<PAGE>
REGISTRATION NO.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
ESKITS, INC.
(Exact Name of Registrant as Specified in Its Charter)
47 MALL DRIVE, UNIT 5
COMMACK, NEW YORK 11725
(631) 864-1515
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
PAUL STEO
ESKITS, INC.
47 MALL DRIVE
COMMACK, NEW YORK 11725
(631) 864-1515
(Name, Address Including Zip Code, and Telephone Number, Including Area Code, of
Agent For Service)
------------------------------
COPIES OF ALL COMMUNICATIONS, INCLUDING ALL COMMUNICATIONS SENT TO THE AGENT FOR
SERVICE, SHOULD BE SENT TO:
ALAN C. EDERER, ESQ.
Westerman Shapiro Draghi & Miller, LLP
600 Old Country Rd., Suite 502
Garden City, New York 11530
Tel: (516) 622-9200
Fax: (516) 977-3056
------------------------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: AT SUCH TIME OR TIMES AFTER
THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT THAT THE SELLING STOCKHOLDERS
SHALL DETERMINE.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please 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,
please check the following box / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO BE OFFERING PRICE PER AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED SECURITY(1) OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, par value $0.001 per
share.................................. 2,230,694 $2.25 $5,019,062 $1,325.03
</TABLE>
------------------------------
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) under the Securities Act of 1933,
as amended.
------------------------------
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES, NOR DOES IT SEEK AN OFFER TO BUY THESE SECURITIES IN
ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER , 2000
ESKITS, INC.
2,230,694 SHARES
COMMON STOCK, PAR VALUE $.001 PER SHARE
------------------
This prospectus relates to 2,230,694 shares of our common stock, which may
be offered and sold, from time to time, by the selling stockholders named in
this prospectus. We will not receive any proceeds from the sale of the shares by
the selling stockholders.
Our common stock is not listed on any national securities exchange, and the
NASDAQ stock market does not list the securities offered. We intend to apply for
listing of our shares of common stock on the Over the Counter Bulletin Board
maintained by the National Association of Securities Dealers, Inc. (the
"OTCBB"). There is no assurance that we will obtain listing on the OTCBB. This
offering consists of securities offered by selling stockholders only. The
selling stockholders may offer their shares at any price. By agreement with the
selling stockholders, we will pay all of the expenses incident to the
registration of the securities under the Securities Act. THESE SECURITIES
INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN
AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" BEGINNING ON PAGE
.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PRELIMINARY PROSPECTUS IS DECEMBER , 2000
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY HIGHLIGHTS SELECTED INFORMATION CONTAINED ELSEWHERE IN
THIS PROSPECTUS. THIS SUMMARY DOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU
SHOULD CONSIDER BEFORE INVESTING IN OUR COMMON STOCK. YOU SHOULD READ THE ENTIRE
PROSPECTUS CAREFULLY, INCLUDING "RISK FACTORS" AND THE FINANCIAL STATEMENTS,
BEFORE MAKING AN INVESTMENT DECISION.
OUR COMPANY
We are a New York-based business-to-consumer and business-to-business "viral
marketing" and "rich-media" Internet company. Our business strategy is to
develop our web site for the "viral marketing" of "rich-media" skits, and to
generate revenues through advertising. By "rich-media", we mean the combination
of video, audio, animation, flash, sophisticated graphics and text into a
synchronized, interactive, navigable and searchable format.
ABOUT US
We were incorporated in the State of Delaware on October 31, 2000. Our
principal executive offices are located at 47 Mall Drive, Unit 5, Commack, New
York 11725. Our phone number is 631-864-1515. Our web site address is
www.eskits.com. The information in our website is not a part of this prospectus.
THE OFFERING
As of December , 2000, we had 2,230,694 shares of our common stock
outstanding. This offering is comprised of securities offered by selling
stockholders only. Although we have agreed to pay all offering expenses, we will
not receive any proceeds from the sale of the shares of common stock offered
hereby.
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully review and consider the risks discussed under "Risk Factors" as well
as the other information set forth in this prospectus before buying our common
stock.
SUMMARY FINANCIAL DATA
The following summary financial information is derived from our financial
statements. You should read this summary financial information in conjunction
with "Management's Plan of Operation" and the financial statements and related
notes.
2
<PAGE>
ESKITS, INC.
SUMMARY FINANCIAL INFORMATION
NOVEMBER 15, 2000
<TABLE>
<S> <C>
BALANCE SHEET DATA:
Total Assets.............................................. $ 1,000
Total Liabilities......................................... 10,750
Total Stockholder's Equity................................ (9,750)
STATEMENT OF OPERATIONS:
Revenues.................................................. $ --
Expenses.................................................. 9,750
Income (loss) from Operations............................. (9,750)
Net Income (loss)......................................... (9,750)
Income (loss) per share................................... $ (0.01)
Shares used in computing net income (loss) per share...... 1,115,850
</TABLE>
3
<PAGE>
RISK FACTORS
AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CAREFULLY REVIEW AND CONSIDER THE RISKS AND UNCERTAINTIES DESCRIBED BELOW AS
WELL AS THE OTHER INFORMATION SET FORTH IN THIS PROSPECTUS BEFORE INVESTING IN
OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS,
FINANCIAL CONDITION, OR OPERATING RESULTS COULD BE MATERIALLY ADVERSELY
AFFECTED. IN SUCH CASE, YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT.
RISKS RELATED TO OUR BUSINESS
DUE TO OUR LIMITED OPERATING HISTORY, IT WILL BE DIFFICULT FOR YOU TO EVALUATE
OUR BUSINESS.
We very recently commenced business operations. Accordingly, we have only a
limited operating history upon which you can evaluate our business and
prospects. An investor in our common stock must consider the risks, expenses and
difficulties frequently encountered by early stage companies in new and rapidly
evolving markets, including web-based entertainment. These risks and
difficulties include our ability to:
- attract a larger audience of users to our web-based entertainment
offerings;
- increase awareness of our brand;
- strengthen user loyalty and increase the number of registered users;
- offer compelling on-line content, services and e-commerce opportunities;
- develop affiliate relationships;
- attract a large number of advertisers who desire to reach our users;
- respond effectively to the offerings of competitive entertainment
providers on the Internet;
- continue to develop and upgrade our technology; and
- attract, retain and motivate qualified personnel.
We also depend on the growing use of the Internet for advertising, commerce
and communication, and on general economic conditions. Our business model is not
proven. We cannot assure you that our business strategy will be successful or
that we will successfully address these risks or difficulties. If we fail to
address adequately any of these risks or difficulties our business would likely
suffer.
WE HAVE NOT HAD ANY REVENUES AND ANTICIPATE CONTINUED LOSSES
We have not generated any revenues and expect to continue to incur net
losses in 2001 and subsequent fiscal periods. We have not achieved profitability
and expect to continue to incur operating losses for the foreseeable future as
we fund operating and capital expenditures in areas such as expansion of our
network, advertising, brand promotion, content development, sales and marketing;
and operating infrastructure. We will need to generate even more substantial
revenues to achieve profitability, which may not occur. Even if we do achieve
profitability, we may be unable to sustain or increase profitability on a
quarterly or annual basis in the future.
IF WE ARE UNABLE TO ATTRACT ADDITIONAL CAPITAL, OUR GROWTH WILL BE LIMITED.
Our ability to implement our business plan will depend on a number of
factors, including our ability to raise substantial additional capital. If
additional funds are raised through the issuance of equity or convertible debt
securities, the percentage ownership of our stockholders will be reduced, and
these newly-issued securities may have rights, preferences or privileges senior
to those of existing stockholders. We
4
<PAGE>
cannot assure you that additional financing will be available on terms favorable
to us, or at all. If adequate funds are not available or are not available on
acceptable terms, our ability to fund our operations, take advantage of
unanticipated opportunities, develop or enhance content, features or services,
or otherwise respond to competitive pressures would be significantly limited. We
have no commitments with respect to any additional financing and there can be no
assurance that any such funds will be available on acceptable terms or
otherwise.
DIFFICULTIES IN DEVELOPING NEW AND ENHANCED CONTENT AND PRODUCTS FOR OUR WEB
SITE COULD HARM OUR BUSINESS
We provide content and other features that consumers demand in order to
continue to attract and retain our audience of users. We expect that competitive
factors will create a continuing need for us to retain, improve and add to our
content and other features. We will not only have to expend significant funds
and other resources to continue to improve our network, but we must also
properly anticipate and respond to consumer preferences and demands. The
addition of new features will also require that we continue to improve the
technology underlying our web site. These requirements are significant, and we
may fail to execute on them quickly and efficiently. If we fail to expand the
breadth of our offerings quickly, or these offerings fail to achieve market
acceptance, our business will suffer significantly. Even if we succeed in
expanding our offerings in a timely manner, this expansion may cause us to spend
more on creating this content than we can charge to our customers.
We may also experience difficulties that could delay or prevent us from
introducing new content and products. These difficulties may include the loss
of, or inability to obtain or maintain, third-party technology license
agreements. Our business, results of operations and financial condition could be
materially adversely affected if we experience difficulties in introducing new
content and products or if these new content and products are not accepted by
our users.
WE FACE A RISK OF SYSTEM FAILURE THAT MAY RESULT IN REDUCED TRAFFIC, REDUCED
REVENUE AND HARM TO OUR REPUTATION
Our ability to attract loyal users depends on the efficient and
uninterrupted operation of our computer and communications hardware and software
systems. Similarly, our ability to track, measure and report the delivery of
advertisements on our site depends on the efficient and uninterrupted operation
of a tracking system. These systems and operations are vulnerable to damage or
interruption from human error, natural disasters, telecommunication failures,
break-ins, sabotage, computer viruses, intentional acts of vandalism and similar
events. Any system failure, including network, software or hardware failure,
that causes an interruption in our service or a decrease in responsiveness of
our web site could result in reduced traffic, reduced revenue and harm to our
reputation, brand and our relations with our advertisers. Any disruption in the
Internet access to our web site could materially adversely affect our business,
results of operations and financial condition. Our insurance policies may not
adequately compensate us for any losses that we may incur because of any
failures in our system or interruptions in our delivery of content. Our
business, results of operations and financial condition could be materially
adversely affected by any event, damage or failure that interrupts or delays our
operations.
FAILURE TO PROTECT OUR INTELLECTUAL, PROPERTY RIGHTS COULD HARM OUR
BRAND-BUILDING EFFORTS AND ABILITY TO COMPETE EFFECTIVELY
We regard our intellectual property as critical to our success. To protect
our rights to our intellectual property, we intend to rely on a combination of
trademark and copyright law, trade secret protection, confidentiality agreements
and other contractual arrangements with our employees, consultants, affiliates,
clients, strategic partners and others. The protective steps we have taken may
be inadequate to deter misappropriation of our proprietary information. We may
be unable to detect the unauthorized use of, or take appropriate steps to
enforce, our intellectual property rights. Effective trademark, copyright and
trade secret protection may not be available in every country in which we offer
or intend to offer our services.
5
<PAGE>
Failure to adequately protect our intellectual property could harm our brand,
devalue our proprietary content and affect our ability to compete effectively.
Further, defending our intellectual property rights could result in the
expenditure of significant financial and managerial resources, which could
materially adversely affect our business, results of operations and financial
condition.
WE MAY HAVE TO DEFEND AGAINST INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS, WHICH
MAY CAUSE SIGNIFICANT OPERATIONAL EXPENDITURES
Other parties may assert infringement claims against us or claims that we
have violated a patent or infringed a copyright, trademark or other proprietary
right belonging to them. We incorporate licensed third-party technology in some
of our services. In these license agreements, the licensors have generally
agreed to defend, indemnify and hold us harmless with respect to any claim by a
third party that the licensed software infringes any patent or other proprietary
right. We cannot assure you that these provisions will be adequate to protect us
from infringement claims. Any infringement claims, even if not meritorious,
could result in the expenditure of significant financial and managerial
resources on our part, which could materially adversely affect our business,
results of operations and financial condition.
ANY FUTURE ACQUISITIONS WE HAKE OF COMPANIES OR TECHNOLOGIES MAY RESULT IN
DISRUPTIONS TO OUR BUSINESS AND/OR THE DISTRACTION OF OUR MANAGEMENT, DUE TO
DIFFICULTIES IN ASSIMILATING ACQUIRED PERSONNEL AND OPERATIONS
We may acquire or make investments in complementary businesses,
technologies, services or products if appropriate opportunities arise. From time
to time we may engage in discussions and negotiations with companies regarding
our acquiring or investing in such companies' businesses, products, services or
technologies, and we regularly engage in such discussions and negotiations in
the ordinary course of our business. Some of those discussions also contemplate
the other party making an investment in our company. we cannot assure you that
we will be able to identify future suitable acquisition or investment
candidates, or if we do identify suitable candidates, that we will be able to
make such acquisitions or investments on commercially acceptable terms or at
all. If we acquire or invest in another company, we could have difficulty in
assimilating that company's personnel, operations, technology and software. In
addition, the key personnel of the acquired company may decide not to work for
us. If we make other types of acquisitions, we could have difficulty in
integrating the acquired products, services or technologies into our operations.
These difficulties could disrupt our ongoing business, distract our management
and employees, increase our expenses and adversely affect our results of
operations. Furthermore, we may incur indebtedness or issue equity securities to
pay for any future acquisitions. The issuance of equity securities would be
dilutive to our existing stockholders. As of the date of this prospectus, we
have no agreement to enter into any material investment or acquisition
transaction.
RISKS RELATED TO OUR INDUSTRY
OUR ABILITY TO MAINTAIN AND INCREASE OUR USER BASE DEPENDS ON THE CONTINUED
GROWTH IN USE AND EFFICIENT OPERATION OF THE WEB
The web-based entertainment market is new and rapidly evolving. Our business
would be materially adversely affected if web usage does not continue to grow or
grows slowly. Web usage may be inhibited for a number of reasons, such as:
- inadequate network infrastructure;
- security concerns;
- inconsistent quality of service; and
- unavailability of cost-effective, high-speed access to the Internet.
6
<PAGE>
Our users depend on Internet service providers, online service providers and
other web site operators for access to our web site. Many of these services have
experienced significant service outages in the past and could experience service
outages, delays and other difficulties due to system failures unrelated to our
systems. These occurrences could cause our members to perceive the web in
general or our web site in particular as an unreliable medium and, therefore,
cause them to use other media, which could materially adversely affect our
business, results of operations and financial condition.
A GENERAL DECLINE IN ONLINE ADVERTISING OR OUR INABILITY TO ADAPT TO TRENDS IN
ONLINE ADVERTISING COULD HARM OUR ADVERTISING REVENUES
No standards have been widely accepted to measure the effectiveness of web
advertising. If standards do not develop, existing advertisers may not continue
or increase their levels of web advertising. If standards develop and we are
unable to meet these standards, advertisers may not continue advertising on our
site. Furthermore, advertisers that have traditionally relied upon other
advertising media may be reluctant to advertise on the web. Our business,
results of operations and financial condition could be materially adversely
affected if the market for web advertising declines or develops more slowly than
expected.
Different pricing models are used to sell advertising on the web. It is
difficult to predict which, if any, will emerge as the industry standard. This
uncertainty makes it difficult to project our future advertising races and
revenues. We cannot assure you that we will be successful under existing or
alternative pricing models that may emerge. Moreover, "filter" software programs
that limit or prevent advertising from being delivered to a web user's computer
are available. Widespread adoption of this software could materially adversely
affect the commercial viability of web advertising, which could materially
adversely affect our advertising revenues and, as a result, our business,
results of operations and financial condition.
We compete with other web sites, television, radio and print media for a
share of advertisers' total advertising budgets. If advertisers perceive the web
in general or our web site in particular to be a limited or an ineffective
advertising medium, they may be reluctant to devote a portion of their
advertising budget to online advertising or to advertising on our web site.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES RELATING TO THE WEB COULD INCREASE
OUR COSTS OF TRANSMITTING DATA AND INCREASE OUR LEGAL AND REGULATORY
EXPENDITURES AND COULD DECREASE OUR USER BASE
Existing domestic and international laws or regulations specifically
regulate communications or commerce on the web. Further, laws and regulations
that address issues such as user privacy, pricing, online content regulation,
taxation and the characteristics and quality of online products and services are
under consideration by federal, state, local and foreign governments and
agencies. Several telecommunications companies have petitioned the Federal
Communications Commission to regulate Internet service providers and online
services providers in a manner similar to the regulation of long distance
telephone carriers and to impose access fees on such companies. This regulation,
if imposed, could increase the cost of transmitting data over the web. Moreover,
it may take years to determine the extent to which existing laws relating to
issues such as intellectual property ownership and infringement, libel,
obscenity and personal privacy are applicable to the web. The Federal Trade
Commission and government agencies in certain states have been investigating
certain Internet companies regarding their use of personal information. We could
incur additional expenses if any new regulations regarding the use of personal
information are introduced or if these agencies chose to investigate our privacy
practices. Any new laws or regulations relating to the web, or certain
application or interpretation of existing laws, could decrease the growth in the
use of the web, decrease the demand for our web site or otherwise materially
adversely affect cur business.
CONCERNS ABOUT WEB SECURITY COULD REDUCE OUR ADVERTISING REVENUES, DECREASE OUR
USER BASE AND INCREASE OUR WEB SECURITY EXPENDITURES
7
<PAGE>
Concern about the transmission of confidential information over the Internet
has been a significant barrier to electronic Commerce and communications over
the web. Any well-publicized compromise of security could deter more people from
using the web or from using it to conduct transactions that Involve the
transmission of confidential information, such as signing up for a paid
subscription or purchasing goods or services. Because many of our advertisers
seek to advertise on our web site to encourage people to use the web to purchase
goods or services, our business, results of operations and financial condition
could be materially adversely affected if Internet users significantly reduce
their use of the web because of security concerns. We may also incur significant
costs to protect ourselves against the threat of security breaches or to
alleviate problems caused by these breaches.
CONTROL BY PRINCIPAL STOCKHOLDERS, OFFICERS AND DIRECTORS COULD ADVERSELY AFFECT
OUR STOCKHOLDERS
At December , 2000, our officers, directors and greater-than-five-percent
stockholders (and their affiliates), in the aggregate, beneficially owned
approximately 50% of the outstanding common stock. As a result, these persons,
acting together, will have the ability to control substantially all matters
submitted to our stockholders for approval (including the election and removal
of directors and any merger, consolidation or sale of all or substantially all
of our assets) and to control our management and affairs. Accordingly, this
concentration of ownership may have the effect of delaying, deferring or
preventing a change in control of us, impeding a merger, consolidation, takeover
or other business combination involving us or discouraging a potential acquirer
from making a tender offer or otherwise attempting to obtain control of us,
which in turn could materially adversely affect the market price of the common
stock.
ANTI-TAKEOVER PROVISIONS COULD PREVENT OR DELAY A CHANGE OF CONTROL
Provisions of our Certificate of Incorporation and Bylaws and Delaware law
could make it more difficult for a third party to acquire us, even if doing so
would be beneficial to our stockholders. Furthermore, some of our
securityholders have the right to approve any change of control.
WE DO NOT INTEND TO PAY DIVIDENDS
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain any future earnings for funding growth and,
therefore, do not expect to pay any dividends in the foreseeable future.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed under the captions "Risk Factors" and "The
Company" and elsewhere in this prospectus or in the information incorporated by
reference constitute forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and
Section 215 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") Some of the forward-looking statements can be identified by the use of
forward-looking words such as "believes," "expects," "may," "will," "should,"
"seeks," "approximately," "intends," "plans," "estimates," or "anticipates" or
the negative of those words or other comparable terminology. The discussion of
financial trends, strategy, plans or intentions may also include forward-looking
statements. Forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those projected.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, or otherwise,
Readers are cautioned not to rely too heavily on these forward-looking
statements. The forward-looking statements by their nature are not intended to
be definitive predictions of future events.
USE OF PROCEEDS
All net proceeds from the sale of the shares of our common stock will go to
the stockholders who offer and sell their shares. Accordingly, we will not
receive any of the proceeds from the sales of the shares of our common stock by
the selling stockholders.
8
<PAGE>
THE COMPANY
OVERVIEW
We were incorporated in October, 2000 as a Delaware corporation. We are a
development stage company and have had very limited operations to date. We have
not yet generated any revenues. Our intended plan of operation will require us
to either generate revenues or raise capital (through private placements or
otherwise) of at least $1 Million for the next twelve months.
9
<PAGE>
BUSINESS
OUR BUSINESS
Our business strategy is to develop our web site for the "viral marketing"
of "rich media' skits. By "viral marketing", we mean that the skits will spread
quickly among users like a "virus", based on the Internet's unique ability to
quickly spread a message. By "rich-media", we mean the combination of video,
audio, animation, flash, sophisticated graphics and text into a synchronized,
interactive, navigable and searchable format.
Statistics show that eighty-one percent of recipients who receive a "viral"
message are willing to pass it along to at least one other person; forty-nine
percent will pass it along to two or three other people. We intend to be a
powerful viral marketing network, with each skit providing an opportunity to add
new members to our network, as the recipients are automatically taken to our web
site to view the digital skit.
INDUSTRY BACKGROUND
GROWTH OF THE INTERNET, E-COMMERCE AND ONLINE ADVERTISING. The Internet has
emerged as a significant global communications medium, enabling millions of
people to share information, communicate and conduct business electronically.
Both the number of Internet users and the amount of time they spend online are
growing. This growth is the result of a number of factors, including: increase
in the number of computes in the home, schools and workplace; improvements in
computer network infrastructure; more convenient, faster and less expensive
Internet access; advances in computer and modem technology; an increase in
public awareness of the benefits of using the Internet; and the development of
easy-to-use interfaces. The rapid adoption of the Internet represents a
significant opportunity for businesses to market and sell products and services
online and for advertisers and businesses to capitalize on the Internet's
interactive nature by marketing their products to highly targeted audiences. The
success of Internet advertising can be attributed to the following factors:
Internet advertising offers advertisers a flexible way to target their messages
and measure their results; Internet advertisers an tailor their messages to
specific groups of consumers; Internet advertisers can change advertising
content frequently in response to market factors, current events and consumer
feedback; and advertisers can more accurately track the effectiveness of their
advertising messages based on the rate at which consumers directly respond to
their advertisements through "click-throughs" that their advertisements receive.
GROWTH OF TARGETED ONLINE CONTENT AND COMMUNITY SITES. As the Internet has
grown, users and advertisers have started seeking more targeted and compelling
content, information, expression and interaction. Just as cable television
channels, such as MTV and ESPN, have become more popular by aggregating content
targeted towards a specific audience, online content and community sites that
provide a demographically targeted environment have emerged. Like the major
television networks that provide programming across many demographic segments,
the major online portals typically provide a broad range of content and services
without a specific demographic focus. Targeted online communities provide users
with the ability to access relevant content and to interact directly with other
people with similar interests. Registered users, or members, are often eligible
for additional services from a site, such as customization options or access to
premium content. As a site learns more about its members as they register and
spend more time online, it can tailor its features to meet the needs and
preferences of its users and members. This information also provides advertisers
and merchants with more focused demographic and psychographic information that
can be used to maximize direct marketing opportunities.
10
<PAGE>
THE ESKITS STRATEGY
Our objective is to be the leading web site for the "viral marketing" of
"rich media" skits. We intend to develop consumer loyalty, attract new
users/members, and promote commerce by implementing the following strategies:
THE MOST VIRAL OF ALL INTERNET SERVICES. Every skit sent exposes a message
to another person. As a result, the recipient will go to the web site to see the
digital skit, and quite possibly sign up himself or herself or send a skit to
another friend, and so on, exposing the skit sponsor's message to many users at
the same time. This also allows us to promote our brand, services and products
at very little cost.
DIRECT MARKETING OPPORTUNITY. With a growing base of users who have
provided significant information about their interests, we believe that we have
a significant opportunity to use our database for direct marketing services. We
believe that we will implement this strategy both to offer a package of
marketing services to our advertisers as well as sell products directly to the
user base.
EXPLOITING BROADBAND
eSkits is positioned to exploit the infrastructure improvements in broadband
technologies by delivering products and services that are increasingly
compelling, such as music, video, animation and other types of "rich media".
Broadband technologies will augment the speed and quality of transmission of
data intensive content over the Internet. We believe that these enhancements
will allow eSkits to vastly enhance its existing content, improve the user
experience and increase its response rate.
ONLINE ADVERTISING: eSkits will capitalize on the huge growth of the
on-line advertising market and take leadership in the emerging viral marketing
category. According to Forrester Research, the global Internet advertising
market will grow exponentially to over $33 billion in 2004 from $3.4 billion in
1999 with $28 billion in the United States.
E-MAIL MARKETING: a component of viral marketing, is expected to grow to
$4.8 billion by 2003 with more than 200 billion emails being sent by companies
to acquire and retain customers. Also by 2003, fifty percent of all online
advertising is expected to be spent on performance marketing initiatives used to
drive site traffic and sales.
CREATE INTERNET "BUZZ": eSkits will release multiple rich media creations
utilizing their unique technology solutions to cost effectively promote brand
name.
LEVERAGE CO-MARKETING OPPORTUNITIES: eSkits's viral marketing network
creates a multi-layered network for companies who want to generate supply and
demand for on-line viral advertising. Using profiling and target audience
analysis techniques, eSkits will match affiliates and merchants to provide
creative media to maximize viral marketing opportunities.
EXECUTE COST-EFFECTIVE ADVERTISING SOLUTIONS: eSkits's performance-based
advertising initiatives along with tracking and data collection, allow companies
to analyze and focus promotional material to a specific demographic. Businesses
can hedge advertising risk by reducing costs and increasing exposure, thus
improving their return on their investment.
REVENUE
The Company's revenue will be derived primarily from our advertising,
marketing and e-commerce initiatives. This includes revenue produced from our
eSkits network, direct marketing and the licensing of our programs. Utilizing a
performance-based structure gives eSkits the ability to develop revenues while
maintaining relatively fixed costs, opening up gross margins and driving
profitability.
11
<PAGE>
CUSTOMER CARE
Users in the future who are unfamiliar with our site can click on the "help"
button on our web site, www.eskits.com. This feature describes all of our
features and services and explains to the user how to use them.
COMPETITION
The market for Internet traffic, registered users and Internet advertising
is new and rapidly evolving, and competition is intense. With no substantial
barriers to entry, we expect that competition will continue to intensify. We
believe that the primary competitive factors in creating community on the
Internet and attracting advertisers are: user receptiveness to branded content;
functionality; brand recognition; user affinity and loyalty; the ability to
target a specific demographic; variety off value-added services; ease-of-use;
quality of service; reliability and critical mass; and the overall
cost-effectiveness of the advertising medium. We compete with sites, and sites
with areas, that are primarily focused on permitting the exchange of animated
skits, such as campchaos.com, newgrounds.com and newinterest.com. We will likely
also face online competition in the future from: search engine providers;
content sites; commercial online services; sites maintained by Internet service
providers; traditional media companies such as MTV, Disney and NBC, many of
which have recently made significant acquisitions or investments in Internet
companies; and other entities that will attempt to establish communities on the
Internet by developing their own or purchasing one of our competitors. We also
compete with traditional forms of media, such as newspapers, magazines, radio
and television, for advertisers and advertising revenues.
GOVERNMENT REGULATION
We are subject to various laws and governmental regulations relating to our
business. Although there are currently few laws or regulations directly
applicable to online services or the Internet. the increasing popularity and use
of the Internet might cause additional laws and regu1ations to be adopted. These
laws and regulations current may cover or may cover in the future issues
including the following:
INTERNET PRIVACY. The Children's Online Privacy Protection Act of 1SDS
which was enacted by the United States Congress on October 21, 1398 and for
which the Federal Trade Commission issued its final regulations on October 20,
1939, regulates the collection, use, and/or disclosure of personal information
obtained from children under the age of 13. Under the provisions of this Act,
which becomes effective on April 21, 2000, web sites catering to children will
be required to: provide notice on their web site and to parents of children
under the age of 13 with notice of what information is being collected, how the
site uses the information, and the web site's practices regarding disclosures of
information; obtain verifiable parental consent for the collection, use and/or
disclosure of their children's information, and allow parents to terminate their
consent at any time; provide parents an opportunity to review the information
collected from their children; and refrain from conditioning a child's
participation in a game on the child revealing more information than reasonably
necessary to participate. If we discover that a member about whom we have
collected information has misrepresented his or her age and is in fact under age
13, or that a child under 13 has disclosed personal information on our bulletin
boards or in any other public forum on cur site, we will have to either
(1) remove that person as a member, or (2) comply with the Federal Trade
Commission regulations under the Act. It is important to our members that we
protect their privacy. We use password protection and. member ID's to ensure
anonymity among our members. While we believe that we currently adequately
provide for cur members' privacy, our current programs tray not conform to
legislation or regulations adopted in the future by the Federal Trade Commission
or other governmental entities. In addition, it unauthorized persons were able
to penetrate our security and gain access to, or otherwise misappropriate, our
members' personal information, we could be subject to liability. Such liability
could include claims for misuses of personal information, such as for
unauthorized marketing purposes or unauthorized use of credit cards. These
claims could result in litigation which could require us to expend significant
financial resources and divert management's attention from operations.
12
<PAGE>
The European Union adopted a Directive which became effective in
October 1998 that imposes restrictions on the collection and use of personal
data. Under the Directive, European Union citizens are guaranteed the right of
access to their data, the right to know where the data originated, the right to
have inaccurate data corrected, the right to recourse in the event of unlawful
processing of information and the right to withhold permission to use their data
for direct marketing. The Directive could affect U.S. companies that collect
information over the Internet from individuals in European Union member
countries and may impose restrictions that are more stringent than current
Internet privacy standards in the United States or our own privacy policies- The
Directive does not, however, define what standards of privacy are adequate. As a
result, the Directive might adversely affect the activities of entities,
including us, that engage in data collection from meters in European Union
member countries.
INTERNET TAXATION. A number of legislative proposals have been made by
federal, state, local and foreign governments that would impose additional taxes
on the sale of goods and services over the Internet, and some states have taken
measures to tax Internet-related activities. Although in October 1998 Congress
placed a three-year moratorium on state and local taxes on Internet access or on
discriminatory taxes on electronic commerce, existing state or local laws were
excluded from this moratorium. Further, once this moratorium is lifted, some
type of federal or state taxes may be imposed upon Internet commerce. Such
legislation or other attempts at regulating commerce over the Internet may cause
sales at the Stan Store to decrease which might adversely affect advertising
revenues as well since Internet sales generally may decline.
DOMAIN NAMES. Our domain names are our Internet "addresses". Domain names
have been the subject of significant trademark litigation in the United States.
We have applied for registration of certain domain names in the United States
and foreign countries. Third parties might bring claims for infringement against
us for the use of these domain names. Moreover, because domain names derive
value from the individual's ability to remember such names, it is possible that
our domain names could lose their value if, for example, meters begin to rely on
mechanisms other than domain names to access online resources. The current
system for registering, allocating and managing domain names has been the
subject of litigation and of proposed regulatory reform. Our domain names might
lose their value, and we might have to obtain entirely new domain names in
addition to or instead of our current domain names if such litigation or reform
efforts result in a restructuring of the current system.
JURISDICTION. Due to the global reach of the Internet, it is possible that
the governments of other states and foreign countries might attempt to regulate
our activities or prosecute us for violations of their laws. This could
seriously affect our business. In addition, because our products and services
are available over the Internet anywhere in the world, multiple jurisdictions
may claim that we are required to qualify to do business as a foreign
corporation in each of those jurisdictions. Our failure to qualify as a foreign
corporation in a jurisdiction where we are required to do so could subject us to
taxes and penalties for the failure to qualify. It is possible that state and
foreign governments might also attempt to regulate our transmissions of content
on our web sites or prosecute us for violations of their laws. State or foreign
governments might allege or charge us with violations of local laws, we might
unintentionally violate these laws, and these laws might be modified, or new
laws might be enacted, in the future.
EMPLOYEES
As of December , 2000, we did not employ any employees. To support our
anticipated future growth, we expect to hire employees, particularly in the
areas of content creation and product development.
DESCRIPTION OF PROPERTY
Our principal executive offices are located in Commack, New York. We occupy
approximately 500 square feet on a "free-rent" basis from Imojo, Inc., our
principal stockholder.
13
<PAGE>
MANAGEMENT'S PLAN OF OPERATION
You should read the following plan of operation in conjunction with the
financial statements and notes thereto contained elsewhere in this prospectus.
The following information contains forward-looking statements which are subject
to risks and uncertainties. If one or more of these risks and uncertainties
materialize, actual results may differ from those expressed or implied by the
forward-looking statements.
We are a development stage company with limited operations and no revenues
to date. We anticipate that over the next 12 months we will require a minimum of
$1 million to fund our operational requirements. We anticipate that such funds
shall be raised through private placements of our securities or by loans or
equity investments from existing investors. We have not yet determined how we
plan to obtain these funds and there is no assurance that we will be able to
obtain financing for our business development. If adequate funds are not
available to us, we believe that our business development will be adversely
affected. We do not expect to purchase or sell any plant and significant
equipment in the next twelve months.
MANAGEMENT
The following table sets forth the names, ages and positions of our sole
executive officer and director:
<TABLE>
<CAPTION>
NAME AGE POSITION AND OFFICES WITH THE COMPANY
---- -------- ------------------------------------------------------------
<S> <C> <C>
Paul Steo...................... 23 Chairman of the Board of Directors, President and Secretary
</TABLE>
EXECUTIVE COMPENSATION
No employee of the Company has received any salary and bonus to date.
COMPENSATION OF DIRECTORS
Currently the only member of our Board of Directors does not receive any
compensation for service on our Board. We expect that a compensation plan for
Directors may be adopted in the future.
STOCK OPTION PLAN
We have no stock option plan in place at the present time. However, we may
adopt a stock option plan at our annual meeting of stockholders.
INDEMNIFICATION AND LIMITATION OF LIABILITY
Our certificate of incorporation provides that our directors will not be
personally liable to our company or our stockholders for monetary damages for
breach of their fiduciary duties as directors to the extent permitted by
Delaware law.
Our bylaws provide that we must indemnify our directors, officers and
employees so long as they act in good faith and are not adjudged liable to the
Corporation. Our bylaws also provide for the prepayment of expenses to persons
entitled to indemnification (subject to certain conditions), and permit us to
purchase and maintain insurance on behalf of any director, officer, employee, or
agent against any liability asserted against them in any such capacity, whether
or not our bylaws would permit or require such indemnification.
14
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth, certain information, as of December ,
2000, regarding beneficial ownership of our common stock by
- each stockholder known by us to be the beneficial owner of more than five
percent (5%) of the outstanding shares of common stock;
- each of our directors;
- each of the named executive officers; and
- all of our current executive officers and directors as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) PERCENT OF CLASS(1)
------------------------ --------------------- -------------------
<S> <C> <C>
Paul Steo, Chairman of the Board,
President and Secretary................................. -- --
Imojo Holdings, LLC....................................... 558,000 25.0%
Imojo, Inc................................................ 557,850 25.0%
All Directors and Officers as a Group..................... -- --
</TABLE>
15
<PAGE>
SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION
The following table sets forth
- the names and addresses of each of the selling stockholders,
- the number of shares of common stock beneficially owned by each selling
stockholder prior to the offering,
- the number of shares of common stock that may be offered by each of the
selling stockholders pursuant to this prospectus, and
- the number of shares of common stock beneficially owned by each selling
stockholder after completion of the offering, assuming all of the shares
covered by this prospectus as sold.
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF SHARES NUMBER OF
SECURITIES OFFERED FOR SECURITIES
BENEFICIALLY SELLING OWNED OF PERCENTAGE
OWNED PRIOR STOCKHOLDER'S RECORD AFTER OWNED AFTER
NAME OF SELLING STOCKHOLDER TO OFFERING ACCOUNT OFFERING OFFERING
--------------------------- ------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
Kenneth Neu................................... 4,444 4,444 4,444 *
David Nouvini................................. 4,444 4,444 4,444 *
Michael Asfour................................ 4,444 4,444 4,444 *
Peter Sterling................................ 4,444 4,444 4,444 *
Carolyn Ferrante.............................. 4,444 4,444 4,444 *
Dimitri Kotsiopoulos.......................... 1,778 1,778 1,778 *
Antonio Cappellino............................ 1,334 1,334 1,334 *
Allison McMarrow.............................. 666 666 666 *
Anthony J. Vitale Jr.......................... 666 666 666 *
Steven Wroblewski............................. 444 444 444 *
Nazmi Colak................................... 444 444 444 *
Todd O'Connell................................ 178 178 178 *
IMOJO Holdings, LLC (Affiliate)............... 558,000 558,000 558,000 25.0%
Chai Ing Wang................................. 110,000 110,000 110,000 4.9%
Robert Brown.................................. 110,000 110,000 110,000 4.9%
Scott Krauss.................................. 110,000 110,000 110,000 4.9%
Brenda Caufield............................... 110,000 110,000 110,000 4.9%
Diana Chungfen Wang........................... 110,000 110,000 110,000 4.9%
Kevin McGoldrich.............................. 109,780 109,780 109,780 4.9%
Melissa Naeder................................ 110,000 110,000 110,000 4.9%
William Brown................................. 105,000 105,000 105,000 4.7%
Lamonte Mitchell.............................. 105,000 105,000 105,000 4.7%
Cindy Bermingham.............................. 105,000 105,000 105,000 4.7%
Catherine Fraiser............................. 100 100 100 *
Bryan Kaufman................................. 100 100 100 *
Adrian Mangra................................. 100 100 100 *
Theresa Mari.................................. 100 100 100 *
Judith Neu.................................... 100 100 100 *
Debra Morsony................................. 100 100 100 *
WSDM 2000, LLC................................ 1,334 1,334 1,334 *
George Gavalos................................ 100 100 100 *
Debra Hamilton................................ 100 100 100 *
IMOJO, Inc. (Affiliate)....................... 557,850 557,850 557,850 25.0%
Jason Asfour.................................. 100 100 100 *
Rosa Nouvini.................................. 100 100 100 *
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF SHARES NUMBER OF
SECURITIES OFFERED FOR SECURITIES
BENEFICIALLY SELLING OWNED OF PERCENTAGE
OWNED PRIOR STOCKHOLDER'S RECORD AFTER OWNED AFTER
NAME OF SELLING STOCKHOLDER TO OFFERING ACCOUNT OFFERING OFFERING
--------------------------- ------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
Total:........................................ 2,230,694 2,230,694 2,230,694 100%
</TABLE>
------------------------
* Under 1%
The selling stockholders are entitled to receive all of the proceeds from
the future sale of their shares.
The selling stockholders, from time to time, depending on market conditions
and other factors, may offer or sell their shares in the over-the-counter
market, or otherwise, at prices and terms then prevailing or at prices related
to the then-current market price, or in negotiated transactions. The shares may
be sold by various methods, including:
- block trades in which a broker or dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
- purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this prospectus;
- purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the broker
solicits purchases; and
- face to face transactions between sellers and purchasers without a broker
or dealer.
In effecting sales, brokers or dealers engaged by the selling stockholders
may arrange for other brokers or dealers to participate. These brokers or
dealers may receive commissions or discounts from the selling stockholders in
amounts to be negotiated. These brokers, dealers and any other participating
brokers or dealers may be deemed to be "underwriters" within the meaning of the
Securities Act, in connection with these sales.
We will bear all costs and expenses of the registration of the shares under
the Securities Act and certain state securities laws, other than discounts or
commissions, if any, payable with respect to sales of the shares.
The selling stockholders are not restricted as to the number of shares that
may be sold at any one time, and it is possible that a significant number of
shares could be sold at the same time. Sales of the shares by the selling
stockholders may have an adverse effect on the market price of the common stock.
CERTAIN TRANSACTIONS
We currently occupy premises on a "rent-free" basis from Imojo, Inc., an
affiliate of the Company.
DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 25,000,000 shares of common stock,
par value $.001 per share, and 5,000,000 shares of preferred stock, par value
$.001 per share. As of December , 2000, there were 2,230,694 shares of common
stock issued and outstanding and no shares of preferred stock issued and
outstanding.
COMMON STOCK
All holders of common stock have one vote per share on all matters submitted
to a vote of stockholders. Stockholders do not have rights to cumulate their
votes in the election of directors under our
17
<PAGE>
certificate of incorporation or applicable provisions of the General Corporation
Law of the State of Delaware.
The holders of common stock have the right to receive dividends, when, and
if declared, by our Board of Directors out of funds legally available therefor.
We have never paid any cash dividends on our common stock. We presently intend
to retain earnings, if any, to finance our operations, and therefore do not
anticipate paying any cash dividends in the future. If we liquidate, holders of
our common stock would share ratably in any assets available for distribution to
stockholders after payment of all our obligations.
Our common stock is neither redeemable nor has any preemptive, subscription,
sinking fund or conversion rights. All outstanding shares of common stock are
fully paid and non-assessable.
PREFERRED STOCK
Our Board of Directors may authorize the issuance up to 5,000,000 shares of
preferred stock without any further stockholder approval. The Board is expressly
authorized to provide for the issuance of shares of preferred stock in one or
more classes or series, and to fix for each such class or series the powers,
rights, privileges, preferences, qualifications, limitations or restrictions,
including dividend rights, dividend rates, conversion rights, voting rights,
redemption rights, redemption prices, liquidation preferences, and the
designation of and the number of shares constituting any class or series.
TRANSFER AGENT AND REGISTRAR
, serves as transfer agent and registrar for the common
stock.
ANTITAKEOVER EFFECTS OF PROVISIONS OF DELAWARE LAW AND OUR CHARTER
Provisions of Delaware law and our certificate of incorporation could
discourage takeover attempts. These include:
- DELAWARE ANTITAKEOVER LAW. We are subject to Section 203 of the Delaware
General Corporation Law. In general, Section 203 prohibits a publicly-held
Delaware corporation from engaging in a business combination with an
interested stockholders for a period of three years from the date the
stockholder became an interested stockholder, unless the business
combination or the transaction in which the person became an interested
stockholder is approved in the manner provided in Section 203. Generally,
a business combination includes a merger, asset or stock sale, or other
transaction resulting in a financial benefit to the interested
stockholder. Generally, an interested stockholder is a person who,
together with affiliates and associates, owns or within three years prior
to the determination of interested stockholder status did own 15% or more
of the corporation's outstanding voting stock.
- OUR RIGHT TO ISSUE PREFERRED STOCK. Our certificate of incorporation
authorizes the issuance of preferred stock with such designations, rights,
and preferences as may be determined from time to time by our Board of
Directors, without any further vote or action by our stockholders.
Therefore, our Board of Directors is empowered, without stockholder
approval, to issue preferred stock with voting rights or preferences that
could prevent or discourage unsolicited takeover attempts.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for us by
Westerman Shapiro Draghi & Miller, LLP, Garden City, New York ("WSDM"). As part
of our agreement with WSDM, we have agreed to pay a portion of their legal fee
in our common stock. The shares of common stock issued to WSDM are being
registered for sale pursuant to the terms of this Registration Statement. As of
the effective date of this registration statement, an affiliate of WSDM owned
1,334 shares of our common stock, all of which are to be registered pursuant to
this Registration Statement
18
<PAGE>
EXPERTS
The consolidated financial statements as of , 2000 included in
this Prospectus have been so included in reliance on the report of Liebman
Goldberg & Drogin, LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission, 450 Fifth Street,
N.W., Washington, D.C., a registration statement on Form SB-2 under the
Securities Act of 1933, with respect to the shares to be sold in this offering.
This prospectus, which is part of the registration statement, does not contain
all of the information contained in the registration statement. For further
information with respect to us and the shares of our common stock offered
hereby, we refer you to the registration statement, including the exhibits
thereto, which may be inspected, without charge, at the office of the Securities
and Exchange Commission.
Copies of the registration statement may be obtained from the Commission in
Washington, D.C., upon payment of the requisite fees, or from the Commission's
Website at http://www.sec.gov. Statements contained in this prospectus as to the
contents of any contract or other document referred to are not necessarily
complete, and in each instance we refer you to the copy of such contract or
other document filed as an exhibit to the registration statement, each such
statement being qualified in all respects by the more complete description of
the matters involved.
19
<PAGE>
ESKITS, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
FROM OCTOBER 31, 2000 (INCEPTION) TO NOVEMBER 30, 2000
WITH
INDEPENDENT AUDITORS' REPORT
<PAGE>
ESKITS, INC.
(A DEVELOPMENT STAGE COMPANY)
FROM OCTOBER 31, 2000 (INCEPTION) TO NOVEMBER 30, 2000
CONTENTS
<TABLE>
<CAPTION>
PAGE #
--------
<S> <C>
Independent Auditors' Report................................ F-1
Balance Sheet............................................... F-2
Statement of Operations..................................... F-3
Statement of Stockholders' Equity........................... F-4
Statement of Cash Flows..................................... F-5
Notes to Financial Statements............................... F-6-8
</TABLE>
<PAGE>
To the Board of Directors
eSkits, Inc.
(A Development Stage Company)
New York, New York
We have audited the accompanying balance sheet of eSkits, Inc. (a
development stage company) as of November 30, 2000, and the related statements
of operations, stockholders' equity, and cash flows for the period, October 31,
2000 (inception) to November 30, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. 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 referred to above present fairly,
in all material respects, the financial position of eSkits, Inc. of
November 30, 2000 and their cash flows for the period then ended in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Notes 2 and 3 to the
financial statements, the Company is in the development stage and will require a
significant amount of capital to commence its planned principal operations and
proceed with its business plan. As of the date of these financial statements, an
insignificant amount of capital has been raised or committed, and as such there
is no assurance that the Company will be successful in its efforts to raise the
necessary capital to commence its planned principal operations and/or implement
its business plan. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans regarding these
matters also are described in Notes 2 and 3. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Liebman Goldberg & Drogin, LLP
Garden City, New York
December 14, 2000
F-1
<PAGE>
ESKITS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
NOVEMBER 30, 2000
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash in bank.............................................. $ 1,000
-------
Total assets.......................................... $ 1,000
=======
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Due to related company.................................... $ 1,000
Accrued expenses.......................................... 9,750
-------
Total liabilities..................................... 10,750
-------
STOCKHOLDERS' (DEFICIT):
Preferred stock $.001 par value, 5,000,000 shares
authoried and $-0- issued and outstanding............... $ --
Common stock $.001 par value per share, 25,000,000 shares
authorized and 1,115,850 shares issued and
outstanding............................................. 1,116
Less: stock subscriptions receivable...................... (1,116)
Deficit accumulated during development stage.............. (9,750)
-------
Total stockholders' (deficit)......................... (9,750)
-------
Total liabilities and stockholders' (deficit)......... $ 1,000
=======
</TABLE>
See notes to financial statements.
F-2
<PAGE>
ESKITS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR OCTOBER 31, 2000 (INCEPTION) TO NOVEMBER 30, 2000
<TABLE>
<S> <C>
EXPENSES:
Professional fees......................................... $ 9,750
---------
Total expenses........................................ 9,750
---------
Loss during development stage............................. (9,750)
---------
Net loss.................................................. $ (9,750)
=========
Basic and diluted (loss) per share........................ $ (0.01)
=========
Weighted average common shares outstanding................ 1,115,850
=========
</TABLE>
See notes to financial statements.
F-3
<PAGE>
ESKITS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT
FOR OCTOBER 31, 2000 (INCEPTION) TO NOVEMBER 30, 2000
<TABLE>
<CAPTION>
DEFICIT
COMMON STOCK CAPITAL IN ACCUMULATED
-------------------- EXCESS OF DURING DEVELOPMENT
SHARES AMOUNT PAR VALUE STAGE
--------- -------- ---------- ------------------
<S> <C> <C> <C> <C>
Common stock issuance.......................... 1,115,850 $1,116 $ -- $ --
Less: stock subscriptions receivable........... -- (1,116) -- --
Net loss for the period........................ -- -- -- (9,750)
--------- ------ ----- -------
Balance--November 30, 2000..................... 1,115,850 $ -- $ -- $(9,750)
========= ====== ===== =======
</TABLE>
See notes to financial statements.
F-4
<PAGE>
ESKITS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR OCTOBER 31, 2000 (INCEPTION) TO NOVEMBER 30, 2000
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(9,750)
ADJUSTMENTS TO RECONCILE NET (LOSS) TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
Increase in current liabilities......................... 10,750
-------
Net cash provided by operating activities............. 1,000
Cash--October 31, 2000 (Inception)........................ --
-------
Cash--November 30, 2000................................... $ 1,000
=======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Taxes paid................................................ $ --
=======
Interest paid............................................. $ --
=======
</TABLE>
See notes to financial statements.
F-5
<PAGE>
ESKITS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2000
NOTE 1--NATURE OF OPERATIONS:
eSkits, Inc. ("the Company") was incorporated on October 31, 2000 under the
business laws of the State of Delaware. The Company is a New York based
business-to-consumer and business-to-business "viral marketing" and "rich-media"
Internet company. The Company's business strategy is to develop web sites for
the "viral marketing" of "rich-media" skits, and to generate revenues through
advertising. "Rich-media" is the combination of video, audio, animation, flash,
sophisticated graphics and text into a synchronized, interactive, navigation and
searchable format for computer operations. As of November 30, 2000, the Company
has not yet commenced any formal business operations, and all activity to date
relates to the Company's formation and proposed fund raising.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
DEVELOPMENT STAGE ACTIVITIES AND OPERATIONS:
The Company is in its initial stages of formation and for the period ended
November 30, 2000 had no revenues. While its website is now active, the Company
is still in early stages of revenue production and completion of website
participation refinement, thus remaining in the development stage.
WEB SITE DEVELOPMENT COSTS:
All costs incurred in the acquisition and development of software for the
Company's website will be capitalized. These costs will be written off over
three years on a straight line basis. Costs incurred to operate the website such
as maintenance, training and administration will be expensed as incurred.
USE OF ESTIMATES:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those amounts.
FAIR VALUE OF FINANCIAL INSTRUMENTS:
SFAS No. 107, "Disclosures about Fair Value of Financial Instruments",
requires disclosure of the fair value information, whether or not recognized in
the balance sheet, where its is practicable to estimate that value. Presently,
the Company has no receivables and payables represent monies owed for
professional fees relating to the formation of the Company and its initial fund
raising.
IMPAIRMENT OF LONG-LIVED ASSETS:
The Company has not yet adopted FASB Statement No. 121 (SFAS 121),
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of". SFAS 121 requires that impairment losses are to be recorded
when long-lived assets to be held and used are reviewed for impairment whenever
events or changes in circumstances indicate that the related carrying amount may
not be recoverable. When required, impairment losses on assets to be held and
used are recognized based on the fair value of the asset. Long-lived assets to
be disposed of, if any, are reported at the lower of
F-6
<PAGE>
ESKITS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOVEMBER 30, 2000
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
carrying amount or fair value less cost to sell. There have been no material
adjustments for impairments of long-lived assets.
REVENUE RECOGNITION:
The Company has not set up policies of revenue recognition for the areas
being developed for revenue streams such as advertising commerce, memberships,
merchandise and etc.
CASH AND CASH EQUIVALENTS:
The Company will consider all highly liquid temporary cash investments with
original maturities of three months or less to be cash equivalents.
CONCENTRATION OF CREDIT RISK:
Financial instruments that potentially subject the Company to significant
concentrations of credit risk could consist primarily of cash and cash
equivalents. The Company's cash management and investment policies will restrict
investments to low risk, highly-liquid securities and the Company will perform
periodic evaluations of the credit standing of the finanical institutions with
which it deals.
INCOME TAXES:
The Company intends to account for income taxes under the Financial
Accounting Standards Board of Financial Accounting Standard No. 109, "Accounting
for Income Taxes" ("Statement 109"). Under Statement 109, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax basis. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date. There were no current or deferred income tax
expense or benefits due to the Company's not having any material operations for
the period ending November 30, 2000.
RECENT ACCOUNTING PRONOUNCEMENTS:
The Company is subject to the provisions of Statement of Financial
Accounting Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income" and
Statement of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosures
about Segments of an Enterprise and Related Information". Neither statement had
any impact on the Company's financial statements as the company does not have
any "comprehensive income" type earnings (losses) and its financial statements
reflect how the "key operating decisions makers" view the business. The Company
will continue to review these statements over time, in particular SFAS 131, to
determine if any additional disclosures are necessary based on evolving
circumstances.
F-7
<PAGE>
ESKITS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOVEMBER 30, 2000
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
NET LOSS PER SHARE:
Net loss per share is computed in accordance with SFAS No. 128, "Earnings
per Share" ("SFAS No. 128") and SEC Staff Accounting Bulletin No. 98 ("SAB 98").
Under the provisions of SFAS No. 128 and SAB 98, basic net loss per share is
computed by dividing the net loss available to common stockholders for the
period by the weighted average number of common shares outstanding during the
period. Diluted net loss per share is computed by dividing the net loss for the
period by the number of common and common equivalent shares outstanding during
the period.
Since all the prospective shareholders other than related parties (as
discussed in Notes 4 and 5) are to remit payment for stock subscriptions
receivable and full payment is not yet complete, no actual common shares have
been issued to those shareholders. Common "stock subscribed" shares do not have
the same rights and responsibilities of actual outstanding stock; including
shares other than those issued to related parties.
NOTE 3--GOING CONCERN:
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As a development stage company, the
Company has no revenue and limited financing. These conditions raise doubt about
its ability to continue as a going concern. The financial statements do not
include any adjustments that might result from this uncertainty.
NOTE 4--DUE TO RELATED PARTY:
On November 14, 2000, the Company received a loan from Imojo, Inc. to open a
bank account. Imojo, Inc. and Imojo Holdings, LLC; another related party are
subscribers of the Company's common stock and initially have a controlling
interest of over 50%.
NOTE 5--SUBSEQUENT EVENTS:
On November 29, 2000, the Company filed a certificate of amendment with the
State of Delaware to change its authorized shares from 1,000 common $.01 par
value to 25,000,000 $.001 par value. Additionally, there will be 5,000,000 $.001
par value preferred shares authorized.
The Company issued 557,850 and 558,000 common shares to Imojo, Inc. and
Imojo Holdings LLC respectively at par value. It also intends to issue an
additional 1,114,844 common shares to 33 investors at $.01 par share. The amount
of common shares to be issued will be 2,230,694. The 1,115,850 common shares
owned by Imojo, Inc. and Imojo Holdings, LLC will represent 50.02% of the total
common shares outstanding after all stock subscriptions have been paid.
NOTE 6--COMMITMENTS AND CONTINGENCIES:
Presently the Company has no commitments or contingencies. However, rental
space has been made available to the Company at no charge by Imojo; a related
party.
F-8
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Prospectus Summary.......................................... 2
Risk Factors................................................ 4
The Company.................................................
Business.................................................... 10
Management's Plan of Operation..............................
Management.................................................. 14
Principal Stockholders...................................... 15
Selling Stockholders and Plan of Distribution............... 16
Certain Transactions........................................ 17
Description of Securities................................... 17
Legal Matters............................................... 18
Experts.....................................................
Where You Can Find More Information.........................
Index to Financial Statements...............................
</TABLE>
------------------------
Until , 2000, all dealers that effect transactions in our common
stock, whether or not participating in this offering, may be required to deliver
a prospectus. This requirement 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.
eSkits, Inc.
2,230,697 Shares of Common Stock
------------------------
PROSPECTUS
DECEMBER , 2000
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with any threatened, pending or completed actions, suits or
proceedings in which such person is made a party by reason of such person being
or having been a director, officer, employee or agent to the Registrant. The
Delaware General Corporation Law provides that Section 145 is not exclusive of
other rights to which those seeking indemnification may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Article IX of the Registrant's Bylaws provides for indemnification by the
Registrant of its directors, officers and employees to the extent that they act
in good faith and are not adjudged liable to the Corporation.
Article IX of the Registrant's Bylaws also provides for the prepayment of
expenses to persons entitled to indemnification (subject to certain conditions),
and permits the Registrant to purchase and maintain insurance on behalf of any
director, officer, employee, or agent against any liability asserted against or
incurred by them in any such capacity, or arising out of their status as such,
whether or not the Registrant would have the power or obligation to indemnify
them against such liability under the Registrant's Bylaws.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
unlawful payments of dividends or unlawful stock repurchase, redemptions or
other distributions, or (iv) for any transaction from which the director derived
an improper personal benefit. Article SIXTH of the Registrant's Certificate of
Incorporation provides for such limitation of liability.
The general effect of the foregoing provisions is to reduce the
circumstances in which an officer, director, agent, or employee may be required
to bear the economic burdens of the foregoing liabilities and expenses.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the Registrant in connection with the issuance and
distribution of the securities being registered hereby (other than underwriting
discounts and commissions) are as follows:
<TABLE>
<CAPTION>
ITEM AMOUNT
---- --------
<S> <C>
Registration Fee (Securities and Exchange Commission)....... $
Accounting Fees and Expenses................................ $
Legal Fees and Expenses..................................... $
Transfer Agent's Fees....................................... $
Miscellaneous Expenses...................................... $
--------
Total....................................................... $
--------
</TABLE>
The Registrant will bear all costs and expenses of the registration of the
shares under the Securities Act and certain state securities laws, other than
any discounts or commissions payable with respect to sales of the shares.
II-1
<PAGE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
In November of 2000, we sold 558,000 shares of our common stock to IMOJO
Holdings, LLC (Affiliate) and 557,850 shares to IMOJO, Inc. (Affiliate) at a
purchase price of .001 per share for an aggregate purchase price of $1,115.85.
In December of 2000, we sold an aggregate of 2,230,694 shares of our common
stock at a purchase price of .01 per share for an aggregate purchase price of
$12,264.29 to the individuals and in the amounts set forth below:
<TABLE>
<CAPTION>
NAME SHARES
---- --------
<S> <C>
Kenneth Neu................................................. 4,444
David Nouvini............................................... 4,444
Michael Asfour.............................................. 4,444
Peter Sterling.............................................. 4,444
Carolyn Ferrante............................................ 4,444
Dimitri Kotsiopoulos........................................ 1,778
Antonio Cappellino.......................................... 1,334
Allison McMarrow............................................ 666
Anthony J. Vitale Jr........................................ 666
Steven Wroblewski........................................... 444
Nazmi Colak................................................. 444
Todd O'Connell.............................................. 178
Chai Ing Wang............................................... 110,000
Robert Brown................................................ 110,000
Scott Krauss................................................ 110,000
Brenda Caufield............................................. 110,000
Diana Chungfen Wang......................................... 110,000
Kevin McGoldrich............................................ 109,780
Melissa Naeder.............................................. 110,000
William Brown............................................... 105,000
Lamonte Mitchell............................................ 105,000
Cindy Bermingham............................................ 105,000
Catherine Fraiser........................................... 100
Bryan Kaufman............................................... 100
Adrian Mangra............................................... 100
Theresa Mari................................................ 100
Judith Neu.................................................. 100
Debra Morsony............................................... 100
WSDM 2000, LLC.............................................. 1,334
George Gavalos.............................................. 100
Debra Hamilton.............................................. 100
Jason Asfour................................................ 100
Rosa Nouvini................................................ 100
</TABLE>
All such shares were sold in private transactions exempt from registration
pursuant to Section 4(2) of the Securities Act.
II-2
<PAGE>
ITEM 27. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- ------------------------------------------------------------
<S> <C>
3.1 Certificate of Incorporation
3.2 Bylaws
4.1 Form of Common Stock Certificate
5* Opinion of Counsel
23.1* Consent of Auditors
23.2* Consent of Counsel (contained in opinion of counsel filed as
Exhibit 5)
</TABLE>
------------------------
* Filed herewith.
ITEM 28. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than 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 such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by final adjudication of
such issue.
THE UNDERSIGNED REGISTRANT HEREBY UNDERTAKES THAT IT WILL:
(1) For purposes of determining any liability under the Securities Act,
treat the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1), or
(4) or 497(h) under the Securities Act as part of this Registration
Statement as of the time the Commission declared it effective.
(2) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of Prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
(3) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or together,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
II-3
<PAGE>
aggregate, the changes in volume and price represent no more than a
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective registration
statement;
(iii) Include any material information with respect to the plan of
distribution not previously discussed in the registration statement or
any material change to such information in the registration statement.
(4) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
II-4
<PAGE>
SIGNATURES
In accordance with 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 of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned in the City of Commack,
State of New York on December 14, 2000.
<TABLE>
<S> <C> <C>
eSKITS, INC.
By: /s/ PAUL STEO
-----------------------------------------
Paul Steo
CHIEF EXECUTIVE OFFICER, PRESIDENT
(PRINCIPAL EXECUTIVE OFFICER), INTERIM
CHIEF FINANCIAL OFFICER (PRINCIPAL
FINANCIAL AND
ACCOUNTING OFFICER)
</TABLE>
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ PAUL STEO
------------------------------------------- Director December 14, 2000
Paul Steo
</TABLE>
II-5
<PAGE>
ESKITS, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- ------------------------------------------------------------
<S> <C>
3.1 Certificate of Incorporation
3.2 Bylaws
4.1 Form of Common Stock Certificate
5* Opinion of Counsel
23.1* Consent of Auditors
23.2* Consent of Counsel (contained in opinion of counsel filed as
Exhibit 5)
</TABLE>
------------------------
* Filed herewith.
II-6
