. As a result of this detailed
information, HY AID's clients such as Proctor & Gamble,
Palladium Press and Warner Bros. are able to make informed
decisions regarding their direct sales solicitations. Below
is a brief description of HY AID's services:
<P>
Merge-Purge Processing
<P>
Merge Purge Processing is the process of matching large name
and address lists for duplication, purchase frequency,
demographic qualifications etc., for the purpose of list
rental or solicitation efforts of various products, clubs,
membership offers, etc.
<P>
Data Entry Processing
<P>
Data Entry Processing encompasses capturing all information
required to build sophisticated consumer databases for
solicitation or order processing functions.
<P>
Automatic Shipment Systems
<P>
Automatic Shipment Systems encompasses decisions being made
to club member files as to who to ship product to, when to
ship product, when to bill customers, how to age receivable
balances.
<P>
Negative Option Programs
<P>
Negative Option Programs are those types of book and/or
record clubs that announce products about to by shipped and
enable members to either refuse the shipments, choose
alternate shipments or choose additional products to receive
along with their normal announced selections. All other
processing found in automatic shipment systems is also
included in negative option system processing.
<P>
Catalogue-Mini-Catalogue or 1-Shot Systems
<P>
These are simple order processing plans that ship any
product or products requested by a consumer that are paid
for by the consumer by check, credit card or other payment
plans.
<P>
Stampsheet Programs
<P>
These are solicitations to consumers for magazines, books or
other merchandise whereby a sheet of stamps is mailed to a
consumer with a different stamp representing a unique
product able to be purchased by the consumer. Frequently,
these solicitations are part of a sweepstake offer .
<P>
Annual Shipment Systems
<P>
These are types of marketing concepts that announce
periodically a shipment that will be mailed to a consumer
(unless he notifies the mailer otherwise) of:
<P>
a. Yearbook addendums
b. Appointment book calendars
c. Membership renewals, etc.
<P>
As a result of HY AID's growth over the last 30 years, it
has reached the point where an infusion of capital is
needed for continued expansion. Below is a partial list of
HY AID's primary needs to continue with its expansion plans:
<P>
Competition.
<P>
HY AID is among the top 5 services in the United States
offering similar services to the mail order industry.
Although HY AID believes it offers unique services which its
competitors do not offer, HY AID's competitors offer their
services nationally and have greater financial resources at
their disposal.
<P>
MANAGEMENT
<P>
The officers and directors of the Company after the
completion of the Acquisition, and further information
concerning them, are as follows:
<P>
NAME AGE POSITION HELD
Richard Levinson 58 President/Director
Barbara Cheney 60 Treasurer/Director
Janine Levinson 34 Vice President/
Director
<P>
Resumes:
<P>
Richard Levinson, President: At age 58, Mr. Levinson has 36
years in the direct mail industry. In addition, he has 6
years experience as Programmer, Programming Manager and
Director of Data Processing for Grolier Enterprises, a
publicly traded direct mail company. Mr .Levinson designed
and programmed all of the mail order processing systems from
order entry through billing, shipping, statistical marketing
and financial reporting. For 30 years, Mr. Levinson has
owned and operated HY AID. Inc. , a direct mail service
processing orders for book clubs, record clubs, collectable
clubs, catalogues and all related processes including, but
not limited to, consulting, credit and collection work,
inbound telemarketing services, internet processing, list
management, caging operations, statistical reporting in both
marketing and accounting areas as well as general management
in all facets of client marketing efforts. In addition to
his operational service experience, he has owned and
operated various book, record and merchandise clubs, one of
which was "Children's Chance Book Club", an award winning
book club consisting of hundreds of thousands of members
being shipped children's classical books and other award
winning books to preschool through 4th grade children.
<P>
Barbara Cheney, Vice President, Controller: Age 60. Barbara
Cheney has 45 years experience in the direct mail industry
.Before coming to HY AID, she spent 15 years in various
departments of Groller Enterprises culminating in management
of the computer control department, which reconciles all
production runs submitted to the computer department. Her
responsibilities included the management of a large control
staff, scheduling of work and training of all her personnel.
Ms, Cheney has 30 years experience in various departments of
HY AID, Inc. culminating in the position of Vice President
and Controller. She is responsible for auditing each
department's budget, all payroll and hospitalization
programs, client billing, book and record keeping and
general administrative function of the corporation.
<P>
Janine Levinson, Vice President, Client Services: Age 34.
Ms. Levinson has 14 years in tile direct mail industry.
Before joining HY AID. she spent one year managing the
lettership operations at Fulfillment Associate, as well as
one year's experience managing the merge purge (list
management) division of fulfillment Associates, She has 12
years experience at HY AID. Inc. starting with the
management of the Merge Purge (list and file maintenance)
division of HY AID, Inc. and working up to manager and
subsequently Vice President of the client service department
at HY AID, lnc. Her experience. knowledge and leadership
qualities enables her to work closely with each of tile
clients of HY AID Inc. in setting up an procedures with
respect to their direct marketing effort, consulting with
clients in both a marketing, credit and collection capacity
as well as an operations capacity. Ms. Levinson is
responsible for the client service representatives. the
control department personnel and the entire merge purge
division of HY AID. She controls the single largest budget
of HY AID in her combined areas of management.
<P>
PRINCIPAL STOCKHOLDERS
----------------------
<P>
Name or Owner No. or Shares Owned Percent
<P>
Richard Levinson 18,462,404 91 %
<P>
Compensation
<P>
Indemnification and Exclusion of Liability of Directs and
Officers
----------------------------------------------------------
<P>
So far as permitted by the laws of the State of New York,
the Company's Certificate of Incorporation provides that the
Company will indemnify its directors and officers against
expenses and liabilities they incur to defend, settle or
satisfy any civil or criminal action brought against them on
account of their being or having been Company directors or
officers unless, in any such action, they are adjudged to
have acted with gross negligence or to have engaged in
willful misconduct.
<P>
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, ! and the Securities
Exchange Act of 1934, as amended, (collectively , the II
Acts") may be permitted j to directors. officers or
controlling persons pursuant to foregoing provisions, the
Company has been informed that, in the opinion of the
Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Acts and is,
therefore unenforceable.
<P>
CONFLICTS OF INTEREST
<P>
The Company's officers and directors are subject to the
doctrine of corporate opportunities only insofar as it
applies to business opportunities in which the Company has
indicated an interest, either through its proposed business
plan or by way of an express statement of interest contained
in the Company's minutes. No such indication of interest has
yet been declared.
<P>
If such areas of interest are delineated, all business
interests which may conflict with those of the Company which
come to the attention of an officer and/or director of the
Company must be promptly disclosed to the Board of Directors
and made available to the Company. In the event the Board
shall reject an opportunity so presented and only in that
event, any of the Company's officers and directors may avail
themselves of such an opportunity. Every effort will be made
to resolve any conflicts which may arise in favor of the
Company. There can be no assurance, however, that these
efforts will be successful.
<P>
DESCRIPTION OF SECURITIES
<P>
The Company is authorized to issue 100,000,000 shares of its
Common Stock, $.0001 par value. Each share of Common Stock
is entitled to share pro rata in dividends and distributions
with respect to the Common Stock when, as and if declared by
the Board of Directors from funds legally available
therefor. No holder of any shares of Common Stock has any
pre-emptive right to subscribe for any of the Company's
securities.
<P>
Upon dissolution, liquidation or winding up of the Company,
the assets will be divided pro rata on a share-for-share
basis among holders of the shares of Common Stock. All
shares of Common Stock outstanding are fully paid and
nonassessable and the shares will, when issued upon payment
therefore as contemplated hereby, be fully paid and
nonassessable. Each shareholder of Common Stock is entitled
to one vote per share with respect to all matters that are
required by law to be submitted to shareholders. The
shareholders are not entitled to cumulative voting in the
election of directors.
<P>
