As filed with the Securities and Exchange Commission on May 31,1996.
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
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.)
702 Marshall Street
Redwood City, California 94063
(Address of principal executive offices) (Zip Code)
CONSULTING AGREEMENT WITH TLD3 INVESTMENT GROUP INC.
(Full title of the plan)
Donald Yu
702 Marshall Street, Suite 500
Redwood City, California 94063
(415) 364-7030
(Name and address of agent for service)
Copy to:
Brenda Lee Hamilton, Esq.
555 S. Federal, Suite 400
Boca Raton, Florida 33423
(407) 392-4868
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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
($.0001 par value) 130,000 shares $2.00 $260,000.00 $329.31
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(1) Pursuant to Rule 457 (h) and Rule 457 (c), the maximum offering price was
calculated based upon the average of the bid and asked price of the Registrant's
Common Stock in the over - the - counter market on May 30, 1996, but giving
effect to the one for ten (1:10) that was effective on February 2, 1996.
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WHITESTONE INDUSTRIES, INC.,
CROSS REFERENCE SHEET REQUIRED BY ITEM 501 (b) OF REGULATION S-K
FORM S-8 ITEM NUMBER
AND CAPTION CAPTION IN PROSPECTUS
- --------------------- ---------------------
1. Forepart of Registration State- Facing page of Registration
ment and Outside Front Cover Statement and Cover Page
Page of Prospectus of Prospectus
2. Inside Front and Outside Inside Cover Page of
Back Cover Pages Of Prospectus Prospectus and Outside
Cover Page of Prospectus
3. Summary Information, Risk Fac-
tors and Ratio of Earnings to Not Applicable
Fixed Charges
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Sales by Selling Security
Holders
8. Plan of Distribution Cover Page of Prospectus
and Sales by Selling
Security Holders
9. Description of Securities to be Description of
Registered Securities; Consulting
Agreement
10.Interests of Named Experts and Legal Matters
Council
11.Material Charges Not Applicable
12.Incorporation of Certain Infor- Incorporation of Certain
mation by Reference Documents by Reference
13.Disclosure of Commission Posi- Indemnification of Direc-
tion on Indemnification for tors and Officers; Under-
Securities Act Liabilities takings
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PROSPECTUS
WHITESTONE INDUSTRIES, INC.
130,000 Shares of Common Stock
($ .0001 par value)
Issued Pursuant to a Consulting Agreement with TLD3 Investment Group Inc.
after Giving Effect to a 1 for 10 Reverse Stock Split of the Company's Common
Stock.
This Prospectus is part of a Registration Statement which registers an
aggregate 130,000 shares of Common Stock, $ .0001 par value (the "Common Stock")
of Whitestone Industries, Inc., (the "Company") which have been issued to TLD3
Investment Group Inc. (the "Consultant"), a Consultant to the Company, pursuant
to a written Consulting Agreement dated January 1,1996, as amended ("Consulting
Agreement") providing for the issuance of 130,000 shares of Common Stock. The
130,000 shares of Common Stock are referred to as the "Consultant Shares" and
the number of Consultant Shares are calculated based upon a 1 for 10 reverse
stock Split of the Company's Common Stock which was effective on February 2,
1996. The Consultant Shares will be issued in the name of the Consultant. Such
selling Stockholder in relation to the sale of the Shares may hereinafter
sometimes be referred to as the "Selling Security Holder." All of the Consultant
Shares are being issued to the Selling Security Holder pursuant to a written
compensation contract. The Company has been advised by the Selling Security
Holder that it may sell all or a portion of the shares of Consultant 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.
No person has been authorized by the Company to give any information or
to make any representation other than 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
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distribution of the Consultant Shares issuable under the terms of the Agreement
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof.
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 May 30, 1996
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
Company's Common Stock is traded in the over-the-counter market 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 an aggregate 130,000 shares of the
Company's Common Stock, to be issued to the Consultant of the Company pursuant
to the Consulting Agreement. 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 hereto. Statements in this
Prospectus as to any document are not necessarily complete, and where any such
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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.
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 fiscal
year ended December 31, 1994; and
2. The Company's Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1995.
3. The Company's Quarterly Report on Form 10-QSB for the
quarter ended June 30, 1995.
4. The Company's Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1995.
5. The Company's Quarterly Report on Form 10-QSB for the
quarter ended December 31, 1995.
6. The Company's Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1996.
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 for filing 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,
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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., 702 Marshall Street, Redwood City, California 94063; Telephone
Number (415)-364-7030.
THE COMPANY
Whitestone Industries Inc. ("the Company") was organized under the laws
of the State of Delaware on April 19, 1988 under the name Fortunistics Inc. The
Company originally engaged in the acquisition and development of oil and gas
properties, interests and production and the sale and disposition of such
properties, interests and production. The Company began operations in 1993 and
since that time, the Company's drilling activities were limited to small work
overs on existing wells. Subsequently, the Company disposed of all its interests
in its oil and gas properties.
On December 7, 1995, the Company, Whitestone Group, Ltd., a British
Virgin Islands Limited Partnership organized under the laws of British Virgin
Islands ("W.G.L."), Golden Bear Entertainment Corporation, a California
Corporation ("GBEC") and Donald Yu, ("Yu") entered into a Stock Purchase and
Exchange Agreement (the "Agreement"). Pursuant to the Agreement, WGL contributed
back to the Company its right and interest in 6,700,000 shares of its 8,700,000
shares of WII Common Stock, in exchange for the Company's interest in certain
securities. Prior to December 7, 1995, WGL owned approximately 64.2% of the
outstanding capital stock interest in the Company. Upon consummation of the
transaction, WGL owned approximately 5.9% of the outstanding capital stock
interest of the Company.
Pursuant to the Agreement, the Company acquired all of the capital
stock of GBEC in exchange for the distribution to Mr. Yu, the sole Stockholder
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of GBEC, of (i) 3,200,000 shares of restricted common stock of the Company and
(ii) 500,000 shares of newly issued shares of Series A Convertible Preferred
Stock (the "Series A Preferred Stock") that are convertible into 24,000,000
shares of Common Stock of the Company. At that time, the Common Stock and the
Series A Preferred Stock issued to Mr. Yu represented approximately 79.89% of
the outstanding capital stock interest of the Company.
On January 23, 1996, Mr. Yu converted 400,000 shares of his 500,000
shares of Preferred Stock into 19,200,000 shares of Common Stock (Pre-Split or
1,920,000 shares of Common Stock Post-Split), however, these shares of Common
Stock were not issued to Mr. Yu until the effective date of the reverse stock
split of the Company's Common Stock, which was effective on February 2, 1996. On
January 28, 1996, the Board of Directors of the Company and the Majority
Shareholder of the Company amended the Statement of Designation for the Series A
Preferred Stock to provide that as of January 28, 1996, the number of Common
Stock into which the Series A Preferred Stock may be converted would not be
affected by the reverse stock split. Thus, Mr. Yu would be entitled to convert
his remaining 100,000 shares of Series A Preferred Stock into 4,800,000 shares
of Common Stock.
GBEC, which is now a wholly-owned subsidiary of the Company and the
only asset of the Company, is a newly organized California Corporation that
intends to manufacture, develop, market and sell certain video and interactive
games. The products are intended to be both educational and interactive and will
be designed to appeal to parents' concerns of education as well as fun for
children. It is GBEC's intent to focus its efforts in two major areas
interactive products and communications. GBEC owns certain intellectual property
rights to four toys that are being developed by the Company. It also has the
exclusive worldwide licensing rights to use, make, or have made and sell two
additional electronic toys.
CONSULTING AGREEMENT
General
On January 1, 1996, the Company entered into a Consulting Agreement
with TLD3 Investment Group Inc. to which the Company agreed to issue to the
Consultant 130,000 shares of Common Stock of the Company (post-split) in
consideration for certain consulting services to be provided to the Company over
an anticipated one year period commencing as of the date of the Consulting
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Agreement. Initial services relative to the performance under the terms of the
Consulting Agreement have already commenced. Under the Terms of the Consulting
Agreement, the Consultant is to provide the following consulting services to the
Company (i) identification, evaluation, structure, negotiation and closing of
business acquisitions, consolidations, mergers and strategic alliances; and (ii)
technical and analytical consulting concerning management, marketing, corporate
organization and structure, and expansion of services. The Consultant is a
Florida Corporation whose sole shareholder, director and officer is Tom
DiStefano III. During the initial phase of the Agreement, Mr. Distefano intends
to spend a predominant amount of his time in his duties for the Company.
Federal Income Tax Effects
The following discussion applies to the Consultant Shares issued under
the Consulting Agreement and is based on Federal Income Tax laws and regulations
in effect on December 31, 1995. In connection with their issuance of Consultant
Shares as compensation payable to the Consultant pursuant to he Consulting
Agreement, the Consultant must include in gross income the excess of the fair
market value of the property received over the amount, if any, paid for the
property. in the first taxable year in which the Consultant's beneficial
interest in the property either is "transferrable" 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. Consultant Shares 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 Consultant are treated
as transferrable if and when the Consultant can sell, assign, pledge or
otherwise transfer any interest in the Consultant Shares to any person. In as
much as the Consultant would not be subject to the short swing profit recovery
rule of Section 16 (b) of the Securities Exchange Act of 1934 and the Consultant
Shares, upon receipt following satisfaction of condition prerequisites to
receipt, will be presently transferrable and not subject to a substantial risk
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of forfeiture, the Consultant would be obligated to include in gross income the
fair market value of the Consultant Shares received once the conditions to
receipt of the Consultant Shares are satisfied.
Restrictions Under Securities Laws
The sale of any Shares of Common Stock acquired upon the exercise of
the Options 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 Exchange Act of 1934. Section 16 (b) of the Exchange Act
Generally provides that if any Officer, director, or 10% and greater Stockholder
sold any Common Stock of the Company acquired pursuant to the exercise of a
Stock option or warrant, he would generally be required to pay to the Company
any "profits" resulting from the sale of the Stock and receipt of the Stock
option. Section 16 (b) exempts all option exercises from being treated as
purchases and, instead, treats a option grant as a purchase of the underlying
security, which grant/purchase may be matched with any sale of the underlying
security within six months of the date of grant.
SALES BY SELLING SECURITY HOLDER
The following table sets forth the name of the Selling Security Holder,
the amount of Shares of Common Stock held directly or indirectly, the maximum
amount of Shares of Common Stock to be offered by the Selling Security Holder,
the amount of Common Stock to be owned by the Selling Security Holder following
sale of such Shares of Common Stock and the percentage of Shares of Common Stock
to be owned by the Selling Security Holder following completion of such offering
(based on 4,784,534 Shares of Common Stock of the Company outstanding at May 30,
1996 taking in to account the reverse-split which occurred on February 2, 1996).
Shares to be Percentage
Name of Selling Number of Shares to owned after to be owned
Security holder Shares Owned be offered Offering after offering
- --------------- ------------ ---------- -------- --------------
TLD3 Investment 130,000 130,000 -0- --
Group, Inc.
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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 4,784,534 Shares were
outstanding as of May 30, 1996. The Company is also authorized to issue up to
1,000,000 Shares of Preferred Stock, $.01 par value, of which 900,000 Shares are
issued or outstanding as of May 30, 1996.
Common Stock
Subject to the dividend rights of the holders of Preferred Stock, upon
any subsequent autorization 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 amoung 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
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,
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calculated as to each conversion to the nearest share at any time at a
conversion ratio of fourty-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 isssued 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 expenditiously to secure approval of its Stockholders for such
amendment to its Certification 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 evidance 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 the Series A Preferred Stock at the time
outstanding shall be necessary to change, alter or revoke the rights and
preference conferred on the Series A Preferred Stock by the Certificate of
Incorporation or these resolutions or to adopt any amendment 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 and 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 $.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 Brenda Hamilton, Esquire.
EXPERTS
The financial statements of the Company appearing in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1994 and the year
ending December 31, 1995 have been audited by Feldman Radin & Co., P.C.,
independent certified public accountants, as set forth in their report thereon,
included therein, and incorporated herein by reference. Such financial
statements are, and audited financial statements to be included in subsequently
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filed documents will be, incorporated herein in reliance upon the reports of
Feldman, Radin & Co., P.C. pertaining to such financial statements (to the
extent covered by consents filed with the Securities and Exchange Commission)
given upon the authority of such firm as experts in accounting and auditing.
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 who is threatened to be
made a party to any proceeding which is 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. Indemnifcation of any
other persons, such as employees or agents of the Corporation, or
serving at the request of the Corporation as 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 REQURIED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The documents listed in (a) through (g) below are incorporated by
reference in the Registration Statement. All documents subsequently filed by the
Registrant 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.
(a) The Registrant's latest annual report filed pursuant to Section
13(a) or 15 (d) of the Exchange Act, or, in the case of the Registrant, either
(1) the latest prosepcturs filed pursuant to Rule 424(b) under the Securities
Act of 1933, as amended ("the Act") that contains audited financial statements
for the Registrant's latest fiscal year for which such statements have been
filed or (2) the Registrant's effective registration statement on Form 10 or 30
F filed under the Exchange Act containing audited financial statements for the
Registrant's latest fiscal year.
(b) the Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1995.
(C) the Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1995.
(d)the Registrant's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1995.
(e) the Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996.
(f) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Registrant's
document referred to in (a) above.
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(g) The description of the Common Stock of the Company which is
contained in a Registration Statement filed under the Exchange Act, including
any amendment or report filed for the purpose of updating such description.
Item 4. Description of Securities
A description of the Registrant'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.
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 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 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 Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant 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 payment by the Registrant of
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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 Act and will be governed by the final
adjudication of such issue.
Item 7.Exemption from Registration Claimed.
Inasmuch as the Consultants that received the Options of the Registrant
were knowledgeable, sophisticated and had access to comprehensive information
relevant to the Registrant, 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 Consultants 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 Registrant except upon sale of the
underlying Shares of Common Stock pursuant to a registration statement.
Item 8. Exhibits
Exhibit Description
(4) Consulting Agreement between the Company and
TLD3 Investment Group, Inc. dated January 1,
1996.
(5) Opinion of Brenda Lee Hamilton Esquire relating
to the issuance of the securities pursuant to
the above Consulting Agreement.
(23.1) Consent of such counsel included in the opinion
filed as exhibit (5) hereto.
(23.2) Consent of independent certified public
accountants.
Item 9. Undertakings
(1) The undersigned Registrant hereby undertakes:
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(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.
(2) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant'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
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
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 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 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 Act and will be governed by the final adjudication of
such issue.
iv.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant 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 Redwood City, California, on the day of , 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
/s/Donald Tu
- -------------
Donald Yu President, Principal May 30, 1996
Executive Officer,
Principal Financial
and Accounting Offi-
cer, Treasurer and
Director
/s/George Eshoo
- ---------------
George Eshoo Director May 30, 1996
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("this agreement") is made and entered into
this &M day of January 1996, by and between TLD3 Investment Group, INC., a
Florida Corporation, hereinafter referred to as "the Consultant" and WHITESTONE
INDUSTRIES INC, a Delaware Corporation, hereinafter referred to as the
"Company".
WHEREAS, the Consultant is desirous of being engaged by the Company, and
the Company has agreed to engage the Consultant upon certain terms and
conditions contained in this Consulting agreement, one of which is the execution
of this agreement by the Consultant;
WHEREAS, the Consultant, by virtue of the Consultant's relationship with
the Company has become familiar with the business of the Company;
WHEREAS, the Company requires Consulting services relating to its'
expansion into the international marketplace and the Company desires to employ
Consultant to provide such services.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Company and the Consultant do hereby agree as follows:
1. ENGAGEMENT. The Company hereby engages the Consultant on a
non-exclusive basis and the Consultant hereby accepts such engagement upon the
terms and conditions hereinafter set forth.
2. TERM. The Term of this agreement shall begin upon execution of this
agreement and terminate on twelve months thereafter.
3. COMPENSATION. As the Consultant's compensation for services provided
under this agreement, the Company shall issue to the Consultant a fee of 1
30,000 Post-Split free trading S-8 shares (as that term is defined by the
Securities Act of 1 9 33) of the Company.
4. TIME FOR COMPENSATION. Said Stock to be issued by the Company on or
before June 10, 1996.
5. SERVICES OF THE Consultant. The Consultant shall provide consulting
services in any or all of the following areas:
i. Identification, evaluation, structuring, negotiating and closing of
business Acquisitions, Consolidations, Mergers and Strategic Alliances
internationally;
ii. Technical and Analytical Consulting concerning management,
marketing, Corporate Organization and Structure, and Expansion of Products in
the international marketplace; and
iii. Analysis and evaluation of new product lines for international
markets.
6. REPRESENTATION AND INDEMNIFICATION OF Company.
<PAGE>
6. REPRESENTATION AND INDEMNIFICATION OF Company.
i) The Company shall be deemed to make a continuing representation of
the accuracy of any and all material facts, material information, and data which
it supplies to Consultant and the Company acknowledges its awareness that
Consultant will rely on such continuing representation in disseminating such
information and otherwise performing its investor relations functions.
ii) Consultant In the absence of notice in writing from the Company will
rely on continuing accuracy of material, information, and data supplied by the
Company.
iii) Company hereby authorized Consultant to issue, in Consultants sole
discretion, corrective, amendatory, supplemental, or explanatory press releases,
shareholder communications and reports, or date supplied to analysts,
broker-dealers, market makers, or other members of the financial community.
iv) The Company hereby agrees to indemnify the Consultant against, and
to hold the Consultant harmless from, any claims, demands, suits, loss, damages,
etc. arising our of the Consultants reliance upon the accuracy nd continuing
accuracy of such facts, material, information and data, unless the Consultant
has been grossly negligent in fulfilling his duties and obligations hereunder.
v) The Company hereby agrees to indemnify the Consultant against, and to
hold the Consultant harmless from, any claims, demands, suits, loss, damages,
etc. arising our of the Consultants reliance upon the general availability of
information supplied to the Consultant and the Consultant's ability to
promulgate such information, unless the Consultant has been negligent in
fulfilling his duties and obligations hereunder.
7. REPRESENTATION AND INDEMNIFICATION BY Consultant.
i)The Consultant shall devote time and effort in performing services
hereunder as is reasonably required and at reasonable times.
ii) The Consultant agrees that it will not release or disseminate any
information pertaining to the Company or its shareholders without providing the
Company with an advance copy thereof and obtaining authorization for such
release and dissemination.
iii) The Consultant hereby agrees to indemnify the Company against, and
to hold harmless from, any claims, demands, suits, loss and damages arising out
of any inaccurate statement or misrepresentation provided that such
indemnification shall not pertain to any information provided by or attributable
to the Company.
8. TERMINATION. This agreement may not be terminated by either party
prior to the expiration of the term except as follows:
i) upon the bankruptcy of either party;
ii) upon either party having or applying for a receiver appointed for
all or a substantial part of such party's assets or business;
iii) upon a material breach by either party;
iv) upon the death of the Consultant;
v) No such termination shall affect the receipt of consideration
therefore received by the Consultant.
<PAGE>
9. SELECTION OF ENTITIES. The Consultant in its sole and absolute
discretion shall hire, retain, or employ such individuals, corporations,
partnerships or other entity or entities to perform services as Consultant deems
necessary for performance of obligations hereunder.
10. COSTS AND EXPENSES. All costs, expenses and compensation that the
Consultant shall incur as a result of the aforementioned services on behalf of
the Company shall be the sole responsibility of the Company.
11. PARTIES RELATIONSHIP. The Consultant shall not by reason of this
agreement or the performance of duties hereunder unless otherwise agreed between
the parties, by or be deemed to be, an employee, agent, partner, co-venturer or
controlling person of the Company; The Consultant shall have no power to enter
into any agreement on behalf of or otherwise bind the Company. The Consultant
shall not have or be deemed to have, any fiduciary obligation or duties to the
Company and is not an agent to the Company. Neither party to this agreement is
intended to have any interest in the business or property of the other.
12. ASSIGNABILITY. This contract is not assignable by the Consultant but
shall be assignable by the Company in connection with the sale, transfer or
other disposition of its business or to any of the Company's affiliated
controlled by or under common control with the Company.
13. HOLD HARMLESS. The Company agrees to indemnify, defend, save and
hold harmless the Consultant and its' agents from and against, any and all
claims, losses, damages, liabilities or expenses related to, growing out of or
arising from: 1) Any representation based on facts, material, information and
data made by Company and relied upon by Consultant; 11) Any service provided to
or by the Consultant pursuant to this agreement.
14. SEVERABILITY. If any part of this agreement is adjudged invalid,
illegal, or unenforceable, the remaining parts shall be enforceable.
15. PARAGRAPH HEADINGS. The headings of the paragraphs contained in this
agreement are for convenience only, and are not to be considered a part of this
agreement or used in determining Its content or context.
16. LAW. Any dispute between the Consultant and the Company involving
the Interpretation or application of any provision of this contract shall be
governed by the laws of the State of Florida. Venue will be In Palm Beach County
Florida.
17. OTHER AGREEMENTS. The parties represent that no other agreement,
oral or written, exists between them. This contract sets forth the entire
agreement between the parties hereto and cannot be modified or supplemented
orally.
18. NOTICES. Any notice required or permitted to be given under this
agreement shall be sufficient if in writing and if sent by certified mail,
return receipt requested, to the principal office of the party to be so
notified.
<PAGE>
19. COUNTERPARTS. This agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one agreement.
IN WITNESS WHEREOF, the parties hereto, Intending to be legally bond,
have executed this agreement on the date above.
TLD3 INVESTMENT GROUP
/s/Tom DiStefano
- --------------------
BY: Tom DiStefano III
- --------------------
WITNESS
- ---------------------
WITNESS
WHITESTONE INDUSTRIES, INC.
/s/ Donald R. Yu
- ----------------------
BY: DONALD R. YU
- ----------------------
WITNESS
- ----------------------
WITNESS
BRENDA LEE HAMILTON
ATTORNEY AT LAW
555 S. Federal Highway, Suite 400
Boca Raton, Florida 33432
(407) 392-4868
Fax (407) 392-5089
May 30, 1996
Ms. Lori Alfred
Securities Transfer Corporation
16910 Dallas Parkway, No. 10
Dallas, TX 75248
Re: Whitestone Industries Inc. the ("Company") Issuance of 130,000
Shares of Common Stock to TLD3 Investment Group Inc. ("TLD")
Dear Sir/Madam:
The Company has requested that I render an opinion to you regarding the
legality of the issuance of a total 130,000 shares of Common Stock, (the
"Shares") $.OOO1 par value to TLD by the Company. These Shares have been
registered under the Securities Act of 1933 and have been acquired pursuant to a
written Consulting Agreement between the Company and TLD. This Consulting
Agreement is described in the Company's Registration Statement on Form S-8 filed
with the Securities and Exchange Commission on May 30, 1996. A copy of same is
enclosed herewith.
In connection with the foregoing, I have examined copies of resolutions
of the Board of Directors of the Company authorized on January 1, 1996, the
Agreement, instruments and documents as I have deemed relevant or necessary as a
basis for the opinions hereinafter set forth. In making such examination, I have
assumed the genuineness of all signatures on all original documents and the
conformity to original documents of all copies submitted to me as conformed,
photostat or other copies. As to matters of fact material to such opinions, I
have, when relevant facts were not independently established, relied upon
statements and certificates furnished to me.
Based upon the foregoing, I am of the opinion that:
(1) The issuance of the Shares has been duly authorized by all
necessary corporate action on the part of the Company, and the
Shares are duly issued and, assuming receipt by the Company of
the consideration described in the Agreements, are fully paid
and nonassessable.
(2) The issuance of the Shares is exempt from registration
under the Securities Act of 1933.
<PAGE>
Page 2, Securities Transfer Corporation, May 30, 1996
Inasmuch as the Shares have been registered under the Securities Act of
1933 by the aforementioned Registration Statement, upon sale pursuant to such
Registration Statement, no legend need be affixed to the certificate evidencing
the Shares following sale thereof.
The opinions expressed herein are for the sole benefit of and may be
relied upon by Securities Transfer Corporation and are not to be used,
circulated, quoted or otherwise registered in connection with any transaction
other than those hereinabove described.
Very Truly Yours,
/s/Brenda Lee Hamilton
----------------------------
Brenda Lee Hamilton, Esquire
BLH:lm
cc: Mr. Donald Yu
Enclosure
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in a Registration
Statement on Form S-8 pertaining to an aggregate of 130,000 shares of common
stock, $.0001 par value, of Whitestone Industries, Inc. issued to TLD3
Investment Group, Inc. pursuant to a certain consulting agreement dated January
1, 1996, 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.
/s/FELDMAN RADIN & CO.,P.C.
----------------------------
FELDMAN RADIN & CO., P.C.
Certified Public Accountants
New York, New York
June 3, 1996
