Florida 65-0928369
(State or other jurisdiction of incorporation or (IRS Employer Identification No.)
organization)
|
1221 Brickell Ave., Suite 900, Miami, Florida 33131
--------------------------------------------- ---------
(Address of principal executive offices ) (Zip Code)
Issuer's telephone number (305) 539-0900
-----------------------------------------------------
Securities registered under Section 12(b) of the Exchange Act:
None
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B not contained in this form, and no disclosure will be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.( )
Revenues for year ended June 30, 2001: $0
Aggregate market value of the voting common stock held by non-affiliates of the registrant as of October 1, 2001, was: $O
Number of shares of the registrant's common stock outstanding as of October 1, 2001 was: 4,600,000
Transfer Agent as of October 1, 2001:
(305) 539-0900.
- stage company. Because Hipstyle has not generated any revenue, it intends to
report its plan of operation below.
PERIOD FROM JUNE 22, 1999 (DATE OF INCEPTION) THROUGH MARCH 31, 2001
Name Age Since Director/Position
---------------------------------------------------------------------
Rebecca J. Farkas 24 1999 President, Treasurer, Secretary
and Director
Michelle Brock 26 2000 Vice President and Director
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Michelle Brock, 26, has served as our Vice President and Director since May 30, 2000. Ms. Brock has been employed in public relations and sales for Norma Kamali, Inc. since May 1999. Her responsibilities include the generating of editorial press of United States and foreign fashion magazines as well as sales to industry insiders and Internet clients. From May 1998 to May 1999, Ms. Brock was employed as an analyst assistant with Odyssey Investments Partners, LLC where she conducted financial and market research in the Internet technology, aerospace, telecommunications and transportation industries. She was also Vice President of Quentin Road Productions, Inc., a publicly traded company listed on the OTC Electronic Bulletin Board. Ms. Brock graduated in May 1998, from Penn State University with a degree in Music Theory and Violin Performance.
ANNUAL COMPENSATION LONG TERM COMPENSATION
RESTRICTED SECURITIES
NAME AND PRINCIPAL FISCAL OTHER ANNUAL STOCK UNDERLYING OPTIONS ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION AWARDS (NO. OF SHARES) COMPENSATION
---- ------ ----- ------------ ------ --------------- ------------
Rebecca Farkas 2001 $ 0 0 0 0 0 $ 0
President and Secretary
Michelle Brock 2001 $ 0 0 0 0 0 0
Vice President
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NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP OUTSTANDING SHARES -------------------- -------------------- ------------------ 5% STOCKHOLDERS Atlas Equity Group, Inc.(2) 2,620,000 56.96% 1221 Brickell Avenue Suite 900 Miami, FL 33131 Rebecca J. Farkas 655,000 14.24% 294 South Coconut Lane Miami Beach, FL 33139 DIRECTORS AND NAMED EXECUTIVE OFFICERS Rebecca J. Farkas 655,000 14.24% 294 South Coconut Lane Miami Beach, FL 33139 Michelle Brock 50,000 1.09% 105 Lexington Avenue, #6D New York, NY 10016 All directors and executive 705,000 15.32% officers as a group (2 persons) |
(2) Michael D. Farkas is the sole officer, director and shareholder of Atlas Equity Group, Inc. and Michael D. Farkas is married to Rebecca J. Farkas, the President of the Company. Mr. Farkas is the sole member and the Chairman and Chief Executive Officer of the Atlas Group of Companies, LLC, the sole shareholder of Atlas Capital Services, Inc., a registered broker dealer and member of the National Association of Broker Dealers, Inc. and SIPC.
(a) The following documents are filed as part of this report:
1. Financial statements; see index to financial statement and schedules
immediately following the signature pages of this report.
2. Financial statement schedules; see index to financial statements and
schedules immediately following the signature pages of this report.
3. Exhibits:
The following exhibits are filed with this Form 10-KSB and are identified by the
numbers indicated: see index to exhibits immediately following financial
statements and schedules of this report.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, there unto duly authorized.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED JUNE 30, 2001 AND 2000 AND FOR THE PERIOD FROM
JUNE 22, 1999 (DATE OF INCEPTION) THROUGH JUNE 30, 2001
TABLE OF CONTENTS Page
To the Stockholders and
Hipstyle.com, Inc. and subsidiary
We have audited the accompanying balance sheets of Hipstyle.com, Inc. (a
development stage company) as of June 30, 2001 and the related statement of
operations, change in stockholders' equity and cash flow for the year ended June
30, 2001. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The financial statements of Hipstyle.com, Inc. as
of June 30, 2000 were audited by other auditors who report dated September 5,
2000, expressed an unqualified opinion on those statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe the audit provides a reasonable
basis for our opinion.
In our opinion, the financial statement referred to above present fairly, in all
material respects, the financial position of Hipstyle.com, Inc. as of June 30,
2001 and the result of its operation and its cash flow for the year ended June
30, 2001 in conformity with accounting principles generally accepted in the
United States of America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 4 to the financial
statements, the Company is a development stage company. The realization of a
major portion of its assets is dependent upon its ability to meet its future
financing requirements, and the success of future operations. These factors
raise substantial doubt about the Company's ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from this uncertainty.
Salibello & Broder LLP
August 23, 2001
BALANCE SHEETS
3(i) Certificate of Incorporation, as amended (1)
3.2 Bylaws, as amended (1)
(1) Incorporated by reference to the Registrant's
Form 10-SB, filed on October 17, 2000
(SEC File No. (0-31779).
(b) Reports on Form 8-K
We did not file any reports on Form 8-K for the quarter ended June 30,
2001.
/s/Rebecca J. Farkas
----------------------------------
Rebecca J. Farkas
President, Treasurer and
Secretary
Dated: October 11, 2001
Name Title Date
/s/Rebecca J. Farkas President, Treasurer and October 11, 2001
-------------------- Secretary
Rebecca J. Farkas
/s/ Michelle Brock Vice President October 11, 2001
--------------------
Michelle Brock
HIPSTYLE.COM, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
HIPSTYLE.COM, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
Balance sheets 2
Statements of operations 3
Statements of changes in stockholders' equity 4
Statements of cash flows 5 - 6
Notes to financial statements 7 - 16
Board of Directors
(A Development Stage Company)
Miami, Florida
New York, NY
(A DEVELOPMENT STAGE COMPANY)
ASSETS JUNE 30, 2001 JUNE 30, 2000
--------------- --------------
CURRENT ASSETS:
Cash $ 275 $ 55
Prepaid expenses 0 0
--------------- --------------
Total current assets 275 55
WEBSITE - net of accumulated amortization $450 0 26,685
--------------- --------------
TOTAL ASSETS $ 275 $ 26,740
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable & accrued expenses $ 21,474 $ 70,649
Loans and advances payable - related party 500 2,488
Notes payable - related party 6,000 0
--------------- --------------
Total current liabilities 27,974 73,137
STOCKHOLDERS' EQUITY:
Common stock, par value $.0001 per share; 100,000,000 shares authorized
4,600,000 and 4,050,000 shares issued and
outstanding at June 30, 2001 and June 30, 2000, respectively 460 405
Additional paid-in capital 119,740 9,795
Deficit accumulated during the development stage (147,899) (56,597)
--------------- --------------
Total Stockholders' equity (27,699) (46,397)
--------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 275 $ 26,740
=============== ==============
STATEMENTS OF OPERATIONS
FOR THE PERIOD
YEAR ENDED JUNE 22, 1999
JUNE 30, (DATE OF INCEPTION) TO
--------
2001 2000 JUNE 20, 2001
---- ---- -------------
DEVELOPMENT STAGE REVENUES $0 $0 $0
DEVELOPMENT STAGE EXPENSES:
Amortization 1,357 450 1,807
Accounting 12,503 13,000 25,503
Bank charges 150 145 295
Consulting fees 0 10,000 10,200
Dues & subscription 55 238 293
Licenses and taxes 748 925 1,673
Office expenses 24,000 0 24,000
On-line services 495 0 495
Legal fees 20,675 4,481 25,156
Postage 267 0 267
Printing 315 0 315
Website development fees 25,328 27,158 52,485
Transfer agent fee 2,321 0 2,321
Travel 2,987 0 2,988
TOTAL DEVELOPMENT STAGE EXPENSES 91,201 56,397 147,798
LOSS FROM OPERATIONS (91,201) (56,397) (147,798)
INTEREST EXPENSE (101) 0 (101)
NET LOSS $ (91,302) $ (56,397) $(147,899)
LOSS PER COMMON SHARE
Basic & diluted $ (0.02) $ (0.01)
Weighted-average common shares outstanding 4,564,836 4,004,110
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STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN- DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
------ ------ ------- ----- -----
Balance, June 22, 1999 (date of inception) 0 $ 0 $ 0 $ 0 $ 0
Restricted common stock issued to related parties 4,000,000 400 (200) 0 200
for consulting fees
Deficit accumulated during the development stage for the
period June 22, 1999 (date of inception) through June 30, 1999 0 0 0 (200) (200)
--------- --------- --------- --------- ---------
Balance, June 30, 1999 4,000,000 400 (200) (200) 0
Restricted common stock issued to related party for 50,000 5 9,995 0 10,000
consulting services
Deficit accumulated during development stage
for the year ended June 30, 2000 0 0 0 (56,397) (56,397)
--------- --------- --------- --------- ---------
Balance, June 30, 2000 4,050,000 405 9,795 (56,597) (46,397)
Common stock issued to third parties in private offering 550,000 55 109,945 0 110,000
Deficit accumulated during the development stage
for the year ended June 30, 2001 0 0 0 (91,302) (91,302)
--------- --------- --------- --------- ---------
Balance, June 30, 2001 4,600,000 $ 460 $ 119,740 $(147,899) $ (27,699)
========= ========= ========= ========= =========
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STATEMENT OF CASH FLOWS
YEAR ENDED FOR THE PERIOD
JUNE 30, JUNE 22, 1999
(DATE OF INCEPTION) TO
2001 2000 JUNE 30, 2001
----------------- ---------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITES:
Net loss (91,302) (56,397) (147,899)
Adjustments to reconcile net loss to net cash used by operations:
Amortization 1,357 450 1,807
Write off of website 25,328 0 25,328
Stock based expense 0 10,000 10,200
Changes in assets and liabilities:
Increase (Decrease) in accounts payable
and accrued expenses (51,663) 70,649 18,986
Increase (Decrease) in loans and advances -
related party 500 2,488 2,988
----------------- ---------------- ----------------
Net cash used by operating activities (115,780) 27,190 (88,590)
CASH FLOWS FROM INVESTING ACTIVITES:
Purchase of website 0 (27,135) (27,135)
----------------- ---------------- ----------------
Net cash used by investing activities 0 (27,135) (27,135)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of common stock 110,000 0 110,000
Notes payable - related party 6,000 0 6,000
----------------- ---------------- ----------------
Net cash provided by financing activities 116,000 0 116,000
INCREASE (DECREASE) IN CASH $ 220 $ 55 $ 275
================= ================ ================
CASH, BEGINNING OF PERIOD $ 55 $ 0 $ 0
================= ================ ================
CASH, END OF PERIOD $ 275 $ 55 $ 275
================= ================ ================
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During the years ended June 30, 2001 and 2000, and for the cumulative periods June 22, 1999 (date of inception) through June 30, 2001, the Company did not pay any interest or taxes.
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVIITES
The Company entered into the following non-cash transactions:
On June 22, 1999 (date of inception) the Company issued 4,000,000 post-split (see note 8) restricted shares of common stock in consideration for consulting services provided by Intelilabs.com, Inc. formerly known as Quentin Road Productions, Inc., the founder of the Company (see note 1). This transaction was valued at $200.
On May 30, 2000 the Company issued 50,000 restricted shares of the Company's common stock in exchange for consulting services to the Vice President of the Company. This transaction was valued at $10,000 (see note 8).
On September 30, 2000 the Company decided to write off the capitalized portion of the website (See note 5). The assets' net value at the time of impairment was $25,328.
1. ORGANIZATION
Hipstyle.com, Inc. ("the Company") was incorporated on June 22, 1999 under
the laws of the State of Florida and was licensed to do business in the
state of New York. The Company is in the process of designing a website
dedicated to bringing together designers of high fashion and beauty
products with a targeted client base. The Company's goal is to provide
links to established e-commerce and catalog retail sites featuring designer
apparel and accessories, as well as fashion related services and content to
its viewers.
The Company was a wholly owned subsidiary of Intellilabs.com, Inc. ("Intellilabs"), formerly known as Quentin Road productions, Inc., a publicly traded company listed on the OTC Electronic Bulletin Board (OTCBB:QRPI) from inception until March 1, 2000. It was spun-off by Intellilabs on March 1, 2000. Upon such spin-off, shareholders of Intellilabs received 1.31 shares of the Company for each share of Intellilabs owned as of March 1, 2000. As a result of the spin-off, Atlas Equity Group, Inc., a related party, beneficial owner of which is Michael D. Farkas, became a majority shareholder in the company owning approximately 57% of the outstanding shares. Its principal office is located at 1221 Brickell Avenue, Suite 900, Miami, FL 33131.
On May 24, 2000, the Company formed Hipstyle.com, Inc. (Hipstyle Delaware)
under the laws of the state of Delaware. Hipstyle Delaware did not have any
significant activity as of June 30, 2001.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Statement of Financial Accounting Standards ("SFAS") No. 94, "Consolidation
of All Majority Owned Subsidiaries," encourages the use of consolidated
financial statements between a parent company and its subsidiaries unless:
a) Control is likely to be temporary, b) Control does not rest with the
majority owner(s), or c) Minority stockholders have certain approval or
veto rights that allow
them to exercise significant control over major management decisions
in the ordinary course of business.
NOTES TO FINANCIAL STATEMENTS
The management of Atlas Equity Group, Inc., a related party, in which
Michael D. Farkas is a beneficial owner, believes that its control is
temporary. Therefore, management believes that separate financial
statements are appropriate and properly reflect the Company's current
operating results.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities as of the date of the
financial statements. Accordingly, actual results could differ from those
estimates.
For purposes of reporting cash flows, the company considers all highly
liquid investments purchased with an original maturity of three months or
less to be cash equivalents.
Website costs have been capitalized pursuant to EITF 00-2. The website was
being amortized on the straight-line basis over a period of 60 months. The
planning and maintenance costs associated with the website were expensed as
incurred.
The Company reviews assets for impairment whenever events or changes in
circumstances indicate the carrying value of the asset may not be
recoverable. A determination of impairment, if any, is made based on
estimates of undiscounted future cash flows. On September 30, 2000 the
Company decided to impair their Website because undiscounted future cash
flows are uncertain at this time. The assets net value was $25,328 at the
time of impairment (see note 4).
NOTES TO FINANCIAL STATEMENTS
The Company utilizes Statement of Financial Standards ("SFAS") No. 109,
"Accounting for Income Taxes", which requires the recognition of deferred
tax assets and liabilities for the expected future tax consequences of
events that have been included in financial statements or tax returns.
Under this method, deferred income taxes are recognized for the tax
consequences in future years of differences between the tax basis of assets
and liabilities and their financial reporting amounts at each period end
based on enacted tax laws and statutory tax rates applicable to the periods
in which the differences are expected to affect taxable income. Valuation
allowances are established when necessary to reduce deferred tax assets to
the amount expected to be realized. The accompanying financial statements
have no provisions for deferred tax assets or liabilities because the
deferred tax allowance offsets deferred tax assets in their entirety.
Stock-based compensation is recognized using the intrinsic value method
prescribed in Accounting Principles Board ("APB") Opinion No. 25,
Accounting for Stock Issued to Employees, and related interpretations.
Accordingly, compensation expense for stock options is measured as the
excess, if any, of the fair value of the Company's stock at the date of the
grant over the amount an employee must pay to acquire the stock and is
amortized over the vesting period. The Company has adopted the disclosure
provisions of SFAS No. 123, Accounting for Stock-Based Compensation, which
requires the Company to disclose the pro forma effects on earnings and
earnings per share as if SFAS No. 123 had been adopted. This adoption has
no effect on the Company.
The Company has adopted SFAS No. 128 "Earnings Per Share". Basic loss per
share is computed by dividing the loss available to common shareholders by
the weighted-average number of common shares outstanding. Diluted loss per
share is computed in a manner similar to the basic loss per share, except
that the weighted-average number of shares outstanding is increased to
include all common shares, including those with the potential to be issued
by virtue of warrants, options, convertible debt and other such convertible
instruments. Diluted earnings per share contemplates a complete conversion
to common shares of all convertible instruments only if they are dilutive
in nature with regards to earnings per share. Since the Company has
incurred losses for all periods, and since there are no convertible
instruments, basic loss per share and diluted loss per share are the same.
NOTES TO FINANCIAL STATEMENTS
SFAS No. 107 "Disclosures about Fair Value of Financial Instruments"
requires the disclosure of the fair value of financial instruments. The
Company's management, using available market information and other
valuation methods, has determined the estimated fair value amounts.
However, considerable judgment is required to interpret market data in
developing estimates of fair value. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts the Company could
realize in a current market exchange.
The Company has adopted the provisions of SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information. SFAS No. 131 establishes
standards for companies to report information about operating segments in
annual financial statements. It also establishes standards for related
disclosures about products and services, geographic areas and major
customers. Since the Company did not have any revenues and or segments
during the years ended June 30, 2001 and June 30, 2000 the provisions of
SFAS No. 131 does not have a material effect on these financial statements.
3. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In March, 2000 the FASB issued Interpretation No. 44, "Accounting for
Certain Transactions Involving Stock Compensation, Interpretation of APB
Opinion No. 25." Interpretation No. 44 clarifies the application of
Accounting Principle Board Opinion No. 25 to certain issues including: (1)
the definition of employee for purposes of applying APB No. 25, (2) the
criteria for determining whether a plan qualifies as a non-compensatory
plan, (3) the accounting consequences of various modifications to the terms
of a previously fixed stock option or award, and (4) the accounting for an
exchange of stock compensation awards in business combinations. Management
adopted the application of the fair value method under FASB Statement 123
and, therefore, this Interpretation does not have a material effect on the
financial statements.
In June 2000, the Financial Accounting Standards Board issued SFAS No. 138,
"Accounting for Derivative Instruments and Hedging Activities - An
Amendment of FASB Statement No. 133." SFAS 138 amends the accounting and
reporting standards for certain derivatives and hedging activities such as
net settlement contracts, foreign currency transactions and inter company
derivatives. The Company does not currently hold derivative instruments or
engage in hedging activities. The requirements of SFAS 138 does not have a
material effect on our financial statements and related disclosures.
NOTES TO FINANCIAL STATEMENTS
4. DEVELOPMENT STAGE OPERATIONS AND GOING CONCERN MATTERS
The Company's initial activities have been devoted to developing a business
plan, negotiating contracts and raising capital for future operations and
administrative functions.
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. As shown in the financial
statements, development stage losses from June 22, 1999 (date of inception)
to June 30, 2001, were $147,899. The Company's cash flow requirements have
been met by contributions of capital and accounts payable.
The possibility exists that these sources of financing will not continue to
be available. If the company is unable to generate profits, or unable to
obtain additional funds for its working capital needs, it may have to cease
operations.
The Company intends to meet its long-term liquidity needs through available
cash as well as through additional financing from outside sources.
Management believes that the existing working capital in combination with
additional paid-in capital will be sufficient to fund operations at least
through July 1, 2001 (see note 8).
The financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern. The Company's
continuation as a going concern is dependent upon its ability to generate
sufficient cash flow to meet its obligations on a timely basis, to retain
additional paid-in capital and to ultimately attain profitability.
5. INTANGIBLE ASSET - WEBSITE
The website and related amortization consisted of the following as of June
30, 2001 and June 30, 2000:
NOTES TO FINANCIAL STATEMENTS
Amortization expense for the years ended June 30, 2001 and June 30, 2000
was $1,357 and $450, respectively. As of June 30, 2000 Management decided
to capitalize the Website based on the Company's belief that there will be
a future benefit derived from the Website. Also, the Company felt that
there will be an adequate future inflow of cash resulting from common stock
being issued to third parties in a private offering and future revenue
derived from operations of the Website. On September 30, 2000 the Company
decided to impair the Website due to the uncertainty of undiscounted future
cash flows and the realization that there will not be any future benefit
resulting from the development of the Website.
6. INCOME TAXES
No provisions for income taxes have been made because the Company has
sustained cumulative losses since the commencement of operations. For the
years ended June 30, 2001 and June 30, 2000, the Company had net operating
loss carryforwards ("NOL's") of $147,899 and $56,597, respectively, which
will be available to reduce future taxable income and expense in the year
ending December 31 and June 30, 2020 respectively.
In accordance with SFAS No. 109 the Company has computed the components or
deferred income taxes as follows.
At June 30, 2001 and June 30, 2000, a valuation allowance has been provided
and realization of the deferred tax benefit is not likely.
NOTES TO FINANCIAL STATEMENTS
The effective tax rate varies from the U.S. Federal statutory tax rate for
both years ended June 30, 2001 and June 30, 2000 respectively, principally
due to the following:
Accounts payable and accrued expenses at June 30, 2001 & June 30, 2000
respectively consisted of the following:
8. STOCKHOLDERS' EQUITY
The Company issued 4,000,000 post-split common shares upon incorporation to
Intellilabs in exchange for consulting services pertaining to the formation
of the Company valued at $200. This investor is deemed to be a founder and
affiliate of the Company. These shares have been adjusted to give
retroactive effect to a 2,000 to 1 stock split that occurred on January 15,
2000.
On January 4, 2000, the Board of Directors amended the Articles of
Incorporation. The number of authorized shares of common stock was
increased to 100,000,000. The par value was changed to $0.0001 per share of
common stock. The financial statements have been retroactively adjusted to
reflect the effect of this change.
On January 15, 2000, the Board of Directors authorized a 2,000 to 1 forward
split of the Company's common stock, par value $0.0001. Subsequent to the
split there were 4,000,000 issued and outstanding. This transaction has
been given retroactive effect as if it occurred on June 22, 1999 (Date of
inception)
NOTES TO FINANCIAL STATEMENTS
On March 1, 2000, the Company entered into an agreement and plan of distribution ("spin-off") with Intellilabs. Upon spin-off, the shareholders of Intellilabs received 1.31 shares of the Company's common stock for each share of Intellilabs owned as of March 1, 2000, totaling 4,000,000 common shares. As a result of this spin-off and share distribution Atlas Equity Group, Inc., a related party, in which Michael D. Farkas is a beneficial owner, received 2,620,000 shares, representing approximately 57% of the Company's outstanding common stock and Rebecca J. Farkas (f/k/a Brock) received 655,000 shares representing approximately 16% of the Company's common stock.
On May 30, 2000, the Board of Directors authorized the issuance of 50,000
restricted shares of the Company's common stock in exchange for consulting
services rendered by the Vice President. These shares were valued at $0.20
per share due to their restrictive nature and are subject to Rule 144 of
the SEC Act of 1933 as amended. This transaction was valued at $10,000.
In June 2000, the Company entered into a private offering of securities
pursuant to Regulation D, Rule 504, promulgated under the Securities Act of
1933 as amended. Common shares were offered to non-accredited and
unaffiliated investors for cash consideration of $0.20 per share. For the
year ended June 30, 2001, 550,000 unrestricted common shares were issued to
22 non-accredited and unaffiliated investors for cash consideration
totaling $110,000.
The proceeds from the sale of these securities were received in July and
August 2000 and have been recorded in the statement of changes in
stockholders' equity (deficit).
9. RELATED PARTY TRANSACTIONS
The Company issued 4,000,000 post-split common shares upon incorporation to
Intellilabs, the parent company, in exchange for consulting services valued
at $200. These shares were subsequently distributed to the shareholders of
Intellilabs. Pursuant to an agreement and plan of distribution.
On May 30, 2000 the Company issued 50,000 restricted shares of the
Company's common stock in exchange for consulting services to Michelle
Brock, a related party, and Vice President of the Company. This transaction
was valued at $10,000.
NOTES TO FINANCIAL STATEMENTS
Michael D. Farkas and Rebecca J. Farkas, his wife, an officer and director, and a related party loaned the Company $2,488 which covered the cost of the license fees to the State of New York and the reservation costs associated with reserving the desired internet address and other operating expenses. No interest has been charged on these loans and were paid on August 31, 2000. In June 2000, the Company engaged WealthHound, Inc., a subsidiary of WealthHound.com, Inc. which is a related party, in which Michael Farkas is a 70% owner, to develop and design its website. The Company paid a total of $54,292 to WealthHound, Inc. in connection with these services. In July 2000, the Company agreed to reimburse Atlas Equity Group, Inc., a related party, beneficial owner of which is Michael D. Farkas, $2,000 per month (on a month-to-month basis) for operating and administrative services. At June 30, 2001, $6,000 of these reimbursable operating and administrative expenses are included in accounts payable and accrued expenses. In August 2000, the Company engaged OSRS Communications a subsidiary of WealthHound.com, Inc., a related party, beneficial owner which is Michael Farkas to provide web hosting services for $45 per month.
HIPSTYLE.COM, INC
(A DEVELOPMENT STAGE COMPANY)
HIPSTYLE.COM, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
HIPSTYLE.COM, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
HIPSTYLE.COM, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
(A DEVELOPMENT STAGE COMPANY)
June 30, 2001 June 30, 2000
Website $ 27,135 $ 27,135
Less: accumulated amortization (1,807) (450)
25,328 0
Impairment (25,328) 0
Website $ - $ 26,685
June 30, 2001 June 30, 2000
Deferred tax assets $ 58,420 $ 22,356
Valuation allowance (58,420) (22,356)
Deferred tax asset, net $ - $ -
(A DEVELOPMENT STAGE COMPANY)
U.S. statutory tax rate 34%
State and local taxes 5.6
Valuation (39.5)
Effective rate - %
7. ACCOUNTS PAYABLE & ACCRUED EXPENSES
June 30, June 30,
2001 2000
Accounts payable $ 16,798 $ 54,697
Accrued interest 101 0
Accrued expenses 4,575 15,952
$ 21,474 $ 70,649
HIPSTYLE.COM, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
HIPSTYLE.COM, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)