As filed with the Securities and Exchange Commission on November 6, 1996.
File No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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WHITESTONE INDUSTRIES, INC.
(Exact name of issuer as specified in its charter)
Delaware 75-2228828
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
19200 Von Karman Avenue
Suite 550
Irvine, CA 92715
(Address of principal executive offices) (Zip Code)
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CONSULTING AGREEMENT
WITH SPIRO PAPPAS
AGREEMENT WITH ESHOO CORP.
AGREEMENT WITH ATLAS, PEARLMAN, TROP & BORKSON, P.A.
(Full title of the plan)
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Donald Yu, President
Whitestone Industries, Inc.
19200 Von Karman Avenue - Suite 500
Irvine, CA 92715
Telephone No.: (714) 622-5565
(Name and address of agent for service)
Copy to:
James M. Schneider, Esq.
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard, Suite 1900
Fort Lauderdale, FL 33301
(954) 763-1200
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CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
maximum maximum
offering aggregate Amount of
Title of securities Amount to be price per offering registration
to be registered registered(1) share(1) price(1) fee (1)
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Common Stock 300,000
(no par value) shares $.875 $262,500 $100.00
================================================================================
(1) Pursuant to Rule 457(h), the maximum offering price was calculated based
upon the average of the bid and asked prices of the Common Stock of the
Company on the OTC Bulletin Board on October 29, 1996. The registration
fee represents the minimum registration fee payable for this Registration
Statement.
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WHITESTONE INDUSTRIES, INC.
CROSS REFERENCE SHEET REQUIRED BY ITEM 501(b) OF REGULATION S-K
Form S-8 Item Number
and Caption Caption in Prospectus
-------------------- ---------------------
1. Forepart of Registration State- Facing Page of Registration
ment and Outside Front Cover Statement and Cover Page of
Page of Prospectus Prospectus
2. Inside Front and Outside Back Inside Cover Page of Pro-
Cover Pages of Prospectus spectus and Outside Cover
Page of Prospectus
3. Summary Information, Risk Fac- Not Applicable
tors and Ratio of Earnings to
Fixed Charges
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Sales by Selling Security
Holders
8. Plan of Distribution Cover Page of Prospectus
and Sales by Selling
Security Holders
9. Description of Securities to be Description of Securities;
Registered Consulting Agreements
10. Interests of Named Experts and Legal Matters
Counsel
11. Material Changes Not Applicable
12. Incorporation of Certain Infor- Incorporation of Certain
mation by Reference Documents by Reference
13. Disclosure of Commission Posi- Indemnification of Direc-
tion on Indemnification for tors and Officers; Under-
Securities Act Liabilities takings
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PROSPECTUS
WHITESTONE INDUSTRIES, INC.
300,000 Shares of Common Stock
($.0001 par value)
Issued Pursuant to the
Company's Consulting Agreement
with Spiro Pappas
and Agreements with Eshoo Corp. and
Atlas, Pearlman, Trop & Borkson, P.A.
This Prospectus is part of a Registration Statement which registers an
aggregate of 300,000 shares of Common Stock, $.0001 par value (such shares being
referred to as the "Shares"), of Whitestone Industries, Inc. (the "Company" or
"Whitestone") which have been issued, as set forth herein, to (i) Mr. Spiro
Pappas ("Pappas") pursuant to a Consulting Agreement dated July 17, 1996 (the
"Consulting Agreement"), providing for the issuance of 200,000 Shares; (ii)
Eshoo Corp., whose sole shareholder is George Eshoo, who serves as Secretary and
Director of the Company, pursuant to agreement dated October 24, 1996 providing
for the issuance of 50,000 shares of Common Stock; and (iii) Atlas, Pearlman,
Trop & Borkson, P.A., securities counsel for the Company, pursuant to an
agreement dated October 1, 1996 providing for the issuance of 50,000 shares of
Common Stock (the agreements with Eshoo Corp. and Atlas, Pearlman Trop &
Borkson, P.A. being individually referred to as an "Agreement" or collectively
as the "Agreements"). Mr. Spiro Pappas may sometimes hereafter be referred to as
the "Consultant." In addition, the Consultant, Eshoo Corp. and Atlas, Pearlman,
Trop & Borkson, in their capacity as selling shareholders, may sometimes
hereafter be collectively referred to as the "Selling Security Holders." All of
the Shares are being issued to the Consultant, Eshoo Corp. and Atlas, Pearlman,
Trop & Borkson, P.A. pursuant to written consulting or other agreements. The
Company has been advised by the Selling Security Holders that they may sell all
or a portion of their Shares from time to time in the over-the-counter market,
in negotiated transactions, directly or through brokers or otherwise, and that
such Shares will be sold at market prices prevailing at the time of such sales
or at negotiated prices, and the Company will not receive any proceeds from such
sales.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY
STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
The date of this Prospectus is November 6, 1996.
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No person has been authorized by the Company to give any information or to
make any representation other than as contained in this Prospectus, and if given
or made, such information or representation must not be relied upon as having
been authorized by the Company. Neither the delivery of this Prospectus nor any
distribution of the Shares issuable under the terms of the Consulting Agreement
or the Agreements shall, under any circumstances, create any implication that
there has been no change in the affairs of the Company since the date hereof.
----------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed with the Commission can be inspected and copied at
the public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of this material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains a web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission at http://www.sec.gov. The Company's Common
Stock is traded on the OTC Bulletin Board under the symbol "WHSN."
The Company has filed with the Commission a Registration Statement on Form
S-8 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Act"), with respect to the resale of up to an aggregate of up to 300,000
of the Company's Common Stock, to be issued to the Consultant, Eshoo Corp. and
Atlas, Pearlman, Trop & Borkson, P.A. pursuant to a written Consulting Agreement
or other Agreements with the Company. This Prospectus, which is Part I of the
Registration Statement, omits certain information contained in the Registration
Statement. For further information with respect to the Company and the shares of
the Common Stock offered by this Prospectus, reference is made to the
Registration Statement, including the exhibits thereto. Statements in this
Prospectus as to any document are not necessarily complete, and where any such
document is an exhibit to the Registration Statement or is incorporated by
reference herein, each such statement is qualified in all respects by the
provisions of such exhibit or other document, to which reference is hereby made,
for a full statement of the provisions thereof. A copy of the Registration
Statement, with exhibits, may be obtained from the Commission's office in
Washington, D.C. (at the above address) upon payment of the fees prescribed by
the rules and regulations of the Commission, or examined there without charge.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission are incorporated herein by reference and made a part hereof:
1. The Company's Annual Report on Form 10-KSB for the year ended
December 31, 1996.
2. The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1996.
3. The Company's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1996.
4. All reports and documents filed by the Company pursuant to Section 13,
14 or 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document, which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement modified or superseded
shall not be deemed, except as so modified or superseded, to constitute part of
this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of the Prospectus has been
delivered, on the written or oral request of any such person, a copy of any or
all of the documents referred to above which have been or may be incorporated by
reference in this Prospectus, other than exhibits to such documents. Written
requests for such copies should be directed to Corporate Secretary, Whitestone
Industries, Inc., 19200 Von Karman Avenue - Suite 500 Irvine, California 92715.
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THE COMPANY
General
Whitestone Industries, Inc. was incorporated as a Delaware corporation on
April 19, 1988 under the name "Fortunistics Inc." as a "blind pool" or "blank
check" company to seek acquisition possibilities, make acquisitions or enter
into other business endeavors. Currently, the Company, through its wholly-owned
subsidiary, Golden Bear Entertainment Corporation, is engaged in developing and
marketing electronic, interactive, pre-school children's games and educational
products. In particular, the Company has developed prototypes of its products
and is negotiating marketing outlets, primarily with large, national toy store
chains. Accordingly, the Company is considered to be a development stage company
for accounting purposes.
Business Strategy
Management believes that currently, there has been minimal integration of
electronics into toys, but the success of Nintendo and SEGA indicates that the
toy market is prime for other entries to this market. The Company is currently
engaged in the development and marketing of electronic, interactive, pre-school
children's games and educational products. The Company's activities to date have
consisted of developing prototypes of its products and negotiating marketing
outlets, primarily with large, national toy store chains. Accordingly, the
financial statement presentation is that of a development stage enterprise. Upon
reaching a full operating stage, the Company envisions contracting out the
manufacture of its products to third parties.
Products
The Company's product line currently consists of the following:
1. Catch the Beat is a stylized FM Radio/Cassette Tape Player with a
built-in antenna and full stereo ear phones. On the game-playing surface
consists of a 16 raised and lighted (in different colors) buttons (similar
to raised telephone numbers on a touch-tone telephone) that light up when
music is played through the Tape Cassette Play. By incorporating certain
proprietary technology, each button is randomly assigned a note or tone.
The object of the game is to listen to the beat, hit which flashing
buttons a player believes appears to be assigned the various notes or
tones and to score points. The faster the beat of the music, the harder
the game is.
2. Smart Fun - Sounds So Real Story Teller is a moving picture story
system with "Wrap-Around" sound that incorporates a proprietary
3-dimensional stereo sound system. Each Story Teller consists of 16
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full-color story frames that advance automatically, a built-in backlight
for nighttime reading, and color effects with exclusive story cartridges
that are easy to load. The sound track incorporates technology using
"Surround Sound," giving an impression that certain of these sounds may be
coming from overhead, behind, nearby, or far away or are traveling.
3. Smart Fun - Musical Color Disk Player is a small, hand held machine
that turns colors into music through proprietary technology. For example,
red may be associated wit the note "C", blue with "F", green with "G",
etc. The user will turn a crank to spin the turntable and hear the color
disk. The machine senses each color and turns it into music. In addition
to pre-colored disks, blank disks will be included so that users can color
their own songs.
4. Smart Fun - Talking Show 'n Know is an interactive light- up learning
game that enhances a child's pre-reading skills. In response to questions
posed by a realistic electronic voice that also incorporates sound
effects, a child will identify the sounds with certain visual pictures. If
the response is correct, the child is praised and if the response is
incorrect, the child is encouraged to try again or, after several
attempts, a new question is asked so that a child is not become
frustrated.
Manufacturing
The Company's strategy is to manufacture the majority of its products
through unaffiliated contract manufacturers with facilities in Hong Kong, the
People's Republic of China and other developing countries in the Pacific Rim
region which offers labor cost advantages. Management has significant experience
and contacts in the subcontracting of toy manufacturing and particularly, in
this region of the world. Over the years, Management has established close
relationships with several subcontractors and has developed product and
manufacturing standards, production planning and quality assurance functions
with the ability to monitor costs, quality assurance and oversight of
manufacturing processes. Some of the Company's products or components may be
manufactured in the United States, depending on cost and related matters.
Marketing and Sales
The Company will sell its products through sales representatives to major
North American retailers of toys, toy- related and consumer electronic products.
Accounts that the management has previously sold to or will make efforts to be
part of its customer base include:
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Toys R Us Sears Walmart
Kay Bee Toys K-Mart Service Merchandise
Price Club Costco Hudson Bay
Target Best Buy Venture
Caldor Ames Bradlee's
Best Products BJ's Wholesale AAFES
At the international level, the Company anticipates that it will set up
exclusive distribution agreements in the major international markets. The
Company's strategy is to manufacture products for international distributors
once the Company has received a firm order accompanied by a letter of credit
issued by the distributor in favor of the Company. The Company believes, but
there can be no assurances, that this approach will help to substantially
eliminate most of the capital commitment that may be required of the Company
prior to the manufacture of products. The Company does not intend to carry any
inventory for the international market, thus eliminating all associated costs
including storage, overhead, insurance, and inventory related expenses.
International distributors will be managed from the Company's headquarters in
Irvine, California. The Company believes that it is important that its
distributors be local to each country, based upon the Company's belief that the
propensity to buy local and this inclination will also help the Company to
obtain local input regarding packaging, product positioning, pricing and new
product ideas which would appeal to a specific country. The Company's local
distributor will be responsible for all of the marketing and selling expenses
for each of their respective markets.
CONSULTING AGREEMENTS
Consulting Agreement with Spiro Pappas
On July 17, 1996, the Company entered into a Consulting Agreement with Mr.
Spiro Pappas pursuant to which the Company agreed to issue to Pappas an
aggregate of 200,000 shares of Common Stock of the Company in consideration for
consulting services to be provided to the Company over an anticipated
twelve-month period commencing as of the date of the Pappas Consulting
Agreement. Under the terms of the Pappas Consulting Agreement, the Consultant is
to undertake for and consult with the Company concerning management, marketing
and operational planning and consulting, expansion of operations on an
international basis, strategic planning, corporate organization and structure,
examination of products and services and shareholder relations, and shall review
and advise the Company regarding its overall progress, needs and condition. The
shares of Common Stock will be issued to the Consultant following commencement
of sufficient performance under this contract by the Consultant in the
reasonable determination of the Company.
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In particular, the Consultant shall provide the following enumerated
services: (i) the implementation of short range and long term strategic planning
to fully develop and enhance the Company's assets, resources, products and
services; (ii) advise the Company of means to restructure its capitalization;
(iii) evaluate expanding the scope of the Company's activities and operations on
an international basis; (iv) advise the Company on means to enhance its
liquidity; (v) assist the Company in developing its business plan; (vi) advise
the Company relative to setting corporate goals and strategic planning; (vii)
advise and recommend to the Company additional services and products to be sold
by the Company and develop new promotional ideas; (viii) assist the Company in
the developing of its marketing program for its toy products; and assist the
Company in its relationship with key stockholders.
In connection with the Pappas Consulting Agreement, the Company has agreed
to issue 200,000 of Common Stock, which shall be issued following initial
performance of services hereunder in the reasonable judgment of the Company.
This compensation arrangement is not being administered by either the Board of
Directors of the Company or any committee of the Board of Directors organized
for that purpose.
Agreements with Eshoo Corp. and Atlas, Pearlman, Trop & Borkson, P.A.
On October 24, 1996, the Company entered into a Letter Agreement with
Eshoo Corp., whose sole shareholder is George Eshoo, pursuant to which, in
consideration for services rendered to the Company by George Eshoo as Secretary
and Director of the Company, Eshoo Corp. was authorized to receive 50,000 shares
of Common Stock of the Company, in discharge of obligations owing to Eshoo Corp.
for provision of such services. In addition, on October 1, 1996 the Company
entered into a Letter Agreement with Atlas, Pearlman, Trop & Borkson, P.A.
pursuant to which it agreed to issue 50,000 Shares of Common Stock of the
Company in consideration for legal services provided to the Company since
December 1995 in discharge of obligations owed by the Company to Atlas,
Pearlman, Trop & Borkson for rendering such services.
Federal Income Tax Effects
The following discussion applies to the Common Stock issued under the
Consulting Agreement and the Agreements and is based on federal income tax laws
and regulations in effect on December 31, 1995. In connection with the issuance
of Common Stock as compensation payable to the Selling Security Holders under
the Consulting Agreement or other Agreements, the Consultant, Mr. Eshoo or
Atlas, Pearlman, Trop & Borkson, P.A. must include in gross income the excess of
the fair market value of the property received over the amount, if any, paid or
exchanged for the property in the first taxable year in which beneficial
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interest in the property either is "transferable" or is not subject to a
"substantial risk of forfeiture." A substantial risk of forfeiture exists where
rights and property that have been transferred are conditioned, directly or
indirectly, upon the future performance (or refraining from performance) of
substantial services by any person, or the occurrence of a condition related to
the purpose of the transfer, and the possibility of forfeiture is substantial if
such condition is not satisfied. Common Stock received by a person who is
subject to the short swing profit recovery rule of Section 16(b) of the
Securities Exchange Act of 1934 is considered subject to a substantial risk of
forfeiture so long as the sale of such property at a profit could subject the
stockholder to suit under that section. The rights of the Selling Security
Holders are treated as transferable if and when the Selling Security Holders can
sell, assign, pledge or otherwise transfer any interest in the Common Stock to
any person. Inasmuch as the Selling Security Holders are not expected, other
than Mr. Eshoo, to be subject to the short swing profit recovery rule of Section
16(b) of the Securities Exchange Act of 1934 and the Common Stock, upon receipt
following satisfaction of condition prerequisites to receipt, will be presently
transferable and not subject to a substantial risk of forfeiture, the Selling
Security Holders would be obligated to include in gross income the fair market
value of the Common Stock received once the conditions to receipt of the Common
Stock are satisfied.
Restrictions Under Securities Laws
The sale of any shares of Common Stock received must be made in compliance
with federal and state securities laws. Officers, directors and 10% or greater
stockholders of the Company, as well as certain other persons or parties who may
be deemed to be "affiliates" of the Company under the Federal Securities Laws,
should be aware that resales by affiliates can only be made pursuant to an
effective Registration Statement, Rule 144 or any other applicable exemption.
Officers, directors and 10% and greater stockholders are also subject to the
"short swing" profit rule of Section 16(b) of the Securities Exchange Act of
1934. Section 16(b) of the Exchange Act generally provides that if an officer,
director or 10% and greater stockholder sold any Common Stock of the Company he
would generally be required to pay to the Company any "profits" resulting from
the sale of the stock.
SALES BY SELLING SECURITY HOLDERS
The following table sets forth the name of the Selling Security Holders,
the amount of shares of Common Stock held directly or indirectly by the Selling
Security Holders, the maximum amount of shares of Common Stock to be offered by
the Selling Security Holders, the amount of Common Stock to be owned by the
Selling Security Holders following sale of such shares of Common Stock and the
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percentage of shares of Common Stock to be owned by the Selling Security Holders
following completion of such offering (based on 4,914,320 shares of Common Stock
of the Company outstanding at September 30, 1996).
Percentage
Shares to be to be Owned
Name of Selling Number of Shares to Owned After After
Security Holder Shares Owned be Offered Offering Offering
- --------------- ------------ ---------- -------- --------
Spiro Pappas 200,000 200,000 -0- --
Eshoo Corp. 50,000 50,000 -0- --
Atlas, Pearlman 50,000 50,000 -0- --
Trop & Borkson,
P.A.
DESCRIPTION OF SECURITIES
The Company is currently authorized to issue up to 20,000,000,000 shares
of Common Stock, $.0001 par value, of which 4,914,320 shares were outstanding as
of September 30, 1996. The Company is also authorized to issue up to 3,000,000
shares of Preferred Stock, $.01 par value, of which 100,000 shares are issued or
outstanding as of July 31, 1996.
Common Stock
Subject to the dividend rights of the holders of preferred stock, upon any
subsequent authorization thereof, holders of shares of Common Stock are entitled
to share, on a ratable basis, such dividends as may be declared by the Board of
Directors out of funds legally available therefor. Upon liquidation, dissolution
or winding up of the Company, after payment to creditors and holders of
preferred stock that may be outstanding, the assets of the Company will be
divided pro rata on a per share basis among the holders of the Common Stock.
Each share of Common Stock entitles the holders thereof to one vote.
Holders of Common Stock do not have cumulative voting rights which means that
the holders of more than 50% of the shares voting for the election of Directors
can elect all of the Directors if they choose to do so, and, in such event, the
holders of the remaining shares will not be able to elect any Directors. The
ByLaws of the Company require that only one-third of the issued and outstanding
shares of Common Stock of the Company need be represented to constitute a quorum
and to transact business at a stockholders' meeting. The Common Stock has no
preemptive, subscription or conversion rights and is not redeemable by the
Company.
Preferred Stock
On December 6, 1995, the Company designated 500,000 shares of its
Preferred Stock, par value $.01, as "Series A Convertible Voting Preferred
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Stock" (the "Series A Preferred Stock"). The Series A Preferred Stock has no
dividend or preemptive rights and is not be subject to a right of redemption on
the part of the Company at any time.
Holders of the Series A Preferred Stock have the right, at their option,
to convert each share of Series A Preferred Stock into Common Stock, calculated
as to each conversion to the nearest share at any time at a conversion ratio of
forty-eight (48) shares of the Common Stock for each share of Series A Preferred
Stock. No fractional share or scrip representing a fractional share will be
issued upon conversion of the Series A Preferred Stock. Through January 27,
1996, in the event of any reclassification, merger, consolidation or change of
shares of the Series A Preferred Stock and/or the Common Stock, the Company
shall make adjustments to the conversion ratio which shall be as nearly
equivalent to that stated above as may be practical. Subsequent to January 28,
1996, no adjustments to the conversion ratio would occur in the event of a
reverse stock split of the Common Stock
The Series A Preferred Stock shall be automatically converted into shares
of the Company's Common Stock at such time as the Company amends its Certificate
of Incorporation to increase its authorized Common Stock to permit the
conversion of the Series A Preferred Stock into shares of Common Stock. The
Company agrees expeditiously to secure approval of its stockholders for such
amendment to its Certificate of Incorporation.
The Series A Preferred Stock is currently subject adjustment in certain
events, including (i) the issuance of capital stock as a dividend or
distribution on Common Stock, (ii) subdivision, combinations, reverse stock
splits and reclassification of the Common Stock, (iii) the fixing of a record
date for the issuance to all holders of Common Stock of rights or warrants
entitling them (for a period expiring within 45 days of such record date) to
subscribe for Common Stock and (iv) the fixing of a record date for the
distribution to all holders of Common Stock of evidence of indebtedness or
assets (other than cash dividends) of the Company's or subscription rights or
warrants (other than those referred to above).
In addition to any voting rights provided by law, each share of the Series
A Preferred Stock shall be entitled to 48 votes on all matters submitted to a
vote of the stockholders of the Company. Unless the vote or consent of the
holders of a greater number of shares is required by law, the consent of the
holders of at least a majority of all of the Series A Preferred Stock at the
time outstanding shall be necessary to change, alter or revoke the rights and
preferences conferred on the Series A Preferred Stock by the Certificate of
Incorporation or these resolutions or to adopt any amendment to the Certificate
of Incorporation materially adversely affecting the rights of the holders of the
Series A Preferred Stock.
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In the event of the liquidation, dissolution or winding up of the Company,
holders of the Series A Preferred Stock shall be entitled to receive, after due
payment or provision for payment for the debts and other liabilities of the
Company, a liquidating distribution before any distribution may be made to
holders of Common Stock of the Company. The holders of the Series A Preferred
Stock outstanding shall be entitled to receive an amount equal to the greater of
$.01 per share, or the liquidation payment per share of Common Stock multiplied
by a factor of 48, plus declared dividends to the date of the final
distribution, whether or not such liquidation, dissolution or winding up is
voluntary or involuntary on the part of the Company. Any shares of the Series A
Preferred Stock which at any time have been redeemed or converted, shall, after
such redemption or conversion, be automatically retired and shall have the
status of authorized but unissued shares of Preferred Stock, without designation
as to class or series, until such shares are once more designated as part of a
particular class or series by the Board of Directors.
Over-The-Counter Market
The Company's Common Stock is traded on the over-the-counter market on the
OTC Bulletin Board of NASDAQ under the symbol "WHSN."
Transfer Agent
The Company's Transfer Agent is Securities Transfer Corporation whose
address is 16910 Dallas Parkway, Suite 10, Dallas, Texas 75248.
LEGAL MATTERS
Certain legal matters in connection with the securities being offered
hereby will be passed upon for the Company by the Law Offices of Atlas,
Pearlman, Trop & Borkson, P.A., except with respect to securities being issued
to Atlas, Pearlman, Trop & Borkson, P.A., as to which the law offices of Jeffrey
Klein will render such opinion. Atlas, Pearlman, Trop & Borkson, as reflected
herein, owns 50,000 shares of Common Stock of the Company.
INDEMNIFICATION
Article X of the Articles of Incorporation of the Company provides as follows:
"The Corporation shall indemnify to the fullest extent
permitted by Delaware Statute 145, as may be amended from time to
time, any director or officer of the Corporation who is a party or
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or who is threatened to be made a party to any proceeding which is a
threatened, pending or completed action or suit brought against said
officer or director in his official capacity. This Corporation shall
not indemnify any director or officer in any action or suit,
threatened, pending or completed, brought by him against the
Corporation, in the event the officer or director is not the
prevailing party. Indemnification of any other persons, such as
employees or agents of the Corporation, or serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
shall be determined in the sole and absolute discretion of the Board
of Directors of the Corporation."
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
- ------- ---------------------------------------
The documents listed in (1) through (4) below are incorporated by
reference in the Registration Statement. All documents subsequently filed by the
Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in the Registration Statement and to be part
thereof from the date of filing of such documents.
(1) The Company's Annual Report on Form 10-KSB for the year ended December
31, 1996.
(2) The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1996.
(3) The Company's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1996.
(4) All reports and documents filed by the Company pursuant to Section 13,
14 or 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document, which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement modified or superseded
shall not be deemed, except as so modified or superseded, to constitute part of
this Prospectus.
Item 4. Description of Securities
- ------- -------------------------
A description of the Company's securities is set forth in the
Prospectus incorporated as a part of this Registration Statement.
Item 5. Interests of Named Experts and Counsel
- ------- --------------------------------------
Not Applicable.
16
<PAGE>
Item 6. Indemnification of Directors and Officers
- ------- -----------------------------------------
Article X of the Articles of Incorporation of the Company provides as
follows:
"The Corporation shall indemnify to the fullest extent
permitted by Delaware Statute 145, as may be amended from time to
time, any director or officer of the Corporation who is a party or
who is threatened to be made a party to any proceeding which is a
threatened, pending or completed action or suit brought against said
officer or director in his official capacity. This Corporation shall
not indemnify any director or officer in any action or suit,
threatened, pending or completed, brought by him against the
Corporation, in the event the officer or director is not the
prevailing party. Indemnification of any other persons, such as
employees or agents of the Corporation, or serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
shall be determined in the sole and absolute discretion of the Board
of Directors of the Corporation."
Insofar as indemnification for liabilities arising under the Act may be
permitted to Directors, officers and controlling persons of the Company pursuant
to the foregoing provisions, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by a Director,
officer or controlling person of the Company 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 Company 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 Act and
will be governed by the final adjudication of such issue.
Item 7. Exemption from Registration Claimed
- ------- -----------------------------------
Inasmuch as the Selling Security Holders that received the Shares of the
Company were knowledgeable, sophisticated and had access to comprehensive
information relevant to the Company, such transaction was undertaken in reliance
on the exemption from registration provided by Section 4(2) of the Act. As a
condition precedent to such grant, the Selling Security Holders were required to
express an investment intent and consent to the imprinting of a restrictive
legend on each stock certificate to be received from the Company except upon
sale of the shares of Common Stock pursuant to a registration statement.
17
<PAGE>
Item 8. Exhibits
- ------- --------
Exhibit Description
- ------- -----------
(4)(a) Consulting Agreement between the Company and Spiro Pappas
dated July 17, 1996.
(4)(b) Letter Agreement with Eshoo Corp. dated October 24, 1996.
(4)(c) Letter Agreement with Atlas, Pearlman, Trop & Borkson, P.A.
dated October 1, 1996.
(5)(a) Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating to
the issuance of securities pursuant to the above Consulting
Agreement.
(5)(b) Opinion of Law Office of Jeffrey Klein relating to the
issuance of shares of securities pursuant to the Agreement
with Atlas, Pearlman, Trop & Borkson, P.A.
(23.1) Consents of such counsel are included in the
opinions filed as exhibit (5) hereto
(23.2) Consent of independent certified public accountants
Item 9. Undertakings
- ------- ------------
(1) The undersigned Company hereby undertakes:
(a) To file, during any period in which offerings or sales are being
made, a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement;
(b) That, for the purposes of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
18
<PAGE>
(2) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company 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 Company 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 Act and will be governed by the final adjudication of
such issue.
19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Company certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Irvine, California, on the 29th day of October, 1996.
WHITESTONE INDUSTRIES, INC.
By: /s/Donald Yu
-----------------------------------
Donald Yu, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
President, Principal
Executive Officer,
Principal Financial
and Accounting Offi-
cer, Treasurer and
/s/Donald Yu Director October 29, 1996
- --------------------------
Donald Yu
/s/George Eshoo Director October 29, 1996
- --------------------------
George Eshoo
20
Consulting Agreement between the Company and Spiro Pappas
dated July 17, 1996.
CONSULTING AGREEMENT
THIS AGREEMENT, entered into this 17th day of July, 1996 by and between
Spiro Pappas, an individual residing at 301 West Oakland Park Blvd., Fort
Lauderdale, Florida 33311 (hereinafter referred to as "CONSULTANT") and
Whitestone Industries, Inc., a Delaware corporation with a principal place of
business located at 10176 Kimberly Court, Cupertino, CA 95014 (hereinafter
referred to as "CLIENT").
1. WITNESSETH:
WHEREAS, CONSULTANT is skilled in the areas of marketing, consulting and
investment relations; and
WHEREAS, CLIENT desires to retain the services of CONSULTANT in order to
assist CLIENT in expanding business operations, strategic planning, marketing,
and financial public relations; and
WHEREAS, the parties are desirous of enter into this CONSULTING AGREEMENT
in accordance with the terms and provisions hereinafter set forth.
NOW THEREFORE in consideration of the promises and of the mutual covenants
and conditions herein contained, it is hereby agreed as follows:
2. SERVICE OF CONSULTANT:
A. CONSULTANT will provide the following services to
CLIENT:
Update and/or revise Client's current business plan.
Assist management in setting corporate goals and strategic planning.
<PAGE>
Meet with the company's executive officers to review operations.
Provide marketing assistance
In additional to the above services, CONSULTANT shall work with CLIENT to
develop new client services and/or promotional ideas.
B. CONSULTANT shall provide the above identified services on as "AS
NEEDED" basis. Nothing contained herein shall obligate CONSULTANT to provide a
minimum number of consulting hours either computed on a weekly or a monthly
basis.
C. Nothing contained herein shall in any way restrict CONSULTANT from
providing similar services to other clients, whether those clients are in the
same or different fields as Client.
3. COMPENSATION TO CONSULTANT:
A. As compensation for the services rendered by the
CONSULTANT, CONSULTANT shall receive a total of 200,000 shares (the "Shares") of
the Client's common stock. Said shares to be issued to the CONSULTANT on
execution of this Agreement.
B. Client further agrees that it will register the Shares pursuant to an
S-8 Registration Statement. CONSULTANT will pay for the costs of S-8
Registration Statement, submit to CLIENT for signature and review by Aug. 26,
1996. If CONSULTANT fails to submit Registration Statement Consultant will
forfeit 25,000 share penalty. Said Registration Statement to be filed by the
Client no later than September 1, 1996. In the event that Client fails to file
<PAGE>
an S-8 Registration Statement by September 1, 1996, CONSULTANT will be entitled
to receive an additional 25,000 shares of the Client's common stock and said
additional shares are to be registered pursuant to an S-8 Registration
Statement.
3B. TERM:
This Agreement shall remain in full force and effect for a period of one
year from the date of execution.
4. NOTICES:
Except as otherwise heretofore and hereinafter provided, any notice or
other communication to any party pursuant to or relating to this Agreement and
the transactions provided for herein shall be deemed to have been given or
delivered when deposited in the United States mail, registered or certified, and
with proper postage and registration or certification fees prepaid, addressed to
the parties for whom intended as follows:
IF TO CONSULTANT: Spiro Pappas
301 West Oakland Park Blvd.
Fort Lauderdale, FL 33311
IF TO CLIENT: Whitestone Industries, Inc.
10176 Kimberly Court
Cupertino, CA 95014
ATTN: DONALD YU
Or to such other address as may be designed by either party in writing.
5. LITIGATION:
The parties agree that this Agreement may be enforced by both legal and
equitable remedies including specific performance. Should litigation become
necessary to enforce the rights of either party to this Agreement, the
prevailing party shall be entitled to recover all costs including reasonably
attorney's fees and costs.
<PAGE>
6. ENTIRE AGREEMENT:
This Agreement sets forth all the promises, covenants, agreements,
conditions and understandings between the parties hereto, and supersedes all
prior and contemporaneous agreements and understandings, inducements or
conditions, express or implied, oral or written, except as herein contained.
This Agreement may not be modified other than by another Agreement in writing,
duly executed by the parties hereto.
7. WAIVERS:
No indulgences extended by the parties hereto to any other party shall be
construed as a waiver of any breach on the part of such other party, nor shall
any waiver of one breach be construed as a waiver of any rights or remedies with
respect to any subsequent breach.
8. APPLICABLE LAW:
This Agreement shall be governed by and construed in accordance with the
laws of the State of Florida. By entering into this Agreement, the parties agree
to the jurisdiction of the Florida courts with venue in Broward County.
9. TITLE NOT TO AFFECT INTERPRETATION:
The titles of sections contained in this Agreement are
inserted for convenience and reference only, and they neither form a part of
this Agreement nor are they to be considered in the interpretation thereof.
10. BINDING EFFECT:
The provisions of this Agreement shall be binding upon each of the parties
hereto and on their respective heirs, executors, administrators, personal
representatives or other legal representative.
<PAGE>
11. NO JOINT VENTURE OR PARTNERSHIP:
Nothing contained herein shall be construed as creating a joint venture,
partnership or other type of legal relationship between the parties hereto.
CLIENT assumes full and absolute responsibility for the use and/or dissemination
of any information or marketing plans developed by CONSULTANT for CLIENT.
12. ENFORCEMENT:
This Agreement is to be interpreted and enforced in accordance with the
laws of the State of Florida with venue for any dispute in Broward County,
Florida. Should any portion hereof be determined to be illegal or unenforceable,
then that portion shall be deemed modified to conform to applicable laws in a
manner most consistent with the intent of the parties as expressed herein.
Should such modification be impossible or impracticable, then the remainder of
this Agreement shall be and remain in full force and effect.
13. EXECUTION IN COUNTERPARTS:
This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, and it shall
not be necessary, in making proof of this Agreement to produce or account for
more than one counterpart.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have subscribed and sworn to their
hands and seals the day and year first above written.
WITNESSES: WHITESTONE INDUSTRIES, INC.
/s/Jean P. Franks
- ------------------------------
JEAN P. FRANKS By: /s/Donald Yu
----------------------------------
Its President
/s/Spiro Pappas
--------------------------------------
SPIRO PAPPAS
Agreement with
Eshoo Corp. dated October 24, 1996.
AGREEMENT
This Agreement is made and entered into this 24th day of October, 1996 by
and amongst the law offices of George P. Eshoo, a professional law corporation
(Eshoo Corp.), George P. Eshoo, its sole shareholder (hereinafter Eshoo) and
Whitestone Industries, Inc., a Delaware corporation (hereinafter Whitestone)
upon the following terms and conditions.
RECITALS
For approximately one year, secretary for Whitestone Eshoo, and persons in
the employ of Eshoo and Eshoo Corp., have acted as directors, secretaries and
assistant secretary to Whitestone and have received no monetary remuneration for
this task; and
Whereas, Eshoo and Eshoo Corp. have agreed to continue to so act as
director and to serve as secretary for Whitestone for so long as Whitestone
desires on an as needed basis in the future and to perform all services incident
thereto provided they are compensated; and
Whereas, Whitestone has agreed to compensate Eshoo and Eshoo Corp. for the
services that it will provide as secretary and director both for such past
services and for prospective services as needed;
NOW THEREFORE, the parties agree as follows:
AGREEMENT
1. Whitestone shall issue to Eshoo Corp. fifty thousand (50,000) shares
of S8 common stock in Whitestone without legend for the services rendered by
Eshoo and Eshoo Corp. both in the past and to be rendered in the future in
acting as a director and secretary to Whitestone.
2. In exchange for the payment of such shares of stock, Eshoo and Eshoo
Corp. shall continue to act as director and secretary for the corporation for so
long as the Board of Directors of Whitestone shall direct and/or until such time
as Eshoo and Eshoo Corp. shall resign in such capacities.
3. The parties agree that this Agreement may be enforced by both legal
and equitable remedies including specific performance. Should litigation become
necessary to enforce the rights of either party to this Agreement, the
prevailing party shall be entitled to recover all costs, including reasonable
attorney's fees and costs.
<PAGE>
4. This Agreement sets forth all of the premises, covenants, agreements,
conditions and understandings between the parties hereto, and supersedes all
prior and contemporaneous agreements and understandings, inducements or
conditions, express or implied, oral or written, except as herein contained.
This Agreement may not be modified other than by another agreement in writing,
duly executed by the parties hereto.
5. This Agreement shall be governed by and construed in accordance with
the laws in the State of California. By entering into this Agreement, the
parties agree to the jurisdiction of the California courts with venue in San
Mateo County.
6. The provisions of this Agreement shall be binding upon each of the
parties hereto and on their respective heirs, executors, administrators,
personal representatives or other legal representative.
WHITESTONE INDUSTRIES, INC.
/s/Donald Yu
--------------------------------------
By: Donald Yu, President
LAW OFFICES OF GEORGE P. ESHOO
A PROFESSIONAL LAW CORPORATION
--------------------------------------
By: George P. Eshoo, Secretary and
President
GEORGE P. ESHOO
---------------------------------
George P. Eshoo
Letter Agreement with Atlas, Pearlman, Trop & Borkson, P.A.
.
WHITESTONE INDUSTRIES, INC.
19200 Von Karman Avenue - Suite 500
Irvine, CA 92715
October 1, 1996
James M. Schneider, Esq.
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard, Suite 1900
Fort Lauderdale, Florida 33301
Re: Whitestone Industries, Inc. (the "Company'")
Dear Mr. Schneider.
As of September 30, 1996, the Company has incurred legal fees and related
costs of $20,736, for services rendered to the Company since the time of the
acquisition of Golden Bear Entertainment Corp. by the Company at the conclusion
of 1995. Previously, we had discussed the circumstance that Atlas, Pearlman,
Trop & Borkson, P.A. would be given the opportunity to elect to receive cash or
common stock of the Company in satisfaction of legal services rendered and to be
rendered on behalf of the Company. At the present time, we are in the process of
finalizing a funding which would provide the Company with critical funds
required for the expansion of the operations of the Company. Accordingly, we
wish to offer the opportunity to your firm to elect to receive either 50,000
shares of Common Stock or a cash payment in satisfaction of the above
obligation.
Please advise us as to your determination in this matter.
Very truly yours,
WHITESTONE INDUSTRIES. INC.
By: /s/Donald Yu
--------------------------
Donald Yu, President
On behalf of the firm I wish to express our determination to accept the
50,000 shares of common stock of the Company. Inasmuch as the stock is
restricted securities but is intended to be the subject of an S-8 Registration
Statement, we would be willing to value the stock at 90% of the fair market
value and an amount in excess of the aforementioned obligation would be applied
to future charges incurred by the firm on behalf of the Company.
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
By: /s/ James M. Schneider
---------------------------
Partner
Opinion of Atlas, Pearlman, Trop & Borkson, P.A.
relating to the issuance of shares of securities
pursuant to the above Consulting Agreement
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
Direct Line: (954) 766-7858
October 29, 1996
Whitestone Industries, Inc.
19200 Von Karman Avenue, Suite 550
Irvine, California 92715
Re: Registration Statement on Form S-8 - Whitestone Industries, Inc. -
Common Stock issued pursuant to a Consulting Agreement with Spiro
Pappas and an Agreement with Eshoo Corp.
Gentlemen:
This opinion is submitted pursuant to the applicable rules of the
Securities and Exchange Commission (the "Commission") with respect to the
registration by Whitestone Industries, Inc. (the "Company") of an aggregate of
250,000 shares of Common Stock, par value $.0001 per share (the "Common Stock"),
issued pursuant to a Consulting Agreement with Spiro Pappas and an Agreement
with Eshoo Corp. (the "Agreements").
In our capacity as special counsel to the Company, we have examined the
original, certified, conformed, photostat or other copies of the Agreements, the
Company's Certificate of Incorporation (as amended), By-Laws and corporate
minutes provided to us by the Company. In all such examinations, we have assumed
the genuineness of all signatures on original documents, and the conformity to
originals or certified documents of all copies submitted to us as conformed,
photostat or other copies. In passing upon certain corporate records and
documents of the Company, we have necessarily assumed the correctness and
completeness of the statements made or included therein by the Company and we
express no opinion thereon.
Based upon and in reliance of the foregoing, we are of the opinion that
the shares of Common Stock when issued in accordance with the terms of the
Agreements, will be validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion in the Registration Statement
on Form S-8 to be filed with the Commission.
Very truly yours,
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
JMS/bb
3566.01
Opinion of Law Office of Jeffrey Klein
relating to the issuance of shares of securities
pursuant to the Agreement with
Atlas, Pearlman, Trop & Borkson, P.A.
Law Offices of
Jeffrey G. Klein, P.A.
Scott Center, Suite 270
2600 N. Military Trail
Boca Raton, Florida 33431
(561) 997-4050
Telecopier: (561) 996-9557
October __, 1996
Whitestone Industries, Inc.
19200 Von Karman Avenue, Suite 550
Irvine, CA 92715
RE: Registration Statement on Form S-8 for Whitestone Industries, Inc. Common
Stock issued pursuant to a Letter Agreement with the law firm of Atlas,
Pearlman, Trop & Borkson, P.A.
Gentlemen:
This opinion is submitted pursuant to the applicable rules of the
Securities and Exchange Commission (the "Commission") with respect to the
registration by Whitestone Industries, Inc. (the "Company") of a total of 50,000
shares of common stock, par value $.0001 per share (the "Common Stock"), issued
pursuant to a Letter Agreement dated October 1, 1996 with Atlas, Pearlman, Trop
& Borkson, P.A. (the "Agreement").
In rendering this opinion, I have examined original, certified, conformed,
photostat or other copies of the Agreements, the Company's Certificate of
Incorporation (as amended), By-Laws and such other documents as deemed relevant
and provided to me by the Company. In all such examination, I have assumed the
genuineness of all signatures on original documents, and the conformity to
original or certified documents of all copies submitted to me as conformed,
photostat or other copies. In reviewing said records and documents of the
Company, I have assumed the correctness and completeness of the statements made
or included therein by the Company and no opinion is expressed thereon.
Based upon and in reliance of the foregoing, I am of the opinion that the
shares of the Company's Common Stock when issued in accordance with the terms of
the Agreement, will be validly issued, fully paid and non-assessable.
<PAGE>
Whitestone Industries, Inc.
Page 2
I hereby consent to the use of this opinion in the Registration Statement
on Form S-8 to be filed with the Commission.
Sincerely,
Jeffrey G. Klein
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in a Registration Statement on
Form S-8 pertaining to an aggregate of 300,000 shares of common stock, $.0001
par value., of Whitestone Industries, Inc. issued to Spiro Pappas, George Eshoo
and Atlas, Pearlman, Trop & Borkson, P.A. pursuant to a consulting agreements,
to which this consent is intended to be annexed as Exhibit No. 23.2, of our
report dated March 20, 1996, with respect to the financial statements of
Whitestone Industries, Inc. included in its Annual Report on Form 10-KSB for the
year ended December 31. 1995.
FELDMAN RADIN & CO., P.C.
Certified Public Accountants *
New York, New York
November 1, 1996
