-----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, TeyrkFI9tCm/mkV/jlwMtw2cYXPVg0Ub/1LtTnuO9XxJLvO05Brij3DzCUZBzWb5 ZHu+JU1OY4752wN9G+Dmqg== 0001121282-02-000043.txt : 20020710 0001121282-02-000043.hdr.sgml : 20020710 20020710163843 ACCESSION NUMBER: 0001121282-02-000043 CONFORMED SUBMISSION TYPE: SB-2 PUBLIC DOCUMENT COUNT: 22 FILED AS OF DATE: 20020710 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL BEAUTY CORP CENTRAL INDEX KEY: 0000821524 STANDARD INDUSTRIAL CLASSIFICATION: PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844] IRS NUMBER: 133422912 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SB-2 SEC ACT: 1933 Act SEC FILE NUMBER: 333-92190 FILM NUMBER: 02700280 BUSINESS ADDRESS: STREET 1: 4818 WEST COMMERICAL BLVD CITY: FT LAUDERDALE STATE: FL ZIP: 33319 BUSINESS PHONE: 9547335785 MAIL ADDRESS: STREET 1: 4818 WEST COMMERICAL BLVD CITY: FT LAUDERDALE STATE: FL ZIP: 33319 FORMER COMPANY: FORMER CONFORMED NAME: TRI CAPITAL CORP /NV/ DATE OF NAME CHANGE: 19880427 FORMER COMPANY: FORMER CONFORMED NAME: ATR INDUSTRIES INC/NV/ DATE OF NAME CHANGE: 19990427 FORMER COMPANY: FORMER CONFORMED NAME: BEAUTYMERCHANT COM INC DATE OF NAME CHANGE: 19991029 SB-2 1 doc1.txt 4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 10, 2002. REGISTRATION NO. ____________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM SB-2REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 National Beauty Corp. --------------------- (Name Of Small Business Issuer In Its Charter) Nevada 2844 13-3422912 (State or Other Jurisdiction (Primary Standard of Incorporation Industrial Classification (I.R.S. Employer or Organization) Code Number) Identification No.) 4818 West Commercial Blvd. Ft. Lauderdale, Florida 33319 (954) 717-8680 -------------- (Address and Telephone Number of Principal Executive Offices) 4818 West Commercial Blvd. Ft. Lauderdale, Florida 33319 (954) 717-8680 -------------- (Address of Principal Place of Business or Intended Principal Place of Business) Mr. Ed Roth ----------- 4818 West Commercial Blvd. Ft. Lauderdale, Florida 33319 (954) 717-8680 (Name, Address, and Telephone Number of Agent for Service) Copy to: Weed & Co. LLP 4695 MacArthur Court, Suite 1430 Newport Beach, CA 92660 Telephone (949) 475-9086 Facsimile (949) 475-9087 Approximate Date of Commencement of Proposed Sale to the Public: as soon as possible after this registration statement becomes effective If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [X] ________________________________________________________________ If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of 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 ------------------------------- Title Of Each. . . Proposed Proposed Class Of . . . . . Maximum Maximum Securities . . . . Amount Offering Aggregate Amount Of To Be. . . . . . . To Be Price Offering Registration Registered . . . . Registered Per Unit Price Fee ---------- --------- ---------- ------------- Units(1) . . . . . 4,000,000 -- -- -- - ------------------ ---------- --------- ---------- ------------- Common Stock, ...001 par value(2) 4,000,000 $ .50 $2,000,000 $ 184.00 - ------------------ ---------- --------- ---------- ------------- Warrants to Purchase Common Stock(3) . . . . . 4,000,000 $ .25 $1,000,000 $ 92.00 - ------------------ ---------- --------- ---------- ------------- Common Stock, ...001 par value(4) 1,325,000 $ .13 $ 172,250 $ 15.85 - ------------------ ---------- --------- ---------- ------------- Total. . . . . . . 9,325,000 N/A $3,172,250 $ 291.85 - ------------------ ---------- --------- ---------- -------------
(1) Includes 4,000,000 shares of common stock and warrants exercisable to purchase 4,000,000 shares of common stock. (2) Represents 4,000,000 shares of common stock included in the units offered by National Beauty Corp. The units are being offered to the public at a price of $.50 per share. (3) Represents 4,000,000 shares of common stock underlying the warrants included in the units offered by National Beauty Corp. The exercise price for the warrants is $.25 per share. (4) Represents 1,325,000 shares being offered by selling shareholders. This calculation is made solely for the purpose of determining the registration fee pursuant to the provisions of Rule 457(c) under the Securities Act and is based on and is calculated on the basis of the average of the high and low prices reported and last sale reported on the OTC Bulletin Board as of July 9, 2002. The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. PROSPECTUS National Beauty, Inc. 4,000,000 Units 1,325,000 Shares of Common Stock This prospectus relates to the public offering, which is not being underwritten, of 4,000,000 units of National Beauty, Inc., a Nevada corporation ("National Beauty") at a price of $.50 per unit. Each unit consists of one share of common stock, $.001 par value, and one warrant exercisable to purchase one share of common stock at an exercise price of $.25 per share. There is no minimum number of units that National Beauty has to sell. There is no escrow account. National Beauty will use all money received from the offering and there will be no refunds. The offering will terminate nine months after the effective date of this registration statement. Further, concurrent with this offering, National Beauty is registering 1,325,000 additional shares which may be resold from time to time by stockholders of the company. National Beauty has been advised by the selling stockholders that they or their successors may sell all or a portion of the securities offered in the over the counter market, in privately negotiated transactions, or otherwise, including sales through or directly to a broker or brokers. Sales will be at prices and terms then prevailing or at prices related to the then current market prices or at negotiated prices. In connection with any sales, any broker or dealer participating in these sales may be deemed to be an underwriter within the meaning of the Securities Act of 1933. National Beauty will not receive proceeds from the sales by the selling stockholders. National Beauty will bear all expenses incurred in connection with the offering. None of the selling stockholders are officers, directors and affiliates of the registrant. YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE __ OF THIS PROSPECTUS BEFORE PURCHASING ANY OF THE COMMON STOCK OFFERED BY THIS PROSPECTUS. Per Unit Total(1) -------- -------- Public offering price $.50 $2,000,000 - --------------------- ---- ---------- Exercise price of warrants $.25 $1,000,000 - -------------------------- ---- ---------- Total proceeds to National Beauty $3,000,000(2) - ------- ------------- (1) Assuming all shares are purchased and all warrants are exercised. (2) Before deducting offering expenses. National Beauty's common stock is currently trading on the OTC Bulletin Board under the symbol "NBEU." This is a self-underwritten offering, to be conducted by the officers and directors of National Beauty. 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. The registrant may amend this registration statement. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. National Beauty may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. The date of this prospectus is July 10, 2002. TABLE OF CONTENTS ----------------- Prospectus Summary Risk Factors Use of Proceeds Determination of Offering Price Dilution Selling Security Holders Plan of Distribution Legal Proceedings . Directors, Executive Officers, Promoters and Control Persons Security Ownership of Certain Beneficial Owners and Management Description of Securities Experts Disclosure of Commission Position on Indemnification for Securities Act Liabilities Organization Within Last Five Years Description of Business Management's Discussion and Analysis or Plan of Operation Description of Property Certain Relationships and Related Transactions Market for Common Equity and Related Stockholder Matters Executive Compensation Financial Statements Changes in and Disagreements With Accountants on Accounting and Financial Disclosure PROSPECTUS SUMMARY National Beauty Corp. National Beauty Corp., formerly known as Beautymerchant.com, Inc., was incorporated in Nevada in 1987. The company has primarily operated through its wholly owned subsidiaries, Cleaning Express USA, Beauty Works USA, Inc. and Beauty Merchant, Inc. Cleaning Express USA is a full service cleaning company offering daily residential cleaning services, carpet cleaning and other related services in the South Florida area. During April 2000, the company began operations as an E-commerce distributor of beauty products under its Beauty Merchant, Inc. subsidiary and ceased these operations in 2001. Through its Beauty Works USA, Inc. subsidiary, National Beauty currently offers beauty services and products through its retail beauty salon in the South Florida area. As of December 31, 2001, National Beauty had generated $431,810 in revenue and had incurred a net loss of $257,044. Over the last fiscal year, National Beauty did not expend any funds for research and development activities. As of March 31, 2002, National Beauty generated $145,256 in revenues and had a net loss of $34,433. National Beauty's business plan entails acquiring existing beauty service operations, developing these salons and marketing the company's own private label beauty products through these operations. National Beauty is also pursuing the development of its "HAIRMAX" concept, which aims to locate hair salons, offering quality and inexpensive hair services, in larger retailers. National Beauty has filed a trademark application on the HAIRMAX name and logo. National Beauty 's common stock trades on the OTCBB under the symbol "NBEU." National Beauty's executive office is located at 4818 West Commercial Blvd., Ft. Lauderdale, Florida 33319. The telephone number is (949) 717-8680. OFFERING
Units Offered by National . . . . . . . . . . . . 4,000,000 shares of common stock, Beauty. . . . . . . . . . . . . . . . . . . . . . 4,000,000shares underlying warrants to purchase common stock Price per Unit. . . . . . . . . . . . . . . . . . $ .50 Common Stock Offered by the Selling Shareholders. . . . . . . . . . . . . . . . . . . 1,325,000 shares Common Stock. . . . . . . . . . . . . . . . . . . 4,525,062 shares Currently Outstanding Risk Factors . . . . . . . . . . . . . . . . . . . Investment in the shares involves a high Degree of risk.
SELECTED FINANCIAL INFORMATION The Selected Financial Information should be read in conjunction with the Consolidated Financial Statements and the Notes thereto appearing in this Prospectus. SUMMARY OF CONSOLIDATED STATEMENTS OF OPERATIONS Fiscal Year Ended Three Months Ended December 31 March 31 (unaudited) ----------- 2001 2002 ---- ---- Revenue $431,810 $145,256 Net income (loss) . $(257,044) $(34,433) Net income (loss) per share $(.57) $(.01) Number of shares outstanding 1,466,362 3,736,362 SUMMARY OF CONSOLIDATED BALANCE SHEETS At December At March 31, 31, 2001 2002 (unaudited) -------- ---------------- Current assets $105,347 $126,698 Current liabilities $16,207 $4,891 Working capital $89,140 $121,807 Total assets $136,743 $157,094 Total liabilities . $16,207 $4,891 Retained deficit . $(1,284,330) $(1,318,763) Stockholders' equity $120,536 $152,203 RISK FACTORS An investment in the shares offered hereby involves a high degree of risk. Prospective investors should carefully consider the following factors concerning the business of National Beauty and its subsidiaries and the offering, and should consult independent advisors as to the technical, tax, business and legal considerations regarding an investment in the shares. NATIONAL BEAUTY HAS A LIMITED OPERATING HISTORY IN REGARD TO ITS CURRENT BUSINESS PLAN, HAS NOT GENERATED SIGNIFICANT REVENUES AND MAY NOT BE SUCCESSFUL IN THE BEAUTY SUPPLY AND SERVICE INDUSTRIES. ... National Beauty is in the early stages of developing its beauty service business and has engaged only in very limited operations, none of which have generated substantial revenues. Further, National Beauty does not have significant experience in the beauty industry and is subject to all the risks inherent in an immature business enterprise, including the absence of an extensive operating history upon which to base a future forecast. Risks to National Beauty's operations include, but are not limited to: - - inability to manage growth and expanding operations; - - inability to predict interest in National Beauty's services; - - inability to increase brand awareness; - - attracting, retaining and motivating qualified personnel; and - - maintaining current and developing strategic relationships. To be successful, National Beauty must: - - retain existing customers; - - attract new customers; - - meet customer demands; - - fulfill all customer needs; - - acquire additional sources for merchandise at discounted prices; - - develop and brand HAIRMAX stores as a consumer choice; - - increase its media exposure; - - monitor the competition; and - - maintain the ability to hire and retain qualified service personnel such as hairstylists. NATIONAL BEAUTY HAS INCURRED SIGNIFICANT LOSSES AND FOR THE YEARS ENDED DECEMBER 31, 2000 AND DECEMBER 31, 2001, HAD NET LOSSES OF $794,306 AND 257,044, RESPECTIVELY, AND ACCORDINGLY, MAY NOT BE ABLE TO GENERATE SUFFICIENT REVENUES TO ACHIEVE OR SUSTAIN PROFITABILITY IN THE FUTURE. For the years ended December 31, 2001 and December 31, 2000, National Beauty's net operating loss was $257,044 and $794,306, respectively. For the three months ended March 31, 2002, National Beauty incurred a net loss of $34,433. National Beauty may continue to experience net-operating losses through the next two years and therefore, National Beauty may not be able to generate sufficient revenues to achieve or sustain profitability in the future. National Beauty's losses are primarily due to expenses incurred in payroll expenses and consulting services. National Beauty expects to incur losses at least through fiscal 2002 due to the following factors: - - the development of the HAIRMAX brand, marketing and promotion; - - expanded offering of service; - - continued store development costs; - - additional personnel to manage customer service and in-house marketing; and - - increases in general and administrative costs to support the company's growing operations. NATIONAL BEAUTY'S GROWTH MAY REQUIRE SUBSTANTIAL EXPENDITURES WHICH NATIONAL BEAUTY MAY NOT BE ABLE TO FUND. Cash flows used in National Beauty's operations were a negative $23,482 for the year ended December 31, 2001, and a negative $291,498 for the year ended December 31, 2000. Further, cash flows used in National Beauty's operations as of March 31, 2002 were a negative $4,128. National Beauty's success and ongoing financial viability is contingent upon the success of its new business model and the generation of related cash flows. National Beauty's failure to meet these contingencies may cause it to delay or suspend its operations. National Beauty has funded its cash needs from inception through December 31, 2001 with a series of debt and equity transactions, including private placements. National Beauty may require financing in addition to this amount, which may not be available on reasonable terms, if at all. NATIONAL BEAUTY'S PROCUREMENT OF ADDITIONAL FINANCING, IF AVAILABLE, MAY DILUTE THE OWNERSHIP INTERESTS OF INVESTORS. National Beauty may raise additional funds through the issuance of equity, equity-related or convertible debt securities. The issuance of additional common stock dilutes existing stockholders. Further procurement of additional financing through the issuance of equity, equity-related or convertible debt securities or preferred stock may further dilute existing stock. Further, the perceived risk of dilution may cause selling shareholders, as well as other holders, to sell their shares, which would contribute to downward movement in the price of your shares. NATIONAL BEAUTY'S SYSTEMS, PROCEDURES, CONTROLS AND EXISTING SPACE MAY NOT BE ADEQUATE TO SUPPORT EXPANSION OF NATIONAL BEAUTY'S OPERATIONS, WHICH MAY STRAIN NATIONAL BEAUTY'S RESOURCES AND THEREFORE, DETRIMENTALLY AFFECT ITS FUTURE OPERATIONS. National Beauty may expand its operations rapidly, which may create significant demands on National Beauty's personnel and other administrative resources, operations and management. These demands on National Beauty's administrative and operational capabilities could adversely effect: - - the quality of its services, - - its ability to retain and attract research and development staff, - - its ability to retain and attract administrative personnel and management, and - - its ability to collect revenues, if any. Further, National Beauty's systems, procedures, controls and existing space may not be adequate to support expansion of National Beauty's operations. National Beauty's business model requires the acquisition of property for new salons. National Beauty's future operating results will depend, among other things, on its ability to manage changing business conditions and to continue to improve its operational, financial control and reporting systems. ANY POTENTIAL ACQUISITION NATIONAL BEAUTY MAKES COULD DISRUPT ITS BUSINESS AND HARM ITS FINANCIAL CONDITION. An element of National Beauty's growth strategy includes the acquisition of companies which it believes have synergistic business models. Acquisitions entail a number of risks that could materially and adversely affect its business and operating results, including: - - Problems integrating the acquired operations, technologies or products; - - Diversion of National Beauty's management's time and attention from its core business; - - Difficulties in retaining business relations with suppliers and customers of the acquired company; - - Risks associated with entering markets in which it lacks prior experience; and - - Potential loss of key employees from the acquired company. NATIONAL BEAUTY'S OPERATIONS ARE DEPENDANT ON LOCATING ADEQUATE STORE LOCATIONS, SUFFICIENT SOURCES OF SUPPLY AND QUALIFIED PERSONNEL TO STAFF THESE LOCATIONS, FAILURE TO DO SO COULD REDUCE OR CURTAIL OPERATIONS. National Beauty intends to offer beauty services and products to the public through the development of new and existing salons, which may be difficult to locate or acquire. The principal suppliers to the company are wholesale distributors, who do not sell retail. As such, sources of supply for National Beauty' s proposed products may be difficult to locate or may not provide sufficient supplies at a reasonable cost. Further, National Beauty does not have manufacturing expertise, facilities or capabilities and does not intend to manufacture any products. Even if an acceptable supplier or manufacturer can be found, termination of the services of these suppliers or manufacturers could result in interruptions in the ability to manufacture the products until an alternative source can be secured. Further, National Beauty will be dependant on its ability to hire and retain qualified service and management personnel to staff the new stores it expects to establish. NATIONAL BEAUTY IS DEPENDENT ON MEMBERS OF ITS KEY PERSONNEL, PARTICULARLY MR. EDWARD ROTH FOR HIS KNOWLEDGE OF THE BEAUTY SERVICE INDUSTRY, AND THE LOSS OF KEY PERSONNEL MAY HINDER THE COMPANY'S DEVELOPMENT. The success of National Beauty is dependent upon, among other things, the service of Mr. Edward Roth, President of National Beauty. Because of Mr. Roth's experience in the beauty service industry, the loss of Mr. Roth could have a material adverse effect on the company's plan to offer beauty products and services to the public. Further, Mr. Roth and Alisha Roth, the company's Secretary, Treasurer and director, have managed the operations of Cleaning Express USA since inception. As such, the loss of either of these individuals could adversely affect the operations of Cleaning Express USA, as well as the company as a whole. National Beauty has entered into an employment agreements with Mr. Roth and Ms. Roth but does not maintain any key-man life insurance. NATIONAL BEAUTY FACES SUBSTANTIAL COMPETITION FROM COMPETITORS WITH SIGNIFICANTLY GREATER HUMAN AND FINANCIAL RESOURCES, EXPERIENCE, AND TECHNICAL STAFF, WHICH COULD REDUCE OR ELIMINATE NATIONAL BEAUTY'S ABILITY TO COMPETE IN A DESIGNATED MARKET. There are many companies, substantially all with significantly greater resources, including financial resources, experience and staff than National Beauty. These companies, such as Regis Corp., have or may successfully develop products and services which meet some of the needs intended to be met by National Beauty' proposed products and services. Some of these companies have established strong market positions in their products and services. These competitors may respond vigorously to any threat in their market shares and therefore, National Beauty may not be able to compete successfully in the future. NATIONAL BEAUTY'S COMMON STOCK PRICE IS HIGHLY VOLATILE AND ANY FLUCTUATIONS THAT OCCUR FOLLOWING COMPLETION OF THIS OFFERING MAY REDUCE THE MARKET PRICE AND/OR LIQUIDITY OF NATIONAL BEAUTY'S COMMON STOCK. The market price of the common stock has been, and is likely to remain, highly volatile as is frequently the case with unseasoned public companies. The following developments affecting National Beauty or its competitors could cause the market price of the common stock to fluctuate substantially and reduce the liquidity of the common stock: - - quarterly operating losses of National Beauty, - - deviations in losses of operations from estimates of securities analysts, and - - changes in general conditions in the economy, or in the beauty service industry. The equity markets have, on occasion, experienced significant price and volume fluctuations that have affected the market prices for many companies' securities and that have often been unrelated to the operating performance of these companies. NATIONAL BEAUTY'S COMMON STOCK IS TRADED ON A LIMITED PUBLIC MARKET, WHICH MAY IMPACT STOCKHOLDERS' ABILITY TO LIQUIDATE THEIR INVESTMENTS. National Beauty 's common stock is traded on the Nasdaq OTC Bulletin Board which tends to be comprised of small businesses of regional interest with limited trading activity. National Beauty intends to submit an application to list the common stock on Nasdaq's National Market System or Small Cap System as soon as it meets the listing qualifications, however, National Beauty's securities may not qualify for listing on Nasdaq's National Market System or Small Cap System or on any other exchange. APPLICABLE SEC RULES GOVERNING THE TRADING OF "PENNY STOCKS" LIMITS THE TRADING AND LIQUIDITY OF NATIONAL BEAUTY'S COMMON STOCK WHICH MAY ADVERSELY AFFECT THE TRADING PRICE OF ITS COMMON STOCK. National Beauty's common stock currently trades on the OTC Bulletin Board. Since its common stock continues to trade below $5.00 per share, its common stock is considered a "penny stock" and is subject to SEC rules and regulations which impose limitations upon the manner in which National Beauty's shares can be publicly traded. These regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the associated risks. Under these regulations, certain brokers who recommend such securities to persons other than established customers or certain accredited investors must make a special written suitability determination for the purchaser and receive the purchaser's written agreement to a transaction prior to sale. These regulations have the effect of limiting the trading activity of National Beauty's common stock and reducing the liquidity of an investment in its common stock. AVAILABLE INFORMATION National Beauty files annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any document National Beauty files with the Commission at the Commission's Public Reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. National Beauty 's Commission filings are also available to the public at the Commission's web site at http://www.sec.gov. You may also request a copy of these filings, at no cost, by writing or telephoning as follows: National Beauty Corp. Attention: Investor Relations, 4818 West Commercial Blvd., Ft. Lauderdale, Florida 33319 (954) 717-8680. This prospectus is part of a registration statement on Form SB-2 National Beauty filed with the SEC under the Securities Act. You should rely only on the information or representations provided in this prospectus. National Beauty has not authorized anyone to provide you with different information other than the information contained in this prospectus. National Beauty is not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of the document. FORWARD-LOOKING STATEMENTS Except for historical information contained herein, the matters discussed in this prospectus are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in such forward looking statements. Such risks and uncertainties include, without limitation, National Beauty 's dependence on the timely development, introduction and customer acceptance of products and services, the impact of competition and downward pricing pressures, the ability of National Beauty to generate revenues and raise any needed capital, the effect of changing economic conditions, and risks in product development. USE OF PROCEEDS The following table sets forth the estimated application of proceeds from the sale of the units offered, assuming that all units offered are sold and all warrants included in the units are exercised.
Amount % ---------- ----- Net Proceeds from Offering. . . . . . . $2,955,000 100% Use of Net Proceeds . $2,955,000 100% Acquisition of Beauty Salons* . . . . . . . $2,920,000 98.8% Contingency Reserve . $ 35,000 1.2%
* Estimated to be approximately $40,000 per salon, the breakdown is as follows:
Acquisition of a Beauty Salon. . . . $40,000 100% Beauty Stations (approximately 8 stations will be needed per salon , amounts include chairs, mirrors and equipment). . . . . $20,000 50% Leasehold Improvements . . . . $10,000 25% Grand Opening/Marketing Costs. . . . . . . . $10,000 25%
The allocations listed above are, for the most part, estimates and approximations only. National Beauty may not be able to sell all of the units in this offering, if any, and may be forced to delay these acquisitions. National Beauty intends to use the funds from this offering to acquire as many salons as possible. DETERMINATION OF OFFERING PRICE Not applicable. DILUTION Not applicable. SELLING SECURITY HOLDERS The following table provides information with respect to the selling shareholders' beneficial ownership of National Beauty's common stock as of July 10, 2002, and as adjusted to give effect to the sale of all of the shares offered. None of the selling shareholders currently is an affiliate of ours, and none of them has had a material relationship with National Beauty during the past three years. The selling shareholders possess sole voting and investment power with respect to the securities shown.
PERCENT OF NUMBER OF CLASS OF SHARES SHARES NUMBER OF SHARES BENEFICIALLY BENEFICIALLY BENEFICIALLY NUMBER OWNED AFTER OWNED AFTER NAME AND ADDRESS OF SELLING OWNED PRIOR TO OF SHARES THE OFFERING IS THE OFFERING IS STOCKHOLDER THE OFFERING OFFERED HEREBY COMPLETE COMPLETE =============== =============== Richard O. Weed 4695 MacArthur Court, Suite 1430 Newport Beach, CA 92660(1) 125,000 125,000 0 0 ================================= ================ ============== =============== =============== Ballantyne Capital Group, LLC 15800 John J. Delaney Drive, Suite 325 Charlotte, NC 28277(2) 1,000,000 1,000,000 0 0 ================================= ================ ============== =============== =============== American Market Support Network, Inc. 5599 San Felipe, Suite 975 Houston, TX 77056 200,000 200,000 0 0 ================================= ================ ============== =============== ===============
(1) Richard O. Weed of Weed & Co. LLP acquired his shares in consideration for legal services rendered. (2) Shares have been issued to Ballantyne pursuant to a Consultant Agreement between Ballantyne and National Beauty, whereby Ballantyne has agreed to provide public relations services to National Beauty. (3) 200,000 shares were issued to American Market Support Network, Inc. for investor relations services provided to National Beauty. PLAN OF DISTRIBUTION 1,325,000 SHARES SOLD BY SELLING STOCKHOLDERS National Beauty is registering 1,325,000 shares of common stock on behalf of the selling stockholders. As used in this prospectus, the term "selling stockholders" includes pledgees, transferees or other successors-in-interest selling shares received from the selling stockholder, as a pledgor, a borrower or in connection with other non-sale-related transfers after the date of this prospectus. This prospectus may also be used by transferees of the selling stockholders, including broker-dealers or other transferees who borrow or purchase the shares to settle or close out short sales of shares of common stock. The selling stockholders will act independently of National Beauty in making decisions with respect to the timing, manner, and size of each sale or non-sale related transfer. National Beauty will not receive any of the proceeds from the sales by the selling stockholders. The selling stockholders may sell their shares of common stock directly to purchasers from time to time. Alternatively, they may from time to time offer the common stock to or through underwriters, broker/dealers or agents, who may receive compensation in the form of underwriting discounts, concessions or commissions from the selling stockholders or the purchasers of the securities for whom they may act as agents. The selling stockholders and any underwriters, broker/dealers or agents that participate in the distribution of common stock may be deemed to be "underwriters" within the meaning of the Securities Act and any profit on the sale of the securities and any discounts, commissions, concessions or other compensation received by any underwriter, broker/dealer or agent may be deemed to be underwriting discounts and commissions under the Securities Act. The common stock may be sold from time to time in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale or at negotiated prices. The sale of the common stock may be effected by means of one or more of the following transactions, which may involve block transactions, - - in the over-the-counter market, or - - in transactions otherwise than on exchanges or services, including transactions pursuant to Rule 144 or another exemption from registration. In connection with sales of the common stock or otherwise, the selling stockholders may enter into hedging transactions with broker/dealers, who in turn may engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell common stock short and deliver common stock to close out short positions, or loan or pledge common stock to broker/dealers who in turn may sell the securities. At the time a particular offering of the common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount common stock being offered and the terms of the offering, including the name or names of any underwriters, broker/dealers or agents, any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts, and commissions or concessions allowed or re-allowed or paid to broker/dealers. To comply with the securities laws of certain jurisdictions, if applicable, the common stock will be offered or sold in jurisdictions only through registered or licensed brokers or dealers. The selling stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, which provisions may limit the timing of sales of the common stock by the selling stockholders. The foregoing may affect the marketability of the securities. 4,000,000 UNITS TO BE SOLD BY NATIONAL BEAUTY National Beauty is offering 4,000,000 units at a purchase price of $.50 per share on a delayed or continuous offering basis pursuant to Rule 415 of the Securities Act of 1933 Rules. The units consist of one share of common stock and one warrant exercisable to purchase common stock at an exercise price of $.25 per share. There are no minimum units that National Beauty has to sell. There is no escrow account. National Beauty will use all money received from the offering and there will be no refunds. This offering will terminate nine months after the effective date of the registration statement. This is a self underwritten offering. National Beauty reserves the right to use selling agents with the appropriate modification to the registration statement, as necessary. If National Beauty makes arrangements to use selling agents after effectiveness of this registration statement, then National Beauty will need to file a post-effective amendment to the registration statement identifying the broker-dealer, providing the required information on the plan of distribution and use of proceeds, revising the disclosures in the registration statement, and filing the agreement as an exhibit to the registration statement. Further, prior to any involvement of any broker-dealer in the offering, such broker-dealer must seek and obtain clearance of the underwriting compensation and arrangements from the NASD Corporate Finance Department. National Beauty's officers and directors will be conducting the offering. Under Section 15 of the Securities Exchange Act of 1934, National Beauty's officers and directors are exempt from registration as broker-dealers under the Act because they are not, and have not in the past been, engaged in the business of effecting transactions in securities for the account of others or engaged in the regular business of buying or selling securities for their own account. The offer to sell and any sales will be made only by this prospectus. None of the persons associated with National Beauty: (1) are subject to a statutory disqualification, as that term is defined in section 3(a)(39) of the Securities Act of 1933, as amended; (2) will be compensated in connection with their participation in this offering by the payment of commissions or other remuneration based either directly or indirectly on transactions in these securities; or (3) are associated persons of a broker or dealer. Furthermore, the persons associated with National Beauty that participate in this offering meet all of the following requirements: (1) each primarily performs, or is intended to primarily perform at the end of the offering, substantial duties for or on behalf of National Beauty otherwise than in connection with transactions in securities; (2) none were a broker or dealer, or an associated person of a broker or dealer, within the preceding 12 months; and (3) none participate in selling an offering of securities for any issuer more than once every 12 months. To subscribe to the units, subscribers are to deliver to the company (1) a completed and duly executed copy of the subscription agreement and (2) immediately available funds in the amount of $.50 per unit. LEGAL PROCEEDINGS There are no material legal proceedings to which National Beauty is a party or to which any of National Beauty's properties are subject. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS Identification of Directors and Executive Officers. The following table sets forth certain information concerning National Beauty's directors and executive officers: Name Age Service Position with Company - ---- --- ------- --------------------- Edward A. Roth 44 1997 to present Chairman, President & CEO Alisha Roth 36 1997 to present Secretary, Treasurer, Director Barbara Patigalia 51 1997 to present Director Michael J. Bongiovanni 40 2000 to present Chief Financial Officer, Director All Directors serve for one-year terms, which expire at the annual shareholders meeting in 2002. All officers serve at the pleasure of the Board. There are no arrangements or understandings pursuant to which any of them were elected as officers. Edward A. Roth has been President and Director of National Beauty since 1997. Mr. Roth previously served as Vice-President and Director of Operations for Cleaning Express USA since its inception in November 1994. During this period, Mr. Roth developed and implemented all operations and developments creating a company that started with less than 50 customers, and today services over 8,000 customers in South Florida. Mr. Roth was President of Advanced Appearance, a chain of Beauty Salons, in Alabama and Florida from 1978 to 1988. Prior to this Mr. Roth served as a management consultant working independently for 20 years. Mr. Roth has attended Auburn University majoring in business and marketing, and is also a veteran of the United States Air Force. Edward A. Roth is married to Alisha M. Roth, the company's Secretary, Treasurer and director. Alisha M. Roth has served as Secretary, Treasurer and Director of National Beauty since 1997. Mrs. Roth served previously as President of Cleaning Express USA, and during her tenure she was in charge of staffing and customer relations. Mrs. Roth has been with Cleaning Express USA since 1994, prior to that she was a resident of Trinidad, West Indies. Mrs. Roth has owned and operated her own business in the restaurant and pre-school development areas, and has eight years of management experience. Alisha M. Roth is married to Edward A. Roth. Barbara Patigalia is a language pathologist with the Head Start program in Maryland, and serves as President of the League of Women Voters in Potomac, Maryland. Ms. Patigalia had no business experience during the last five years, except other than through her role as a director of National Beauty. Michael J. Bongiovanni has been Chief Financial Officer of National Beauty since April 2000. Mr. Bongiovanni is responsible for SEC reporting compliance and financial analysis of new operations including Beautyworks USA, Inc. Mr. Bongiovanni has served numerous publicly traded companies in financial consulting and business management since 1980. Mr. Bongiovanni received his Masters of Accounting degree at Florida Atlantic University. There have been no events under any bankruptcy act, no criminal proceedings and no judgments or injunctions material to the evaluation of the ability and integrity of any director or executive officer during the past five years. COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT Section 16(a) of the Securities Exchange Act of 1934 requires National Beauty's directors and officers and persons who own more than 10 percent of National Beauty 's equity securities, to file reports of ownership and changes in ownership with the SEC. Directors, officers and greater than ten percent shareholders are required by SEC regulation to furnish National Beauty with copies of all Section 16(a) reports filed. Based solely on information it received from persons required to file, National Beauty believes that all filing requirements applicable to its officers, directors and greater than ten percent shareholders were complied with. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table, based upon figures obtained from National Beauty's transfer agent, sets forth certain information as of June 28, 2002 relating to the beneficial ownership of National Beauty common stock by (i) all persons known by National Beauty to beneficially own more than 5% of the outstanding shares of its stock, (ii) each officer and director of National Beauty and (iii) all officers and directors of National Beauty as a group. The table includes all shares underlying options or warrants that are currently exercisable or that will become exercisable within sixty days. As of June 28, 2002, National Beauty had 4,525,062 shares of its common stock issued or issuable and outstanding.
Amount and Nature of Percent of Name and Address of Beneficial Shares Outstanding Title of Class . . . . . . Beneficial Owner Owned* Ownership ========================== =========================== ================== ========================= Edward A. Roth and Alisha Roth (1) 4818 W. Commercial Common Stock,. . . . . . . Blvd. ...001 Par Value. . . . . . Ft. Lauderdale, FL 33319 2,806,500 62% - -------------------------- --------------------------- ------------------ ------------------------- Michael J. Bongiovanni 4818 W. Commercial Common Stock,. . . . . . . Blvd. ...001 Par Value. . . . . . Ft. Lauderdale, FL 33319 25,000 Less than 1% - -------------------------- --------------------------- ------------------ ------------------------- Barbara Patagalia 4818 W. Commercial Common Stock,. . . . . . . Blvd. ...001 Par Value. . . . . . Ft. Lauderdale, FL 33319 2,065 Less than 1% - -------------------------- --------------------------- ------------------ ------------------------- Common Stock,. . . . . . . .All Officers and Directors ...001 Par Value. . . . . . as a Group 2,833,565 62.6% - -------------------------- --------------------------- ------------------ ------------------------- Edward A. Roth and Alisha Roth (3) Preferred Stock, . . . . . 4818 W. Commercial ...001 Par Value. . . . . . Blvd. (2) Ft. Lauderdale, FL 33319 950,000 100% - --------------------------- --------------------------- ------------------ -------------------------
*All shareholders listed have direct beneficial ownership over their shares. (1) Edward and Alisha Roth own the common shares as joint tenants. (2) Each share of preferred stock is convertible into ten shares of common stock. (3) Edward and Alisha Roth own the preferred shares as joint tenants. DESCRIPTION OF SECURITIES The following summary is a description of material provisions of National Beauty's Articles of Incorporation and Bylaws. COMMON STOCK Pursuant to National Beauty's Articles of Incorporation, the Board of Directors has authority to issue up to 100,000,000 shares of common stock, par value $0.001 per share. As of July 10, 2002, there were 4,525,062 shares issued and outstanding, one vote for each share held on all matters. Cumulative voting in elections of directors and all other matters brought before stockholders meetings, whether they are annual or special, is not provided for under National Beauty's Articles of Incorporation or Bylaws. National Beauty has not paid cash dividends on its common stock and does not intend to do so in the foreseeable future. National Beauty intends to retain earnings, if any, to provide funds for its operations. Future dividend policy will be determined by the board of directors based upon conditions then existing including National Beauty's earnings and financial condition, capital requirements and other relevant factors. PREFERRED STOCK Pursuant to National Beauty's Articles of Incorporation, the Board of Directors has the authority, without further action by the stockholders, to issue up to 50,000,000 shares of preferred stock in one or more series. Further, the Board of Directors may fix the designations, preferences, rights and the qualifications, limitations of restrictions on these shares, including: - - dividend rights, - - conversion rights, - - voting rights, - - terms of redemption, and - - liquidation preferences. Any or all of these rights may be greater than the rights of the common stock. The Board of Directors, without stockholder approval, can issue preferred stock with voting, conversion or other rights that could adversely affect the voting power and other rights of the holders of common stock. Preferred stock could thus be issued quickly with terms calculated to delay or prevent a change in control of National Beauty or make removal of management more difficult. Additionally, the issuance of preferred stock may have the effect of decreasing the market price of the common stock, and may adversely affect the voting and other rights of the holders of common stock. National Beauty's Board of Directors has designated 50,000,000 shares of convertible preferred stock as Series A Voting Convertible Preferred Stock of which 950,000 shares are issued and outstanding. The Series A is senior to the common stock and all other shares of preferred stock that may be later authorized. The holders of the Series A Preferred shall be entitled to receive common stock dividends or other distributions when, as, and if declared by the directors of the company, with the holders of the common stock on an as converted basis. Each share of the Series A is convertible into common stock at the option of the holder, at any time after the issuance of the shares, on an one for ten basis. In the event of liquidation, dissolution or winding up of National Beauty, the holders of the Series A shall be entitled to receive, prior to the holders of common stock or other series of preferred stock, $1.00 per share, plus all declared but unpaid dividends. The Series A is entitled to vote, on an as converted basis, on any matter submitted to the common stock holders including the election of the board of directors. WARRANTS National Beauty plans to issue one warrant for each share of common stock purchased, Each warrant will have an exercise price of $.25 per share and will expire within three years of issuance. Each series of warrants will be evidenced by certificates issued under a separate warrant agreement. The warrant agreement will be entered into between National Beauty and the warrant agent. The exercise price and number of shares of National Beauty common stock or other securities issuable on exercise of the warrants are subject to adjustment to protect against dilution if National Beauty: - - issues a stock dividend, - - undertakes a stock split, - - recapitalization, - - reorganization, - - merger, - - consolidation, or - - other similar event. Before exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such exercise, including: - - the right to receive dividends, if any, or payments, or upon the liquidation, dissolution or winding up of National Beauty, or - - to exercise voting rights, if any. TRANSFER AGENT Florida Atlantic Stock Transfer, Inc. located in Tamarac, Florida serves as the transfer agent for National Beauty. EXPERTS Perrella & Associates, P.A., independent auditors, have audited National Beauty's financial statements included in its Annual Report on Form 10-KSB for the year ended December 31, 2001, which is incorporated by reference in this prospectus and elsewhere in the registration statement. Weed & Co. LLP, legal counsel to National Beauty, has expressed an opinion concerning the validity of the securities being registered. Richard O. Weed of Weed & Co. LLP owns 125,000 shares of restricted National Beauty common stock and options to purchase 34,000 shares of National Beauty's common stock at an exercise of $0.48 per share. These stock options expire on December 31, 2005. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES Insofar as indemnification for liabilities arising under 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 Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities, other than the payment by National Beauty 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, National Beauty 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. ORGANIZATION WITHIN LAST FIVE YEARS None. DESCRIPTION OF BUSINESS CORPORATE ORGANIZATION National Beauty Corp., a Nevada corporation, was originally incorporated in 1987 as Tri-Capital Corporation. In 1988, the company changed its name to Advanced Appearance of America, which operated beauty salons until 1995. At that time, National Beauty discontinued its operations and went inactive until early 1998. In March of 1998, National Beauty changed its name to ATR Industries, Inc. On June 1, 1998, National Beauty acquired ATR Industries, Inc. of Florida, formerly known as Cleaning Express USA and Cleaning Express of South Palm Beach, Inc., a private Florida Corporation, for 3,000,000 restricted shares of common stock. In September 1999, ATR Industries, Inc. changed its name to Beautymerchant.com and in March 2001, the company changed its name to National Beauty Corp. National Beauty has operated primarily through its wholly owned subsidiaries, Cleaning Express USA, Beauty Works USA, Inc. and Beautymerchant.com, Inc. Since 1998, National Beauty has concentrated its operations primarily on the home cleaning services industry. In January 2000, National Beauty began a new division of operations related to the preparation, development and marketing of cosmetics and beauty products via an e-commerce Internet site. These operations were conducted through National Beauty's wholly owned subsidiary Beautymerchant.com, Inc. In 2001, after a developmental period, National Beauty ceased any further investment into Beautymerchant.com Inc. because it had encountered numerous distribution and inventory problems. National Beauty currently offers beauty services and products through its retail beauty salon in the south Florida area under its Beauty Works USA subsidiary. DESCRIPTION OF BUSINESS CLEANING EXPRESS USA Cleaning Express USA's operations primarily involve home cleaning services. Through its emphasis on budget pricing, Cleaning Express USA has developed a market in the home cleaning industry. Cleaning Express USA currently operates two offices and dispatches 40-50 workers in teams of two workers on a daily basis. The present geographic area in which the Cleaning Express USA operates includes Broward and South Palm Beach County areas of South Florida. Marketing for the home cleaning services is accomplished through print ads, television and radio commercials. Additionally, Cleaning Express USA utilizes a referral program that rewards customers with future discounts for referring a client. The home cleaning industry is highly competitive with respect to price, service, quality and location. There are numerous, well-established, larger competitors in the home cleaning industry possessing substantially greater financial, marketing, personnel and other resources than National Beauty. National Beauty may not be able to respond to various competitive factors affecting the business. National Beauty plans to gain a competitive advantage over its competitors in the home cleaning industry by offering quality service at a low price. National Beauty plans to further expand Cleaning Express USA's operations in South Florida by continuing its current marketing strategy. The primary market for Cleaning Express USA is individual households. No single customer makes up more than ten percent of the total revenues of Cleaning Express USA. National Beauty does not expect that this will change in the future. Cleaning Express USA has three full time employees and 40-50 workers that are each independently contracted with the company to service and provide home cleaning services to existing and new customers. BEAUTYMERCHANT.COM, INC. During January 2000, National Beauty, through its wholly owned subsidiary Beautymerchant.com, Inc., a Florida corporation, developed a retail cosmetic and beauty product e-commerce Internet site. Beautymerchant.com was developed under the guidance of the CEO, Mr. Ed Roth. Beautymerchant.com sold and distributed popular cosmetic, fragrances and beauty products. In 2001, the company ceased any further investment into Beautymerchant.com Inc. since it encountered numerous distribution and inventory problems. BEAUTYWORKS U.S.A., INC. Beautyworks USA is designed to tap into the beauty industry through its offering of personal care salons. Beautyworks USA will aim to be both a retailer and provider of such needed consumer services and provide a one-stop resource for professional services on hair, with emphasis on haircutting and related haircolor services, under the name HAIRMAX. During the second quarter of 2001, Beautyworks U.S.A. acquired a full service beauty salon located in Boca Raton, Florida and conducted 12 months of research and development of marketing and operational techniques. National Beauty is expecting to continue to build and or acquire retail salons. Management is presently discussing potential acquisitions, as well as new locations. This development strategy is expected to be implemented in Nevada next. The principal suppliers to the company are wholesale distributors who do not sell retail. The beauty services industry is highly competitive with respect to price, service, and location. As a result, the potential for failure in this industry is significant. There are numerous, well-established, larger competitors in the beauty services industry with considerable expertise, possessing substantially greater financial, marketing, personnel and other resources than National Beauty. Currently, Regis Corp. (NASDAQ:RGIS) has over 8,000 salon stores and is the only well-known publicly traded company. YOURSALONAPPT.COM Plans have been formulated to develop and market www.yoursalonappt.com, a consumer to business application service provider. In the opinion of management, this developmental information and interactive consumer to business portal, when fully developed will assist thousands of hair, nail, and spa customers by providing appointment services that have traditionally made by telephone, during normal business hours. This application service provider will allow customers access to appointment setters, 7 days a week, 24 hours a day, regardless normal business hours. In addition, consumers will have access to information that will provide them with a registry and directory of national salons and beauty spas. Initial development is expected to begin in the 2nd quarter of 2003, with projected completion later in the year. Risks and uncertainties include, but are not limited to, consumer spending habits, availability of funds for project completion, and general acceptance of new technology functions in the beauty service industry. The primary market will be the United States, but could be extended worldwide. Business Strategy National Beauty's objective is to become a leading provider of beauty services. Through its subsidiaries, National Beauty will attempt to: - - Build its customer base by serving as a one-stop provider for discounted haircutting and styling, along with hair coloring services; - - Enhancing its brand name reputation by offering convenient, competitive pricing and participation in special promotions; and - - Expanding its business concept by developing "HAIRMAX" a newly developed concept, conceived after 12 months of research and development in the hair services industry, focused on quality haircutting and coloring services, and offering them in a convenient high traffic location, such as a large retailer, at below market prices, using a strategy of aggressive marketing. National Beauty plans help enhance and brand its operations by: - - Billboard, radio, television and newspaper advertising; - - Offering free samples of hair products; - - Attempting to acquire two existing beauty service salons by August 2002; and open 25 new stores in early 2003. - - Seeking to enter into marketing relationships with national advertising agencies to establish concept branding strategies; - - Attempting to market its concept, "Max service" and "Max value", on a national basis. - - Establish strategic relationships with large retailers and expand the "store in store" concept. Beautyworks USA Inc. is presently the operations holding company for salon operations in Florida. Beautyworks USA presently employs nine full time employees and plans to add at least 30-35 new employees during the next twelve months to supervise and administer its retail operations. Further, if National Beauty acquires any beauty salons with existing operations, additional staff will be added to operate these salons if necessary. National Beauty has filed a trademark application on the HAIRMAX name and logo. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Introduction National Beauty Corp., formerly known as Beautymerchant.com, Inc., was incorporated in Nevada in 1987. The company has primarily operated through its wholly owned subsidiaries, Cleaning Express USA, Beauty Works USA, Inc. and Beauty Merchant, Inc. Cleaning Express USA is a full service cleaning company offering daily residential cleaning services, carpet cleaning and other related services in the South Florida area. During April 2000, the company began operations as an e-commerce distributor of beauty products under its Beauty Merchant, Inc. subsidiary and ceased these operations in 2001. National Beauty currently offers beauty services and products though its retail beauty salon in the South Florida area through its Beauty Works USA, Inc. subsidiary. Results of Operations Quarter Ended March 31, 2002 Compared to the Quarter Ended March 31, 2001 Net Income National Beauty had a net loss of $34,433, or $.01 per common share, for the three months ended March 31, 2002, versus a net loss of $45,422, or less than $.01 for the same period ended March 31, 2001. The change in net loss was primarily due to a decrease in administrative expenses relating to the operation and marketing of the BeautyMerchant.com online superstore. Sales Revenues increased $57,969 or 66% to $145,256 for the three months ended March 31, 2002 as compared with $87,287 for the three months ended March 31, 2001. The increase was primarily due to the acquisition of the salon in the second quarter of 2001 that generated additional revenues. Average selling prices and gross margins remained fairly constant. Expenses Selling, general and administrative expenses for the three months ended March 31, 2002 increased $68,424 to $110,902. In comparison with the three-month period ended March 31, 2001, consulting and payroll increased $34,255 and $20,445, respectively, due to National Beauty's acquisition of the salon in the second quarter of 2001. Year Ended December 31, 2001 Compared to Year Ended December 31, 2000 Sales Sales for the year ended December 31, 2001 increased to $437,225 from $376,450 for the year ended December 31, 2000, an increase of 16%. The increase in revenues was primarily attributable to an increase in the revenues from Beautyworks U.S.A., Inc., the Boca Raton beauty salon subsidiary, somewhat offset by revenues earned by the Cleaning Express USA subsidiary. Net sales from the home cleaning segment have accounted for approximately 64% of total net sales in 2001 and 90% of the net sales in 2000. National Beauty plans to accelerate growth of beauty salon sales in 2002 by increasing expenditures on marketing and growing public awareness of services. Income / Losses Net losses for the year ended December 31, 2001 decreased to $257,044 from $794,306 for the year ended December 31, 2000, a decrease of 68%. The substantial decrease in losses was attributable primarily to a decrease in non-cash expenses relating to payroll expenses and consulting services, which were $387,346 and $96,097 for 2000, respectively, compared to $42,519 in payroll expenses for 2001. National Beauty expects to continue to incur losses at least through fiscal 2002 and may not be able to achieve or maintain profitability or sustain its revenue growth in the future. Expenses Selling, general and administrative expenses for the year ended December 31, 2001, decreased to $344,662 from $906,322 for the year ended December 31, 2000, a decrease of 62%. The decrease in selling, general and administrative expenses was the result of significant decreases in payroll expenses and consulting fees that were $387,346 and $96,097, respectively. Depreciation and amortization expenses for the years ended December 31, 2001 and December 31, 2000 were $3,017 and $3,800, respectively. The decrease was due to differences in accelerated depreciation percentages between the year 2001 and the year 2000. National Beauty has attempted to reduce rent expenses by closing one of the two cleaning offices in 2001 and consolidating operations in the other Fort Lauderdale office. This reduces overhead expenses by a projected 10% for the coming year. In addition, the company has taken steps to change daily operations of Cleaning Express USA, projecting a savings of 5-10% over the new year. Specifically, National Beauty is anticipating a lower labor cost associated with its cleaning services and nominal web site maintenance leading into 2002. National Beauty expects increases in overall expenses through 2002 as it moves toward increasing development and marketing of its Beauty Works, USA subsidiary, developing the HAIRMAX concept, and related acquisitions of beauty salons. Cost of Sales The cost of sales for the year ended December 31, 2001 was $282,123 compared to $263,394 for the year ended December 31, 2000. The increase in the cost of sales was primarily attributable to an increase in cleaning and beauty salon sales. Cost of sales as a percentage of sales for December 31, 2001 and 2000 was 65% and 69%, respectively. The largest factor in the variation from year to year in the cost of sales as a percentage of net sales was the cost of labor. Impact of Inflation National Beauty believes that inflation has had a negligible effect on operations over the past two years. National Beauty believes that it can offset inflationary increases in the cost of labor by increasing sales and improving operating efficiencies. Trends, Events, and Uncertainties Demand for National Beauty's home cleaning services and beauty salon services will be dependent on, among other things, market acceptance of the National Beauty's concept and general economic conditions, which are cyclical in nature. Inasmuch as a major portion of National Beauty's activities is the receipt of revenues from the sales of its products, National Beauty's business operations may be adversely affected by National Beauty's competitors and prolonged recessionary periods. Liquidity and Capital Resources Quarter Ended March 31, 2002 Compared to the Quarter Ended March 31, 2001 On March 31, 2002, National Beauty had cash of $5,154 and working capital of $121,807. This compares with cash of $11,001 and working capital of $91,312 at March 31, 2001. The increase in working capital was due to an increase in prepaid expenses. Net cash used in operating activities was $4,128 for the three months ended March 31, 2002 as compared with net cash used in operating activities of $12,411 for the period ended March 31, 2001. The decrease in cash used was primarily attributable to a decrease in net loss for the period. Net cash used in investing activities was $-0- for the three months ended March 31, 2002 as compared with net cash used in investing activities of $-0- for the period ended March 31, 2001. Net cash used in financing activities totaled $719 for the three months ended March 31, 2002 as compared with net cash provided by financing activities of $5,388 for the three months ended March 31, 2001. The decrease in net cash provided by financing activities was primarily due to the collection of shareholder loan receivable during 2001. Years Ended December 31, 2001 and December 31, 2000 Cash flows used in operations were a negative $23,482 for the year ended December 31, 2001, and a negative $291,498 for the year ended December 31, 2000. Negative cash flows from operating activities for the years ended December 31, 2001 and 2000 are primarily attributable to losses from operations, partially offset by the common stock issued for services in both years and an unrealized loss on trading securities in 2001. Cash flows from investing activities were a negative $4,395 for the year ended December 31, 2001 and a negative $1,565 for the same period in 2000. The negative cash flows were primarily attributable to new equipment purchases during 2001 and 2000. Cash flows used in financing activities were $17,313 for the year ended December 31, 2001 and cash flows generated from financing activities were $237,826 for the year ended December 31, 2000. The negative cash flows in 2001 pertained to repayments on a note payable and capitalized lease obligation. The positive cash flows in 2000 were primarily due to the private placement of common stock sold during 2000 less the effects of repayments on a capitalized lease obligation. National Beauty has funded its cash needs from inception through December 31, 2001 with a series of debt and equity transactions, including private placements. During October 2000, National Beauty signed an agreement with Standart Capital, S.A., Inc. of West Palm Beach, Florida, an investment-banking firm, to assist in a private placement stock offering for National Beauty. Under the terms of the agreement, Standart Capital, S.A. agreed to use its best efforts to locate funding for National Beauty between $500,000 and $3 million within the next 24 months. No funds were raised for National Beauty and ultimately, the company terminated this agreement. During the year ended December 31, 2000, National Beauty collected aggregate proceeds from unrelated investors of $240,326 under a limited Regulation D private placement. Web site development costs paid to the web designer for development, marketing and advertisements for Beautymerchant.com were approximately $27,000 during the year 2000. In 2001, because of numerous distribution and inventory problems, after a developmental period, National Beauty ceased any further investment into Beautymerchant.com Inc. On a long-term basis, liquidity is dependent on continuation and expansion of operations, receipt of revenues, additional infusions of capital and debt financing. National Beauty is considering launching a wide scale marketing and advertising campaign. The current capital and revenues are not sufficient to fund such a campaign. If National Beauty chooses to launch such a campaign it well require substantially more capital. If necessary, National Beauty plans to raise this capital through an additional follow-on stock offering. The funds raised from this offering will be used to develop and execute the marketing and advertising strategy that may include the use of television, radio, print and Internet advertising. Funds would also be used to acquire beauty salons. However, National Beauty may not be able to obtain additional equity or debt financing in the future, if at all. If National Beauty is unable to raise additional capital, the growth potential will be adversely affected. Additionally, National Beauty will have to significantly modify its plans. Financing activities for the years ended December 31, 2001 and 2000 consisted of principal repayments under the company's capitalized lease obligation its office equipment. Principal repayments under the capitalized lease obligation for the years ended December 31, 2001 and 2000 were $2,313 and $2,500, respectively. Principal repayments of the note payable balance were made in the amount of $15,000 in 2001. DESCRIPTION OF PROPERTY National Beauty has leased its executive offices at 4818 West Commercial Blvd, Lauderhill, Florida 33319 for $1,987 per month. Effective July 1, 2002, National Beauty will relocate to 4810 West Commercial Blvd., Tamarac, Florida 33319, an 1,000 square foot administrative office space. The lease expires on June 30, 2005, with an option to renew until June 30, 2007. Payments on the lease are as follows: From 7/1/02 to 6/30/03 ($1,100.00 per month) ------------------- -------- From 7/1/03 to 6/30/04 ($1,200.00 per month) ------------------- -------- From 7/1/04 to 6/30/05 ($1,300.00 per month) From 7/1/05 to 6/30/06 ($1,400.00 per month) ------------------- -------- From 7/1/06 to 6/30/07 ($1,500.00 per month) National Beauty also leases its beauty salon facility of 1,200 square feet at the Del Mar Shopping Village, located at Powerline Road at Palmetto Park Road, Boca Raton, Florida, for $3,100 per month. This lease expires September 30, 2005. Management of National Beauty considers these facilities to be adequate for its requirements for the immediate future. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS (a) The principal market in which National Beauty's common stock is traded is the Over-the-Counter Bulletin Board. The table below presents the high and low bid price for the Company's common stock each quarter during the past two years and reflects inter-dealer prices, without retail markup, markdown, or commission, and may not represent actual transactions. National Beauty obtained the following information from brokers who make a market in National Beauty's securities. Bid --- Quarter Ended Low High 03/31/00 $ .94 $1.56 06/30/00 .38 1.25 09/30/00 .21 .43 12/31/00 .07 .36 03/31/01 .08 .44 06/30/01 .05 .16 09/30/01 .04 8.00 12/31/01 .36 1.36 03/31/02 .25 .70 (b) Holders. The approximate number of holders of record of National Beauty's common stock as of June 28, 2002 was 36. (c) National Beauty has not paid dividends from inception to date and does not currently intend to do so. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The following table sets forth in summary form the compensation received during each of the National Beauty's last three completed fiscal years by the Chief Executive Officer and President of National Beauty. No executive officer of National Beauty, including the Chief Executive Officer and President, received total salary and bonus exceeding $100,000 during any of the last three fiscal years.
Other Awards/Stock LTIP Restricted Name and. . . Fiscal Annual Compen Underlying Pay- Stock Position. . . Year Salary Bonuses - sation Options/SARs Outs Bonuses - ------------- ----------- -------------- -------- ----------- ------------ ----- ------- (1) (2) (3) (5) (4) ----------- -------------- -------- ----------- Edward A. . . 2001 $ 65,000 -0- -0- -0- -0- -0- Roth, CEO . . 2000 $ 233,121 -0- -0- -0- -0- -0- and President 1999 $ 43,215 -0- -0- -0- -0- -0- - ------------- ----------- -------------- -------- ----------- ------------ ----- ------- Michael J.. . 2001 $ 15,000 -0- -0- -0- -0- -0- Bongiovanni,. 2000 $ 46,800 -0- -0- -0- -0- -0- CFO. . . . . 1999 $ -0- -0- -0- -0- -0- -0- - ------------- ----------- -------------- -------- ----------- ------------ ----- ------- Alisha Roth,. 2001 $ -0- -0- -0- -0- -0- -0- Secretary,. . 2000 $ 60,000 -0- -0- -0- -0- -0- Treasurer . . 1999 $ -0- -0- -0- -0- -0- -0- - ------------- ----------- -------------- -------- ----------- ------------ ----- -------
(1) The dollar value of base salary, cash and non-cash, received. Information on the stock-based compensation can be found in the accompanying audited financial statements. (2) The dollar value of bonus, cash and non-cash, received. (3) During the periods covered by the summary compensation table, National Beauty did not pay any other annual compensation not properly categorized as salary or bonus, including perquisites and other personal benefits, securities or property. (4) During the periods covered by the summary compensation table, National Beauty did not make any award of restricted stock. (5) No other compensation Compensation of Directors National Beauty pays its non-employee directors' 1,000 shares of the company's restricted common stock per year for Directors' meetings attended. It is anticipated that no more than twelve meetings will occur each year. Employment Contracts and Termination of Employment and Change-In Control Arrangements On April 1, 2002, the board approved a five year employment agreement with Edward Roth, President and CEO, whereby Mr. Roth would be compensated with an annual salary of $250,000 and 250,000 shares of preferred stock per annum. On April 1, 2002, the board approved a five year employment agreement with Alisha Roth, Vice President, whereby Ms. Roth would be compensated with an annual salary of $125,000. 2002 Non-Qualified Stock Compensation Plan - ---------------------------------------------- The board of directors of National Beauty adopted the 2002 Non-Qualified Stock Compensation Plan in December 2001. Under the Stock Plan, 1,000,000 shares of National Beauty's common stock, subject to adjustments, are reserved for issuance upon the exercise of options or restricted stock grants. There are currently 600,000 shares issued under the plan. Options granted under the Stock Plan may be either (a) options intended to constitute incentive stock options under Section 422 of the Internal Revenue Code of 1986 or (b) nonqualified stock options. Incentive stock options may be granted under the Stock Plan to employees, including officers and directors who are employees, of on the date of grant. Nonqualified options may be granted to (a) officers and directors of National Beauty on the date of the grant, without regard to whether they are employees, and (b) consultants, advisors, agents or independent representatives of National Beauty. By its terms, the Stock Plan is to be administered by a committee appointed by the board of directors which shall consist of either the entire board of directors, or by a committee of three or more persons, who must be directors, all of whom must be disinterested persons and who serve at the discretion of the board of directors. Subject to the provisions of the Stock Plan, the committee has the authority to determine the persons to whom restricted stock or options will be granted, the exercise price, the term during which options may be exercised and other terms and conditions as it deems appropriate. Incentive stock options granted under the Stock Plan may not have an exercise price less than the fair market value of the common stock on the date of the grant, i.e. 110% of the fair market value in the case of employees holding ten percent or more of the voting stock of National Beauty. Options granted under the Stock Plan will expire, not more than ten years from the date of the grant, five years in the case of incentive options of employees holding ten percent or more of the voting stock of National Beauty, subject to earlier termination under the Stock Plan. Optionees under the Stock Plan may exercise their options by paying cash, by using the cashless exercise procedure allowed under Federal Reserve Regulation T or by tendering shares of National Beauty's common stock that they already own. FINANCIAL STATEMENTS -16- INDEPENDENT AUDITORS' REPORT ---------------------------- To the Board of Directors and Stockholders: NATIONAL BEAUTY CORP. (FKA Beautymerchant, Inc.) 4818 West Commercial Boulevard Fort Lauderdale, Florida 33319 We have audited the accompanying consolidated balance sheet of National Beauty Corp. (FKA Beautymerchant, Inc., a Nevada corporation) and its wholly owned subsidiaries as of December 31, 2001 and the related consolidated statements of operations, stockholders' equity, and cash flows for the years ended December 31, 2001 and 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of National Beauty Corp. (a Nevada corporation) and its wholly-owned subsidiaries as of December 31, 2001, and the consolidated results of its operations and its cash flows for the years ended December 31, 2001 and 2000 in conformity with accounting principles generally accepted in the United States of America. Pompano Beach, FL March 15, 2002 NATIONAL BEAUTY CORP. & SUBSIDIARIES CONSOLIDATED BALANCE SHEET December 31, 2001 =================
ASSETS --------- CURRENT ASSETS - -------------------------------- Cash . . . . . . . . . . . . . $ 11,001 Accounts receivable. . . . . . 903 Marketable securities. . . . . . 1,743 Inventory. . . . . . . . . . . . 1,700 Prepaid expenses . . . . . . . 90,000 --------- TOTAL CURRENT ASSETS . . . . 105,347 --------- PROPERTY AND EQUIPMENT - -------------------------------- Furniture. . . . . . . . . . . 21,616 Leasehold improvements . . . . 3,500 Equipment. . . . . . . . . . . 34,985 Accumulated depreciation . . . (35,361) --------- NET PROPERTY AND EQUIPMENT 24,740 --------- OTHER ASSETS - -------------------------------- Deposits . . . . . . . . . . . 6,656 --------- TOTAL OTHER ASSETS . . . . . 6,656 --------- TOTAL ASSETS . . . . . . . $136,743 ==========
The accompanying notes are an integral part of these consolidated financial statements. NATIONAL BEAUTY CORP. & SUBSIDIARIES CONSOLIDATED BALANCE SHEET (CONTINUED) December 31, 2001 =================
LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES - ------------------------------------------------ Accounts payable and accrued expenses. . . . . $ 2,230 Outstanding checks in excess of bank balance . 11,664 Current portion of capitalized lease obligation. . . . . . . . . . . 2,313 ------------ TOTAL CURRENT LIABILITIES. . . . . . . . . . 16,207 ------------ COMMITMENTS - NOTE C - ------------------------------------------------ STOCKHOLDERS' EQUITY - ------------------------------------------------ Convertible preferred stock ($.001 par value; 50,000,000 shares authorized, 950,000 shares issued and outstanding) . . . . . . . . 950 Common stock ($.001 par value; 100,000,000 shares authorized, 1,466,362 shares issued and outstanding). . . . . . . . . . . . . . 1,466 Additional paid-in-capital . . . . . . . . . . . 1,402,450 Retained deficit . . . . . . . . . . . . . . . (1,284,330) ------------ TOTAL STOCKHOLDERS' EQUITY . . . . . . . . . . . 120,536 ------------ $136,743 ============
The accompanying notes are an integral part of these consolidated financial --------------------------------------------------------------------------- statements. ----------- NATIONAL BEAUTY CORP. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended December 31, 2001 and 2000 ==============================================
2001 2000 ---------- ----------- REVENUES: - ---------------------------------------------------- Sales. . . . . . . . . . . . . . . . . . . . . . . $ 431,810 $ 340,413 Cost of Sales. . . . . . . . . . . . . . . . . . . (275,974) (221,268) ---------- ----------- Gross profit . . . . . . . . . . . . . . . . . . . 155,836 119,145 ---------- ----------- EXPENSES: - ---------------------------------------------------- Selling, general and administrative. . . . . . . . 336,240 816,126 ---------- ----------- Total expenses . . . . . . . . . . . . . . . . . . 336,240 816,126 ---------- ----------- Loss from operations . . . . . . . . . . . . . . . (180,404) (696,981) ---------- ----------- OTHER EXPENSES: - ---------------------------------------------------- Unrealized Loss on Trading Securities. . . . . . . (66,257) -0- Interest Expense. . . . . . . . . . . . . . . . . (1,227) (1,040) ---------- ----------- Total Other Expenses . . . . . . . . . . . . . . . (67,484) (1,040) ---------- ----------- Loss from continuing operations. . . . . . . . . . (247,888) (698,021) Net loss from discontinued operations. . . . . . . (9,156) (96,285) ---------- ----------- NET LOSS . . . . . . . . . . . . . . . . . . . . $(257,044) $ (794,306) ========== =========== Basic and fully diluted net loss per common share: Continuing operations. . . . . . . . . . . . . . $ (.55) $ (10.84) Discontinued operations. . . . . . . . . . . . . (.02) (1.50) ---------- ----------- Basic and fully diluted net loss per common share $ (.57) $ (12.34) ========== ===========
The accompanying notes are an integral part of these consolidated financial statements. NATIONAL BEAUTY CORP. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2001 and 2000
2001 2000 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: - ---------------------------------------------------- Net loss . . . . . . . . . . . . . . . . . . . . . $(257,044) $(794,306) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation . . . . . . . . . . . . . . . . . . . 3,017 3,800 Common stock issued in exchange for services . . . 235,044 103,908 Unrealized loss on trading securities. . . . . . . 66,257 -0- (Increase) decrease in operating assets: Accounts receivable . . . . . . . . . . . . . . . 781 3,700 Shareholder loan receivable. . . . . . . . . . . . 7,892 -0- Inventory . . . . . . . . . . . . . . . . . . . . 1,863 979 Prepaid expenses. . . . . . . . . . . . . . . . . (90,000) 393,121 Deposits. . . . . . . . . . . . . . . . . . . . . (2,956) -0- (Decrease) in operating liabilities: Outstanding checks in excess of bank balance. . . 11,664 -0- Accounts payable & accrued expenses . . . . . . . -0- (4,700) ---------- ---------- NET CASH USED IN OPERATING ACTIVITIES . . . . . . . . . . . . . . (23,482) (293,498) ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: - ---------------------------------------------------- Purchases of property and equipment. . . . . . . . (4,395) (1,565) ---------- ---------- NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . . (4,395) (1,565) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: - ---------------------------------------------------- Proceeds from common stock issuances/subscriptions -0- 242,326 Repayment of note payable. . . . . . . . . . . . . (15,000) -0- Principal repayments under capital lease . . . . . (2,313) (2,500) ---------- ---------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES . . . . . . . . . . . . $ (17,313) $ 239,826 ---------- ----------
The accompanying notes are an integral part of these consolidated financial statements. NATIONAL BEAUTY CORP. & SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (CONT.) For the Years Ended December 31, 2001 and 2000 ==============================================
2001 2000 --------- --------- NET (DECREASE) IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . $(45,190) $(55,237) Cash and cash equivalents, beginning of year 56,191 111,428 --------- --------- CASH AND CASH EQUIVALENTS, END OF YEAR. . . . . . . . . . . . . . . . $ 11,001 $ 56,191 ========= =========
SUPPLEMENTAL CASH FLOW INFORMATION: - ----------------------------------- Supplemental disclosures of cash flow information for the year ended December 31, 2001 and 2000 is summarized as follows:
Cash paid during the year for: 2001 2000 -------- -------- Income Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . $ -0- $ -0- ======== ======== Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,227 $ 1,040 ======== ======== NON-CASH FINANCING ACTIVITES: - ------------------------------------------------------------------- Assumption of note payable with acquisition . . . . . . . . . . . . $ 15,000 $ -0- ======== ======== Common stock issued to officers for services, charged to prepaid expenses . . . . . . . . . . . . . . . . . . . $ 28,500 $ -0- ======== ======== Common stock issued to others for services, charged to prepaid expenses . . . . . . . . . . . . . . $ 61,500 $ -0- ======== ======== Common stock issued to officers for other services. . . . . . . . . $ 25,044 $103,908 ======== ======== Common stock issued to others for other services. . . . . . . . . . $120,000 $103,908 ======== ======== Common stock issued in exchange for marketable securities $ -0- $ 68,000 ======== ======== Retirement of common stock. . . . . . . . . . . . . . . . . . . . . $ -0- $359,667 ======== ========
The accompanying notes are an integral part of these consolidated financial statements. NATIONAL BEAUTY CORP. & SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY For the Years Ended December 31, 2001 and 2000 ==============================================
Convertible Common Common Stock Preferred Stock Stock Shares Amount Shares Amount Subscribed ------------- ----------------- Balances, January 1, 2000* . . . . . . . . . . . 58,843 $ 59 1,000,000 $ 1,000 $ 17 Common stock issued for services . . . . . . . . 741 -0- -0- -0- 103,908 Proceeds from common stock subscriptions. . . . . . . . . . . . . . . . . . 5,508 6 -0- -0- (6) Common stock exchanged for marketable securities 1,545 2 -0- -0- (2) Retirement of shares during the year . . . . . . (8,212) (9) -0- -0- (9) Net loss for the year. . . . . . . . . . . . . . -0- -0- -0- -0- -0- ------------- ----------------- ----------- --------------- ------------ Balances, December 31, 2000. . . . . . . . . . . 58,425 $ 58 1,000,000 $ 1,000 -0- ------------- ----------------- ----------- --------------- ------------ Common stock issued for services . . . . . . . . 907,937 908 -0- -0- -0- Conversion of preferred shares into common shares by officers. . . . . . . . . . . . 500,000 500 (50,000) (50) -0- ------------- ----------------- ----------- --------------- ------------ Net loss for the year. . . . . . . . . . . . . . -0- -0- -0- -0- -0- Balances, December 31, 2001. . . . . . . . . . . 1,466,362 $ 1,466 950,000 $ 950 -0- ------------- ----------------- ----------- --------------- ------------ *Includes retroactive adjustments due to stock split. Additional Subscriptions Paid-in Retained Receivable Capital Deficit ------------ Balances, January 1, 2000* . . . . . . . . . . . $ (671,637) $1,425,709 $ (232,980) Common stock issued for services . . . . . . . . -0- Proceeds from common stock subscriptions. . . . . . . . . . . . . . . . . . 242,326 -0- -0- Common stock exchanged for marketable securities 68,000 -0- -0- Retirement of shares during the year . . . . . . 361,311 (361,303) -0- Net loss for the year. . . . . . . . . . . . . . -0- -0- (794,306) ------------ ----------- ------------ Balances, December 31, 2000. . . . . . . . . . . -0- $1,168,314 $(1,027,286) ------------ ----------- ------------ Common stock issued for services . . . . . . . . -0- 234,136 -0- Conversion of preferred shares into common shares by officers. . . . . . . . . . . . -0- -0- -0- Net loss for the year. . . . . . . . . . . . . . -0- -0- (257,044) ------------ ----------- ------------ Balances, December 31, 2001. . . . . . . . . . . -0- $1,402,450 $(1,284,330) ------------ ----------- ------------ *Includes retroactive adjustments due to stock split.
The accompanying notes are an integral part of these consolidated financial --------------------------------------------------------------------------- statements. ----------- ------ NATIONAL BEAUTY CORP. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended December 31, 2001 and 2000 ============================================== NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - --------------------------------------------------- Business Activity - National Beauty Corp. (formerly known as Beautymerchant.com, - ----------------- Inc.) (a Nevada corporation) legally changed its corporate name in 2001 and was also formerly known as ATR Industries, Inc., a Nevada corporation, which was incorporated in 1987. These financial statements include its wholly owned subsidiaries, Cleaning Express USA, Beauty Works USA, Inc. and Beauty Merchant, Inc. The company is a full service cleaning company offering daily residential cleaning services, carpet cleaning and other related services in the South Florida area under the name of Cleaning Express USA. During April 2000, the Company began operations as an E-commerce distributor of beauty products under its Beauty Merchant, Inc. subsidiary and ceased these operations in 2001. The Company currently offers beauty services and products though its retail beauty salon in the South Florida area under its Beauty Works USA, Inc. subsidiary. During the year ended December 31, 2001, the Company enacted a 200 for 1 reverse stock split on its common stock. All common stock amounts in the accompanying financial statements have been retroactively restated to reflect this capitalization change. Accounts Receivable - Accounts receivable are charged to bad debt expense as - -------------------- they are deemed uncollectible based upon a periodic review of the accounts. The Company performs ongoing credit reviews of its customer accounts. Property and Equipment - Property and Equipment are recorded at cost. - ------------------------ Maintenance and repair costs are expensed as incurred. Depreciation is provided using the straight-line method and other methods that approximate the straight-line method. It is calculated over recovery periods as prescribed by management which range from 5 years for equipment to 7 years for furniture. Leasehold improvements are amortized over the terms of the office operating leases. When an asset is disposed of, its cost and related accumulated depreciation are removed from the accounts. The difference between undepreciated cost and proceeds from disposition is recorded as gain or loss. The Company makes ongoing evaluations of the values of its assets to determine whether an impairment write-down should be recognized in accordance with SFAS No. 144. To date, no such impairment write-down has been deemed necessary. NATIONAL BEAUTY CORP. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended December 31, 2001 and 2000 ============================================== NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.) - ----------------------------------------------------------- Marketable Securities - Marketable securities include the Company's investment - ---------------------- in equity securities recorded at fair market value. The marketable securities were classified as trading securities with holding gains and losses recognized in current period operations. Cash and Cash Equivalents - For purposes of the Statement of Cash Flows, the - ---------------------------- Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents. Revenue Recognition- Revenue for the residential cleaning operations is - -------------------- recognized when cleaning services are performed. Revenues for beauty services are recognized when the services are rendered. Revenues for beauty products are recognized when the products are shipped provided collection of the resulting receivable is probable and the earnings process is complete. If any material contingencies are present, revenue recognition is delayed until all material contingencies are eliminated. Material contingencies are circumstances in which there are any potential uncertainties as to the completion of the revenue process being complete. Further, no revenue is recognized unless collection of the applicable consideration is probable. Probable collection is determined at the time collection occurs or is more than reasonably possible it will be collected. Income Taxes - Income taxes are provided for the tax effects of transactions - ------------- reported in the financial statements and consist of deferred taxes related primarily to differences between the basis of certain assets and liabilities for financial and tax reporting. Deferred taxes represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. The income tax benefit consists of taxes currently refundable due to net operating loss carryback provisions for federal and state governments. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or the entire deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment. NATIONAL BEAUTY CORP. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended December 31, 2001 and 2000 ============================================== NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.) - ----------------------------------------------------------- Use of Estimates - The preparation of financial statements in conformity with - ------------------ accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Advertising - The Company charges the costs of advertising to expense when - ----------- incurred. Earnings Per Share- The Companyreports earnings per share in accordance with - -------------------- Statement of Financial Accounting Standard (SFAS) No.128. This statement requires dual presentation of basic and diluted earnings (loss) with a reconciliation of the numerator and denominator of the loss per share computations. Basic earnings per share amounts are based on the weighted average shares of common outstanding. If applicable, diluted earnings per share would assume the conversion, exercise or issuance of all potential common stock instruments such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share. Accordingly, this presentation has been adopted for the period presented. There were no adjustments required to net loss for the period presented in the computation of diluted earnings per share. Comprehensive Income (Loss) - The Company adopted Financial Accounting Standards - --------------------------- Board Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income", which establishes standards for the reporting and display of comprehensive income (loss) and its components in the financial statements. There were no material items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements. NOTE B - ACQUISITION - -------------------- During 2001, the Company acquired the fixed assets of a beauty salon in South Florida. The Company financed the acquisition with a short-term note with the unrelated seller in the amount of $15,000 at 8% interest per annum. This note was paid in full with interest thereto during 2001. The Company also assumed the lease from the seller. See footnote G for the minimum lease commitments. Since the acquisition does not meet the conditions of a significant acquisition, pro forma information has not been provided. NATIONAL BEAUTY CORP. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended December 31, 2001 and 2000 ============================================== NOTEC - DISCONTINUED OPERATIONS - ------------------------------- In November 2001, the Board of Directors approved a plan for the disposal of it e-commence segment. The results of beautymerchant.com have been reported as discontinued operations for all periods presented. NOTE D - STOCKHOLDERS' EQUITY - --------------------------------- During the year ended December 31, 2000, the Company issued 741 shares of its common stock for services to employees and consultants. The stock issued was valued at the market price at the time of issuance, yielding an aggregate value of $103,907. The total amount was expensed during the year ended December 31, 2000 and is included in the accompanying financial statements in selling, general and administrative expenses. During the year ended December 31, 2000, the Company retired 8,212 of the common shares that had been subscribed at $44 per share ($.22 pre-split). Also during the year ended December 31, 2000, the Company received $242,326 in proceeds from common stock subscribed during the year ended December 31, 1999. The Company also received $68,000 in marketable securities in exchange for common stock subscribed during the year ended December 31,2000. The Company has 950,000 shares of preferred stock outstanding at December 31, 2001, which is convertible at the option of the shareholder into 9,500,000 shares of common stock. During 2001, the Company's officers converted 50,000 preferred shares into 500,000 common shares. During the year ended December, 31 2001, the Company issued 607,937 shares of its common stock for services rendered by officers and outside consultants. The shares were valued at the date of issuance yielding an aggregate market value of $145,044, which was expensed during the year. On December 27, 2001, the Company issued 95,000 and 205,000 common shares to its officers and outside consultants, respectively. These common shares were paid in advance for services to be received by the Company in 2002 and are reflected as Prepaid Expenses in the accompanying balance sheet. The shares were priced at the date of issuance yielding an aggregate market value of $90,000. In addition, 34,000 options were granted to an outside consultant as part of compensation. The options are exercisable at $.48 per share prior to December 31, 2005. The options did not yield a material expense using the Black-Scholes Option Pricing Model. NATIONAL BEAUTY CORP. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended December 31, 2001 and 2000 ============================================== NOTE E - INCOME TAXES - --------------------- The Company has approximately $726,000 of federal and state net operating losses that expire in various years through the year 2015. Due to operating losses, there is no provision for current federal or state income taxes for the years ended December 31, 2001 and 2000. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes. The Company's deferred tax asset at December 31, 2001 consists of net operating loss carryforwards calculated using federal and state effective tax rates. Because of the Company's lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance. The valuation allowance increased by approximately $8,000 and $141,000 for the years ended December 31, 2001 and 2000, respectively. The Company's net deferred tax asset as of December 31, 2001 is as follows: Net operating loss carryforwards $ 276,000 Valuation allowance (276,000) ------------- Net deferred tax asset $ -- ============ The reconciliation of income taxes computed at the federal statutory income tax rate to total income taxes for the years ended December 31, 2001 and 2000 is as follows: 2001 2000 ---- ---- Income tax computed at the federal statutory rate 34% 34% State income taxes, net of federal tax benefit 4% 4% ----- ---- Valuation allowance (38%) (38%) ----- ---- Total deferred tax asset 0% 0% ===== ===== NATIONAL BEAUTY CORP. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended December 31, 2001 and 2000 ============================================== NOTE F - OBLIGATION UNDER CAPITAL LEASE - --------------------------------------------- The Company is leasing equipment under a noncancelable capital lease that expires in December, 2002. The obligation under the capital lease has been recorded in the accompanying Balance Sheet at the net present value of the future minimum lease payments, discounted at an interest rate of 20%. The book value of the equipment was approximately $1,500 at December 31, 2001. Minimum future obligations under this capital lease at December 31, 2001 are as follows: Year Amount - ---- ------ 2002 $ 3,540 -------- Total minimum obligation 3,540 Less amount representing interest 1,227 --------- Present value of net minimum obligation 2,313 Less current portion 2,313 --------- $ -0- ========== NOTE G - COMMITMENTS - -------------------- The Company leases its offices in Fort Lauderdale, Florida and a beauty salon in Boca Raton, Florida under non-cancelable operating leases that expire from varying dates through September 30, 2005. Future minimum rental payments as of December 31, 2001 in the aggregate and for each of the four succeeding years are as follows: Year Amount - ---- ------ 2002 $ 61,050 2003 37,200 2004 37,200 2005 27,900 --------- $163,350 ======== Rent expense for 2001 and 2000 was $47,467 and $32,526, respectively. NATIONAL BEAUTY CORP. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended December 31, 2001 and 2000 ============================================== NOTE G - COMMITMENTS (CONT') - ---------------------------- In 1999, the Company committed itself to compensate each of its Board of Directors in the amount of 1,000 shares of its common stock annually and 10,000 common stock purchase options over a thirty six-month period. As of the date of this report, no option agreement has been officially adopted, there is no fair market value for the options and none of the equity instruments have been issued with the exception of 1,000 restricted common shares issued to each of its directors in 2001. NOTE H - SEGMENT INFORMATION - -------------------------------- Based on the criteria established by SFAS 131, "Disclosures about Segments of an Enterprise and Related Information," the Company operates in two principal business segments - (1) residential cleaning service and (2) retail beauty salons. In accordance with SFAS 131, the Company is required to describe its reportable segments and provide data that is consistent with the data made available to the Company's management to assess performance and make decisions. Information from the internal management reports may differ from the amounts reported under accounting principles generally accepted in the United States of America due to certain corporate level adjustments related to vendor reserves for potential under-delivery of minimum guaranteed orders. The assets of the discontinued subsidiary are reflected as corporate assets. Summarized revenues and expense information by segment for 2001, as excerpted from the internal management reports, is as follows: 2001 2000 ---- ---- Residential Cleaning: - --------------------- Residential cleaning sales $281,124 $ 340,413 Cost of sales (182,731) (221,268) Corporate and other expenses (220,436) (819,626) --------- --------- Segment loss (122,043) (700,481) Total assets 9,550 9,550 Capital expenditures -0- -0- Depreciation -0- 200 Interest expense 240 208 NATIONAL BEAUTY CORP. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended December 31, 2001 and 2000 ============================================== NOTE H - SEGMENT INFORMATION (CONT') - ----------------------------------------- 2001 2000 ---- ---- Retail beauty salon: - -------------------- Retail beauty salon sales $150,686 N/A Cost of sales ( 93,243) -0- Corporate and other expenses (117,031) -0- ---------- ------ Segment loss (59,588) -0- Total assets 13,500 -0- Capital expenditures 1,538 -0- Depreciation 1,056 -0- Interest expense 429 -0- Corporate: - ---------- Corporate revenues $ N/A $ N/A Cost of sales -0- -0- Unallocated and other expenses (66,257) -0- ---------- ----- Segment loss (66,257) -0- Total assets 113,693 139,843 Capital expenditures 2,857 1,565 Depreciation 1,961 3,600 Interest expense 558 832 NOTE I - SUBSEQUENT EVENTS - -------------------------- Subsequent to December 31, 2001, one of the Company's officers converted 200,000 shares of the Company's preferred stock in to 2,000,000 shares of common stock. NATIONAL BEAUTY CORP. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended December 31, 2001 and 2000 ============================================== NOTE J - RECENT ACCOUNTING PRONOUNCEMENTS - ---------------------------------------------- In July 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No.143, "Accounting for Asset Retirement Obligations" which addresses the accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated retirement costs. SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value cannot be made. SFAS No. 143 is effective for financial statements issued for fiscal years beginning after June 15, 2002. The Company does not expect SFAS No. 143 to have a material effect on its financial condition or cash flows. In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS No. 144 generally establishes a standard framework which to measure impairment of long-lived assets and expands the Accounting Principles Board ("APB") 30, "Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions" to include a component of the entity (rather than a segment of the business). SFAF No. 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001. The Company does not expect SFAS No. 144 to have a material effect on its financial condition and cash flows. INTERIM FINANCIAL STATEMENTS (UNAUDITED)
NATIONAL BEAUTY CORPORATION & SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2002 AND DECEMBER 31, 2001 (Unaudited) ASSETS March 31, 2002 Dec. 31, 2001 - ------------------------- -------------- -------------- CURRENT ASSETS: - ------------------------- Cash and cash equivalents $ 6,154 $ 11,001 Accounts receivable . . . 132 903 Marketable securities . . 1,500 1,743 Inventory . . . . . . . . 4,087 1,700 Prepaid expenses. . . . . 114,825 90,000 ---------------- --------------- TOTAL CURRENT ASSETS. . . 126,698 105,347 ---------------- --------------- FIXED ASSETS - ------------------------- Furniture . . . . . . . . 21,616 21,616 Leasehold improvements. . 3,500 3,500 Equipment . . . . . . . . 34,985 34,985 Accumulated depreciation. (36,361) (35,361) ---------------- --------------- NET FIXED ASSETS. . . . . 23,740 24,740 ---------------- --------------- OTHER ASSETS: - ------------------------- Deposits. . . . . . . . . 6,656 6,656 ---------------- --------------- TOTAL OTHER ASSETS. . . . 6,656 6,656 ---------------- --------------- TOTAL ASSETS. . . . . . . $ 157,094 $ 136,743 ---------------- ---------------
NATIONAL BEAUTY CORPORATION & SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) AS OF MARCH 31, 2002 AND DECEMBER 31, 2001 (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY March 31, 2002 Dec. 31, 2001 - ----------------------------------------------------------------- --------------------------------- CURRENT LIABILITIES - ----------------------------------------------------------------- Accounts payable and accrued expenses . . . . . . . . . . . . . . $ 2,230 $ 2,230 Outstanding checks in excess of bank balance. . . . . . . . . . . 1,067 11,664 Current portion of capitalized lease obligation . . . . . . . . . 1,594 2,313 ---------------- --------------- TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . . . . . 4,891 16,207 ---------------- --------------- STOCKHOLDERS' EQUITY - ----------------------------------------------------------------- Common stock ($.001 par value, 100,000,000 shares authorized; 3,736,362 and 1,466,362 issued and outstanding at March 31, 2002 and December 31, 2001, respectively). . . . . . . . . . . . . . . 3,736 1,466 Convertible preferred stock ($.001 par value; 50,000,000 shares authorized, 750,000 and 950,000 shares issued and outstanding at March 31, 2002 and December 31, 2001, respectively) . . . . . . . 750 950 Additional paid in capital. . . . . . . . . . . . . . . . . . . . 1,466,480 1,402,450 Retained deficit. . . . . . . . . . . . . . . . . . . . . . . . . (1,318,763) (1,284,330) ---------------- --------------- TOTAL STOCKHOLDERS' EQUITY. . . . . . . . . . . . . . . . . . . . 152,203 120,536 ---------------- --------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY. . . . . . . . . . . . $ 157,094 $ 136,743 ---------------- ---------------
NATIONAL BEAUTY CORPORATION & SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 2002 2001 REVENUES: - -------------------------------------- Sales. . . . . . . . . . . . . . . . . $ 145,256 $ 87,287 Cost of Sales. . . . . . . . . . . . . (68,544) (60,731) ----------- ------------ GROSS PROFIT . . . . . . . . . . . . . 76,712 26,556 ----------- ------------ EXPENSES: - -------------------------------------- Advertising. . . . . . . . . . . . . . 6,471 13,511 Automobile . . . . . . . . . . . . . . 283 3,259 Bank service charges . . . . . . . . . 1,099 1,170 Consulting . . . . . . . . . . . . . . 37,500 3,245 Depreciation . . . . . . . . . . . . . 1,000 800 Insurance. . . . . . . . . . . . . . . 1,141 5,544 Office expenses. . . . . . . . . . . . 2,180 2,221 Payroll. . . . . . . . . . . . . . . . 20,445 -0- Professional fees. . . . . . . . . . . 13,970 1,375 Public trading . . . . . . . . . . . . 1,315 -0- Rent . . . . . . . . . . . . . . . . . 15,166 6,771 Repairs & maintenance. . . . . . . . . 106 60 Taxes & licenses . . . . . . . . . . . 6,871 1,425 Telephone. . . . . . . . . . . . . . . 1,988 2,508 Travel . . . . . . . . . . . . . . . . -0- 460 Utilities. . . . . . . . . . . . . . . 1,367 129 ----------- ------------ TOTAL EXPENSES . . . . . . . . . . . . 110,902 42,478 ----------- ------------ OPERATING (LOSS) . . . . . . . . . . . $ (34,190) $ (15,922) OTHER (EXPENSE): - -------------------------------------- Unrealized loss on trading securities. (243) (29,500) Interest Expense . . . . . . . . . . . -0- -0- ----------- ------------ NET (LOSS) . . . . . . . . . . . . . . $ (34,433) $ (45,422) ----------- ------------ Net (Loss) per Share - basic and fully diluted. . . . . . . ($0.01) $ ** =========== ============ Weighted Average Shares. . . . . . . 2,583,862 11,706,701 =========== ============ ** Less than $.01
See accompanying notes to financial statements
NATIONAL BEAUTY CORPORATION & SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 2002 2001 CASH FLOWS FROM OPERATING ACTIVITIES: - ----------------------------------------------------------------------------- Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(34,433) $(45,422) Adjustments to reconcile net loss to net cash (used in) operating activities: Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 800 Common stock issued for services. . . . . . . . . . . . . . . . . . . . . . . 66,100 3,245 Unrealized loss on trading securities . . . . . . . . . . . . . . . . . . . . 243 29,500 (Increase) decrease in operating assets: Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 771 (245) Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,387) (289) Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (24,825) -0- Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0- -0- (Decrease) in outstanding checks in excess of bank balance. . . . . . . . . . (10,597) -0- --------- --------- NET CASH (USED IN) OPERATING ACTIVITIES . . . . . . . . . . . . . . . . . . . (4,128) (12,411) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: - ----------------------------------------------------------------------------- Expenditures for leaseholds and equipment . . . . . . . . . . . . . . . . . . -0- -0- --------- --------- NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . . . . . . . . -0- -0- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: - ----------------------------------------------------------------------------- Repayment of shareholder loan receivable. . . . . . . . . . . . . . . . . . . -0- 6,013 Principal repayments under capitalized lease. . . . . . . . . . . . . . . . . (719) (625) --------- --------- NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES. . . . . . . . . . . . . . . (719) 5,388 --------- --------- NET (DECREASE) IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . . . . . (4,847) (7,023) --------- --------- CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,001 56,191 --------- --------- END OF THE PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,154 $ 49,168 --------- --------- SUPPLEMENTARY CASH FLOW INFORMATION - ----------------------------------------------------------------------------- OF NON-CASH FINANCING: - ----------------------------------------------------------------------------- Common stock issued for services. . . . . . . . . . . . . . . . . . . . . . . $ 66,100 $ 3,245 --------- ---------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ NATIONAL BEAUTY CORPORATION & SUBSIDIARIES March 31, 2002 (UNAUDITED) ITEM 1. - ------- NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments consisting only of normal recurring accruals considered necessary to present fairly the Company's financial position at March 31, 2002, the results of operations for the three month period ended March 31, 2002 and 2001, and cash flows for the three months ended March 31, 2002 and 2001. The results for the period ended March 31, 2002, are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2002. NOTE 2 - EARNINGS (LOSS) PER SHARE The following represents the calculation of earnings (loss) per share: Three Three Months Ended Months Ended BASIC & FULLY DILUTED* March 31, 2002 March 31, 2001 - --------------------- -------------- -------------- Net Loss $ (34,433) $ (45,422) Less- preferred stock dividends -0- -0- ------------ -------------- Net Loss $ (34,433) $ (45,422) Weighted average number of common shares 2,583,862 11,706,701 ------------- -------------- Basic & Fully Diluted* loss per share $ (.01) $ ** ============= ============== * The Company had no common stock equivalents during the periods presented ** Less than $(0.01) CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There were no changes in or disagreements with National Beauty's independent accountants on financial statement disclosure or auditing scope or procedure during the two year period prior covered by their report. PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Under Nevada law, a corporation may indemnify its officers, directors, employees and agents under certain circumstances, including indemnification of such person against liability under the Securities Act of 1933. A true and correct copy of Section 78.7502 of Nevada Revised Statutes that addresses indemnification of officers, directors, employees and agents is attached hereto as Exhibit 99.1. In addition, Section 78.037 of the Nevada Revised Statutes and National Beauty's Articles of Incorporation and Bylaws provide that a director of this corporation shall not be personally liable to the corporation or its stockholders for monetary damages due to breach of fiduciary duty as a director except for liability (a) for acts or omissions which involve intentional misconduct, fraud or a knowing violation of law; or (b) for the payments of distribution in violation of Nevada Revised Statute 78.300. The effect of these provisions may be to eliminate the rights of National Beauty and its stockholders (through stockholders' derivative suit on behalf of National Beauty) to recover monetary damages against a director for breach of fiduciary duty as a director (including breaches resulting from negligent or grossly negligent behavior) except in the situations described in clauses (a) - (b) of the preceding paragraph. ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following sets forth the expenses in connection with the issuance and distribution of the Securities being registered, other than underwriting discounts and commissions. National Beauty shall bear all such expenses. All amounts set forth below are estimates, other than the SEC registration fee. SEC Registration Fee $415.52 Legal Fees and Expenses $25,000.00 Accounting Fees and Expenses $15,000.00 Miscellaneous $5,000.00 --------- TOTAL $45,415.52 ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES On July 1, 2002, National Beauty agreed to issue 200,000 shares of common stock to American Market Support Network, Inc. in consideration of investor services to be rendered. On April 17, 2002, National Beauty issued 10,000 shares of common stock to Richard McCaffrey and 30,000 shares of common stock to National Financial Communications Corp. in consideration of investor relations services rendered to the company. On February 27, 2002, National Beauty issued 125,000 shares of common stock to Richard O. Weed in consideration of legal services rendered in approximately the amount of $25,000. On February 11, 2002, National Beauty issued 1,000,000 shares, respectively, to Edward Roth and Alisha Roth, officers and directors of the company, in consideration of services rendered. On January 3, 2002, National Beauty issued 30,000 shares of common stock to National Financial Communications Corp. in consideration of investor relations services rendered to the company. On September 14, 2001, National Beauty issued 2,000 shares, 2,000 shares and 25,000 shares to Geoff Gazda, Barbara Patigalia and Michael Bongiovanni, respectively, in consideration of services rendered as directors of the company. On September 14, 2001, National Beauty issued 150,000 shares to Gerald Sklar. On August 15, 2001, National Beauty issued 250,000 shares, respectively, to Edward Roth and Alisha Roth, officers and directors of the company, in consideration of services rendered. On May 9, 2001, National Beauty issued 1,650 shares, 8,100 shares and 900 shares, respectively, to Thomas Engelbert, Action Stocks, Inc. and James Williams. On July 28, 2000, National Beauty issued 375 shares and 1 share, respectively, to Richard Barson and John Schertl. On May 9, 2000, National Beauty issued 250 shares to Market Voice, Inc. On January 26, 2000, National Beauty issued 8 shares to Brenda Lee Hamilton. On November 18, 1999, National Beauty issued 1,250 shares and 300 shares , respectively, to Edward Roth and Alisha Roth, officers and directors of the company, in consideration of services rendered. On November 1, 1999, National Beauty issued 25 shares, 100 shares and 17 shares, respectively, to Brenda Lee Hamilton, Richard D. Surber and Chris Cottone. Exemption from registration under the Securities Act of 1933 ("Act") is claimed for the sale of these securities in reliance upon the exemption offered by Section 4(2) of the Act, which exempts transactions by issuers not involving a public offering. Use of this exemption is based on the following facts: - - Neither National Beauty nor any person acting on behalf of National Beauty solicited any offer to buy or sell the securities by any form of general solicitation or advertising; - - The purchasers represented that they were acquiring the securities as a principal for their own account for investment purposes only and without a view towards distribution or reselling these securities unless pursuant to an effective registration statement or exemption from registration in compliance with federal or state securities laws; and - - The securities were issued with the understanding that they may only be disposed of pursuant to an effective registration statement or exemption from registration in compliance with federal or state securities laws. ITEM 27. EXHIBITS The following is a list of exhibits required by Item 601 of Regulation S-B that are filed or incorporated by reference. The exhibits that are incorporated by reference from National Beauty's prior SEC filings are noted on the exhibit index. The other exhibits are attached hereto and being filed with the SEC as part of this registration statement. Exhibit Number Description of Exhibits - ------ ----------------------- 3(i)(a) Articles of Incorporation of Tri-Capital Corporation, Inc.(1) 3(ii) Bylaws of Tri-Capital Corporation, Inc.(1) 3(iii) Articles of Amendment to the Articles of Incorporation of Tri Capital Corporation, Inc. 3(iv) Certificate of Amendment to the Articles of Incorporation of Advanced Appearance of America, Inc. 3(v) Certificate of Amendment to the Articles of Incorporation of ATR Industries, Inc. 3(vi) Certificate of Amendment to the Articles of Incorporation of ATR Industries, Inc. 3(vii) Certificate of Amendment to the Articles of Incorporation of ATR Industries, Inc. 3(viii) Certificate of Amendment to the Articles of Incorporation of Beautymerchant.com, Inc. 3(ix) Certificate of Amendment to the Articles of Incorporation of National Beauty Corp. 3(x) Certificate of Amendment to the Articles of Incorporation of National Beauty Corp. 4.1 Form of Common Stock Certificate of National Beauty, Inc. 4.2 Warrant Agreement 4.3 Common Stock Purchase Warrant 4.4 Certificate of Designation of the Rights and Preferences of the Series A Convertible Preferred Stock of National Beauty Corp. 5.1 Opinion of Weed & Co. LLP re: Legality 10.1 Employment Agreement with Edward Anthony Roth(1) 10.2 Employment Agreement with Alisha Roth(1) 10.3 Consulting Agreement with Ballantyne Capital Group, LLC 10.4 Commercial Lease between Commercial Villas and Beautyworks USA of Florida Inc. 10.5 Third Lease Amendment Agreement and Assignment of Lease 10.6 Form of Subscription Agreement 10.7 Investor Relations Services Agreement 21 Subsidiaries of National Beauty 23.1 Consent of Independent Auditors, Perrella & Associates, P.A. 23.2 Consent of Weed & Co. LLP 99.1 Section 78.7502 of Nevada Revised Statutes (2) (1) Previously filed with National Beauty's filing of Form 10-SB and subsequent amendments thereto (File No. 00030212). (2) Previously filed with National Beauty's filing of a Form S-8 on August 21, 2001. ... ITEM 28. UNDERTAKINGS. National Beauty hereby undertakes to: (a)(1) File, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to: (i) Include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement; and (iii) Include any additional or changed material information on the plan of distribution not previously disclosed in the registration statement or any material change to such information provided. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. (b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer 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 small business issuer 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. SIGNATURES In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in the city of Fort Lauderdale, State of Florida, on July 10, 2002. National Beauty Corp. By: /s/ Edward Roth Name: Edward Roth Title: President In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated. Signature Date - --------- ---- /s/ Edward A. Roth July 10, 2002 - ------------------ Edward A. Roth President & CEO /s/ Alisha Roth July 10, 2002 - --------------- Alisha Roth Secretary, Treasurer Director /s/ Barbara Patagalia July 10, 2002 - --------------------- Barbara Patagalia Director /s/Michael J. Bongiovanni July 10, 2002 - ------------------------- -------------- Michael J. Bongiovanni Chief Financial Officer EX-3.3 3 doc2.txt ARTICLES OF AMENDMENT Exhibit 3(iii) Articles of Amendment to the Articles of Incorporation of Tri Capital Corporation, Inc. FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF NEVADA MAY 09 1988 ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF TRI CAPITAL CORP. Pursuant to the provisions of the Nevada Business Corporation the undersigned Corporation hereby adopts the following Articles of Amendment to its Articles of Incorporation: FIRST: The name of the Corporation is TRI CAPITAL CORP. SECOND: The following amendments to the Articles of Incorporation was duly adopted by the shareholders of the corporation. Article I of the Articles of Incorporation is hereby Amended as follows: The name of the Corporation is ADVANCED APPEARANCE OF AMERICA, INC. THIRD: The foregoing Amendment to the Articles of Incorporation was adopted by the shareholders and the director of the corporation on the 12th day of April, 1988 in the manner prescribed by the laws of the State of Nevada. FOURTH: The number of shares outstanding on said date was 36,670,000 shares and the number of shares entitled to vote of 36,670,000 FIFTH: The number of share voted for said Amendments was 28,660,000 shares and the number of shares voted against such Amendment was none. SIXTH: No class was entitled to vote thereon as a class. SEVENTH: The manner in which any exchange reclassification or cancellation of issued and outstanding shares provided here shall be effected as follows: Name Change /s/ Joel Axelrod - ---------------- Joel Axelrod President /s/ Ilene Ashkenasy - ------------------- Ilene Ashkenasy Secretary STATE - NEW YORK COUNTY - NEW YORK On the 12th day of April, 1988, personally appeared before me the above signed persons, known to me to be the President and Secretary of TRI CAPITAL CORP., and upon being duly sworn did state the foregoing instrument was voluntarily signed by them for the purpose above stated. /s/ Benjamin G. Sprecher ------------------------ Benjamin G. Sprecher Sworn to me before on this 12th day of April, 1988 [NOTARY STAMP] EX-3.4 4 doc3.txt CERTIFICATE OF AMENDMENT Exhibit 3(iv) Certificate of Amendment to the Articles of Incorporation of Advanced Appearance of America, Inc. FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF NEVADA APR 10 1998 No. C6243-87 ---------- Dean Heller DEAN HELLER, SECRETARY OF STATE CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION (After Issuance of Stock) Filed by: ADVANCED APPEARANCE OF AMERICA Name of Corporation I, the undersigned Edward A. Roth and Alisha M. Roth of Advanced Appearance of America, Inc. do hereby certify: That the Board of Directors of said corporation at a meeting duly convened, held on the 7 day of April, 1998, adopted a resolution to amend the original articles as follows: Article _________ is hereby amended to read as follow: NAME CHANGE TO ATR INDUSTRIES ---- ------ The number of shares of the corporation outstanding and entitled to vote on an amendment to the Articles of Incorporation is 183,361; that the said change(s) and amendment have been consented to and approved by a majority vote of the stockholders holding at least a majority of each class of stock outstanding and entitled to vote thereon. /s/ Edward A. Roth - ------------------ President or Vice President /s/ Alisha Roth - --------------- Secretary or Assistant Secretary State of Florida ) ) ss. County of Broward ) On 4/8/98, personally appeared before me, a Notary Public, Alisha M. Roth & Edward A. Roth, who acknowledged that they executed the above instrument. Rene B. Chaner MY COMMISSION # CC 375061 EXPIRES: May 23, 1998 Bonded Thru Notary Public Underwriters -------------------------------------- Rene B. Chaner --------------- Signature of Notary EX-3.5 5 doc4.txt CERTIFICATE OF AMENDMENT Exhibit 3(v) Certificate of Amendment to the Articles of Incorporation of ATR Industries, Inc. FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF NEVADA OCT 26 1998 No. C6243-87 ---------- Dean Heller DEAN HELLER, SECRETARY OF STATE CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION ----------------------------------------------------- FOR PROFIT NEVADA CORPORATIONS ------------------------------ (PURSUANT TO NRS 78.385 AND 78.390 - AFTER ISSUANCE OF STOCK) 1. Name of Corporation: ATR Industries 2. The articles have been amended as follows: Article 1. The name of the corporation is ATR Industries, Inc. - ---------- Article 10. The corporation is authorized to issue 50,000,000 shares of - ----------- convertible preferred stock; the board of directors is authorized to fix and determine the designations, rights, preferences and other variations of each class of stock or series within each class as provided by N.R.S. 78.195. Article 11. No member of the board of directors or officer of the corporation - ----------- shall be held liable for damages to the corporation or its stockholders for breach of fiduciary duty as a director or officer except for acts which involve intentional misconduct, fraud or a knowing violation of the law, or the payment of dividends in violation of N.R.S. 78.300. 3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation have voted in favor of the amendment is 3,120,500. 4. Signatures: /s/ Edward Anthony Roth /s/ Alisha M. Roth - ----------------------- ------------------ President Secretary STATE OF FLORIDA ) ) ss. COUNTY OF BROWARD ) This instrument was acknowledged before me on October 16, 1998, by Edward A. Roth, as President as designated to sign this certificate of ATR INDUSTRIES. /s/ Rene B. Chaner - ------------------- NOTARY PUBLIC Rene B. Chaner MY COMMISSION # CC 375061 EXPIRES: May 23, 1998 Bonded Thru Notary Public Underwriters EX-3.6 6 doc5.txt CERTIFICATE OF AMENDMENT Exhibit 3(vi) Certificate of Amendment to the Articles of Incorporation of ATR Industries, Inc. FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF NEVADA FEB 02 1999 No. C6243-87 ---------- Dean Heller DEAN HELLER, SECRETARY OF STATE CERTIFICATE OF CHANGE IN NUMBER OF ---------------------------------- AUTHORIZED SHARES OF COMMON STOCK --------------------------------- FOR PROFIT NEVADA CORPORATION ----------------------------- (PURSUANT TO NRS 78.207 AND 78.209-STOCK SPLIT) 1. Name of Corporation: ATR Industries 2. At a special meeting of the board of directors of ATR Industries, Inc., held on January 18, 1999, the following resolution was adopted: a) That the number of the authorized shares of common stock of the corporation shall be 10,000,000. b) That the number of issued and outstanding shares of common stock held by stockholders of record as of the date of this resolution is 3,183,000. --------- c) The current number of authorized shares of common stock of the corporation is 100,000,000 and the par value of each share is $.001. d) The number of authorized shares of common stock of the corporation after the change adopted hereby is 10,000,000. e) The number of shares of common stock to be issued after the change is: 0. f) There are no fractional shares of stock issued. g) Approval of a majority of the stockholders holding issued shares of stock has been obtained. h) The change shall become effective on the date of the filing of the certificate. 3. Signatures: /s/ Edward Anthony Roth /s/ Alisha Roth - ----------------------- --------------- President Secretary STATE OF FLORIDA ) ) ss. COUNTY OF BROWARD ) On this 2nd day of February, 1999, personally appeared before me Edward Anthony -------------- Roth and Alisha Roth, known to me to be the President and Secretary, - ---- ----------- respectively of ATR Industries, Inc., a Nevada corporation, and acknowledged they executed the above Certificate in Change in Number of Authorized Shares of Common Stock. /s/ Nancy A. Berrios - -------------------- NOTARY PUBLIC EX-3.7 7 doc6.txt CERTIFICATE OF AMENDMENT Exhibit 3(vii) Certificate of Amendment to the Articles of Incorporation of ATR Industries, Inc. FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF NEVADA FEB 09 1999 No. C6243-87 ---------- Dean Heller DEAN HELLER, SECRETARY OF STATE CERTIFICATE OF CHANGE IN NUMBER OF ---------------------------------- AUTHORIZED SHARES OF COMMON STOCK --------------------------------- FOR PROFIT NEVADA CORPORATION ----------------------------- (PURSUANT TO NRS 78.207 AND 78.209-STOCK SPLIT) 1. Name of Corporation: ATR Industries 2. At a special meeting of the board of directors of ATR Industries, Inc., held on February 4, 1999, the following resolution was adopted: a) That the number of the authorized shares of common stock of the corporation shall be 100,000,000. b) That the number of issued and outstanding shares of common stock held by stockholders of record as of the date of this resolution is 3,193,000. c) The current number of authorized shares of common stock of the corporation is 10,000,000 and the par value of each share is $.01. d) The number of authorized shares of common stock of the corporation after the change adopted hereby is 100,000,000 and the par value of each share is $.001. e) The number of shares of common stock to be issued after the change is: 0. f) There are no fractional shares of stock issued. g) Approval of a majority of the stockholders holding issued shares of stock has been obtained. h) The change shall become effective on the date of the filing of the certificate. 3. Signatures: /s/ Edward Anthony Roth /s/ Alisha Roth - ----------------------- --------------- President Secretary STATE OF FLORIDA ) ) ss. COUNTY OF BROWARD ) On this 4th day of February, 1999, personally appeared before me Edward Anthony Roth and Alisha Roth, known to me to be the President and Secretary, respectively of ATR Industries, Inc., a Nevada corporation, and acknowledged they executed the above Certificate in Change in Number of Authorized Shares of Common Stock. /s/ Nancy A. Berrios - -------------------- NOTARY PUBLIC EX-3.8 8 doc7.txt CERTIFICATE OF AMENDMENT Exhibit 3(viii) Certificate of Amendment to the Articles of Incorporation of ATR Industries, Inc. DEAN HELLER Secretary of State FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF NEVADA SEP 22 1999 No. C6243-87 STATE OF NEVADA Telephone 702.687.5203 -------- OFFICE OF THE SECRETARY OF STATE Fax 702.687.3471 Dean Heller 101 N. CARSON ST., STE.3 Web site http://sos.state.nv.us ---------------------- DEAN HELLER, SECRETARY OF STATE CARSON CITY, NEVADA 89701-4786 Filing Fee: CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION ----------------------------------------------------- FOR NEVADA PROFIT CORPORATIONS ------------------------------ (PURSUANT TO NRS 78.385 AND 78.390 - AFTER ISSUANCE OF STOCK) - REMIT IN DUPLICATE - 1. Name of corporation: ATR INDUSTRIES INC. 2. The articles have been amended as follows (provide article numbers, if available): NAME CHANGE TO: BEAUTYMERCHANT.COM 3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation have voted in favor of the amendment is: 63%* 4. Signatures (Required): /s/ Edward Anthony Roth /s/ Alisha Roth - ----------------------- --------------- President or Vice President Secretary or Asst. Secretary (acknowledgement required) (acknowledgement required) State of: Florida County of: Broward This instrument was acknowledged before me on Sept. 18, 1999, by ______________ (Name of Person) as __________________ as designated to sign this certificate of ____________________________ (name on behalf of whom instrument was executed) JACQUELINE D. YANNAYON Notary Public, State of Florida /s/ Jacqueline D. Yannayon My comm. exp. May 11, 2003 - --------------------------- Notary Public Signature Comm. No. CC836203 *If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless of limitations or restrictions on the voting power thereof. IMPORTANT: Failure to include any of the above information and remit the proper fees may cause this filing to be rejected. EX-3.9 9 doc8.txt CERTIFICATE OF AMENDMENT Exhibit 3(ix) Certificate of Amendment to the Articles of Incorporation of Beautymerchant.com, Inc. FILED # C6243-87 -------- DEAN HELLER Secretary of State MAR 30 2001 101 North Carson Street, Suite 3 CERTIFICATE OF IN THE OFFICE OF Carson City, Nevada 89701-4786 AMENDMENT Dean Heller (775) 684-5708 (Pursuant to NRS 78.385 and 78.390) DEAN HELLER, SECRETARY OF STATE Important: Read attached instructions before completing CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION ----------------------------------------------------- FOR NEVADA PROFIT CORPORATIONS ------------------------------ (PURSUANT TO NRS 78.385 AND 78.390 - AFTER ISSUANCE OF STOCK) - REMIT IN DUPLICATE - 1. Name of corporation: BEAUTYMERCHANT.COM INC. 2. The articles have been amended as follows (provide article numbers, if available): EXPEDITE: Name change to: NATIONAL BEAUTY CORP. 3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation have voted in favor of the amendment is: 8,300,000.* 4. Signatures (Required): /s/ Edward Anthony Roth /s/ Alisha Roth - ----------------------- --------------- President or Vice President and Secretary or Asst. Secretary *If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless of limitations or restrictions on the voting power thereof. IMPORTANT: Failure to include any of the above information and remit the proper fees may cause this filing to be rejected. EX-3.10 10 doc9.txt CERTIFICATE OF AMENDMENT Exhibit 3(x) Certificate of Amendment to the Articles of Incorporation of National Beauty Corp. FILED # C6243-87 -------- DEAN HELLER Secretary of State JUL 20 2001 202 North Carson Street CERTIFICATE OF IN THE OFFICE OF Carson City, Nevada 89701-4201 AMENDMENT Dean Heller (775) 684-5708 (Pursuant to NRS 78.385 and 78.390) DEAN HELLER, SECRETARY OF STATE Important: Read attached instructions before completing CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION ----------------------------------------------------- FOR NEVADA PROFIT CORPORATIONS ------------------------------ (PURSUANT TO NRS 78.385 AND 78.390 - AFTER ISSUANCE OF STOCK) - REMIT IN DUPLICATE - 1. Name of corporation: NATIONAL BEAUTY CORP. 2. The articles have been amended as follows (provide article numbers, if available): 200-1 REVERSE STOCK SPLIT, WITH NO FRACTIONARY SHARES THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK OF THE CORPORATION AFTER THE CHANGE ADOPTED HEREBY IS 100,000,000. THE CHANGE SHALL BE EFFECTIVE ON JULY 30, 2001 APPROVAL OF A MAJORITY OF THE STOCKHOLDERS ISSUED SHARES HAVE BEEN OBTAINED. 3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation have voted in favor of the amendment is: 66%* 4. Signatures (Required): /s/ Edward Anthony Roth /s/ Alisha Roth - ----------------------- --------------- President or Vice President Secretary or Asst. Secretary *If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless of limitations or restrictions on the voting power thereof. IMPORTANT: Failure to include any of the above information and remit the proper fees may cause this filing to be rejected. EX-4.1 11 doc10.txt FORM OF COMMON STOCK Exhibit 4.1 Form of Common Stock Certificate of National Beauty, Inc. FORM OF STOCK CERTIFICATE NUMBER PARVALUE $.001 SHARES NATIONAL BEAUTY CORP. --------------------- INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA CUSIP 63486Q COMMON STOCK SEE REVERSE FOR CERTAIN DEFINITIONS 20 2 THIS CERTIFIES THAT IS THE OWNER OF FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, of National Beauty Corp., Transferable only on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar. WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers. Dated National Beauty Corp. CORPORATE SEAL NEVADA President Secretary EX-4.2 12 doc11.txt WARRANT AGREEMENT Exhibit 4.2 Warrant Agreement WARRANT AGREEMENT ----------------- WARRANT AGREEMENT dated as of _________, 2002, between National Beauty Corp., a Nevada corporation, (the "Company"), and the Warrant Agent (the "Warrant Agent") whose name, address and signature are set forth below. WHEREAS, the Company proposes to issue Common Stock Purchase Warrants, as hereinafter described (the "Warrants"), to Warrant Holders to purchase up to an aggregate of 4,000,000 shares (subject to adjustment as provided herein) of its Common Stock, $.001 par value per share (the "Common Stock") (the shares of Common Stock issuable on exercise of the Warrants being referred to herein as the "Warrant Shares"). NOW, THEREFORE, in consideration of the foregoing and for the purposes of defining the terms and provisions of the Warrants and the respective rights and obligations thereunder of the Company and the registered owners of the Warrants (the "Holders"), the Company and the Warrant Agent hereby agree as follows: 1. APPOINTMENT OF WARRANT AGENT ------------------------------- The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the instructions set forth in this Agreement, for the benefit of the Holders and the Company and the Warrant Agent hereby accepts such appointment. 2. TRANSFERABILITY AND FORM OF WARRANT --------------------------------------- 2.1 REGISTRATION. The Warrants shall be numbered and shall be registered in a Warrant register as they are issued. The Company and the Warrant Agent shall be entitled to treat the Holder of any Warrant as the owner in fact thereof for all purposes, and shall not be bound to recognize any equitable or other claim to or interest in such Warrant on the part of any other person. 2.2 The Warrants shall be transferable on the books of the Company maintained at the principal office of the Warrant Agent upon delivery thereof duly endorsed by the Holder or by his duly authorized attorney or representative, or accompanied by proper evidence succession, assignment or authority to transfer. In all cases of transfer by an attorney, the original power of attorney, duly approved, or a copy thereof, duly certified, shall be deposited and remain with the Warrant Agent. In case of transfer by executors, administrators, guardians or other legal representatives, duly authenticated evidence of their authority shall be produced, and may be required to be deposited and remain with the Warrant Agent in its discretion. Upon any registration of transfer the Warrant Agent shall countersign and deliver a new Warrant or Warrants to the persons entitled thereto. 2.3 FORM OF WARRANT. The text of the Warrant and the Subscription Form shall be substantially as set forth in Exhibit "A" attached hereto. The price per Warrant Share and the number of Warrant Shares issuable upon exercise of each Warrant are subject to adjustment upon the occurrence of certain events, all as hereinafter provided. The Warrant shall be executed on behalf of the Company by its Chairman of the Board or President under its corporate seal reproduced thereon and attested by its Secretary or an Assistant Secretary. The signature of any such officers on the Warrants may be manual or facsimile. Warrants bearing the manual or facsimile signature of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any one of them shall have ceased to hold such office prior to the delivery of such Warrants, or did not hold such office on the date of this Agreement. Warrants shall be dated as of the date of countersignature thereof by the Warrant Agent either upon initial issuance or upon division, exchange, substitution or transfer. Warrants shall be numbered serially. 3. COUNTERSIGNATURE OF WARRANTS ------------------------------ The Warrants shall be countersigned by the Warrant Agent (or any successor to the Warrant Agent then acting as Warrant Agent under this Agreement) and shall not be valid for any purpose unless so countersigned. Warrants may be countersigned, however, by the Warrant Agent (or by its successor as Warrant Agent hereunder) and may be delivered by the Warrant Agent notwithstanding that the persons whose manual or facsimile signatures appear thereon as proper officers of the Company shall have ceased to be such officers at the time of such countersignature, issuance or delivery. The Warrant Agent shall, upon written instruction of the Chairman of the Board, President, or Secretary of the Company, countersign, issue and deliver Warrants entitling the Holders thereof to purchase not more than 4,000,000 of Warrant Shares (subject to Section 7 hereof and adjustment pursuant to Section 10 hereof) and shall countersign and deliver Warrants as otherwise provided in this Agreement. 4. EXCHANGE OF WARRANT CERTIFICATES ----------------------------------- Each Warrant certificate may be exchanged for another certificate or certificates entitling the Holder thereof to purchase a like aggregate number of Warrant Shares as the certificate or certificates surrendered then entitle such Holder to purchase. Any Holder desiring to exchange a Warrant certificate or certificates shall make such request in writing delivered to the Warrant Agent and shall surrender, properly endorsed, the certificate or certificates to be so exchanged. Thereupon, the Warrant Agent shall countersign and deliver to the person entitled thereto a new Warrant certificate or certificates, as the case may be, as so requested. 5. TERM OF WARRANTS: EXERCISE OF WARRANTS ------------------------------------------- 5.1 TERM OF WARRANTS. Subject to the terms of this Agreement, each Holder shall have the right, which may be exercised commencing on issuance and until the close of business on ___________, 2005 to purchase from the Company the number of fully paid and non-assessable Warrant Shares which the Holder may at the time be entitled to purchase on exercise of such Warrants. 5.2 EXERCISE OF WARRANTS. Warrants may only be exercised for the purchase of whole Warrant Shares. Warrants may be exercised upon surrender to the Company at the principal office of the Warrant Agent of the certificate or certificates evidencing the Warrants to be exercised (except as otherwise provided below), together with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to the Warrant Agent for the account of the Company of the Warrant Price (as defined in and determined in accordance with the provisions of Sections 9 and 10 hereof), for the number of Warrant Shares in respect of which such Warrants are then exercised. Subject to Section 6 hereof, upon such surrender of Warrants and payment of the Warrant Price as aforesaid, the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Holder, and in such name or names as the Holder may designate, a certificate or certificates for the number of full Warrant Shares so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 hereof, in respect of any fractional Warrant Shares otherwise issuable upon such exercise of Warrants. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of such Warrant Price, as aforesaid; provided, however, that if, at the date of surrender of such Warrants and payment of such Warrant Price, the transfer books for the Warrant Shares or other class of stock purchasable upon the exercise of such Warrants shall be closed, the certificates for the Warrant Shares in respect of which such Warrants are then exercised shall be issuable as of the date on which such books shall next be opened and until such date the Company shall be under no duty to deliver any certificate for such Warrant Shares provided further, however that the transfer books of record, unless otherwise required by law, shall not be closed at any one time for a period of longer than twenty days. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Holders thereof, either in full or from time to time in part, and in the event that a certificate evidencing Warrants is exercised in respect of less than all of the Warrant Shares purchasable on such exercise at any time prior to the date of expiration of the Warrant, a new certificate evidencing the remaining Warrant or Warrants will be issued, and the Warrant Agent is hereby irrevocably authorized to countersign and to deliver the required new Warrant certificate or certificates pursuant to the provisions of this Section and of Section 3 hereof; and the Company, whenever required by the Warrant Agent will supply the Warrant Agent with Warrant certificates duly executed on behalf of the Company for such purpose. 6. PAYMENT OF TAXES ------------------ The Company will pay all documentary stamp taxes, if any, attributable to the initial issuance of Warrant Shares upon the exercise of Warrants; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issue or deliver of any Warrants or certificates for Warrant Shares in a name other than that of the registered Holder of Warrants in respect of which such Warrants Shares are issued. 7. MUTILATED OR MISSING WARRANTS -------------------------------- In case any of the certificates evidencing the Warrants shall be mutilated, lost, stolen or destroyed the Company may in its discretion issue and the Warrant Agent shall countersign and deliver in exchange and substitution for and upon cancellation of the mutilated Warrant certificate, or in lieu of and substitution for the Warrant certificate lost, stolen or destroyed, a new Warrant certificate of like tenor and representing an equivalent right or interest; but only upon receipt of evidence satisfactory to the Company and the Warrant Agent of such loss, theft or destruction of such Warrant and indemnity if requested, also satisfactory to them. An applicant for such a substitute Warrant certificate shall also comply with such other reasonable regulations and pay such other reasonable charges as the Company or the Warrant Agency may prescribe. 8. RESERVATION OF WARRANT SHARES; PURCHASE OF WARRANTS --------------------------------------------------------- 8.1 RESERVATION OF WARRANT SHARES. There have been reserved, and the Company shall at all times keep reserved and available, out of its authorized Common Stock, such number of shares of Common Stock as shall be sufficient to provide for the exercise of the rights of purchase represented by the outstanding Warrants. The Transfer Agent for the Common Stock and every subsequent transfer agent for any shares of the Company's capital stock issuable upon the exercise of any of such rights of purchase will be irrevocably authorized and directed at all times to reserve such number of authorized shares as shall be requisite for such purpose. The Company will keep a copy of this Agreement on file with the Transfer Agent or its successors and with every subsequent transfer agent for any shares of the Company's capital stock issuable upon the exercise of the rights of purchase represented by the Warrants. The Warrant Agent is hereby irrevocably authorized to requisition from time to time from the Transfer Agent or its successors the stock certificates required to honor outstanding Warrants upon exercise thereof in accordance with the terms of this Agreement. The Company will supply such Transfer Agent or its successors with duly executed stock certificates for such purposes and will provide or otherwise make available any cash which may be payable as provided in Section 12 hereof. All Warrants surrendered in the exercise of the rights thereby evidenced shall be canceled by the Warrant Agent and shall thereafter be delivered to the Company. 8.2 PURCHASE OF WARRANTS BY THE COMPANY. The Company shall have the right, except as limited by law, other agreement or herein, to purchase or otherwise acquire Warrants at such times, in such manner and for such consideration as it may deem appropriate. 8.3 CANCELLATION OF WARRANTS. In the event the Company shall purchase or otherwise acquire Warrants, the same shall thereupon be delivered to the Warrant Agent and be cancelled by it and retired. The Warrant Agent shall cancel any Warrants surrendered for exchange, substitution, transfer or exercise in whole or in part. 9. WARRANT PRICE The price per share at which Warrant Shares shall be purchasable upon exercise of Warrants (the "Warrant Price") shall be $.25 per share from the date that the Warrants are issued until ________, 2005 subject to adjustment pursuant to Section 10 hereof. 10. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES The number and kind of securities purchasable upon the exercise of the Warrants and the Warrant Price shall be subject to adjustment from time to time upon the happening of certain events, as hereinafter defined. 10.1 MECHANICAL ADJUSTMENTS. Except as provided below, the number of Warrant Shares purchasable upon the exercise of each Warrant and the Warrant Price shall be subject to adjustment as follows: (A) In case the Company shall (i) pay a dividend in shares of Common Stock or make a distribution in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock, (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, or (iv) issue by reclassification of recapitalization of its shares of Common Stock other securities of the Company, the number of Warrant Shares purchasable upon exercise of each Warrant immediately prior thereto shall be adjusted so that the Holder of each Warrant shall be entitled to receive the kind and number of Warrant Shares or other securities of the Company which he would have owned or have been entitled to receive after the happening of any of the events described above, had such Warrant been exercised immediately prior to the happening of such event or any record date with respect thereto. An adjustment made pursuant to this paragraph (a) shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. (B) In case the Company shall distribute to all holders of its shares of Common Stock evidence of its indebtedness or assets (excluding cash dividends or distributions payable out of consolidated earnings or earned surplus and dividends or distributions referred to in paragraph (a) above) or rights, options or warrants or convertible or exchangeable securities containing the right to subscribe for or purchase shares of Common Stock, then in each case the number of Warrant Shares thereafter purchasable upon the exercise of each Warrant, by a fraction, of which the numerator shall be the then current market price per share of Common Stock (as defined in Section 10.1 (c) hereof) on the date of such distribution, and of which the denominator shall be the then current market price per share of Common Stock, less the then fair value (as determined by the Board of Directors of the Company, whose determination shall be conclusive) of the portion of the assets or evidences of indebtedness so distributed or of such subscription rights, options or warrants, or of such convertible or exchangeable securities applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made, and shall become effective on the date of distribution retroactive to the record date for the determination of stockholders entitled to receive such distribution. (C) For the purpose of any computation under Section 10.1(b) and Section 12 hereof, the current market price per share of Common Stock at any date shall be the average closing bid price of the Common Stock (if then traded in the over-the-counter market) or the average closing price of the Common Stock (if then traded on NASDAQ's National Market System or on a national securities exchange) for the five consecutive trading days ending the day prior to the date as of which such computation is made. If the Common Stock is not so listed or admitted to unlisted trading privileges and bid or closing prices are not so reported, the current market price per share shall be determined in such reasonable manner as may be prescribed by the Board of Directors of the Company. (D) No adjustment in the number of Warrant Shares purchasable hereunder shall be required unless such adjustment would require an increase or decrease of at least 1% in the number of Warrant Shares purchasable upon the exercise of each Warrant; provided, however, that any adjustments which by reason of this Section 10.1(d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations shall be made to the nearest one-thousandth of a share. (E) Whenever the number of Warrant Shares purchasable upon the exercise of each Warrant is adjusted, as herein provided, the Warrant Price payable upon exercise of each Warrant in effect immediately prior to such adjustment, shall be adjusted by multiplying such Warrant Price immediately prior to such adjustment by a fraction, of which the numerator shall be the number of Warrant Shares purchasable upon the exercise of each Warrant immediately prior to such adjustment, and of which the denominator shall be the number of Warrant Shares so purchasable immediately thereafter. (F) For the purpose of this Section 10.1, the term "shares of Common Stock" shall mean (i) the class of stock designated as the Common Stock of the Company at the date of this Agreement, or (ii) any other class of stock resulting from successive changes or reclassification of such shares consisting solely of changes in par value, or from par value to no par value, or from no par value to par value. In the event that at any time, as a result of an adjustment made pursuant to paragraph (a) above, the Holders shall become entitled to purchase any shares of the Company other than shares of Common Stock, thereafter the number of such other shares so purchasable upon exercise of each Warrant and the Warrant Price of such shares shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Warrants Shares contained in Section 10.1(a) through Section 10.1(e), inclusive, above, and the provisions of Section 5 and Sections 10.2 and 10.3 hereof, with respect to the Warrant Shares, shall apply on like terms to any such other shares. 10.2 NOTICE OF ADJUSTMENT. Whenever the number Warrant Shares purchasable upon the exercise of each Warrant or the Warrant Price of such Warrant Shares is adjusted, as herein provided, the Company shall cause the Warrant Agent promptly to mail by first class mail, postage repaid, to each Holder notice of such adjustment or adjustments, and shall deliver to the Warrant Agent a certificate of a firm of independent public accountants selected by the Board of Directors of the Company (who may be the regular accountants employed by the Company) setting forth the number of Warrant Shares purchasable upon the exercise of each Warrant and the Warrant Price of such Warrant Shares after such adjustment, setting forth a brief statement of the facts requiring such adjustment and setting forth the computation by which such adjustment was made. Such certificate shall be conclusive of the correctness of such adjustment. The Warrant Agent shall be entitled to rely on such certificate and shall be under no duty or responsibility with respect to any such certificate, except to exhibit the same, from time to time, to any Holder desiring an inspection thereof during reasonable business hours. The Warrant Agent shall not at any time be under any duty or responsibility to any Holders to determine whether any facts exist which may require any adjustment of the Warrant Price or the number of Warrant Share or other stock or property purchasable on exercise thereof, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed in making such adjustment. 10.3 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Subsection 10.1, no adjustment in respect of any cash dividend shall be made during the term of a Warrant or upon the exercise of a Warrant. 10.4 PRESERVATION OF PURCHASE RIGHTS UPON CONSOLIDATION, ETC. In case of any consolidation of the Company with or merger of the Company into another corporation, or in case of any sale or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety, the Company or such successor or purchasing corporation, as the case may be, shall execute with the Warrant Agent an agreement that each Holder shall have the right thereafter upon payment of the Warrant Price in effect immediately prior to such action to purchase upon exercise of each Warrant the kind and amount of shares and other securities and property which he would have owned or have been entitled to receive after the happening of such consolidation, merger, sale or conveyance, had such Warrant been exercised immediately prior to such action. The Company shall mail by first class mail, postage prepaid, to each Holder, notice of the execution of any such agreement. Such agreement shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 10. The provision of this Section 10.4 shall similarly apply to successive consolidations, mergers, sales or conveyances. The Warrant Agent shall be under no duty or responsibility to determine the correctness of any provisions contained in any such agreement relating either to the kind or amount of shares of stock or other securities or property receivable upon exercise of Warrants or with respect to the method employed and provided therein for any adjustments. 10.5 REDUCTION OF WARRANT PRICE. The Company shall have the right to reduce the Warrant Price at any time upon thirty days prior written notice to all Holders. 10.6 STATEMENT ON WARRANTS. Irrespective of any adjustments in the Warrant Price or the number of kind of shares purchasable upon the exercise of the Warrants, Warrant certificates theretofore or thereafter issued may continue to express the same price and number and kind of shares as are stated in the Warrant certificates initially issuable pursuant to this Agreement. 11. EXPIRATION OF WARRANTS At the close of business on ___________, 2005 all outstanding Warrants shall become void, and all rights of all Holders thereof and thereunder and under this Agreement shall cease. 12. FRACTIONAL SHARES The Company shall not be required to issue fractional Warrant Shares on the exercise of Warrants. The number of full Warrant Shares which shall be issuable upon the exercise of Warrants shall be computed on the basis of the aggregate number of Warrant Shares purchasable on exercise of the Warrant so presented. If any fraction of a Warrant Share would, except for the provisions of this Section 12, be issuable on the exercise of any Warrant (or specified portion thereof), the Company shall pay an amount in cash equal to the then current market price per Warrant Share (as defined in Section 10.1(c) above) multiplied by such fraction. 13. NO RIGHTS AS STOCKHOLDERS; NOTICE TO HOLDERS Nothing contained in this Agreement or in any of the Warrants shall be construed as conferring upon the Holders or their transferees the right to vote or to receive dividends or to consent to or receive notice as stockholders in respect of any meeting of stockholders for the election of Directors of the Company or any other matter, or any rights whatsoever as stockholders of the Company. If, however, at any time prior to the expiration of the Warrants and prior to their exercise, any of the following events shall occur: (A) the Company shall declare any dividend payable in any securities upon its shares of Common Stock, or make any distribution (other than a cash dividend) to the Holders of its shares of Common Stock; or (B) the Company shall offer to the holders of its shares of Common Stock any additional shares of Common Stock or securities convertible into shares of Common Stock or any rights to subscribe thereto; or (C) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation, merger, or sale of all or substantially all of its property, assets, and business as an entirety) shall be proposed; then, in any one or more of said events, the Company shall (i) give notice in writing of such event to the Warrant Agent and the Holders as provided in Section 19 hereof and (ii) cause notice of such event to be published once in one or more newspapers printed in the English language and in general circulation in Carson City, Nevada such giving of notice and publication to be completed at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders entitled to such dividend, distribution, or subscription rights, or for the determination of stockholders entitled to vote on such proposed dissolution, liquidation or winding up. Such notice shall specify such record date or the date of closing the transfer books, as the case may be. Failure to publish or mail such notice or any defect therein or in the publication or mailing thereof shall not affect the validity of any action taken in connection with such dividend, distribution or subscription rights, or proposed dissolution, liquidation or winding up. 14. DISPOSITION OF PROCEEDS ON EXERCISE OF WARRANTS; INSPECTION OF WARRANT AGREEMENT The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently pay the Company all monies received by the Warrant Agent for the purchase of the Warrant Shares through the exercise of such Warrants. The Warrant Agent shall keep copies of this Agreement and any notices given or received hereunder available for inspection by the Holders during normal business hours at its principal office. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Agreement as the Warrant Agent may request. 15. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT Any corporation into which the Warrant Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party, shall be the successor to the Warrant Agent hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Warrant Agent under the provisions of Section 17 hereof. In case at the time such successor the Warrant Agent shall succeed to the agency created by this Agreement, any of the Warrants shall have been countersigned but not delivered, any such successor to the Warrant Agent may adopt the countersignature of the original Warrant Agent and deliver such Warrants so countersigned; and in case at that time any of the Warrants shall not have been countersigned, any successor the Warrant Agent may countersign such Warrants either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases Warrants shall have the full force provided in the Warrants and in this Agreement. In case at any time the name of the Warrant Agent shall be changed and at such time any of the Warrants shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignatures under its prior name and deliver such Warrants so countersigned; and in case at that time any of the Warrants shall not have been countersigned, the Warrant Agent may countersign such Warrants wither in its prior name or in its changed name; and in all such cases such Warrants shall have the full force provided in the Warrants and in this Agreement. 16. CONCERNING THE WARRANT AGENT ------------------------------- The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the Holders, by their acceptance of Warrants, shall be bound: 16.1 CORRECTNESS OF STATEMENTS. The statements contained herein and in the Warrants shall be taken as statements of the Company and the Warrant Agent assumes no responsibility for the correctness of any of the same except such as describe the Warrant Agent or action taken by it. The Warrant Agent assumes no responsibility with respect to the distribution of the Warrants except as herein otherwise provided. 16.2 BREACH OF COVENANTS. The Warrant Agent shall not be responsible for any failure of the Company to comply with the covenants contained in this Agreement or in the Warrants to be complied with by the Company. 16.3 PERFORMANCE OF DUTIES. The Warrant Agent may execute any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents (which shall not include its employees). 16.4 RELIANCE ON COUNSEL. The Warrant Agent may consult at any time with legal counsel satisfactory to it (who may be counsel for the Company), and the Warrant Agent shall incur no liability or responsibility to the Company or to any Holder in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the opinion or the advice of such counsel. 16.5 PROOF OF ACTIONS TAKEN. Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed conclusively to be proved and established by a certificate signed by the Chairman of the Board, President, Treasurer or Secretary of the Company and delivered to the Warrant Agent; and such certificate shall be full authorization to the Warrant Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. 16.6 COMPENSATION. The Company agrees to pay the Warrant Agent reasonable compensation for all services rendered by the Warrant Agent in the performance of its duties under this Agreement, to reimburse the Warrant Agent for all expenses, taxes and governmental charges and other charges of any kind and nature incurred by the Warrant Agent in the performance of its duties under this Agreement, and to indemnify the Warrant Agent and hold it harmless against any and all liabilities, including judgments, costs and fees arising as a result of the Warrant Agent's negligence or bad faith. 16.7 LEGAL PROCEEDINGS. The Agent shall be under no obligation to institute any action, suit or legal proceeding or to take any other action likely to involve expense unless the Company or one or more Holders shall furnish the Warrant Agent with reasonable security and indemnity for any costs and expenses which may be incurred, but the provision shall not affect the power of the Warrant Agent to take such action as the Warrant Agent may consider proper, whether with or without any such security or indemnity. All rights of action under this Agreement or under any of the Warrants may be enforced by the Warrant Agent without possession of any of the Warrants or the production thereof at any trial or other proceeding relative thereto, and any such action, suit or proceeding instituted by the Warrant Agent shall be brought in its name as Warrant Agent, and any recovery of judgment shall be for the ratable benefit of the Holders, as their respective rights or interests may appear. 16.8 OTHER TRANSACTIONS IN SECURITIES OF COMPANY. The Warrant Agent and any stockholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants, or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity. 16.9 LIABILITY OF WARRANT AGENT. The Warrant Agent shall act hereunder solely as agent, and its duties shall be determined solely by the provisions thereof. The Warrant Agent shall not be liable for anything which it may do or refrain from doing in connection with this Agreement except for its own negligence or bad faith. 16.10 RELIANCE ON DOCUMENTS. The Warrant Agent will not incur any liability or responsibility to the Company or to any Holder for any action taken in reliance on any notice, resolution, waiver, consent, order, certificate, or other paper, document of instrument reasonably believed by it to be genuine and to have been signed, sent or present by the proper party or parties. 16.11 VALIDITY OF AGREEMENT, ETC. The Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Warrant (except its countersignature thereof) or in respect of the necessity or the extent of any adjustment to the Warrant Price or the number of Warrant Shares purchasable under a Warrant; nor shall the Warrant Agent by any act hereunder be deemed to make any representation or warranty as to the authorization, reservation, value or registration under securities laws of any Warrant Shares (or other stock) to be issued pursuant to this Agreement or any Warrant, as to whether any Warrant Share (or other stock) will, when issued, be validly issued, fully paid and non-assessable, or as to the Warrant Price or the number of amount of Warrant Shares or other securities or other property issuable upon exercise of any Warrant of the method employed in making any adjustment to the foregoing. 16.12 INSTRUCTIONS FROM COMPANY. The Warrant Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Chairman of the Board, the President, the Secretary or the Treasurer of the Company and, with respect to Section 2.2 hereof, the representative, and to apply to such officers or the representative, as the case may be, for advice or instructions in connection with its duties, and shall not be liable for any action taken or suffered to be taken by it in good faith in accordance with instruction of any such officer or officers or the representative, as the case may be. 17. CHANGE OF WARRANT AGENT -------------------------- The Warrant Agent may resign and be discharged from all further duties and liabilities under this Agreement (except liabilities arising as a result of the Warrant Agent's own negligence or bad faith) by giving to the Company thirty days prior notice in writing. The Warrant Agent may be removed by like notice to the Warrant Agent from the Company. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Warrant Agent. If the Company shall fail to make such appointment within a period of thirty days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent or by any Holder (who shall with such notice submit his Warrant for inspection by the Company), then the Holder may apply to any court of competent jurisdiction for the appointment of a successor to the Warrant Agent. Any successor Warrant agent, whether appointed by the Company or such a court, shall be a bank or trust company, in good standing, incorporated under the laws of the United States of America or any state thereof and having at the time of its appointment as Warrant agent a combined capital and surplus of a least $50,000,000, or a stock transfer company. After acceptance in writing of such appointment is received by the Company, the successor agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent without further act or deed; but the former Warrant Agent shall deliver and transfer to the successor Warrant agent any property at the time held by it hereunder, and legally and validly execute and deliver any further assurance, conveyance, act or deed necessary for that purpose. Failure to file any notice provided for in this Section 17, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Warrant Agent or the appointment of the successor Warrant agent, as the case may be. In the event of such resignation or removal, the successor Warrant agent shall mail by first class mail, postage prepaid, to each Holder, written notice of such resignation or removal and the name and address of such successor Warrant agent. 18. IDENTITY OF TRANSFER AGENT ----------------------------- Forthwith upon the appointment of any subsequent transfer agent for the Common Stock or any other shares of the Company's capital stock issuable upon the exercise of the Warrants, the Company will file with the Warrant Agent a statement setting forth the name and address of such subsequent transfer agent. 19. NOTICES ------- Any notice pursuant to the Agreement by the Company, or by any Holder to the Warrant Agent, or by the Warrant Agent or by any Holder to the Company, shall be in writing and shall be mailed first class, postage prepaid, or deliver (a) to the Company, at its offices Attention: President; (b) the Holder of the Warrant; at the address shown on the records of the Company or (c) to Warrant Agent, at its offices. Each party hereto may from time to time change address to which notices to it are to be delivered or mailed hereunder by notice in writing to the other party. Any notice mailed pursuant to this Agreement by the Company or the Warrant Agent to the Holders shall be in writing and shall be mailed first class, postage prepaid, or delivered to such Holders at their respective addresses on the books of the Warrant Agent. 20. SUPPLEMENTS AND AMENDMENTS ---------------------------- The company and the Warrant Agent may from time to time supplement or amend this Agreement, in order to cure any ambiguity or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provision herein, or to make any other provisions in regard to matters or questions arising hereunder which the Company and the Warrant Agent may deem necessary or desirable, and which shall not be inconsistent with the provisions of the Warrants and which shall not adversely affect the interests of the Holders; provided, however, that this Agreement shall not otherwise be supplemented or amended in any respect except with the consent in writing of the Holders of Warrants representing not less than 50% of the Warrants then outstanding; and provided further that no change in the number or nature of the securities purchasable upon the exercise of any Warrant, or the Purchase Price therefore shall be made without the consent in writing of the Holder of the certificate representing such Warrant, other than changes as are specifically prescribed by this Agreement as originally executed. 21. SUCCESSORS ---------- All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns. 22. APPLICABLE LAW --------------- This Agreement and each Warrant issued hereunder shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to any principles of conflicts of law. 23. BENEFITS OF THIS AGREEMENT ----------------------------- Nothing in this Agreement shall be construed to give any person or corporation other than the Company, the Warrant Agent and the Holders any legal or equitable right, remedy or claim under this Agreement, this Agreement shall be for the sole and exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrants. 24. COUNTERPARTS ------------ This Agreement may be executed in any number of counterparts, and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 25. CAPTIONS -------- The captions of the Sections and Subsections of this Agreement have been inserted for convenience only and shall have no substantive effect. 26. TERMINATION ----------- This Agreement shall terminate at the close of business on ________, 2005 or such earlier date upon which all Warrants have been exercised, except that the Warrant Agent shall account to the Company for any cash held by the Warrant Agent after the termination hereof. [rest of page intentionally left blank] IN WITNESS WHEREOF this Warrant Agreement has been executed by the undersigned to be effective as of the date set forth above. National Beauty Corp. By: ______________ Name: Edward Roth Title: President Warrant Agent By: _____________ Name: _____________ Title: ______________ _____________________ EX-4.3 13 doc12.txt COMMON STOCK PURCHASE WARRANT Exhibit 4.3 Common Stock Purchase Warrant COMMON STOCK PURCHASE WARRANT ----------------------------- National Beauty Corp., a Nevada corporation Expiration Date: _______, 2005 COMMON STOCK PURCHASE WARRANT ----------------------------- National Beauty Corp., a Nevada corporation Expiration Date: _______, 2005 No. ______ Warrant for subscription to purchase $.001 par value common stock of National Beauty Corp., a Nevada corporation (the "Company") as set forth more fully in that certain Warrant Agreement dated _________, 2002 between the Company and the Warrant Agent. This is to certify that the holder named below, or assigns, is entitled to subscribe, at the rate of Twenty-Five Cents ($.25) per share, for _____________________ shares of $.001 par value common stock of the Company upon the following conditions: The right of subscription can be exercised only by the surrender of this warrant, with the form of subscription on the reverse side hereof duly signed, at the office of the Company wherever located or at the principal place of business of the Company in the State of Florida, as shown from time to time by the records of the Nevada Secretary of State, accompanied by cash or certified funds in payment for said subscription at the rate of Twenty Five Cents ($.25) per share, whereupon the subscriber will become entitled to the issuance of a certificate or certificates for the shares of said stock so subscribed and paid for. If said right of subscription is not exercised in the manner above provided this warrant shall become and be wholly void and of no value, and the right of subscription evidenced hereby shall wholly cease and terminate. This warrant may be transferred on surrender of this warrant, properly endorsed using the form of assignment on the reverse hereof, and is divisible on surrender, at either of said offices of the Company, in which case a new warrant or warrants will be issued. On the reverse side hereof are two forms: (1) A form of subscription, to be executed by the shareholder named below or the shareholder's assignee; and (2) A form of assignment, to be executed by such shareholder if the shareholder wishes to assign the right to subscribe. Dated: ____________, 2002 National Beauty Corp., a Nevada corporation By: __________________ Name: Edward Roth Title: President Name & Address of Holder (Reverse Side of Common Stock Purchase Warrant) SUBSCRIPTION AGREEMENT (Do not execute the assignment if you execute this subscription.) Payment Should Accompany This Subscription Agreement. Make Checks Payable to National Beauty Corp., a Nevada corporation Date _______________. National Beauty Corp., a Nevada corporation: The undersigned hereby subscribes for the stock covered by this warrant. Subscriber's signature: _____________________ Printed name in full: _______________________ Telephone Number: _______________________ Mailing address for stock certificate unless otherwise ordered. ______________________ ______________________ ______________________ ASSIGNMENT (Do not execute this assignment if you execute the subscription) National Beauty Corp., a Nevada corporation: Date _______________. For value received the rights described in this warrant, together with all right, title and interest therein, are hereby assigned to ____________________________________________ [Name], _____________________________________________________________________ [Address]. Signature of holder: ___________________________________ Printed name in full: __________________________________ Witness: _____________________ THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY. EX-4.4 14 doc13.txt CERTIFICATE OF DESIGNATION Exhibit 4.4 Certificate of Designation of the Rights and Preferences of the Series A Convertible Preferred Stock of National Beauty Corp. CERTIFICATE OF DESIGNATION OF THE RIGHTS AND PREFERENCES OF THE SERIES A CONVERTIBLE PREFERRED STOCK OF NATIONAL BEAUTY CORP. WE, Edward Roth and Alisha Roth, being the President and Secretary, respectively, of National Beauty Corp., a corporation organized and existing under the laws of Nevada (the "Corporation"), DO HEREBY CERTIFY that, pursuant to the authority conferred on the Board of Directors by the Certificate of Incorporation and Section 78.195 of the Corporation Law of Nevada, the Board of Directors, by unanimous written consent on October 26, 1998, adopted the following resolution providing for the issuance of a series of Preferred Stock: WHEREAS, the Articles of Incorporation of the Corporation, as amended, provide that the Corporation has authorized One Hundred Million (100,000,000) shares of $.001 par value common stock ("Common Stock") and Fifty Million (50,000,000) shares of $.001 par value preferred stock (?Preferred Stock@). The Bylaws and the Articles of Incorporation of the Corporation, as amended, further provide that the designation, powers, preferences and relative participating, option or other special rights and qualification, limitations or restrictions of the shares of such Preferred Stock may be issued from to time in one or more series, each of such series to have such voting powers, designation, preferences, and relative participating, optional or other special rights and the qualifications, limitations or restrictions thereof, as expressed herein or in a resolution or resolutions, providing for the issuance of such series, adopted by the Board of Directors; and NOW, THEREFORE, BE IT: RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation by its Articles of Incorporation, a series of preferred stock of the Corporation, be and is hereby created out of the Preferred Stock, such series to be designated Series A Convertible Preferred Stock (the "Series A Preferred Stock"), to consist of Fifty Million (50,000,000) shares of which the preferences and relative other rights, and the qualifications, limitations or restrictions thereof (in addition to those set forth in the Corporation's Articles of Incorporation), shall be as follows: The powers, preferences and rights granted to the Series A Preferred (as defined below) or the holders thereof are as follows: 1. Designation and Rank. The series of Preferred Stock shall be designated -------------------- the "Series A Convertible Preferred Stock" ("Series A Preferred") and shall consist of 50,000,000 shares. The Series A Preferred and any other series of Preferred Stock authorized by the Board of Directors of this Corporation are hereinafter referred to as "Preferred Stock" or "Preferred." The Series A Preferred shall be senior to the common stock and all other shares of Preferred Stock that may be later authorized. 2. Dividend Rate and Rights. The holders of the Series A Preferred shall be ------------------------ entitled to receive Common Stock dividends or other distributions when, as, and if declared by the directors of the Corporation, with the holders of the Common Stock on an as converted basis. 3. Conversion intoCommon Stock. --------------------------- (a) Right to Convert. Each share of Series A Preferred shall be ---------------- convertible, at the option of the holder thereof, at any time after the date of --- issuance (the "Conversion Date") into ten (10) shares of fully paid and nonassessable shares of Common Stock (the "Conversion Ratio"). (b) Mechanics of Conversion. Before any holder shall be entitled to ----------------------- convert, he shall surrender the certificate or certificates representing Series A Preferred to be converted, duly endorsed or accompanied by proper instruments of transfer, at the office of the Corporation or of any transfer agent, and shall give written notice to the Corporation at such office that he elects to convert the same. The Corporation shall, as soon as practicable thereafter, issue a certificate or certificates for the number of shares of Common Stock to which the holder shall be entitled. The Corporation shall, as soon as practicable after delivery of such certificates, or such agreement and indemnification in the case of a lost, stolen or destroyed certificate, issue and deliver to such holder of Series A Preferred a certificate or certificates for the number of shares of Common Stock to which such holder is entitled as aforesaid and a check payable to the holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of Common Stock. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Series A Preferred to be converted. (c) Adjustments to Conversion Ratio. ------------------------------- (1) Merger or Reorganization. In case of any consolidation or merger of the ------------------------ Corporation as a result of which holders of Common Stock become entitled to receive other stock or securities or property, or in case of any conveyance of all or substantially all of the assets of the Corporation to another corporation, the Corporation shall mail to each holder of Series A Preferred at least thirty (30) days prior to the consummation of such event a notice thereof, and each such holder shall have the option to either (i) convert such holder's shares of Series A Preferred into shares of Common Stock pursuant to this Section 3 and thereafter receive the number of shares of stock or other securities or property to which a holder of the number of shares of Common Stock of the Corporation deliverable upon conversion of such Series A Preferred would have been entitled upon such consolidation, merger or conveyance, or (ii) exercise such holder's rights pursuant to Section 4(a). Unless otherwise set forth by the Board of Directors, the Conversion Ratio shall not be affected by a stock dividend or subdivision (stock split) on the Common Stock of the Corporation, or a stock combination (reverse stock split) or stock consolidation by reclassification of the Common Stock. However, once the Series A Preferred has been converted to Common Stock, it shall be subject to all corporate actions that affect or modify the common stock. (d) No Impairment. The Corporation will not, by amendment of its Articles ------------- of Incorporation, this Certificate of Designation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Section 3 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Series A Preferred against impairment. (e) Certificate as to Adjustments. Upon the occurrence of each adjustment ----------------------------- or readjustment of the Conversion Ratio of the Series A Preferred pursuant to this Section 3, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series A Preferred a certificate setting forth such adjustment or readjustment and the calculation on which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Series A Preferred, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Ratio for the Series A Preferred at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of the Series A Preferred. (f) Notices of Record Date. In the event of any taking by the Corporation ---------------------- of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarter) or other distribution, the Corporation shall mail to each holder of Series A Preferred at least ten (10) days prior to the date specified herein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution. (g) Common Stock Reserved. The Corporation shall reserve and keep available --------------------- out of its authorized but unissued Common Stock such number of shares of Common Stock as shall from time to time be sufficient to effect conversion of the Series A Preferred. 4. Liquidation Preference. ---------------------- (a) In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary (a "Liquidation"), the assets of the Corporation available for distribution to its stockholders shall be distributed as follows: (1) The holders of the Series A Preferred shall be entitled to receive, prior to the holders of the other series of Preferred Stock and prior and in preference to any distribution of the assets or surplus funds of the Corporation to the holders of any other shares of stock of the corporation by reason of their ownership of such stock, an amount equal to $1.00 per share with respect to each share of Series A Preferred, plus all declared but unpaid dividends with respect to such share. (2) If upon occurrence of a Liquidation the assets and funds thus distributed among the holders of the Series A Preferred shall be insufficient to permit the payment to such holders of the full preferential amount, then the entire assets and funds of the Corporation legally available for distribution shall be distributed among the holders of the Series A Preferred ratably in proportion to the full amounts to which they would otherwise be respectively entitled. (3) After payment of the full amounts to the holders of Series A Preferred as set forth above in paragraph (1), any remaining assets of the Corporation shall be distributed pro rata to the holders of the Preferred Stock and Common Stock (in the case of the Preferred Stock, on an "as converted" basis into Common Stock). (b) For purposes of this Section 4, and unless a majority of the holders of the Series A Preferred affirmatively vote or agree by written consent to the contrary, a Liquidation shall be deemed to include (i) the acquisition of the Corporation by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation) and (ii) a sale of all or substantially all of the assets of the Corporation, unless the Corporation's stockholders of record as constituted immediately prior to such acquisition or sale will, immediately after such acquisition or sale (by virtue of securities issued as consideration for the Corporation's acquisition or sale or otherwise) hold at least fifty percent (50%) of the voting power of the surviving or acquiring entity. (c) If any of the assets of the Corporation are to be distributed other than in cash under this Section 4, then the board of directors of the Corporation shall promptly engage independent competent appraisers to determine the value of the assets to be distributed to the holders of Preferred Stock or Common Stock. The Corporation shall, upon receipt of such appraiser's valuation, give prompt written notice to each holder of shares of Preferred Stock or Common Stock of the appraiser's valuation. 5. Voting Rights. Except as otherwise required by law, the holders of ------------- Series A Preferred and the holders of Common Stock shall be entitled to notice of any stockholders' meeting and to vote as a single class upon any matter submitted to the stockholders for a vote as follows: (i) the holders of each series of Preferred Stock shall have one vote for each full share of Common Stock into which a share of such series would be convertible on the record date for the vote, or, if no such record date is established, at the date such vote is taken or any written consent of stockholders is solicited; and (ii) the holders of Common Stock shall have one vote per share of Common Stock held as of such date. 6. Covenants. --------- (a) In addition to any other rights provided by law, the Corporation shall not, without first obtaining the affirmative vote or written consent of the holders of a majority of the outstanding shares of Series A Preferred, do any of the following: (1) take any action which would either alter, change or affect the rights, preferences, privileges or restrictions of the Series A Preferred or increase the number of shares of such series authorized hereby or designate any other series of Preferred Stock; (2) increase the size of any equity incentive plan(s) or arrangements; (3) make fundamental changes to the business of the Corporation; (4) make any changes to the terms of the Series A Preferred or to the Corporation's Articles of Incorporation or Bylaws, including by designation of any stock; (5) create any new class of shares having preferences over or being on a parity with the Series A Preferred as to dividends or assets, unless the purpose of creation of such class is, and the proceeds to be derived from the sale and issuance thereof are to be used for, the retirement of all Series A Preferred then outstanding; (6) accrue any indebtedness in excess of $1,000,000; (7) make any change in the size or number of authorized directors; (8) repurchase any of the Corporation's Common Stock; (9) sell, convey or otherwise dispose of, or create or incur any mortgage, lien, charge or encumbrance on or security interest in or pledge of, or sell and leaseback, all or substantially all of the property or business of the Corporation or more than 50% of the stock of the Corporation; (10) make any payment of dividends or other distributions or any redemption or repurchase of stock or options or warrants to purchase stock of the Corporation; or (11) make any sale of additional Preferred Stock. (7) Reissuance. No share or shares of Series A Preferred acquired by ---------- the Corporation by reason of conversion or otherwise shall be reissued as Series A Preferred, and all such shares thereafter shall be returned to the status of undesignated and unissued shares of Preferred Stock of the Corporation. 8. Directors. The holders of Series A Preferred and Common Stock voting --------- together as a class shall be entitled to elect the directors comprising the Board of Directors (and to fill any vacancies with respect thereto). The undersigned being the President and Secretary of the Company hereby declare under penalty of perjury that the foregoing is a true and correct copy of the Certificate of Designation of the Rights and Preferences of the Series A Convertible Preferred Stock of National Beauty Corp. duly adopted by the Board of Directors of the Company on October 26, 1998. By: /s/ Edward Roth --------------- Name: Edward Roth Title: President By: /s/Alisha Roth -------------- Name: Alisha Roth Title: Secretary EX-5.1 15 doc14.txt OPINION OF WEED & CO. LLP Exhibit 5.1 Opinion of Weed & Co. LLP re: Legality WEED & CO. LLP 4695 MacArthur Court, Suite 1430 Newport Beach, California 92660 Telephone (949) 475-9086 Facsimile (949) 475-9087 July ___, 2002 Board of Directors National Beauty Corp. 4818 West Commercial Blvd. Ft. Lauderdale, FL 33319 RE: Opinion of Counsel Greetings: We have acted as counsel to National Beauty Corp. (the "Company") in connection with the registration under the Securities Act of 1933, as amended (the "Act"), of 4,000,000 units, each unit consisting of one share of the Company's common stock and one warrant exercisable to purchase one share of common stock, and 1,325,000 shares of common stock to be sold by selling stockholders of the Company (collectively, the "Shares"). The Company and the selling stockholders will sell the shares upon the terms and subject to the conditions set forth in the Company's registration statement on Form SB-2 (the "Registration Statement"). In connection therewith, we have examined copies of the Company's Articles of Incorporation, Bylaws, the corporate proceedings with respect to the shares, and such other documents and instruments as we have deemed necessary or appropriate for the expression of the opinions contained herein. In such examination, we have assumed the genuineness of all signatures, the authenticity and completeness of all documents submitted to us as originals, the conformity to the original documents of all documents submitted to us as copies and the correctness of all statements of fact contained in such documents. Based on the foregoing, and having regard for such legal considerations as we have deemed relevant, we are of the opinion that the Shares, when sold in accordance with the terms and conditions set forth in the Registration Statement, will be duly and validly issued, fully paid and non-assessable. Very truly yours, /s/ Weed & Co. LLP -------------- Weed & Co. LLP EX-10.3 16 doc15.txt CONSULTING AGREEMENT Exhibit 10.3 Consultant Agreement between National Beauty Corp. and Ballantyne Capital Group, LLC BALLANTYNE CAPITAL GROUP, LLC www.ballantynecapital.com ------------------------- Consulting Agreement For: National Beauty Corp CONSULTANT AGREEMENT -------------------- Agreement made this 1st day of September or upon SB-2 effective date, 2002, between National Beauty Corp at 4818 West Commercial Blvd, Ft Lauderdale, FL 33319 (hereinafter referred to as "Corporation"), and Ballantyne Capital Group, LLC at 15800 John J Delaney Drive, Suite 325, Charlotte, NC 28277(hereinafter referred to as "Consultant). In consideration of the mutual promises contained in this Agreement, the contracting parties agree as follows: RECITALS: The Corporation desires to engage the services of the Consultant to act as special corporate development counsel for the Corporation and to perform consulting services regarding all phases of the Corporation's "Public Relations" in the area of investor relations and broker/dealer relations as such may pertain to the operation of the Corporation's business. The Consultant desires to consult with the Board of Directors, the Officers of the Corporation, and certain administrative staff members of the Corporation, and to undertake for the Corporation consultation as to the company's public relations activities involving corporate relations and relationships with various broker/dealers involved in the regulated securities industry. AGREEMENT TERM 1. The respective duties and obligations of the contracting parties shall be for a period of SIX (6) months commencing on the date first appearing above. This Agreement maybe terminated by either parties only in accordance with the terms and conditions set forth in Paragraph 7, below. SERVICES PROVIDED BY CONSULTANT 2. Consultant will provide consulting services in connection with the Corporation "public relations" dealings with NASD broker/dealers and the investing public. (At no time shall the Consultant provide services which would require Consultant to be registered and licensed with any federal or state regulatory body or self-regulating agency.) During the term of this Agreement, Consultant will provide those services customarily provided for a public relations firm to a Corporation, including but not necessarily limited to the following (a) Aiding a Corporation in developing a marketing plan directed at informing the public as to the business of the Corporation; and (b) Providing assistance and expertise in devising an advertising campaign in conjunction with the marketing campaign as act forth in (a) above; and (c) Advise the Corporation in dealing with institutional investors as it pertains to the Company's offerings of its securities; an (d) Aid and assist the Corporation in developing an (investor friendly) "web site" (e) Aid and consult the Corporation in the preparation and dissemination of all "due diligence" packages requested by and furnished to NASD registered broker/dealers and/or other institutional and/or fund managers requesting such information from the Corporation; and COMPENSATION 3. In consideration for the services provided by Consultants to Corporation, the Corporation shall pay or cause to be delivered to the Consultants of Ballantyne Capital and/or consultants acting on the behalf of BCG as independent consultants, on the execution of this Agreement, or as otherwise provided, the following: (a) 1,000,000 shares will be delivered to Ballantyne Capital Group LLC & Associates upon successful registration of SB-2. COMPLIANCE 4. In the event the shares of the Corporation an: not presently trading on any recognized market, the said shares delivered by Corporation to Consultant will, at that particular time, be "free trading," or, if a registration is contemplated, the shares shall have "piggy back" registration rights and will, at the expense of the Corporation, be included in said registration. REPRESENTATIONS OF CORPORATION 5. (a). The Corporation, upon entering this Agreement, hereby warrants and guarantees to the Consultant that all statements, either written or oral, made by the Corporation to the Consultant are true and accurate, and contain no misstatements of a material fact. The Corporation acknowledges that the information it delivers to the Consultant will be used by the Consultant in preparing materials regarding the Company's business, including but not necessarily limited to, its financial condition, for dissemination to the public. Therefore, in accordance with Paragraph 6, below, the Corporation shall hold harmless the Consultant from any and all errors, omissions, misstatements, negligent or intentional misrepresentations, in connection with all information furnished by Corporation to Consultant, in accordance with and pursuant to the terms and conditions of this Agreement for whatever purpose or purposes the Consultant sees fit to use said information. The Corporation further represents and warrants that as to all matters set forth within this Agreement, the Corporation has had independent legal counsel and will continue to maintain independent legal counsel to advise the Corporation of all matters concerning, but not necessarily limited to, corporate law, corporate relations, investor relations, all manners concerning and in connection with the Company's activities regarding the Securities Act of 1933 and 1934, and state Blue Sky laws. (b). In addition to the representations and. warranties set forth above, the Corporation further warrants to the Consultant that the share makeup of the Corporation is as follows: Post Merger: 1. Authorized: shares. 2. Issued: shares. 3. Outstanding: shares. 4. Free trading (float): shares. LIMITED LIABILITY 6. With regard to the services to be performed by the Consultant pursuant to the terms of this Agreement, the Consultant shall not be liable to the Corporation, or to anyone who may claim any right due to any relationship with the Corporation, or any acts or omissions in the performance of services on the part of the Consultant, or on the part of the agents or employees of the Consultant, except when said acts or omissions of the Consultant are due to its willful misconduct or culpable negligence. TERMINATION 7. This Agreement may be terminated by either party upon the giving of not less than sixty (60) days written notice, delivered to the parties at such address or addresses as set forth in paragraph 8, below. In the event the Corporation terminates this Agreement, all compensation paid by Corporation to the Consultant shall be deemed earned. In the event Consultant terminates this Agreement, a portion of the compensation paid by Corporation to Consultant shall be "back-charged" to Consultant, and payable to the Corporation as follows: (a) In the event the Agreement is terminated by the Consultant in months 1 through 6, Consultant shall repay to Corporation two thirds (2/3rds) of the fees paid pursuant to Paragraph 3 above. (b) In the event the Consultant terminates this Agreement during months 7 through 10, the Corporation shall be entitled to a return of fifty percent (50%) of the fees paid in accordance with Paragraph 3 above; thereafter, all fees paid shall be deemed earned. (c) In the event of a termination by either party, any repayment of funds or stock due from Consultant to Corporation maybe paid either in cash or the equivalent number of shares of the Corporation received by Consultant from the Corporation in accordance with Paragraph 3 above, payable at the option of the Consultant. The valuation of said shares for purposes of repayment of shares, shall be the bid price of said shares as of the date shares are tendered back to the Corporation. If there is no bid price, then the price shall be agreed to, by separate writing, to be determined by the parties upon the execution of this agreement. NOTICES 8. Notices to be sent pursuant to the terms and conditions of this Agreement, shall be sent as follows: As to Consultant: - ---------------- Ballantyne Capital Group LLC 15800 John J Delaney Drive Ste 325 Charlotte, NC 28277 As to Corporation: - ----------------- National Beauty Corp 4818 West Commercial Blvd Ft. Lauderdale. FL 33319 ATTORNEYS' FEES 9. In the event any litigation or controversy, including arbitration, arises out of or in connection with this Agreement between the parties hereto, the prevailing party in such litigation, arbitration or controversy, shall be entitled to recover from the other party or parties, all reasonable attorneys' fees, expenses and suit costs, including those associated within the appellate or post judgment collection proceedings. ARBITRATION 10. In connection with any controversy or claim arising out of or relating to this Agreement, the parties hereto agree that such controversy shall be submitted to arbitration, in conformity with the Federal Arbitration Act (Section 9 U.S. Code Section 901 et seq), and shall be conducted in accordance with the Rules of the American Arbitration Association. Any judgment rendered as a result of the arbitration of any dispute herein, shall upon being rendered by the arbitrators be submitted to a Court of competent jurisdiction within the State of North Carolina or in any state where a party to this action maintains its principal business or is a Corporation incorporated in said state. GOVERNING LAW 11. This Agreement shall be construed under and in accordance with the laws of the State of North Carolina, and all obligations of the parties created under it are performed in Charlotte, North Carolina. Further, in any controversy arising out of this Agreement, wherein arbitration is elected, the venue for said arbitration shall be in Mecklenburg County, North Carolina, and all parties hereby consent to that venue as the proper jurisdiction for said proceedings provided herein. PARTIES BOUND 12. This Agreement shall be binding on and inure to the benefit of the contracting parties and their respective heirs, executors, administrations, legal representatives, successors, and assigns when permitted by this Agreement. LEGAL CONSTRUCTION 13. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, the invalidity, illegality, or unenforceability shall not affect any other provision, and this Agreement shall be construed as if the invalid, illegal, or unenforceable provision had never been contained in it. PRIOR AGREEMENTS SUPERSEDED 14. This Agreement constitutes the sole and only Agreement of the contracting parties and supersedes any prior understandings or written or oral agreements between the respective parties. Further, this Agreement may only be modified or changed by written agreement signed by all parties hereto. MULTIPLE COPIES OR COUNTERPARTS OF AGREEMENT 15. The original and one or more copies of this Agreement may be executed by one or more of the parties hereto. In such event, all of such executed copies shall have the same force and effect as the executed original, and all of such counterparts taken together shall have the effect of a fully executed original. Further, this Agreement may be signed by the parties and copies hereof delivered to each party by way of facsimile transmission, and such facsimile copies shall be deemed original copies for all purposes if original copies of the parties' signatures are not delivered. HEADINGS 16. Headings used throughout this Agreement are for reference and convenience, and in no way define, limit or describe the scope or intent of this Agreement or effect its provisions. IN WITNESS WHEREOF, the parties have set their hands and seal as of the date written above. National Beauty Corp. BY:/s/Edward Roth -------------- President Ballantyne Capital Group, LLC BY:/s/David Wood ------------- President EX-10.4 17 doc16.txt COMMERCIAL LEASE Exhibit 10.4 Commercial Lease between Commercial Villas and Beautyworks USA of Florida Inc. COMMERCIAL LEASE THIS LEASE is made between COMMERCIAL VILLAS, c/o David Feldman, 407 Lincoln Road, Suite 701, Miami Beach, FL 33139, herein called Lessor, and BEAUTYWORKS USA OF FLORIDA INC., a Florida corporation, herein called Lessee. --------------------------------------------------- Lessee hereby offers to lease from Lessor the premises situated in the City of Tamarac, County of Broward, State of Florida, described as Unit 4810, COMMERCIAL ---- VILLAS (the "Project"), 4750-4820, approx. 1,000 sq. feet, West Commercial Blvd., Tamarac, FL 33319, upon the following TERMS AND CONDITIONS: L. TERM AND RENT. Lessor demises the above premises for a term of Three (3) years, commencing July 1st, 2002, and terminating on June 30th, 2005 or sooner --------------- as provided herein at the rental indicated below. The rent during the term of this lease shall be payable by Lessee in monthly installments on or before the first day of each month in advance at the --- office of Lessor or at such place designated by Lessor without any prior demand therefor, and without any deduction or set-off whatsoever, and shall be as follows: From 7/1/02 to 6/30/03 ($1,100.00 per month) ------------------- -------- From 7/1/03 to 6/30/04 ($1,200.00 per month) ------------------- -------- From 7/1/04 to 6/30/05 ($1,300.00 per month) ------------------- -------- Option to Renew, If Applicable. - ----------------------------------- This lease being in good standing and in no way in default by the Lessee, the Lessee is hereby granted an option to extend this lease for an additional period of TWO (2) years, upon the same terms and conditions, other than the rent being increased as hereinafter set forth. In order to exercise the option to extend this lease, the Lessee shall notify Lessor, in writing of its exercise of its option to extend no later than one hundred and eighty (180) days prior to the expiration of the original term. From 7/1/05 to 6/30/06 ($1,400.00 per month) ------------------- -------- From 7/1/06 to 6/30/07 ($1,500.00 per month) ------------------- -------- Lessee shall pay all rent that is due together with applicable Sale or Use Tax. 1st Month Payment Rent: 1st Month Rent ____________ $1,100.00 CAM per para. 7 $131.63 Sales or Use Tax $ 73.90 ----------- SUB TOTAL $1,305.53 Last Month Rent ** Security Deposit ** TOTAL $1,305.53 **SECURITY DEPOSIT OF $1,000.00, AND LAST MONTH RENT OF $1305.53, ARE TRANSFERRED FROM THE LEASE FOR UNIT 4818. 2. USE. Lessee shall use and occupy the premises for office use. The premises shall be used for no other purpose. 3. CARE AND MAINTENANCE OF PREMIUMS. Lessee acknowledges that the premises are in good order and repair. Lessee shall, at its own expense, and at all times, maintain the premises in good, clean and safe condition, including glass, electrical wiring, plumbing, air conditioning and heating installations and other system and equipment upon the premises and shall surrender the same at the termination hereof, in as good condition as received, normal wear and tear excepted. Lessee shall be responsible for all repairs required, excepting the roof, exterior walls, structural foundations and parking, which shall be maintained by Lessor. 4. ALTERATIONS. Lessee shall not, without first obtaining the written consent of Lessor, make any alterations, additions, or improvements, to or about the premises. 5. ORDINANCES AND STATUTES. Lessee shall comply with all statutes, ordinances and requirements of all municipal, state and federal authorities now in force, or which may hereafter be in force, pertaining to the premises, occasioned by or affecting the use thereof by Lessee. 6. ASSIGNMENT AND SUBLETTING. Lessee shall not assign this lease or sublet any portion of the premises without prior written consent of the Lessor, which shall not be unreasonably withheld. Any such assignment or subletting without consent shall be void and, at the option of the Lessor, may terminate this lease. 7. UTILITIES. All applications and connections for necessary utility services on the demised premises shall be made in the name of Lessee only, and Lessee shall be solely liable for utility charges as they become due, including those for sewer, water, gas, electricity, garbage and telephone services. If any such services are not separately assessed or metered to Lessee, Lessee shall pay its pro-rata share, estimated at this time at $131.63 per month. Lessee agrees to use Certified Security Company for monitoring of the security alarm to keep the systems of the building consistent at a cost of $26.45 per month. 8. ENTRY AND INSPECTION. Lessee shall permit Lessor or Lessor's agents to enter upon the premises at reasonable times and upon reasonable notice, for the purpose of inspecting the same, and will permit Lessor at any time within sixty (60) days prior to the expiration of this lease, to place upon the premises any usual "To Let" or "For Lease" signs, and permit persons desiring to lease the same to inspect the premises thereafter. 9. POSSESSION. If Lessor is unable to deliver possession of the premises at the commencement hereof, Lessor shall not be liable for any damage caused thereby, nor shall this lease be void or voidable, but Lessee shall not be liable for any rent until possession is delivered. Lessee may terminate this lease if possession is not delivered within 30 days of the commencement of the term hereof. 10. INDEMNIFICATION OF LESSOR. Lessor shall not be liable for any damage or injury to Lessee, or any other person, or to any property, occurring on the demised premises or any part hereof, and Lessee agrees to hold Lessor harmless from any claims for damages, no matter how caused. 11. INSURANCE. Lessee, at its expense, shall maintain public liability insurance including bodily injury and property damage insuring Lessee and Lessor with minimum coverage of Five Hundred Thousand ($500,000.00) Dollars. Lessee shall provide Lessor with a Certificate of Insurance showing Lessor as additional insured. The Certificate shall provide for a ten-day written notice to Lessor in the event of cancellation or material change of coverage. To the maximum extent permitted by insurance policies which may be owned by Lessor or Lessee, Lessee and Lessor, for the benefit of each other, waive any and all rights of subrogation which might otherwise exist. 12. CONTROL OF COMMON AREAS AND FACILITIES. The use of the sidewalks, driveway and parking lot and any other common area at the subject premises shall at all times be subject to the exclusive control and management of Lessor and Lessor shall have the right from time to time to establish, modify and enforce reasonable rules and regulations with respect to all common areas and facilities, and Lessee agrees to abide and conform with such rules and regulations. Lessee specifically agrees not to over burden the parking lot by using more than the code allotted spacing for their premises. If Lessee requires the use of additional parking space Lessee agrees to use off-site parking, i.e. street. 13. SIGNAGE. Lessee agrees to have installed and maintained, at Lessee's expense, its name on the canopy in front of its premises consistent with the other signs of the tenants. No other sign, name, placard, advertisement or notice visible from the exterior of any leased premises, nor shall any sign be inscribed, painted or affixed by any Lessee on any part of the Building or Project without the prior written approval of Lessor. 14. BROKERAGE COMMISSIONS. Lessee represents to the Lessor that no broker or agent, other than N/A , was instrumental in procuring or -------------------- negotiating or consummating this Lease, and Lessee agrees to defend and indemnify Lessor against any loss, expense or liability incurred by Lessor as a result of a claim by any other broker or finder in connection with this Lease or its negotiation. 15. TAX ASSESSMENT AND INSURANCE INCREASE. In the event there is any increase during any year of the term of this lease in the City, County or State real estate taxes over and above the amount of such taxes assessed for the prior tax year, whether because of increased rate or valuation, Lessee shall pay to Lessor within ten (10) days of receipt of tax bill an amount equal to its pro-rata share of the increase in taxes upon the land and buildings in which the leased premises are situated. In the event that such taxes are assessed for a tax year extending beyond the term of the lease, the obligation of Lessee shall be proportionate to the portion of the lease term included in such year. If the premium for property, casualty and/or liability insurance (or similar insurance premiums) payable by lessor, with respect to the Project increase over the amount of the last premiums paid by the said Lessor, Lessee shall pay to Lessor as additional rent within ten (10) days after the amount of such insurance premiums are ascertained, an amount equal to its pro-rata share of the increase in the premiums in which the leased premises are situated. In the event that such insurance premiums are assessed for a year extending beyond the term of the lease, the obligation of Lessee shall be proportionate to the portion of the lease term included in such year. The parties hereto agree that Lessee's pro-rata share for any items to be pro-rated pursuant to this lease is 1/33. 16. MECHANICS'S LIENS. Lessee agrees to promptly pay all costs and expenses of any repairs, construction or installations, which are the responsibility of Lessee so that no mechanics, materialmen's and laborers' liens are filed against the premises. Lessee agrees to indemnify and save Lessor harmless from any such liens and to cause same to be paid, canceled or discharged within five (5) days of notice. In no event shall anything contained in this paragraph or elsewhere in the lease be deemed to subject Lessor's interest in the premises to the lien of any person doing work or furnishing materials at the instance and request of Lessee. Upon request, Lessee agrees to execute a memorandum reflecting the provisions of the foregoing paragraph. 17. P1EDGE. The said Lessee hereby pledges and assigns to the Lessor all the furniture, fixtures, good and chattels of said lessee, which shall or may be brought or put on said premises as security for the payment of the rent herein reserved, and the Lessee agrees that the said lien may be enforced by distress foreclosure or otherwise at the election of said Lessor. 18. NOISE, NUISANCE, ETC. Lessee shall not make or permit any noise or odor, which is objectionable to other tenants of the Project to emanate from the premises and shall not create or maintain a nuisance therein and shall not distribute, solicit or canvas in the common areas of the project. Lessee shall not install any radio or television antennas at the premises without the prior written consent of the Lessor. Lessee shall not bring any machinery, equipment, safe, which may cause damage or danger to the building. Lessee shall not maintain at the premises or permit the use of any chemicals or materials, in such quantities, which may pose an environmental or safety hazard. 19. EMINENT DOMAIN. If the premises or any part thereof or any estate therein, or any other part of the building materially affecting Lessee's use of the premises, shall be taken by eminent domain, this lease shall terminate on the date when title vests pursuant to such taking. The rent, and any additional rent, shall be apportioned as of the termination date, and any rent paid for any period beyond that date shall be repaid to Lessee. Lessee shall not be entitled to any part of the award for such taking or any payment in lieu thereof, but Lessee may file a claim for any taking of fixtures and improvements owned by Lessee, and for moving expenses 20. DESTRUCTION OF PREMISES. In the event of a partial destruction of the premises during the term hereof, from any cause, Lessor shall forthwith repair the same, provided that such repairs can be made within sixty (60) days under existing governmental laws and regulations, but such partial destruction shall not terminate this lease, except that Lessee shall be entitled to a proportionate reduction of rent while such repairs are being made, based upon the extent to which the making of such repairs shall interfere with the business of Lessee on the premises. If such repairs cannot be made within said sixty (60) days, Lessor, at his option, may make the same within a reasonable time, this lease continuing in effect with the rent proportionately abated as aforesaid, and in the event that Lessor shall not elect to make such repairs which cannot be made within sixty (60) days, this lease may be terminated at the option of either party. In the event that the building in which the demised premises may be situated is destroyed to an extent of not less than one-third of the replacement costs thereof, Lessor may elect to terminate this lease whether the demised premises be injured or not. A total destruction of the building in which the premises may be situated shall terminate this lease. 21. LESSOR'S REMEDIES ON DEFAULT. If Lessee defaults in the payment of rent, or any additional rent, or defaults in the performance of any of the other covenants or conditions hereof, Lessor may give Lessee notice of such default and if Lessee does not cure any such default within FIVE (5) days, after the giving of such notice then Lessor may terminate this lease and Lessee shall then quit and surrender the premises to Lessor, but Lessee shall remain liable to Lessor for loss of rent and other charges due under the terms of lease and for any damages or costs to restore the premises in the condition as delivered to Lessee at the inception of this lease. If this lease shall have been so terminated by Lessor, Lessor may at any time thereafter resume possession of the premises by any lawful means and remove Lessee or other occupants and their effects. No failure to enforce any term shall be deemed a waiver. Any rent received after the fifth day of the month there shall be a five ($5.00) dollar per day late fee. 22. SECURITY DEPOSIT. Lessee shall deposit with Lessor on the signing of this lease the sum of ONE THOUSAND DOLLARS ($1,000.00) as security for the performance of Lessee's obligations under this lease, including without limitation the surrender of possession of the premises to Lessor as herein provided. If Lessor applies any part of the deposit to cure any default of Lessee, Lessee shall on demand deposit with Lessor the amount so applied so that Lessor shall have the full deposit on hand at all times during the term of this lease. No interest shall be paid by the Lessor to the Lessee on such security deposit, and Lessor may commingle those funds. 23. RECORDING. Lessee shall not record this lease without the written consent of Lessor. 24. LIABILITY OF LESSOR. Title to the Premises is in a trust and Lessee agrees that neither the trustees nor the beneficiaries of the trust shall be personally liable. Lessee shall not make any claim under this Lease against the trustee(s) or beneficiaries of the trust, personally, and Lessee agrees that it shall look solely to the estate and property of the Lessor in the land and building comprising the Premises of which the demised premises are a part for the collection of any judgment (or any other judicial process) requiring the payment of money by Lessor in the event of any act, default or breach by Lessor with respect to any of the terms, covenants, and conditions of this lease to be observed and performed by Lessor and no other property or estates of Lessor shall be subject to levy, execution or other enforcement procedures for the satisfaction of Lessee's remedies. 25. ATTORNEYS' FEES. In case suit should be brought for recovery of the premises, or for any sum due hereunder, or because of any act which may arise out of the possession of the premises, by either party, the prevailing party shall be entitled to all costs incurred in connection with such action, including a reasonable attorney's fee. 26. NOTICES. Any notice which either party may or is required to give, shall be given by mailing the same, postage prepaid, to Lessee at the premises, or Lessor at the address shown above, or at such other places as may be designated by the parties from time to time. 27. HEIRS, ASSIGNS, SUCCESSORS. This lease is binding upon and inures to the benefit of the heirs, assigns and successors in interest to the parties. 28. SUBORDINATION. This lease is and shall be subordinated to all existing and future mortgages against the property. Lessee agrees to execute upon request of Lessor memorandum or agreement reflecting the Subordination. 29. ENTIRE AGREEMENT. The foregoing constitutes the entire agreement between the parties and may be modified only by a writing signed by both parties. 30. FACSIMILES. Facsimile copies of this lease signed by the parties shall serve as originals for all purposes. 31. RADON GAS. Radon Gas is a naturally occurring gas that, when accumulated in a building in sufficient quantities may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county public health unit. Signed this 3 day of -------, 2002. ---- LESSOR: /s/ David Feldman - ----------------- DAVID FELDMAN, as Trustee d/b/a COMMERCIAL VILLAS LESSEE: BEAUTWORKS USA OF FLORIDA INC., a Florida corporation /s/ Edward S. Roth - ------------------ By: Edward S. Roth, President ------------------------- EX-10.5 18 doc17.txt THIRD LEASE AGREEMENT Exhibit 10.5 Third Lease Amendment Agreement and Assignment of Lease THIRD LEASE AMENDMENT AGREEMENT AND ASSIGNMENT OF LEASE THIS THIRD LEASE AMENDMENT AGREEMENT AND ASSIGNMENT OF LEASE ("Third Amendment") is dated as of this ____ day of April, 2001, amending that certain Lease Agreement dated September 21, 1995 ("Lease"), by and among DEL MAR VILLAGE LIMITED PARTNERSHIP ("Landlord"); GIUSEPPE INGRAITI ("Ingraiti"); and BEAUTYWORKS USA, a Florida corporation ("Beautyworks"). W I T N E S S E T H : WHEREAS, Landlord's predecessor, R.W. VENTURES, and Ingraiti's predecessors, MELVYN ENGLER and HEIDI ROKOW ("Engler & Rokow"), entered into the Lease relating to that certain premises known as Bay #35, whose address is 7094 Beracasa Way, Boca Raton, Florida 33433 "(Premises"), within that certain shopping center known as Del Mar Shopping Village ("Shopping Center"); and WHEREAS, on September 21, 1995, Landlord and Engler & Rokow entered into the First Lease Amendment Agreement, which corrected certain issues and discrepancies in the Lease; and WHEREAS, on December 27, 1996, Landlord became the owner of the Shopping Center, and succeeded to the interest of R.W. Ventures as landlord under the Lease; and WHEREAS, the Lease was assigned by Engler & Rokow to Ingraiti on July 9, 1998; and WHEREAS, on September 15, 2000, Landlord and Ingraiti entered into the Second Lease Agreement extending the Lease through September 30, 2005, and granted Ingraiti one (1) renewal option for the period October 1, 2005 through September 30, 2010; and WHEREAS, Ingraiti agrees to remain liable for the performance of all covenants and conditions of the Lease in the event of any default by Beautyworks thereunder; and WHEREAS, Ingraiti has accepted the Premises, has opened for business, and has acknowledged that, to date, Landlord has fulfilled all of its obligations under the Lease; NOW, THEREFORE, for and in consideration of the terms, covenants and conditions hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Landlord, Ingraiti and Beautyworks agree as follows: 1. Beautyworks acknowledges that it will be bound by all of the terms, covenants and conditions of the Lease, and will be recognized as Tenant under the Lease. 2. Landlord acknowledges assignment of the Lease to Beautyworks. 3. Ingraiti hereby reaffirms that, in accordance with the terms of the Guaranty, dated July 9, 1998, he will remain responsible and liable for the prompt payment and performance of all of the terms, covenants and conditions of the Lease required to be performed by Tenant therein, from the date hereof through the expiration of the Lease on September 30, 2005, which liability shall be secondary to that of Beautyworks, and Landlord agrees that it must pursue and exhaust all remedies against Beautyworks, without satisfaction, prior to endeavoring to seek recourse against Ingraiti. All other terms and conditions of the Lease shall remain in full force and effect, and shall remain binding upon the parties hereto. IN WITNESS WHEREOF, the parties hereto have executed this Third Lease Amendment Agreement and Assignment of Lease as of the day and year first above written. WITNESSES: LANDLORD DEL MAR VILLAGE LIMITED PARTNERSHIP By: Del Mar Village, Inc., Managing Partner By: /s/Bruce D. Lyons ----------------- Bruce D. Lyons Executive Vice President WITNESSES: BEAUTYWORKS USA /s/ By:/s/ Edward Roth - --- --------------- Signature Print Name: Edward Roth ----------- Title: Vice President -------------- WITNESSES: INGRAITI /s/ /s/ Giuseppe Ingraiti - --- --------------------- GIUSEPPE INGRAITI EX-10.6 19 doc18.txt FORM OF SUBSCRIPTION AGREEMENT Exhibit 10.6 Form of Subscription Agreement SUBSCRIPTION AGREEMENT UNITS National Beauty Corp. 4818 West Commercial Blvd. Ft. Lauderdale, FL 33319 In order to purchase units of National Beauty Corp. (the "Company"), each unit consisting of one share of common stock, $.001 par value, and a warrant to purchase one share of common stock at an exercise price of $.25 per share, (the "Units") at a price of $.50 per Unit as described in the Prospectus dated ________, 2002, accompanying this Subscription Agreement, each subscriber must complete, execute and return this Subscription Agreement, along with the payment, by check payable to National Beauty Corp., 4818 West Commercial Blvd., Ft. Lauderdale, 33319. Capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Prospectus. 1. Subscription The undersigned (the Subscriber) hereby subscribes for and agrees to purchase from the National Beauty Corp. (the Company), subject to the terms and conditions set forth in the Prospectus dated ________ , 2002, a copy of which accompanied this Subscription Agreement, __________Units of the Company, each consisting of one share of common stock, $.001 par value, and a warrant to purchase one share of common stock at an exercise price of $.25 per share, at a price per Unit of $.50 per share or $____________ in the aggregate (the Subscription Price). 2. Payment The Subscription Price must accompany this Subscription and shall be paid by check payable to National Beauty Corp., 4818 West Commercial Blvd., Ft. Lauderdale. FL 33319. 3. Subscription Information If an Individual: - -------------------------------------------------------------------------- Full Name (type or print) Social Security Number - -------------------------------------------------------------------------- Address, City, State, Zip Telephone If a Corporation: - ---------------------------------------------------------------------------- Full Corporation Name (type or print) Tax ID Number - ----------------------------------------------------------------------------- Office Address, City, State, Zip Telephone 4. Miscellaneous (a) All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, impersonal, singular or plural, as the identity of the person or persons may require. (b) This Subscription Agreement constitutes the legal, valid and binding obligation of the undersigned enforceable in accordance with its terms. This Subscription Agreement shall be enforced, governed and construed in all respects in accordance with the laws of the State of Nevada, as such laws are applied by Nevada courts to agreements entered into and to be performed in Nevada and between residents of Nevada, and shall be binding upon the Subscriber, the Subscriber's heirs, estate, legal representatives, successors and assigns. If any provision of this Subscription Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof that may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof. (c) This Subscription Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by both parties hereto. (d) Except as set forth herein, neither this Subscription Agreement nor any provision hereof shall be waived, modified, changed, discharged, terminated, revoked or canceled except by an instrument in writing signed by the party effecting the same against whom any change, discharge or termination is sought. (e) The offering may be withdrawn at any time prior to the issuance of Units to prospective subscribers. Further, in connection with the offer and sale of the Units, the Company reserves the right, in its sole discretion, to reject any subscription in whole or in part or to allot to any prospective subscriber fewer than the Units applied for by such subscriber. The Units are offered by the Company subject to prior sale, acceptance of an offer to purchase, withdrawal, cancellation or modification of the offer, without notice. (f) This Subscription Agreement does not constitute an offer to sell or a solicitation of any offer to buy any securities offered hereby by anyone in any jurisdiction in which such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. IN WITNESS WHEREOF, THE SUBSCRIBER HAS EXECUTED THIS SUBSCRIPTION AGREEMENT ON THIS ______ DAY OF ____________, _____. Name of Subscriber (Please type or print) Accepted this ___ day of _________, _________________ Name:_____________________________________ By: ____________________________________ Title:______________________________________ (Signature of duly authorized signatory) Please print or type name and title of duly authorized signatory of a corporate, partnership or other subscriber that is not a natural person. EX-10.7 20 doc19.txt INVESTOR RELATIONS SERVICE AGREEMENT Exhibit 10.7 Investor Relations Services Agreement INVESTOR RELATIONS SERVICES AGREEMENT 1 PARTIES INVOLVED AND THE PURPOSED OF COOPERATION This Investor Relations Services Agreement (the "Agreement") is by and between American Market Support Network, Inc. ("AMSN") and National Beauty Corp. (the "Company"), The object of the cooperation covered by this Agreement is to assist in increasing the visibility and investor awareness National Beauty Corp. (the "Company"), its products and services, through a combination of investor relations activities, as approved by the Company. 2 DUTIES AMSW's sole duty is to assist with the Company's investor relations activities according to this Agreement. 2.1 PRESS RELEASES AMSN will assist in the production of up to four press releases for the Company per month. The preparation of these documents will take place using material and information provided by the Company and may also include additional information that AMSN finds through its independent research. The Company accepts all responsibility for the validity and accuracy of all information and material included in these press releases. All press releases will be distributed by the Company via a national newswire service and all expenses related to their distribution shall be paid by the Company. AMSN may also distribute these press releases via e-mail to its database of individual investor, institutions, broker/dealers and the media, only after all information included in these materials has been released publicly. Occasional e-mail distribution of the Company's press releases to AMSN's databases will be coordinated at no additional cost to the Company. If the Company elects to have AMSN coordinate the distribution of any other additional materials via facsimile or mail, the total costs for those services shall be paid separately and in advance by the Company. 2.2 SHAREHOLDER CONTACT AMSN will work to introduce the Company to potential new shareholders, including individual investors and broker/dealers, many of which AMSN and its associates have established previous contacted. AMSN will contact these potential new shareholders via telephone, e-mail and fax. AMSN may inform these potential new shareholders of the Company and discuss the merits of and recent developments of the Company and may distribute Company-related materials to these potential new shareholders. All information that AMSN communicates to these potential new shareholders must be pre-approved by the Company through the means outlined !n this Agreement and must already have been released to the public. 2.3 CORPORATE INFORMATION KIT AMSN will create a 3-4 page corporate information kit for the Company. This kit shall include a detailed description of the Company and its products and services, an overview of its industry, description of its products and services, background on its stock, bios of its key people, a list of recent press releases and links to its financial filings and website. This kit shall be created using material and information provided by the Company and may also include additional information that AMSN finds through its independent research. The kit will be designed in a manner that allows the Company to update it as needed. The kit will be created in Adobe PDF (and HTML, if so desired) format and will be available to the Company for use on its website and distributed as desired. AMSN will also coordinate to professional printing of the Company's corporate information kit, at the Company's request. The Company shall be responsible for all costs involved in the coordination the professional printing of it corporate information kit and these costs must be paid to AMSN before the printing will be undertaken. 2.4 LETTERS TO THE SHAREHOLDERS AMSN will write text for a monthly or quarterly letter from the Company's CEO, President or Chairman to its shareholders. These letters can be distributed by the Company to its shareholders as it sees fit. 2.5 DISTRIBUTION OF E-MAIL MESSAGES AMSN will distribute one or more e-mail messages and/or press release for the Company to AMSN's database of approsimately 1,000,000 contacts per month for as long as this Agreement is valid and in force. AMSN will distribute these e-mail messages and/or press releases on dates that shall be decided upon jointly by the Company and AMSN. The preparation of these e-mail messages will take place using material and information provided by the Company and may also include additional information that AMSN finds through its independent research. The Company must give written authorization, approving the distribution as well as the content of the message(s), i.e. accepting all responsibility for the validity and accuracy of all information and material included in these messages before they will be distributed. 2.6 ONLINE INTERVIEWS We wi1l set-up a series of FREE interviews with online news and information services, wherein a representative of the Company will be allowed to talk about his or her vision for the future of the Company, as well as comment on its recent developments. AMSN will draft a press release that announces every new interview. These press releases will be distributed by the Company according to the terms described in Section 2.1 of this Agreement. 3. APPROVAL BY THE COMPANY Each final draft of any document to be delivered by AMSN to the Company's shareholders or the investment community must be pre-approved in writing by the company, confirming that the release, document or message has been carefully read and reviewed and that the statements set forth in the statements set forth in the attached document are complete and accurate in all material respects and that the Company takes full responsibility for its accuracy and completeness. AMSN must receive this signed approval prior to the release of the document. The Company shall assume responsibility for getting appropriate approval from all other companies mentioned in the Company's press releases and article ideas. 4 LIABILITY AMSN's activities are strictly Media and Investor Relations-related. Because AMSN's activities are directed by and pre-approved by the Company, and are based on f information it receives either directly from the Company, neither AMSN nor its employees, officers, directors, partners, consultants or any other related party shall assume any liability or responsibility related to said activities, or any consequences related to said activities, or their use or misuse. The Company hereby further agree to indemnify AMSN against any action, suit, claim or proceeding, whether civil, criminal or administrative, and against any fine, cost, levy, expense, judgment or award arising therefrom (collectively a "Claim"), in which AMSN may be involved (whether as a witness or a party) as a result of statement made or document distributed by AMSN on the Company's behalf; which contains any false or misleading statement or omission of material fact or which, other than through gross negligence of AMSN, violates any statute, rule or order of any statement, document, fact or information provided to AMSN by the Company. 5 ANTI-RECRUITING Neither the Company, any of its partners nor AMSN shall recruit any of the other parties' employees or other affiliated personnel during or for six (6) months after the termination of this Agreement. 6 HANDING THE AGREEMENT TO A THIRD PARTY This Agreement cannot be released to a third party (except to the Company) without written approval of non-releasing party. This Agreement will be written is two identical copies, one for both parties involved. 7 VALIDITY OF THE AGREEMENT This effective daft of this Agreement is July 1, 2002. This Agreement shall be valid for six (6) months. Both parties understand that AMSN will start providing its services to the Company when it receives its first month's compensation. This Agreement may be cancelled by AMSN, the Third Party or the Company only through the means outlined herein. This Agreement can be canceled by any party at any time if any other party fails to abide by the covenants of this Agreement (breach of contract) or for reason of lack of participation by the other party, meaning a clear failure by that party to abide by the duties outlined in this Agreement. AMSN may also cancel this Agreement at any time if the Third Party fails to make scheduled payments to AMSN on a timely basis. 8 FINANCIAL INFORMATION For the above investor relations-related services, AMSN will be compensated by the Company in the amount of seven-hundred and fifty dollars ($750) per month for the first three (3) full or partial months this Agreement is valid and in force. For the above investor relations-related services, AMSN will also be compensated by the Company in the amount of two-hundred thousand (200,000) unregistered, restricted shares of the Company's common stock. The Company agrees that AMSN must receive the first month's cash compensation ($750) and the entire six months' stock compensation (200,000 unregistered shares) from the Company in advance or no services shall not be performed by AMSN on the Company's behalf: The Company agrees that at any time during the twelve (12) months years following the execution of this Agreement, the Company files any type of registration statement relating to shares of common stock issued or to be issued by it, then it shall include all of the shares of common stock it has or is due to award to AMSN in the very next registration statement of any kind, thus permitting AMSN to sell those shares at its discretion, without further restriction. The Company agrees that it shall do everything in its power to promptly cause all such shares of registrable stock issued to AMSN to be registered under the Act so as to permit the sale or other disposition by AMSN of the shares so registered. ALL OUT OF POCKET EXPENSES, such as, but not limited to, expenses related to press release distribution via newswire, mass fax and e-mail services to databases other than those e-mail databases controlled by AMSN; and all printing, mailing and shipping expenses shall be the sole responsibility of the Company and shall be billed directly to the Company whenever possible. AMSN shall not, in any instance, be responsible for any expenses generated by the Company or on the Company's behalf. All expenses incurred by AMSN on the Company's behalf must pre-approved by the Company before they will be incurred. If this Agreement is cancelled by the Company for reason of breach of contract by AMSN or because AMSN has clearly failed to abide by the duties outlined in this Agreement, the compensation AMSN has received in advance shall be pro-rated and the appropriate portion for the remaining portion of the Agreement period shall be returned to the Third Party. If the Company or the Third Party cancels this Agreement for any other reason, AMSN shall retain its TOTAL COMPENSATION PACKAGE AND NO REFUND SHALL BE MADE. 9 MISCELLANEOUS 9.1 NOTICES All reports, communications, requests, demands or notices required by or permitted under this Agreement shall be in writing and shall be deemed to be duly given on the date same is sent and acknowledged via hand delivery, facsimile or reputable overnight delivery service (with a copy simultaneously sent by registered mail), or, if mailed, five (5) days after mailing by certified or registered mail, return receipt requested, to the party concerning at the following address: American Market Support Network, Inc. National Beauty Corp. 5599 San Felipe, Suite 975 4818 W. Commercial Blvd. Houston, TX 77056 Ft. Lauderdale, FL 33319 Tel. (713) 961-9007 Tel. (954) 717-8680 Fax (713) 961-9057 Fax (954) 717-2508 Attn: Alvie Merrill Attn: Edward Roth Any party may change the address to which such notices and communications shall be by written notice to the other party, provided that any notice of change of address shall be effective only upon receipt. 9.2 INTEGRATION This Agreement sets forth the entire Agreement and understanding between the parties, or to the subject matter hereof and supersedes and merges all prior discussion, arrangements and agreements between them. 9.3 AMENDMENTS This Agreement may be amended or modified except by written instrument signed by each of the parties hereto. 9.4 LNTERPRETATION This Agreement shall be construed by and interpreted in accordance with the laws of the State of Texas, without regard to principles of conflict of law. The headings given to the paragraphs of this Agreement are for the convenience of the parties only and are not to be used in any interpretation of this Agreement. 9.5 JURISDICTION The parties hereby (i) agree that the State and Federal courts sitting in the State of Texas, County of Harris shall have exclusive jurisdiction in any action arising out of or connected in any way with this Agreement; (ii) each consent to personal jurisdiction of and venue in such courts in any such matter; and (iii) further agree that the service of process or of any other papers with respect to such proceedings upon them by mail in accordance with the provisions set out in Article 9.1 hereof shall be deemed to have been duly given to and received by them five (5) days after the date of certified mailing and shall constitute good, proper and effective service. 9.6 SEVERABILITY In the event that any one or more provisions of this Agreement shall be held invalid, illegal or unenforceable to any respect, the validity, legality or inforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 9.7 WAIVER No failure or delay on the part of either party in exercising any power or right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No waiver by either party of any provision of this Agreement, or of any breach of default, shall be effective unless in writing and signed by the party against whom such waiver is to be enforced. All rights and remedies provided for herein shall be cumulative and in addition to any other rights or remedies such parties may have at law or in equity. 9.8 NON-DISCLOSURE The parties to this Agreement hereby agree that the information which each imparts to the other shall remain the sole property of the revealing party, including but not limited to technology, trade secrets, financial information, identification of business and marketing methods, sales and promotion packages, and all information contained in each party's memoranda or business plans. In recognition of such rights, it is agreed that each party will keep all information revealed to it by the other party in the strictest confidence and shall treat such information as secret, divulging none of such information to any party whatsoever, for any purpose other than those outlined in this Agreement, without the express permission of the revealing party. 10 COUNTERPARTS This Agreement may be executed in one or more counterparts, all of which taken together shall be deemed an original. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on July 1, 2002. American Market Support Networks, Inc. National Beauty Corp. by: Alvie Merrill by: Edward Roth ------------- ----------- Alvie Merrill name: Edward Roth ----------- President title: President --------- EX-21 21 doc20.txt SUBSIDIARIES OF NATIONAL BEAUTY Exhibit 21 Subsidiaries of National Beauty Names under which Name Jurisdiction of Incorporation Subsidiaries do Business - ---- ----------------------------- ------------------------ Cleaning Express USA, Inc. Florida Cleaning Express USA, Inc. - -------------------------- ------- -------------------------- BeautyWorks USA, Inc. Florida BeautyWorks USA, Inc. - --------------------- ------- --------------------- Beauty Merchant, Inc. Florida Beauty Merchant, Inc. - --------------------- ------- --------------------- EX-23.1 22 doc21.txt CONSENT OF INDEPENDENT AUDITORS Exhibit 23.1 Consent of Independent Auditors, Perrella & Associates, P.A. [Letterhead of Perrella & Associates, P.A.] EXHIBIT CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS We hereby consent to the incorporation of our audit report dated March 15, 2002 relating to the financial statements of National Beauty Corp. in the SB-2 registration statement dated on June 19, 2002 and to the reference of our firm therein as "Experts." /s/Perrella & Associates, P.A. - ------------------------------ Perrella & Associates, P.A. Pompano Beach, Florida June 19, 2002 EX-23.2 23 doc22.txt CONSENT OF WED & CO. Exhibit 23.2 Consent of Weed & Co. LLP WEED & CO. LLP 4695 MACARTHUR COURT, SUITE 1430, NEWPORT BEACH, CALIFORNIA 92660-2164 TELEPHONE (949) 475-9086 FACSIMILE (949) 475-9087 July __, 2002 Board of Directors National Beauty Corp. 4818 West Commercial Blvd. Ft. Lauderdale, Florida 33319 RE: Consent Greetings: We hereby consent to the use of our opinion in connection with the registration under the Securities Act of 1933, as amended (the "Act"), of 4,000,000 units, each unit consisting of one share of the Company's common stock and one warrant exercisable to purchase one share of common stock to be sold by the Company, and 1,325,000 shares of common stock to be sold by selling stockholders of the Company upon the terms and subject to the conditions set forth in the Company's registration statement on Form SB-2, (the "Registration Statement") and as an exhibit to the Registration Statement. Very truly yours, /s/ Weed & Co. LLP ------------------ Weed & Co. LLP -----END PRIVACY-ENHANCED MESSAGE-----