-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LghZH3mIdZffo462gJqwasyAHNzPJyB5X+KHuedt/SO0Hf5ygy0YvtT6xtD+cMA+ 5tRsQOFT5lKoD4vsQ8+hpw== 0001213900-04-000378.txt : 20040728 0001213900-04-000378.hdr.sgml : 20040728 20040728163102 ACCESSION NUMBER: 0001213900-04-000378 CONFORMED SUBMISSION TYPE: SB-2 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20040728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIVERSAL FLIRTS CORP. CENTRAL INDEX KEY: 0001297024 IRS NUMBER: 201198142 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SB-2 SEC ACT: 1933 Act SEC FILE NUMBER: 333-117718 FILM NUMBER: 04936407 BUSINESS ADDRESS: STREET 1: 142 MINEOLA AVENUE STREET 2: SUITE 2D CITY: ROSLYN HEIGHTS STATE: NY ZIP: 11577 BUSINESS PHONE: (516) 359-5619 MAIL ADDRESS: STREET 1: 142 MINEOLA AVENUE STREET 2: SUITE 2D CITY: ROSLYN HEIGHTS STATE: NY ZIP: 11577 SB-2 1 fsb2_universalflirts.txt REGISTRATION STATEMENT SECURITIES AND EXCHANGE COMMISSION ================================== FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ================================== UNIVERSAL FLIRTS, CORP. (Exact Name of Small Business Issuer in its Charter) DELAWARE 20-1198142 (State of Incorporation) (Primary Standard (IRS Employer ID No.) Classification Code) 142 Mineola Avenue, Suite 2-D Roslyn Heights, New York 11577 (516) 359-5619 (Address and Telephone Number of Registrant's Principal Executive Offices and Principal Place of Business) Darrell Lerner 142 Mineola Avenue, Suite 2-D Roslyn Heights, New York 11577 (516) 359-5619 (Name, Address and Telephone Number of Agent for Service) Copies of communications to: GREGG E. JACLIN, ESQ. ANSLOW & JACLIN, LLP 195 Route 9 South, Suite 204 Manalapan, NJ 07726 TELEPHONE NO.: (732) 409-1212 FACSIMILE NO.: (732) 577-1188 Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act registration Statement number of the earlier effective registration statement for the same offering. |_| If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.|_| If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.|_| If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. |_| CALCULATION OF REGISTRATION FEE
Amount to be Proposed Maximum Proposed Maximum Registered Aggregate Aggregate Amount of Title of Each Class Of Offering Price Offering Price Registration fee Securities to be Registered per share Common Stock, par value $0.001 1,939,000 $0.05 $ 96,950 $ 12.28
The offering price has been estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457(c). Our common stock is not traded and any national exchange and in accordance with Rule 457, the offering price was determined by the price shareholders were sold to our shareholders in a private placement memorandum. The price of $0.05 is a fixed price at which the selling security holders may sell their shares until our common stock is quoted on the OTC Bulletin Board at which time the shares may be sold at prevailing market prices or privately negotiated prices. PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED JULY 26, 2004 The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the securities act of 1933 or until the registration statement shall become effective on such date as the commission, acting pursuant to said section 8(a), may determine. UNIVERSAL FLIRTS, CORP. 1,939,000 SHARES COMMON STOCK The selling shareholders named in this prospectus are offering all of the shares of common stock offered through this prospectus. Our common stock is presently not traded on any market or securities exchange. The 1,939,000 shares of our common stock can be sold by selling security holders at a fixed price of $.05 per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders. The Purchase Of The Securities Offered Through This Prospectus Involves A High Degree Of Risk. You Should Carefully Consider The Factors Described Under The Heading "Risk Factors" Beginning On Page 4. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. The information in this prospectus is not complete and may be changed. The shareholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. The Date Of This Prospectus Is: July 26, 2004 TABLE OF CONTENTS PAGE Summary Financial Data Schedule 1 Risk Factors 2 Use of Proceeds 5 Determination of Offering Price 6 Dilution 6 Selling Shareholders 7 Plan of Distribution 8 Legal Proceedings 9 Directors, Executive Officers, Promoters and Control Persons 9 Security Ownership of Certain Beneficial Owners and Management 9 Description of Securities Interests of Named Experts and Counsel 10 Disclosure of Commission Position of Indemnification for Securities Act Liabilities 12 Organization Within Last Five Years 12 Description of Business 12 Plan of Operation 15 Description of Property 18 Certain Relationships and Related Transactions 19 Market for Common Equity and Related Stockholder Matters 19 Executive Compensation 20 Available Information 20 Index to Financial Statements F ================================================================================ Until cleared, all dealers that effect transactions in these securities whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer's obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. Dealers should deliver the prospectus for 90 days after the first date upon which the security was offered to the public. i ABOUT OUR COMPANY We were incorporated under the laws of the State of Delaware on May 25, 2004. We commenced operations for the purposes of evaluating, structuring, and completing a merger with or acquisition of, prospect consisting of private companies, partnerships, or sole proprietorships in the United States. On May 27, 2004, we acquired all of the shares of Universal Flirts, Inc., a New York corporation, from Darrell Lerner, the sole shareholder of Universal Flirts, Inc. in consideration for the issuance of 8,500,000 shares of our common stock to the Universal Flirts, Inc. shareholder pursuant to a stock purchase agreement and share Exchange between Universal Flirts, Inc. and us. Pursuant to the stock purchase Agreement and share exchange, Universal Flirts, Inc. became our wholly owned subsidiary. Until this merger our activities had been limited to actions related to our organization and we conducted virtually no business operations. Now, through our subsidiary, we own and operate an online dating service. Our subsidiary, Universal Flirts, Inc. was incorporated on August 22, 2003, and launched their first website, www.Americanflirts.com, in late 2003. American Flirts is an online dating service dedicated towards helping American Singles find love and romance. We presently offer complete access to all of the site's features for free. Although we cater towards American singles, singles from all over the world are welcome to use our service. Singles can register for free and gain access to all features offered by American Flirts including personal ads, instant messaging, advanced search features, hot lists, cupid report, instant flirts, public or private photos (for members you specify can view them) and e-mail. A new and unique American Flirts feature is the "hotties" section, which lists the most popular singles by state. The online dating industry is one of the few sectors of the Internet that consistently produces profitable companies. The industry continues to grow at an accelerating rate while being highly profitable as the medium becomes more and more accepted by society as a tool for finding a mate. In the fall of 2002, online dating passed Financial Content to become the leading paid content category on the internet and the industry has continued to grow since then. In addition to AmericanFlirts.com, Universal Flirts has also secured the following domain names for potential expansion: o UniversalFlirts.Com - General site aggregating the standard members from partner sites. o UniversityFlirts.Com - Geared towards college students, allowing users to search by specific colleges in addition to standard search tools. o CasualFlirts.com - "Edgier" site catering to a more "adults only" audience. o DiscreetFlirts.com Ultimately, we plan to offer a number of niche sites catering to specific audiences, while aggregating all of these sites under the overall "flirts" banner. Terms of the Offering The selling shareholders named in this prospectus are offering all of the shares of common stock offered through this prospectus. The selling stockholders are selling shares of common stock covered by this prospectus for their own account. We will not receive any of the proceeds from the resale of these shares. The offering price of $.05 was determined by the price shareholders were sold to our shareholders in a private placement memorandum and is a fixed price at which the selling security holders may sell their shares until our common stock is quoted on the OTC Bulletin Board at which time the shares may be sold at prevailing market prices or privately negotiated prices. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders. Summary Financial Data The following summary financial data should be read in conjunction with "Management's Discussion and Analysis or Plan of Operation" and the Financial Statements and Notes thereto, included elsewhere in this prospectus. The following summary financial data should be read in conjunction with "Management's Discussion and Analysis or Plan of Operation" and the Financial Statements and Notes thereto, included elsewhere in this prospectus. The statement of operations and balance sheet data from inception (May 25, 2004) through June 30, 2004 are derived from our audited financial statements. 1 From Inception- May 25, 2004 through June 30, 2004 STATEMENT OF OPERATIONS Revenues 0 Net Income (10,451) Total Operating Expenses 10,451 Accumulated Deficit (10,451) As of June 30, 2004 BALANCE SHEET DATA Cash 44,799 Total Assets 53,299 Total Liabilities 750 Stockholders' Equity (Deficiency) 52,817 WHERE YOU CAN FIND US Our corporate offices are located at 142 Mineola Avenue, Suite 2-D, Roslyn Heights, New York 11577. Our telephone number is (516) 359-5619. We have an Internet website is located at www.AmericanFlirts.com. RISK FACTORS An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. Please note that throughout this prospectus, the words "we", "our" or "us" refer to the Company and not to the selling stockholders. WE HAVE A LIMITED OPERATING HISTORY THAT YOU CAN USE TO EVALUATE US, AND THE LIKELIHOOD OF OUR SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES, DIFFICULTIES, COMPLICATIONS AND DELAYS FREQUENTLY ENCOUNTERED BY A SMALL DEVELOPING COMPANY. We were incorporated in Delaware in 2004. We have no significant assets or financial resources. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company starting a new business enterprise and the highly competitive environment in which we will operate. To address these risks, we must, among other things, respond to competitive developments; continue to attract, retain and motivate qualified persons, research and develop new technology; and commercialize services incorporating such technologies. There can be no assurance we will be successful in addressing these risks or any other risks. We have not been in business long enough to make a reasonable judgment as to our future performance. There can be no assurance that we will be able to successfully implement our business plan, generate sufficient revenue to meet our expenses, operate profitably or be commercially successful. Since we have a limited operating history of marketing our services to the public over the Internet, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenues to meet our expenses and support our anticipated activities. Even if we do achieve profitability, we may be unable to sustain or increase profitability on a quarterly or annual basis in the future. We expect to have quarter to quarter fluctuations in revenues, expenses, losses and cash flow, some of which could be significant. Results of operations will depend upon numerous factors, some of which are beyond our control, including: 2 o regulatory actions; o market acceptance of our products and services; o new product and service introductions; and o competition. As we have such a limited history of operation, you will be unable to assess our future operating performance or our future financial results or condition by comparing these criteria against our past or present equivalents. WE WILL REQUIRE ADDITIONAL FUNDS TO ACHIEVE OUR CURRENT BUSINESS STRATEGY AND OUR INABILITY TO OBTAIN ADDITIONAL FINANCING COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR ABILITY TO MAINTAIN BUSINESS OPERATIONS. Even with the proceeds from this offering we will need to raise additional funds through public or private debt or sale of equity to achieve our current business strategy. Such financing may not be available when needed. Even if such financing is available, it may be on terms that are materially adverse to your interests with respect to dilution of book value, dividend preferences, liquidation preferences, or other terms. Our capital requirements to implement our business strategy will be significant. However, at this time, we can not determine the amount of additional funding necessary to implement such plan. We intend to assess such amount at the time we will implement the business plan. We anticipate requiring additional funds in order to fully implement our business plan to significantly expand our operations. No assurance can be given that such funds will be available or, if available, will be on commercially reasonable terms satisfactory to us. There can be no assurance that we will be able to obtain financing if and when it is needed on terms we deem acceptable. If we are unable to obtain financing on reasonable terms, we could be forced to delay, scale back or eliminate certain product and service development programs. In addition, such inability to obtain financing on reasonable terms could have a material adverse effect on our business, operating results, or financial condition to such extent that we are forced to restructure, file for bankruptcy, sell assets or cease operations, any of which could put your investment dollars at significant risk. Our Future Success Is Dependent, In Part, On the Performance And Continued Service Of Our Managers and Officers. We are presently dependent to a great extent upon the experience, abilities and continued services of our managers and officers. The loss of services of any of the management staff could have a material adverse effect on our business, financial condition or results of operation. OUR SUCCESS DEPENDS UPON THE EFFORTS OF DARRELL LERNER AND OUR FAILURE TO RETAIN HIM AND TO ATTRACT KEY PERSONNEL WILL NEGATIVELY AFFECT OUR BUSINESS. Our business is greatly dependent on the efforts of Darrell Lerner, our Chairman and President, and on our ability to attract key personnel. Also, our success will depend in large part upon our ability to attract, develop, motivate and retain highly skilled technical employees. Competition for qualified personnel is intense and we may not be able to hire or retain qualified personnel. As an Internet Company, We Are in an Intensely Competitive Industry and Any Failure to Timely Implement Our Business Plan Could Diminish or Suspend our Development and Possibly Cease Our Operations. The internet industry is highly competitive, and has few barriers to entry. We can provide no assurance that additional competitors will not enter markets that we intend to serve. If we are unable to efficiently and effectively institute our business plan as a result of intense competition or a saturated market, we may not be able to continue the development and enhancement of our web site and become profitable. If We Are Unable to Establish a Large User Base We May Have Difficulty Attracting Advertisers to Our Web Site, Which Will Hinder Our Ability to Generate Advertising Revenues, Which May Affect Our Ability to Expand Our Business Operations and OUR USER BASE. An integral part of our business plan and marketing strategy requires us to establish a large user base. Once we are able to establish a large user base and a demand for our online services, we will be able to attract advertisers to our web site and possibly begin to generate advertising revenues. If for any reason our web site is ineffective at attracting consumers or if we are unable to continue to develop and update our web site to keep consumers satisfied with our service, our user base may decrease and our ability to generate advertising revenues may decline. 3 Our Market Is Characterized by Rapid Technological Change, and If We Fail to Develop and Market New Technologies Rapidly, We May Not Become Profitable in the Future. The internet and the online commerce industry are characterized by rapid technological change that could render our existing web site obsolete. The development of our web site entails significant technical and business risks. We can give no assurance that we will successfully use new technologies effectively or adapt our web site to customer requirements or needs. If our management is unable, for technical, legal, financial, or other reasons, to adapt in a timely manner in response to changing market conditions or customer requirements, we may never become profitable which may result in the loss of all or part of your investment. WE OPERATE IN AN INDUSTRY THAT MAY BECOME HEAVILY REGULATED AND COMPLIANCE FAILURES COULD ADVERSELY AFFECT OUR BUSINESS. Due to the increasing popularity of the Internet, it is possible that new laws and regulations may be adopted dealing with such issues as user privacy, content and pricing. Such laws and regulations might increase our cost of using, or limit our ability to use, the Internet, which in turn could have a material adverse effect on our business, financial condition and operating results. Government regulation and legal uncertainties could add additional costs to doing business on the Internet. There are currently few laws or regulations that specifically regulate communications or commerce on the Internet. However, laws and regulations may be adopted in the future that address issues such as user privacy, pricing and the characteristics and quality of products and services. For example, the Telecommunications Act of 1996 sought to prohibit transmitting various types of information and content over the Internet. Several telecommunications companies have petitioned the Federal Communications Commission to regulate Internet service providers and on-line service providers in a manner similar to long distance telephone carriers and to impose access fees on those companies. This could increase the cost of transmitting data over the Internet. Moreover, it may take years to determine the extent to which existing laws relating to issues such as intellectual property ownership, libel and personal privacy are applicable to the Internet. Any new laws or regulations relating to the Internet or any new interpretations of existing laws could adversely affect our business. The Shares Sold In This Offering Have Not Been Registered Under The Securities Act, And Therefore The Shareholders Must Be Prepared To Hold Such Shares For An Indefinite Period Of Time. Our common shares offered are "restricted securities" as defined under the Securities Act. The resale of such securities may not be made without registration under the Securities Act and state securities laws or the existence of an exemption from such registration requirements. THE OFFERING PRICE OF THE SHARES WAS ARBITRARILY DETERMINED AND THEREFORE SHOULD NOT BE USED AS AN INDICATE OF THE FUTURE MARKET PRICE OF THE SECURITIES. Since our shares are not listed or quoted on any exchange or quotation system, the offering price of $.05 for the shares of common stock was arbitrarily determined. The facts considered in determining the offering price were our financial condition and prospects, our limited operating history and the general condition of the securities market. The offering price is not an indication of and is not based upon the actual value of Universal Flirts, Corp. The offering price bears no relationship to the book value, assets or earnings of our company or any other recognized criteria of value. The offering price should not be regarded as an indicator of the future market price of the securities. WE DO NOT EXPECT TO PAY DIVIDENDS AND INVESTORS SHOULD NOT BUY OUR COMMON STOCK EXPECTING TO RECEIVE DIVIDENDS. We have not paid any dividends on our common stock in the past, and do not anticipate that we will declare or pay any dividends in the foreseeable future. Consequently, you will only realize an economic gain on your investment in our common stock if the price appreciates. You should not purchase our common stock expecting to receive cash dividends. There Is No Assurance of a Public Market and that the Common Stock Will Ever Trade on a Recognized Exchange. 4 There is no established public trading market for our securities. We currently intend to seek a market maker to apply for a listing on the OTC Electronic Bulletin Board in the United States. Our shares are not and have not been listed or quoted on any exchange or quotation system. There can be no assurance that a market maker will agree to file the necessary documents with the National Association of Securities Dealers, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor may be unable to liquidate its investment. USE OF PROCEEDS The selling stockholders are selling shares of common stock covered by this prospectus for their own account. We will not receive any of the proceeds from the resale of these shares. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders. DETERMINATION OF OFFERING PRICE Since our shares are not listed or quoted on any exchange or quotation system, the offering price of the shares of common stock was arbitrarily determined. The offering price was determined by the price shares were sold to our shareholders in our Regulation D Rule 506 private placement in June 2004. The offering price of the shares of our common stock has been determined arbitrarily by us and does not necessarily bear any relationship to our book value, assets, past operating results, financial condition or any other established criteria of value. Although our common stock is not listed on a public exchange, we will be filing to obtain a listing on the Over The Counter Bulletin Board (OTCBB) concurrently with the filing of this prospectus. However, there is no assurance that our common stock, once it becomes listed on a public exchange, will trade at market prices in excess of the initial public offering price as prices for the common stock in any public market which may develop will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for the common stock, investor perception of us and general economic and market conditions. DILUTION The common stock to be sold by the selling shareholders is common stock that is currently issued and outstanding. Accordingly, there will be no dilution to our existing shareholders. PENNY STOCK CONSIDERATIONS Broker-dealer practices in connection with transactions in "penny stocks" are regulated by certain penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. 5 SELLING SHAREHOLDERS The shares being offered for resale by the selling stockholders consist of the 1,939,000 shares of our common stock held by 46 shareholders. Such shareholders include the holders of the share sold in our Regulation D Rule 506 offering in June 2004. Such shares were issued in reliance on an exemption from registration under Section 4(2) of the Securities Act of 1933. In addition, included in that amount are 5,000 shares received by David Liss, 8,000 shares received by Mark Belletiere, and 5,000 shares received by Judy Alpert pursuant to consulting agreements and issued pursuant to an exemption from registration at Section 4(2) of the Securities Act of 1933, and 250,000 shares issued to Anslow & Jaclin, LLP for legal services rendered to us and issued pursuant to an exemption from registration at Section 4(2) of the Securities Act of 1933. We are also registering a total of 200,000 shares of our common stock held by Darrell Lerner, our sole officer and director. The following table sets forth the name of the selling stockholders, the number of shares of common stock beneficially owned by each of the selling stockholders as of July 26, 2004 and the number of shares of common stock being offered by the selling stockholders. The shares being offered hereby are being registered to permit public secondary trading, and the selling stockholders may offer all or part of the shares for resale from time to time. However, the selling stockholders are under no obligation to sell all or any portion of such shares nor are the selling stockholders obligated to sell any shares immediately upon effectiveness of this prospectus. All information with respect to share ownership has been furnished by the selling stockholders.
Shares of Name of selling stockholder Shares of common common Shares of common Percent of Stock owned prior stock to be stock owned common stock to offering sold after offering owned after offering - -------------------------------------------------------------------------------------------------------------- Judy Alpert (1) 5,000 5,000 0 0 AM&PM, LLC 5,000 5,000 0 0 Anslow & Jaclin, LLP (2) 250,000 250,000 0 0 Mark Belletiere (3) 8,000 8,000 0 0 Melvin Bernstein 10,000 10,000 0 0 Alison Bernstein 90,000 90,000 0 0 Alice Bolocan 20,000 20,000 0 0 David Bolocan 10,000 10,000 0 0 Angelo Cipriano 5,000 5,000 0 0 Rodney Cutler 20,000 20,000 0 0 Gregory Frantz 5,000 5,000 0 0 David Gavrin 50,000 50,000 0 0 Drew Goldberg 60,000 60,000 0 0 Alan Golomb 10,000 10,000 0 0 Emily Hamamoto 20,000 20,000 0 0 Michael Hartman 40,000 40,000 0 0 Thelma Hartman 40,000 40,000 0 0 Robert Hartman 40,000 40,000 0 0 Danielle Hartman 40,000 40,000 0 0 Mary Hartman 40,000 40,000 0 0 Cynthia A. Indelicato 5,000 5,000 0 0 William & Shirley Lau 10,000 10,000 0 0 Darrell Lerner 9,000,000 200,000 8,800,000 81.94% David Liss (4) 5,000 5,000 0 0 Andrew Meyers 5,000 5,000 0 0 Philip D. Mazzella 8,000 8,000 0 0 Martin Miller 90,000 90,000 0 0 Dolores Miller 100,000 100,000 0 0 Dolores Miller 5,000 5,000 0 0 Juan C. Morales 5,000 5,000 0 0 a/c/f Dillion Engel Karen Pasteressa 5,000 5,000 0 0 a/c/f Samantha Pasteressa Roberta & Robert Riesenberg 100,000 100,000 0 0 Sheldon Shalom 10,000 10,000 0 0 Victor Shalom 5,000 5,000 0 0 Cecilia Soh 10,000 10,000 0 0 James Supple 180,000 180,000 0 0 Mary Supple 20,000 20,000 0 0 Beth Sussman 100,000 100,000 0 0 Meg Sussman 100,000 100,000 0 0 Amy Sussman 100,000 100,000 0 0 Billy Tsim, Tak Piu 10,000 10,000 0 0 Eric Tjaden 8,000 8,000 0 0 James Tubbs 40,000 40,000 0 0 Richard V. Volpe 5,000 5,000 0 0 Jeffrey Wenzel 40,000 40,000 0 0 Richard J. Zapolski 5,000 5,000 0 0
6 (1) Judy Alpert received these shares in exchange for consulting services. She is an artist/art teacher who will help with art and design related matters on the website, brochures, advertisements etc. (2) Anslow & Jaclin, LLP received these shares in exchange for legal fees. (3) Mark Belletiere received these shares in exchange for consulting services. He is a CPA and will assist internal financial record keeping and preparing financial projections. (4) David Liss received these shares in exchange for consulting services. He is an NYC bar/lounge manager and formerly owned his own restaurant. He will assist with planning live parties and events. To our knowledge, except for Darrell Lerner, our sole officer and director, none of the selling shareholders or their beneficial owners: - has had a material relationship with us other than as a shareholder at any time within the past three years; or - has ever been one of our officers or directors or an officer or director of our predecessors or affiliates - are broker-dealers or affiliated with broker-dealers. PLAN OF DISTRIBUTION The selling security holders may sell some or all of their shares at a fixed price of $.05 per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. Sales by selling security holder must be made at the fixed price of $.05 until a market develops for the stock. Once a market has been developed for our common stock, the shares may be sold or distributed from time to time by the selling stockholders directly to one or more purchasers or through brokers or dealers who act solely as agents, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices, which may be changed. The distribution of the shares may be effected in one or more of the following methods: o ordinary brokers transactions, which may include long or short sales, o transactions involving cross or block trades on any securities or market where our common stock is trading, o through direct sales to purchasers or sales effected through agents, o through transactions in options, swaps or other derivatives (whether exchange listed or otherwise), or o any combination of the foregoing. In addition, the selling stockholders may enter into hedging transactions with broker-dealers who may engage in short sales, if short sales were permitted, of shares in the course of hedging the positions they assume with the selling stockholders. The selling stockholders may also enter into option or other transactions with broker-dealers that require the delivery by such broker-dealers of the shares, which shares may be resold thereafter pursuant to this prospectus. Brokers, dealers, or agents participating in the distribution of the shares may receive compensation in the form of discounts, concessions or commissions from the selling stockholders and/or the purchasers of shares for whom such broker-dealers may act as agent or to whom they may sell as principal, or both (which compensation as to a particular broker-dealer may be in excess of customary commissions). Neither the selling stockholders nor we can presently estimate the amount of such compensation. We know of no existing arrangements between the selling stockholders and any other stockholder, broker, dealer or agent relating to the sale or distribution of the shares. We do not anticipate that either our shareholders or we will engage an underwriter in the selling or distribution of our shares. We will not receive any proceeds from the sale of the shares of the selling security holders pursuant to this prospectus. We have agreed to bear the expenses of the registration of the shares, including legal and accounting fees, and such expenses are estimated to be approximately $10,000. 7 LEGAL PROCEEDINGS There are no legal proceedings pending or threatened against us. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS Our sole executive officer and director and his age as of July 26, 2004 is as follows: NAME AGE POSITION - ---- --- ------------------------------- Darrell Lerner 30 President, Chief Executive Officer, Chairman of the Board of Directors Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years. DARRELL LERNER is our founder and will serve as President and Chief Executive Officer as well as Board Chairman. Darrell has extensive experience with the start-up process as well as with all aspects of operating and maintaining a public company. Darrell was the President and Chief Executive Officer of Relocate411.com, Inc. from January 2000 to May 2004. For 3 years Darrell served as CEO of FantasySports Net, Inc. ("FSN"), an interactive fantasy sports site that he founded in 1998. FSN created and ran nationwide fantasy sports games for itself and for known partners including WFAN Sports Radio in NY and Daily Racing Form. The company had approximately 12 employees and endorsement deals with Hall of Fame athletes Johnny Bench, Bill Walton, John Davidson as well as Dr. Ruth Westheimer. Darrell has also been involved in various capacities with several other Internet start-ups and public companies. Darrell holds a law degree from Hofstra University and is a Cum Laude graduate of the same university with an undergraduate degree in Business Administration/Finance. Additionally, Darrell maintains a Series 7 license (General Securities Representative) and Series 66 license (Investment Advisory Representative), as well as various insurance licenses. Term of Office Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding common stock as of July 26, 2004, and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly.
Name and Address Amount and Nature Percent Title of Class of Beneficial Owner of Beneficial Owner of Class - -------------- ------------------- ------------------- -------- Common Stock Darrell Lerner 9,000,000 83.81% Common Stock All executive officers 9,000,000 83.81% and directors as a group
The percent of class is based on 10,739,000 shares of common stock issued and outstanding as of July 26, 2004. DESCRIPTION OF SECURITIES General Our authorized capital stock consists of 100,000,000 shares of common stock at a par value of $0.001 per share and 10,000,000 shares of preferred stock at a par value of $0.001 per share. Common Stock As of July 26, 2004, 10,739,000 shares of common stock are issued and outstanding and held by 46 shareholders. Holders of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. 8 Holders of common stock do not have cumulative voting rights. Therefore, holders of a majority of the shares of common stock voting for the election of directors can elect all of the directors. Holders of our common stock representing a majority of the voting power of our capital stock issued and outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Holders of common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. In the event of a liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock. Preferred Stock Our articles of incorporation also provide that we are authorized to issue up to 10,000,000 shares of preferred stock with a par value of $.001 per share. As of the date of this prospectus, there are no shares of preferred stock issued and outstanding. Our Board of Directors has the authority, without further action by the shareholders, to issue from time to time the preferred stock in one or more series for such consideration and with such relative rights, privileges, preferences and restrictions that the Board may determine. The preferences, powers, rights and restrictions of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions and purchase funds and other matters. The issuance of preferred stock could adversely affect the voting power or other rights of the holders of common stock. Dividends Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant. Warrants There are no outstanding warrants to purchase our securities. Options There are no options to purchase our securities outstanding. We may in the future establish an incentive stock option plan for our directors, employees and consultants. INTERESTS OF NAMED EXPERTS AND COUNSEL Except for Anslow & Jaclin, LLP, no expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee. Anslow & Jaclin, LLP owns a total of 250,000 shares of our common stock which is being registered as part of this registration statement. 9 The financial statements included in this prospectus and the registration statement have been audited by Gately & Associates, LLC, certified public accountants, to the extent and for the periods set forth in their report appearing elsewhere herein and in the registration statement, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting. DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES Our directors and officers are indemnified as provided by the Delaware Statutes and our Bylaws. We have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court's decision. ORGANIZATION WITHIN LAST FIVE YEARS We were incorporated on May 25, 2004 in the State of Delaware. Our wholly-owned subsidiary, Universal Flirts, Inc. was organized as a corporation in the State of New York on August 22, 2003. On May 27, 2004, we acquired all of the shares of Universal Flirts, Inc., a New York corporation, from Darrell Lerner, the sole shareholder of Universal Flirts, Inc. in consideration for the issuance of 8,500,000 shares of our common stock to the Universal Flirts, Inc. shareholders pursuant to a stock purchase agreement and share exchange between Universal Flirts, Inc. and us. Pursuant to the stock purchase agreement and share exchange, Universal Flirts, Inc. became our wholly owned subsidiary. The purpose for this merger with Universal Flirts, Inc. was to acquire an operating company which we believed has a successful business plan. DESCRIPTION OF BUSINESS General The online dating industry is one of the few sectors of the Internet that consistently produces profitable companies. The industry continues to grow at an accelerating rate while being highly profitable as the medium becomes more and more accepted by society as a tool for finding a mate. In the fall of 2002 online dating passed financial content to become the leading paid content category on the internet and the industry has continued to grow since then. We were incorporated under the laws of the State of Delaware on May 25, 2004. We commenced operations for the purposes of evaluating, structuring, and completing a merger with or acquisition of, prospect consisting of private companies, partnerships, or sole proprietorships in the United States. On May 27, 2004, we acquired all of the shares of Universal Flirts, Inc., a New York corporation, from Darrell Lerner, the sole shareholder of Universal Flirts, Inc. in consideration for the issuance of 8,500,000 shares of our common stock to the Universal Flirts, Inc. shareholder pursuant to a stock purchase agreement and share Exchange between Universal Flirts, Inc. and us. Pursuant to the stock purchase Agreement and share exchange, Universal Flirts, Inc. became our wholly owned subsidiary. Until this merger our activities had been limited to actions related to our organization and we conducted virtually no business operations. Now, through our subsidiary, we own and operate an online dating service. Our subsidiary, Universal Flirts, Inc. was incorporated on August 22, 2003, and launched their first website, www.Americanflirts.com, in late 2003. American Flirts is an online dating service dedicated towards helping all American Singles find love and romance and presently offers complete access to all of the site's features for free. Although we cater towards American singles, singles from all over the world are welcome to use our service. Singles can register for free and gain access to all features offered by American Flirts including personal ads, instant messaging, advanced search features, hotlists, cupid report, instant flirts, public or private photos (only for members you specify to view) and e-mail. A new and unique American Flirts feature is the "hotties" section, which lists the most popular singles by state. 10 On a very limited budget, and with no money spent on advertising, AmericanFlirts.com now has in excess of 1,900 members. The majority of our member base has been obtained from two sources: search engine results and links placed in online dating directories via link exchange programs. We have just completed a private placement where we have raised $ 73,550 to devote primarily to advertising, working capital and site enhancements, as well as professional fees, thereby giving us the opportunity to gain members at a faster rate, further differentiate and brand our product, and ultimately generate revenue through membership fees and advertising income. In addition the AmericanFlirts.com, we have also secured the following domain names for potential expansion: o UniversalFlirts.Com - General site aggregating the standard members from partner sites. o UniversityFlirts.Com - Geared towards college students, allowing users to search by specific colleges in addition to standard search tools. o CasualFlirts.com - "Edgier" site catering to a more "adults only" audience. o DiscreetFlirts.com Ultimately, we plan to offer a number of niche sites catering to specific audiences, while aggregating all of these sites under the overall "flirts" banner. In subsequent phases of operations, we anticipate generating revenue from the following sources: o Subscription fees from website members - a "pay" model o Advertising and sponsorship revenue o Implementing a "partnership" model whereby we build a custom look & feel online dating sites for partners with large member bases, integrate their subscribers into our database, and share revenues o Leveraging our member base by throwing parties and other offline events for singles in major cities Since inception, we have spent a total of $5,000 on research and development costs to develop our website. Marketing We expect to implement a comprehensive marketing plan in the fourth quarter of 2004, primarily in the areas of Keyword Advertising and Sponsored Links through Google, FindWhat, and other similar targeted keyword programs that employ a "cost-per-click" model. We will continue to devote resources to link exchange programs where we can create additional links for americanflirts.com in online dating and online personals directories throughout the web. Another area that we will continue to vigorously pursue as part of our marketing and branding program is search engine placement. We have gone to great lengths to optimize the search for priority search engine placement and are seeing our efforts paying off as we are now on the front page of several major search engine sites under the keyword "American singles." On MSN.com, americanflirts.com is presently in the sixth position on the front page of search results. By continuing to work to optimize the site, and by increasing the number of links to the site, we feel we can receive better and better search results and search engine saturation, which in turn directs more traffic to the website. Competition We believe that its primary competition will most likely be from other online dating services. Presently the market is very segmented with Match.Com widely considered the industry leader. Match.com's personals businesses claim more than 800,000 paying subscribers and more than 10 million members with profiles posted or who are active users. Other big players include Yahoo!, Date.Com, Matchmaker.Com, MatchNet plc. and Udate.com. Overall there are about 30-50 "known" sites in the industry. Achieving critical mass with respect to market share is critical for our business. Competitors who already have an established market share will, therefore, be in a better competitive position than us. We hope to offset any such competitive advantages by offering products and services which are superior in quality to and more appealing than those of our competitors, and by launching an effective marketing campaign. We also believe that the industry offers substantial room for growth as the internet becomes more and more of an acceptable tool for finding a mate. Employees We currently have one full-time employee. We also pay three consultants and a computer programmer for their work on an hourly basis. 11 MANAGEMENT DISCUSSION AND ANALYSIS Plan of Operations During the next twelve months, we expect to take the following steps in connection with the further development of our business and the implementation of our plan of operations: * Prepare and execute a marketing plan to increase our member base. We presently have over 1900 members and have spent no money on advertising to date. The majority of our member base has been obtained from two sources: search engine results and links placed in online dating directories via link exchange programs. We anticipate that within thirty to sixty days, a comprehensive marketing plan will be developed. We expect to spend approximately $5,000 on marketing in the fourth quarter of 2004, primarily in the areas of Keyword Advertising and Sponsored Links through Google, FindWhat, and other similar targeted keyword programs that employ a "cost-per-click" model. We will continue to devote resources to link exchange programs where we can create additional links for americanflirts.com in online dating and online personals directories throughout the web. Another area that we will continue to vigorously pursue as part of our marketing and branding program is search engine placement. We have gone to great lengths to optimize the search for priority search engine placement and are seeing our efforts paying off as we are now on the front page of several major search engine sites under the keyword "American singles." On MSN.com, americanflirts.com is presently in the sixth position on the front page of search results. By continuing to work to optimize the site, and by increasing the number of links to the site, we feel we can receive better and better search results and search engine saturation, which in turn directs more traffic to the website. * In ninety days we anticipate implementing a major upgrade to the Americanflirts.com website. We have already had some initial discussions with our primary programmer about enhancements that can be made to the website including an improved instant messenger feature. We believe these enhancements can be made for between $1,000 and $2,000. * In the fourth quarter of 2004 we expect to begin developing additional websites that will fall under the "Universal Flirts" banner. We presently own the following domain names: Americanflirts.com, Universalflirts.com, Universityflirts.com, Casualflirts.com, and Discreetflirts.com. While keeping the look and feel of Americanflirts.com, we hope to launch several other websites designed to cater to different niches of the dating world. We believe we can launch one to three additional websites within six to nine months for a cost of $5,000 to $10,000. We will focus on the sites related to the domain names that we presently own, as well as any other niche areas that we feel are underdeveloped in the online dating industry. * By early 2005 we hope to implement an affiliate partnership program whereby we will have the ability to create online dating sites for partners on a revenue- share basis. The sites would use our software, but be customized to reflect the look and feel of the partner company. We will seek to form partnerships with companies that have a large existing member base from which we can draw members. Costs and revenues associated with this program will be determined on a case-by- case basis. * By early 2005 we hope to be able to hire a programmer on a dedicated basis in order to execute our plans for additional websites and partnerships in a more expedient manner. We anticipate paying either an annual salary, or hourly fee to a dedicated programmer depending upon the workload required. * We hope to convert our website(s) to a subscription-based pay model in early to mid 2005, or at such time as our member base has grown to the point where it can support the implementation of a pay model. Americanflirts.com is already configured to accept credit cards and be a pay site, so such a conversion will only require a credit card processor. It is anticipated that member subscriptions will be the primary source of revenue generation for Universal Flirts in the future. 12 * In early 2005 we hope to be able to begin offering offline events and speed dating events. Such events would be local and likely begin in the New York City area. These events would generate revenue from an admission fee. The implementation of these events is dependent upon the growth of the member base as we will only begin hosting events at such a time as our member base is large enough to support a full turnout. We don't anticipate any material costs associated with hosting events as advertising will be done through the website and via emails to our members and we would seek facilities that are willing to operate on a revenue share arrangement with us thereby eliminating any upfront costs. DESCRIPTION OF PROPERTY Our executive offices are located at 142 Mineola Avenue, Suite 2-D, Roslyn Heights, New York 11577. This office space is subleased to us for $300 per month from Byron Lerner, the father of Darrell Lerner, our sole officer and director. We believe that this space is sufficient and adequate to operate our current business. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS We currently use space at 142 Mineola Avenue, Suite 2-D, Roslyn Heights, New York 11577. We sublease such space for $300 per month from Byron Lerner, the father of DarrellLerner, our sole officer and director. On May 27, 2004, we acquired all of the shares of Universal Flirts, Inc., a New York corporation, from Darrell Lerner, our sole officer and director, in consideration for the issuance of 8,500,000 shares of our common stock to Darrell Lerner, the sole Universal Flirts, Inc. shareholder pursuant to a stock purchase agreement and share exchange between Universal Flirts, Inc. and us. Pursuant to the stock purchase agreement and share exchange, Universal Flirts, Inc. became our wholly owned subsidiary. The purpose for this merger with Universal Flirts, Inc. was to acquire an operating company which we believed has a successful business plan. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS No Public Market for Common Stock There is presently no public market for our common stock. We anticipate applying for trading of our common stock on the over the counter bulletin board upon the effectiveness of the registration statement of which this prospectus forms a part. However, we can provide no assurance that our shares will be traded on the bulletin board or, if traded, that a public market will materialize. Holders of Our Common Stock As of the date of this registration statement, we had 46 registered shareholders. Rule 144 Shares As of July 26, 2004, there are no shares of our common stock which are currently available for resale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act. After May 27, 2005, 9,000,000 shares owned by Mr. Darrell Lerner will become available for resale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act. After June 2005, the 1,471,000 shares held by the shareholders who purchased their shares in the offering by us will become available for resale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act. After June 2005, the 250,000 shares held by Anslow & Jaclin, LLP and the will become available for resale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act. After June 2005, the 5,000 shares held by Judy Alpert, the 8,000 shares held by Mark Belletiere, and the 5,000 shares held by David Liss for consulting services will become available for resale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act. In general, under Rule 144 as currently in effect, a person who has beneficially owned shares of a company's common stock for at least one year is entitled to sell within any three month period a number of shares that does not exceed 1% of the number of shares of the company's common stock then outstanding which, in our case, would equal approximately 10,739,000 shares as of the date of this prospectus. Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about the company. Under Rule 144(k), a person who is not one of the company's affiliates at any time during the three months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. Stock Option Grants To date, we have not granted any stock options. Registration Rights We have not granted registration rights to the selling shareholders or to any other persons. 13 EXECUTIVE COMPENSATION Summary Compensation Table The table below summarizes all compensation awarded to, earned by, or paid to our executive officers by any person for all services rendered in all capacities to us from the date of our inception until July 26, 2004. ANNUAL COMPENSATION LONG TERM COMPENSATION
ANNUAL COMPENSATION LONG TERM COMPENSATION RESTRICTED OPTION OTHER ANNUAL STOCKS/PAYOUTS SARS LTIP ALL OTHER NAME TITLE YEAR SALARY BONUS COMPENSATION AWARDED ($) COMPENSATION COMPENSATION - ---- ----- ---- ------ ----- ------------ ------- --- ------------ ------------ Darrell Lerner President 2004 $18,000(1) 0 0 0 0 0 0 CEO and Chairman
(1) We currently pay our sole officer and director a monthly sum of $1,500 per month as salary and to cover various business related expenses. Stock Option Grants We have not granted any stock options to our executive officers since our incorporation. Employment Agreements We do not have an employment or consultant agreement with Mr. Darrell Lerner, our Chief Executive Officer, President, and Chairman of the Board of Directors. AVAILABLE INFORMATION We have filed a registration statement on Form SB-2 under the Securities Act of 1933 with the Securities and Exchange Commission with respect to the shares of our common stock offered through this prospectus. This prospectus is filed as a part of that registration statement and does not contain all of the information contained in the registration statement and exhibits. Statements made in the registration statement are summaries of the material terms of the referenced contracts, agreements or documents of the company and are not necessarily complete. We refer you to our registration statement and each exhibit attached to it for a more complete description of matters involving us, and the statements we have made in this prospectus are qualified in their entirety by reference to these additional materials. You may inspect the registration statement and exhibits and schedules filed with the Securities and Exchange Commission at the Commission's principal office in Washington, D.C. Copies of all or any part of the registration statement may be obtained from the Public Reference Section of the Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The Securities and Exchange Commission also maintains a web site at http://www.sec.gov that contains reports, proxy statements and information regarding registrants that file electronically with the Commission. In addition, we will file electronic versions of our annual and quarterly reports on the Commission's Electronic Data Gathering Analysis and Retrieval, or EDGAR System. Our registration statement and the referenced exhibits can also be found on this site as well as our quarterly and annual reports. We will not send the annual report to our shareholders unless requested by the individual shareholders. 14 UNIVERSAL FLIRTS CORP. (a development stage company) FINANCIAL STATEMENTS As Of June 30, 2004 INDEPENDENT AUDITORS REPORT F-1 BALANCE SHEET F-2 STATEMENT OF OPERATIONS F-3 STATEMENT OF STOCKHOLDERS' EQUITY F-4 STATEMENT OF CASH FLOWS F-5 FINANCIAL STATEMENT FOOTNOTES F-6 Gately & Associates, LLC 1248 Woodridge Court Altamonte Springs, FL 32714 (407) 341-6942 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT The Board of Directors and Shareholders Universal First Corp. Gentlemen: We have audited the accompanying balance sheet of Universal Flirts Corp. (a development stage company) as of June 30, 2004 and the related statements of operations, stockholder's equity and cash flows from inception (May 25, 2004) through June 30, 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on the audit. We conducted the audit in accordance with generally accepted auditing standards. These 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 that the audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Universal Flirts Corp. as of December 31, 2003, and the statement of operations and cash flows from inception (May 25, 2004) through June 30, 2004 in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 8 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plan in regard to these matters are also described in Note 11. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Gately & Associates, LLC July 7, 2004 F-1 UNIVERSAL FLIRTS CORP. (an development stage company) BALANCE SHEET As of June 30, 2004
ASSETS ------ CURRENT ASSETS 6/30/2004 - -------------- --------------- Cash $ 44,799 --------------- Total Current Assets 44,799 PROPERTY AND EQUIPMENT - ---------------------- Internet Website 8,500 --------------- TOTAL ASSETS $ 53,299 =============== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES - ------------------- Accounts payable $ - Accrued expenses 750 --------------- Total Current Liabilities 750 LONG-TERM LIABILITIES - --------------------- None - --------------- TOTAL LIABILITIES 750 --------------- STOCKHOLDERS' EQUITY - -------------------- Common Stock, $.001 par value Authorized: 100,000,000 Issued 10,348,000 10,348 Additional paid in capital 66,052 Preferred stock, $.001 par value Authorized: 10,000,000 Issued: none - Accumulated deficit during exploration stage (23,851) --------------- Total Stockholders' Equity 52,549 --------------- TOTAL LIABILITIES AND EQUITY $ 53,299 ===============
The accompanying notes are an integral part of these financial statements. UNIVERSAL FLIRTS CORP. (an development stage company) STATEMENT OF OPERATIONS For the 37 days ending June 30, 2004 and from inception (May 25, 2004) through June 30, 2004
FROM 6/30/2004 INCEPTION ------------------------------ REVENUE $ - $ - - ------- COST OF SERVICES - - - ---------------- ------------------------------ GROSS PROFIT OR (LOSS) - - - ---------------------- GENERAL AND ADMINISTRATIVE EXPENSES 23,851 23,851 - ----------------------------------- ------------------------------ OPERATING INCOME (23,851) (23,851) - ---------------- ------------------------------ ACCUMULATED DEFICIT $ (23,851) $ (23,851) - ------------------- ============================== Earnings (loss) per share, basic and diluted $ (0.00) - -------------------------------------------- Weighted average number of common shares 5,215,667 - ----------------------------------------
The accompanying notes are an integral part of these financial statements. UNIVERSAL FLIRTS CORP. (an development stage company) STATEMENT OF STOCKHOLDERS' EQUITY As of June 30, 2004
ADDITIONAL COMMON PAR PAID IN ACCUM. TOTAL STOCK VALUE CAPITAL DEFICIT EQUITY -------------------------------------------------------------------------- Common stock issued upon incorporation 500,000 $ 500 $ - $ - $ 500 on May 25, 2004 at $0.001 per share Common stock issued in exchange 8,500,000 8,500 8,500 of shares to acquire subsidiary effective June 1, 2004 at $0.001 per share Common stock issued as compensation for 250,000 250 12,250 12,500 legal services on June 15, 2004 at $0.05 per share Common stock issued as compensation for 18,000 18 882 900 consulting services on June 21, 2004 Common stock issued for cash 1,080,000 1,080 52,920 54,000 July, 2004 at $0.05 per share in a private placement Net income (loss) (23,851) (23,851) -------------------------------------------------------------------------- Balance, June 30, 2004 10,348,000 $ 10,348 $ 66,052 $ (23,851) $ 52,549 ==========================================================================
The accompanying notes are an integral part of these financial statements. UNIVERSAL FLIRTS CORP. (an development stage company) STATEMENTS OF CASH FLOWS For the 37 days ending June 30, 2004 and from inception (May 25, 2004) through June 30, 2004
FROM CASH FLOWS FROM OPERATING ACTIVITIES 6/30/2004 INCEPTION - ------------------------------------ ------------------------------ Net income (loss) $ (23,851) $ (23,851) ------------------------------ Adjustments to reconcile net income to net cash provided by (used in) operating activities: Stock issued as compensation 13,900 13,900 (Increase) Decrease in accounts receivable - - Increase (Decrease) in accounts payable - - Increase (Decrease) in accrued expenses 750 750 ------------------------------ Total adjustments to net income 14,650 14,650 ------------------------------ Net cash provided by (used in) operating activities (9,201) (9,201) ------------------------------ CASH FLOWS FROM INVESTING ACTIVITIES None - - ------------------------------ Net cash flows provided by (used in) investing activities - - ------------------------------ CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from stock issuance 54,000 54,000 ------------------------------ Net cash provided by (used in) financing activities 54,000 54,000 ------------------------------ CASH RECONCILIATION Net increase (decrease) in cash 44,799 44,799 Cash - beginning balance - - ------------------------------ CASH BALANCE END OF PERIOD $ 44,799 $ 44,799 ==============================
The accompanying notes are an integral part of these financial statements. UNIVERSAL FLIRTS CORP. (a development stage company) NOTES TO FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION Business Universal Flirts Corp. (the Company), was organized under the laws of the State of Delaware on May 25, 2004 and has adopted a fiscal year ending December 31. The Company is considered to be in the development stage (a development stage company) since it is devoting substantially all of its efforts to establishing a new business. Its planned principal operations are in the online dating industry. There have been no revenues to date. The Company currently has a web site that it plans to use to generate revenues. Organization On June 1, 2004, the Company acquired, in a stock purchase agreement and share exchange, Universal Flirts, Inc. (a New York corporation incorporated on August 22, 2003). The share exchange called for the Company to issue 8,500,000 common shares in exchange for 200 common shares (100%) of Universal Flirts, Inc. The Company makes use of the internet website that Universal Flirts, Inc. has title. Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Development Stage Activities and Operations: All costs incurred in development activities are charged to operations as incurred. The Company has not produced any revenues from operations. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those amounts. F-6 UNIVERSAL FLIRTS CORP. (a development stage company) NOTES TO FINANCIAL STATEMENTS Accounts Receivable, deposits, Accounts Payable and accrued Expenses: Accounts receivable have historically been immaterial and therefore no allowance for doubtful accounts has been established. Normal operating refundable Company deposits are listed as Other Assets. Accounts payable and accrued expenses consist of trade payables created from the normal course of business. Property and Equipment: Property and equipment purchased by the Company are recorded at cost. Depreciation is computed by the straight-line method based upon the estimated useful lives of the respective assets. Expenditures for repairs and maintenance are charged to expense as incurred as are any items purchased which are below the Company's capitalization threshold of $1,000. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from accounts, and any related gain or loss is reflected in income for the period. Income Taxes: The Company accounts for income taxes using the liability method which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company's management determines if a valuation allowance is necessary to reduce any tax benefits when the available benefits are more likely than not to expire before they can be used. Stock Based Compensation: In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation," (SFAS 123), which is effective for periods beginning after December 15, 1995. SFAS 123 requires that companies either recognize compensation expense for grants of stock, stock options, and other equity instruments based on fair value or provide pro-forma disclosure of the effect on net income and earnings per share in the Notes to the Financial Statements. The Company has adopted SFAS 123 in accounting for stock-based compensation. Cash and Cash Equivalents, and Credit Risk: For purposes of reporting cash flows, the Company considers all cash accounts with maturities of 90 days or less and which are not subject to withdrawal restrictions or penalties, as cash and cash equivalents in the accompanying balance sheet. The portion of deposits in a financial institution that insures its deposits with the FDIC up to $100,000 per depositor in excess of such insured amounts are not subject to insurance and represent a credit risk to the Company. F-7 UNIVERSAL FLIRTS CORP. (a development stage company) NOTES TO FINANCIAL STATEMENTS Fair Value of Financial Instruments: SFAS No. 107, "Disclosures About Fair Value of Financial Instruments", requires disclosure of the fair value information whether or not recognized in the balance sheet, where it is practicable to estimate that value. The carrying value of cash, cash equivalents, accounts receivable and notes payable approximates fair value. Impairment of Long-Lived Assets: Company's management believes that any evaluation necessitated through the adoption of SFAS 121, "Accounting for the Impairment Long-Lived Assets and for Long-Lived Assets to be Disposed of." will not be material. Loss Per Common Share: The Company has adopted Financial Accounting Standards Board (FASB) Statement No. 128, "Earnings per Share". The Statement establishes standards for computing and presenting earnings per share (EPS). It replaced the presentation of primary EPS with a presentation of basic EPS and also requires dual presentation of basic and diluted EPS on the face of the income statement. The statement was retroactively applied to the prior loss per share but did not have any effect. Basic loss per share was computed by dividing the Company's net loss by the weighted average number of common shares outstanding during the period. There is no presentation of diluted loss per share as the effect of common stock options, warrants and convertible debt amount are antidilutive NOTE 3 - ORGANIZATION COSTS The requirements set forth in accordance to SOP 98-5. SOP 98-5 requires the costs of organization expenses to be expensed as incurred for fiscal years beginning after December 15, 1998. The organization costs have been expensed accordingly. F-8 UNIVERSAL FLIRTS CORP. (a development stage company) NOTES TO FINANCIAL STATEMENTS NOTE 4 - STOCKHOLDERS EQUITY PREFERRED STOCK: The Company has authorized 10,000,000 preferred shares with a par value of $.001, none of which are issued or outstanding. COMMON STOCK: The Company has authorized 100,000,000 common shares with a par value of $.0001 of which 10,348,000 shares were issued and outstanding. On May 25, 2004, the Company issued 500,000 common shares as compensation to an Officer of the Company, a value of $500, for the incorporation of the Company. The stock is restricted from sale for one year in accordance with section 144 Of the securities act. On June 1, 2004, the Company issued 8,500,000 common shares in a stock purchase agreement and share exchange. The Company exchanged these shares for 200 common shares (100%) of Universal Flirts, Inc., a New York corporation incorporated on August 22, 2003. The stock is restricted from sale for one year in accordance with section 144 Of the securities act. During June of 2004, the Company issued 1,080,000 shares of its common stock for a consideration of $54,000 cash, or $.05 per share, in reliance on the exemption under Section 4(2) of the Securities Act of 1933, as amended (the "Act"). The stock is restricted from sale for one year in accordance with section 144 Of the securities act. On June 15, 2004, the Company issued 250,000 common shares as compensation for Legal services for a value of $12,500, or $0.05 per share. On June 21, 2004, the Company issued 18,000 common shares as compensation for Consulting services for a value of $900, or $0.05 per share. NOTE 5 - CONFLICTS OF INTEREST Certain conflicts of interest have existed and will continue to exist between management, their affiliates and the Company. Management have other interests including business interests to which they devote their primary attention. Management may continue to do so notwithstanding the fact that management time should be devoted to the business of the Company and in addition, management may negotiate an acquisition resulting in a conflict of interest. NOTE 6 - CASH FLOW STATEMENT DISCLOSURE The Company did not pay in cash any income tax or interest on debt financing. Non-cash transactions included the issuance of 268,500 common shares of the Company's stock in consideration for services and the issuance of 8,500,000 Common shares in the acquisition of Universal First, Inc. F-9 UNIVERSAL FLIRTS CORP. (a development stage company) NOTES TO FINANCIAL STATEMENTS NOTE 7 - LITIGATION, CONTINGENCIES, OPERATING AND CAPITAL LEASES From time to time in the normal course of business the Company may be involved in litigation. The Company's management is not aware of any asserted or unasserted claims and therefore feels any such proceedings to have an immaterial effect on the financial statements. The Company's management has not bound the Company with any contingencies other than those through the normal course of business. The Company has no operating or capital leases, but will account for such leases in accordance with Generally Accepted Accounting Principles when entered into which would require operating leases to be expensed and capital leases to be capitalized and amortized over the lease term. NOTE 8 - GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As a development stage company, the Company has no revenue from operations and limited financing. The Company's continued existence is dependent upon its ability to meet its financing requirements on a continuing basis, and to succeed in its future operations. The financial statements do not include any adjustments that might result from this uncertainty. Because of uncertainties surrounding the Company's development and limited operating history, management anticipates incurring development stage losses in the foreseeable future. Management's ability to achieve the Company's business objectives is contingent upon its success in raising additional capital until adequate revenues are realized from operations. Management believes that the Company has sufficient cash to meet the minimum development and operating costs for the next 12 months. The Company will need to raise additional capital to continue operations past 12 months, and there is no assurance that the Company will be successful in raising the needed capital. F-10 UNIVERSAL FLIRTS, CORP. 1,939,000 Shares Common Stock PROSPECTUS YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON STOCK AND IS NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. Until _____________, all dealers that effect transactions in these securities whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS II-1 Section of the Delaware Statutes provides for the indemnification of officers, directors, employees, and agents. A corporation shall have power to indemnify any person who was or is a party to any proceeding (other than an action by, or in the right of, the corporation), by reason of the fact that he or she is or was a director, officer, employee, or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against liability incurred in connection with such proceeding, including any appeal thereof, if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any proceeding by judgment, order, settlement, or conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in, or not opposed to, the best interests of the corporation or, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act of 1933. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person 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, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION Securities and Exchange Commission $ 6.77 registration fee Federal Taxes $ 0 State Taxes and Fees $ 0 Transfer Agent Fees $ 5,000.00 Accounting fees and expenses $ 5,000.00 Legal fees and expenses $ 10,000.00 Blue Sky fees and expenses $ 0 Miscellaneous $ 0 Total $ 20,006.77 All amounts are estimates other than the Commission's registration fee. We are paying all expenses of the offering listed above. No portion of these expenses will be borne by the selling shareholders. The selling shareholders, however, will pay any other expenses incurred in selling their common stock, including any brokerage commissions or costs of sale. ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES Universal Flirts, Inc. was incorporated in the State of Delaware on May 25, 2004 and 500,000 shares were issued to Darrell Lerner in reliance on the exemption under Section 4(2) of the Securities Act of 1933, as amended (the "Act"). Such shares were issued to Darrell Lerner as founders shares. On May 27, 2004, we issued a total of 8,500,000 shares of our common stock to Darrell Lerner. Such shares were issued pursuant to the stock purchase agreement and share exchange between us and Universal Flirts, Inc. and were issued in reliance on an exemption from registration under Section 4(2) of the Securities Act of 1933. These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance shares by us did not involve a public offering. The offering was not a "public offering" as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, Mr. Lerner had the necessary investment intent as required by Section 4(2) since he agreed to and received a share certificate bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a "public offering." Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for this transaction. On June 15, 2004, we issued 250,000 shares to Anslow & Jaclin, LLP as payment for legal services provided to us, and were issued in reliance on an exemption from registration under Section 4(2) of the Securities Act of 1933. These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance shares by us did not involve a public offering. The offering was not a "public offering" as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, Anslow & Jaclin, LLP had the necessary investment intent as required by Section 4(2) since they agreed to and received a share certificate bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a "public offering." Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for this transaction. On June 21, 2004, we issued 5,000 shares to Judy Alpert, 8,000 shares to Mark Belletiere, and 5,000 shares to David Liss for consulting services. These shares were issued in reliance on an exemption from registration under Section 4(2) of the Securities Act of 1933. These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance shares by us did not involve a public offering. The offering was not a "public offering" as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, Judy Alpert, Mark Belletiere, and David Liss had the necessary investment intent as required by Section 4(2) since they agreed to and received a share certificate bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a "public offering." Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for this transaction. In June 2004, we issued a total of 1,471,000 shares of our common stock to 41 shareholders at a price per share of $.05 for an aggregate offering price of $73,550. Such shares were issued in reliance on an exemption from registration under Section 4(2) of the Securities Act of 1933. The following sets forth the identity of the class of persons to whom we sold these shares and the amount of shares for each shareholder: AM&PM, LLC 5,000 Melvin Bernstein 10,000 Alison Bernstein 90,000 Alice Bolocan 20,000 David Bolocan 10,000 Angela Cipriano 5,000 Rodney Cutler 20,000 Gregory Frantz 5,000 David Gavrin 50,000 Drew Goldberg 60,000 Alan Golomb 10,000 Emily Hamamoto 20,000 Michael Hartman 40,000 Thelma Hartman 40,000 Robert Hartman 40,000 Danielle Hartman 40,000 Mary Hartman 40,000 Cynthia A. Indelicato 5,000 William & Shirley Lau 10,000 Philip D. Mazzella 8,000 Andrew Meyers 5,000 Martin Miller 90,000 Dolores Miller 100,000 Juan C. Morales 5,000 Dolores Miller a/c/f Dillion Engel 5,000 Karen Pasteressa a/c/f Samantha Pasteressa 5,000 Roberta and Robert Riesenberg 100,000 Sheldon Shalom 10,000 Victor Shalom 5,000 Cecilia Soh 10,000 James Supple 180,000 Mary Supple 20,000 Beth Sussman 100,000 Meg Sussman 100,000 Amy Sussman 100,000 Billy Tsim, Tak Piu 10,000 Eric Tjaden 8,000 James Tubbs 40,000 Richard V. Volpe 5,000 Jeffrey Wenzel 40,000 Richard J. Zapolski 5,000 These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance shares by us did not involve a public offering. The offering was not a "public offering" as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. We sold to a total of 41 investors, we only issued a total of 1,489,000 shares in the offering and we only sold the shares at $.05 per share for a total of $73,550.In addition, these shareholders had the necessary investment intent as required by Section 4(2) since he agreed to and received a share certificate bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a "public offering." These investors received a memorandum disclosing information on us similar to this prospectus. Each investor also completed a questionnaire to confirm that there were sophisticated and could bear the economic risk of their investment. Each of these investors had some form of prior relationship with Mr. Lerner in that these investors were all either friends or family of Mr. Lerner or friends of the family and friends of Mr. Lerner. Therefore this offering was done with no general solicitation or advertising by Mr. Lerner. Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for this transaction. We have never utilized an underwriter for an offering of our securities. Other than the securities mentioned above, we have not issued or sold any securities. II-3 ITEM 27. EXHIBITS. EXHIBIT NUMBER DESCRIPTION - ------ ----------- 3.1 Articles of Incorporation 3.2 By-Laws 5.1 Opinion of Anslow & Jaclin, LLP 10.1 Stock Purchase Agreement and Share Exchange 21 Subsidiaries 23.1 Consent of Gately & Associates ITEM 28. UNDERTAKINGS. The undersigned registrant hereby undertakes: 1. To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (a) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (b) To reflect in the prospectus any facts or events arising after the effective date of this registration statement, or most recent post-effective amendment, which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement; and Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation From the low or high end of the estimated maximum offering range may be reflected in the form of prospects filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (c) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in the registration statement. 2. That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 3. To remove from registration by means of a post-effective amendment any of the securities being registered hereby which remain unsold at the termination of the offering. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue. SIGNATURES In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in the City of Roslyn Heights, State of New York on July 26, 2004. By: /s/ Darrell Lerner --------------------------------- DARRELL LERNER President, Chief Executive Officer and Chairman of the Board of Directors POWER OF ATTORNEY ALL MEN BY THESE PRESENT, that each person whose signature appears below constitutes and appoints Joseph Hess, true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all pre- or post-effective amendments to this registration statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any one of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof. In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated. By: /s/ Darrell Lerner President, Chief Executive Officer - ------------------------ and Chairman of the Board of Directors Darrell Lerner Dated: July 28, 2004 II-5 EX-3.(I) 2 fsb2ex3i_universalflirts.txt CERTIFICATE OF INCORPORATION CERTIFICATE OF INCORPORATION FIRST: The name of the corporation shall be: UNIVERSAL FLIRTS CORP. SECOND: Its registered office in the State of Delaware is to be located at 2771 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle and its registered agent at such address is CORPORATION SERVICE COMPANY. THIRD: The purpose or purposes of the corporation shall be: To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH: The total number of shares of stock, which this corporation is authorized to issue is: 110,000,000 of which 100,000,000 shares shall be Common Stock with a par value of .001 and 10,000,000 shares shall be Preferred Stock with a par value of $.001. FIFTH: The name and address of the incorporator is as follows: Kimberly Fisher 2711 Centerville Road Suite 400 Wilmington, Delaware 19808 SIXTH: The Board of Directors shall have the power to adopt, amend or repeal the by-laws. SEVENTH: No director shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. Notwithstanding the foregoing sentence, a director shall be liable to the extent provided by applicable law, (i) for breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this Article Seventh shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment. IN WITNESS WHEREOF, the undersigned, being the incorporator herein before named, has executed signed and acknowledged this certificate of incorporation. Date: May 25, 2004 /s/ Kimberly Fisher ------------------------------------------- Name: Kimberly Fisher Incorporator EX-3.(II) 3 fsb2ex3ii_universalflirts.txt BYLAWS -------------------- BY-LAWS -------------------- ARTICLE I The Corporation Section 1. Name. The legal name of this corporation (hereinafter --------- ---- called the "Corporation") is Universal Flirts, Corp. Section 2. Offices. The Corporation shall have its principal office in --------- ------- the State of Delaware. The Corporation may also have offices at such other places within and without the United States as the Board of Directors may from time to time appoint or the business of the Corporation may require. Section 3. Seal. The corporate seal shall have inscribed thereon the --------- ---- name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware". One or more duplicate dies for impressing such seal may be kept and used. ARTICLE II Meetings of Shareholders Section 1. Place of Meetings. All meetings of the shareholders shall be --------- ----------------- held at the principal office of the Corporation in the State of New Delaware or at such other place, within or without the State of Delaware, as is fixed in the notice of the meeting. Section 2. Annual Meeting. An annual meeting of the shareholders of the --------- -------------- Corporation for the election of directors and the transaction of such other business as may properly come before the meeting shall be held on the 1st day of February in each year if not a legal holiday, and if a legal holiday, then on the next secular day. If for any reason any annual meeting shall not be held at the time herein specified, the same may be held at any time thereafter upon notice, as herein provided, or the business thereof may be transacted at any special meeting called for the purpose. Section 3. Special Meetings. Special meetings of shareholders may be --------- ---------------- called by the President whenever he deems it necessary or advisable. A special meeting of the shareholders shall be called by the President whenever so directed in writing by a majority of the entire Board of Directors or whenever the holders of one-third (1/3) of the number of shares of the capital stock of the Corporation entitled to vote at such meeting shall, in writing, request the same. Section 4. Notice of Meetings. Notice of the time and place of the --------- ------------------ annual and of each special meeting of the shareholders shall be given to each of the shareholders entitled to vote at such meeting by mailing the same in a postage prepaid wrapper addressed to each such shareholders at his address as it appears on the books of the Corporation, or by delivering the same personally to any such shareholder in lieu of such mailing, at least ten (10) and not more than fifty (50) days prior to each meeting. Meetings may be held without notice if all of the shareholders entitled to vote thereat are present in person or by proxy, or if notice thereof is waived by all such shareholders not present in person or by proxy, before or after the meeting. Notice by mail shall be deemed to be given when deposited, with postage thereon prepaid, in the United States mail. If a meeting is adjourned to another time, not more than thirty (30) days hence, or to another place, and if an announcement of the adjourned time or place is made at the meeting, it shall not be necessary to give notice of the adjourned meeting unless the Board of Directors, after adjournment fix a new record date for the adjourned meeting. Notice of the annual and each special meeting of the shareholders shall indicate that it is being issued by or at the direction of the person or persons calling the meeting, and shall state the name and capacity of each such person. Notice of each special meeting shall also state the purpose or purposes for which it has been called. Neither the business to be transacted at nor the purpose of the annual or any special meeting of the shareholders need be specified in any written waiver of notice. Section 5. Record Date for Shareholders. For the purpose of determining --------- ---------------------------- the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividend or other distribution or the allotment of any rights, or entitled to exercise any rights in respect of any change, conversion, or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than fifty (50) days nor less than ten (10) days before the date of such meeting, nor more than fifty (50) days prior to any other action. If no record date is fixed, the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if no notice is given, the day on which the meeting is held; the record date for determining shareholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed; and the record date for determining shareholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of shareholders of record entitled to notice of or to vote at any meeting of shareholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. Section 6. Proxy Representation. Every shareholder may authorize --------- -------------------- another person or persons to act for him by proxy in all matters in which a shareholder is entitled to participate, whether by waiving notice of any meeting, voting or participating at a meeting, or expressing consent or dissent without a meeting. Every proxy must be signed by the shareholder or by his attorney-in-fact. No proxy shall be voted or acted upon after eleven (11) months from its date unless such proxy provides for a longer period. Every proxy shall be revocable at the pleasure of the shareholder executing it, except as otherwise provided in Section 608 of the Delaware Business Corporation Law. Section 7. Voting at Shareholders' Meetings. Each share of stock shall --------- -------------------------------- entitle the holder thereof to one vote. In the election of directors, a plurality of the votes cast shall elect. Any other action shall be authorized by a majority of the votes cast except where the Delaware Business Corporation Law prescribes a different percentage of votes or a different exercise of voting power. In the election of directors, and for any other action, voting need not be by ballot. Section 8. Quorum and Adjournment. Except for a special election of --------- ---------------------- directors pursuant to the Delaware Business Corporation Law, the presence, in person or by proxy, of the holders of a majority of the shares of the stock of the Corporation outstanding and entitled to vote thereat shall be requisite and shall constitute a quorum at any meeting of the shareholders. When a quorum is once present to organize a meeting, it shall not be broken by the subsequent withdrawal of any shareholders. If at any meeting of the shareholders there shall be less than a quorum so present, the shareholders present in person or by proxy and entitled to vote thereat, may adjourn the meeting from time to time until a quorum shall be present, but no business shall be transacted at any such adjourned meeting except such as might have been lawfully transacted had the meeting not adjourned. Section 9. List of Shareholders. The officer who has charge of the --------- -------------------- stock ledger of the Corporation shall prepare, make and certify, at least ten (10) days before every meeting of shareholders, a complete list of the shareholders, as of the record date fixed for such meeting, arranged in alphabetical order, and showing the address of each shareholder and the number of shares registered in the name of each shareholder. Such list shall be open to the examination of any shareholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city or other municipality or community where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any shareholder who is present. If the right to vote at any meeting is challenged, the inspectors of election, if any, or the person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting. Section 10. Inspectors of Election. The Board of Directors, in advance ---------- ---------------------- of any meeting, may, but need not, appoint one or more inspectors of election to act at the meeting or any adjournment thereof. If an inspector or inspectors are not appointed, the person presiding at the meeting may, and at the request of any shareholder entitled to vote thereat shall, appoint one or more inspectors. In case any person who may be appointed as an inspector fails to appear or act, the vacancy may be filled by appointment made by the Board of Directors in advance of the meeting or at the meeting by the person presiding thereat. Each inspector, if any, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of the inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors, if any, shall determine the number of shares of stock outstanding and the voting power of each, the shares of stock represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all shareholders. On request of the person presiding at the meeting or any shareholder entitled to vote thereat, the inspector or inspectors, if any, shall make a report in writing of any challenge, question or matter determined by him or them and execute a certificate of any fact found by him or them. Any report or certificate made by the inspector or inspectors shall be prima facie evidence of the facts stated and of the vote as certified by them. Section 11. Action of the Shareholders Without Meetings. Any action ---------- ------------------------------------------- which may be taken at any annual or special meeting of the shareholders may be taken without a meeting on written consent, setting forth the action so taken, signed by the holders of all outstanding shares entitled to vote thereon. Written consent thus given by the holders of all outstanding shares entitled to vote shall have the same effect as a unanimous vote of the shareholders. ARTICLE III Directors Section 1. Number of Directors. The number of directors which shall --------- ------------------- constitute the entire Board of Directors shall be at least one (1). Subject to the foregoing limitation, such number may be fixed from time to time by action of a majority of the entire Board of Directors or of the shareholders at an annual or special meeting, or, if the number of directors is not so fixed, the number shall be one (1). No decrease in the number of directors shall shorten the term of any incumbent director. Section 2. Election and Term. The initial Board of Directors shall be --------- ----------------- elected by the incorporator and each initial director so elected shall hold office until the first annual meeting of shareholders and until his successor has been elected and qualified. Thereafter, each director who is elected at an annual meeting of shareholders, and each director who is elected in the interim to fill a vacancy or a newly created directorship, shall hold office until the next annual meeting of shareholders and until his successor has been elected and qualified. Section 3. Filling Vacancies, Resignation and Removal. Any director may --------- ------------------------------------------ tender his resignation at any time. Any director or the entire Board of Directors may be removed, with or without cause, by vote of the shareholders. In the interim between annual meetings of shareholders or special meetings of shareholders called for the election of directors or for the removal of one or more directors and for the filling of any vacancy in that connection, newly created directorships and any vacancies in the Board of Directors, including unfilled vacancies resulting from the resignation or removal of directors for cause or without cause, may be filled by the vote of a majority of the remaining directors then in office, although less than a quorum, or by the sole remaining director. Section 4. Qualifications and Powers. Each director shall be at least --------- ------------------------- eighteen (18) years of age. A director need not be a shareholder, a citizen of the United States or a resident of the State of Delaware. The business of the Corporation shall be managed by the Board of Directors, subject to the provisions of the Certificate of Incorporation. In addition to the powers and authorities by these By-Laws expressly conferred upon it, the Board may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done exclusively by the shareholders. Section 5. Regular and Special Meetings of the Board. The Board of --------- ----------------------------------------- Directors may hold its meetings, whether regular or special, either within or without the State of Delaware. The newly elected Board may meet at such place and time as shall be fixed by the vote of the shareholders at the annual meeting, for the purpose of organization or otherwise, and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a majority of the entire Board shall be present; or they may meet at such place and time as shall be fixed by the consent in writing of all directors. Regular meetings of the Board may be held with or without notice at such time and place as shall from time to time be determined by resolution of the Board. Whenever the time or place of regular meetings of the Board shall have been determined by resolution of the Board, no regular meetings shall be held pursuant to any resolution of the Board altering or modifying its previous resolution relating to the time or place of the holding of regular meetings, without first giving at least three (3) days written notice to each director, either personally or by telegram, or at least five (5) days written notice to each director by mail, of the substance and effect of such new resolution relating to the time and place at which regular meetings of the Board may thereafter be held without notice. Special meetings of the Board shall be held whenever called by the President, Vice-President, the Secretary or any director in writing. Notice of each special meeting of the Board shall be delivered personally to each director or sent by telegraph to his residence or usual place of business at least three (3) days before the meeting, or mailed to him to his residence or usual place of business at least five (5) days before the meeting. Meetings of the Board, whether regular or special, may be held at any time and place, and for any purpose, without notice, when all the directors are present or when all directors not present shall, in writing, waive notice of and consent to the holding of such meeting, which waiver and consent may be given after the holding of such meeting. All or any of the directors may waive notice of any meeting and the presence of a director at any meeting of the Board shall be deemed a waiver of notice thereof by him. A notice, or waiver of notice, need not specify the purpose or purposes of any regular or special meeting of the Board. Section 6. Quorum and Action. A majority of the entire Board of --------- ----------------- Directors shall constitute a quorum except that when the entire Board consists of one director, then one director shall constitute a quorum, and except that when a vacancy or vacancies prevents such majority, a majority of the directors in office shall constitute a quorum, provided that such majority shall constitute at least one-third (1/3) of the entire Board. A majority of the directors present, whether or not they constitute a quorum, may adjourn a meeting to another time and place. Except as herein otherwise provided, and except as otherwise provided by the Delaware Business Corporation Law, the vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board. Section 7. Telephonic Meetings. Any member or members of the Board of --------- ------------------- Directors, or of any committee designated by the Board, may participate in a meeting of the Board, or any such committee, as the case may be, by means of conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time, and participation in a meeting by such means shall constitute presence in person at such meeting. Section 8. Action Without a Meeting. Any action required or permitted --------- ------------------------ to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. Section 9. Compensation of Directors. By resolution of the Board of --------- ------------------------- Directors, the directors may be paid their expenses, if any, for attendance at each regular or special meeting of the Board or of any committee designated by the Board and may be paid a fixed sum for attendance at such meeting, or a stated salary as director, or both. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefore; provided, however, that directors who are also salaried officers shall not receive fees or salaries as directors. ARTICLE IV Committees Section 1. In General. The Board of Directors may, by resolution or --------- ---------- resolutions passed by the affirmative vote therefore of a majority of the entire Board, designate an Executive Committee and such other committees as the Board may from time to time determine, each to consist of one (1) or more directors, and each of which, to the extent provided in the resolution or in the Certificate of Incorporation or in the By-Laws, shall have all the powers of the Board, except that no such Committee shall have power to fill vacancies in the Board, or to change the membership of or to fill vacancies in any committee, or to make, amend, repeal or adopt By-Laws of the Corporation, or to submit to the shareholders any action that needs shareholder approval under these By-Laws or the Delaware Business Corporation Law, or to fix the compensation of the directors for serving on the Board or any committee thereof, or to amend or repeal any resolution of the Board which by its terms shall not be so amendable or repealable. Each committee shall serve at the pleasure of the Board. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Section 2. Executive Committee. Except as otherwise limited by the --------- ------------------- Board of Directors or by these By-Laws, the Executive Committee, if so designated by the Board of Directors, shall have and may exercise, when the Board is not in session, all the powers of the Board of Directors in the management of the business and affairs of the Corporation, and shall have power to authorize the seal of the Corporation to be affixed to all papers which may require it. The Board shall have the power at any time to change the membership of the Executive Committee, to fill vacancies in it, or to dissolve it. The Executive Committee may make rules for the conduct of its business and may appoint such assistance as it shall from time to time deem necessary. A majority of the members of the Executive Committee, if more than a single member, shall constitute a quorum. ARTICLE V Officers Section 1. Designation, Term and Vacancies. The officers of the --------- ------------------------------- Corporation shall be a President, one or more Vice-Presidents, a Secretary, a Treasurer, and such other officers as the Board of Directors may from time to time deem necessary. Such officers may have and perform the powers and duties usually pertaining to their respective offices, the powers and duties respectively prescribed by law and by these By-Laws, and such additional powers and duties as may from time to time be prescribed by the Board. The same person may hold any two or more offices, except that the offices of President and Secretary may not be held by the same person unless all the issued and outstanding stock of the Corporation is owned by one person, in which instance such person may hold all or any combination of offices. The initial officers of the Corporation shall be appointed by the initial Board of Directors, each to hold office until the meeting of the Board of Directors following the first annual meeting of shareholders and until his successor has been appointed and qualified. Thereafter, the officers of the Corporation shall be appointed by the Board as soon as practicable after the election of the Board at the annual meeting of shareholders, and each officer so appointed shall hold office until the first meeting of the Board of Directors following the next annual meeting of shareholders and until his successor has been appointed and qualified. Any officer may be removed at any time, with or without cause, by the affirmative note therefore of a majority of the entire Board of Directors. All other agents and employees of the Corporation shall hold office during the pleasure of the Board of Directors. Vacancies occurring among the officers of the Corporation shall be filled by the Board of Directors. The salaries of all officers of the Corporation shall be fixed by the Board of Directors. Section 2. President. The President shall preside at all meetings of --------- --------- the shareholders and at all meetings of the Board of Directors at which he may be present. Subject to the direction of the Board of Directors, he shall be the chief executive officer of the Corporation, and shall have general charge of the entire business of the Corporation. He may sign certificates of stock and sign and seal bonds, debentures, contracts or other obligations authorized by the Board, and may, without previous authority of the Board, make such contracts as the ordinary conduct of the Corporation's business requires. He shall have the usual powers and duties vested in the President of a corporation. He shall have power to select and appoint all necessary officers and employees of the Corporation, except those selected by the Board of Directors, and to remove all such officers and employees except those selected by the Board of Directors, and make new appointments to fill vacancies. He may delegate any of his powers to a Vice-President of the Corporation. Section 3. Vice-President. A Vice-President shall have such of the --------- -------------- President's powers and duties as the President may from time to time delegate to him, and shall have such other powers and perform such other duties as may be assigned to him by the Board of Directors. During the absence or incapacity of the President, the Vice-President, or, if there be more than one, the Vice-President having the greatest seniority in office, shall perform the duties of the President, and when so acting shall have all the powers and be subject to all the responsibilities of the office of President. Section 4. Treasurer. The Treasurer shall have custody of such funds --------- --------- and securities of the Corporation as may come to his hands or be committed to his care by the Board of Directors. Whenever necessary or proper, he shall endorse on behalf of the Corporation, for collection, checks, notes, or other obligations, and shall deposit the same to the credit of the Corporation in such bank or banks or depositaries, approved by the Board of Directors as the Board of Directors or President may designate. He may sign receipts or vouchers for payments made to the Corporation, and the Board of Directors may require that such receipts or vouchers shall also be signed by some other officer to be designated by them. Whenever required by the Board of Directors, he shall render a statement of his cash accounts and such other statements respecting the affairs of the Corporation as may be required. He shall keep proper and accurate books of account. He shall perform all acts incident to the office of Treasurer, subject to the control of the Board. Section 5. Secretary. The Secretary shall have custody of the seal of --------- --------- the Corporation and when required by the Board of Directors, or when any instrument shall have been signed by the President duly authorized to sign the same, or when necessary to attest any proceedings of the shareholders or directors, shall affix it to any instrument requiring the same and shall attest the same with his signature, provided that the seal may be affixed by the President or Vice-President or other officer of the Corporation to any document executed by either of them respectively on behalf of the Corporation which does not require the attestation of the Secretary. He shall attend to the giving and serving of notices of meetings. He shall have charge of such books and papers as properly belong to his office or as may be committed to his care by the Board of Directors. He shall perform such other duties as appertain to his office or as may be required by the Board of Directors. Section 6. Delegation. In case of the absence of any officer of the --------- ---------- Corporation, or for any other reason that the Board of Directors may deem sufficient, the Board may temporarily delegate the powers or duties, or any of them, of such officer to any other officer or to any director. ARTICLE VI Stock Section 1. Certificates Representing Shares. All certificates --------- -------------------------------- representing shares of the capital stock of the Corporation shall be in such form not inconsistent with the Certificate of Incorporation, these By-Laws or the laws of the State of Delaware of the Business Corporation Law. Such shares shall be approved by the Board of Directors, and shall be signed by the President or a Vice-President and by the Secretary or the Treasurer and shall bear the seal of the Corporation and shall not be valid unless so signed and sealed. Certificates countersigned by a duly appointed transfer agent and/or registered by a duly appointed registrar shall be deemed to be so signed and sealed whether the signatures be manual or facsimile signatures and whether the seal be a facsimile seal or any other form of seal. All certificates shall be consecutively numbered and the name of the person owning the shares represented thereby, his residence, with the number of such shares and the date of issue, shall be entered on the Corporation's books. All certificates surrendered shall be cancelled and no new certificates issued until the former certificates for the same number of shares shall have been surrendered and cancelled, except as provided for herein. In case any officer or officers who shall have signed or whose facsimile signature or signatures shall have been affixed to any such certificate or certificates, shall cease to be such officer or officers of the Corporation before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation, and may be issued and delivered as though the person or persons who signed such certificates, or whose facsimile signature or signatures shall have been affixed thereto, had not ceased to be such officer or officers of the Corporation. Any restriction on the transfer or registration of transfer of any shares of stock of any class or series shall be noted conspicuously on the certificate representing such shares. Section 2. Fractional Share Interests. The Corporation, may, but shall --------- -------------------------- not be required to, issue certificates for fractions of a share. If the Corporation does not issue fractions of a share, it shall: (1) arrange for the disposition of fractional interests by those entitled thereto; (2) pay in cash the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined; or (3) issue scrip or warrants in registered or bearer form which shall entitle the holder to receive a certificate for a full share upon the surrender of such scrip or warrants aggregating a full share. A certificate for a fractional share shall, but scrip or warrants shall not unless otherwise provided therein, entitle the holder to exercise voting rights, to receive dividends thereon, and to participate in any distribution of the assets of the Corporation in the event of liquidation. The Board of Directors may cause scrip or warrants to be issued subject to the conditions that they shall become void if not exchanged for certificates representing full shares before a specified date, or subject to the condition that the shares for which scrip or warrants are exchangeable may be sold by the Corporation and the proceeds thereof distributed to the holders of scrip or warrants, or subject to any other conditions which the Board of Directors may impose. Section 3. Addresses of Shareholders. Every shareholder shall furnish --------- ------------------------- the Corporation with an address to which notices of meetings and other notices may be served upon or mailed to him, and in default thereof notices may be addressed to him at his last known post office address. Section 4. Stolen, Lost or Destroyed Certificates. The Board of --------- -------------------------------------- Directors may in its sole discretion direct that a new certificate or certificates of stock be issued in place of any certificate or certificates of stock theretofore issued by the Corporation, alleged to have been stolen, lost or destroyed, and the Board of Directors when authorizing the issuance of such new certificate or certificates, may, in its discretion, and as a condition precedent thereto, require the owner of such stolen, lost or destroyed certificate or certificates or his legal representatives to give to the Corporation and to such registrar or registrars and/or transfer agent or transfer agents as may be authorized or required to countersign such new certificate or certificates, a bond in such sum as the Corporation may direct not exceeding double the value of the stock represented by the certificate alleged to have been stolen, lost or destroyed, as indemnity against any claim that may be made against them or any of them for or in respect of the shares of stock represented by the certificate alleged to have been stolen, lost or destroyed. Section 5. Transfers of Shares. Upon compliance with all provisions --------- ------------------- restricting the transferability of shares, if any, transfers of stock shall be made only upon the books of the Corporation by the holder in person or by his attorney thereunto authorized by power of attorney duly filed with the Secretary of the Corporation or with a transfer agent or registrar, if any, upon the surrender and cancellation of the certificate or certificates for such shares properly endorsed and the payment of all taxes due thereon. The Board of Directors may appoint one or more suitable banks and/or trust companies as transfer agents and/or registrars of transfers, for facilitating transfers of any class or series of stock of the Corporation by the holders thereof under such regulations as the Board of Directors may from time to time prescribe. Upon such appointment being made all certificates of stock of such class or series thereafter issued shall be countersigned by one of such transfer agents and/or one of such registrars of transfers, and shall not be valid unless so countersigned. ARTICLE VII Dividends and Finance Section 1. Dividends. The Board of Directors shall have power to fix --------- --------- and determine and to vary, from time to time, the amount of the working capital of the Corporation before declaring any dividends among its shareholders, and to direct and determine the use and disposition of any net profits or surplus, and to determine the date or dates for the declaration and payment of dividends and to determine the amount of any dividend, and the amount of any reserves necessary in their judgment before declaring any dividends among its shareholder, and to determine the amount of the net profits of the Corporation from time to time available for dividends. Section 2. Fiscal Year. The fiscal year of the Corporation shall end on --------- ----------- the last day of December in each year and shall begin on the next succeeding day, or shall be for such other period as the Board of Directors may from time to time designate with the consent of the Department of Taxation and Finance, where applicable. ARTICLE VIII Miscellaneous Provisions Section 1. Stock of Other Corporations. The Board of Directors shall --------- --------------------------- have the right to authorize any director, officer or other person on behalf of the Corporation to attend, act and vote at meetings of the shareholders of any corporation in which the Corporation shall hold stock, and to exercise thereat any and all rights and powers incident to the ownership of such stock, and to execute waivers of notice of such meetings and calls therefore; and authority may be given to exercise the same either on one or more designated occasions, or generally on all occasions until revoked by the Board. In the event that the Board shall fail to give such authority, such authority may be exercised by the President in person or by proxy appointed by him on behalf of the Corporation. Any stocks or securities owned by this Corporation may, if so determined by the Board of Directors, be registered either in the name of this Corporation or in the name of any nominee or nominees appointed for that purpose by the Board of Directors. Section 2. Books and Records. Subject to the Delaware Business --------- ----------------- Corporation Law, the Corporation may keep its books and accounts outside the State of Delaware. Section 3. Notices. Whenever any notice is required by these By-Laws to --------- ------- be given, personal notice is not meant unless expressly so stated, and any notice so required shall be deemed to be sufficient if given by depositing the same in a post office box in a sealed postpaid wrapper, addressed to the person entitled thereto at his last known post office address, and such notice shall be deemed to have been given on the day of such mailing. Whenever any notice whatsoever is required to be given under the provisions of any law, or under the provisions of the Certificate of Incorporation or these By-Laws a waiver in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Section 4. Amendments. Except as otherwise provided herein, these --------- ---------- By-Laws may be altered, amended or repealed and By-Laws may be made at any annual meeting of the shareholders or at any special meeting thereof if notice of the proposed alteration, amendment or repeal, or By-Law or By-Laws to be made be contained in the notice of such special meeting, by the holders of a majority of the shares of stock of the Corporation outstanding and entitled to vote thereat; or by a majority of the Board of Directors at any regular meeting of the Board of Directors, or at any special meeting of the Board of Directors, if notice of the proposed alteration, amendment or repeal, or By-Law or By-Laws to be made, be contained in the notice of such special meeting. EX-5 4 fsb2ex5_universalflirts.txt LEGAL OPINION OF ANSLOW & JACLIN, LLP ANSLOW & JACLIN, LLP RICHARD I. ANSLOW Counselors at Law ADMITTED IN NJ, NY, DC EMAIL: RANSLOW@ANSLOWLAW.COM GREGG E. JACLIN ADMITTED IN NJ, NY EMAIL: GJACLIN@ANSLOWLAW.COM ----------------------------- AMOD CHOUDHARY ADMITTED IN NJ, NY EMAIL: ACHOUDHARY@ANSLOWLAW.COM July 28, 2004 UNIVERSAL FLIRTS, CORP. 142 Mineola Avenue, Suite 2-D Roslyn Heights, New York 11577 Gentlemen: You have requested our opinion, as counsel for Universal Flirts, Corp. a Delaware corporation (the "Company"), in connection with the registration statement on Form SB-2 (the "Registration Statement"), under the Securities Act of 1933 (the "Act"), being filed by the Company with the Securities and Exchange Commission. The Registration Statement relates to an offering of 1,939,000 shares of the Company's common stock. We have examined such records and documents and made such examination of laws as we have deemed relevant in connection with this opinion. It is our opinion that the shares of common stock to be sold by the selling shareholders have been duly authorized and are legally issued, fully paid and non-assessable. No opinion is expressed herein as to any laws other than the State of Delaware of the United States. This opinion opines upon Delaware law including the statutory provisions, all applicable provisions of the Delaware Constitution and reported judicial decisions interpreting those laws. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the caption "Experts" in the Registration Statement. In so doing, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act and the rules and regulations of the Securities and Exchange Commission promulgated thereunder. Very truly yours, ANSLOW & JACLIN, LLP By: /s/ Gregg E. Jaclin - ----------------------------------- GREGG E. JACLIN 195 Route 9 South, Suite 204, Manalapan, New Jersey 07726 EX-10 5 fsb2ex10_universalflirts.txt STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE by and among UNIVERSAL FLIRTS, CORP. a Delaware Corporation and UNIVERSAL FLIRTS, INC. a New York Corporation effective as of May 27, 2004 STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE THIS STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE, made and entered into this 27th day of May, by and among Universal Flirts, Corp., a Delaware corporation with its principal place of business located at 142 Mineola Avenue Suite 2-D, Roslyn Heights, NY 11577 ("Corporation"); Universal Flirts, Inc., a New York Corporation with its principal place of business at 142 Mineola Avenue Suite 2-D, Roslyn Heights, NY 11577 ("Incorporated") and Darrell Lerner, the sole shareholder of Incorporated ("Shareholder") (collectively Incorporated and the Shareholder of Incorporated shall be known as the "Incorporated Group"). Premises A. This Agreement provides for the acquisition of Incorporated whereby Incorporated shall become a wholly owned subsidiary of Corporation and in connection therewith, the issuance of a total of 8,500,000 shares of Corporation to the Incorporated shareholders. B. The boards of directors of Incorporated and Corporation have determined, subject to the terms and conditions set forth in this Agreement, that the transaction contemplated hereby is desirable and in the best interests of their stockholders, respectively. This Agreement is being entered into for the purpose of setting forth the terms and conditions of the proposed acquisition. Agreement NOW, THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the parties to be derived here from, it is hereby agreed as follows: ARTICLE I REPRESENTATIONS, COVENANTS AND WARRANTIES OF UNIVERSAL FLIRTS, CORP. As an inducement to and to obtain the reliance of Incorporated, Corporation represents and warrants as follows: Section 1.1 Organization. Corporation is a corporation duly organized, validly existing, and in good standing under the laws of Delaware and has the corporate power and is duly authorized, qualified, franchised and licensed under all applicable laws, regulations, ordinances and orders of public authorities to own all of its properties and assets and to carry on its business in all material respects as it is now being conducted, including qualification to do business as a foreign corporation in the jurisdiction in which the character and location of the assets owned by it or the nature of the business transacted by it requires qualification. Included in the Schedules attached hereto (hereinafter defined) are complete and correct copies of the articles of incorporation, bylaws and amendments thereto as in effect on the date hereof. The execution and delivery of this Agreement does not and the consummation of the transactions contemplated by this Agreement in accordance with the terms hereof will not violate any provision of Corporation's articles of incorporation or bylaws. Corporation has full power, authority and legal right and has taken all action required by law, its articles of incorporation, its bylaws or otherwise to authorize the execution and delivery of this Agreement. Section 1.2 Capitalization. The authorized capitalization of Corporation consists of 100,000,000 Common Shares, $0.001 par value per share, and 10,000,000 Preferred Shares, $0.001 par value per share. As of the date hereof, Corporation has 500,000 common shares issued and outstanding. All issued and outstanding shares are legally issued, fully paid and nonassessable and are not issued in violation of the preemptive or other rights of any person. Corporation has no securities, warrants or options authorized or issued. Section 1.3 Subsidiaries. Corporation has no subsidiaries. Section 1.4 Tax Matters: Books and Records. (a) The books and records, financial and others, of Corporation are in all material respects complete and correct and have been maintained in accordance with good business accounting practices; and (b) Corporation has no liabilities with respect to the payment of any country, federal, state, county, or local taxes (including any deficiencies, interest or penalties). (c) Corporation shall remain responsible for all debts incurred by Corporation prior to the date of closing. Section 1.5 Litigation and Proceedings. There are no actions, suits, proceedings or investigations pending or threatened by or against or affecting Corporation or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign or before any arbitrator of any kind that would have a material adverse affect on the business, operations, financial condition or income of Corporation. Corporation is not in default with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator or governmental agency or instrumentality or of any circumstances which, after reasonable investigation, would result in the discovery of such a default. Section 1.6 Material Contract Defaults. Corporation is not in default in any material respect under the terms of any outstanding contract, agreement, lease or other commitment which is material to the business, operations, properties, assets or condition of Corporation, and there is no event of default in any material respect under any such contract, agreement, lease or other commitment in respect of which Corporation has not taken adequate steps to prevent such a default from occurring. Section 1.7 Information. The information concerning Corporation as set forth in this Agreement and in the attached Schedules is complete and accurate in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact required to make the statements made in light of the circumstances under which they were made, not misleading. Corporation's filings with the SEC are complete and accurate in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to make the statements made in light of the circumstances under which they were made, not misleading. Section 1.8 Title and Related Matters. Corporation has good and marketable title to and is the sole and exclusive owner of all of its properties, inventory, interest in properties and assets, real and personal (collectively, the "Assets") free and clear of all liens, pledges, charges or encumbrances. Corporation owns free and clear of any liens, claims, encumbrances, royalty interests or other restrictions or limitations of any nature whatsoever and all procedures, techniques, marketing plans, business plans, methods of management or other information utilized in connection with Corporation's business. No third party has any right to, and Corporation has not received any notice of infringement of or conflict with asserted rights of other with respect to any product, technology, data, trade secrets, know-how, proprietary techniques, trademarks, service marks, trade names or copyrights which, singly on in the aggregate, if the subject of an unfavorable decision ruling or finding, would have a materially adverse affect on the business, operations, financial conditions or income of Corporation or any material portion of its properties, assets or rights. Section 1.9 Contracts On the closing date: (a) There are no material contracts, agreements franchises, license agreements, or other commitments to which Corporation is a party or by which it or any of its properties are bound: (b) Corporation is not a party to any contract, agreement, commitment or instrument or subject to any charter or other corporate restriction or any judgment, order, writ, injunction, decree or award materially and adversely affects, or in the future may (as far as Corporation can now foresee) materially and adversely affect , the business, operations, properties, assets or conditions of Corporation; and (c) Corporation is not a party to any material oral or written: (I) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, agreement or arrangement covered by Title IV of the Employee Retirement Income Security Act, as amended; (iii) agreement, contract or indenture relating to the borrowing of money; (iv) guaranty of any obligation for the borrowing of money or otherwise, excluding endorsements made for collection and other guaranties, of obligations, which, in the aggregate exceeds $1,000; (v) consulting or other contract with an unexpired term of more than one year or providing for payments in excess of $10,000 in the aggregate; (vi) collective bargaining agreement; (vii) contract, agreement or other commitment involving payments by it for more than $10,000 in the aggregate. Section 1.10 Compliance With Laws and Regulations. To the best of Corporation's knowledge and belief, Corporation has complied with all applicable statutes and regulations of any federal, state or other governmental entity or agency thereof, except to the extent that noncompliance would not materially and adversely affect the business, operations, properties, assets or condition of Corporation or would not result in Corporation incurring material liability. Section 1.11 Insurance. All of the insurable properties of Corporation are insured for Corporation `s benefit under valid and enforceable policy or policies containing substantially equivalent coverage and will be outstanding and in full force at the Closing Date. Section 1.12 Approval of Agreement. The directors of Corporation have authorized the execution and delivery of the Agreement by and have approved the transactions contemplated hereby. Section 1.13 Material Transactions or Affiliations. There are no material contracts or agreements of arrangement between Corporation and any person, who was at the time of such contract, agreement or arrangement an officer, director or person owning of record, or known to beneficially own ten percent (10%) or more of the issued and outstanding Common Shares of Corporation and which is to be performed in whole or in part after the date hereof. Corporation has no commitment, whether written or oral, to lend any funds to, borrow any money from or enter into material transactions with any such affiliated person. Section 1.14 No Conflict With Other Instruments. The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, or constitute an event of default under, any material indenture, mortgage, deed of trust or other material contract, agreement or instrument to which Corporation is a party or to which any of its properties or operations are subject. Section 1.15 Governmental Authorizations. Corporation has all licenses, franchises, permits or other governmental authorizations legally required to enable it to conduct its business in all material respects as conducted on the date hereof. Except for compliance with federal and state securities and corporation laws, as hereinafter provided, no authorization, approval, consent or order of, or registration, declaration or filing with, any court or other governmental body is required in connection with the execution and delivery by Corporation of this Agreement and the consummation of the transactions contemplated hereby. ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES OF UNIVERSAL FLIRTS, INC. As an inducement to, and to obtain the reliance of Corporation, Incorporated represents and warrants as follows: Section 2.1 Organization. Incorporated is a corporation duly organized, validly existing and in good standing under the laws of New York and has the corporate power and is duly authorized, qualified, franchised and licensed under all applicable laws, regulations, ordinances and orders of public authorities to own all of its properties and assets and to carry on its business in all material respects as it is now being conducted, including qualification to do business as a foreign entity in the country or states in which the character and location of the assets owned by it or the nature of the business transacted by it requires qualification. Included in the Attached Schedules (as hereinafter defined) are complete and correct copies of the articles of incorporation, bylaws and amendments thereto as in effect on the date hereof. The execution and delivery of this Agreement does not and the consummation of the transactions contemplated by this Agreement in accordance with the terms hereof will not, violate any provision of Incorporated's certificate of incorporation or bylaws. Incorporated has full power, authority and legal right and has taken all action required by law, its articles of incorporation, bylaws or otherwise to authorize the execution and delivery of this Agreement. Section 2.2 Capitalization. The authorized capitalization of Incorporated consists of 1,000,000 shares, $0.0001 par value and no preferred shares. As of the date hereof, there are 1,000,000 shares issued and outstanding. All issued and outstanding common shares have been legally issued, fully paid, are nonassessable and not issued in violation of the preemptive rights of any other person. Incorporated has no other securities, warrants or options authorized or issued. Section 2.3 Subsidiaries. Incorporated has no subsidiaries. Section 2.4 Tax Matters; Books & Records (a) The books and records, financial and others, of Incorporated are in all material respects complete and correct and have been maintained in accordance with good business accounting practices; and (b) Incorporated has no liabilities with respect to the payment of any country, federal, state, county, local or other taxes (including any deficiencies, interest or penalties). (c) Incorporated shall remain responsible for all debts incurred prior to the closing. Section 2.5 Information. The information concerning Incorporated as set forth in this Agreement and in the attached Schedules is complete and accurate in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading. Section 2.6 Title and Related Matters. Incorporated has good and marketable title to and is the sole and exclusive owner of all of its properties, inventory, interests in properties and assets, real and personal (collectively, the "Assets") free and clear of all liens, pledges, charges or encumbrances. Except as set forth in the Schedules attached hereto, Incorporated owns free and clear of any liens, claims, encumbrances, royalty interests or other restrictions or limitations of any nature whatsoever and all procedures, techniques, marketing plans, business plans, methods of management or other information utilized in connection with Incorporated's business. Except as set forth in the attached Schedules, no third party has any right to, and Incorporated has not received any notice of infringement of or conflict with asserted rights of others with respect to any product, technology, data, trade secrets, know-how, proprietary techniques, trademarks, service marks, trade names or copyrights which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a materially adverse affect on the business, operations, financial conditions or income of Incorporated or any material portion of its properties, assets or rights. Section 2.7 Litigation and Proceedings. There are no actions, suits or proceedings pending or threatened by or against or affecting Incorporated, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign or before any arbitrator of any kind that would have a material adverse effect on the business, operations, financial condition, income or business prospects of Incorporated. Incorporated does not have any knowledge of any default on its part with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator or governmental agency or instrumentality. Section 2.8 Contracts. On the Closing Date: (a) There are no material contracts, agreements, franchises, license agreements, or other commitments to which Incorporated is a party or by which it or any of its properties are bound; (b) Incorporated is not a party to any contract, agreement, commitment or instrument or subject to any charter or other corporate restriction or any judgment, order, writ, injunction, decree or award which materially and adversely affects, or in the future may (as far as Incorporated can now foresee) materially and adversely affect, the business, operations, properties, assets or conditions of Incorporated; and (c) Incorporated is not a party to any material oral or written: (i) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension, benefit or retirement plan, agreement or arrangement covered by Title IV of the Employee Retirement Income Security Act, as amended; (iii) agreement, contract or indenture relating to the borrowing of money; (iv) guaranty of any obligation for the borrowing of money or otherwise, excluding endorsements made for collection and other guaranties of obligations, which, in the aggregate exceeds $1,000; (v) consulting or other contract with an unexpired term of more than one year or providing for payments in excess of $10,000 in the aggregate; (vi) collective bargaining agreement; (vii) contract, agreement, or other commitment involving payments by it for more than $10,000 in the aggregate. Section 2.9 No Conflict With Other Instruments.The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, or constitute an event of default under, any material indenture, mortgage, deed of trust or other material contract, agreement or instrument to which Incorporated is a party or to which any of its properties or operations are subject. Section 2.10 Material Contract Defaults. To the best of Incorporated's knowledge and belief, it is not in default in any material respect under the terms of any outstanding contract, agreement, lease or other commitment which is material to the business, operations, properties, assets or condition of Incorporated, and there is no event of default in any material respect under any such contract, agreement, lease or other commitment in respect of which Incorporated has not taken adequate steps to prevent such a default from occurring. Section 2.11 Governmental Authorizations. To the best of Incorporated's knowledge, Incorporated has all licenses, franchises, permits and other governmental authorizations that are legally required to enable it to conduct its business operations in all material respects as conducted on the date hereof. Except for compliance with federal and state securities or corporation laws, no authorization, approval, consent or order of, or registration, declaration or filing with, any court or other governmental body is required in connection with the execution and delivery by Incorporated of the transactions contemplated hereby. Section 2.12 Compliance With Laws and Regulations. To the best of Incorporated's knowledge and belief, Incorporated has complied with all applicable statutes and regulations of any federal, state or other governmental entity or agency thereof, except to the extent that noncompliance would not materially and adversely affect the business, operations, properties, assets or condition of Incorporated or would not result in Incorporated 's incurring any material liability. Section 2.13 Insurance. All of the insurable properties of Incorporated are insured for Incorporated`s benefit under valid and enforceable policy or policies containing substantially equivalent coverage and will be outstanding and in full force at the Closing Date. Section 2.14 Approval of Agreement. The directors of Incorporated have authorized the execution and delivery of the Agreement and have approved the transactions contemplated hereby. Section 2.15 Material Transactions or Affiliations. As of the Closing Date, there will exist no material contract, agreement or arrangement between Incorporated and any person who was at the time of such contract, agreement or arrangement an officer, director or person owning of record, or known by Incorporated to own beneficially, ten percent (10%) or more of the issued and outstanding Common Shares of Incorporated and which is to be performed in whole or in part after the date hereof except with regard to an agreement with the Incorporated shareholders providing for the distribution of cash to provide for payment of federal and state taxes on Subchapter S income. Incorporated has no commitment, whether written or oral, to lend any funds to, borrow any money from or enter into any other material transactions with, any such affiliated person. ARTICLE III EXCHANGE PROCEDURE AND OTHER CONSIDERATION Section 3.1 Share Exchange/Delivery of Incorporated Securities. On the Closing Date, the holders of all of the Incorporated Common Shares shall deliver to Corporation (i) certificates or other documents evidencing all of the issued and outstanding Incorporated Common Shares, duly endorsed in blank or with executed power attached thereto in transferable form. On the Closing Date, all previously issued and outstanding Common Shares of Incorporated shall be transferred to Corporation, so that Incorporated shall become a wholly owned subsidiary of Corporation. Section 3.2 Issuance of Corporation Common Shares. In exchange for all of the Incorporated Common Shares tendered pursuant to Section 3.1, Corporation shall issue to the Incorporated shareholders a total of 8,500,000 Corporation common shares which are restricted in accordance with Rule 144 of the 1933 Securities Act. The 8,500,000 common shares shall be transferred to Darrell Lerner, the sole Incorporated shareholder: Darrell Lerner 8,500,000 Shares Section 3.3 Events Prior to Closing. Upon execution hereof or as soon thereafter as practical, management of Corporation and Incorporated shall execute, acknowledge and deliver (or shall cause to be executed, acknowledged and delivered) any and all certificates, opinions, financial statements, schedules, agreements, resolutions rulings or other instruments required by this Agreement to be so delivered, together with such other items as may be reasonably requested by the parties hereto and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby, subject only to the conditions to Closing referenced herein below. Section 3.4 Closing. The closing ("Closing") of the transactions contemplated by this Agreement shall be on or about May 27, 2004 ("Closing Date"). Section 3.5 Termination. (a) This Agreement may be terminated by the board of directors or majority interest of Shareholders of either Corporation or Incorporated, respectively, at any time prior to the Closing Date if: (i) there shall be any action or proceeding before any court or any governmental body which shall seek to restrain, prohibit or invalidate the transactions contemplated by this Agreement and which, in the judgment of such board of directors, made in good faith and based on the advice of its legal counsel, makes it inadvisable to proceed with the exchange contemplated by this Agreement; or (ii) any of the transactions contemplated hereby are disapproved by any regulatory authority whose approval is required to consummate such transactions. In the event of termination pursuant to this paragraph (a) of this Section 3.5, no obligation, right, or liability shall arise hereunder and each party shall bear all of the expenses incurred by it in connection with the negotiation, drafting and execution of this Agreement and the transactions herein contemplated. (b) This Agreement may be terminated at any time prior to the Closing Date by action of the board of directors of Corporation if Incorporated shall fail to comply in any material respect with any of its covenants or agreements contained in this Agreement or if any of the representations or warranties of Incorporated contained herein shall be inaccurate in any material respect, which noncompliance or inaccuracy is not cured after 20 days written notice thereof is given to Incorporated. If this Agreement is terminated pursuant to this paragraph (b) of this Section 3.5, this Agreement shall be of no further force or effect and no obligation, right or liability shall arise hereunder. (c) This Agreement may be terminated at any time prior to the Closing Date by action of the board of directors of Incorporated if Corporation shall fail to comply in any material respect with any of its covenants or agreements contained in this Agreement or if any of the representations or warranties of Corporation contained herein shall be inaccurate in any material respect, which noncompliance or inaccuracy is not cured after 20 days written notice thereof is given to Corporation. If this Agreement is terminated pursuant to this paragraph (d) of this Section 3.5, this Agreement shall be of no further force or effect and no obligation, right or liability shall arise hereunder. In the event of termination pursuant to paragraph (b) and (c) of this Section 3.5, the breaching party shall bear all of the expenses incurred by the other party in connection with the negotiation, drafting and execution of this Agreement and the transactions herein contemplated. Section 3.6 Directors of Corporation After Acquisition. After the Closing Date, Darrell Lerner shall remain the sole director of Corporation and shall hold office until his successor shall have been duly elected and shall have qualified or until his earlier death, resignation or removal. Section 3.7 Officers of Corporation. Upon the closing, Darrell Lerner shall remain as Chief Executive Officer, Chief Financial Officer, President, Secretary, and Treasurer of Corporation ARTICLE IV SPECIAL COVENANTS Section 4.1 Access to Properties and Records. Prior to closing, Corporation and Incorporated will each afford to the officers and authorized representatives of the other full access to the properties, books and records of each other, in order that each may have full opportunity to make such reasonable investigation as it shall desire to make of the affairs of the other and each will furnish the other with such additional financial and operating data and other information as to the business and properties of each other, as the other shall from time to time reasonably request. Section 4.2 Availability of Rule 144. Corporation and Incorporated shareholders holding "restricted securities, " as that term is defined in Rule 144 promulgated pursuant to the Securities Act will remain as "restricted securities". Corporation is under no obligation to register such shares under the Securities Act, or otherwise. The stockholders of Corporation and Incorporated holding restricted securities of Corporation and Incorporated as of the date of this Agreement and their respective heirs, administrators, personal representatives, successors and assigns, are intended third party beneficiaries of the provisions set forth herein. The covenants set forth in this Section 4.2 shall survive the Closing and the consummation of the transactions herein contemplated. Section 4.3 Special Covenants and Representations Regarding the Corporation Common Shares to be Issued in the Exchange. The consummation of this Agreement, including the issuance of the Corporation Common Shares to the Shareholders of Incorporated as contemplated hereby, constitutes the offer and sale of securities under the Securities Act, and applicable state statutes. Such transaction shall be consummated in reliance on exemptions from the registration and prospectus delivery requirements of such statutes which depend, inter alia, upon the circumstances under which the Incorporated Shareholders acquire such securities. Section 4.4 Third Party Consents. Corporation and Incorporated agree to cooperate with each other in order to obtain any required third party consents to this Agreement and the transactions herein contemplated. Section 4.5 Actions Prior and Subsequent to Closing. (a) From and after the date of this Agreement until the Closing Date, except as permitted or contemplated by this Agreement, Corporation and Incorporated will each use its best efforts to: (i) maintain and keep its properties in states of good repair and condition as at present, except for depreciation due to ordinary wear and tear and damage due to casualty; (ii) maintain in full force and effect insurance comparable in amount and in scope of coverage to that now maintained by it; (iii) perform in all material respects all of its obligations under material contracts, leases and instruments relating to or affecting its assets, properties and business; (b) From and after the date of this Agreement until the Closing Date, Corporation will not, without the prior consent of Incorporated: (i) except as otherwise specifically set forth herein, make any change in its articles of incorporation or bylaws; (ii) declare or pay any dividend on its outstanding Common Shares, except as may otherwise be required by law, or effect any stock split or otherwise change its capitalization, except as provided herein; (iii) enter into or amend any employment, severance or agreements or arrangements with any directors or officers; (iv) grant, confer or award any options, warrants, conversion rights or other rights not existing on the date hereof to acquire any Common Shares; or (v) purchase or redeem any Common Shares. Section 4.6 Indemnification. (a) Corporation hereby agrees to indemnify Incorporated, each of the officers, agents and directors and current shareholders of Incorporated as of the Closing Date against any loss, liability, claim, damage or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened or any claim whatsoever), to which it or they may become subject to or rising out of or based on any inaccuracy appearing in or misrepresentation made in this Agreement. The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement; and (b) Incorporated hereby agrees to indemnify Corporation, each of the officers, agents, directors and current shareholders of Corporation as of the Closing Date against any loss, liability, claim, damage or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened or any claim whatsoever), to which it or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentation made in this Agreement. The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement. ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF ASTURIAS The obligations of Corporation under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions: Section 5.1 Accuracy of Representations. The representations and warranties made by Corporation in this Agreement were true when made and shall be true at the Closing Date with the same force and effect as if such representations and warranties were made at the Closing Date (except for changes therein permitted by this Agreement), and Corporation shall have performed or compiled with all covenants and conditions required by this Agreement to be performed or complied with by Corporation prior to or at the Closing. Incorporated shall be furnished with a certificate, signed by a duly authorized officer of Corporation and dated the Closing Date, to the foregoing effect. Section 5.2 Director Approval. The Board of Directors of Corporation shall have approved this Agreement and the transactions contemplated herein. Section 5.3 Officer's Certificate. Incorporated shall have been furnished with a certificate dated the Closing Date and signed by a duly authorized officer of Corporation to the effect that: (a) the representations and warranties of Corporation set forth in the Agreement and in all Exhibits, Schedules and other documents furnished in connection herewith are in all material respects true and correct as if made on the Effective Date; (b) Corporation has performed all covenants, satisfied all conditions, and complied with all other terms and provisions of this Agreement to be performed, satisfied or complied with by it as of the Effective Date; (c) since such date and other than as previously disclosed to Incorporated, Corporation has not entered into any material transaction other than transactions which are usual and in the ordinary course if its business; and (d) no litigation, proceeding, investigation or inquiry is pending or, to the best knowledge of Corporation, threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement or, to the extent not disclosed in the Corporation Schedules, by or against Corporation which might result in any material adverse change in any of the assets, properties, business or operations of Corporation. Section 5.4 No Material Adverse Change. Prior to the Closing Date, there shall not have occurred any material adverse change in the financial condition, business or operations of nor shall any event have occurred which, with the lapse of time or the giving of notice, may cause or create any material adverse change in the financial condition, business or operations of Corporation. Section 5.5 Other Items. Incorporated shall have received such further documents, certificates or instruments relating to the transactions contemplated hereby as Incorporated may reasonably request. ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF FISHTHEWORLD The obligations of Incorporated under this Agreement are subject to the satisfaction, at or before the Closing date (unless otherwise indicated herein), of the following conditions: Section 6.1 Accuracy of Representations. The representations and warranties made by Incorporated in this Agreement were true when made and shall be true as of the Closing Date (except for changes therein permitted by this Agreement) with the same force and effect as if such representations and warranties were made at and as of the Closing Date, and Incorporated shall have performed and complied with all covenants and conditions required by this Agreement to be performed or complied with by Incorporated prior to or at the Closing. Corporation shall have been furnished with a certificate, signed by a duly authorized executive officer of Incorporated and dated the Closing Date, to the foregoing effect. Section 6.2 Director Approval. The Board of Directors of Incorporated shall have approved this Agreement and the transactions contemplated herein. Section 6.3 Officer's Certificate. Corporation shall be furnished with a certificate dated the Closing date and signed by a duly authorized officer of Incorporated to the effect that: (a) the representations and warranties of Incorporated set forth in the Agreement and in all Exhibits, Schedules and other documents furnished in connection herewith are in all material respects true and correct as if made on the Effective Date; and (b) Incorporated had performed all covenants, satisfied all conditions, and complied with all other terms and provisions of the Agreement to be performed, satisfied or complied with by it as of the Effective Date. Section 6.4 No Material Adverse Change. Prior to the Closing Date, there shall not have occurred any material adverse change in the financial condition, business or operations of nor shall any event have occurred which, with the lapse of time or the giving of notice, may cause or create any material adverse change in the financial condition, business or operations of Incorporated. ARTICLE VII MISCELLANEOUS Section 7.1 Brokers and Finders. Each party hereto hereby represents and warrants that it is under no obligation, express or implied, to pay certain finders in connection with the bringing of the parties together in the negotiation, execution, or consummation of this Agreement. The parties each agree to indemnify the other against any claim by any third person for any commission, brokerage or finder's fee or other payment with respect to this Agreement or the transactions contemplated hereby based on any alleged agreement or understanding between the indemnifying party and such third person, whether express or implied from the actions of the indemnifying party. Section 7.2 Law, Forum and Jurisdiction. This Agreement shall be construed and interpreted in accordance with the laws of the State of New York, United States of America. Section 7.3 Notices. Any notices or other communications required or permitted hereunder shall be sufficiently given if personally delivered to it or sent by registered mail or certified mail, postage prepaid, or by prepaid telegram addressed as follows: If to Corporation : Anslow & Jaclin, LLP 195 Route 9 South Suite 206 Manalapan, NJ 07726 If to Incorporated: 142 Mineola Avenue, Suite 2-D Roslyn Heights, NY 11577 or such other addresses as shall be furnished in writing by any party in the manner for giving notices hereunder, and any such notice or communication shall be deemed to have been given as of the date so delivered, mailed or telegraphed. Section 7.4 Attorneys' Fees. In the event that any party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the breaching party or parties shall reimburse the non-breaching party or parties for all costs, including reasonable attorneys' fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein. Section 7.5 Confidentiality. Each party hereto agrees with the other party that, unless and until the transactions contemplated by this Agreement have been consummated, they and their representatives will hold in strict confidence all data and information obtained with respect to another party or any subsidiary thereof from any representative, officer, director or employee, or from any books or records or from personal inspection, of such other party, and shall not use such data or information or disclose the same to others, except: (i) to the extent such data is a matter of public knowledge or is required by law to be published; and (ii) to the extent that such data or information must be used or disclosed in order to consummate the transactions contemplated by this Agreement. Section 7.6 Schedules; Knowledge. Each party is presumed to have full knowledge of all information set forth in the other party's schedules delivered pursuant to this Agreement. Section 7.7 Third Party Beneficiaries.This contract is solely between Corporation and Incorporated and except as specifically provided, no director, officer, stockholder, employee, agent, independent contractor or any other person or entity shall be deemed to be a third party beneficiary of this Agreement. Section 7.8 Entire Agreement.This Agreement represents the entire agreement between the parties relating to the subject matter hereof. This Agreement alone fully and completely expresses the agreement of the parties relating to the subject matter hereof. There are no other courses of dealing, understanding, agreements, representations or warranties, written or oral, except as set forth herein. This Agreement may not be amended or modified, except by a written agreement signed by all parties hereto. Section 7.9 Survival; Termination. The representations, warranties and covenants of the respective parties shall survive the Closing Date and the consummation of the transactions herein contemplated for 18 months. Section 7.10 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument. Section 7.11 Amendment or Waiver. Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any time prior to the Closing Date, this Agreement may be amended by a writing signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance hereof may be extended by a writing signed by the party or parties for whose benefit the provision is intended. Section 7.12 Expenses. Each party herein shall bear all of their respective cost s and expenses incurred in connection with the negotiation of this Agreement and in the consummation of the transactions provided for herein and the preparation thereof. Section 7.13 Headings; Context. The headings of the sections and paragraphs contained in this Agreement are for convenience of reference only and do not form a part hereof and in no way modify, interpret or construe the meaning of this Agreement. Section 7.14 Benefit. This Agreement shall be binding upon and shall inure only to the benefit of the parties hereto, and their permitted assigns hereunder. This Agreement shall not be assigned by any party without the prior written consent of the other party. Section 7.15 Public Announcements. Except as may be required by law, neither party shall make any public announcement or filing with respect to the transactions provided for herein without the prior consent of the other party hereto. Section 7.16 Severability. In the event that any particular provision or provisions of this Agreement or the other agreements contained herein shall for any reason hereafter be determined to be unenforceable, or in violation of any law, governmental order or regulation, such unenforceability or violation shall not affect the remaining provisions of such agreements, which shall continue in full force and effect and be binding upon the respective parties hereto. Section 7.17 Failure of Conditions; Termination. In the event of any of the conditions specified in this Agreement shall not be fulfilled on or before the Closing Date, either of the parties have the right either to proceed or, upon prompt written notice to the other, to terminate and rescind this Agreement. In such event, the party that has failed to fulfill the conditions specified in this Agreement will liable for the other parties legal fees. The election to proceed shall not affect the right of such electing party reasonably to require the other party to continue to use its efforts to fulfill the unmet conditions. Section 7.18 No Strict Construction. The language of this Agreement shall be construed as a whole, according to its fair meaning and intendment, and not strictly for or against either party hereto, regardless of who drafted or was principally responsible for drafting the Agreement or terms or conditions hereof. Section 7.19 Execution Knowing and Voluntary. In executing this Agreement, the parties severally acknowledge and represent that each: (a) has fully and carefully read and considered this Agreement; (b) has been or has had the opportunity to be fully apprized by its attorneys of the legal effect and meaning of this document and all terms and conditions hereof; (c) is executing this Agreement voluntarily, free from any influence, coercion or duress of any kind. Section 7.20 Amendment. At any time after the Closing Date, this Agreement may be amended by a writing signed by both parties, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance hereof may be extended by a writing signed by the party or parties for whose benefit the provision is intended. Section 7.21 Conflict of Interest. Both Incorporated and Corporation understand that Anslow & Jaclin, LLP is representing both parties in this transaction which represents a conflict of interest Both Incorporated and Corporation have the right to different counsel due to this conflict of interest. Notwithstanding the above, both Incorporated and Corporation agrees to waive this conflict and have Anslow & Jaclin, LLP represent both parties in the above-referenced transaction. Both Incorporated and Corporation agree to hold this law firm harmless from any and all liabilities that may occur or arise due to this conflict. IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to be executed by their respective officers, hereunto duly authorized, and entered into as of the date first above written. ATTEST: UNIVERSAL FLIRTS, CORP. By: /s/ Darrell Lerner ------------------ ATTEST: UNIVERSAL FLIRTS, INC. By: /s/ Darrell Lerner ------------------ DARRELL LERNER SOLE SHAREHOLDER - UNIVERSAL FLIRTS, INC. By: /s/ Darrell Lerner ------------------ EX-21 6 fsb2ex21_universalflirts.txt SUBSIDIARY OF UNIVERSAL FLIRTS CORP. LIST OF SUBSIDIARIES -------------------- UNIVERSAL FLIRTS, INC. - A New York Corporation EX-23 7 fsb2ex23_universalflirts.txt AUDITORS CONSENT OF GATELY & ASSOCIATES INDEPENDENT AUDITORS'CONSENT We hereby consent to the use in this Registration Statement on Form SB-2 of our report dated July 7, 2004, relating to the consolidated financial statements of Universal Flirts, Corp. We also consent to the reference to our firm under the caption "Experts" in the Registration Statement. /s/ Gately & Associates, Inc. GATELY & ASSOCIATES, INC. Boca Raton, Florida July 28, 2004 -----END PRIVACY-ENHANCED MESSAGE-----