-----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, EFTgozZ3LZegTB3L5OK7kAXD/Ad9q2pVSZauQWc46HoCfAWqQ7FBeplwir1gm0FP nHF+9fE+P45wA63NcJH8YA== 0001144204-05-007448.txt : 20050314 0001144204-05-007448.hdr.sgml : 20050314 20050314134239 ACCESSION NUMBER: 0001144204-05-007448 CONFORMED SUBMISSION TYPE: SB-2 PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20050314 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEVIN TEXTILES INT CENTRAL INDEX KEY: 0001319815 IRS NUMBER: 980437836 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SB-2 SEC ACT: 1933 Act SEC FILE NUMBER: 333-123292 FILM NUMBER: 05677888 BUSINESS ADDRESS: STREET 1: 315 EAST 2ND AVE CITY: VANCOUVER STATE: A1 ZIP: V5T1B9 BUSINESS PHONE: 604-215-3291 MAIL ADDRESS: STREET 1: 315 EAST 2ND AVE CITY: VANCOUVER STATE: A1 ZIP: V5T1B9 SB-2 1 v014270_sb2.txt AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 14, 2005 AN EXHIBIT LIST CAN BE FOUND ON PAGE II-2. REGISTRATION NO. 333- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 LEVIN TEXTILES INTERNATIONAL INC. (Name of small business issuer in its charter) DELAWARE 2200 98-0437836 - ----------------------------- ---------------------------- ------------------- (State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.) 315 E. 2nd Avenue Vancouver, British Columbia Canada V5T 1B9 (604) 215-3294 ------------------------------------------------------------- (Address and telephone number of principal executive offices) Simon Levin, President 315 E. 2nd Avenue Vancouver, British Columbia Canada V5T 1B9 (604) 215-3294 --------------------------------------------------------- (Name, address and telephone number of agent for service) COPIES TO: Marc Ross, Esq. Sichenzia Ross Friedman Ference LLP 1065 Avenue of the Americas New York, New York 10018 (212) 930-9700 APPROXIMATE DATE OF PROPOSED SALE TO 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, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. |_| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. |_| CALCULATION OF REGISTRATION FEE ================================================================================ Proposed Proposed Maximum Maximum Title of each class Offering Aggregate Amount of of securities Amount to be Price Per Offering Registration to be registered Registered Security (1) Price Fee - -------------------------------------------------------------------------------- Common Stock, $.001 par value per share, to be offered by the selling stockholders 939,500 $0.10 $93,950 $11.06 - -------------------------------------------------------------------------------- Common Stock, $.001 par value per share, for sale by the Company 2,500,000 $0.10 $250,000 $29.43 - -------------------------------------------------------------------------------- Total 3,439,500 $343,950.00 $40.49 ================================================================================ (1) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(e) under the Securities Act of 1933. 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 this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a) may determine. The information in this prospectus is not complete and may be changed. We 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 is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. PRELIMINARY PROSPETUS, SUBJECT TO COMPLETION, DATED MARCH 14, 2005 Levin Textiles International Inc. 3,439,500 Shares of Common Stock This prospectus relates to the sale of 3,439,500 shares of our common stock, par value $.001 per share. Of the 3,439,500 shares, up to 2,500,000 shares may be sold by us at $0.10 per share. The common stock will be sold through our sole officer and director, Simon Levin, to investors, both inside and outside the United States. For purposes of this offering, the officer and director involved in offering and selling the shares on our behalf may be deemed to be an underwriter of this offering. The shares will be sold as a self-underwritten offering with no minimum number of shares required to be sold in order for us to accept funds. We have no arrangement to place the proceeds of this offering in an escrow, trust or similar account. We will offer shares pursuant to this prospectus until December 31, 2005. No assurance can be given on the number of shares we will sell or that we will be able to sell any shares. In addition, this prospectus relates to the resale of up to 939,500 shares of common stock by selling stockholders. The selling stockholders may sell their common stock from time to time in private negotiated transactions. The selling stockholders will offer or sell shares of our common stock at $0.10 per share unless and until the offering price is changed by subsequent amendment to this prospectus or our shares are quoted on the OTC Bulletin Board. Should our shares become listed on the OTC Bulletin Board, selling stockholders may then sell shares at prevailing market prices or privately negotiated prices. We will not receive any proceeds from the resale of shares of common stock by the selling stockholders. We have paid the expenses of preparing this prospectus and the related registration expenses. Our common stock is not currently traded on any exchange or quotation system. The Securities offered hereby involve a high degree of risk. See "Risk Factors" beginning on page 2. We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments or supplements carefully before you make your investment decision. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. ================================================================================ Price to Maximum Selling Proceeds to the the Public Commission Company (1) - -------------------------------------------------------------------------------- Per Share $0.10 0 $0.10 - -------------------------------------------------------------------------------- 2,500,000 shares of common stock offered by us $250,000 0 $250,000 - -------------------------------------------------------------------------------- 939,500 shares of common stock offered by selling stockholders $93,950 0 0 ================================================================================ (1) Before deducting expenses related to the offering anticipated to be $25,000 TABLE OF CONTENTS ----------------- Page ---- Prospectus Summary 1 Risk Factors 2 The Offering 6 Use of Proceeds 6 Dilution 7 Market For Common Stock 7 Dividend Policy 8 Forward Looking Statements 8 Business 9 Description of Property 12 Legal Proceedings 12 Management's Discussion and Analysis and Plan of Operations 14 Management 16 Executive Compensation 17 Certain Relationships and Related Transactions 18 Security Ownership of Certain Beneficial Owners and Management 19 Plan of Distribution 20 Selling Stockholders 22 Description of Securities 23 Indemnification for Securities Act Liabilities 24 Legal Matters 24 Experts 24 Additional Information 24 Index to Financial Statements 25 PROSPECTUS SUMMARY The following summary highlights selected information contained in this prospectus. This summary does not contain all the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus carefully, including the "RISK FACTORS" section, the financial statements and the notes to the financial statements. LEVIN TEXTILES INTERNATIONAL INC. We were incorporated under the laws of the State of Delaware on July 7, 2004 to act as a holding company for our wholly-owned subsidiary, Levin Industries Ltd. Levin Industries is a sales and marketing company based in Vancouver, British Columbia, Canada. Levin Industries' goal it is to generate manufacturing contracts and place them in manufacturing facilities in North America and Asia. Levin Industries receives a fixed commission for the procurement of these contracts. Levin Industries also intends to acquire minority interests in manufacturing facilities in Asia. We are a development stage business and have had nominal revenues since our formation. There is currently no public market for our common stock. Subsequent to this offering, we hope to have our common stock approved for quotation on the Over-The-Counter Bulletin Board. We have incurred losses since our inception and we expect to incur losses for the foreseeable future. For the period from February 16, 2004 (date of inception) to November 30, 2004, we incurred a net loss of $24,516. As a result of operating losses from inception and our being a development stage company, these issues raise substantial doubt about our ability to continue as a going concern. Our principal executive offices are located at 315 E. 2nd Avenue, Vancouver, British Columbia, Canada V5T 1B9. Our telephone number is (604) 215-3294. Offering Summary Selling stockholders are offering for resale up to 939,500 shares of our common stock which they currently own. We will not be involved in the offer or sale of these shares other than registering such shares for resale pursuant to this prospectus. We are offering up to 2,500,000 shares of its common stock in order to raise up to $250,000 of proceeds to be used in our business operations. 1 RISK FACTORS Our business involves a high degree of risk. Potential investors should carefully consider the risks and uncertainties described below and the other information in this prospectus before deciding whether to invest in shares of our common stock. If any of the following risks actually occur, our business, financial condition, and results of operations could be materially and adversely affected. This could cause the trading price of our common stock to decline, with the loss of part or all of an investment in the common stock. Risks Related to Our Business - ----------------------------- Our financial status creates doubt whether we will continue as a going concern for more than 12 months from the date of this prospectus. If we do not continue as a going concern, investors will lose their entire investment. We reported a net loss totaling $24,516 from February 16, 2004, our date of inception, until November 30, 2004. We will require additional working capital to develop business operations. We intend to raise additional working capital either through private placements, public offerings and/or bank financing. There are no assurances that we will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or obtain additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms. These conditions raise substantial doubt about our ability to continue as a going concern. If adequate working capital is not available we may be forced to discontinue operations, which would cause investors to lose the entire amount of their investment. We are a development stage company and have a limited operating history upon which an evaluation of our prospects can be made. For that reason, it would be difficult for a potential investor to judge our prospects for success. We were organized in July 2004 and our operating subsidiary was organized in February 2004 and have had limited operations since our inception from which to evaluate our business and prospects. There can be no assurance that our future proposed operations will be implemented successfully or that we will ever have profits. If we are unable to sustain our operations, you may lose your entire investment. We face all the risks inherent in a new business, including the expenses, difficulties, complications and delays frequently encountered in connection with conducting operations, including capital requirements and management's potential underestimation of initial and ongoing costs. In evaluating our business and prospects, these difficulties should be considered. We need significant infusions of additional capital, which may result in dilution to your ownership and voting rights in our Company. Based upon our current cash reserves and forecasted operations, we believe that we will need to obtain at least $1 million in outside funding to implement our plan of operation over the next twelve months. Although we are seeking to raise up to $250,000 in this offering, there is no assurance that this amount or any meaningful amount can be raised in this offering. Our need for additional capital to finance our business strategy, operations, and growth will be greater should, among other things, revenue or expense estimates prove to be incorrect. If we fail to arrange for sufficient capital in the future, we may be required to reduce the scope of our business activities until we can obtain adequate financing. We may not be able to obtain additional financing in sufficient amounts or on acceptable terms when needed, which could adversely affect our operating results and prospects. Debt financing must be repaid regardless of whether or not we generate profits or cash flows from our business activities. Equity financing may result in dilution to existing stockholders and may involve securities that have rights, preferences, or privileges that are senior to our common stock. 2 If we are not able to manage growth of our business, our financial condition and results of operations will be negatively affected. We anticipate a period of significant growth. This growth could cause significant strain on our managerial, operational, financial and other resources. Success in managing this expansion and growth will depend, in part, upon the ability of our senior management to effectively manage the growth of our business. Any failure to manage the proposed growth and expansion of our business could have a material adverse effect on our financial condition and results of operations. The loss of Simon Levin could have a material adverse effect on our business; if we are not able to retain additional key personnel, our business could suffer. Our success depends to a large degree upon the skills of Mr. Levin, our sole officer and director, and upon our ability to identify, hire, and retain additional senior management, sales, marketing and financial personnel. We may not be able to retain our existing key personnel or to attract and retain additional key personnel. The loss of Mr. Levin or the failure to attract, integrate, motivate, and retain additional key employees could have a material adverse effect on our business. We do not have "key person" insurance on the life of Mr. Levin. We are dependent on certain contractual relationships to generate revenues, the loss of which could significantly reduce revenue. Our revenue is dependent upon the contractual relationships we can establish with companies to place their products in manufacturing facilities. We currently have one contract with ANK Apparel and hope to general additional contracts in the future. Although we believe we will continue to meet all of our material obligations under such contracts, there can be no assurance that such contracts will continue or will be available for renewal on favorable terms. Failure to obtain new contracts or extensions on current contracts for any reason, could have a significant negative impact on our revenue. A manufacturer's inability to produce our clients' goods on time and to our clients' specifications could result in lost revenue and net losses. We do not own or operate any manufacturing facilities and therefore depend upon third parties for the manufacture of all of the products for which we generate contracts for our clients. These products are manufactured to our client specifications. The inability of a manufacturer to process our goods on time, ship orders of the products in a timely manner or to meet the quality standards could cause us to miss the delivery date requirements of our customers for those items, which could result in cancellation of orders, refusal to accept deliveries or a reduction in purchase prices, any of which could have a material adverse effect as our revenues would decrease and we would incur net losses as a result of the manufacture of such products, if any sales could be made. Because of the seasonality the apparel business in particular, the dates on which customers need and require shipments of products are critical, as styles and consumer tastes change so rapidly in the apparel business, particularly from one season to the next. Further, because quality is a leading factor when customers and retailers accept or reject goods, any decline in quality by our third-party manufacturers could be detrimental not only to a particular order, but also to our future relationship with that particular customer. If we need to replace manufacturers, our expenses could increase resulting in smaller profit margins. We compete with other companies for the production capacity of manufacturers and import quota capacities. Many of these competitors have greater financial and other resources than we have, and thus may have an advantage in the competition for production and import quota capacity. If we experience a significant increase in demand, or if an existing manufacturer of ours must be replaced, we may have to expand our third-party manufacturing capacity. We cannot assure you that this additional capacity will be available when required on terms that are acceptable to us or our clients or similar to existing terms which we have had with manufacturers in the past, either from a production standpoint or a financial standpoint. 3 Should we be forced to replace one or more of our manufacturers, particularly a manufacturer that we may rely upon for a substantial portion of its production needs, such as ANK Apparel Source Inc. and their affiliates, then we may experience an adverse financial impact, or an adverse operational impact, such as being forced to pay increased costs for such replacement manufacturing or delays upon distribution and delivery of our clients' products to their customers, which could cause us to lose customers or lose revenues because of late shipments. If a manufacturer fails to use acceptable labor practices, we might have delays in shipments or face joint liability for violations, resulting in decreased revenue and increased expenses. While we require our independent manufacturers to operate in compliance with applicable laws and regulations, we have no control over the ultimate actions of our independent manufacturers. While our internal and vendor operating guidelines promote ethical business practices and our staff periodically visit and monitor the operations of our independent manufacturers, we do not control these manufacturers or their labor practices. The violation of labor or other laws by an independent manufacturer of ours or the divergence of an independent manufacturer's labor practices from those generally accepted as ethical in the United States, could interrupt, or otherwise disrupt the shipment of finished products to our clients or damage our reputation. Any of these, in turn, could have a material adverse effect on our financial condition and results of operations. In particular, the laws governing garment manufacturers in the State of California impose joint liability upon us and our independent manufacturers for the labor practices of those independent manufacturers. As a result, should one of our independent manufacturers be found in violation of state labor laws, we could suffer financial or other unforeseen consequences. We have never used or currently intend to use a manufacturer in the State of California, although we cannot rule out using one in the future. Many of our competitors are larger and have greater financial and other resources than we do and those advantages could make it difficult for us to compete with them. The fashion apparel manufacturing industry is extremely competitive and includes several companies which have achieved substantially greater market shares than we have, and have longer operating histories, have larger customer bases, have substantially greater financial, development and marketing resources than we do. If overall demand for our services should decrease it could have a materially adverse affect on our operating results. We face intense competition in the manufacturing contract procurement industry. We face a variety of competitive challenges from other domestic and foreign fashion-oriented apparel producers, many of which may be significantly larger and more diversified and have greater financial and marketing resources than we have. We do not currently hold a dominant competitive position in any market. We compete with fashion apparel producers and manufacturers for the placement of the manufacturing business. The elimination of quotas may lead to increased competition. In 1995, the Agreement on Textiles and Clothing came into effect, requiring importing countries, including Canada, the United States and countries in Western Europe, to eliminate quotas on imports of textiles and apparel from WTO member exporting countries by 2005. This could result in increased competition from developing countries which have lower labor costs and reliable infrastructures, such as China, India and Pakistan. Increased competition from such countries could adversely affect our business. Moreover, since January 2003, Canada has granted duty and quota free access to approximately 48 least developed countries, which may result in increased competition from these least developed countries in the Canadian textile and apparel markets. To obtain new customers, we must overcome long-standing customer relationships and long sales cycles; failure to obtain new customers could result in increased expenses and operating losses. Many of the potential customers that we pursue have long-standing business relationships and personal ties with their existing manufacturers, which they are reluctant to disrupt. To successfully sell our services, we generally must educate potential customers on the use and benefits of our services, which can require significant time and resources. Consequently, we must incur substantial expenses in acquiring new customers. The period between initial contact and the retention of our services is often long and subject to delays associated with the lengthy approval and competitive evaluation processes that typically accompany a customer's decision to change its outsourcing relationships. For many customers, the cycle could takes several months, and for large customers, the cycle may require more than one year. If we are unable to obtain new customers, it could result in increased operating and marketing expenses and operating losses. 4 The offering price of $0.10 per share was arbitrarily determined by us and is not based on any trading market value which makes the offering price speculative and subject to significant change after purchase. The price of our common stock offered hereby has been arbitrarily determined by us and bears no relationship to our earnings, book value or any other recognized criteria of value. Our shares are not currently traded on any stock market. Consequently, no established market value for our shares exists. As a result, there is no assurance that shares purchased pursuant to this prospectus can be resold at or above the offering price. Our sole officer and director, Mr. Levin, will own a controlling interest in our voting stock and investors will not have any voice in our management. Upon completion of this offering, our sole officer and director, Mr. Levin will, in the aggregate, beneficially own approximately 50.51% of our outstanding common stock. As a result, Mr. Levin will have the ability to control substantially all matters submitted to our stockholders for approval, including: o election of our board of directors; o removal of any of our directors; o amendment of our certificate of incorporation or bylaws; and o adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination involving us. As a result of his ownership and position, Mr. Levin is able to influence all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. In addition, sales of significant amounts of shares held by Mr. Levin, or the prospect of these sales, could adversely affect the market price of our common stock. Mr. Levin's stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price. Risks Related to Our Common Stock - --------------------------------- There is currently no public market for our common stock. Failure to develop or maintain a trading market could negatively affect the value of our shares and make it difficult or impossible for you to sell your shares. Prior to this offering, there has been no public market for our common stock and a public market for our common stock may not develop upon completion of this offering. Failure to develop or maintain an active trading market could negatively affect the value of our shares and make it difficult for you to sell your shares or recover any part of your investment in us. Even if a market for our common stock does develop, the market price of our common stock may be highly volatile. In addition to the uncertainties relating to our future operating performance and the profitability of our operations, factors such as variations in our interim financial results, or various, as yet unpredictable factors, many of which are beyond our control, may have a negative effect on the market price of our common stock. 5 THE OFFERING We are registering up to 2,500,000 shares of common stock for sale to the public. The common stock will be sold by our sole officer and director Simon Levin, to investors inside and outside the United States. Other than possible reimbursement for out-of-pocket selling costs incurred by the officers and directors in their selling efforts and costs of preparing this prospectus, no commissions or other deductions will be paid from the proceeds raised. There is no minimum number of shares that must be sold in order for us to accept funds and consummate investor purchases. Determination of offering price We have arbitrarily determined the initial public offering price of the shares at $0.10 per share which price does not necessarily bear any relationship to established valuation criteria such as earnings, book value or assets. Rather, the offering price per share was derived from a subjective consideration by management of various factors including: o prevailing market conditions, including the history and prospects for the industry in which we compete; o our future prospects; and o our capital structure. Due to the arbitrary nature of the $0.10 offering price of the shares, such valuation may not be indicative of prices that may prevail at any time or from time to time in the future. You cannot be sure that a public market for any of our securities will develop and continue or that the shares will ever trade at a price higher than the offering price in this offering. We are also registering on behalf of selling stockholders, for resale up to 939,500 shares of common stock. The shares of common stock offered for resale may be sold in a secondary offering by the selling stockholders by means of this prospectus. The shares will be sold at a price of $0.10 per share. We will not participate in the resale of shares by selling stockholders. USE OF PROCEEDS The proceeds from the sale of the shares of common stock offered by us are estimated to be up to $250,000 based on a public offering price of $0.10 per share. We intend to utilize the estimated proceeds during the twenty-four month period following this offering for the following purposes:
- ------------------------------- ---------------- ---------------- ---------------- ----------------- 25% of Maximum 50% of Maximum 75% of Maximum Maximum Offering Offering Amount Offering Amount Offering Amount Amount - ------------------------------- ---------------- ---------------- ---------------- ----------------- Total Proceeds $ 62,500 $ 125,000 $ 187,500 $ 250,000 Legal and Accounting Costs of Offering $ 15,000 $ 15,000 $ 15,000 $ 15,000 Net Proceeds from Offering $ 47,500 $ 110,000 $ 172,500 $ 235,000 Use of Net Proceeds Joint Ventures $ 21,000 $ 42,000 $ 63,000 $ 84,000 Research and Travel $ 6,000 $ 12,000 $ 18,000 $ 24,000 Marketing and Advertising $ 9,500 $ 46,000 $ 80,500 $ 117,000 Working Capital $ 11,000 $ 10,000 $ 11,000 $ 10,000 - ------------------------------- ---------------- ---------------- ---------------- -----------------
6 DILUTION Our book value per share, as of November 30, 2004 was $0.00 per share. Without taking into account any changes in our book value after November 30, 2004 and giving effect to the sale by us of 1,250,000 or 2,500,000 shares of common stock offered hereby (after deducting estimated offering expenses payable by us) the pro forma book value at November 30, 2004, would have been approximately $112,820 or $0.03 per share if 1,250,000 shares are sold and $237,820 or $0.04 per share if 2,500,000 shares are sold. This amount represents an immediate and significant dilution to new investors. The following table illustrates this dilution per share:
1,250,000 2,500,000 Shares Sold Shares Sold ----------- ----------- Public offering price per share $ 0.10 $ 0.10 Weighted average price per share paid by existing stockholders $ 0.10 $ 0.10 Book Value per share at November 30, 2004 $ 0.00 $ 0.00 Book value per share after offering $ 0.03 $ 0.04 Increase per share attributable to existing stockholders $ 0.03 $ 0.04 Dilution per share to new investors $ 0.07 $ 0.06
The following table sets forth, as of March 1, 2005, certain information regarding the existing stockholders and the investors purchasing shares of common stock in this offering:
50% Shares Purchased 100% Shares Purchased -------------------- --------------------- Number of Amount Number of Amount Shares Percent Invested Percent Shares Percent Invested Percent --------- ------- --------- ------- --------- ------- --------- ------- Existing Stockholders 3,439,500 73.3% $ 68,950 35.6% 3,439,500 57.9% $ 68,950 21.6% New investors 1,250,000 26.7% $ 125,000 64.4% 2,500,000 42.1% $ 250,000 78.4% --------- ----- --------- ----- --------- ----- --------- ----- Total 4,689,500 100% $ 193,950 100% 5,939,500 100% $ 318,950 100% ========= ===== ========= ===== ========= ===== ========= =====
MARKET FOR OUR COMMON STOCK Our common stock is not quoted on any exchange and there is no public trading market. As of March 11, 2005, we had 3,439,500 issued and outstanding shares of common stock and 13 stockholders of record. We do not have any outstanding options, warrants or other arrangements providing for the issuance of additional shares of our capital stock. Of the 3,439,500 shares of common stock outstanding, none of these shares are eligible for resale pursuant to Rule 144 of the 1933 Act as they have been held for less than one year. Except for the shares being registered in this prospectus, we do not have any current intention or obligation to register any additional shares of common stock for sale. 7 There is no public market for our common stock. Trades of our common stock, should a market ever develop, will be subject to Rule 15g-9 of the Securities and Exchange Commission, which rule imposes certain requirements on broker/dealers who sell securities subject to the rule to persons other than established customers and accredited investors. For transactions covered by the rule, brokers/dealers must make a special suitability determination for purchasers of the securities and receive the purchaser's written agreement to the transaction prior to sale. The SEC also has rules that regulate broker/dealer practices in connection with transactions in "penny stocks". 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, provided that current price and volume information with respect to transactions in that security is provided by the exchange or system). The 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 prepared by the SEC that provides information about penny stocks and the nature and level of 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 bid and offer quotations, and the broker/dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our common stock. As a result of these rules, investors in this offering, even if a market for our shares ever develops, may find it difficult to sell their shares. The provisions in our Certificate of Incorporation allow our board of directors to issue preferred stock with rights, preferences and privileges superior to our common stock. The issuance of preferred stock with such rights may make the removal of management difficult even if such removal would be considered beneficial to stockholders generally. It would have the effect of limiting stockholder participation in certain transactions such as mergers or tender offers if such transactions are not favored by our management. There are no shares of preferred stock outstanding, and there are no current plans, arrangements, commitments or undertakings to issue any preferred stock. However, the board of directors has the authority to issue shares of preferred stock at any time up to the amount authorized in our Certificate of Incorporation. DIVIDEND POLICY Holders of our common stock are entitled to receive such dividends as may be declared by our board of directors and, in the event of liquidation, to share pro rata in any distribution of our assets after payment of liabilities. We have not paid any dividends on our common stock and we do not have any current plans to pay any common stock dividends. FORWARD-LOOKING STATEMENTS This prospectus contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks identified in the section entitled "Risk Factors," that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. 8 BUSINESS Forward Looking Statements Certain information contained in this Form SB-2 are forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). Factors set forth that appear with the forward-looking statements, or in our other Securities and Exchange Commission filings, could affect our actual results and could cause our actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, us in this Form SB-2. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms "believes," "belief," "expects," "intends," "anticipates" or "plans" to be uncertain and forward-looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in our reports and registration statements filed with the Securities and Exchange Commission. In addition, prior financial performance and customer orders are not necessarily indicative of the results that may be expected in the future and we believe that such comparisons cannot be relied upon as indicators of future performance. Additionally, we undertake no obligation to publicly release the results of any revisions to these forward-looking statements, which may be made to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Introduction and Background We were incorporated under the laws of the State of Delaware on July 7, 2004 to act as a holding company for our wholly-owned subsidiary, Levin Industries Ltd. Levin Industries is a sales and marketing company based in Vancouver, British Columbia, Canada. Levin Industries' goal it is to generate manufacturing contracts and place them in manufacturing facilities in North America and Asia. Levin Industries receives a fixed commission for the procurement of these contracts. Levin Industries also intends to acquire minority interests in manufacturing facilities in Asia. We are a development stage business and have had nominal revenues since our formation. Contract Procurement Our primary focus is to generate contracts with companies that create technical outerwear clothing to place their manufacturing orders with manufacturing facilities and oversee the process from design to finished product. Many large fashion and apparel companies do not own their own manufacturing facilities; instead, they have internal departments that are responsible for finding manufacturing facilities, negotiating contracts and overseeing the process at such facilities until the products are produced and shipped. We believe there is a growing market for the outsourcing of this services from in-house to companies like ours. We offer the following services to clients to be outsourced: o Design and development; o Pattern making and grading; o Fabric sourcing; o Sample sewing; o Production; o Quality control; o Private label development; and o Duty, quota, brokerage and TPL services. Design and development - ---------------------- This involves the creation of actual designs, including styles, colors, stitching and fabric selection through the process of having such designs make into patterns, samples created and arranging for manufacturing of the products. 9 Pattern making and grading - -------------------------- Creates first pattern or make alterations to existing hard paper patterns or digitized data. All patterns are computerized using a Gerber pattern making system. Patterns made from sample or specification. Grading involves making grade rules for the market that product is intended, such as men, women, youth, child, toddler, etc. Fabric sourcing - --------------- This service involves searching for the type, quality, fiber and amount of fabric needed for the customers' needs. Sample sewing - ------------- This service involves finding companies to provide the sewing of samples of the garments to be manufactured to ensure stitching, quality and proper pattern design. The samples are provided to clients for proofing prior to full manufacture of the garments. Samples can be sewn using various methods. Production - ---------- This involves placing orders with manufacturers to mass-produce a customer's clothing line based upon developed patterns. Quality control - --------------- This involves the assessment of product compliance with stated patterns, including reviewing for proper material, color, stitching and gluing. Private label development - ------------------------- Involves the creation of a new, independent line of clothing. Private labels are clothing lines for companies to sell in addition to, or instead of nationally known brands. For example, a retail store may carry jeans from nationally recognized brands such as Levi's, Polo, and Calvin Klein, but also carry a brand of jeans made for that retain store and only sold in that retail store. This typically involves the process from design to development. Duty, quota, brokerage and TPL services. - ---------------------------------------- This involves the many laws and regulations relating to the amount of certain products that can be imported into a country at a particular time or over a period of time. This also involves payment of various taxes, depending on what type of goods are being shipped, where they are shipped from, where they are shipped to and how much of the product is being shipped. Failure to comply with these regulations could result in shipments being held up in transit or large financial penalties, among other repercussions. Manufacturing Facility Ownership Our second business objective is to acquire interests in manufacturing facilities in Asia. In connection with any contracts we would enter into with manufacturing facilities in Asia, it is our intention to negotiate to receive an ownership interest at a discount to the market price. Through securing ownership interests in these facilities, we will have added incentive to place future manufacturing contracts with such facilities and will help ensure that our clients have access to manufacturing facilities at the best rate possible. This in turn will hopefully lead to additional business for us. Contract with and Ownership in ANK Apparel Source Inc. We entered into an agreement with ANK Apparel Source Inc. to procure contracts on their behalf for the manufacture of clothing in ANK's manufacturing facilities. Pursuant to our agreement with ANK, we receive a commission based upon the total value of the contract we secure on their behalf. In addition, we own approximately 16% of the total issued and outstanding shares of common stock of ANK. It is our intention for the immediate future to place all manufacturing contracts we secure at ANK's Canadian manufacturing facility. 10 ANK Apparel Source Inc. ANK Apparel Source Inc. was incorporated on November 7, 2001. It is in its fourth year of business in the technical outerwear industry. Its primary source of business is the manufacture of Technical Sports Outerwear Apparel for North American and European markets. ANK does not have a brand or its own line of clothing. ANK is a contract manufacturer. ANK has a manufacturing facility in Canada, owns a 35% interest in another facility in Hang Zhou, China and is negotiating to acquire an interest in another facility in China. The Canadian facility has 120 operators, a gluing facility for technical welding of pockets and seams and a quality control and trimming section. There is also a cutting department on premise that consists of the latest Gerber computerized pattern making, product grading and marker producing technology. The cutting equipment is all computerized and fully automated for consistency and accuracy. In addition, there is also an Embroidery department consisting of 24 heads for bulk production and four head machines for sampling. Within the facility, there is a small sewer-sewing floor, bulk fabric storage, packaging and shipping departments for finished products. The facility in Hang Zhou holds 100 operators with existing space to increase capacity to 200 sewers. ANK Canadian facilities are slowly decreasing the manufacturing capacity in Canada and increasing the capacity in Asia. This is due solely to the change in the quota and duties being abolished or decreased. As a result, China without quotas now makes it a prime location for manufacturing. ANK Apparel offers full package programs consisting of patternmaking, pattern size grading, fabric sourcing, sampling, fabric purchases for bulk production, packaging development, labeling, UPC coding, and EDI capabilities. ANK offers a second option of cut, make and trim only. This gives a customer an option to bring an already developed style and in stock fabric to the facility and have the production floor cut, sew and package the product. Following is a list of some of ANK's current and recent customers: o Polo RLX Sport Line; o Moonstone; o Marmot; o Patagonia; o Cloudvail; o Cabela's; o Gander Mountain; o Bass Pro; o Arcteryx; o Alpha Broder; o Costco; o Running Room; o Forzani Group; and o Eddie Bauer. ANK's strength is in the ability to develop and source technical fabric or develop fabrics with foreign mills and service the customer in North America rather than companies having to go offshore themselves. As a result of the pattern making and production expertise of ANK, it has developed a solid reputation for technical, well designed, sound fitting garments with a high level of quality and on time delivery. All development and sampling is done in Canada and finished approved garments are then sent to the Asian facility for production. 11 ANK's produces the following types of fabrics and designs: o Base layer and next to skin underwear - moisture transfer; o Fleece Outerwear - Jackets, bottoms, vests - hoodies, men's, woman's and kids; o Soft shell technology for windproof and waterproof outerwear; o Woven shells for wind resistance; o Military ECWACS (Extended Cold Weather Clothing Systems) for Navy Seals and Military Personnel; and o Gloves, hates scarves and other accessory items. Customers and Marketing Strategy We currently have one customer, ANK Apparel. We are seeking contracts with additional customers. We intend to focus our marketing strategy on the attending of trade shows and the networking of our President, Simon Levin, who has been involved in this industry for over 15 years. Competition The market for clothing manufacturing contracts is very competitive. Many companies own their own manufacturing facilities or have long-standing business relationships and personal ties with their existing manufacturers, which they are reluctant to disrupt. Additionally, we do not own our own manufacturing facility, so we are reliant upon other manufacturers whom we shall solicit to fulfill manufacturing orders. We must educate potential customers on the use and benefits of our services, which can require significant time and resources. The period between initial contact and the retention of our services is often long and subject to delays associated with the lengthy approval and competitive evaluation processes that typically accompany a customer's decision to change its outsourcing relationships. For many customers, the cycle could take several months, and for large customers, the cycle may require more than one year. If we are unable to obtain new customers, it could result in increased operating and marketing expenses and operating losses. We also face direct competition from other manufacturing service brokers who might also have contracts or relationships with existing manufacturing facilities. Employees We currently have one full time employee. We consider our relations with our employee to be good. DESCRIPTION OF PROPERTY We maintain our principal office at 315 E. 2nd Avenue, Vancouver, British Columbia, Canada V5T 1B9. Our telephone number at that office is (604) 215-3294 and our facsimile number is (604) 255-3290. We lease 300 square feet of office space. Our monthly rent for this location is $250 per month. The lease expires on September 30, 2005 and we have an option to renew the lease. We believe that our current office space and facilities are sufficient to meet our present needs and do not anticipate any difficulty securing alternative or additional space, as needed, on terms acceptable to us. LEGAL PROCEEDINGS From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other 12 matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse affect on our business, financial condition or operating results. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS The information in this registration statement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This Act provides a "safe harbor" for forward-looking statements to encourage companies to provide prospective information about themselves so long as they identify these statements as forward looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. All statements other than statements of historical fact made in this registration statement are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. Forward-looking statements reflect management's current expectations and are inherently uncertain. The Company's actual results may differ significantly from management's expectations. Plan of Operations Our first objective is to increase the annual sales for ANK Apparel. To achieve this goal, we will attend four major trades shows for the technical and ski wear industries at which we will have a booth soliciting customers and placing contracts in the ANK's facility. These four shows are the Magic Show, Outdoor Retailer show, SIA Show and the Shot Show. Our second objective will be to travel to Asia to achieve the following two initiatives: o Inspecting the manufacturing facility in Hang Zhou, China to ensure compliance with applicable laws and regulations and to ensure that is has the ability and capacity to handle the production capacity that Levin Industries hopes to deliver. o Investigating other manufacturing facilities in Asia and looking to purchase our own equity stake in one or two facilities so as to have direct interest in the manufacturing process to ensure customer service and deliverability. To that end, Levin will travel to Da Lian, China, where the town council has expressed an interest in renovating an existing manufacturing facility and assisting us in purchasing an interest in that company. The town council is interested in growing the manufacturing base/employment opportunities in this particular region. They see a North American equity owner as a way to drive North American business to the region, which would increase employment. It is expected that we will be offered an equity ownership at a discounted price pursuant to the profitability of specific contracts consuming the factories' production capacity. This purchase can be either paid out of the proceeds raised or by the profits generated by significant contracts. Our third objective is to raise $250,000 via a public offering to expedite our growth. Results of Operation Period from inception (February 16, 2004) to fiscal year end November 30, 2004 We have commenced operations and have received $70,961 of revenues through November 30, 2004. Start-up expenses of $85,488 were incurred in the period from inception through November 30, 2004. Professional and consulting fees represented $71,685 of these start-up expenses as we are using outside consultants in such areas as legal, accounting, web design and marketing in developing our business. Consulting fees include $34,975 paid to Mr. Levin. Included in operating expenses in the period is $2,367 of rent donated by the Company's President. We incurred a net loss of $24,516 during the period from inception through November 30, 2004. Prior to our acquisition of assets from Levin Industries on July 7, 2004, our business had not yet commenced and no revenues had been generated. 14 Liquidity and Capital Resources We have incurred operating losses since the inception of our business (February 16, 2004), and, as of November 30, 2004, we have an accumulated deficit of $24,516. At November 30, 2004, we had cash and cash equivalents of $7,430 and a net working capital deficiency of $40,478. To date, we have funded our operations through the issuance of common stock. During the period from inception to March 1, 2005, we raised $25,000 from the sale of 3,000,000 shares of common stock to our President, Simon Levin and $43,950 from the sale of 439,500 shares of common stock to 12 unrelated persons. We also received the benefit of having the costs of our premises donated by a related party having a total value of $2,367. We have used the $68,950 cash raised to date from the sale of stock for legal and accounting services and general working capital purposes. We expect our expenses will continue to increase during the foreseeable future as a result of increased marketing expenses and the enhancement of our website. We are dependent on the proceeds from future debt or equity investments to sustain our operations and implement our business plan. If we are unable to raise sufficient capital, we will be required to delay or forego some portion of our business plan, which may have a material adverse effect on our anticipated results from operations and financial condition. Alternatively, we may seek interim financing in the form of bank loans, private placement of debt or equity securities, or some combination of these. Such interim financing may not be available in the amounts or at the times when we require, and will likely not be on terms favorable to us. 15 MANAGEMENT Executive Officers, Directors, Director Nominees and Key Employees The following is the name and certain information regarding our current Director and Executive Officer: Name Age Position ---- --- -------- Simon Levin 40 President, Principal Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director Pursuant to our bylaws, our directors are elected at our annual meeting of stockholders and each director holds office until his successor is elected and qualified. Officers are elected by our Board of Directors and hold office until an officer's successor has been duly appointed and qualified unless an officer sooner dies, resigns or is removed by the Board. There are no family relationships among any of our directors and executive officers. Background of Executive Officers and Directors Simon Levin, President, Principal Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director. Mr. Levin has been our President, Principal Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director since the Company was founded in July 2004. Mr. Levin has been the President of Levin Industries, our wholly-owned subsidiary since its founding in February 2004. Between 1995 and February 2004, Mr. Levin was the Director of Sales and Marketing of Abaca Garment Maker Ltd., a garment manufacturer based in Vancouver, Canada. Employment Agreements None. Director Compensation None. 16 EXECUTIVE COMPENSATION We were incorporated under the laws of the State of Delaware on July 7, 2004. As a result, there has been no executive compensation for the last two fiscals years. Stock Option Plan We do not have a stock option plan and we have not issued any warrants, options or other rights to acquire our securities. Employee Pension, Profit Sharing or other Retirement Plans We do not have a defined benefit, pension plan, profit sharing or other retirement plan, although we may adopt one or more of such plans in the future. Director's Compensation At present we do not pay our directors for attending meetings of our Board of Directors, although we expect to adopt a director compensation policy in the future. We have no standard arrangement pursuant to which our directors are compensated for any services provided as a director or for committee participation or special assignments. 17 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Our President, Simon Levin, donates the rent for our offices. 18 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information, as of March 11, 2005 with respect to the beneficial ownership of the outstanding common stock by (i) any holder of more than five (5%) percent; (ii) each of our executive officers and directors; and (iii) our directors and executive officers as a group. Except as otherwise indicated, each of the stockholders listed below has sole voting and investment power over the shares beneficially owned.
Percentage of Percentage of Common Stock Common Stock Common Stock Name of Beneficial Owner (1) Beneficially Owned Before Offering (3) After Offering (4) - ---------------------------------------------------------------------------------------------------------------- Simon Levin 3,000,000 87.22% 50.51% - ---------------------------------------------------------------------------------------------------------------- All officers and directors as a group 3,000,000 87.22% 50.51% (1 person)
* Less than 1% (1) Except as otherwise indicated, the address of each beneficial owner is c/o Levin Textiles International Inc., 315 E. 2nd Avenue, Vancouver, British Columbia, Canada V5T 1B9. (2) Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to the shares shown. Except where indicated by footnote and subject to community property laws where applicable, the persons named in the table have sole voting and investment power with respect to all shares of voting securities shown as beneficially owned by them. (3) Based on 3,439,500 shares outstanding. (4) Based on 5,939,500 shares outstanding. 19 PLAN OF DISTRIBUTION We are offering up to 2,500,000 shares of our common stock at $0.10 per share. The common stock will be sold through our sole officer and director, Simon Levin, to investors located both inside and outside the United States. Our shares will be sold on a "self-underwritten" basis with no minimum amount of common stock that we must sell in order to accept purchasers. No commissions are being paid in connection with the offering. Expenses related to the offering are estimated to be $25,000 which will be paid by us from the proceeds of this offering. In addition, the selling stockholders may, from time to time, sell up to 939,500 shares of common stock which they own. The selling stockholders may sell all or a portion of the shares of common stock in privately negotiated transactions or otherwise. Such sales will be offered at $0.10 per share. Unless and until the offering price is changed by subsequent amendment to this prospectus or our shares are quoted on the OTC Bulletin Board. If our shares become listed on the OTC Bulletin Board, selling stock holders may then sell their shares at prevailing market prices or privately negotiated prices. The shares of common stock may be sold by the selling stockholders by one or more of the following methods, without limitation: (a) block trades in which the broker or dealer so engaged will attempt to sell the shares of common stock as agent but may position and resell a portion of the block as principal to facilitate the transaction; (b) ordinary brokerage transactions and transactions in which the broker solicits purchasers; (c) privately negotiated transactions; and (d) a combination of any aforementioned methods of sale. Simon Levin will be offering the shares of common stock being offered by us. Mr. Levin is not a registered broker-dealer but will be offering our shares pursuant to an exemption from such broker-dealer registration pursuant to Rule 3a4-1 of the Securities Exchange Act of 1934 (the "Exchange Act"). Mr. Levin is not subject to any statutory disqualification as defined in section 3(a)(39) of the Exchange Act nor will he be compensated by way of commissions or other remuneration based upon his participation in the offering of our common stock nor is Mr. Levin currently an associated person with any broker or dealer. Furthermore, Mr. Levin believes he meets the requirements of Rule 3a4-1(a)(4)(ii) in that he satisfies the following conditions: (a) Mr. Levin is expected to perform substantial duties for and on our behalf as our CEO and President; (b) Mr. Levin has not been a broker or a dealer or an associated person with a broker or dealer within the past 12 months; and (c) Mr. Levin will not participate in the offering of securities for any issuer more than once every 12 months. Based upon the foregoing, Mr. Levin believes that he satisfies the safe harbor requirements of Rule 3a4-1. The offering of shares by the selling stockholders will run concurrently with the offering of shares on our behalf. In this regard, the selling stockholders, will be competing with us for the sale of shares. Brokers or dealers may receive commissions or discounts from the selling stockholders or, if any of the broker-dealers act as an agent for the purchaser of said shares, from the purchaser in amounts to be negotiated which are not expected to exceed those customary in the types of transactions involved. In connection with such resales, the broker-dealer may pay to or receive from the purchasers of the shares, commissions as described above. The selling stockholders may also sell the shares of common stock in accordance with Rule 144 under the Securities Act, rather than pursuant to this prospectus. 20 The selling stockholders and any broker-dealers or agents that participate with the selling stockholders in the sale of the shares of common stock may be deemed to be "underwriters" within the meaning of the Securities Act in connection with these sales. In that event, any commissions received by the broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Furthermore, selling stockholders are subject to Regulation M of the Exchange Act. Regulation M prohibits any activities that could artificially influence the market for our common stock during the period when shares are being sold pursuant to this prospectus. Consequently, selling stockholders must refrain from directly or indirectly attempting to induce any person to bid for or purchase the common stock being offered with any information not contained in this prospectus. Regulation M also prohibits any bids or purchases made in order to stabilize the price of our common stock in connection with the stock offered pursuant to this prospectus. A selling stockholder may enter into hedging transactions with broker-dealers and the broker-dealers may engage in short sales of our common stock in the course of hedging the positions they assume with such selling stockholder, including, without limitation, in connection with the distribution of our common stock by such broker-dealers, or pursuant to exemption from such registration. A selling stockholder may also enter into option or other transactions with broker-dealers that involve the delivery of the common stock to the broker-dealers, who may then resell or otherwise transfer such common stock. A selling stockholder may also loan or pledge the common stock to a broker-dealer and the broker-dealer may sell the common stock so loaned or upon default may sell or otherwise transfer the pledged common stock. Under the securities laws of certain states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers or persons exempt from such registration. The selling stockholders are advised to ensure that any brokers, dealers or agents affecting transactions on behalf of the stockholders are registered to sell securities in such states. In addition, in certain states the shares of common stock may not be sold unless the shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with. All expenses of the registration statement estimated to be $20,000-$25,000 including but not limited to, legal, accounting, printing and mailing fees have or will be paid by us. We have agreed to pay the incremental costs of including the selling stockholders' shares in this prospectus. However, any selling costs or brokerage commissions incurred by each selling stockholder relating to the sale of his/her shares will be paid by the selling stockholder. 21 SELLING STOCKHOLDERS The following table sets forth the common stock ownership of the selling stockholders as of March 11, 2005. Other than as set forth in the following table, the selling stockholders have not held any position or office or had any other material relationship with us or any of our predecessors or affiliates within the past three years.
Shares Beneficially Owned Shares Beneficially Owned Prior to the Offering After the Offering (1) --------------------------- ------------------------- Total Shares Offered Name Number Percent (2) by this Prospectus (1) Number Percent - ------------------- ------------- ------------- ------------------------------------------------ Karl Catill 45,000 1.3% 45,000 0 0% Duane Cole 40,000 1.2% 40,000 0 0% Trenton L. Dahl 27,000 * 27,000 0 0% Will Davis 50,000 1.5% 50,000 0 0% Dilshad Jamal 42,000 1.2% 42,000 0 0% Bruce Korhonen 27,500 * 27,500 0 0% Catherine Lai 45,000 1.3% 45,000 0 0% Simon Levin 3,000,000 87.2% 500,000 2,500,000 42.1% Ezio Montagliani 28,000 * 28,000 0 0% Ajay K. Pathak 31,000 * 31,000 0 0% Anita Pathak 30,000 * 30,000 0 0% Sandra Sanders 45,000 1.3% 45,000 0 0% Jonathan C.F. Shea 29,000 * 29,000 0 0%
* Less than 1%. (1) Assumes that all securities registered will be sold and that all shares of common stock being registered and sold by us as described in this prospectus will be issued. (2) Applicable percentage ownership is based on 3,439,500 shares of common stock outstanding as of March 11, 2005, together with securities exercisable or convertible into shares of common stock within 60 days of March 11, 2005. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock that are currently exercisable or exercisable within 60 days of March 11, 2005 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. 22 DESCRIPTION OF SECURITIES The following description of our capital stock is a summary and is qualified in its entirety by the provisions of our Articles of Incorporation, with amendments, all of which have been filed as exhibits to our registration statement of which this prospectus is a part. Dividend Policy We have not had any earnings or profits and have not paid any dividends. Our proposed operations are capital intensive and we need working capital. Therefore, we will be required to reinvest any future earnings in our operations. Our Board of Directors has no present intention of declaring any cash dividends, as we expect to re-invest all profits in the business for additional working capital for continuity and growth. The future declaration and payment of dividends will be determined by our Board of Directors after considering the conditions then existing, including our earnings, financial condition, capital requirements, and other factors. There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends. Capital Structure Our authorized capital stock consists of 100,005,000 shares of capital stock, par value $.001 per share, of which 100,000,000 shares are common stock and 5,000 shares are preferred stock that may be issued in one or more series at the discretion of the Board of Directors. As of March 11, 2005, 3,439,500 shares of common stock and 0 shares of Preferred Stock are issued and outstanding. Common Stock The holders of common stock are entitled to one vote for each share held of record on all matters to be voted on by the stockholders. The holders of common stock are entitled to receive dividends ratably, when, as and if declared by the Board of Directors, out of funds legally available therefor. In the event of a liquidation, dissolution or winding-up of Levin Textiles International Inc., the holders of common stock are entitled to share equally and ratably in all assets remaining available for distribution after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. The holders of shares of common stock, as such, have no conversion, preemptive, or other subscription rights and there are no redemption provisions applicable to the common stock. All of the outstanding shares of common stock are, and the shares of common stock offered by us hereby, when issued against the consideration set forth in this prospectus, will be, validly issued, fully paid and non-assessable. Preferred Stock Shares of preferred stock may be issued from time to time in one or more series as may from time to time be determined by our Board of Directors. Our Board of Directors has authority, without action by the stockholders, to determine the voting rights, preferences as to dividends and liquidation, conversion rights and any other rights of such series. Any preferred shares, if and when issued in the discretion of the Board of Directors, may carry voting, conversion or other rights superior to those of the shares of common stock and may adversely affect the voting power and rights of the common stockholders. Our Board of Directors has not designated any series or class of preferred stock and, as such, there are no shares of preferred stock currently outstanding. Options and Warrants We have not yet issued any options, warrants or other rights to acquire our securities. Transfer Agent and Registrar The transfer agent and registrar for our common stock is Colonial Stock Transfer, Salt Lake City, Utah. 23 INDEMNIFICATION FOR SECURITIES ACT LIABILITIES Our Articles of Incorporation provide to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, that our directors or officers shall not be personally liable to us or our shareholders for damages for breach of such director's or officer's fiduciary duty. The effect of this provision of our Articles of Incorporation, as amended and restated, is to eliminate our rights and our shareholders (through shareholders' derivative suits on behalf of our company) to recover damages against a director or officer for breach of the fiduciary duty of care as a director or officer (including breaches resulting from negligent or grossly negligent behavior), except under certain situations defined by statute. We believe that the indemnification provisions in our Articles of Incorporation, as amended, are necessary to attract and retain qualified persons as directors and officers. Our By Laws also provide that the Board of Directors may also authorize our company to indemnify our employees or agents, and to advance the reasonable expenses of such persons, to the same extent, following the same determinations and upon the same conditions as are required for the indemnification of and advancement of expenses to our directors and officers. As of the date of this Registration Statement, the Board of Directors has not extended indemnification rights to persons other than directors and officers. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, 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. LEGAL MATTERS The validity of the common stock offered hereby will be passed upon for Levin Textiles International Inc. by Sichenzia Ross Friedman Ference LLP, New York, New York. EXPERTS Financial statements for Levin Industries Ltd., our operating subsidiary, audited from February 16, 2004, the date of inception, to and as of November 30, 2004, included in this prospectus, have been audited by Manning Elliott, Chartered Accountants, independent registered public accountants, as stated in their report appearing herein and are so included herein in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. ADDITIONAL INFORMATION We have not previously been required to comply with the reporting requirements of the Securities Exchange Act. We have filed with the SEC a registration statement on Form SB-2 to register the securities offered by this prospectus. The prospectus is part of the registration statement, and, as permitted by the SEC's rules, does not contain all of the information in the registration statement. For future information about us and the securities offered under this prospectus, you may refer to the registration statement and to the exhibits filed as a part of the registration statement. In addition, after the effective date of this prospectus, we will be required to file annual, quarterly, and current reports, or other information with the SEC as provided by the Securities Exchange Act. You may read and copy any reports, statements or other information we file at the SEC's public reference facility maintained by the SEC at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. Our SEC filings are also available to the public through the SEC Internet site at http://www.sec.gov. 24 LEVIN TEXTILES INTERNATIONAL INC. INDEX TO FINANCIAL STATEMENTS Page ---- Independent Auditor's Report F-1 Consolidated Balance Sheet F-2 Consolidated Statement of Operations F-3 Consolidated Statement of Cash Flows F-4 Consolidated Statement of Stockholders' Deficit F-5 Notes to Consolidated Financial Statements F-6 25 [MANNING ELLIOTT LETTERHEAD] Independent Auditors' Report To the Stockholders and Board of Directors of Levin Textiles International, Inc. (A Development Stage Company) We have audited the accompanying consolidated balance sheets of Levin Textiles International, Inc. (A Development Stage Company) as of November 30, 2004 and August 31, 2004 and the related consolidated statements of operations, stockholders' equity and cash flows for the three month period ended November 30, 2005 and the period from February 16, 2004 (Date of Inception) to August 31, 2004 and accumulated for the period from February 16, 2004 (Date of Inception) to November 30, 2004. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the aforementioned consolidated financial statements present fairly, in all material respects, the financial position of Levin Textiles International, Inc. (A Development Stage Company), as of November 30, 2004 and August 31, 2004, and the results of its operations, cash flows and stockholders' equity for the three month period ended November 30, 2004 and the period from February 16, 2004 (Date of Inception) to August 31, 2004 and accumulated for the period from February 16, 2004 (Date of Inception) to November 30, 2004, in conformity with generally accepted accounting principles used in the United States of America. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company is in the development stage and has incurred losses from operations since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also discussed in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ "Manning Elliott" CHARTERED ACCOUNTANTS Vancouver, Canada March 1, 2005 F-1
Levin Textiles International, Inc. (A Development Stage Company) Consolidated Balance Sheet (Expressed in US dollars) November 30, August 31, 2004 2004 $ $ ASSETS Current Assets Cash 7,430 10,185 Accounts receivable 10,599 -- Due from related party (Note 4(a)) 19,885 -- - --------------------------------------------------------------------------------------------- Total Current Assets 37,914 10,185 Investment (Note 2(k)) 42,150 -- Property and Equipment (Note 3) 1,148 1,103 - --------------------------------------------------------------------------------------------- Total Assets 81,212 11,288 ============================================================================================= LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Accounts payable 13,553 3,243 Accrued liabilities (Note 7) 12,222 13,592 Income taxes payable 10,467 -- Promissory note to a related party (Note 4(e)) 42,150 -- Due to a related party (Note 4(a)) -- 7,661 - --------------------------------------------------------------------------------------------- Total Liabilities 78,392 24,496 - --------------------------------------------------------------------------------------------- Contingencies and Commitments (Note 1) Stockholders' Equity (Deficit) Preferred Stock, 5,000 shares authorized, with a par value of $0.001, None issued and outstanding -- -- Common Stock, 100,000,000 shares authorized, with a par value of $0.001, 3,000,000 shares issued and outstanding (Note 5) 3,000 3,000 Additional Paid in Capital 22,001 22,001 Donated Capital 1,875 1,625 Accumulated Other Comprehensive Income 460 -- Deficit Accumulated During the Development Stage (24,516) (39,834) - --------------------------------------------------------------------------------------------- Total Stockholders' Equity (Deficit) 2,820 (13,208) - --------------------------------------------------------------------------------------------- Total Liabilities and Stockholders' Equity (Deficit) 81,212 11,288 =============================================================================================
F-2 (The accompanying notes are an integral part of the financial statements)
Levin Textiles International, Inc. (A Development Stage Company) Consolidated Statement of Operations (Expressed in US dollars) From From February 16, 2004 Three Month February 16, 2004 (Date of Inception) Period Ended (Date of Inception) to November 30, November 30, to August 31, 2004 2004 2004 $ $ $ Revenue 70,961 45,864 25,097 - ------------------------------------------------------------------------------------------------------------------ Expenses Amortization 112 76 36 Consulting fees to related party (Note 4(b)) 34,975 10,621 24,354 Consulting fees 1,222 1,222 -- General and administrative 2,632 746 1,886 Professional fees 35,488 6,999 28,489 Rent (Note 4(c)) 2,367 742 1,625 Travel 8,692 151 8,541 - ------------------------------------------------------------------------------------------------------------------ Total Expenses 85,488 20,557 64,931 - ------------------------------------------------------------------------------------------------------------------ Net Income (Loss) Before Provision for Income Taxes (14,527) 25,307 (39,834) Provision for Income Taxes (9,989) (9,989) -- - ------------------------------------------------------------------------------------------------------------------ Net Income (Loss) for the Period (24,516) 15,318 (39,834) ================================================================================================================== Other Comprehensive Income Foreign currency translation adjustment 460 460 -- - ------------------------------------------------------------------------------------------------------------------ Comprehensive Income (Loss) (24,056) 15,778 (39,834) ================================================================================================================== Net Income (Loss) Per Share - Basic and Diluted 0.01 (0.06) Weighted Average Shares Outstanding 3,000,000 627,000
F-3 (The accompanying notes are an integral part of the financial statements)
Levin Textiles International, Inc. (A Development Stage Company) Consolidated Statement of Cash Flows (Expressed in US dollars) From From February 16, 2004 February 16, 2004 Three Month (Date of (Date of Inception) Period Ended Inception) to November 30, November 30, to August 31, 2004 2004 2004 $ $ $ Cash Flows Provided By Operating Activities Net income (loss) for the period (24,516) 15,318 (39,834) Adjustments to reconcile net loss to cash: Amortization 112 76 36 Donated rent 1,875 250 1,625 Change in operating assets and liabilities: Increase in accounts receivable (10,114) (10,114) -- Increase in accounts payable and accrued liabilities 24,890 8,055 16,835 Increase in income taxes payable 9,989 9,989 -- Decrease (increase) in due from related party (18,654) (26,315) 7,661 - --------------------------------------------------------------------------------------------------------------------- Net Cash Used By Operating Activities (16,418) (2,741) (13,677) - --------------------------------------------------------------------------------------------------------------------- Cash Flows Used By Investing Activities Purchase of property and equipment (1,139) -- (1,139) - --------------------------------------------------------------------------------------------------------------------- Net Cash Flows Used In Investing Activities (1,139) (1,139) - --------------------------------------------------------------------------------------------------------------------- Cash Flows Provided By Financing Activities Net cash acquired in reverse acquisition 25,000 -- 25,000 Issue of common stock 1 -- 1 - --------------------------------------------------------------------------------------------------------------------- Net Cash Flows Provided By Financing Activities 25,001 -- 25,001 - --------------------------------------------------------------------------------------------------------------------- Effect of Exchange Rate Changes on Cash (14) (14) -- - --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Cash 7,430 (2,755) 10,185 Cash - Beginning of Period -- 10,185 -- ===================================================================================================================== Cash - End of Period 7,430 7,430 10,185 ===================================================================================================================== Non-Cash Financing Activities Investment acquired by issue of promissory note to related party (Note 4(e)) 42,150 42,150 -- - --------------------------------------------------------------------------------------------------------------------- Supplemental Disclosures Interest paid -- -- -- Income taxes paid -- -- --
F-4 (The accompanying notes are an integral part of the financial statements)
Levin Textiles International, Inc. (A Development Stage Company) Consolidated Statement of Stockholders' Equity (Deficit) From February 16, 2004 (Date of Inception) to November 30, 2004 (Expressed in US dollars) Deficit Accumulated Accumulated Additional During the Other Paid-in Donated Development Comprehensive Shares Amount Capital Capital Stage Income Total # $ $ $ $ $ $ Balance - February 16, 2004 (Date of Inception) -- -- -- -- -- -- -- Stock issued for cash 100 1 -- -- -- -- 1 Adjustment for reverse acquisition - elimination of shares of Levin Industries Ltd. (100) (1) -- -- -- -- (1) - add issued shares of Levin Textiles International, Inc. 3,000,000 3,000 22,001 -- -- -- 25,001 Donated rent -- -- -- 1,625 -- -- 1,625 Net loss for the period -- -- -- -- (39,834) -- (39,834) - ----------------------------------------------------------------------------------------------------------------------------------- Balance - August 31, 2004 3,000,000 3,000 22,001 1,625 (39,834) -- (13,208) Donated rent -- -- -- 250 -- -- 250 Net income for the period -- -- -- -- 15,318 -- 15,318 Foreign currency translation adjustment -- -- -- -- -- 460 460 - ----------------------------------------------------------------------------------------------------------------------------------- Balance - November 30, 2004 3,000,000 3,000 22,001 1,875 (24,516) 460 2,820 ===================================================================================================================================
F-5 (The accompanying notes are an integral part of the financial statements) Levin Textiles International, Inc. (A Development Stage Company) Notes to the Consolidated Financial Statements November 30, 2004 1. Development Stage Company The Company was incorporated in the State of Delaware, USA on July 7, 2004. Effective July 16, 2004, the Company acquired all the outstanding common stock of Levin Industries Ltd. ("Industries"), a company under common control. Prior to the acquisition, the Company was a non-operating shell corporation with net assets consisting solely of cash of $25,000. The acquisition is a capital transaction in substance and therefore has been accounted for as a reverse acquisition. See Note 6. The Company's principal business is in the garment manufacturing industry (technical outerwear), specializing in sales, product development, initial sample approval, fabric sourcing, and product placement in Asian Pacific Rim and North American facilities. The Company is in the development stage and planned principal activities have commenced, but there has been no significant revenue therefrom. In a development stage company, management devotes most of its activities to developing a market for its products and services. The Company's primary source of revenue is currently commission income from product sales to third parties. These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated minimal revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. The continuation of the Company as a going concern and the ability of the Company to emerge from the development stage is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, to generate significant revenues and the attainment of profitable operations. As at November 30, 2004, the Company has accumulated losses of $24,516 since inception. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. In December 2004, the Company issued 439,500 common shares at a price of $0.10 per share for total proceeds of $43,950 pursuant to a private placement. The Company is planning to file a Form SB-2 Registration Statement ("SB-2") with the United States Securities and Exchange Commission to register up to 939,500 shares of common stock held by existing shareholders for resale at a price of $0.10 per share. Also pursuant to the SB-2, the Company plans to offer up to 2,500,000 common shares at a price of $0.10 per share for maximum proceeds of $250,000 to the Company. 2. Summary of Significant Accounting Policies a) Basis of Presentation and Fiscal Year These financials statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company has not produced significant revenue from its principal business and is a development stage company as defined by Statement of Financial Accounting Standard ("SFAS") No. 7 "Accounting and Reporting by Development Stage Enterprises". These financial statements include the accounts of the Company and its wholly-owned subsidiary, Levin Industries Ltd. All intercompany transactions and balances have been eliminated. The Company's fiscal year-end is August 31, 2004. b) Use of Estimates The preparation of financial statements in conformity with U.S. 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 estimates. F-6 Levin Textiles International, Inc. (A Development Stage Company) Notes to the Consolidated Financial Statements November 30, 2004 2. Summary of Significant Accounting Policies (continued) c) Other Comprehensive Income SFAS No. 130, "Reporting Comprehensive Income", establishes standards for the reporting and display of comprehensive income (loss) and its components in the financial statements. As at November 30, 2004, the Company's only component of comprehensive income (loss) was foreign currency translation adjustments. d) Cash and Cash Equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. e) Concentrations The fair value of financial instruments, which include accounts receivable, accounts payable, accrued liabilities, income taxes payable, and due from a related party were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. The Company's operations are in Canada resulting in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company's operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk. As at November 30, 2004, accounts receivable from a single, related party customer represented 100% of total accounts receivables, and this customer represented 99% of total revenues. Financial instruments that potentially subject the Company to credit risk consist principally of cash. Cash was deposited with a high quality institution. f) Foreign Currency Transactions/Balances During the three-month period ended November 30, 2004, the functional currency of the Company's wholly-owned subsidiary changed to the Canadian dollar. The financial statements of this subsidiary are translated to United States dollars in accordance with SFAS No. 52 "Foreign Currency Translation" using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues and expenses. Translation gains (losses) are recorded in accumulated other comprehensive income (loss) as a component of stockholders' equity. Foreign currency transaction gains and losses are included in current operations. g) Revenue Recognition The Company earns commission income from product sales made by an affiliated company, ANK Apparel Source Inc. ("ANK"). Commission income is recognized at the time products are shipped to customers by ANK. The Company records commission income on a net basis in accordance with EITF 99-19, "Reporting revenue gross as a principal vs. net as an agent". The Company recognizes revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104 ("SAB 104"), "Revenue Recognition in Financial Statements". Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the product is shipped by ANK, and collectibility is reasonably assured. The Company's accounts receivable are due entirely from ANK, an affiliated company. The Company has not encountered any collectibility issues relating to amounts owed from ANK and therefore has not established allowance for doubtful accounts. h) Property and Equipment Property and equipment consists of computer hardware and is recorded at cost. Computer hardware is being amortized on the straight line basis over the estimated life of four years. F-7 Levin Textiles International, Inc. (A Development Stage Company) Notes to the Consolidated Financial Statements November 30, 2004 2. Summary of Significant Accounting Policies (continued) i) Long-Lived Assets In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. j) Basic and Diluted Net Income (Loss) per Share The Company computes net income (loss) per share in accordance with SFAS No. 128, "Earnings per Share" ("SFAS 128"). SFAS 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. k) Investment Investment consists of a 16% interest in the common shares of ANK Apparel Source Inc., a private company incorporated in the Province of British Columbia, Canada. These securities are classified as available-for-sale and are recorded at cost of $42,150, which approximates fair value at November 30, 2004. Any unrealized gains and losses in the valuation of the investment will be included in stockholders' equity. l) Income Taxes Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109 "Accounting for Income Taxes" as of its inception. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. F-8 Levin Textiles International, Inc. (A Development Stage Company) Notes to the Consolidated Financial Statements November 30, 2004 2. Summary of Significant Accounting Policies (continued) m) Recent Accounting Pronouncement In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 123R, "Share Based Payment". SFAS 123R is a revision of SFAS No. 123 "Accounting for Stock-Based Compensation", and supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees" and its related implementation guidance. SFAS 123R establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. SFAS 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS 123R does not change the accounting guidance for share-based payment transactions with parties other than employees provided in SFAS 123 as originally issued and Emerging Issues Task Force Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services". SFAS 123R does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, "Employers' Accounting for Employee Stock Ownership Plans". SFAS 123R requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award - the requisite service period (usually the vesting period). SFAS 123R requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of SFAS 123R includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. Public entities (other than those filing as small business issuers) will be required to apply SFAS 123R as of the first interim or annual reporting period that begins after June 15, 2005. Public entities that file as small business issuers will be required to apply SFAS 123R in the first interim or annual reporting period that begins after December 15, 2005. For nonpublic entities, SFAS 123R must be applied as of the beginning of the first annual reporting period beginning after December 15, 2005. The adoption of this standard is not expected to have a material effect on the Company's results of operations or financial position. In December 2004, FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets - An Amendment of APB Opinion No. 29". The guidance in APB Opinion No. 29, "Accounting for Nonmonetary Transactions", is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. The guidance in that Opinion, however, included certain exceptions to that principle. SFAS No. 153 amends Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The provisions of SFAS No. 153 are effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. Early application is permitted and companies must apply the standard prospectively. The adoption of this standard is not expected to have a material effect on the Company's results of operations or financial position. F-9 Levin Textiles International, Inc. (A Development Stage Company) Notes to the Consolidated Financial Statements November 30, 2004 3. Property and Equipment
November 30, August 31, 2004 2004 Accumulated Net Carrying Net Carrying Cost Amortization Value Value $ $ $ $ Computer hardware 1,266 118 1,148 1,103 - -------------------------------------------------------------------------------------------------------
4. Related Party Transactions/Balances a) At November 30, 2004, $19,885 is owing from the President of the Company. At August 31, 2004, the Company owed $7,661 to the President of the Company. These amounts are non-interest bearing, unsecured and due on demand. b) Consulting fees of $10,621 were paid to the President of the Company during the three month period ended November 30, 2004 (August 31, 2004 - $24,354). c) The President of the Company provided office premises to the Company at no charge up to September 30, 2004. The donated office premises are valued at $250 per month. During the three month period ended November 30, 2004, donated rent of $250 was recorded (August 31, 2004 - $1,625). d) The Company acquired all the issued and outstanding common shares of Levin Industries Ltd. from the President of the Company (refer to Note 6). e) The Company issued a promissory note for $42,150 (CDN$50,000) to the President of the Company for the acquisition of a 16% interest in ANK Apparel Source Inc. ("ANK"). The Company generated commission income from ANK of $45,462 during the three month period ended November 30, 2004, representing 97% of total revenues. At November 30, 2004, ANK owes $10,599 to the Company. f) All Company commission sales are from shipments made by a related company, of which the Company has a 16% ownership interest. g) The total balance of accounts receivable is due from ANR. 5. Common Shares a) On February 16, 2004, prior to the reverse acquisition, Levin Industries Ltd. issued 100 shares of common stock at a price of $0.01 per share in consideration for $1. b) On July 15, 2004, prior to the reverse acquisition, the Company issued 500,000 shares of common stock to the President of the Company at a price of $0.05 per share for cash proceeds of $25,000. c) On July 16, 2004, the Company issued 2,500,000 shares of common stock to the President of the Company at a fair value of $0.01 per share in consideration for all the issued and outstanding share capital of Industries. 6. Recapitalization - Reverse Acquisition By a Share Purchase Agreement dated July 22, 2004, the Company acquired 100% of the issued and outstanding common stock of Levin Industries Ltd. ("Industries") in consideration for the issue of 2,500,000 shares of common stock of the Company. Industries was incorporated on February 16, 2004 under the Company Act of British Columbia and was owned by the President of the Company. The principal business of Industries is in the garment manufacturing industry specializing in sales, product development, initial sample approval, fabric sourcing, and product placement. F-10 Levin Textiles International, Inc. (A Development Stage Company) Notes to the Consolidated Financial Statements November 30, 2004 6. Recapitalization - Reverse Acquisition (continued) Prior to the reverse acquisition, the Company was a non-operating shell company with net assets consisting solely of cash of $25,000. Therefore, this acquisition is a recapitalization, rather than a business combination, and has been accounted for as a reverse acquisition. Because Industries is deemed to be the acquirer for accounting purposes, the financial statements are presented as a continuation of Industries and include the results of operations of Industries since incorporation on February 16, 2004, and the results of operations of the Company since the date of acquisition on July 22, 2004. As at July 16, 2004 the Company had $25,000 of net assets which has been allocated to additional paid in capital. 7. Accrued Liabilities As at November 30, 2004 and August 31, 2004, accrued liabilities consist of accrued professional fees. 8. Income Tax The Company follows the provisions of SFAS No. 109, "Accounting for Income Taxes". Pursuant to SFAS 109 the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefit of net U.S. operating losses has not been recognized in the financial statements because the Company cannot be assured that it is more likely than not that it will utilize the net U.S. operating losses carried forward in future years. The Company has a U.S. tax loss of $33,957 to offset future years taxable income expiring commencing in fiscal 2024. Income tax expense was as follows: Three Month From Period Ended February 16, 2004 November 30, 2004 (Date of Inception) $ to August 31, 2004 $ Current Canadian 9,989 -- United States -- -- Deferred: Canadian -- -- United States -- -- -------------------------------------------------------------------------- Total income tax expense 9,989 -- ========================================================================== A reconciliation of the statutory federal income tax rate to the Company's effective tax rate follows: Canada United States Statutory federal income tax rate 37.6% 34.0% Change in valuation allowance -- (34.0%) -------------------------------------------------------------------------- Total income tax expense 37.6% -- ========================================================================== F-11 Levin Textiles International, Inc. (A Development Stage Company) Notes to the Consolidated Financial Statements November 30, 2004 8. Income Tax (continued) The deferred tax liabilities and assets were as follows: Three Month From Period Ended February 16, 2004 November 30, 2004 (Date of Inception) $ to August 31, 2004 $ Deferred tax asset - Net operating loss carryforwards 11,545 13,084 - Less valuation allowance (11,545) (13,084) -------------------------------------------------------------------------- Net deferred tax asset -- -- ========================================================================== 9. Subsequent Event In December 2004, the Company issued 439,500 common shares at a price of $0.10 per share for total proceeds of $43,950 pursuant to a private placement. F-12 3,439,500 Shares of Common Stock of Levin Textiles International Inc. PROSPECTUS The date of this prospectus is __________, 2005 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 24. Indemnification of Directors and Officers Our Articles of Incorporation provide to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, that our directors or officers shall not be personally liable to us or our shareholders for damages for breach of such director's or officer's fiduciary duty. The effect of this provision of our Articles of Incorporation, as amended and restated, is to eliminate our rights and our shareholders (through shareholders' derivative suits on behalf of our company) to recover damages against a director or officer for breach of the fiduciary duty of care as a director or officer (including breaches resulting from negligent or grossly negligent behavior), except under certain situations defined by statute. We believe that the indemnification provisions in our Articles of Incorporation, as amended, are necessary to attract and retain qualified persons as directors and officers. Our By Laws also provide that the Board of Directors may also authorize our company to indemnify our employees or agents, and to advance the reasonable expenses of such persons, to the same extent, following the same determinations and upon the same conditions as are required for the indemnification of and advancement of expenses to our directors and officers. As of the date of this Registration Statement, the Board of Directors has not extended indemnification rights to persons other than directors and officers. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, 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. Item 25. Other Expenses of Issuance and Distribution The following table sets forth an itemization of all estimated expenses, all of which we will pay, in connection with the issuance and distribution of the securities being registered: Nature of Expense Amount ----------------- ------ SEC Registration fee $ 40.49 Accounting fees and expenses 3,000.00* Legal fees and expenses 20,000.00* ---------- Blue Sky Fees and Expenses 100.00 Printing and Engraving Expenses 500.00 Miscellaneous 1,000.00 TOTAL $24,640.49* ========== * Estimated Item 26. Recent Sales of Unregistered Securities Since we were formed on February 16, 2004, we issued an aggregate of 3,439,500 shares of our common stock to 13 individuals pursuant to Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"), and/or Regulation S, promulgated pursuant to the Securities Act. On July 22, 2004, we sold 500,000 shares of our common stock to our President, Simon Levin, for consideration of $25,000. On July 22, 2004, we issued 2,500,000 shares of our common stock to our President, Simon Levin, in exchange for all of the issued and outstanding shares of Levin Industries Ltd. II-1 On December 31, 2004, we sold 439,500 shares of our common stock to 12 unrelated individuals in a private placement for $0.10 per share. All of the foregoing issuances were exempt from registration under Section 4(2) of the Securities Act and/or Regulation S, promulgated pursuant to the Securities Act. None of the purchasers who received shares under Regulation S are U.S. persons as defined in Rule 902(k) of Regulation S, and no sales efforts were conducted in the U.S., in accordance with Rule 903(c). Such purchasers acknowledged that the securities purchased must come to rest outside the U.S., and the certificates contain a legend restricting the sale of such securities until the Regulation S holding period is satisfied. Item 27. Exhibits Exhibit Number Description - ------- ---------------------------------------------------------------------- 3.1 Certificate of Incorporation of Levin Textiles International Inc. 3.2 Bylaws 5.1 Opinion of Sichenzia Ross Friedman Ference LLP 10.1 Share purchase agreement, dated as of July 16, 2004, by and between Levin Textiles International and Simon Levin 10.2 Share purchase agreement, dated as of November 1, 2004, by and between Levin Industries Ltd. and Simon Levin 10.3 Promissory Note, dated November 1, 2004, issued by Levin Industries Ltd. to Simon Levin 10.4 Agreement dated as of February 16, 2004 by and between Levin Industries Ltd. and A N' K Apparel Source Inc. 23.1 Consent of Sichenzia Ross Friedman Ference LLP (Included in Exhibit 5) 23.2 Consent of Manning Elliott, Chartered Accountants II-2 Item 28. Undertakings The undersigned Registrant hereby undertakes: (1) To file a post-effective amendment to this Registration Statement during any period in which offers or sales are being made: (i) to include any Prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the Prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually, or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) ((S)230.424(b) of this Chapter) if, in the aggregate, the changes in 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 (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement of any material change to such information in the Registration Statement. (2) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of this offering. (3) 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 therein, and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (4) That, insofar as indemnification for liabilities arising from the Securities Act may be permitted to directors, officers, and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. (5) That, for purposes of determining any liability under the Securities Act, the information omitted from the form of Prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or Rule 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. II-3 SIGNATURES Pursuant to the requirements of the Act, the Company certifies that it has reasonable grounds to believe that it meets all of the requirement for filing on Form SB-2 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in British Columbia, Canada on March 14, 2005. LEVIN TEXTILES INTERNATIONAL INC. By: /s/ SIMON LEVIN ---------------------------------- Simon Levin, President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, Secretary Treasurer and Director In accordance with the requirements of the Securities Act, this Registration Statement has been signed below by the following persons on behalf of the Company in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ SIMON LEVIN President, Principal Executive Officer, March 14, 2005 - --------------- Principal Financial Officer, Principal Simon Levin Accounting Officer, Secretary, Treasurer and Director II-4 EX-3.1 2 v014270_ex3-1.txt Exhibit 3.1 CERTIFICATE OF INCORPORATION FIRST: The name of this Corporation shall be: LEVIN TEXTILES INTERNATIONAL INC. SECOND: Its registered offices in the State of Delaware is to be located at 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle and its registered agent at such address is THE COMPANY CORPORATION. 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: 100,000,000 shares of common stock with a par value of ($.001), and 5,000 shares of preferred stock with a par value of ($.001). The powers, preferences and rights and the qualifications, limitations or restrictions thereof shall be determined by the board of directors. FIFTH: The name and address of the incorporator is as follows: Angela Norton 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. Nothwithstanding 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 this 7th day of July, 2004. /s/ ANGELA NORTON ---------------------------------- Name: Angela Norton Incorporator EX-3.2 3 v014270_ex3-2.txt Exhibit 3.2 BY-LAWS of LEVIN TEXTILES INTERNATIONAL INC. a Delaware corporation Part 1 Offices By-law 1. Registered Office. The registered office of Levin Textiles International Inc. (the "Corporation") will be maintained at such locations within the State of Delaware as the Board of Directors from time to time will designate. The Corporation will maintain in charge of such registered office an agent upon whom process against the Corporation may be served. By-law 2. Other Offices. The Corporation may also have an office or offices at such other place or places, either within or without the State of Delaware, as the Board of Directors from time to time may determine or the business of the Corporation may require. Part 2 Meetings of Shareholders By-law 3. Annual Meetings. Subject to the provisions of these Bylaws, the annual meeting of the shareholders for the election of directors and for the transaction of such other business as may properly come before such meeting will be held on such date and at such time as will be designated by the Board of Directors and stated in the notice of such meeting. If the election for directors will not be held on the day designated therefor or at any adjournment thereof, the directors will cause such election to be held at a special meeting of the shareholders as soon thereafter as may be convenient. At such special meeting, subject to the provisions of these Bylaws, the shareholders may elect the directors and transact any other business with the same force and effect as at an annual meeting duly called and held. By-law 4. Special Meetings. A special meeting of the shareholders for any purpose or purposes, unless otherwise prescribed by statute, may be called at any time and will be called by the President or Secretary, upon the direction of the Board of Directors, or upon the written request of a shareholder or shareholders holding of record at least ten (10 %) percent of the outstanding shares of the Corporation entitled to vote at such a meeting. By-law 5. Place of Meetings. All meetings of the shareholders will be held at the principal place of business of the Corporation or at such other place, within or without the State of Delaware, as will be designated by the Board of Directors and stated in the notice of each such meeting. By-law 6. Notice of Meetings. Except as otherwise provided by law, notice of each meeting of the shareholders, whether annual, special, or adjourned, will be given, not less than 10 days nor more than 60 days before the day on which such meeting is to be held, to each shareholder of record entitled to vote at such meeting by delivering a written or printed notice thereof to such shareholder personally, by facsimile machine, or by mailing such notice in a postage prepaid envelope addressed to such shareholder at the post office address furnished by such shareholder to the Secretary for such purpose, or, if such shareholder will not have furnished to the Secretary an address for such purpose, then at the address of such shareholder last known to the Secretary. Except when expressly required by law, no publication of any notice of a meeting of shareholders will be required. Notice of any meeting of shareholders will not be required to be given to any shareholder who will attend such meeting in person or by proxy. If any shareholder will in person or by proxy waive notice, in writing, of such meeting, whether before or after such meeting, notice thereof need not be given to such shareholder. Notice of any adjourned meeting of the shareholders will not be required to be given, except when expressly required by law. Page 2 By-law 7. Quorum. At each meeting of the shareholders, the presence in person or by proxy of shareholders holding of record a majority of the outstanding shares entitled to vote at such meeting will be necessary and sufficient to constitute a quorum for the transaction of business. In the absence of a quorum, the shareholders entitled to vote who are present in person or by proxy at the time and place of any meeting, or, if no shareholder entitled to vote is so present in person or by proxy, any officer entitled to preside at or act as secretary of such meeting may adjourn such meeting from time to time, without notice other than an announcement at such meeting, until a quorum will be present. At any such adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally called. By-law 8. Organization. At every meeting of the shareholders, the President, or, in his or her absence, a Vice President, or, in the absence of the President and all of the Vice Presidents, a chairman chosen by a majority in interest of the shareholders present in person or by proxy and entitled to vote thereat, will act as chairman. The Secretary, or, in his or her absence, an Assistant Secretary, will act as secretary at all meetings of the shareholders. In the absence from any such meeting of the Secretary or an Assistant Secretary, the chairman may appoint any person to act as secretary of such meeting. By-law 9. Business and Order of Business. Subject to the provisions of these Bylaws, at each meeting of the shareholders, such business may be transacted as may properly be brought before such meeting. By-law 10. Voting. At each meeting of the shareholders, each shareholder will be entitled to one vote in person or by proxy for each share of the Corporation having voting rights registered in his or her name on the books of the Corporation at the close of business on the day next preceding the day on which notice of such meeting was given, or, if no notice was given, on the day next preceding the day on which such meeting is held, except when, pursuant to the provisions of By-law 60, a date will have been fixed as a record date for the determination of the shareholders entitled to vote. Any shareholder entitled to vote may vote in person or by proxy in writing; provided, however, that no proxy will be valid after 11 months after the date of its execution, unless otherwise provided therein. The presence at any meeting of any shareholder who has given a proxy will not revoke such proxy, unless such shareholder will file written notice of such revocation with the secretary of such meeting prior to the voting of such proxy. At each meeting of the shareholders, all matters other than those the manner of deciding of which is expressly regulated by statute, the Certificate of Incorporation, or these Bylaws, will be decided by a majority of the votes cast by the holders of shares entitled to vote thereon. The Board of Directors, in advance of any meeting of the shareholders, or the chairman of such meeting, at such meeting, may appoint one or more inspectors of election to act at such meeting or any adjournment thereof, but no inspectors need be appointed unless expressly requested at such meeting by a shareholder entitled to vote thereat. By-law 11. Conduct of Meetings of Shareholders. Meetings of the shareholders will generally follow reasonable and fair procedure. Subject to the foregoing, the conduct of any meeting and the determination of procedure and rules will be within the absolute discretion of the chairman, and there will be no appeal from any ruling of the chairman with respect to procedure or rules. Accordingly, in any meeting of the shareholders, or part thereof, the chairman will have the absolute power to determine appropriate rules or to dispense with theretofore prevailing rules. Without limiting the foregoing, the following rules will apply: (a) Within his or her sole discretion, the chairman of a meeting may adjourn such meeting by declaring such meeting adjourned. Upon his or her doing so, such meeting will be immediately adjourned. (b) The chairman may ask or require anyone to leave a meeting if that person is not a bona fide shareholder or proxy. (c) A resolution or motion will be considered for vote only if proposed by a shareholder or duly authorized proxy, and seconded by a person, who is a shareholder or a duly authorized proxy, other than the person who proposed the resolution or motion. The chairman may propose any motion for vote. Page 3 (d) The chairman of a meeting may impose any reasonable limits with respect to participation by shareholders in a meeting, including, but not limited to, limits on the amount of time at the meeting taken up by the remarks or questions of any shareholder, limits on the numbers of questions per shareholder, and limits as to the subject matter and timing of questions and remarks by shareholders. Notwithstanding anything in these Bylaws to the contrary, no business will be conducted at any meeting of the shareholders except in accordance with the procedures set forth in this By-law 11; provided, however, that nothing in this By-law 11 will be deemed to preclude discussion by any shareholder as to any business properly brought before any meeting. The chairman will, if the facts warrant, determine, and declare at any meeting of the shareholders that business was not properly brought before such meeting in accordance with the provisions of this By-law 11, and if he or she should so determine, he or she will so declare to such meeting and any such business not properly brought before such meeting will not be transacted. By-law 12. Advance Notice of Shareholder Proposed Business at any Shareholders' Meeting. To be properly brought before any meeting of the shareholders, business must be either (a) specified in the notice of such meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before such meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before such meeting by a shareholder. In addition to any other applicable requirements, including, but not limited to, requirements imposed by federal and state securities laws pertaining to proxies, for business to be properly brought before any meeting by a shareholder, such shareholder must have given timely notice thereof in writing to the Secretary. To be timely, shareholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation not later than the close of business on the 15th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made, whichever first occurs. A shareholder's notice to the Secretary will set forth as to each matter such shareholder proposes to bring before any meeting of the shareholders (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (ii) the name and record address of the shareholder proposing such business, (iii) the class and number of shares of the Corporation that are beneficially owned by such shareholder, and (iv) any material interests of such shareholder in such business. Notwithstanding anything in these Bylaws to the contrary, no business will be conducted at any annual meeting except in accordance with the procedures set forth in this By-law 12. The chairman of such annual meeting will, if the facts warrant, determine and declare to the meeting that business was not properly brought before such meeting and in accordance with the provisions of this By-law 12, and if he or she should so determine, he or she will so declare to such meeting and any such business not properly brought before such meeting will not be transacted. By-law 13. Action by Shareholders Without a Meeting. Any action required or permitted to be taken at a meeting of the shareholders under any provisions of the Delaware General Corporation Law, the Certificate of Incorporation, or these Bylaws may be taken without a meeting if all of the shareholders entitled to vote thereon consent in writing to such action being taken, or, subject to the provisions of Section 228 of the Delaware General Corporation Law, if the shareholders who would have been entitled to cast the minimum number of votes which would be necessary to authorize such action at a meeting at which all of the shareholders entitled to vote thereon were present and voting will consent in writing to such action being taken. Whenever action of the Corporation is so taken, the consents of the shareholders consenting thereto will be filed with the minutes of proceedings of the shareholders. Part 3 Board of Directors By-law 14. General Powers. The Board of Directors will manage the property, affairs, and business of the Corporation. Page 4 By-law 15. Number, Qualifications, and Term of Office. The number of directors constituting the entire Board of Directors of this corporation will be not less than one (1) nor more than eight (8) as fixed from time to time by vote of a majority of the entire Board of Directors of this Corporation; provided, however, that the number of directors will not be reduced so as to shorten the term of any director at that time in office. The directors will be elected annually at the annual meeting of the shareholders. Each director will hold office until his or her successor will have been elected and qualified, until his or her death, until he or she will have resigned in the manner set forth in By-law 26, or until he or she will have been removed in the manner set forth in By-law 27, whichever will first occur. Any director elected to fill a vacancy in the Board of Directors will be deemed elected for the unexpired portion of the term of his or her predecessor on the Board of Directors. Each director, at the time of his or her election, will be at least 18 years of age. By-law 16. Nomination of Directors. (a) Only persons who are nominated in accordance with the procedures set forth in this by-law will be eligible for election as directors. The Board of Directors, or a duly appointed committee thereof, will act as a nominating committee for selecting nominees for election as directors. Except in the case of a nominee substituted as a result of the death or incapacity of a nominee of the nominating committee, the nominating committee will deliver written nominations to the Secretary at least 90 days prior to the appropriate date of the previous meeting of shareholders called for election of directors. Provided such nominating committee makes such nominations, no nominations for directors, except those made by the nominating committee, will be voted upon at the annual meeting unless other nominations by shareholders are made in accordance with the provisions of this By-law. No person will be elected as a director of the Corporation unless nominated in accordance with the procedures set forth in this By-law. Ballots specifying the names of all persons nominated by the nominating committee and by shareholders will be provided for use at the annual meeting. (b) Nominations of persons for election to the Board of Directors of the Corporation at an annual meeting of shareholders may be made by any shareholder entitled to vote for the election of directors at such meeting who complies with the procedures set forth in this By-law. Such nominations, other than those made by the Board of Directors or a nominating committee thereof, will be made pursuant to timely notice in writing to the Secretary as set forth in this By-law. To be timely, a shareholder's notice will be delivered to or received at the principal executive offices of the Corporation not less than 90 days prior to the appropriate anniversary date of the previous meeting of shareholders of the Corporation called for the election of directors. Each such shareholder's notice will set forth (1) the name and address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (2) a representation that the shareholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (3) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; (4) such other information regarding each nominee proposed by such shareholder as would be required to be disclosed in solicitations of proxies with respect to nominees for election as directors, pursuant to Regulation 14A under the Securities Exchange Act of 1934, including, but not limited to, information required to be disclosed by Items 4, 5, 6, and 7 of Schedule 14A; (5) the consent of each nominee to serve as director of the Corporation if so elected; and (6) the class and number of shares of stock of the Corporation that are beneficially owned by such shareholder on the date of such shareholder notice and, to the extent known, by any other shareholders known by such shareholder to be supporting such nominees on the date of such shareholder notice. At the request of the Board of Directors, any person nominated by the Board of Directors, or a nominating committee thereof, for election as a director will furnish to the Secretary that information required to be set forth in a shareholder's notice of nomination that pertains to the nominee together with the required written consents, each as described herein. (c) The Board of Directors may reject any nomination by a shareholder not timely made in accordance with the requirements of this By-law. If the Board of Directors, or a designated committee thereof, determines that the information provided in a shareholder's notice does not satisfy the informational requirements of this by-law in any material aspect, the Secretary will notify such shareholder of the deficiency in the notice. The shareholder will have an opportunity to cure the deficiency by providing additional information to the Secretary within such period of time, not to exceed five days from the date such deficiency notice is given to the shareholder, as the Board of Directors or such committee will reasonably determine. If the deficiency is not cured within such period, or if the Board of Directors or such committee reasonably determines that the additional information provided by the shareholder, together with information previously provided, does not satisfy the requirements of this by-law in any material respect, then the Board of Directors may reject such shareholder's nomination. The Secretary will notify a shareholder in writing whether his or her nomination has been made in accordance with the time and informational requirements of this by-law. Notwithstanding the procedures set forth in this by-law, if neither the Board of Directors nor such committee makes a determination as to the validity of any nominations by a shareholder, the chairman of such annual meeting will determine and declare at such annual meeting whether the nomination was made in accordance with the terms of this By-law. If such chairman determines a nomination was made in accordance with the terms of this By-law, he or she will so declare at such annual meeting and ballots will be provided for use at the annual meeting with respect to such nominee. If such chairman determines that a nomination was not made in accordance with this by-law, he or she will so declare at the annual meeting and defective nomination will be disregarded. Page 5 By-law 17. Election of Directors. At each meeting of the shareholders for the election of directors, the directors will be chosen by a plurality of the votes cast at such election by the holders of shares entitled to vote thereon. The vote for directors need not be by ballot, unless demanded by a shareholder entitled to vote thereon at such election and before the voting begins. The shareholders will not be entitled to cumulate their votes for directors. By-law 18. Annual Meetings. The annual meeting of the Board of Directors will be held in each year immediately after the annual meeting of shareholders, at such place as the Board of Directors from time to time may fix and, if so held, no notice of such meeting need be given. By-law 19. Regular Meetings. Regular meetings of the Board of Directors will be held at such times as the Board of Directors will determine. If any day fixed for a regular meeting will be a legal holiday at the place where the meeting is to be held, then the meeting which would otherwise be held on that day will be held at said place at the same hour on the next succeeding business day that is not a legal holiday. Notice of regular meetings need not be given. By-law 20. Special Meetings. Special meetings of the Board of Directors will be held whenever called by the President or any one director. Notice of each such meeting will be mailed to each director, addressed to him or her at his or her residence or usual place of business, at least five days before the day on which such meeting is to be held, or will be sent to him or her at such place by facsimile machine, telegraph, cable, telex, or the equivalent, or be delivered personally or by telephone, not later than the day preceding the day on which such meeting is to be held, except that in an emergency, the President may direct that shorter notice of a special meeting be given personally or by facsimile machine, telephone, telegraph, cable, telex, or the equivalent. Neither the business to be transacted nor the purpose of any such meeting need be specified in such notice. Notice of any meeting of the Board of Directors need not be given, however, if waived in writing or by facsimile machine, telegraph, telex, cable, or the equivalent, either before or after such meeting, or, at the meeting. Any meeting of the Board of Directors will be a legal meeting without any notice having been given, if all the directors will be present thereat. By-law 21. Place of Meeting. Meetings of the Board of Directors may be held at such place or places within or without the State of Delaware as the Board of Directors from time to time may designate. By-law 22. Quorum and Manner of Acting. A majority of the directors will be required to constitute a quorum for the transaction of business at any meeting. The act of a majority of the directors present at any meeting while a quorum is present will be an act of the Board of Directors. In the absence of a quorum, a majority of the directors present may adjourn any meeting from time to time until a quorum is present. Notice of any adjourned meeting will be given, in the same manner as notice of special meetings is required to be given, as set forth in these Bylaws. The directors will act only as a board and the individual directors will have no power as such. By-law 23. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if, prior or subsequent to such action, all members of the Board of Directors or of such committee, as the case may be, consent thereto in writing and such written consents are filed with the minutes of the proceedings of the Board of Directors or such committee. Such consent will have the same effect as a unanimous vote of the Board of Directors or such committee for all purposes and may be stated as such in any certificate or other document. By-law 24. Organization. At each meeting of the Board of Directors, the President or, in his or her absence, a chairman chosen by a majority of the directors present, will act as chairman. The Secretary, or, in his or her absence, an Assistant Secretary, or, in the absence of the Secretary and the Assistant Secretaries, any person appointed by the chairman, will act as recording secretary of such meeting. By-law 25. Order of Business. At all meetings of the Board of Directors business may be transacted in such order as the Chairman of the Board of Directors may determine. Page 6 By-law 26. Resignations. Any director of the Corporation may resign at any time by giving written notice to the President or to the Secretary. The resignation of any director will take effect at the time specified therein and, unless otherwise specified therein, the acceptance of such resignation will not be necessary to make such resignation effective. By-law 27. Removal of Directors. Any director may be removed at any time, either with or without cause, by the shareholders at any regular or special meeting of the shareholders and the vacancy in the Board of Directors caused thereby may be filled by the shareholders at the same meeting. By-law 28. Vacancies. In addition to a vacancy occurring by removal by the shareholders, as contemplated by By-law 27, a vacancy in the Board of Directors will occur upon the happening of any of the following events: (a) a director dies or resigns; (b) the shareholders fail to elect the number of directors authorized to be elected at any meeting of shareholders at which any director is to be elected; (c) the Board of Directors by resolution have elected to increase the number of directors; (d) the Board of Directors declare vacant the office of any director for such cause as the Board may determine; or (e) a vacancy occurs for any other reason. Any vacancy occurring in the Board of Directors will be filled by a majority of the remaining members of the Board of Directors, though less than a quorum, and each person so elected will hold office until the next annual meeting of shareholders and until his or her successor is duly elected and has qualified. By-law 29. Compensation. The Executive Committee will fix the salaries of the directors of the Corporation from time to time. No director will be prevented from receiving such salary by reason of the fact that he or she is also an officer of the Corporation. The directors may be paid their expenses for attending each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the directors or a stated salary as director. No payment precludes any director from serving the Corporation in any other capacity and being compensated for the service. Members of special or standing committees may be allowed like reimbursement and compensation for attending committee meetings. By-law 30. Indemnification of Directors, Officers, Employees and Agents. The Corporation will indemnify each director, officer, employee and agent of the Corporation, as amended by the provisions of Section 145 of the Delaware General Corporation Law, as set forth in Part 6 of these Bylaws. By-law 31. Executive and Other Committees. (a) The Board of Directors, by resolution adopted by a majority of the members of the Board of Directors determined in the manner specified by these Bylaws, may create and establish an Executive Committee consisting of not less than two directors. The Board of Directors may provide the Executive Committee with such powers as the Board of Directors determines to be necessary or appropriate, subject to such conditions as may be prescribed by the Board of Directors, these Bylaws, the Certificate of Incorporation and the Delaware General Corporation Law. (b) During the intervals between the meetings of the Board of Directors, the Executive Committee may exercise all the authority of the Board of Directors; provided, however, that the Executive Committee will not have the power to amend or repeal any resolution of the Board of Directors that by its terms will not be subject to amendment or repeal by the Executive Committee, and the Executive Committee will not have the authority of the Board of Directors in reference to (1) approving or proposing to shareholders action required to be approved by shareholders; (2) filling vacancies on the Board of Directors or on any of its committees; (3) amending the Certificate of Incorporation; (4) adopting, amending or repealing bylaws; or (5) approving a plan of merger or share exchange not requiring shareholder approval. (c) The Executive Committee will meet from time to time on call of the Chairman of the Board of Directors or of any two or more members of the Executive Committee. Meetings of the Executive Committee may be held at such place or places, within or without the State of Delaware, as the Executive Committee will determine or as may be specified or fixed in the respective notices or waivers of such meetings. The Executive Committee may fix its own rules of procedures, including provision for notice of its meetings. It will keep a record of its proceedings and will report these proceedings to the Board of Directors at the meeting thereof held next after they have been taken, and all such proceedings will be subject to revision or alternation by the Board of Directors except to the extent that action will have been taken pursuant to or in reliance upon such proceedings prior to any such revision or alternation. Page 7 (d) The Executive Committee will act by majority vote of its members; provided, however, the provisions of Bylaw 32 notwithstanding, that contracts or transactions of and by the Corporation in which officers or directors of the Corporation are interested will require the affirmative vote of majority of the disinterested members of the Executive Committee, at a meeting of the Executive Committee at which the material facts as to the interest and as to the contract or transaction are disclosed or known to the members of the Executive Committee prior to the vote. (e) Members of the Executive Committee may participate in committee proceedings by means of conference telephone or similar communications equipment by means of which all persons participating in the proceedings can hear each other, and such participation will constitute presence in person at such proceedings. (f) The Board of Directors, by resolution adopted in accordance with paragraph (a) of this By-law, may designate one or more directors as alternate members of the Executive Committee who may act in the place and stead of any absent member or members at any meeting of said committee. (g) The Board of Directors, by resolution adopted by a majority of the entire Board of Directors, may designate one or more additional committees, each committee to consist of two or more of the directors, which will have such name or names and will have and may exercise such powers of the Board of Directors, except the powers denied to the Executive Committee, as may be determined from time to time by the Board of Directors. Such committees will provide for their own rules of procedure, subject to the same restrictions thereon as provided above for the Executive Committee. (h) The Board of Directors will have the power at any time to remove any member of any committee, with or without cause, and to fill vacancies in and to dissolve any such committee. By-law 32. Provision Concerning Interested Transactions. Any contract or other transaction between the Corporation and (i) any director, or (ii) any corporation, unincorporated association, business trust, estate, partnership, trust, joint venture, individual or other legal entity ("Legal Entity") (A) in which any director has a material financial interest or is a general partner, or (B) of which any director is a director, officer, or trustee (collectively, a "Conflict Transaction"), will be valid for all purposes, if the material facts of such Conflict Transaction and such director's interest were disclosed or known to the Board of Directors, a committee with authority to act thereon, or the shareholders entitled to vote thereon, and the Board of Directors, such committee, or such shareholders authorized, approved, or ratified such Conflict Transaction. A Conflict Transaction will be authorized, approved or ratified: (a) By the Board or Directors or such committee, if it receives affirmative vote of majority of the directors who have no interest in the Conflict Transaction, notwithstanding the fact that such majority may not constitute a quorum or a majority of the Board of Directors or such committee or a majority of the directors present at such meeting, and notwithstanding the presence or vote of any director who does have such an interest; provided, however, that no Conflict Transaction may be authorized, approved or ratified by a single director; or (b) By such shareholders, if such Conflict Transaction receives the vote of a majority of the shares entitled vote, in which vote shares owned or voted under the control of any director who, or of any Legal Entity that, has an interest in the Conflict Transaction may be counted. This By-law will not be construed to require authorization, ratification or approval by the shareholders of any Conflict Transaction, or to invalidate any Conflict Transaction that would otherwise be valid under the common and statutory law applicable thereto. By-law 33. Telephonic Meeting. Unless restricted by the Certificate of Incorporation, any one or more members of the Board of Directors may participate in a meeting of the Board of Directors by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation by such means will constitute presence in person at a meeting. Page 8 Part 4 Officers By-law 34. Number. The officers of the Corporation will be a President, a Treasurer, and a Secretary, and, in the discretion of the Board of Directors, one or more Vice Presidents. By-law 35. Election, Qualifications, and Terms of Office. The Board of Directors will elect the officers annually. Each officer will hold office until his or her successor will have been elected and qualified, or until his or her earlier death, resignation, or removal in the manner provided in these Bylaws. Any person may hold more than one office. By-law 36. Resignations. Any officer may resign at any time by giving written notice of such resignation to the Board of Directors, the President, or the Secretary. Unless otherwise specified in such written notice, such resignation will take effect upon receipt of the notice thereof by the Board of Directors or any such officer. By-law 37. Vacancies. The Board of Directors will fill a vacancy in any office because of death, resignation, removal, disqualification, or any other cause for the unexpired portion of the term. By-law 38. President. The President will be the chief executive officer of the Corporation. Subject to the direction of the Board of Directors, the President will have general charge of the business affairs and property of the Corporation and general supervision over its officers and agents. If present, the President will preside at all meetings of shareholders and at all meetings of the Board of Directors. The President will see that all orders and resolutions of the Board of Directors are carried into effect. The President may sign, with any other officer "hereunto authorized, share certificates of the Corporation, the issuance of which will have been duly authorized, and may sign, in the name of the Corporation, deeds, mortgages, bonds, contracts, agreements, and other instruments duly authorized by the Board of Directors, except in these instances where the signing thereof will be expressly delegated by the Board of Directors to some other officer or agent. From time to time, the President will report to the Board of Directors all matters within his or her knowledge that the interests of the Corporation may require to be brought to their attention. The President will also perform such other duties as are given to him or her by these Bylaws or as from time to time may be assigned to him or her by the Board of Directors. By-law 39. Secretary. The Secretary will (a) record all the proceedings of the meetings of the shareholders and Board of Directors in a book or books to be kept for that purpose; (b) cause all notices to be duly given in accordance with the provisions of these Bylaws and as required by statute; (c) be custodian of the records and of the seal of the Corporation and cause such seal to be affixed to all certificates representing shares of the Corporation prior to the issuance thereof and to all instruments the execution of which on behalf of the Corporation under its seal will have been duly authorized; (d) see that the lists, books, reports, statements, certificates, and other documents and records required by statute are properly kept and filed; (e) have charge of the share record books of the Corporation and cause the same to be kept in such manner as to show at any time the amount of shares of the Corporation issued and outstanding, the names and addresses of the holders of record thereof, the number of shares held by each, and the date when each became such holder of record; (f) perform the duties required of him or her under Bylaw 11; (g) sign (unless the Treasurer will sign) certificates representing shares of the Corporation, the issuance of which will have been duly authorized; and (h) in general, perform all duties incident to the office of Secretary and such other duties as are given to him or her by these Bylaws or as from time to time may be assigned to him or her by the Board of Directors or the President. By-law 40. Chief Financial Officer. The Chief Financial Officer will (a) have charge of and supervision over and by responsible for the funds, securities, receipts, and disbursements of the Corporation; (b) cause the moneys and other valuable effects of the Corporation to be deposited in the name and to the credit of the Corporation in such banks or trust companies, or with such bankers or other depositories, as will be selected in accordance with Bylaw 46 or to be otherwise dealt with in such manner as the Board of Directors may direct; (c) cause the funds of the Corporation to be disbursed by checks or drafts upon the authorized depositories of the Corporation and cause to be taken and preserved proper vouchers for all moneys disbursed; (d) render to the Board of Directors or the President, whenever requested, a statement of the financial condition of the Corporation and of all his or her transactions as Chief Financial Officer; (e) cause to be kept, at the principal office of the Corporation or at such other office (within or without the State of Delaware) as will be designated by the Board of Directors, correct books of account of all its business and transactions; (f) sign (unless the Secretary will sign) certificates representing shares of the Corporation, the issuance of which will have been duly authorized; and (g) in general, perform all duties incident to the office of Treasurer and such other duties as are given to him or her by these Bylaws or as from time to time may be assigned to him or her by the Board of Directors or the President. Page 9 By-law 41. Vice Presidents. At the request of the President, any Vice President will perform all the duties of the President and, when so acting, will have all the powers of and be subject to all restrictions upon the President. Any Vice President may also sign, with any other officer thereunto duly authorized, share certificates of the Corporation, the issuance of which will have been duly authorized, and may sign in the name of the Corporation, deeds, mortgages, bonds, contracts, agreements, and other instruments duly authorized by the Board of Directors, except in those instances where the signing thereof will be expressly delegated by the Board of Directors to some other officer or agent. Each Vice President will perform such other duties as are given to him or her by these Bylaws or as from time to time may be assigned to him or her by the Board of Directors or the President. By-law 42. Salaries. The Board of Directors will fix the salaries of the officers of the Corporation from time to time. No officer will be prevented from receiving such salary by reason of the fact that he or she is also a director of the Corporation. By-law 43. Surety Bonds. If the Board of Directors will so require, any officer or agent of the Corporation will sign a bond to the Corporation, in such amount and with such surety or sureties as the Board of Directors may direct, conditioned upon the faithful discharge of his or her duties. Part 5 Contracts and Financial Matters By-law 44. Execution of Contracts. The President or any Vice President, subject to the approval of the Board of Directors, may enter into any contract or sign and deliver any instrument in the name and on behalf of the Corporation. Such authorization may be general or restricted to specific instances. By-law 45. Checks and Drafts. All checks, drafts, or other orders for the payment of money and all notes or other evidences of indebtedness issued in the name of the Corporation will be signed by such officer or officers or agent or agents of the Corporation as will be thereunto so authorized from time to time by resolution of the Board of Directors. By-law 46. Deposits. All funds of the Corporation not otherwise employed will be deposited from time to time to its credit in such banks or trust companies or with such bankers or other depositaries as the Board of Directors may select or as may be selected by any officer or officers or agent or agents authorized so to do by the Board of Directors. Endorsements for deposit to the credit of the Corporation in any of its duly authorized depositaries will be made in such manner as the Board of Directors from time to time may determine. By-law 47. General and Special Bank Accounts. The Board of Directors may authorize from time to time the opening and keeping of general and special bank accounts with such banks, trust companies, or other depositaries as the Board of Directors may designate and may make such special rules and regulations with respect thereto, not inconsistent with the provisions of these Bylaws, as the Board of Directors may deem expedient. By-law 48. Loans. No loans or advances will be contracted on behalf of the Corporation and no negotiable paper will be issued in its name, unless and except as authorized by the Board of Directors. Such authorization may be general or restricted to specific instances. Any officer or agent of the Corporation thereunto so authorized may affect loans and advances for the Corporation and for such loans and advances may make, sign, and deliver promissory notes, bonds, or other evidences of indebtedness of the Corporation. Any officer or agent of the Corporation thereunto so authorized may pledge, hypothecate, or transfer, as security for the payment of any and all loans, advances, indebtedness, and liabilities of the Corporation, any and all stocks, bonds, other securities, and other personal property at any time held by the Corporation and, to that end, may endorse, assign, and deliver the same and do every act and shine necessary or proper in connection therewith. By-law 49. Proxies. Proxies to vote with respect to shares of stock of other corporations owned by or standing in the name of the Corporation may be executed and delivered from time to time on behalf of the Corporation by such person or persons as will be thereunto authorized from time to time by the Board of Directors. Page 10 Part 6 Indemnification and Insurance By-law 50. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is involved in any pending, threatened, or completed civil, criminal, administrative, or arbitration action, suit, or proceeding, or any appeal therein or any inquiry or investigation which could lead to such action, suit, or proceeding ("proceeding"), by reason of his or her being or having been a director, officer, employee, or agent of the Corporation or of any constituent corporation absorbed by the Corporation in a consolidation or merger or by reason of his or her being or having been a director, officer, trustee, employee, or agent of any other corporation (domestic or foreign) or of any partnership, joint venture, sole proprietorship, trust, employee benefit plan, or such enterprise (whether or not for profit), serving as such at the request of the Corporation or of any such constituent corporation, or the legal representative of any such director, officer, trustee, employee, or agent, will be indemnified and held harmless by the Corporation to the fullest extent permitted by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than the Delaware General Corporation Law permitted prior to such amendment), from and against any and all reasonable costs, disbursements, and attorney's fees, and any and all amounts paid or incurred in satisfaction of settlements, judgments, fines, and penalties, incurred or suffered in connection with any such proceeding, and such indemnification will continue as to a person who has ceased to be a director, officer, trustee, employee, or agent and will inure to the benefit of his or her heirs, executors, administrators, and assigns; provided, however, that, except as provided in By-law 51, the Corporation will indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was specifically authorized by the Board of Directors of the Corporation. The right to indemnification specified in Part 6 of these By-laws will be a contract right and will include the right to be paid by the Corporation the expenses incurred in connection with any proceeding in advance of the final disposition of such proceeding as authorized by the Board of Directors; provided, however; that, if the Delaware General Corporation Law so requires, the payment of such expenses in advance of the final disposition of a proceeding will be made only upon receipt by the Corporation of an undertaking, by or on behalf of such director, officer, employee, or agent, to repay all amounts so advanced unless it will ultimately be determined that such person is entitled to be indemnified under this By-law or otherwise. By-law 51. Right of Claimant to Bring Suit. If a claim made under By-law 50 is not paid in full by the Corporation within 30 days after a written request has been received by the Corporation, the claimant may, at any time thereafter, apply to a court for an award of indemnification by the Corporation for the unpaid amount of the claim and, if successful on the merits or otherwise in connection with any proceeding or in the defense of any claim, issue, or matter therein, the claimant will also be entitled to be paid by the Corporation for any and all expenses incurred or suffered in connection with such proceeding. It will be a defense to any such action (other than an action brought to enforce a claim for the advancement of expenses incurred in connection with any proceeding where the required undertaking, if any, has been tendered to the Corporation) that the claimant has not satisfied the standard of conduct that makes it permissible under the Delaware General Corporation Law for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense will be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, or its shareholders) to have made a determination prior to the commencement of such proceeding that indemnification of the claimant is proper in the circumstances because he or she has satisfied the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, or its shareholders) that the claimant has not satisfied such applicable standard of conduct, nor the termination of any proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, will be a defense to the action or create a presumption that the claimant has not satisfied the applicable standard of conduct. By-law 52. Non-exclusivity of Rights. The right to indemnification and advance of expenses provided by or granted pursuant to part 6 of these By-laws will not exclude or be exclusive of any other rights to which any person may be entitled under the Certificate of Incorporation of the Corporation, these Bylaws, any agreement, vote of shareholders, or otherwise; provided, however, that no indemnification will be made to or on behalf of such person if a judgment or other final adjudication adverse to such person establishes that such person has not satisfied the applicable standard of conduct required to be satisfied under the Delaware General Corporation Law. Page 11 By-law 53. Insurance. The Corporation may purchase and maintain insurance on behalf of any director, officer, employee, or agent of the Corporation, or of another corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, against any expenses incurred in any proceeding and against any liabilities asserted against him or her by reason of such person's being or having been such a director, officer, employee, or agent, whether or not the Corporation would have the power to indemnify such person against such expenses and liabilities under the provisions of Part 6 of these By-laws or otherwise. Part 7 Shares and Share Transfers By-law 54. Share Certificates. Every holder of shares of the Corporation will be entitled to have a certificate, signed by the President or a Vice president and either the Treasurer or the Secretary, certifying the number of shares owned by him or her in the Corporation. In case any officer of the Corporation who has signed any such certificate will cease to be such officer, for whatever cause, before the certificate will have been delivered by the Corporation, the certificate will be deemed to have been adopted by the Corporation, unless the Board of Directors will otherwise determine prior to the issuance and delivery thereof, and may be issued and delivered as though the person who signed it had not ceased to be such officer of the Corporation. Certificates representing shares of the Corporation will be in such form as will be approved by the Board of Directors. There will be entered upon the share record books of the Corporation, at the time of issuance of each share, the number of the certificate issued, the name and address of the person owning the shares represented thereby, the number of shares, and the date of issuance thereof. Every certificate exchanged or returned to the Corporation will be marked "cancelled" with the date of cancellation. By-law 55. Share Record Books. The share record books and the blank share certificate books will be kept by the Secretary, or by any officer or agent designated by the Board of Directors. By-law 56. Addresses of Shareholders. Each shareholder will designate to the Secretary of the Corporation an address at which notices of meetings and all other corporate notices may be served, delivered, or mailed to such shareholder and, if any shareholder will fail to designate such address, all corporate notices (whether served or delivered by the Secretary, another shareholder, or any other person) may be served upon such shareholder by mail directed to him or her at his or her last known post office address. By-law 57. Transfers of Shares. The holder or record will make transfers of shares of the Corporation on the books of the Corporation thereof or by his or her attorney thereunto duly authorized by a power of attorney duly executed in writing and filed with the Secretary and on surrender of the certificate or certificates representing such shares. The Corporation will be entitled to treat the holder of record of any shares as the absolute owner thereof for all purposes and, accordingly, will not be obligated to recognize any legal, equitable, or other claim to or interest in such shares on the part of any other person, whether or not it or they will have express or other notice thereof, except as otherwise expressly provided by statute; provided, however, that whenever any transfer of shares will be made for collateral or security and not absolutely and written notice thereof will be given to the Secretary, such fact will be expressed in the entry of the transfer. Notwithstanding anything to the contrary contained in these Bylaws, the Corporation will not be required or permitted to make any transfer of shares of the Corporation that, if made, would violate the provisions of any agreement restricting the transfer of shares of the Corporation to which the Corporation will be a party; provided, however, that the restriction upon the transfer of the shares represented by any share certificate will be set forth or referred to upon the certificate. If the Corporation is not a reporting corporation with its shares listed for trading then no shares can be transferred without the consent of the directors expressed by a resolution of the board of directors. The board of directors will not be required to give any reason for refusing to consent to any such proposed transfer. By-law 58. Regulations. Subject to the provisions of Part 7 of these By-laws, the Board of Directors may make such rules and regulations as it may deem expedient concerning the issuance, transfer, and registration of certificates for shares of the Corporation. By-law 59. Lost, Destroyed, and Mutilated Certificates. The holder of any shares will immediately notify the Corporation of any loss, destruction, or mutilation of the certificate therefor and the Board of Directors, in its discretion, may cause to be issued to him or her a new certificate or certificates upon surrender of the mutilated certificate or, in case of loss or destruction of the certificate, upon satisfactory proof of such loss or destruction. The Board of Directors, in its discretion, may require the owner of the lost or destroyed certificate or his or her legal representative to give the Corporation a bond, in such amount (not exceeding twice the value of such shares) and with such surety or sureties as it may direct, to indemnify the Corporation against any claim that may be made against it on account of the alleged loss or destruction of any such certificate. Page 12 By-law 60. Fixing of Record Dates. The Board of Directors will have the power to fix in advance a date, not more than 60 days nor less than 10 days, preceding the date of any meeting of shareholders, the date for the payment of any dividend or allotment of any right, the date when any change, conversion, or exchange of shares will go into effect, or for the purpose of any other action, as a record date for the determination of the shareholders entitled to notice of and to vote at any such meeting, entitled to receive payment of any such dividend or allotment of any right, entitled to exercise the rights in respect to any such change, conversion, or exchange of shares, or entitled to participate in or be entitled to the benefit of any such other action. Whenever a record date has been so fixed, only shareholders of record on such date will be entitled to notice of and to vote at such meeting, to receive payment of any such dividend or allotment of any right, to exercise such rights in respect to any such change, conversion, or exchange of shares, or to participate in or be entitled to the benefit of any such other action. By-law 61. Refusal to Register Transfer. The Corporation will not register any transfer of securities issued by the Corporation in any transaction that qualifies for the exemption from registration requirements specified by the provisions of Regulation S, unless such transfer is made in accordance with the provisions of Regulation S. Part 8 Dividends By-law 62. Dividends. Subject to any restrictions imposed by statute, the Board of Directors from time to time, in its discretion, may fix and vary the amount of the working capital of the Corporation and determine what, if any, dividends will be declared and paid to the shareholders out of the surplus of the Corporation. The Board of Directors, in its discretion, may use and apply any surplus in purchasing or acquiring any of the shares of the Corporation in accordance with law or any of its bonds, debentures, or other obligations, or from time to time may set aside from such surplus such amount or amounts as it, in its absolute discretion, may deem proper as a reserve fund to meet contingencies or for equalizing dividends, for the purpose of maintaining or increasing the property or business of the Corporation, or for any other purposes it may deem consistent with the best interest of the Corporation. All such surplus, until actually declared in dividends or used and applied as aforesaid, will be deemed to be so set aside by the Board of Directors for one or more of said purposes. Part 9 Corporate Seal By-law 63. Corporate Seal. The Corporation may have a corporate seal which will be in circular form, will bear the name of the Corporation and the words and figures denoting its organization under the laws of the State of Delaware and the year thereof and otherwise will be in such form as will be approved from time to time by the Board of Directors. Part 10 Fiscal Year By-law 64. Determination of Fiscal Year. The fiscal year of the Corporation will be fixed by resolution of the Board of Directors. Part 11 Accountants By-law 65. Designation of Accountants. The Board of Directors of the Corporation from time to time will designate the independent accountants of the Corporation. Page 13 Part 12 Amendments By-law 66. Amendments. All By-laws of the Corporation will be subject to amendment, alteration, or repeal, and new Bylaws not inconsistent with any provision of the Certificate of Incorporation of the Corporation or any provision of law may be made, by the shareholders or by the Board of Directors, except as otherwise expressly required by statute. Any Bylaw adopted, amended, or repealed by the shareholders may be amended or repealed by the Board of Directors, unless the resolution of the shareholders adopting such Bylaw expressly reserves the right to amend or repeal it only to the shareholders. Part 13 Force and Effect By-law 67. Amendments. These Bylaws are subject to the provisions of the Delaware General Corporation Law and the Certificate of Incorporation, as the same may be amended from time to time. If any provision in these Bylaws is inconsistent with an express provision of either of the Delaware General Corporation Law or the Certificate of Incorporation, the provision of the Delaware General Corporation Law or the Certificate of Incorporation, as the case may be, will govern, prevail and control the extent of such inconsistency. Approved and adopted on April 8, 2004 CERTIFICATE OF THE SECRETARY I, Simon Levin, certify that I am the secretary of Levin Textiles International Inc. and that the foregoing By-laws consisting of 1 pages constitute full, true and correct code of By-laws of this Corporation as duly adopted at a regular meeting of the Board of Directors of the Corporation held on July 7, 2004. July 7, 2004 /s/ SIMON LEVIN - ----------------------- Simon Levin - Secretary EX-5.1 4 v014270_ex5-1.txt EXHIBIT 5.1 SICHENZIA ROSS FRIEDMAN FERENCE LLP 1065 Avenue of the Americas, 21st Flr. New York, NY 10018 Telephone: (212) 930-9700 Facsimile: (212) 930-9725 March 14, 2005 VIA ELECTRONIC TRANSMISSION Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549 RE: Levin Textiles International Inc. Form SB-2 Registration Statement (File No. 333-) - ------------------------------------------------ Ladies and Gentlemen: We refer to the above-captioned registration statement on Form SB-2 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Act"), filed by Levin Textiles International Inc., a Delaware corporation (the "Company"), with the Securities and Exchange Commission. We have examined the originals, photocopies, certified copies or other evidence of such records of the Company, certificates of officers of the Company and public officials, and other documents as we have deemed relevant and necessary as a basis for the opinion hereinafter expressed. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as certified copies or photocopies and the authenticity of the originals of such latter documents. Based on our examination mentioned above, we are of the opinion that the securities being sold pursuant to the Registration Statement are duly authorized and will be, when issued in the manner described in the Registration Statement, legally and validly issued, fully paid and non-assessable. We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to our firm under "Legal Matters" in the related Prospectus. In giving the foregoing consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations of the Securities and Exchange Commission. /s/ Sichenzia Ross Friedman Ference LLP EX-10.1 5 v014270_ex10-1.txt Exhibit 10.1 SHARE PURCHASE AGREEMENT THIS SHARE PURCHASE AGREEMENT dated as of the 16th day of July, 2004, BETWEEN: LEVIN TEXTILES INTERNATIONAL INC., a Delaware corporation with an office located at 315 East 2nd Avenue, Vancouver, British Columbia, V5T 1B9, Canada (the "Purchaser") AND: SIMON LEVIN, a businessman of 1108 - 1529 West Pender Street, Vancouver, British Columbia, V6G 3J3 (the "Shareholder") WHEREAS: A. The Shareholder is the registered and beneficial owner of 100 Common Shares in the capital of Levin Industries Ltd. (the "Shares"); B. The Shareholder wishes to sell, and the Purchaser wishes to purchase, the Shares pursuant to the terms and conditions of this agreement; NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of $1.00 and other good and valuable consideration paid by each party to the other, the receipt and sufficiency of which are acknowledged, the parties covenant and agree as follows: 1. The Shareholder agrees to sell and the Purchaser agrees to purchase the Shares for and at a price of US$2,500 at the date of this agreement. 2. The Purchaser will deliver 2,500,000 shares of common stock in the capital of the Purchaser to the Shareholder as consideration for the transfer of the Shares. 3. The Shareholder represents and warrants to the Purchaser that: a. The Shareholder owns the Shares as the legal and beneficial owner thereof, free of all liens, claims, charges and encumbrances of every nature and kind whatsoever. The Shares are fully paid and non-assessable and the Shareholder has due and sufficient right and authority to enter into this agreement and to transfer the legal and beneficial title and ownership of the Shares to the Purchaser. b. No person, firm or corporation has any agreement or option or a right capable of becoming an agreement for the purchase of the Shares, with the exception of this agreement. 2 4. The effective date of sale and purchase of the Shares will be July 16, 2004 (the "Closing"). 5. At the Closing, a. the Shareholder will deliver to the Purchaser the share certificates, duly endorsed for transfer, representing the Shares, and b. the Purchaser will deliver 2,500,000 shares of common stock in the capital of the Purchaser registered in the name of the Shareholder representing the full consideration for the Purchase Price. 6. This agreement will enure to the benefit of and will be binding upon the parties and their respective successors and assigns. 7. Time will be of the essence of this agreement. 8. The parties will sign such further assurances and other documents and instruments and do such further and other things as may be necessary to implement and carry out the intent of the agreement. IN WITNESS WHEREOF the parties have signed this Share Purchase Agreement as of the day and year first above written. Levin Textiles International Inc. Per: /s/ SIMON LEVIN /s/ SIMON LEVIN - -------------------- -------------------- Authorized Signatory Simon Levin EX-10.2 6 v014270_ex10-2.txt Exhibit 10.2 SHARE PURCHASE AGREEMENT THIS SHARE PURCHASE AGREEMENT dated as of the 1st day of November, 2004, BETWEEN: LEVIN INDUSTRIES LTD., a British Columbia company with an office located at 315 East 2nd Avenue, Vancouver, British Columbia, V5T 1B9, Canada (the "Purchaser") AND: SIMON LEVIN, a businessman of 1108 - 1529 West Pender Street, Vancouver, British Columbia, V6G 3J3 (the "Shareholder") WHEREAS: A. The Shareholder is the registered and beneficial owner of a certain number of common shares in the capital of ANK Apparel Source Inc. (the "Shares"), which represent a 16% interest in ANK Apparel Source Inc.; B. The Shareholder wishes to sell, and the Purchaser wishes to purchase, the Shares pursuant to the terms and conditions of this agreement; NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of $1.00 and other good and valuable consideration paid by each party to the other, the receipt and sufficiency of which are acknowledged, the parties covenant and agree as follows: 1. The Shareholder agrees to sell and the Purchaser agrees to purchase the Shares for and at a price of CDN$50,000 at the date of this agreement (the "Purchase Price"). 2. The Purchaser will deliver to the Shareholder a promissory note in the principal amount of CDN$50,000 (the "Promissory Note") as consideration for the transfer of the Shares. 3. The Shareholder represents and warrants to the Purchaser that: a. The Shareholder owns the Shares as the legal and beneficial owner thereof, free of all liens, claims, charges and encumbrances of every nature and kind whatsoever. The Shares are fully paid and non-assessable and the Shareholder has due and sufficient right and authority to enter into this agreement and to transfer the legal and beneficial title and ownership of the Shares to the Purchaser. 2 b. No person, firm or corporation has any agreement or option or a right capable of becoming an agreement for the purchase of the Shares, with the exception of this agreement. 4. The effective date of sale and purchase of the Shares will be November 1, 2004 (the "Closing"). 5. At the Closing, a. the Shareholder will deliver to the Purchaser the share certificates, duly endorsed for transfer, representing the Shares, and b. the Purchaser will deliver the Promissory Note to the Shareholder, which represents the full consideration for the Purchase Price. 6. This agreement will enure to the benefit of and will be binding upon the parties and their respective successors and assigns. 7. Time will be of the essence of this agreement. 8. The parties will sign such further assurances and other documents and instruments and do such further and other things as may be necessary to implement and carry out the intent of the agreement. IN WITNESS WHEREOF the parties have signed this Share Purchase Agreement as of the day and year first above written. Levin Industries Ltd. Per: /s/ SIMON LEVIN /s/ SIMON LEVIN - -------------------- -------------------- Authorized Signatory Simon Levin EX-10.3 7 v014270_ex10-3.txt Exhibit 10.3 PROMISSORY NOTE November 1, 2004 CDN$50,000.00 FOR VALUE RECEIVED, the undersigned, LEVIN INDUSTRIES LTD., a company existing under the laws of British Columbia (the "Purchaser"), unconditionally promises to pay ON DEMAND, to or to the order of SIMON LEVIN (the "Shareholder") at 1108 - 1529 West Pender Street, Vancouver, British Columbia, V6G 3J3 or at such other place as the Lender may designate from time to time in writing, the sum of Fifty Thousand (CDN$50,000.00) Dollars in lawful money of Canada. The principal amount will not bear interest and may be prepaid by the Purchaser in whole or in part at any time without notice or penalty. Extension of time for payment of all or any part of the amount owing hereunder or failure of the Shareholder to enforce any of its rights or remedies hereunder will not release the Shareholder and will not constitute a waiver of the rights of the Shareholder to enforce such rights and remedies thereafter. Presentment and demand for payment, protest, notice of protest and notice of dishonour and non-payment of this Promissory Note are waived. IN WITNESS WHEREOF the Purchaser has signed this Promissory Note as of the 1st day of November, 2004. LEVIN INDUSTRIES LTD. Per: /s/ SIMON LEVIN ----------------------- Simon Levin - President EX-10.4 8 v014270_ex10-4.txt Exhibit 10.4 THIS AGREEMENT MADE ON THE 16th DAY OF FEBRUARY, 2004 BETWEEN: A N' K APPAREL SOURCE INC., a company incorporated under the laws of the Province of British Columbia, having a registered and records office at Suite 301 - 4838 Fraser Street, Vancouver, British Columbia, V5V 4H4, and its business office located at 1331 Clark Drive, Vancouver, British Columbia, V5L 3I8 ("A N' K") OF THE FIRST PART AND LEVIN INDUSTRIES LTD. ("LEVIN") OF THE SECOND PART COLLECTIVELY REFERRED TO AS THE "PARTIES" WHEREAS: A. This agreement ("Agreement") is intended to set forth the terms and conditions of a business relationship between A N' K and Levin; B. Levin has agreed to be a sales and marketing representative for A N' K's products ("Products"); C. A N' K has agreed to appoint Levin as a sales and marketing representative for its Products; and D. The Parties are desirous of formalizing their business relationship under the terms and conditions set forth in this Agreement. NOW THEREFORE THIS AGREEMENT WITNESSETH that the Parties understand and agree to the following terms and conditions: 1. Levin and A N' K agree to comply with and be bound by the terms and conditions of this Agreement. 2. A N' K hereby appoints Levin to be a sales and marketing representative for its Products and Levin hereby accepts such appointment. 3. This Agreement shall commence on February 16, 2004, ("Commencement Date"). 4. During the term of this Agreement, Levin shall have the right to sell and market the Products, including any variations of the Products, developed and manufactured by A N' K from time to time. 5. Levin represents, and warrants to A N' K that it has the required skills and experience to perform the duties and exercise the responsibilities required of it to be a Sales and Marketing Representative. In carrying out these duties and responsibilities, Levin undertakes to comply with all lawful reasonable instructions that it may receive from A N' K. Levin specifically undertakes and shall be responsible for the following: (a) soliciting customer orders for the Products and forwarding the orders on to A N' K; (b) maintaining a high level of service to existing customers; (c) responding promptly to requests for quotation, delivery and after-sale service; (d) providing A N' K price lists, sales brochures, literature and other Product information to customers and prospective customers; 2 (d) introducing new products to these accounts where possible; (e) qualifying new business prospects and building an active, high potential prospect list; and (f) keeping accurate records and reports with respect to sales and prospects. 6. As a Sales and Marketing Representative, Levin shall be responsible for all expenses incurred by it in carrying out its duties under this Agreement, including, but not limited to, transportation, meals, lodging and entertainment. 7. Levin acknowledges and agrees that A N' K shall determine the terms and conditions of all sales and marketing efforts and that orders received by A N' K from Levin's customers shall not be binding on A N' K until accepted by A N' K. 8. The prices to be charged for all Products, including discounts and allowances, shall be as specified by A N' K. No other credits or allowances of any kind shall be granted by Levin on behalf of A N' K. 9. It is understood and agreed that the commission arrangements set out in Article 11 below are not to be varied without the mutual consent of the Parties. 10. It is understood and agreed that the commission arrangements set out in Article 11 below may be renegotiated by mutual consent of the Parties if A N' K is not making a ten percent (10%) gross profit margin on the sale of each Product. 11. As full compensation for all services provided for herein, A N' K shall pay or cause to be paid to Levin, and Levin shall accept: (a) a commission of two percent (2%) of the Net Invoice amount on sales of the Products and for the purposes of this Agreement, the term "Net Invoice" means the invoice price of the purchased products, less normal or customary discounts or allowances; and (b) a further commission of one and one - half percent (1.5%) on any additional Products Levin sells after it has earned a minimum net amount of eighty thousand dollars ($80,000) per year in commissions based upon the two percent (2%) commission arrangement set out in (a) above. 12. At the time of each shipment of Products sold by Levin to customers, A N' K will provide to Levin copies of A N' K's commercial invoice, the packing list and the bill of lading. 3 13. On or about the first day of each calendar month, Levin shall prepare and submit to A N' K an invoice for commissions earned by it on Products shipped by A N' K during the immediately preceding calendar month. Each invoice shall be accompanied by a summary description of the preceding month's shipments sufficient to identify the shipments by customer, by purchase order number, by shipping date and by the commercial invoice amount. 14. Reimbursement of commissions earned on shipments shall be immediately due and payable to Levin once A N' K receives payments for the Products from the customers. 15. The rights which accrue to A N' K under this Agreement shall pass to its successors or assigns. The rights of Levin under this Agreement are not assignable or transferable in any manner. 16. In the event that any provision in this Agreement shall be deemed void or invalid by a court of competent jurisdiction, the remaining provisions shall be and remain in full force and effect. 17. The waiver by either party of any breach or violation of any provision of this Agreement shall not operate, or be construed, as a waiver of any similar subsequent breach or violation of it. 18. This Agreement constitutes the entire agreement between the Parties with respect to the matters set out in it and any and all previous agreements, written or oral, express or implied between the Parties or on their behalf relating to such matters, are terminated and cancelled and each of the Parties releases and forever discharges the other of and from all manner of action, causes of action, claims or demands under or in respect of any agreement. 19. Any modification to this Agreement must be in writing, signed by the Parties or it shall have no effect and shall be void. 20. This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia, as they were on the date of execution of this Agreement by A N' K and Levin. 21. (1) Any notice required or permitted to be given to Levin shall be sufficiently given if delivered to Levin personally or if mailed by registered mail to Levin's address last known to A N' K, or if delivered to Levin via facsimile. 4 (2) Any notice required or permitted to be given to A N' K shall be sufficiently given if mailed by registered mail to A N' K's head office at its address last known to Levin. (3) Any notice given by mail shall be deemed to have been given forty-eight (48) hours after the time it is posted. IN WITNESS WHEREOF the Parties have duly executed this Agreement on the 16th day of February, 2004. SIGNED SEALED AND DELIVERED in the presence of: /s/ SIMON LEVIN ----------------------------------- SIMON LEVIN /s/ AILEEN YE - -------------------- Signature of witness Aileen Ye - -------------------- Name of witness /s/ CHARLES TAN ------------------------------------ for A N'K APPAREL SOURCE INC. 5 EX-23.2 9 ex23.txt EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" and to the use of our report dated March 1, 2005 included in the Registration Statement on Form SB-2 and the related Prospectus of Levin Textiles International Inc. for the registration of shares of its common stock. /s/ "Manning Elliott" MANNING ELLIOTT CHARTERED ACCOUNTANTS Vancouver, Canada March 14, 2005 -----END PRIVACY-ENHANCED MESSAGE-----