UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(Amendment No. _________________)
Wine System Design, Inc.
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(Name of small business issuer in its charter)
Nevada 4961 86-1005291
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(State or jurisdiction of (Primary Standard Industrial I.R.S.Employer
incorporation or organization Classification Code Number) Identification No.)
8343 E. Earll Drive
Scottsdale, AZ 85251
(480) 423-0447
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(Address and telephone number of principal executive offices)
8343 E. Earll Drive
Scottsdale, AZ 85251
(480) 423-0447
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(Address of principal place of business or intended principal
place of business)
Approximate date of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. If this Form is filed to register additional securities for anoffering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering.[]_________________________________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. []_________________________________________
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. []_________________________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box.[]
CALCULATION OF REGISTRATION FEE
Tile of each class Dollar amount Proposed proposed maximum Amount of
of securities to be maximum aggregate registration
to be registered registered offering offering price fee
price per unit (1)
------------------ ----------- -------------- ------------ ------------
Common Stock $52,000 $0.25 $52,000 $13.00
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(1) Estimated solely for the purpose of calculating the registration fee under the Securities Act.
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.
Wine System Design, Inc. ("WSD" or the "Company") is offering an aggregate of 208,000 shares of the Company's common stock ("Shares") to be sold, from time to time, by one or more of the following selling stockholders of the Company (collectively, "Selling Stockholders"):
Name Number of Name Number of Name Number of
---- Shares ---- Shares ---- Shares
------- ------- -------
Earl Gilbrech 100,000 Pamela Grover 4,000 William Karbula 4,000
Jack Davelaar 4,000 Carl Grover,Jr. 4,000 David Palmieri 4,000
Paul Andre 4,000 Ross Denny 4,000 Gary Sanchez 4,000
Carl Suter 4,000 Shantel Denny 4,000 Jake Jacobson 4,000
Thomas Beck 4,000 Lamar Wasescha 4,000 Michael Sanchez 4,000
Joe Glen 4,000 Edward Stowe 4,000 Carolyn Butler 4,000
John Shaffer 4,000 Mary Piccolo 4,000 Dale Trier 4,000
Lucas Zlosio 4,000 James Piccolo 4,000 Christos Loukas 4,000
Kenneth Laurent 4,000 Steven Smith 4,000
Todd Laurent 4,000 Jack Hester 4,000
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The per share offering price of the Shares will be based on the bid price for the Company's common stock on the dates of specific sales, unless shares are sold in private transactions. Consequently, no determination can be made as to actual pricing matters. The Registrant anticipates that firms that sell any of the Shares for accounts of the Selling Stockholders will charge normal brokerage commissions. However, the Registrant cannot provide specific information pertaining to the identity of such firms and/or the amount of such commissions. The Company and the Selling Stockholders have no brokerage agreements or other agreements for the sale of the Shares. The costs of selling the Shares, by a conservative estimate, should not exceed ten percent of the gross value of the stock. The proceeds from the sale of the Shares will go directly to the Selling Stockholders and will not be available to the Company.
Prior to this offering, there has been no public market for the Company's common stock. Neither the Nasdaq National Market nor any national securities exchange lists the Company's common stock.
INVESTMENT IN THE SHARES INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" STARTING ON PAGE 4.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Offering Price Aggregate Offering
Class of Securities Number of Shares per Share Price
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Common Stock 208,000
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During the offering period, we are required to update this prospectus to reflect any facts or events arising after the effective date of the Registration Statement filed with the SEC that represent a fundamental change in the information set forth in the Registration Statement.
Wine Systems Design, Inc. 8343 E. Earll Drive Scottsdale, AZ 85251 (480) 423-0447
The date of this Prospectus is May 8, 2001
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TABLE OF CONTENTS
PAGE
PART I: INFORMATION REQUIRED IN PROSPECTUS-------------------------------- 3
Item 1. Front of Registration Statement and Outside
Front Cover of Prospectus---------------------------------------- 3
Item 2. Inside Front and Outside Back Cover Pages of Prospectus---------- 3
Item 3. Summary Information and Risk Factors----------------------------- 3
Item 4. Use of Proceeds-------------------------------------------------- 6
Item 5. Determination of Offering Price---------------------------------- 6
Item 6. Dilution--------------------------------------------------------- 7
Item 7. Selling Security Holders----------------------------------------- 7
Item 8. Plan of Distribution--------------------------------------------- 8
Item 9. Legal Proceedings------------------------------------------------ 8
Item 10.Directors, Executive Officers, Promoters and Control Persons----- 9
Item 11.Security Ownership of Certain Beneficial Owners and Management--- 10
Item 12.Description of Securities---------------------------------------- 10
Item 13.Interest of Named Experts and Counsel---------------------------- 11
Item 14.Disclosure of Commission Position of Indemnification for
Securities Act Liabilities--------------------------------------- 11
Item 15.Organization Within Last Five Years------------------------------ 12
Item 16.Description of Business------------------------------------------ 12
Item 17.Management's Discussion and Plan of Operation-------------------- 15
Item 18.Description of Property------------------------------------------ 16
Item 19.Certain Relationships and Related Transactions------------------- 16
Item 20.Market for Common Equity and Related Stockholder Matters--------- 16
Item 21.Executive Compensation------------------------------------------- 17
Item 22.Financial Statements--------------------------------------------- 17
Item 23.Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure------------------------------ 24
PART II:INFORMATION NOT REQUIRED IN PROSPECTUS---------------------------- 25
Item 24.Indemnification of Directors and Officers------------------------ 25
Item 25.Other Expenses of Issuance and Distribution---------------------- 26
Item 26.Recent Sales of Unregistered Securities-------------------------- 26
Item 27.Exhibits--------------------------------------------------------- 26
Item 28.Undertakings----------------------------------------------------- 28
SIGNATURES---------------------------------------------------------------- 30
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PART I: INFORMATION REQUIRED IN PROSPECTUS
Item 1. Front of Registration Statement and Outside Front Cover of Prospectus.
The required information is provided on the front page of the Prospectus.
Item 2. Inside Front and Outside Back Cover Pages of Prospectus.
The required information is provided on the page immediately following the front page of the Prospectus.
Item 3. Summary Information and Risk Factors.
The Company
Wine System Design, Inc. ("WSD" or the "Company") was incorporated in the State of Nevada on August 31, 2000. WSD is engaged in the business of installing and maintaining high-end, high-profile wine-cellar cooling systems. As of the date of this Prospectus, the Company has generated only limited revenues.
The Company is authorized to issue 25,000,000 million shares of common stock with par value of $0.001 per share. On October 26, 2000, the Company issued 10,000,000 shares of common stock to Michael G. Quinlan, an officer and director of the Company, for services valued at $10,000 pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933. On November 27, 2000 the Company issued 400,000 shares of common stock for cash of $10,000 to Earl Gilbrech, an unaffiliated investor, pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933. Between approximately December 2000 and March 2001, the Company issued 108,000 shares of common stock for cash at $0.25 per share to twenty-seven shareholders unaffiliated with the Company. That offering was conducted pursuant to an exemption from registration under Regulation D, Rule 506 of the Securities Act of 1933, as amended. As of the date of this Registration Statement, the Company has 10,508,000 shares of $0.001 par value common stock issued and outstanding.
The Company's administrative office is located at 8343 E. Earll Drive, Scottsdale, Arizona 85251, telephone (480) 423-0447.
The Company's fiscal year end is June 30.
The Offering
The Offering consists entirely of shares offered by the Selling Stockholders. The Company is offering no shares. The Selling Stockholders are offering 208,000 shares of common stock at market prices as soon as practicable after this Registration Statement becomes effective.
The proceeds of the Offering will go directly to the Selling Stockholders. None of the proceeds will be available to the Company.
The Selling Stockholders will sell the Shares at prevailing market prices. The price per share is likely to be based on the bid price for the Company's common stock on the dates of specific sales, unless the Shares are sold in private transactions. Consequently, at this time, the Company cannot make a determination of the price.
The Company's Transfer Agent is CPN Securities Transfer Inc., 16810 Ave. of the Fountains, Suite 222, Fountain Hills, AZ 85268.
The Company has agreed to pay all costs and expenses relating to the registration of its common stock, but the Selling Stockholders will be responsible for any related commissions, taxes, attorney's fees, and related charges in connection with the offer and sale of the Shares. The Selling Stockholders may sell their common stock through one or more broker/dealers, and such broker/dealers may receive compensation in the form of commissions.
The purchase of the Common Stock of this Offering hereby involves a high degree of risk and immediate substantial dilution. The Common Stock offered in this Prospectus is for investment purposes only and currently no market for the common Stock exists. (See "Risk Factors" and "Dilution").
Risk Factors
Investment in the securities offered hereby involves certain risks and is suitable only for investors of substantial financial means. Prospective investors should carefully consider the following risk factors in addition to the other information contained in this prospectus, before making an investment decision concerning the common stock.
Special Note Regarding Forward-Looking Statements
This Prospectus contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934, including statements concerning possible or assumed future results of operations of the Company and those preceded by, followed by or that include the words "may," "will," "should," "could," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of such terms and other comparable terminology. Investors should understand that the factors described below, in addition to those discussed elsewhere in this document, could affect the Company's future results and could cause those results to differ materially from those expressed in such forward-looking statements. These factors include
-material adverse changes in economic conditions in the markets
-the Company serves;
-future regulatory actions and conditions in the Company's
operating areas;
-competition from others; and
-other risks and uncertainties.
Limited Operating History
The Company was formed in August 2000. The Company has only a limited operating history on which you can evaluate the business and its prospects. The Company's prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies in their early stages of development. The Company cannot guarantee that it will be successful in accomplishing its objectives.
Continuing Losses
To date, the Company has not achieved profitability and expects to incur losses in the next twelve to eighteen months.
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Limited Capital Resources
The Company has limited resources available for marketing its products. Name recognition is very important and with the limited resources the company may not be able to establish a significant market share.
Vulnerability of the Market Niche
The economic conditions could change, which could adversely impact the Company's sales. Wine cellars are luxury items that aren't necessities.
Geographic Concentration
Initially, the Company's sales will be concentrated in a single metropolitan area around Phoenix, Arizona. A slowdown in residential growth in that area may adversely affect the Company's business prospects.
Control by Principal Stockholders, Officers and Directors
The directors and executive officers and their affiliates beneficially own approximately 95% of the outstanding common stock. As a result, these stockholders could exercise control over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control of the Company.
Dependence on Key Personnel
The Company's future success depends to a significant extent on the continued services of its current officers and directors. The loss of any of these officers or directors would likely have a significantly detrimental effect on the Company's business. The Company does not maintain "key man" life insurance policies for any of its officers or directors.
The Company's prospects also depend on its continuing ability to attract and retain highly qualified technical, sales and marketing, customer support, financial and accounting, and managerial personnel. Competition for such personnel is intense, and there can be no assurance that the Company will be able to retain its key personnel.
No Dividend Payments in the Foreseeable Future
The Company has never declared or paid any cash dividends on its common stock. For the foreseeable future, the Company intends to retain any earnings to finance the development and expansion of its business, and it does not anticipate paying any cash dividends on our common stock. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent upon then existing conditions, including the Company's financial condition and results of operations, capital requirements, contractual restrictions, business prospects, and other factors that the board of directors considers relevant.
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Lack of Liquidity
As of the date of this Registration Statement, there is no public market for the Company's Common Stock. This Registration Statement is a step toward creating a public market for the Company's stock, which may enhance the liquidity of the Company's shares. However, there can be no assurance that a meaningful trading market will develop. The Company makes no representation about the value of its Common Stock.
If the stock ever becomes tradable, the trading price of the Company's common stock could be subject to wide fluctuations in response to variations in quarterly results of operations, the gain or loss of significant customers, changes in earning estimates by analysts, announcements of technological innovations or new solutions by the Company or its competitors, general conditions in service industries, and other events or factors, many of which are beyond the Company's control. In addition, the stock market may experience extreme price and volume fluctuations which, without a direct relationship to the operating performance, may affect the market price of the Company's stock. Such market fluctuations may have a material adverse effect on the market price of the Company's common stock if it ever becomes tradable.
Penny Stock Regulation
The SEC has adopted rules that regulate broker/dealer practices in connection with transactions in penny stocks. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange system). The penny stock rules require a broker/dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker/dealer also must provide the customer with bid and offer quotations for the penny stock, the compensation of the broker/dealer, and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker/dealer must make a special written determination that a penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in any secondary market for a stock that becomes subject to the penny stock rules, and accordingly, customers in Company securities may find it difficult to sell their securities, if at all.
Item 4. Use of Proceeds.
The proceeds of the Offering will go directly to the Selling Stockholders. None of the proceeds will be available to the Company.
Item 5. Determination of Offering Price.
The Selling Stockholders may sell all or part of their shares in the over-the-counter market at prices related to the prevailing market prices of the Company's common stock at the time. The price per share is likely to be based on the bid price for the Company's common stock on the dates of specific sales, unless shares are sold in private transactions. Consequently, the Company currently cannot make a determination of the price.
Item 6. Dilution.
Not applicable.
Item 7. Selling Security Holders.
The following table sets forth (i) the number of outstanding shares, beneficially owned by the selling stockholders prior to the offering; (ii) the aggregate number of shares offered by each such stockholder pursuant to this prospectus; and (iii) the amount and the percentage of the class to be owned by such security holder after the offering is complete:
of Common Stock Owned before Offered Owned after after the Offering Shares Offered the Offering the Offering ------------------------------------------------------------------------------- Earl Gilbrech 400,000 100,000 300,000 2.9% Jack Davelaar 4,000 4,000 None None Paul Andre 4,000 4,000 None None Carl Suter 4,000 4,000 None None Thomas Beck 4,000 4,000 None None Joe Glen 4,000 4,000 None None John Shaffer 4,000 4,000 None None Lucas Zlosio 4,000 4,000 None None Kenneth Laurent 4,000 4,000 None None Todd Laurent 4,000 4,000 None None Pamela Grover 4,000 4,000 None None Carl Grover,Jr. 4,000 4,000 None None Ross Denny 4,000 4,000 None None Shantel Denny 4,000 4,000 None None Lamar Wasescha 4,000 4,000 None None Edward Stowe 4,000 4,000 None None Mary Piccolo 4,000 4,000 None None James Piccolo 4,000 4,000 None None Steven Smith 4,000 4,000 None None Jack Hester 4,000 4,000 None None William Karbula 4,000 4,000 None None David Palmieri 4,000 4,000 None None Gary Sanchez 4,000 4,000 None None Jake Jacobson 4,000 4,000 None None Michael Sanchez 4,000 4,000 None None Carolyn Butler 4,000 4,000 None None Dale Trier 4,000 4,000 None None Christos Loukas 4,000 4,000 None None |
None of the Selling Stockholders has been affiliated with the Company in any capacity in the past three years.
Item 8. Plan of Distribution.
The selling stockholders may offer their shares at various times in one or more of the following transactions:
-in the over-the-counter market;
-on any exchange on which the shares may hereafter be listed;
-in negotiated transactions other than on such exchanges;
-by pledge to secure debts and other obligations;
-in connection with the writing of non-traded and exchange-
traded call options, in hedge transactions, in covering
previously established short positions and in settlement of
other transactions in standardized or over-the-counter options;
or
-in a combination of any of the above transactions.
The selling stockholders may sell their shares at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices.
The selling stockholders may use broker/dealers to sell their shares. The broker/dealers will either receive discounts or commissions from the selling stockholders, or they will receive commissions from purchasers of shares.
Some of the Selling Stockholders may be eligible and may elect to sell some or all of their shares pursuant to additional exemptions to the registration requirements of the Securities Act, including but not limited to, Rule 144 promulgated under the Securities Act, rather than pursuant to this Registration Statement.
Under certain circumstances the Selling Stockholders and any broker/dealers that participate in the distribution may be deemed to be "underwriters" within the meaning of the Securities Act. Any commissions received by such broker/dealers and any profits realized on the resale of shares by them may be considered underwriting discounts and commissions under the Securities Act. The Selling Stockholders may agree to indemnify such broker/dealers against certain liabilities, including liabilities under the Securities Act.
The Selling Stockholders will also be subject to applicable provisions of the Exchange Act and regulations under the Exchange Act, which may limit the timing of purchases and sales of the Shares by the Selling Stockholders. Under the rules and regulations of the Exchange Act, any person engaged in the distribution or the resale of shares may not simultaneously engage in market making activities with respect to the Company's common stock for a period of two business days prior to the commencement of such distribution.
The Selling Stockholders will pay all commissions, transfer fees, and other expenses associated with the sale of securities by them. The Shares offered hereby are being registered by the Company, and the Company has paid the expenses of the preparation of this Prospectus. The Company has not made any underwriting arrangements with respect to the sale of shares offered hereby.
Item 9. Legal Proceedings.
No director, officer, significant employee, or consultant of the Company has been convicted in a criminal proceeding, exclusive of traffic violations.
No director, officer, significant employee, or consultant of the Company has been permanently or temporarily enjoined, barred, suspended, or otherwise limited from involvement in any type of business, securities or banking activities.
No director, officer, significant employee, or consultant of the Company has been convicted of violating a federal or state securities or commodities law.
Certain aspects of the Company's business involve risks of liability. For example, there can be no assurance that third parties will not claim that the Company has misappropriated their creative ideas or otherwise infringed upon their proprietary rights. Any claims of infringement, with or without merit, could be time consuming to defend, result in costly litigation, divert management attention, require the Company to enter into costly royalty or licensing arrangements to prevent the Company from using important technologies or methods, any of which could have a material adverse effect on the Company's business, financial condition or operating results.
Item 10. Directors, Executive Officers, Promoters and Control Persons.
Directors, Executive Officers, Promoters and Control Persons
Each of the Company's directors is elected by the stockholders to a term of one (1) year and serves until his or her successor is elected and qualified. Each of the officers is appointed by the Board of Directors to a term of one (1) year and serves until his or her successor is duly elected and qualified, or until he or she is removed from office. The Board of Directors has no nominating, auditing, or compensation committees.
The following table sets forth certain information regarding executive officers and directors of the Company as of the date of this Registration Statement:
Name and Address Age Position ----------------------------------------------------------------------- Michael G. Quinlan 28 President and Director 8343 E. Earll Drive Scottsdale, AZ. 85251 Michelle R. Quinlan 30 Secretary and Director 8343 E. Earll Drive Scottsdale, AZ. 85251 |
The persons named above have held their office/position since inception of the Company and are expected to hold their office/position until the next annual meeting of the Company's stockholders.
Background of Directors, Executive Officers, Promoters and Control Persons
Michael G. Quinlan, President and Director, was employed by SunVek, a leading remodeling, roofing, and air conditioning firm from November 1995 to February 1997. While at SunVek, Mr. Quinlan specialized in installing large air conditioning systems. From February 1997 to present, Mr. Quinlan has been self-employed at Quinlan Air Conditioning and Heating in the air conditioning/refrigeration industry. Quinlan Air Conditioning and Heating is currently generating several hundred thousand dollars a year in sales.
Michelle R. Quinlan, Secretary and Director, has handled the administrative duties and assisted in the sales of air conditioning systems for Quinlan Air Conditioning and Heating from 1996 to present. In 1998, Mrs. Quinlan implemented a financing and alternative payment program for the customers that substantially increased the marketability and sales of Quinlan Air Conditioning and Heating.
Family Relationships
Michael G. Quinlan and Michael G. Quinlan are husband and wife.
Conflicts of Interest
Michael G. Quinlan and Michelle R. Quinlan may have a conflict of interest with the Company because of their involvement with Quinlan Air Conditioning and Heating. However, Mr. Quinlan devotes the majority of his time to the Wine System Design. In the future, the Company will draft an employment agreement to minimize potential conflicts of interest.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information as of the date of this offering with respect to the beneficial ownership of the Company's Common Stock by all persons known by the Company to be beneficial owners of more than 5% of any such outstanding classes, and by each director and executive officer, and by all officers and directors as a group. Unless otherwise specified, the named beneficial owner has, to the Company's knowledge, either sole or majority voting and investment power.
Name and Address of Amount of
Beneficial Owner shares held Percent of
Title of Class Shares Position by Owner Class
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Common Michael G. Quinlan President and 10,000,000 95%
8343 E. Earll Drive Director
Scottsdale, AZ. 85251
Common Michelle R. Quinlan Secretary and None None
8343 E. Earll Drive Director
Scottsdale, AZ. 85251
Common Executive Officers 10,000,000 95%
and Directors as a
Group
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Item 12. Description of Securities.
The Company's authorized capital stock consists of 25,000,000 shares of common stock, par value $0.001 per share. The holders of the Company's common stock:
-have equal ratable rights to dividends from funds legally
available therefor, when, as and if declared by the Company's
Board of Directors;
-are entitled to share ratably in all of the Company's assets
available for distribution to holders of common stock upon
liquidation, dissolution or winding up of the Company's affairs;
-do not have preemptive, subscription or conversion rights
and there are no redemption or sinking fund provisions or rights;
and
-are entitled to one vote per share on all matters on which stockholders may vote.
All shares of common stock now outstanding are fully paid for and non assessable and all shares of common stock which are the subject of this offering, when issued, will be fully paid for and non assessable. The Company's Articles of Incorporation and Bylaws, incorporated here by reference to the Exhibits to this Registration Statement, and the applicable statutes of the State of Nevada contain a more complete description of the rights and liabilities of holders of our securities.
Non-Cumulative Voting
Holders of shares of the Company's common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in such event, the holders of the remaining shares will not be able to elect any of our directors.
Cash Dividends
As of the date of this prospectus, we have not paid any cash dividends to stockholders. The declaration of any future cash dividend will be at the discretion of our board of directors and will depend upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.
Reports
After this offering, the Company will furnish its shareholders with annual financial reports certified by the Company's independent accountants, and may, in the Company's discretion, furnish unaudited quarterly financial reports.
Item 13. Interest of Named Experts and Counsel.
None.
Item 14. Disclosure of Commission Position of Indemnification for Securities Act Liabilities.
The Securities and Exchange Commission's Policy on Indemnification.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the Registrant pursuant to any provisions contained in its Certificate of Incorporation, or Bylaws, or otherwise, the Registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Item 15. Organization Within Last Five Years.
Wine System Design, Inc. ("WSD" or the "Company") was incorporated in the State of Nevada on August 31, 2000. WSD is pursuing a business plan of becoming a high-end, high-profile wine-cellar cooling system company. As of the date of this Prospectus, the Company has generated only limited revenues.
The Company is authorized to issue 25,000,000 million shares of common stock with par value of $0.001 per share. On October 26, 2000, the Company issued 10,000,000 shares of common stock to Michael G. Quinlan, an officer and director of the Company, for services valued at $10,000 pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933. On November 27, 2000 the Company issued 400,000 shares of common stock for cash of $10,000 to Earl Gilbrech, an unaffiliated investor, pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933. Between approximately December 2000 and March 2001, the Company issued 108,000 shares of common stock for cash at $0.25 per share to twenty-seven shareholders unaffiliated with the Company. That offering was conducted pursuant to an exemption from registration under Regulation D, Rule 506 of the Securities Act of 1933, as amended. As of the date of this Registration Statement, the Company has 10,508,000 shares of $0.001 par value common stock issued and outstanding.
Item 16. Description of Business.
A. Business Development and Summary
Wine System Design, Inc. ("WSD" or the "Company") was incorporated in the State of Nevada on August 31, 2000. WSD is engaged in the business of installing and maintaining high-end, high-profile wine-cellar cooling systems. As of the date of this Prospectus, the Company has generated only limited revenues and is considered a development stage company.
The Company is authorized to issue 25,000,000 million shares of common stock with par value of $0.001 per share. On October 26, 2000, the Company issued 10,000,000 shares of common stock to Michael G. Quinlan, an officer and director of the Company, for services valued at $10,000 pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933. On November 27, 2000 the Company issued 400,000 shares of common stock for cash of $10,000 to Earl Gilbrech, an unaffiliated investor, pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933. Between approximately December 2000 and March 2001, the Company issued 108,000 shares of common stock for cash at $0.25 per share to twenty-seven shareholders unaffiliated with the Company. That offering was conducted pursuant to an exemption from registration under Regulation D, Rule 506 of the Securities Act of 1933, as amended. As of the date of this Registration Statement, the Company has 10,508,000 shares of $0.001 par value common stock issued and outstanding.
The Company's administrative office is located at 8343 E. Earll Drive, Scottsdale, Arizona 85251, telephone (480) 423-0447. The Company's registered agent is Corporate Service Center, Inc., 1475 Terminal Way, Suite E, Reno, Nevada 89502-3225.
The Company's fiscal year end is June 30.
B.Business of Issuer
(1) Principal Products and Services and Principal Markets
The Company is pursuing the business of installing and maintaining high-end wine-cellar cooling systems. The Company is commencing its operations in Arizona with plans eventually to expand to other regions. Initially, the Company plans to capitalize on a growth boom in the Phoenix metro area.
The Company offers a Wine Refrigeration System, which includes a custom designed refrigeration unit Bohn.
The Company plans to offer its clients weekly, monthly, and annual maintenance programs supported by a qualified staff of technicians.
In the future, the Company plans to extend its product/service offerings to address the needs of fur storage, floral storage, and tobacco humidors.
(2) Distribution Methods of the Products or Services
The Company's marketing strategy is to promote its products among wine enthusiasts who desire the best equipment specifically designed for wine cellars. A priority for such wine enthusiasts is to protect the investment into a fine wine collection.
The Company plans to reach its target customer through several direct and indirect channels. In an effort to generate awareness of its products and services, the Company will work with custom homebuilders, wine distributors, and specialty wine stores in target markets. In the initial stages, the cost-effective word- of-mouth advertising will play a significant role.
Subject to availability of sufficient resources for traditional advertising, the Company will develop a campaign focused on product innovation, high-performance, and competitive advantages. A consistent reach and frequency of advertising throughout the year should be effective in achieving the Company's marketing goals.
(3) Status of any announced new product or service
None.
(4) Industry background
Investment grade wines have been producing good returns over the years. Investors realize that this is a good long-term investment (several years) and are choosing to store their wines at home. Hence, wine cellars in the last few years have become very popular for high end (over one million dollar) homes.
Unfortunately, for many years, owners of private wine cellars had to rely on climate control systems that were not designed specifically for their needs. That frequently resulted in very expensive wine collections being ruined by storage in damaging temperature or humidity conditions.
The competition in the wine cellar industry is very sparse and spread out. There is not one company that dominates the market.
The main competitors of the Company are primarily providers of standard air-conditioning hardware and services. Typically, the prices of competitors are relatively high because of their inability to build a custom unit for a specific wine cellar.
The Company believes that its products and services provide a solution with more versatility and features and have superior performance over other competitors. However, there can be no assurance that the Company's perceptions of its competitive strength are accurate.
(5) Raw Materials
The Company uses materials and equipment that are widely available from multiple suppliers. The Company installs the following brands of equipment: Heat Craft, Larkin, Bohn, Copeland, MagicAire, Total Line, and Ranco. The Company's business does not depend disproportionately on any single supplier or a group of suppliers.
(6) Customers
The Company plans to direct the majority of its sales to new home construction projects and some high-end restaurants. The typical customer is someone who maintains a medium to a large collection of wine. The Company does not expect that a single customer will account for a disproportionately large share of the Company's sales. Currently, the company has a backlog of approximately 40 projects worth approximately $50,000.
The Company carries a $500,000 policy to insure against potential liability for damages resulting from possible equipment malfunction.
(7) Intellectual Property
The Company does not have any patents, trademarks, licenses, franchises, concessions or royalty agreements.
There can be no assurance that third parties will not bring claims of patent or technology infringement against the Company or claim that the Company's use of certain technologies violates a patent. Any claims of infringement, with or without merit, could be time consuming to defend, result in costly litigation, divert management attention, require the Company to enter into costly royalty or licensing arrangements to prevent the Company from using important technologies or methods, any of which could have a material adverse effect on the Company's business, financial condition or operating results.
(8) Need for Government Approval
The Company's business involves handling refrigerants, which are considered hazardous materials. The Company's technicians must be qualified and properly certified by the Environmental Protection Agency (EPA) to work with such materials. The Company holds a C-39 contractors license in the state of Arizona.
(9) Effect of existing or probable government regulations
As outlined above, various aspects of the Company's business are or may become subject to government regulation and/or approval. Any changes in the regulatory environment are likely to affect the Company's business, results of operation, and financial condition.
(10) Research and Development
The Company does not devote material resources to research and development activities.
(11) Environmental Issues
The Company installs systems that use refrigerants. The use and/or disposal of refrigerants is subject to various environmental regulations.
(12) Employees
As of the date of this Registration Statement, the Company has three employees. The Company's employees are not represented by a collective bargaining agreement, and the Company believes that its relations with its employees are good.
The Company's growth plans may require additional staff. By the end of calendar year 2001, the Company expects to hire additional three employees.
Item 17. Management's Discussion and Plan of Operation.
This section must be read in conjunction with Audited Financial Statements included in this Registration Statement.
The Company was incorporated in the State of Nevada on August 31, 2000. The Company is a startup and has not yet realized any significant revenues from operations. To date, the Company has:
-organized operations,
-capitalized itself through equity offerings,
-recruited and retained a management team and board of directors,
-developed a business plan and commenced initial operations, and
-secured a variety of equipment to use as needed.
In the initial approximately four-month operating period from August 31, 2000 (inception) to December 31, 2000, the Company generated no revenues and incurred a cumulative net loss of $12,355. Consequently, the Company is considered in the development stage. The losses resulted entirely from start-up costs.
The Company financed its initial operations by issuing common stock in exchange for cash and services. In October 2000, the Company issued 10,000,000 shares of common stock to an officer and director of the Company for services valued at $10,000. In November 27, 2000, the Company issued 400,000 shares of common stock for cash of $10,000 ($0.025 per share) to an unaffiliated investor. In March 2001, the Company completed an offering of Common Stock to a group of unaffiliated private investors. The
Company issued 108,000 shares of common stock for cash of $27,000 ($0.25 per share) to twenty-seven shareholders unaffiliated with the Company.
As of December 31, 2000, the Company had $10,045 in cash and a working capital of $7,645. Taking into account the subsequent offering of Common Stock completed in March 2001, the Company believes that it has sufficient capital funds to continue as a going concern for the next twelve months.
The Company designates the following as its priorities for the
next six (6) to twelve (12) months:
-securing contracts for wine cooling systems installations
and maintenance services; and
-developing an advertising and marketing campaign.
Sales growth in the next six (6) to twelve (12) months is important for the Company's plan of operations. However, the Company cannot guarantee that it will generate such growth. If the Company does not generate sufficient cash flow to support its operations in the next twelve (12) to eighteen (18) months, it may need to raise additional capital by issuing capital stock in exchange for cash in order to continue as a going concern. However, there can be no assurance that the Company would be able to raise enough capital to stay in business.
Item 18. Description of Property.
The Company is using office space and equipment provided at no charge by a company owned and operated by a Company's officer and director.
The Company uses a 1985 Chevy Truck (approximate value $3500.00) owned by Quinlan Air Conditioning and Heating, a company controlled by an officer and director of WSD. The Company is also using two trucks (a 1998 Chevy and a 2000 Chevy) leased jointly with Quinlan Air Conditioning and Heating. Of the monthly lease payments, the Company pays $565.00 and Quinlan Air Conditioning and Heating pays $560.00.
Item 19. Certain Relationships and Related Transactions.
The Company is using office space and equipment provided at no charge by a company owned and operated by a Company's officer and director.
The Company uses a 1985 Chevy Truck (approximate value $3500.00) owned by Quinlan Air Conditioning and Heating, a company controlled by an officer and director of WSD. The Company is also using two trucks (a 1998 Chevy and a 2000 Chevy) leased jointly with Quinlan Air Conditioning and Heating. Of the monthly lease payments, the Company pays $565.00 and Quinlan Air Conditioning and Heating pays $560.00.
Item 20. Market for Common Equity and Related Stockholder Matters.
Market Information
As of the date of this Registration Statement, there is no public market in the Company's Common Stock. This Registration Statement is a step toward creating a public market for the Company's stock, which may enhance the liquidity of the Company's shares. However, there can be no assurance that a meaningful trading market will develop. The Company makes no representation about the value of its Common Stock.
Holders
As of the date of this Registration Statement, the Company has approximately 10,508,000 shares of $0.001 par value common stock issued and outstanding held by approximately 29 shareholders of record. The Company's Transfer Agent is CPN Securities Transfer, Inc.,16810 Ave. of the Fountains, Suite 222, Fountain Hills, AZ 85268.
Dividends
The Company has never declared or paid any cash dividends on its common stock. For the foreseeable future, the Company intends to retain any earnings to finance the development and expansion of its business, and it does not anticipate paying any cash dividends on our common stock. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent upon then existing conditions, including the Company's financial condition and results of operations, capital requirements, contractual restrictions, business prospects, and other factors that the board of directors considers relevant.
Item 21. Executive Compensation.
Compensation for the Period from
Inception (August 31, 2000)
to December 31, 2000
-----------------------------------
Name Position Salary Other
-------------------------------------------------------------------------------
Michael G.Quinlan President and Director None $10,000
(10,000,000 shares
of common stock
at par value)
Michelle R. Quinlan Secretary and Director None None
|
Effective January 1, 2001, Mr. Quinlan has started accruing a salary of $3,000 per month. The Company, however, is yet to pay Mr. Quinlan his accrued salary.
Item 22. Financial Statements.
The following audited financial statements are included as part of this Registration Statement:
-Report of Michael L. Stuck CPA, P.C.
-Balance Sheet as of December 31, 2000
-Statement of Operations for the period from August 31, 2000 (Inception) to December 31, 2000
-Statement of Stockholder's Equity for the period from August 31, 2000 (Inception) to December 31, 2000
-Statement of Cash Flows for the period from August 31, 2000 (Inception) to December 31, 2000
-Notes to Financial Statements
Michael L. Stuck C.P.A., P.C.
7641 E. Gray Road, Suite G
Scottsdale, AZ. 85260
Board of Directors and Stockholders
Wine Systems Design, Inc.
Scottsdale, Arizona
We have audited the accompanying balance sheet of Wine Systems Design, Inc., a corporation, as of December 31, 2000 and the related statements of income, stockholders' equity, and cash flows for the period then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with Generally Accepted Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wine Systems Design, Inc. as of December 31, 2000, and its results of operations, and cash flows for the period then ended, in conformity with Generally Accepted Accounting Principles.
As discussed in Note 1, the Company has been in the development stage since its inception on August 31, 2000. Realization of the major portion of its assets is dependent upon the Company's ability to meet its future financing requirements, and the success of future operations. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.
/s/ Michael L. Stuck Michael L. Stuck Certified Public Accountant May 2, 2001 Scottsdale, Arizona |
Wine Systems Design, Inc.
(a development stage enterprise)
Balance Sheet
December 31, 2000
ASSETS
CURRENT ASSETS
Cash $ 10,045
----------------------
Total current assets 10,045
PROPERTY AND EQUIPMENT
-
----------------------
$ 10,045
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Loan payable $ 2,400
STOCKHOLDER'S EQUITY
Common stock, $.001 par value, 25,000,000,
shares authorized, 10,400,000 shares issued
and outstanding 10,400
Additional paid-in-capital 9,600
Deficit accumulated during development stage (12,355)
---------------------
Total stockholders' equity 7,645
---------------------
$ 10,045
======================
|
The accompanying notes are an integral part of these financial statements.
Wine Systems Design, Inc.
(a development stage enterprise)
Statement of Income
For the Period August 31, 2000 (inception) to December 31, 2000
August 31,2000
(inception) to
December 31,2000
------------------
REVENUE $ -
COST OF SALES -
-----------------
GROSS PROFIT -
OPERATING EXPENSES
Filing Fees 600
Office Supplies 55
Outside services 10,000
Professional Fees 1,700
-----------------
12,355
-----------------
NET INCOME (LOSS) BEFORE INCOME TAXES (12,355)
INCOME TAXES -
-----------------
NET INCOME ( LOSS ) $ (12,355)
=================
EARNINGS PER SHARE OF COMMON STOCK (0.00)
WEIGHTED AVERAGE NUMBERS OF SHARES OUTSTANDING 10,400,000
|
The accompanying notes are an integral part of these financial statements.
Wine Systems Design, Inc.
(a development stage enterprise)
Statement of Stockholders' Equity
December 31, 2000
Deficit
Accumulated
Paid in During
Common Stock Capital Development
Stock Amount Amount Stage Total
---------- -------- ---------- ----------- ------
Balance August 31,2000 - $ - $ - $ - $ -
Stock issued 10,400,000 10,400 9,600 - 20,000
Retained earnings (loss) - - - (12,355) (12,355)
---------- -------- ---------- --------- -------
Balance 10,400,000 $10,400 $ 9,600 $(12,355) $ 7,645
December 31,2000
========== ======== ========== ========= =======
|
The accompanying notes are an integral part of these financial statements.
Wine Systems Design, Inc.
(a development stage enterprise)
Statement of Cash Flows
For the Period August 31, 2000 (inception) to December 31, 2000
August 31,2000
(inception)to
December 31,2000
------------------
Net income (loss) $ (12,355)
Adjustments to reconcile net income to net
cash provided by operating activities:
Stock issued for services rendered 10,000
------------------
Cash Used in Operations (2,355)
------------------
Cash Used in Investing Activities -
------------------
Cash Provided by Financing Activities
Shareholder loan 2,400
Stock issued 10,000
------------------
12,400
------------------
Net Change in Cash 10,045
Beginning Balance -
------------------
Ending Cash Balance $ 10,045
==================
|
The accompanying notes are an integral part of these financial statements.
WINE SYSTEMS DESIGN, INC.
(a development stage enterprise)
Notes to Financial Statements December 31, 2000
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 2 - EARNINGS PER SHARE
Earnings per share has been computed by dividing net income/(loss) by the weighted average number of common shares outstanding for the period. There are no items which are deemed to be common stock equivalents during the audit period.
NOTE 3: COMMON STOCK
As of December 31, 2000, the Company had 10,400,000 shares of common stock, par value $0.001, issued and outstanding. 400,000 shares of stock were issued for cash with the balance representing start-up costs.
NOTE 4 - LEASE COMMITMENTS
The Company currently has no commitments for leases or contingencies.
NOTE 5 - USE OF ESTIMATES
The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates.
Item 23. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
PART II: INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers.
The Company's Articles of Incorporation and its Bylaws provide for the indemnification of a present or former director or officer. The Company indemnifies any of its directors, officers, employees or agents who are successful on the merits or otherwise in defense on any action or suit. Such indemnification shall include, expenses, including attorney's fees actually or reasonably incurred by him. Nevada law also provides for discretionary indemnification for each person who serves as or at the Company's request as one of its officers or directors. The Company may indemnify such individuals against all costs, expenses and liabilities incurred in a threatened, pending or completed action, suit or proceeding brought because such individual is one of the Company's directors or officers. Such individual must have conducted himself in good faith and reasonably believed that his conduct was in, or not opposed to, the Company's best interests. In a criminal action, he must not have had a reasonable cause to believe his conduct was unlawful.
Nevada Law
Pursuant to the provisions of Nevada Revised Statutes 78.751, the Corporation shall indemnify its directors, officers and employees as follows: Every director, officer, or employee of the Corporation shall be indemnified by the Corporation against all expenses and liabilities, including counsel fees, reasonably incurred by or imposed upon him/her in connection with any proceeding to which he/she may be made a party, or in which he/she may become involved, by reason of being or having been a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of the Corporation, partnership, joint venture, trust or enterprise, or any settlement thereof, whether or not he/she is a director, officer, employee or agent at the time such expenses are incurred, except in such cases wherein the director, officer, employee or agent is adjudged guilty of willful misfeasance or malfeasance in the performance of his/her duties; provided that in the event of a settlement the indemnification herein shall apply only when the Board of Directors approves such settlement and reimbursement as being for the best interests of the Corporation. The Corporation shall provide to any person who is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of the corporation, partnership, joint venture, trust or enterprise, the indemnity against expenses of a suit, litigation or other proceedings which is specifically permissible under applicable law.
The Securities and Exchange Commission's Policy on Indemnification.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to any provisions contained in its Certificate of Incorporation, or by- laws, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Item 25. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses, other than underwriting discounts and commissions, payable by the Registrant in connection with the sale of the common stock being registered. All amounts are estimated except the SEC Registration Fee.
SEC Registration Fee $13
EDGAR Conversion Fees $1,500
Blue Sky Qualification Fees and Expenses $250
Accounting Fees and Expenses $1,000
Legal Fees and Expenses $5,000
Printing and Engraving $200
Miscellaneous $500
======
Total $8,463
|
Item 26. Recent Sales of Unregistered Securities.
On October 26, 2000, the Company issued 10,000,000 shares of common stock to Michael G. Quinlan, an officer and director of the Company, for services valued at $10,000 pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933.
On November 27, 2000 the Company issued 400,000 shares of common stock for cash of $10,000 to Earl Gilbrech, an unaffiliated investor, pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933.
In March 2001, the Company completed an offering of Common Stock to a group of unaffiliated private investors. The Company issued 108,000 shares of common stock for cash at $0.25 per share to twenty-seven shareholders unaffiliated with the Company. That offering was conducted pursuant to an exemption from registration under Regulation D, Rule 506 of the Securities Act of 1933, as amended. As of the date of this Registration Statement, the Company has 10,508,000 shares of $0.001 par value common stock issued and outstanding.
Item 27. Exhibits.
Exhibit Number Name and/or Identification of Exhibit
1. Underwriting Agreement None.
2. Plan of Acquisition,reorganization,arrangement,liquidation, or succession None.
3. Articles of Incorporation & By-Laws
(a) Articles of Incorporation of the Company filed on August
31, 2000.
(b) Bylaws of the Company adopted on September 1, 2000.
4. Instruments Defining the Rights of Holders, Including Indentures None other than those included in Exhibit 3.
5. Opinion on Legality Attorney Opinion Letter
6. No exhibit required
7. No exhibit required
8. Opinion on Tax Matters Not Applicable.
9. Voting Trust Agreement None.
10. Material Contracts None.
11. Statement on Computation of Per Share Earnings None. The computation can be clearly determined from Report.
12. No exhibit required
13. Annual or Quarterly Reports, Form 10-Q None.
14. No exhibit required
15. Letter on Unaudited Interim Financial Information None.
16. Letter on Change in Certifying Accountant None.
17. Letter on Director Resignation Not applicable.
18. Letter on Change in Accounting Principles Not applicable.
19. Reports Furnished to Securityholders
Not applicable.
20. Other Documents or Statements to Security Holders Not applicable.
21. Subsidiaries of the Small Business Issuer None.
22. Published Report Regarding Matters Submitted to Vote Not applicable.
23. Consent of Experts and Counsel None.
24. Power of Attorney None.
25. Statement of Eligibility of Trustee None.
26. Invitations for Competitive Bids Not applicable.
27. Financial Data Schedule Not required.
Item 28. Undertakings.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period, in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933, as amended;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of the Registration Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, as amended, 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) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
B. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 14 above, 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 the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
C. The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this Registration Statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus 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.
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 of filing on Form SB-2 and authorized this Registration Statement to be signed on its behalf by the undersigned, in the City of Scottsdale State of Arizona on May 8, 2001.
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:
/s/ Michael G. Quinlan
---------------------------------
(Signature)
|
/s/ Michelle R. Quinlan
---------------------------------
(Signature)
|
EXHIBIT 3(a): Articles of Incorporation of the Company filed on August 31,2000.
ARTICLES OF INCORPORATION OF
WINE SYSTEMS DESIGN, INC.
THE UNDERSIGNED PERSON, acting as Incorporator of a corporation under the provisions of the Nevada General Corporation Law, adopts the following Articles of Incorporation:
FIRST. The name of the corporation is:
WINE SYSTEMS DESIGN, INC.
SECOND. The street address of the corporation's resident agent and the principal or statutory address of this corporation in the State of Nevada shall be:
CORPORATE SERVICE CENTER, INC.
1475 Terminal Way, Suite E
Reno, Washoe County, NV 89502
This corporation may maintain an office, or offices, in such other place or places within or without the State of Nevada as may be from time to time designated by the Board of Directors, or by the bylaws of said corporation, and that this corporation may conduct all corporation business of every kind and nature, including the holding of all meetings of directors and stockholders, outside the State of Nevada as well as within the State of Nevada.
THIRD. The corporation shall have unlimited power to engage in and do any lawful act concerning any or all lawful business for which corporations may be organized under the Law and not limited by the Statutes of Nevada, or any other state in which it conducts its business.
FOURTH. That the total number of voting common stock authorized that may be issued by the corporation is TWENTY FIVE MILLION (25,000,000) shares of stock with $0.001 par value, and no other class of stock shall be authorized. Said shares may be issued by the corporation from time to time for such considerations as may be fixed from time to time by the Board of Directors.
FIFTH. The governing board of this corporation shall be known as directors, and the number of directors may from time to time be increased or decreased in such manner as shall be provided by the bylaws of this corporation, providing that the number of directors shall not be reduced to less than one (1). The name and post office address of the first Board of Directors, which shall be one (1) in number, shall be listed as follows:
DEREK G. ROWLEY
1475 Terminal Way, Suite E
Reno, NV 89502.
SIXTH. The capital stock, after the amount of the subscription price, or par value, has been paid in, shall not be subject to assessment to pay the debts of the corporation.
SEVENTH. The name and post office address of the Incorporator signing the Articles of Incorporation is as follows:
DEREK G. ROWLEY
1475 Terminal Way, Suite E
Reno, NV 89502.
EIGHTH. The corporation is to have perpetual existence.
NINTH. Any corporate officer, director, or shareholder of this corporation shall not, in the absence of fraud, be prohibited from dealing with this corporation either as vendor, purchaser or otherwise. A pecuniary interest in any transaction by any such director, shareholder or officer shall not disqualify him in any way from acting in his corporate capacity. No director nor officer, nor any firm, association, or corporation of which he shall be a member, or in which he may be peculiarly interested in any manner be disqualified from dealing with the corporation as a result of the association. No director nor officer, nor any firm, association, or corporation with which he is connected as aforesaid shall be liable to account to this corporation or its shareholders for any profit realized by him from or though any such transaction or contract, it being the express purpose and intent of the Article to permit this corporation to buy from, sell to, or otherwise deal with the partnerships, firms, or corporations of directors and officers of the corporation, or any one or more of them who may have pecuniary interest, and the contracts of this corporation, in the absence of fraud, shall not be void or voidable or affecting in any manner by reason of such position. Furthermore, directors of this corporation may be counted for a quorum of the Board of Directors of this corporation at a meeting even though they may be peculiarly interested in matters considered at a meeting; any action taken at such a meeting with reference to such matters by a majority of the disinterested directors shall not be void or voidable by this corporation in the absence of fraud.
TENTH. No director or officer of the corporation shall be
personally liable to the corporation or any of its stockholders
for damages for breach of fiduciary duty as a director or officer
or for any act or omission of any such director or officer,
however, the foregoing provision shall not eliminate or limit the
liability of a director or officer for (a) acts or omissions
which involve intentional misconduct, fraud or a knowing
violation of law or (b) the payment of dividends in violation of
Section 78.300 of the Nevada Revised Statutes. Any repeal or
modification of this Article by the stockholders of the
corporation shall be prospective only and shall not adversely
affect any limitation on the personal liability of a director or
officer of the corporation for acts or omissions prior to such
repeal or modification.
ELEVENTH. This corporation reserves the right to amend, alter, change or repeal any provision contained in the Articles of Incorporation, in the manner now or hereafter prescribed by statute, or by the Articles of Incorporation, and all rights conferred upon stockholders herein are granted subject to this reservation.
I, THE UNDERSIGNED, being the Incorporator hereinbefore named for the purpose of forming a corporation pursuant to the General Corporation Laws of the State of Nevada, do make and file these Articles of Incorporation, hereby declaring and certifying that the facts herein stated are true, and accordingly have hereunto set my hand this Tuesday, August 29, 2000.
/s/ DEREK G. ROWLEY DEREK G. ROWLEY Incorporator |
STATE OF NEVADA
WASHOE COUNTY
On this Tuesday, August 29, 2000, in the City of Reno, before me, the undersigned, a Notary Public in and for Washoe County, State of Nevada, personally appeared DEREK G. ROWLEY, known to me to be the person whose name is subscribed to the foregoing document and acknowledged to me that he executed the same.
/s/ D. K. Melius Notary Public |
EXHIBIT 3(b): Bylaws of the Company Adopted on September 1,2000.
BYLAWS OF
WINE SYSTEMS DESIGN, INC.
a Nevada Corporation
ARTICLE I. MEETINGS OF STOCKHOLDERS
ANNUAL MEETING
Section 1. The annual meeting of the stockholders of this corporation shall be held at the Nevada offices of the Corporation on September 1, 2000, at 12pm each and every year, or at such other places and times as the directors shall from time to time determine. The purpose of this meeting shall be for the election of directors and such other business as may properly come before said meeting. Notice of the time, place an object of such meeting shall be given by publication thereof by serving personally or by mailing at least ten (10) days prior to such meeting, postage prepaid, a copy of such notice, addressed to each stockholder at his residence or place of business, as the same shall appear on the books of the corporation. No business other than that stated in such notice shall be transacted at such meeting without the unanimous consent of all the stockholders thereat, in person or by proxy.
SPECIAL MEETINGS
Section 2. Special meetings of stockholders, other than those regulated by statute, may be called at any time by the president or by a majority of the directors. It shall also be the duty of the president to call such meetings whenever requested to do so by the holder or holders of the majority share of the capital stock of the corporation. A notice of every meeting stating the time, place and object thereof, shall be given by mailing, postage prepaid, at least ten (10) days before such meeting, a copy of such notice addressed to each stockholder at his post office address as the same appears on the books of the corporation.
QUORUM
Section 3. At all meetings of the stockholders, there shall be present, either in person or by proxy, stockholders owning FIFTY ONE PERCENT (51%) of the capital stock of the corporation in order to constitute a quorum. If a quorum is not present, the stockholders present in person or by proxy may adjourn to such future time as shall be agreed upon by them, and notice of such adjournment shall be mailed, postage prepaid, to each stockholder at least ten (10) days before such adjourned meeting but if a quorum is present, they may adjourn from day to day as they see fit, and no notice of such adjournment need be given.
VOTING CAPACITY
Section 4. At all meetings of the stockholders, each stockholder shall be entitled to one vote for each share of stock in his own name on the books of the corporation, whether represented in person or by proxy. All proxies shall be in writing and signed.
ORDER OF BUSINESS
Section 5. At all meetings of stockholders the following shall be the order of business so far as is practicable:
1. Calling the roll
2. Reading, correcting, and approving ofthe minutes of the
previous meeting
3. Reports of officers
4. Reports of committees
5. Unfinished business
6. New business
7. Election of directors
8. Miscellaneous business
ARTICLE II. DIRECTORS
ELECTION
Section 1. The board of directors of this corporation, consisting of a least one (1) person, shall be elected for the term of 1 year at the annual meeting of stockholders, except as hereinafter otherwise provided for filling vacancies. The directors shall be chosen by a majority vote of the stockholders, voting either in person or by proxy, at such annual election.
VACANCIES
Section 2. Vacancies in the board of directors, occurring during the year, shall be filled for the unexpired term by a majority vote of the remaining directors at any special meeting called for that purpose, or at any regular meeting of the board.
DEATH OR RESIGNATION OF ENTIRE BOARD
Section 3. In case the entire board of directors shall die or resign, any stockholder may call a special meeting in the same manner that the president may call such meetings, and directors for the unexpired term may be elected at such special meeting in the manner provided for their election at annual meetings.
RULES AND REGULATIONS
Section 4. The directors shall have the creneral control and management of the business and affairs of the company and shall exercise all the powers that may be exercised or performed by the corporation. The board of directors may adopt such rules and regulations for the conduct of their meetings and management of the affairs of the corporation as they may deem proper, not inconsistent with the laws and statutes of the state of Nevada, the articles of incorporation, or these bylaws. Such management will be by majority vote of the board of directors with each director having an equal vote.
TIME OF MEETING
Section 5. The board of directors shall meet regularly at 12pm, on September 1 of each and every year, at the office of the company at Scottsdale, Arizona, or at such other places and times as the board of directors shall by resolution appoint. On the request of the president or any director, the secretary shall call a special meeting of the board. The secretary shall give each director at least ten (10) days prior notice of such meeting. Special meetings may also be called by execution of the appropriate waiver of notice as contained in Article VI of these bylaws.
RESOLUTIONS
Section 6. A resolution, in writing, signed by all or a majority of the members of the board of directors, shall constitute action by the board of directors to the effect therein expressed, with the same force and effect as though such resolution had been passed at a duly convened meeting and it shall be the duty of the secretary to record every such resolution in the Minute Book of the corporation under its proper date.
COMMITTEES
Section 7. All committees shall be appointed by the board of directors. The directors may, by majority resolution, designate one or more committees with a director or directors to manage the business or any aspect of the business and to have full powers.
ARTICLE III. OFFICERS
Section 1. The officers of this corporation shall consist of a president, one or more vice-presidents, secretary, treasurer, resident agent and such other officers as shall be elected or appointed by the board of directors. The salaries of such officers shall be fixed by the board of directors and may be changed from time to time by a majority vote of the board. Each officer shall serve for a term of one (1) year or until their successors are chosen and qualified. Officers may be reelected or re-appointed for successive annual terms. Additional officers elected or appointed by the board of directors shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined by the board of directors.
DUTIES OF THE PRESIDENT
Section 2. The president shall preside at all meetings of the board of directors, and shall act as temporary chairman at, and call to order all meetings of the stockholders. The president shall sign or countersign all certificates, contracts and other instruments of the corporation as authorized by the board of directors. The president shall have general management of the affairs of the corporation, subject to the board of directors, and shall perform all duties as are incidental to his office or are required of him by the board of directors.
DUTIES OF VICE-PRESIDENT
Section 3. The vice-president shall, in the absence or incapacity of the president, perform the duties of the president and shall have such powers and such duties as may be assigned to him by the board of directors.
DUTIES OF THE SECRETARY
Section 4. The secretary shall keep the minutes of the board of directors, and also the minutes of the meetings of stockholders he shall attend to the giving and serving of all notices of the company, shall have charge of the books and papers of the corporation and shall make such reports and perform such other duties as are incidental to his office and as the board of directors may direct. The secretary shall be responsible that the corporation complies with Section 78.105 of the Nevada Corporation Laws by supplying to the Nevada resident agent or principal office in Nevada, any and all amendments to the corporation's Articles of Incorporation and any and all amendments or changes to the bylaws of the corporation. Also in compliance with Section 78.105 of the same laws, he will also maintain and supply to the Nevada resident agent or principal office in Nevada, a current statement setting forth the name of
the custodian of the stock ledger or duplicate stock ledger, and the present and complete post office address, including street and number, if any, where such stock ledger or duplicate stock ledger specified in the section is kept.
DUTIES OF THE TREASURER
Section 5. The treasurer shall have the care and custody of all the funds and securities of the corporation and shall keep regular books of account. He shall disburse the funds of the corporation in payment of the just demands against the corporation, or as may be ordered by the board of directors, making proper such vouchers for such disbursements and shall render to the board of directors or stockholders, as may be required of him, an account of all his transactions as treasurer and of the financial condition of the corporation. He shall perform all other duties as are incidental to his office or as properly required of him by the board of directors.
DUTIES OF THE RESIDENT AGENT
Section 6. The resident agent shall be in charge of the corporation's registered or principal office in the state of Nevada, upon whom process against the corporation may be served and shall perform all duties as required of him by statute.
ARTICLE IV. STOCK
Section 1. Certificates of stock shall be in a form approved by the board of directors and shall be consecutively numbered. The name of the person owning the shares represented by each certificate, with the number. of such shares and the date of issue, shall be entered on the company's books. The president and secretary shall sign all certificates of stock issued by the corporation. All certificates of stock transferred by endorsement therein shall be surrendered by cancellation and new certificates issued to the purchaser or assignee.
ARTICLE V. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1. The corporation shall indemnify any and all of its directors or officers or former directors or officers or any person who may have served at its request as a director or officer of another corporation in which it owns shares of capital stock or of which it is a creditor against expenses actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding in which they, or any of them, are made parties, or a party, by reason of being or having been directors or officers or a director or officer of the corporation, or of such other corporation, except, in relation to matters as to which any such director or officer or former director or officer or person shall be adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of duty. Such indemnification shall not be deemed exclusive of any other rights to which those indemnified may be entitled under by-law, agreement, vote of stockholders or otherwise.
ARTICLE VI. WAIVER OF NOTICE
Section 1. Whenever, under the provisions of these bylaws or of any of the corporate laws, the stockholders or directors are required to give notice or allow a lapse of time after such notice for authorization to hold a meeting, such meeting may be held without such notice and without such lapse of time by execution of the appropriate waiver of notice by a majority of the directors of the corporation.
ARTICLE VII. AMENDMENTS
Section 1. These bylaws may be amended at any stockholders' meeting by a vote of the stockholders owning a majority of the stock, represented either in person or by proxy, provided the proposed amendment is included in the notice of such meeting. The board of directors may amend the bylaws or adopt additional bylaws, but shall not alter or repeal any bylaws adopted by the stockholders of the corporation. A copy of any amended bylaws shall be sent to each stockholder and to the resident agent within ten (10) days after the adoption of the same.
CERTIFIED TO BE THE BY-LAWS OF:
WINE SYSTEMS DESIGN, INC.
BY: /s/ Michelle R. Quinlan Secretary |
EXHIBIT 5: Attorney Opinion Letter.
101 Convention Center Drive Harold P. Gewerter & Associates Suite 1225 Harold P. Gewerter, Esq. Las Vegas, Nevada USA 89109 Office: (702) 221-2094 Cell: (702) 375-9471 Facsimile: (702) 735-5330 E-Mail: hga@attorney.com
May 9, 2001
Michael G. Quinlan
Wine Systems Design, Inc.
8343 E. Earll Drive
Scottsdale, AZ 85251
RE: Proposed Sale of Common Stock by Certain Shareholders of Wine Systems Design, Inc.
Dear Mr. Quinlan:
At your request, we are rendering this opinion in connection with a proposed sale by certain shareholders ("Selling Shareholders") of Wine Systems Design, Inc., a Nevada corporation (the "Company"), of up to 208,000 shares of common stock, $0.001 par value (the "Common Stock"). The Selling Shareholders are identified in the Registration Statement on Form SB-2 originally dated May 8, 2000.
We have examined instruments, documents, and records, which we deemed relevant and necessary for the basis of our opinion hereinafter expressed. In such examination, we have assumed the following: (a) the authenticity of original documents and the genuineness of all signatures; (b) the conformity to the originals of all documents submitted to us as copies; and (c) the truth, accuracy, and completeness of the information, representations, and warranties contained in the records, documents, instruments, and certificates we have reviewed.
Based on such examination, we are of the opinion that 208,000 shares of Common Stock to be sold by the Selling Shareholders are, as of the date hereof, duly authorized shares of Common Stock, and have been legally issued, fully paid, and non- assessable.
We hereby consent to the filing of this opinion as an exhibit to the above-referenced Registration Statement and to the use of our name wherever it appears in said Registration Statement, including the Prospectus constituting a part thereof, as originally filed or as subsequently amended or supplemented. In giving such consent, we do not consider that we are "experts" within the meaning of such term as used in the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission issued thereunder, with respect to any part of the Registration Statement, including this opinion as an exhibit or otherwise.
Sincerely
/s/ Harold P. Gerwerter Harold P. Gerwerter, Esq |