|
Registration
No. 333-_______
|
As
filed with the U.S. Securities and Exchange Commission on April 6,
2009
|
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
K-KITZ,
INC.
(Exact
name of registrant as specified in its charter)
Delaware
|
|
5099
|
|
20-5313323
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
(Primary
Standard Industrial
Classification
Code Number)
|
|
(I.R.S.
Employer Identification
Number)
|
|
|
Jennifer
H. Jarvis
|
|
|
President
and Chief
Executive
Officer
|
1630
Integrity Drive East
Columbus,
Ohio 43209
Tel:
(614) 449-8614
Fax:
(614) 449-9605
|
|
K-Kitz,
Inc.
1630
Integrity Drive East
Columbus,
Ohio 43209
Tel:
(614) 449-8614
Fax:
(614) 449-9605
|
(Address,
including zip code, and telephone
|
|
(Name,
address, including zip code, and
|
number,
including area code, of registrant's
|
|
telephone
number, including area code, of
|
principal executive
offices)
|
|
agent
for service)
|
Copies
of communications to:
Greenberg
Traurig, LLP
MetLife
Building
200
Park Avenue, 15th
Floor
New
York, New York 10166
Attention:
Spencer G. Feldman, Esq.
Tel:
(212) 801-9200
Fax:
(212) 801-6400
|
As
soon as practicable after the effective date of this Registration
Statement
(Approximate
date of commencement of proposed sale to the public)
If any
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. o
If this
Form is filed to register additional securities for an offering under Rule
462(b) 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. o
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. o
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. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated filer
|
o
|
Accelerated
filer
|
o
|
Non-accelerated
filer
|
o
|
Smaller
reporting company
|
x
|
CALCULATION
OF REGISTRATION FEE
Title of each class
of securities to be
registered
|
|
Amount to be
registered(1)
|
|
Proposed maximum
offering price per
share
|
|
|
Proposed maximum
aggregate offering
price
|
|
|
Amount of
registration
fee (2)
|
|
Common
Stock, par
value
$0.000001 per share
|
|
2,000,000 shares
|
|
$ |
0.05 |
|
|
|
100,000 |
|
|
$ |
5.58 |
|
(1)
|
In
accordance with Rule 416(a) under the Securities Act, the registrant is
also registering hereunder an indeterminate number of shares that may be
issued and resold resulting from stock splits, stock dividends or similar
transaction.
|
(2)
|
Estimated
solely for purposes of calculating the registration fee pursuant to Rule
457(c) 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 under said Section 8(a), may
determine.
The
information in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the U.S.
Securities and Exchange Commission is declared effective. This prospectus is not
an offer to sell these securities, and we are not soliciting offers to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS (Subject to
Completion)
Issued
April 6, 2009
K-KITZ,
INC.
Shares
of Common Stock
1,000,000
Minimum - 2,000,000 Maximum
Before
this offering, there has been no public market for our shares of common stock.
Assuming we raise the minimum amount in this offering, we will attempt to have
the shares quoted on the OTC Bulletin Board. There is no assurance that
the shares will ever be quoted on the OTC Bulletin Board. To be quoted on the
OTC Bulletin Board, a market maker must apply to make a market in our common
stock.
We are
offering up to a total of 2,000,000 shares of common stock on a
self-underwritten basis, 1,000,000 shares minimum, and 2,000,000 shares maximum.
The offering price is $0.05 per share. In the event that 1,000,000 shares are
not sold within 180 days, at our sole discretion, we may extend the offering for
an additional 90 days. In the event that 1,000,000 shares are not sold within
the 180 days or within the additional 90 days if extended, all money received by
us and held in escrow will be promptly returned to you without charge, deduction
or interest. If at least 1,000,000 shares are sold within 180 days or within the
additional 90 days if extended, all money received by us will be retained by us
and there will be no refund. There are no minimum purchase requirements for each
individual investor. The proceeds of this offering will be deposited at
Fifth Third Bank, Columbus, Ohio, in an escrow account established by us, until
we have sold at least 1,000,000 shares of common stock. Once we sell at least
1,000,000 shares of common stock, Fifth Third Bank will release the funds from
escrow to us.
There are
no underwriting commissions involved in this offering. Our common stock will be
sold on our behalf by our officers and directors. The intended methods of
communication with potential investors include, without limitation, telephone
calls and personal contacts. Our officers and directors will not receive
any commissions or proceeds from the offering for selling the shares on our
behalf.
Investing
in our common stock involves a high degree of risk. Please see "Risk
Factors" starting on page 5.
Neither
the U.S. 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 date
of this prospectus is __________, 2009.
K-KITZ, INC.
TABLE OF
CONTENTS
|
|
Page
|
|
|
|
|
|
SUMMARY
OF OUR OFFERING
|
|
|
3 |
|
|
|
|
|
|
RISK
FACTORS
|
|
|
5 |
|
|
|
|
|
|
USE
OF PROCEEDS
|
|
|
9 |
|
|
|
|
|
|
DETERMINATION
OF OFFERING PRICE
|
|
|
10 |
|
|
|
|
|
|
DILUTION
OF THE PRICE YOU PAY FOR YOUR SHARES
|
|
|
10 |
|
|
|
|
|
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
|
|
12 |
|
|
|
|
|
|
BUSINESS
|
|
|
17 |
|
|
|
|
|
|
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
|
|
20 |
|
|
|
|
|
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
|
|
22 |
|
|
|
|
|
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
|
|
23 |
|
|
|
|
|
|
PLAN
OF DISTRIBUTION AND TERMS OF THE OFFERING
|
|
|
24 |
|
|
|
|
|
|
DESCRIPTION
OF SECURITIES
|
|
|
28 |
|
|
|
|
|
|
LEGAL
OPINION
|
|
|
30 |
|
|
|
|
|
|
EXPERTS
|
|
|
30 |
|
|
|
|
|
|
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
|
|
|
30 |
|
|
|
|
|
|
FINANCIAL
STATEMENTS
|
|
|
F-1 |
|
SUMMARY
OF OUR OFFERING
Prospectus
Summary
The
following summary is only a shortened version of the more detailed information,
exhibits and financial statements appearing elsewhere in this prospectus.
Prospective investors are urged to read this prospectus in its
entirety.
Our
Business
K-Kitz,
Inc. designs, assembles, markets and sells emergency preparedness kits and
supplies to school systems, municipalities, businesses and other
customers. We combine our own direct marketing and sales effort, primarily
through our kkitz.com website, with approximately 11 independent dealers which
resell our products to these target buyers throughout the country.
We custom
design and assemble most of our emergency preparedness kits based on the
individual needs of a buyer. During 2008, we supplied kits to end-users such as
the Board of Health of Franklin County, Ohio and the Roman Catholic Diocese for
parochial schools in and around Columbus, Ohio, and to dealers such as Airgas
Safety, Inc. and Safety Environmental Control, Inc. We believe these
customers are representative of our overall customer base. We are able to
assemble the kits using a variety of essential emergency supplies such as crank
lanterns, weatherband radios, portable decontamination chambers, megaphones,
first responder vests, protection facemasks, disposable gloves and blood
pressure cuffs. Our approach is to be responsive to customer needs by
performing these customized services, while also supplying a full line of
products from a single source. Competition in this market is based largely
on design capability, price, product quality, customer service and ability to
meet delivery requirements.
We were
incorporated in the state of Delaware on August 9, 2006. Our principal
executive offices are located at 1630 Integrity Drive East, Columbus, Ohio
43209, and our telephone number is (614) 449-8614. Our web address is
www.kkitz.com. Information on our website is not part of this
prospectus.
As described more fully in the Risk
Factors section below, we face numerous obstacles in operating and expanding our
business, including:
|
·
|
conservative
state and municipal budgets which negatively affect spending by school
systems and municipalities, our primary
customers,
|
|
·
|
lack
of capital to significantly expand our marketing capabilities beyond our
existing base in Columbus, Ohio,
|
|
·
|
many
competitors that make similar emergency preparedness kits, some of which
operate in large geographical regions and sell nationally and have greater
resources than we have, and
|
|
·
|
our
poor financial condition raises substantial doubt about our ability to
continue as a going concern.
|
The
Offering
Following
is a brief summary of this offering:
Securities
being offered
|
|
A
minimum of 1,000,000 shares of common stock and a maximum of 2,000,000
shares of common stock, par value $0.000001 per share.
|
|
|
|
Offering
price
|
|
$0.05
per share.
|
Offering
period
|
|
The
shares are being offered for a period not to exceed 180 days, unless
extended by our board of directors for an additional 90
days.
|
|
|
|
Net
proceeds to us
|
|
Approximately
$50,000 assuming the minimum number of shares is sold. Approximately
$100,000 assuming the maximum number of shares is sold.
|
|
|
|
Use
of proceeds
|
|
We
will use the net proceeds of this offering to expand our marketing efforts
and for working capital.
|
|
|
|
Number
of shares outstanding before the offering
|
|
4,500,000
shares.
|
|
|
|
Number
of shares outstanding after the offering
|
|
5,500,000
shares (minimum);
6,500,000
shares (maximum)
|
|
|
|
Risk
factors
|
|
Investing
in our common stock involves a high degree of risk. The common stock
offered in this prospectus is for investment purposes only and there is
currently no public trading market for our common stock. Please
refer to the sections “Risk Factors” and “Dilution” before making an
investment in our stock.
|
The
proceeds of the offering will be deposited at Fifth Third Bank, Columbus, Ohio,
in an escrow account established by us. Fifth Third Bank will hold the
funds in the account until we receive a minimum of $50,000 at which time Fifth
Third Bank will release the funds to us. Any funds received in excess of $50,000
will immediately be available to us. If we do not receive the minimum amount of
$50,000 within 180 days of the effective date of our registration statement, we
may extend the offering for an additional 90 days. If we have not received the
minimum amount at the end of the 90-day extension, Fifth Third Bank will
promptly return all funds to you without charge, deduction or interest. During
the 180-day period and possible additional 90-day period, no funds will be
returned to you. You will only receive a refund of your subscription if we do
not raise a minimum of $50,000 within the 180-day period referred to above which
could be expanded by an additional 90 days at our discretion for a total of 270
days.
Selected
Financial Data
The
following financial information summarizes the more complete historical
financial information at the end of this prospectus.
|
|
Year ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
Income Statement Data:
|
|
|
|
|
|
|
Revenue
|
|
$ |
459,229 |
|
|
$ |
197,120 |
|
Total
operating expenses
|
|
|
448,825 |
|
|
|
187,465 |
|
Net
income
|
|
|
8,392 |
|
|
|
7,789 |
|
|
|
|
|
|
|
|
|
|
Balance Sheet Data (at end of
period):
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$ |
140,606 |
|
|
$ |
60,564 |
|
Total
current liabilities
|
|
|
105,028 |
|
|
|
33,378 |
|
Total
stockholders’ equity
|
|
|
35,578 |
|
|
|
27,186 |
|
RISK
FACTORS
Please
consider the following risk factors before deciding to invest in our common
stock. We discuss all material risks in the risk factors.
Risks
Associated with K-Kitz
We
depend on state and municipal budgets, which have been cut over the past several
years, and negatively affect spending by school systems and municipalities,
which are our primary customers.
Our
primary market depends on the adequacy of funding of school systems and
municipalities. As a result of conservative state and municipal
budgets caused by the current economic slowdown, we believe this market has not
experienced any appreciable growth over the past several years. This was
particularly true in our major geographic market, which is the central Ohio
area. In addition, prices have trended upward for products used in our
emergency preparedness kits. This, together with competitive bidding for
orders, affects our overall profitability and, should these conditions persist,
will continue to have an adverse effect on our financial result in the
future.
We
have reported limited sales and net income, and there can be no assurance that
we will ever generate significant sales or net income.
We were
incorporated in August 2006 and have had limited operations. Our
operations are subject to all of the risks inherent in the establishment of a
new business enterprise. The likelihood of our success must be considered
in light of the problems, expenses, difficulties, complications and delays
frequently encountered in connection with the growth of a new business, the
scaling-up of operations and the competitive environment in which we are
operating. For the year ended December 31, 2008, we had revenue of
$459,229 and net income of $8,392. As of December 31, 2008, we had total
stockholders’
equity of $35,578. For the year ended December 31, 2007, we had revenue of
$197,120 and net income of $7,789. No assurance can be given that we will
continue to have net income or ever generate significant sales.
Our
poor financial condition raises substantial doubt about our ability to continue
as a going concern.
Our independent registered public
accounting firm has indicated in its audit report for the year ended December
31, 2008, that, because we rely on loans and advances from related parties to
meet our current liquidity needs, there is substantial doubt about our ability
to continue as a going concern. Our poor financial condition could inhibit
our ability to achieve our business plan.
We
compete with many different companies, some of which operate in large
geographical regions and sell nationally with greater resources than we
have.
We
compete with a variety of companies that manufacture or distribute emergency
preparedness kits. While many competitors are small, privately-owned
companies, some operate in large geographical regions and some sell nationally,
either through a system of dealers, direct sales offices, or both, such as
Aramsco
(a Safeguard Industrial company), with greater financial and personnel resources
than we have. Competition in these markets is based largely on design
capability, price, product quality, customer service and ability to meet
delivery requirements.
We
could be exposed to product liability if the products we sell malfunction, and
such damages may be substantial.
The products we sell are intended to be
used in emergency and disaster situations. Although we do not sell
products for immediate medical treatment or for use in a “life or death”
situation, in the event of a malfunction of any of our products, irrespective of
the cause, we could be sued alone or along with other companies and become
liable for substantial damages. We have secured product liability
insurance aggregating $1,000,000. There can be no assurance that such
insurance will be adequate to protect us from defense costs and a possible
adverse judgment against us.
We
have a limited marketing and sales capability, which would not currently support
extensive growth and could cause our results of operations to be
stagnant.
We have limited internal marketing and
sales capability at this time. We also presently use independent dealers
to market our products. These dealers handle other product lines, many of
which may be of greater significance to them than our products. Currently,
our own direct marketing and sales force and independent dealers would not
support extensive growth. This limited marketing and sales capability
could cause our results of operations to be stagnant for an indefinite period of
time.
We
have a need for the proceeds of this offering to expand our marketing efforts
and for subsequent funding thereafter.
We have a need for the proceeds of this
offering in order to finance our planned marketing efforts that would include
exhibiting our products at selected trade shows and conducting print and
direct-mail campaigns to targeted customers. No assurance can be given
that the amount of money being allocated to such marketing efforts will be
sufficient to complete these plans, or that we will derive any profits from
these planned marketing efforts. Additionally, although we believe the
anticipated proceeds of this offering, together with cash on hand and projected
cash flow from operating activities, will allow us to conduct our operations for
at least the next 12 to 18 months, our continued operations thereafter will
depend upon the availability of cash flow, if any, from our operations or our
ability to raise additional funds through equity or debt financing. There
is no assurance that we will be able to obtain additional funding when it is
needed, or that such funding, if available, will be obtainable on terms and
conditions favorable to or affordable by us. If we cannot obtain needed
funds, we may be forced to curtail our activities.
If
Jennifer H. Jarvis resigns or dies without our having found a replacement, our
operations may be suspended or cease. If that should occur, you could lose your
investment.
Jennifer
H. Jarvis is our President, Chief Executive Officer and Chief Financial
Officer. We are dependent upon her to coordinate the marketing of our
products and for her knowledge and contacts in our business. If Ms. Jarvis
should resign or die there will be no one with her knowledge to operate the
company. Further, we do not have an employment agreement with Ms. Jarvis and we
do not have key-person life insurance for our benefit should she die. If we lose
the services of Ms. Jarvis, and until we find another person to replace her, our
operations may be suspended. In that event, it is possible you could lose your
entire investment.
We
use a small number of suppliers for our products, and rely on them for prompt
shipment and quality control.
The products used by us to produce our
emergency preparedness kits are currently provided to our specifications by
single suppliers, so as to maintain good relations for prompt shipments to us
when required and for consistent product quality standards. Our management
believes that alternative sources of supply of these materials used by us to
produce our kits are readily available. We have never experienced any
difficulty with the quantity or quality of products from our product
suppliers. All other component products are readily available from a
variety of sources.
Our
technology and know-how is unpatented and others may seek to copy it without
compensating us.
We do not
patent technology or other know-how developed by us relating to our
decontamination chambers or pumps or certain other minor products and processes,
and we cannot be sure that others will not independently develop the same or
similar technology, or otherwise obtain access to and use our technology or
know-how without compensating us. To protect our rights in these areas, we
require all employees, consultants and others who work for or with us to enter
into confidentiality agreements. We cannot be sure that these agreements
will provide meaningful protection for our know-how, trade secrets or other
information in the event of any unauthorized use, misappropriation or
disclosure. We do not, however, consider the grant of patents essential to
the success of our business.
Having
only two officers and directors (the same persons) limits our ability to
establish effective independent corporate governance procedures and increases
the control of our senior executive officer.
We have only two directors, who are
also our executive officers. Accordingly, we cannot establish board
committees comprised of independent members to oversee functions like
compensation or audit issues. In addition, a tie vote of board members is
decided in favor of the chairman (who is Jennifer H. Jarvis, our President,
Chief Executive Officer and Chief Financial Officer), which gives Ms. Jarvis
significant control over all corporate issues.
Unless and until we have a larger board
of directors that would include one or more independent members, there will be
limited oversight of Ms. Jarvis’ decisions and activities and little ability for
you to challenge or reverse those activities and decisions, even if they are not
in your best interests.
Risks
Associated with this Offering
Because
there is no public trading market for our common stock, you may not be able to
resell your stock and, as a result, your investment is illiquid.
There is
currently no public trading market for our common stock. Therefore, there is no
central place, such as a stock exchange or electronic trading system, to resell
your shares. If you do want to resell your shares, you will have to locate a
buyer and negotiate your own sale, of which there is no assurance. As a result,
your investment is illiquid.
We
are selling the shares offered in this prospectus without an underwriter and may
not be able to sell all of the shares.
The shares of common stock are being
offered on our behalf by our officers and directors on a self-underwritten
efforts basis. No broker/dealer has been retained as an underwriter and no
broker/dealer is under any obligation to purchase any shares. There are no
firm commitments to purchase any of the shares in this offering.
Consequently, there is no guarantee that we, through our officers and directors,
are capable of selling all of the shares offered in this
propsectus.
Finra
sales practice requirements may limit a stockholder's ability to buy and sell
our stock.
The
Financial Industry Regulatory Authority, or Finra, has adopted rules that
require that in recommending an investment to a customer, a broker/dealer must
have reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low-priced securities to their
non-institutional customers, broker/dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status, investment
objectives and other information. Under interpretations of these rules, Finra
believes that there is a high probability that speculative low-priced securities
will not be suitable for at least some customers. Finra requirements will
make it more difficult for broker/dealers to recommend that their customers buy
our common stock when traded, which may have the effect of reducing the level of
trading activity and liquidity of our common stock in the future. Further,
many brokers charge higher fees for penny stock transactions. As a result, fewer
broker/dealers may be willing to make a market in our common stock, reducing a
stockholder's ability to resell shares of our common stock.
Jennifer
H. Jarvis will continue to exercise significant control over our operations. As
a minority stockholder, you would have no control over certain matters requiring
stockholder approval that could affect your ability to resell any shares you
purchase in this offering.
If the
maximum offering is achieved, Jennifer H. Jarvis will own 69.2% of our then
outstanding shares of common stock. Due to the controlling amount of her share
ownership, she will have a significant influence in determining the outcome of
all corporate transactions, including the election of directors, approval of
significant corporate transactions, changes in control of the company or other
matters that could affect your ability to ever resell your shares. Ms. Jarvis’
interests may differ from the interests of the other stockholders and thus
result in corporate decisions that are disadvantageous to other
stockholders.
We
will incur ongoing costs and expenses for SEC reporting and compliance and we
may not be able to remain in compliance, making it difficult for investors to
sell their shares, if at all.
Our
business plan allows for the estimated $39,000 cost of this registration
statement to be paid from existing cash on hand. We plan to contact a market
maker promptly following the effective date of this registration statement (and
do not currently expect any shortage of or delay in identifying a qualified
market maker) and apply to have the shares quoted on the OTC Bulletin Board
operated by Finra. To be eligible for quotation on the OTC Bulletin Board,
issuers must remain current in their periodic report filings with the SEC.
Securities that become delinquent in their required filings are removed. In
order for us to remain in compliance we will require funds to cover the cost of
these filings, which could comprise a substantial portion of our available cash
resources. If we are unable to remain in compliance, it may be difficult for you
to resell any shares you may purchase, if at all.
We
do not anticipate paying cash dividends on our common stock at any time.
Don’t buy our shares if you expect to receive dividends.
We have
never declared or paid dividends on our common stock and do not expect paying
dividends on our common stock at any time in the foreseeable
future.
Our
charter contains some anti-takeover provisions that may inhibit a takeover that
might benefit you.
The
provisions in our certificate of incorporation relating to delegation to the
board of directors of rights to determine the terms of preferred stock may have
the effect not only of discouraging attempts by others to buy us, but also of
making it more difficult or impossible for existing stockholders to make
management changes. The ability of our board of directors to determine the
terms of preferred stock, while providing flexibility in connection with
possible business purchases and other corporate purposes, could make it more
difficult for a third party to secure a majority of our outstanding shares of
common stock.
USE
OF PROCEEDS
Our
offering is being made on a $50,000 minimum, $100,000 maximum self-underwritten
basis. The registration costs will be paid from cash on hand and not from the
proceeds of this offering. The table below sets forth the use of proceeds if
1,000,000 shares (minimum) and 2,000,000 shares (maximum) of the offering are
sold.
|
|
Sale
of
|
|
|
Sale
of
|
|
|
|
1,000,000
|
|
|
2,000,000
|
|
|
|
Shares
|
|
|
Shares
|
|
|
|
(Minimum)
|
|
|
(Maximum)
|
|
|
|
|
|
|
|
|
Marketing
efforts
|
|
$ |
30,000 |
|
|
$ |
60,000 |
|
Working
capital
|
|
|
20,000 |
|
|
|
40,000 |
|
Total
|
|
$ |
50,000 |
|
|
$ |
100,000 |
|
The net
proceeds of this offering will be used to expand our marketing efforts and for
working capital. The proceeds allocated for marketing will be used
principally to exhibit our products at selected trade shows scheduled in
2009-2010, and to engage in one or more print and direct-mail campaigns to
targeted customers. See “Business Description — Sales and Markets.”
A portion of the proceeds allocated for working capital will be used to add the
latest e-commerce features to our website. If more than 1,000,000 shares
are sold in this offering, we may determine to hire additional sales
staff.
We
believe the anticipated proceeds of this offering, together with cash on hand
and projected cash flow from operating activities, will allow us to conduct our
operations for at least the next 12 months if the minimum number of shares is
sold and for at least 18 months if the maximum number of shares is
sold.
There are
no underwriting commissions involved in this offering. Our common stock will be
sold on our behalf by our officers and directors. Our officers and directors
will not receive any commissions or proceeds from the offering for selling the
shares on our behalf.
DETERMINATION
OF OFFERING PRICE
The price
of the shares we are offering was arbitrarily determined in order for us to
raise up to a total of $100,000 in this offering. The offering price bears no
relationship whatsoever to our assets, earnings, book value or other criteria of
value. Among the factors considered were:
|
·
|
our limited operating
history,
|
|
|
|
|
·
|
the proceeds to be raised by the
offering,
|
|
|
|
|
·
|
the
amount of capital to be contributed by purchasers in this offering in
proportion to the amount of stock to be retained by our existing
stockholders, and
|
|
|
|
|
·
|
our relative cash
requirements.
|
DILUTION
OF THE PRICE YOU PAY FOR YOUR SHARES
Dilution
represents the difference between the offering price and the net tangible book
value per share immediately after completion of this offering. Net tangible book
value is the amount that results from subtracting total liabilities and
intangible assets from total assets. Dilution arises mainly as a result of our
arbitrary determination of the offering price of the shares being offered.
Dilution of the value of the shares you purchase is also a result of the lower
book value of the shares held by our existing stockholders.
As of
December 31, 2008, the net tangible book value of our shares of common stock was
approximately $60,143, or approximately $0.0133 per share based upon 4,500,000
shares outstanding. Our offering costs will be paid from cash on hand, not from
the proceeds of this offering. Of our $39,000 estimated offering costs, $12,750
had already been paid as of December 31, 2008, resulting in $26,250 remaining
costs.
If
100% of the Shares Are Sold
Upon
completion of this offering, in the event all of the shares are sold, the net
tangible book value of the 6,500,000 shares to be outstanding will be
approximately $160,143, or approximately $0.024 per share. The net tangible book
value of the shares held by our existing stockholder will be increased by $0.011
per share without any additional investment on their part.
After
completion of this offering, if 2,000,000 shares are sold, non-affiliated
stockholders would own 30.8% of the total number of shares then outstanding for
which non-affiliated stockholders will have made a cash investment of $100,000,
or $0.05 per share. Our existing affiliated stockholder paid $45,000 for
4,500,000 shares of common stock (at a price of $0.01 per share). If 2,000,000
shares are sold in this offering, our existing affiliated stockholder will own
69.2% of the total number of shares then outstanding.
If
the Minimum Number of the Shares Are Sold
Upon
completion of this offering, in the event 1,000,000 shares (the minimum) are
sold, the net tangible book value of the 5,500,000 shares to be outstanding will
be approximately $110,143, or approximately $0.017 per share. The net tangible
book value of the shares held by our affiliated stockholder will be increased by
$0.0037 per share without any additional investment on her part.
After
completion of this offering, if 1,000,000 shares are sold, non-affiliate
stockholders will own 18.2% of the total number of shares then outstanding for
which non-affiliate stockholders will have made a cash investment of $50,000, or
$0.05 per share. Our existing affiliated stockholder paid $45,000 for 4,500,000
shares of common stock (at a price of $0.01 per share). If 1,000,000 shares are
sold in this offering, our existing affiliated stockholder will own 81.8% of the
total number of shares then outstanding.
The
following table compares the differences of your investment in our shares with
the investment of our existing stockholders.
Existing
Stockholder if all of the Shares are Sold
|
|
|
|
|
|
|
|
Price
per share
|
|
$ |
0.024 |
|
Net
tangible book value per share before offering
|
|
$ |
60,143 |
|
Potential
gain to existing stockholders
|
|
$ |
0.011 |
|
Net
tangible book value per share after offering
|
|
$ |
160,143 |
|
|
|
|
|
|
Capital
contribution of existing stockholder
|
|
$ |
16,868 |
|
Number
of shares outstanding before the offering
|
|
|
4,500,000 |
|
Number
of shares after offering assuming the sale of the maximum number of shares
sold
|
|
|
6,500,000 |
|
Percentage
of ownership after offering
|
|
|
|
|
|
|
|
|
|
Purchasers
of Shares in this Offering if all Shares Sold
|
|
|
69 |
% |
|
|
|
|
|
Price
per share
|
|
$ |
0.05 |
|
Capital
contributions of public investors
|
|
$ |
100,000 |
|
Number
of shares after offering held by public investors
|
|
|
2,000,000 |
|
Percentage
of capital contribution by existing stockholder
|
|
|
69 |
% |
Percentage
of capital contributions by public investors
|
|
|
31 |
% |
Percentage
of ownership after offering
|
|
|
100 |
% |
|
|
|
|
|
Purchasers
of Shares in this Offering if the minimum number of Shares
Sold
|
|
|
|
|
|
|
|
|
|
Price
per share
|
|
$ |
0.05 |
|
Capital
contributions of public investors
|
|
$ |
50,000 |
|
Number
of shares after offering held by public investors
|
|
|
1,000,000 |
|
Percentage
of capital contribution by existing stockholder
|
|
|
81 |
% |
Percentage
of capital contributions by public investors
|
|
|
19 |
% |
Percentage
of ownership after offering
|
|
|
100 |
% |
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS
OF OPERATIONS
This
section of the prospectus includes a number of forward-looking statements that
reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words like
believe, expect, estimate, anticipate, intend, project and similar expressions,
or words which, by their nature, refer to future events. You should not place
undue certainty on these forward-looking statements, which apply only as of the
date of this prospectus. These forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or our predictions.
This
Management’s Discussion and Analysis contains not only statements that are
historical facts, but also statements that are forward-looking (within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934). These forward-looking statements involve
certain known and unknown risks, uncertainties and other factors which may cause
our actual results, performance or achievements to be materially different from
any future results, performance or achievements expressed or implied by these
forward-looking statements. These factors include, among others, the
factors set forth above under “Risk Factors.” The words “believe,”
“expect,” “anticipate,” “intend,” “plan” and similar expressions identify
forward-looking statements. We caution you not to place undue reliance on
these forward-looking statements. We undertake no obligation to update and
revise any forward-looking statements or to publicly announce the result of any
revisions to any of the forward-looking statements in this document to reflect
any future or developments. However, the Private Securities Litigation
Reform Act of 1995 is not available to us as a non-reporting issuer.
Further, Section 27A(b)(2)(D) of the Securities Act and Section 21E(b)(2)(D) of
the Securities Exchange Act expressly state that the safe harbor for
forward-looking statements does not apply to statements made in connection with
an initial public offering or to statements made by a penny stock issuer such as
us.
Although
the forward-looking statements in this registration statement reflect the good
faith judgment of our management, such statements can only be based on facts and
factors currently known by us. Consequently, and because forward-looking
statements are inherently subject to risks and uncertainties, the actual results
and outcomes may differ materially from the results and outcomes discussed in
the forward-looking statements. You are urged to carefully review and
consider the various disclosures made by us in this report and in our other
reports as we attempt to advise interested parties of the risks and factors that
may affect our business, financial condition, and results of operations and
prospects.
The
following discussion of our financial condition and results of operations should
be read in conjunction with our financial statements and the related notes, and
other financial information included in this registration
statement.
Overview
K-Kitz,
Inc. is a Delaware corporation formed on August 8, 2006. We custom design and
assemble most of our emergency preparedness kits based on the individual needs
of a buyer. During 2008, we supplied kits to end-users such as the Board
of Health of Franklin County, Ohio and the Roman Catholic Diocese for parochial
schools in and around Columbus, Ohio, and to dealers such as Airgas Safety, Inc.
and Safety Environmental Control, Inc. We are able to assemble the kits
using a variety of essential emergency supplies such as crank lanterns,
weatherband radios, portable decontamination chambers, megaphones, first
responder vests, protection facemasks, disposable gloves and blood pressure
cuffs. Our approach is to be responsive to customer needs by performing
these customized services, while also supplying a full line of products from a
single source. Competition in this market is based largely on design
capability, price, product quality, customer service and ability to meet
delivery requirements.
We face numerous obstacles
in operating and expanding our business, including:
|
·
|
conservative
state and municipal budgets which negatively affect spending by school
systems and municipalities, our primary
customers,
|
|
·
|
lack
of capital to significantly expand our marketing capabilities beyond our
existing base in Columbus, Ohio,
|
|
·
|
many
competitors that make similar emergency preparedness kits, some of which
operate in large geographical regions and sell nationally and have greater
resources than we have, and
|
|
·
|
our
poor financial condition raises substantial doubt about our ability to
continue as a going concern.
|
Revenue
Recognition
We
recognize revenue from the sales of our products in accordance with Staff
Accounting Bulletins 101 and 104. The criteria for recognition is as
follows:
|
·
|
persuasive
evidence of an arrangement exists,
|
|
·
|
delivery
has occurred or services have been
rendered,
|
|
·
|
the
seller’s price to the buyer is fixed or determinable,
and
|
|
·
|
collectability
is reasonably assured.
|
A
majority of our revenues are generated through our catalogs, either through the
Internet or telephone, at which time the customer places an order. Shipments of
products are made as soon as the customized orders are placed in kits and
quality checked. Revenues from sales of kits and related products are
recorded when title transfers, which is typically upon shipment. Most
shipments are made by commercial couriers. Invoicing occurs at shipment,
by regular mail.
A major
customer or vendor is a customer or vendor that represents 10% of our sales or
purchases.
For the
year ended December 31, 2008, we had three major customers representing
approximately 80% of our sales: Franklin County, Ohio - 50.4%, Airgas
Safety, Inc. - 17.8%, and Safety Environmental Control, Inc. - 10.8%. See
“Business - Sales and Markets” for additional information about the nature of
our customer relationships.
For the
year ended December 31, 2008, we had three major vendors that represented
approximately 91% of our purchases of merchandise: Jendco Safety Supply
Inc. - 58.6%, Wolf Creek Co. - 18.9%, and TM Poly Film, Inc. - 13.9%. For
additional information about our relationship with Jendco Safety Supply, see
“Certain Relationships and Related Transactions.”
Results
of Operations
Year
ended December 31, 2008 compared to Year ended December 31, 2007
For the years ended December 31, 2008
and 2007, revenue earned from three customers amounted to approximately 80% and
69%, respectively, of total sales revenue. Accounts receivable from these
customers equaled $41,167 and $11,912 of total receivables at December 31, 2008
and December 31, 2007, respectively.
Our cost of sales were 84.1% of revenue
for the year ended December 31, 2008, and our cost of sales were 64.5% of
revenue for the year ended December 31, 2007. The increase of 16.6% was
due to the greater volume from our contract with the Franklin County, Ohio Board
of Health.
Our
revenue of $459,229 increased for the year ended December 31, 2008 by 133.0%
from our revenues of $197,120 for the year ended December 31, 2007. This
was due to the greater volume from our contract with the Franklin County, Ohio
Board of Health.
Our selling, general and administrative
expenses remained constant as they were $62,342 for the year ended December 31,
2008 as compared to $62,361 for the year ended December 31, 2007. We
expect to maintain consistent levels of selling, general and administrative
expenses in the foreseeable future.
Total operating expenses for the year
ended December 31, 2008 were $448,825 as compared to $187,465 for the year ended
December 31, 2007. The 139.4% increase of total operating expenses was
primarily due to the increase of the cost of sales resulting from the greater
volume from our contract with the Franklin County, Ohio Board of Health in the
year ended December 31, 2008 as compared to the year ended December 31,
2007.
Accordingly, for the year ended
December 31, 2008, we had net income of $8,392 and for the year ended December
31, 2007, we had net income of $7,789.
Liquidity and Capital
Resources
Our principal capital resources have
historically been provided through advances from Jennifer H. Jarvis, our
President, Chief Executive Officer and Chief Financial Officer.
At
December 31, 2008, we had total assets of $140,606 consisting of cash, accounts
receivable, deferred tax asset and prepaid taxes, and inventory.
At
December 31, 2008, our total current liabilities were $105,028, consisting of
accounts payable, accrued expenses and income taxes payable. We have no
long-term liabilities.
We intend to provide funding for our
future activities, if any, through a combination of operating revenues, private
placement of equity securities, public sales of equity securities and borrowing
from commercial lenders. At December 31, 2008, we had $43,717 in cash on
hand, which we believe, together with the anticipated proceeds of this offering
and projected cash flow from operating activities, is enough to sustain
operations for at least the next 12 to 18 months. This estimate is made
without considering additional funding. We have no agreement, commitment
or understanding to secure any new funding from any source other than operating
revenues.
Our
future success is dependent upon our ability to continue operations, generate
cash from operating activities and obtain additional financing. There is no
assurance that we will be able to generate sufficient cash from operations, sell
additional shares of common stock or borrow additional funds. Our inability to
obtain additional cash could have a material adverse affect on our ability to
continue in business and implement our business plan.
We do not
intend to conduct any product research and development, nor do we intend to
purchase any significant equipment, in the foreseeable future.
Off-Balance Sheet
Arrangements
We do not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to investors.
Seasonality
We do not have a seasonal business
cycle. Our revenues and operating profits are generally derived evenly
throughout the months of the year.
Critical
Accounting Policies
Use of estimates. The
preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Cash and cash equivalents.
For purposes of the statement of cash flows, we consider all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents. As of December 31, 2008, there were no cash
equivalents.
Allowance for doubtful
accounts. Accounts receivable reflect those amounts due to the
company from its customers and reflect the net realizable value of the balances
due. Terms are net 30 days from invoice. We provide an allowance for
doubtful account which is based upon a review of outstanding receivables as well
as historical collection information. In determining the amount of the
allowance, we are required to make certain estimates and assumptions. We
have determined that no reserve for uncollectible accounts was required as of
December 31, 2008 and December 31, 2007.
Inventory. Inventory is
valued at the lower of cost or market value which approximates the first in,
first out method of inventory flow. The balance reflects the net
realizable value of such inventory.
Income taxes. We account
for income taxes under the Financial Accounting Standards Board of Financial
Accounting Standard No. 109, "Accounting for Income Taxes" (Statement 109).
Under Statement 109, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax basis. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under
Statement 109, the effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the enactment
date. The current income tax expense for the year ended December 31, 2008
was $1,481 for Federal and $531 for state, which was calculated at a federal
rate net of state tax benefit of 14.2% and a state rate of 5.1% The income
tax expense for the year ended December 31, 2007 was $1,374 for Federal and $792
for state, which was calculated at a federal rate net of state tax benefit of
14.2% and a state rate of 5.1%.
Basic and diluted net loss per common
share. Basic and diluted net loss per share calculations are
calculated on the basis of the weighted average number of common shares
outstanding during the year. The per share amounts include the dilutive effect
of common stock equivalents in years with net income. Basic and diluted loss per
share is the same due to the anti dilutive nature of potential common stock
equivalents. We had no common stock equivalents outstanding at December
31, 2008.
Stock-based compensation.
We account for stock-based employee compensation arrangements using the
fair value method in accordance with the provisions of Statement of Financial
Accounting Standards no.123(R) or SFAS No. 123(R), Share-Based Payments, and
Staff Accounting Bulletin No. 107, or SAB 107, Share-Based Payments. We
account for the stock options issued to non-employees in accordance with the
provisions of Statement of Financial Accounting Standards No. 123, or SFAS No.
123, Accounting for Stock-Based Compensation, and Emerging Issues Task Force No.
96-18, Accounting for Equity Instruments with Variable Terms that are Issued for
Consideration other than Employee Services under FASB Statement No.
123.
We did not grant any stock options or
warrants during the years ended December 31, 2008 and 2007.
Recent Accounting
Pronouncements
We do not
expect the adoption of recently issued accounting pronouncements to have a
significant impact on our results of operations, financial position or cash
flow.
In
September 2006, the FASB issued SFAS 158, “Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements
87, 88, 106 and 132(R)” (SFAS 158). SFAS 158 requires an employer to recognize
the over-funded or under-funded status of a defined benefit postretirement plan
(other than a multiemployer plan) as an asset or liability in its statement of
financial position and to recognize changes in that funded status in the year in
which the changes occur through comprehensive income. SFAS 158 also
requires the measurement of defined benefit plan assets and obligations as of
the date of the employer’s fiscal year-end statement of financial position (with
limited exceptions). Management does not expect adoption of SFAS 158 to have a
material impact on our financial statements.
In
February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities – Including an amendment of FASB Statement No.
115” (FAS 159), which permits entities to choose to measure many financial
instruments and certain other items at fair value at specified election dates. A
business entity is required to report unrealized gains and losses on items for
which the fair value option has been elected in earnings at each subsequent
reporting date. This statement is expected to expand the use of fair value
measurement. FAS 159 is effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal
years.
In July
2006, the FASB issued Interpretation No. 48 (FIN No. 48), “Accounting for
Uncertainty in Income Taxes.” This interpretation requires recognition and
measurement of uncertain income tax positions using a “more-likely-than-not”
approach. FIN No. 48 is effective for fiscal years beginning after December 15,
2006. Management is still evaluating what effect this will have on our financial
statements.
In September 2006, the U.S. Securities
and Exchange Commission issued SAB 108, “Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements.” This SAB provides guidance on the consideration of the
effects of prior year misstatements in quantifying current year misstatements
for the purpose of a materiality assessment. SAB 108 establishes an approach
that requires quantification of financial statement errors based on the effects
of each of a company’s financial statements and the related financial statement
disclosures. SAB 108 permits existing public companies to record the cumulative
effect of initially applying this approach in the first year ending after
November 15, 2006 by recording the necessary correcting adjustments to the
carrying values of assets and liabilities as of the beginning of that year with
the offsetting adjustment recorded to the opening balance of retained earnings.
Additionally, the use of the cumulative effect transition method requires
detailed disclosure of the nature and amount of each individual error being
corrected through the cumulative adjustment and how and when it arose. We do not
anticipate that SAB 108 will have a material impact on our financial
statements.
Quantitative
and Qualitative Disclosure about Market Risk
Market
risk is the potential loss arising from adverse changes in market rates and
prices, such as foreign currency exchange, interest rates and commodity
prices. Currently, we are not materially affected by changes in any of
these instances.
BUSINESS
K-Kitz
designs, assembles, markets and sells emergency preparedness kits and
supplies. These products are sold to school systems, municipalities,
businesses and other customers. We combine our own direct marketing and
sales effort, primarily through our kkitz.com website, with approximately 11
independent dealers which resell our products to these target buyers throughout
the country.
Market
Following the terrorist attacks in New
York and Washington, D.C. on September 11, 2001, the floods and damage caused by
Hurricane Katrina in New Orleans in August 2005 and the school shootings in
Columbine, Colorado in April 1999, federal, state and local governments, as well
as private businesses, began more actively focusing on preparing and planning
for emergencies and other catastrophic events. Many governmental entities
and businesses have invested in their response and recovery capabilities.
In recent years, the U.S. Department of Homeland Security’s Federal Emergency
Management Agency (FEMA) has provided grants to state and local programs tasked
with disaster mitigation, preparedness, response and recovery planning.
Due to the market need for emergency preparedness materials, companies such as
ours were established.
Products
We are able to assemble our emergency
preparedness kits using a variety of essential emergency supplies such as (in
the order of most to least ordered products from us):
·
|
crank
lanterns,
|
·
|
lanyard
for name tags,
|
·
|
weatherband
radios,
|
·
|
identification
badges,
|
·
|
portable
decontamination chambers,
|
·
|
privacy
screens,
|
·
|
megaphones,
|
·
|
blood
pressure cuffs,
|
·
|
first
responder vests,
|
·
|
foil
blankets,
|
·
|
protection
facemasks,
|
·
|
disposable
thermometers,
|
·
|
disposable
gloves,
|
·
|
vomit
and blood spill bags, and
|
·
|
cots,
|
·
|
7-hour
emergency light
sticks.
|
Our “grab
and go” kits are often put into the form of a back pack or duffle bag, and our
large P.O.D. (point of distribution) kits are placed within metal cages.
Both kits are designed to be easily stored so they can be retrieved and
transported when a disaster or an emergency occurs or requires evacuation.
The kits are built to be durable and maintenance free.
We custom design most of our emergency
preparedness kits based on the individual needs of a buyer. We design and
assemble our products at our Columbus, Ohio office. Our “grab and go”
emergency preparedness kits are normally priced from $100 to $350 per kit and
our P.O.D. kits are normally priced from $10,000 to $14,000 per kit, depending
on the supplies contained in the kit and the overall size of the system, and
whether the products are being sold through our own website or through
independent dealers. Product pricing is re-evaluated semiannually by
reviewing the costs of assembling the system.
Sales
and Markets
We sell our kits primarily through our
kkitz.com website using our own sales staff and through independent dealers
which resell our products to our target customers throughout the country.
Warranties made with respect to our products are passed on from the actual
manufacturers of the products to the end-users and, we believe, are consistent
with industry standards. Jennifer H. Jarvis, our President and Chief
Executive Officer, coordinates the marketing of our products. Part of our
distribution channel consists of the sales efforts of independent dealers who do
their own marketing and customizing of kits. As of December 31, 2008, we
had approximately 11 unwritten arrangements with dealers covering various
geographical areas of the United States, on a non-exclusive basis. None of
the arrangements require minimum sales of our products. Of these dealers,
six dealers entered into oral agreements with us in late 2008, and thus sales
efforts have only recently begun.
Sales to
school systems and municipalities account for a majority of our revenues.
Our business is currently concentrated in the central part of Ohio, in and
around Columbus.
During
the year ended December 31, 2008, we had approximately 15 customers.
During 2008, we supplied kits to end-users such as the Board of Health of
Franklin County, Ohio and the Roman Catholic Diocese for parochial schools in
and around Columbus, Ohio, and to dealers such as Airgas Safety, Inc. and Safety
Environmental Control, Inc. We believe these customers are representative
of our overall customer base.
We sell
our product line primarily through a bid process conducted by school systems and
municipalities, working with our sales staff.
Substantially all of our customer sales
are effected pursuant to relatively informal, computer-generated purchase orders
that include price and payment terms, products ordered and shipping
instructions. The standard form of sales invoice that we provide to
customers is included as an exhibit to the registration statement of which this
prospectus forms a part.
Following sales, our sales staff
follows-up with customers to provide them with refills and replacements as
products are used or damaged, or their “shelf life” expires (such as with
batteries and some plastic parts).
Going forward, our marketing and sales
strategy is to increase brand awareness of K-Kitz. We intend to implement
an extensive marketing plan to reach the maximum number of potential customers
to grow demand. We have plans to exhibit our products at selected trade
shows scheduled in 2009-2010. We also intend to retain an outsourced
marketing firm to create and execute marketing strategies for us. We will
work with the marketing firm to create a new logo and tagline to facilitate
brand recognition and to engage in one or more print and direct-mail campaigns
to targeted customers.
Assembly
We conduct the assembly of our
emergency preparedness kits at our 10,000 square-foot Columbus, Ohio
facility.
Raw
Materials
The emergency supplies used in our kits
are widely available but are purchased from three main sources in order to
obtain favorable prices and terms. During the year ended December 31,
2008, we purchased 58.6% of our kit requirements from Jendco Safety Supply Inc.
(disposable emergency preparedness materials), 18.9% from Wolf Creek Co. (pipes
for decontamination chambers) and 13.9% from TM Poly Film, Inc. (plastic
sheeting for decontamination chambers). Prices have trended upward for
products used in our emergency preparedness kits. These prices have
generally been passed on to our customers. For additional information
about our relationship with Jendco Safety Supply, see “Certain Relationships and
Related Transactions.”
Competition
We compete with a variety of companies
that make similar emergency preparedness kits. Based on our review of
trade publications and attendance at trade shows, we believe there are more than
50 companies that compete in the sale of these kits, some of which compete in
large geographical regions and some that sell nationally, either through a
system of dealers, direct sales offices, or both, such as Aramsco (a Safeguard
Industrial company) for emergency supplies, and Grayling Industries and TM Poly
Film, Inc. for decontamination chambers. These companies have had many
years of business experience and have greater financial and personnel resources,
including marketing and sales organizations. We do not believe any one
company holds a dominant share of this market.
Emergency
preparedness kits compete on the basis of design capability, price, product
quality, customer service and ability to meet delivery
requirements.
Seasonality
We do not have a seasonal business
cycle.
Backlog
Due to the nature of our assembly
process and customer base, we purchase and ship products to our customers
without experiencing a significant backlog (the time elapsing from contract
execution to fulfillment). As of December 31, 2008 and 2007, we had no
order backlog. Revenues from sales of kits and related products are
recorded when title transfers, which is typically upon shipment.
Regulation
Our activities currently are subject to
no particular regulation by governmental agencies other than that routinely
imposed on corporate businesses, and no such regulation is now
anticipated.
Employees
As of December 31, 2008, we employed
our two executive officers on a full-time basis, as well as two part-time
employees who assemble and package our products. We use contract labor for
the rest of our assembly requirements. No employees are covered by a
collective bargaining agreement. We consider relations with our employees
to be good.
Patents
and Trademarks
We do not hold any patents or
trademarks on our products or processes relating to our business.
Insurance
We
maintain insurance with respect to our properties and operations in such form,
in such amounts and with such insurers as is customary in the business in which
we are engaged. We believe that the amount and form of our insurance
coverage is sufficient.
Environmental
Matters
In our operations, we do not store,
handle, emit, transport or discharge hazardous materials or waste
products.
Properties
We occupy a 10,000 square foot office
in Columbus, Ohio, which serves as our principal executive offices and
warehouse. Our lease at this location runs from month-to-month, and we
currently pay $1,300 in rent per month.
Legal
Proceedings
There are
no pending or threatened lawsuits against us.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our
directors and executive officers are as follows:
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
Jennifer
H. Jarvis
|
|
28
|
|
President,
Chief Executive Officer, Chief Financial Officer and
Director
|
|
|
|
|
|
Michael
J. Funtjar
|
|
28
|
|
Chief
Operating Officer, Secretary and
Director
|
Jennifer H. Jarvis has been
our President, Chief Executive Officer, Chief Financial Officer and a director
(acting as chairman) since we were incorporated in August 2006. Ms.
Jarvis’ responsibilities include running the day-to-day operations and business
development of our company. Before founding the company in August 2006,
she was a sales representative for Jendco Safety Supply Inc., a safety products
distributor based in Columbus, Ohio, since September 2004, and a night club
event coordinator for clubs in the Columbus metro area since May 2004. Ms.
Jarvis was also a customer service representative at Safelite Auto Glass Corp.
in Columbus from June 2000 to September 2004. Ms. Jarvis received a B.S.
degree in human development and family science from the Ohio State
University.
Michael J. Funtjar has been
our Chief Operating Officer, Secretary and a director since we were incorporated
in August 2006. Mr. Funtjar’s responsibilities include overseeing our kit
assembly and order fulfillment. Before joining the company, he was a senior
event and partner management specialist with the American Motorcyclist
Association since March 2004, and a real estate operations sales person with
Prudential Residential One from May 2002 to March 2004. Mr. Funtjar
attended Columbus State Community College.
The board
of directors appoints our executive officers annually. A majority vote of the
directors who are in office are required to fill director vacancies. Each
director is elected for the term of one year, and until his or her successor is
elected and qualified, or until his or her earlier resignation or removal.
As long as we have an even number of directors, a tie vote of board members on
issues are resolved in favor of the vote of the chairman (who is Jennifer H.
Jarvis, our President, Chief Executive Officer and Chief Financial
Officer). We have never experienced a deadlock in director voting.
There are no family relationships among our directors and executive
officers. Ms. Jarvis and Mr. Funtjar may be deemed “promoters” of our
company and underwriters of this offering.
Executive
Officer Compensation
The
following table sets forth, for the most recent two fiscal years, all cash
compensation paid, distributed or accrued, including salary and bonus amounts,
for services rendered to us by our Chief Executive Officer and our other
executive officer in such year.
Summary
Compensation Table
|
|
|
|
Annual
Compensation
|
|
|
Long-Term
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards
|
|
|
Payouts
|
|
Name
and Principal Position
|
|
|
|
|
|
|
|
|
|
Other Annual
Compensation
($)
|
|
|
Restricted
Stock
Award(s)
($)
|
|
|
Securities
Underlying
Options/
SARs
(#)
|
|
|
|
|
|
All Other
Compen-
sation
($)
|
|
President,
Chief Executive Officer and
|
|
2008
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Chief
Financial Officer
|
|
2007
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
J. Funtjar
|
|
2008
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Chief
Operating Officer and Secretary
|
|
2007
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
As shown
above, none of our executive officers or directors has received any compensation
for services rendered. Our executive officers have agreed to work without
salary until we have a sufficient level of cash flow from operating activities
to meet reasonable base salary requirements.
Outstanding
Equity Awards at Fiscal Year-End
|
|
Option Awards
|
|
|
Stock Awards
|
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration
Date
|
|
|
Number
of
Shares
or
Units
of
Stock
That
Have Not
Vested
(#)
|
|
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units
or Other
Rights That
Have
Not
Vested
(#)
|
|
|
Equity Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares, Units
or
Other Rights That
Have Not Vested
($)
|
|
Jennifer
H. Jarvis
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Michael
J. Funtjar
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
We
presently do not have any pension, health, annuity, insurance, stock option,
profit sharing or other similar benefit plans for officers, employees or
directors. However, we may adopt plans in the future.
Director
Compensation
Our
directors are not currently compensated for their services as
directors.
Director
Independence and Board Committees
We
presently have no “independent directors,” according to Nasdaq’s guidelines,
because our directors also serve as executive officers. We have not
established a separate audit, compensation, nominations and corporate
governance, or any other board committees to date. All such relevant
issues are decided by our entire board of directors. We are not required
to maintain board committees at this time because our shares are not listed on a
national securities exchange.
Code
of Business Conduct and Ethics
In March 2009, we adopted a Code of
Business Conduct and Ethics which is applicable to our future employees and
which also includes a Code of Ethics for our CEO and senior financial officers
and persons performing similar functions. A code of ethics is a written
standard designed to deter wrongdoing and to promote:
|
·
|
honest
and ethical conduct,
|
|
·
|
full,
fair, accurate, timely and understandable disclosure in regulatory filings
and public statements,
|
|
·
|
compliance
with applicable laws, rules and
regulations,
|
|
·
|
the
prompt reporting violation of the code,
and
|
|
·
|
accountability
for adherence to the code.
|
A copy of
our Code of Business Conduct and Ethics is included as an exhibit to the
registration statement of which this prospectus forms a part.
Employment
Agreements
Neither
Ms. Jarvis nor Mr. Funtjar has an employment agreement with us.
Legal
Proceedings
No
officer, director, or persons nominated for such positions, promoter or
significant employee has been involved in the last five years in any of the
following:
|
·
|
Any bankruptcy petition filed by
or against any business of which such person was a general partner or
executive officer either at the time of the bankruptcy or within two years
prior to that time,
|
|
·
|
Any conviction in a criminal
proceeding or being subject to a pending criminal proceeding (excluding
traffic violations and other minor
offenses),
|
|
·
|
Being subject to any order,
judgment, or decree, not subsequently reversed, suspended or vacated, of
any court of competent jurisdiction, permanently or temporarily enjoining,
barring suspending or otherwise limiting his involvement in any type of
business, securities or banking activities,
and
|
|
·
|
Being found by a court of
competent jurisdiction (in a civil action), the SEC or the Commodity
Futures Trading Commission to have violated a federal or state securities
or commodities law, and the judgment has not been reversed, suspended or
vacated.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
There are no relationships or
transactions requiring disclosure between us and our related persons, promoters
or control persons, other than with regard to Jendco Safety Supply Inc.
(Jendco).
Jendco, our largest vendor, is owned by
the mother of Jennifer H. Jarvis, our President, Chief Executive Officer and
Chief Financial Officer. Our principal executive offices and warehouse are
located within a larger facility owned by Jendco. Our lease at this
location runs from month-to-month, and we currently pay $1,300 in rent per
month. We paid total rent of $15,600 in each of the years ended December
31, 2008 and 2007 to Jendco.
We sold products to Jendco totaling
$17,546 and $11,974 in the years ended December 31, 2008 and 2007, respectively,
and had an accounts receivable from Jendco of $13,276 and $6,735 as of December
31, 2008 and 2007, respectively. We purchased raw materials from Jendco
totaling $195,956 and $25,354 in the years ended December 31, 2008 and 2007,
respectively, and had an accounts payable from Jendco of $51,480 and $0 as of
December 31, 2008 and 2007, respectively.
We believe that all of such
transactions and arrangements were advantageous to us and were on terms no less
favorable to us than could have been obtained from unaffiliated third
parties.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information concerning the number of shares
of our common stock owned beneficially as of March 30, 2009, by: (i) each person
known by us to be the beneficial owner of more than 5% of our outstanding common
stock; (ii) each of our directors; (iii) each of our officers; and (iv) all of
our directors and executive officers as a group.
Names
and Address of
Beneficial Owner
|
|
Shares
of Common Stock
Beneficially
Owned
Before the Offering
|
|
|
Shares
of Common Stock Beneficially
Owned After the Offering
|
|
|
|
Number
|
|
|
Percent
|
|
|
Minimum
|
|
|
Percent
|
|
|
Maximum
|
|
|
Percent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jennifer
H. Jarvis
|
|
|
4,500,000 |
|
|
|
100%
|
|
|
|
4,500,000 |
|
|
|
81.8%
|
|
|
|
4,500,000 |
|
|
|
69.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
J. Funtjar
|
|
|
0 |
|
|
|
—
|
|
|
|
0 |
|
|
|
—
|
|
|
|
0 |
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
directors and executive
officers
as a group
(2
persons)
|
|
|
4,500,000 |
|
|
|
100%
|
|
|
|
4,500,000 |
|
|
|
81.8%
|
|
|
|
4,500,000 |
|
|
|
69.2%
|
|
The table
above is based upon information derived from our stock records. Unless otherwise
indicated in the footnotes to the table and subject to community property laws
where applicable, each of the persons named in the table has sole or shared
voting and investment power with respect to the shares indicated as beneficially
owned. Except as set forth above, applicable percentages are based upon
4,500,000 shares of common stock outstanding as of March 30, 2009.
The
information presented above regarding beneficial ownership of our voting
securities has been presented in accordance with the rules of the U.S.
Securities and Exchange Commission and is not necessarily indicative of
ownership for any other purpose. Under these rules, a person is deemed to be a
“beneficial owner” of a security if that person has or shares the power to vote
or direct the voting of the security or the power to dispose or direct the
disposition of the security. A person is deemed to own beneficially any security
as to which such person has the right to acquire sole or shared voting or
investment power within 60 days through the conversion or exercise of any
convertible security, warrant, option or other right. More than one person may
be deemed to be a beneficial owner of the same securities. The percentage of
beneficial ownership by any person as of a particular date is calculated by
dividing the number of shares beneficially owned by such person, which includes
the number of shares as to which such person has the right to acquire voting or
investment power within 60 days, by the sum of the number of shares outstanding
as of such date plus the number of shares as to which such person has the right
to acquire voting or investment power within 60 days. Consequently, the
denominator used for calculating such percentage may be different for each
beneficial owner. Except as otherwise indicated below and under applicable
community property laws, we believe that the beneficial owner of our common
stock listed above has sole voting and investment power with respect to the
shares shown.
We are
unaware of any contract or other arrangement the operation of which may at a
subsequent date result in a change in control of our company.
PLAN
OF DISTRIBUTION AND TERMS OF THE OFFERING
We are
offering up to a total of 2,000,000 shares of common stock on a
self-underwritten basis, 1,000,000 shares minimum, and 2,000,000 shares maximum.
The offering price is $0.05 per share. Funds will be deposited at Fifth Third
Bank, Columbus, Ohio, in an escrow account established by us. The funds will be
held in the account until we receive a minimum of $50,000, at which time Fifth
Third Bank will release those funds to us for our use as set forth in the "Use
of Proceeds" section of this prospectus.
In the
event that 1,000,000 shares are not sold within 180 days, at our sole
discretion, we may extend the offering for an additional 90 days. In the event
that 1,000,000 shares are not sold within the 180 days or within the additional
90 days if extended, all monies received by us and held in escrow will be
promptly returned to you without charge, deduction or interest. If at
least 1,000,000 shares are sold within 180 days or within the additional 90 days
if extended, all monies received by us and held in escrow will be released to us
and there will be no refund. There are no minimum purchase requirements for each
individual investor.
Our
shares of common stock will be sold on our behalf by our officers and
directors. Potential investors include, but are not limited to, friends,
family members and business acquaintances of our officers and directors.
The intended methods of communication include, without limitation, telephone
calls and personal contacts. In their efforts, our officers and directors
will not use any mass advertising methods such as the Internet or print
media. Our officers and directors (including any of their affiliates) will
not receive any commissions or proceeds from the offering for selling the shares
on our behalf. We have not engaged the services of any broker/dealer to
assist us in selling the shares.
There are
no finders fees involved in our distribution. Officers, directors, affiliates or
anyone involved in marketing the shares will not be allowed to purchase shares
in the offering. You will not have the right to withdraw your funds during the
offering. You will only have the right to have your funds returned if we do not
raise the minimum amount of the offering or there would be a change in the
material terms of the offering. The following are material terms that would
allow you to be entitled to a refund of your money:
|
·
|
extension of the offering period
beyond 180 days,
|
|
·
|
change in the offering
price,
|
|
·
|
change in the minimum sales
requirement,
|
|
·
|
change to allow sales to
affiliates in order to meet the minimum sales
requirement,
|
|
·
|
change in the amount of proceeds
necessary to release the proceeds held in the separate escrow account,
and
|
|
·
|
change in the application of the
proceeds.
|
If the
changes above occur, any new offering may be made by means of a post-effective
amendment.
We will
sell the shares in this offering through our officers and directors. They will
receive no commissions from the sale of any shares. They will not register as a
broker/dealer under Section 15 of the Securities Exchange Act of 1934 in
reliance upon Rule 3a4-1. Rule 3a4-1 sets forth those conditions under which a
person associated with an issuer may participate in the offering of the issuer's
securities and not be deemed to be a broker/dealer. The conditions are
that:
|
·
|
The person is not statutorily
disqualified, as that term is defined in Section 3(a)(39) of the
Securities Exchange Act, at the time of his
participation,
|
|
·
|
The person is not compensated in
connection with his participation by the payment of commissions or other
remuneration based either directly or indirectly on transactions in
securities,
|
|
|
|
|
·
|
The person is not at the time of
their participation, an associated person of a broker/dealer,
and
|
|
|
|
|
·
|
The person meets the conditions
of paragraph (a)(4)(ii) of Rule 3a4-1 of the Securities Exchange Act, in
that he (a) primarily performs, or is intended primarily to perform at the
end of the offering, substantial duties for or on behalf of the issuer
otherwise than in connection with transactions in securities, (b) is not a
broker or dealer, or an associated person of a broker or dealer, within
the preceding 12 months, and (c) does not participate in selling and
offering of securities for any issuer more than once every 12 months other
than in reliance on paragraphs (a)(4)(i) or
(a)(4)(iii).
|
This is a
self-underwritten offering. This prospectus forms a part of a registration
statement that permits our officers and directors to sell the shares directly to
the public, with no commission or other remuneration payable to them for any
shares they sell. There are no plans or arrangements to enter into any contracts
or agreements to sell the shares with a broker or dealer. Our officers and
directors will sell the shares and intend to offer them to friends, family
members and business acquaintances. In offering the securities on our behalf,
our officers and directors will rely on the safe harbor from broker/dealer
registration set out in Rule 3a4-1 under the Securities Exchange Act, which sets
forth those conditions under which a person associated with an issuer may
participate in the offering of the issuer's securities and not be deemed to be a
broker/dealer.
Our
executive officers and directors (including their respective affiliates) will
not purchase shares in this offering to reach the minimum offering
amount.
Offering
Period and Expiration Date
This
offering will start on the date this registration statement is declared
effective by the SEC and continue for a period of 180 days. We may extend the
offering period for an additional 90 days, unless the offering is completed or
otherwise terminated by us. We reserve the right to terminate this offering at
anytime. We have not determined under what circumstances we would terminate the
offering prior to the expiration of the offering period; however, we reserve the
right to do so. Such termination will be solely at our discretion. Should we do
so and have not reached the minimum amount, your funds will be promptly returned
to you without charge, deduction or interest. If we terminate the offering prior
to the end to the offering period, but have reached at least the minimum
offering amount, we will retain the proceeds.
We will
not market these securities or accept any money until this registration
statement is declared effective by the SEC.
Procedures
for Subscribing
We will
not accept any money until this registration statement is declared effective by
the SEC. Once the registration statement is declared effective by the SEC, if
you decide to subscribe for any shares in this offering, you must:
|
·
|
Execute and deliver a
subscription agreement, a copy of which is included with the prospectus
(and as an exhibit to the registration statement of which this prospectus
forms a part), and
|
|
·
|
Deliver a check or certified
funds to Fifth Third Bank for acceptance or rejection. All checks for
subscriptions must be made payable to “K-Kitz, Inc. - Escrow
Account.”
|
Right
to Reject Subscriptions
We have
the right to accept or reject subscriptions in whole or in part, for any reason
or for no reason. All monies from rejected subscriptions will be returned
immediately by us to the subscriber, without charge, deduction or interest.
Subscriptions for securities will be accepted or rejected within 48 hours after
we receive them.
Section
15(g) of the Exchange Act - Penny Stock Disclosure
Our
shares are "penny stock" covered by Section 15(g) of the Securities Exchange Act
of 1934 and Rules 15g-1 through 15g-6 promulgated under the Securities Exchange
Act. They impose additional sales practice requirements on broker/dealers who
sell such securities to persons other than established customers and accredited
investors (generally institutions with assets in excess of $5,000,000 or
individuals with net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouses). For transactions covered by
these rules, the broker/dealer must make a special suitability determination for
the purchase and have received the purchaser's written agreement to the
transaction prior to the sale. Consequently, the rules may affect the ability of
broker/dealers to sell our securities and also may affect your ability to resell
your shares.
Section
15(g) also imposes additional sales practice requirements on broker/dealers who
sell penny stock. These rules require a one-page summary of certain essential
items. The items include the risk of investing in penny stocks in both public
offerings and secondary marketing; terms important to an understanding of the
function of the penny stock market, such as "bid" and "offer" quotes, a dealers
"spread" and broker/dealer compensation; the broker/dealer compensation, the
broker/dealer's duties to its customers, including the disclosures required by
any other penny stock disclosure rules; the customers' rights and remedies in
cases of fraud in penny stock transactions; and the Financial Industry
Regulatory Authority’s toll-free telephone number and the central number of the
North American Securities Administrators Association (NASAA), for information on
the disciplinary history of broker/dealers and their associated persons. While
Section 15(g) and Rules 15g-1 through 15g-6 apply to broker/dealers, they do not
apply to us.
Rule
15g-1 exempts a number of specific transactions from the scope of the penny
stock rules.
Rule
15g-2 declares unlawful broker/dealer transactions in penny stock unless the
broker/dealer has first provided to the customer a standardized disclosure
document.
Rule
15g-3 provides that it is unlawful for a broker/dealer to engage in a penny
stock transaction unless the broker/dealer first discloses and subsequently
confirms to the customer current quotation prices or similar market information
concerning the penny stock in question.
Rule
15g-4 prohibits broker/dealers from completing penny stock transactions for a
customer unless the broker/dealer first discloses to the customer the amount of
compensation or other remuneration received as a result of the penny stock
transaction.
Rule
15g-5 requires that a broker/dealer executing a penny stock transaction, other
than one exempt under Rule 15g-1, disclose to its customer, at the time of or
prior to the transaction, information about the sales person's
compensation.
Rule
15g-6 requires broker/dealers selling penny stock to provide their customers
with monthly account statements.
The
foregoing rules apply to broker/dealers. They do not apply to us in any manner
whatsoever. The application of the penny stock rules may affect your ability to
resell your shares because many brokers are unwilling to buy, sell or trade
penny stock as a result of the additional sales practices imposed upon them
which are described in this section.
Regulation
M
We are
subject to Regulation M of the Securities Exchange Act of 1934. Regulation M
governs activities of underwriters, issuers, selling security holders and others
in connection with offerings of securities. Regulation M prohibits distribution
participants and their affiliated purchasers from bidding for, purchasing or
attempting to induce any person to bid for or purchase the securities being
distributed.
OTC
Bulletin Board Considerations
To be
quoted on the OTC Bulletin Board, a market maker must file an application on our
behalf in order to make a market for our common stock. We have engaged in
preliminary discussions with a market maker to file our application on Form 211
with the Financial Industry Regulatory Authority, or Finra, but as of the date
of this prospectus, no filing has been made. We anticipate that after this
registration statement is declared effective, it will take approximately two to
eight weeks for Finra to issue a trading symbol.
The OTC
Bulletin Board is separate and distinct from the Nasdaq stock market. Nasdaq has
no business relationship with issuers of securities quoted on the OTC Bulletin
Board. The SEC’s order handling rules, which apply to Nasdaq-listed securities,
do not apply to securities quoted on the OTC Bulletin Board.
Although
the Nasdaq stock market has rigorous listing standards to ensure the high
quality of its issuers, and can delist issuers for not meeting those standards,
the OTC Bulletin Board has no listing standards. Rather, it is the market maker
who chooses to quote a security on the system, files the application, and is
obligated to comply with keeping information about the issuer in its files.
Finra cannot deny an application by a market maker to quote the stock of a
company. The only requirement for inclusion in the Bulletin Board is that the
issuer be current in its periodic reporting requirements with the
SEC.
Although
we anticipate listing on the OTC Bulletin Board will increase liquidity for our
stock, investors may have greater difficulty in getting orders filled because it
is anticipated that if our stock trades on a public market, it initially will
trade on the OTC Bulletin Board rather than on Nasdaq. Investors’ orders may be
filled at a price much different than expected when an order is placed. Trading
activity in general is not conducted as efficiently and effectively as with
Nasdaq-listed securities.
Investors
must contact a broker/dealer to trade OTC Bulletin Board securities. Investors
do not have direct access to the OTC Bulletin Board service. For OTC Bulletin
Board securities, there only has to be one market maker.
OTC
Bulletin Board transactions are conducted almost entirely manually. Because
there are no automated systems for negotiating trades on the OTC Bulletin Board,
they are conducted via telephone. In times of heavy market volume, the
limitations of this process may result in a significant increase in the time it
takes to execute investor orders. Therefore, when investors place market orders
(an order to buy or sell a specific number of shares at the current market
price) it is possible for the price of a stock to go up or down significantly
during the lapse of time between placing a market order and execution of such
order.
Because
OTC Bulletin Board stocks are usually not followed by analysts, there may be
lower trading volume than for Nasdaq-listed securities.
DESCRIPTION
OF SECURITIES
The
following description is a summary of the material terms of the provisions of
our certificate of incorporation and by-laws. The certificate of incorporation
and by-laws have been filed as exhibits to the registration statement of which
this prospectus forms a part.
Common
Stock
We are
authorized to issue 95,000,000 shares of common stock, par value $0.000001 per
share. As of the date of this registration statement, there are 4,500,000 shares
of common stock issued and outstanding held by one stockholder.
Each
share of common stock entitles the holder to one vote, either in person or by
proxy, at meetings of shareholders. The vote of the holders of a majority of the
issued and outstanding shares of common stock entitled to vote thereon is
sufficient to authorize, affirm, ratify or consent to such act or action, except
as otherwise provided by law.
In the
election of directors, the stockholders are permitted to vote their shares
cumulatively. Accordingly, each shareholder entitled to vote in the election of
directors has the right to vote the number of shares owned by such shareholder
for as many persons as there are directors to be elected.
Holders
of common stock are entitled to receive ratably such dividends, if any, as may
be declared by the board of directors out of our surplus. We have not paid any
dividends since our inception, and we presently anticipate that all earnings, if
any, will be retained for development of our business. Any future disposition of
dividends will be at the discretion of our board of directors and will depend
upon, among other things, our future earnings, operating and financial
condition, capital requirements and other factors.
Holders
of our common stock have no preemptive rights or other subscription rights,
conversion rights, redemption or sinking fund provisions. Upon our liquidation,
dissolution or winding up, the holders of our common stock will be entitled to
share ratably in the net assets legally available for distribution to
shareholders after the payment of all of our debts and other liabilities. Other
than “blank
check”
preferred stock, there are no provisions in our certificate of incorporation or
by-laws that would prevent or delay a change in control.
Preferred
Stock
We are
authorized to issue 5,000,000 shares of preferred stock, par value $0.000001 per
share. As of the date of this prospectus, there are no shares of preferred stock
outstanding.
Preferred
stock may be issued in series with preferences and designations as the board of
directors may from time to time determine (commonly known as “blank check” preferred stock).
The board may, without shareholders approval, issue preferred stock with voting,
dividend, liquidation and conversion rights that could dilute the voting
strength of our common shareholders and may assist management in impeding an
unfriendly takeover or attempted changes in control.
Warrants,
Stock Options and Other Convertible Securities
As of the
date of this prospectus, there are no warrants, stock options or other
convertible securities to purchase our common or preferred stock outstanding. We
may, however, in the future grant warrants, options or convertible securities
and/or establish an incentive compensation plan for our directors, employees and
consultants.
Anti-Takeover
Effect of Delaware Law
We are
subject to the provisions of Section 203 of the Delaware General Corporate Law,
an anti-takeover law. In general, Section 203 prohibits a publicly-held Delaware
corporation from engaging in a “business combination” with an “interested
stockholder” for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. For purposes of Section 203, a
“business combination” includes a merger, asset sale or other transaction
resulting in a financial benefit to the interested stockholder, and an
“interested stockholder” is a person who, together with affiliates and
associates, owns, or within three years prior did own, 15% or more of the voting
stock of a corporation.
Transfer
Agent
Globex
Transfer LLC is our transfer agent and registrar. All communications concerning
accounts of shareholders of record, including address changes, name changes,
inquiries as to requirements to transfer shares of common stock and similar
issues can be handled by contacting:
Globex
Transfer LLC
780
Deltona Blvd., Suite 202
Deltona,
Florida 32725
Attention:
Mr. Michael Turner
Tel:
(386) 206-1133
Fax:
(386) 267-3124
LEGAL
OPINION
Greenberg Traurig, LLP, New York, New
York, will issue for us as our legal counsel an opinion regarding the legality
of the shares of common stock being registered.
EXPERTS
The
financial statements for the years ended December 31, 2008 and 2007,
incorporated by reference to this prospectus, have been audited by W.T. Uniack
& Co. CPA’s P.C., an independent registered certified public accounting
firm, to the extent and for the periods set forth in its report and are
incorporated herein in reliance upon such report given upon the authority of
said accounting firm as an expert in auditing and accounting. This includes the
audited balance sheets of K-Kitz, Inc. as of December 31, 2008 and 2007, the
related income statements for the years ended December 31, 2008 and
2007, statements of stockholders’ equity for the years ended December 31,
2008 and 2007, and statements of cash flows for the years ended December 31,
2008 and 2007.
No expert
or counsel named in this prospectus as having prepared or certified any part of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the common stock was employed on a contingency basis, or had, or
is to receive, in connection with the offering, a substantial interest, direct
or indirect, in the registrant, nor was any such person connected with the
registrant as a promoter, managing or principal underwriter, voting trustee,
director, officer, or employee.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION
FOR
SECURITIES ACT LIABILITIES
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to our directors, officers and controlling persons pursuant to
Section 145 of the Delaware General Corporation Law, or DGCL, we have been
advised that in the opinion of the U.S. Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities is asserted by one of our directors,
officers, or controlling persons in connection with the securities being
registered, we will, unless in the opinion of our legal counsel the matter has
been settled by controlling precedent, submit the question of whether such
indemnification is against public policy to a court of appropriate jurisdiction.
We will then be governed by the court's decision.
FINANCIAL
STATEMENTS
Our
fiscal year end is December 31. We will provide audited financial statements to
our stockholders on an annual basis; the statements will be audited by W.T.
Uniack & Co. CPA’s P.C.
Our
financial statements immediately follow:
K-KITZ,
INC.
INDEX TO FINANCIAL
STATEMENTS
|
|
Page
|
Audited
Financial Statements:
|
|
|
|
|
|
Report
of Independent Registered Public Accounting Firm
|
|
F-2
|
|
|
|
Balance
Sheet as of December 31, 2008 and 2007
|
|
F-3
|
|
|
|
Income
Statement for the years ended December 31, 2008 and 2007
|
|
F-4
|
|
|
|
Statement
of Cash Flows for the years ended December 31, 2008 and
2007
|
|
F-5
|
|
|
|
Statement
of Stockholders’ Equity for the years ended December 31, 2008 and
2007
|
|
F-6
|
|
|
|
Notes
to Financial Statements
|
|
F-7
|
Report
of Independent Registered Public Accounting Firm
Board of
Directors
K-Kitz,
Inc.
We have
audited the accompanying balance sheet of K-Kitz, Inc. (the “Company”) as of
December 31, 2008 and 2007 and the related statements of operations,
stockholders’ equity, and cash flows for the years ended December 31, 2008 and
2007. 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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In
our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of December 31, 2008
and 2007, and the results of its operations and changes in stockholders’ equity
and its cash flows for the years ended December 31, 2008 and 2007, in conformity
with accounting principles generally accepted in the United States of
America.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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 provide a reasonable
basis for our opinion.
As discussed in Note 2 of the notes to
the accompanying financial statements, the financial statements have been
prepared assuming that the Company will continue as a going concern. As
discussed in the footnotes, the Company relies on loans and advances from
related parties to meet its current liquidity needs. Those conditions raise
substantial doubt about the Company’s ability to continue as a going concern.
The accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ W.T. Uniack & Co. CPA’s P.C.
W.T. Uniack & Co. CPA’s P.C.
Alpharetta, Georgia
March 12, 2009
K-Kitz,
Inc.
Balance
Sheet
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash
& cash equivalents
|
|
$ |
43,717 |
|
|
|
5,073 |
|
Accounts
receivable
|
|
$ |
60,374 |
|
|
|
26,132 |
|
Deferred
tax asset & prepaid taxes
|
|
|
10,172 |
|
|
|
872 |
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
114,263 |
|
|
|
32,077 |
|
|
|
|
|
|
|
|
|
|
Inventory
|
|
|
26,343 |
|
|
|
28,487 |
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$ |
140,606 |
|
|
$ |
60,564 |
|
|
|
|
|
|
|
|
|
|
Liabilities
& Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable & accrued expenses
|
|
$ |
96,738 |
|
|
|
30,640 |
|
Income
taxes payable
|
|
$ |
8,290 |
|
|
|
2,738 |
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
|
105,028 |
|
|
|
33,378 |
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock, $.000001 par value, 95,000,000 shares authorized; issued &
outstanding 100 as of December 31, 2008 & 2007
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Preferred
stock, $.000001 par value, 5,000,000 shares authorized; issued &
outstanding -0- as of December 31, 2008 & 2007
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Additional
paid-in-capital
|
|
|
19,397 |
|
|
|
19,397 |
|
Retained
earnings
|
|
|
16,181 |
|
|
|
7,789 |
|
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity
|
|
|
35,578 |
|
|
|
27,186 |
|
|
|
|
|
|
|
|
|
|
Total
Liabilities & Stockholders' Equity
|
|
$ |
140,606 |
|
|
$ |
60,564 |
|
The
accompanying notes are an integral part of the financial
statements.
K-Kitz,
Inc.
Income
Statement
|
|
For the Years Ended
|
|
|
|
December 31, 2008
|
|
|
December 31, 2007
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ |
459,229 |
|
|
$ |
197,120 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost
of sales
|
|
|
386,483 |
|
|
|
125,104 |
|
Selling,
general & administrative expenses
|
|
|
62,342 |
|
|
|
62,361 |
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
|
|
448,825 |
|
|
|
187,465 |
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
10,404 |
|
|
|
9,655 |
|
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
|
|
10,404 |
|
|
|
9,655 |
|
Provision
for income taxes |
|
|
2,012 |
|
|
|
1,866 |
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$ |
8,392 |
|
|
$ |
7,789 |
|
|
|
|
|
|
|
|
|
|
Earnings
per share:
|
|
|
|
|
|
|
|
|
Basic
& fully diluted
|
|
$ |
83.92 |
|
|
$ |
77.89 |
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
& fully diluted
|
|
|
100 |
|
|
|
100 |
|
The
accompanying notes are an integral part of the financial
statements.
K-Kitz,
Inc.
Statement
of Cash Flows
|
|
For the Years Ended
|
|
|
|
December 31, 2008
|
|
|
December 31, 2007
|
|
|
|
|
|
|
|
|
Cash
Flows From Operating Activities
|
|
|
|
|
|
|
Net
income (loss)
|
|
$ |
8,392 |
|
|
$ |
7,789 |
|
|
|
|
|
|
|
|
|
|
(Increase)
decrease in operating assets:
|
|
|
|
|
|
|
|
|
Accounts
receivable, deferred tax asset & prepaid taxes
|
|
$ |
(43,542 |
) |
|
|
(27,004 |
) |
Inventory
|
|
$ |
2,144 |
|
|
|
(11,295 |
) |
Increase
(decrease) in operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable, accrued expenses & income taxes payable
|
|
$ |
71,650 |
|
|
|
33,378 |
|
|
|
|
|
|
|
|
|
|
Net
cash provided from operating activities
|
|
$ |
38,644 |
|
|
|
2,868 |
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash
|
|
$ |
38,644 |
|
|
|
2,868 |
|
Cash –
beginning of year
|
|
$ |
5,073 |
|
|
|
2,205 |
|
Cash –
end of year
|
|
$ |
43,717 |
|
|
$ |
5,073 |
|
The
accompanying notes are an integral part of the financial
statements.
K-Kitz,
Inc.
Statement
of Stockholders’ Equity
For
The Years Ended December 31, 2008 and 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
Total
|
|
|
|
Common Stock |
|
|
Preferred Stock - Series A
|
|
|
Additional
|
|
|
Retained
|
|
|
Stockholders'
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid-In Capital
|
|
|
Earnings
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at January 1, 2007
|
|
|
100 |
|
|
$ |
0.0001 |
|
|
|
|
|
|
|
|
$ |
19,397 |
|
|
$ |
- |
|
|
$ |
19,397 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,789 |
|
|
|
7,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2007
|
|
|
100 |
|
|
$ |
0.0001 |
|
|
|
- |
|
|
$ |
- |
|
|
$ |
19,397 |
|
|
$ |
7,789 |
|
|
$ |
27,186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,392 |
|
|
|
8,392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2008
|
|
|
100 |
|
|
$ |
0.0001 |
|
|
|
- |
|
|
$ |
- |
|
|
$ |
19,397 |
|
|
$ |
16,181 |
|
|
$ |
35,578 |
|
The
accompanying notes are an integral part of the financial
statements.
K-KITZ,
INC.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008 AND 2007
NOTE
1-
|
ORGANIZATION AND BASIS
OF PRESENTATION
|
K-Kitz,
Inc. (the “Company”) incorporated in the state of Delaware on August 9,
2006. Our principal executive offices are located at 1630 Integrity
Drive East, Columbus, Ohio 43209, and our telephone number is (614)
449-8614. Our web address is www.kkitz.com.
We
design, assemble, market and sell emergency preparedness kits and supplies to
school systems, municipalities, businesses and other customers. We
combine our own direct marketing and sales effort, primarily through our
kkitz.com website, with approximately 11 independent dealers which resell our
products to these target buyers throughout the country.
These
financial statements have been prepared in accordance with generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and the satisfaction of liabilities and commitments in the
normal course of business. However, the Company has incurred net
income of $8,392 and $7,789 for the twelve months ended December 31, 2008 and
2007, respectively, and the stockholders’ equity is $35,578 and $37,186 as of
December 31, 2008 and 2007, respectively. The Company has remained in
business primarily from loans and advances from a significant related party (see
related party footnote). The Company intends on financing its future
development activities from the same sources, until such time that funds
provided by operations are sufficient to fund working capital
requirements.
These
factors, among others, raise substantial doubt about the Company’s ability to
continue as a going concern for a reasonable period of
time.
K-KITZ,
INC.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008 AND 2007
NOTE
3-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
|
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates.
Cash and Cash
Equivalents
The
Company considers all highly liquid debt instruments and other short-term
investments with a maturity of three (3) months or less, when purchased, to be
cash equivalents. Liquid investments with maturities greater than
three (3) months are recorded as investments.
Allowance for Doubtful
Accounts
Accounts
receivable reflect those amounts due to the Company from its customers and
reflect the net realizable value of the balances due. Terms are net
30 days from invoice. The Company provides an allowance for doubtful
accounts which is based upon a review of outstanding receivables as well as
historical collection information. In determining the amount of the
allowance, management is required to make certain estimates and
assumptions. Management has determined that no reserve for
uncollectible accounts is required as of December 31, 2008 and December 31,
2007.
Inventory
Inventory
is valued at the lower of cost or market value which approximates the first in
first out method of inventory flow. The balance reflects the net
realizable value of such inventory.
K-KITZ,
INC.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008 AND 2007
NOTE
3-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
|
Revenue
Recognition
We
recognize revenue from the sales of our products in accordance with Staff
Accounting Bulletins 101 and 104. The criteria for recognition is as
follows:
|
·
|
persuasive
evidence of an arrangement exists,
|
|
·
|
delivery
has occurred or services have been
rendered,
|
|
·
|
the
seller’s price to the buyer is fixed or determinable,
and
|
|
·
|
collectability
is reasonably assured.
|
A
majority of our revenues are generated through our catalogs, either through the
Internet or telephone, at which time the customer places an order. Shipments of
products are made as soon as the customized orders are placed in kits and
quality checked. Revenues from sales of kits and related products are
recorded when title transfers, which is typically upon shipment. Most
shipments are made by commercial couriers. Invoicing occurs at
shipment, by regular mail.
Recent Accounting
Pronouncements
In
September 2006, the FASB issued SFAS 158, “Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements
87, 88, 106 and 132(R)” (“SFAS 158”). SFAS 158 requires an employer to recognize
the over-funded or under-funded status of a defined benefit postretirement plan
(other than a multiemployer plan) as an asset or liability in its statement of
financial position and to recognize changes in that funded status in the year in
which the changes occur through comprehensive income. SFAS 158 also
requires the measurement of defined benefit plan assets and obligations as of
the date of the employer’s fiscal year-end statement of financial position (with
limited exceptions). Management does not expect adoption of SFAS 158 to have a
material impact on the Company’s financial statements.
In
February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities – Including an amendment of FASB Statement No.
115”, (“FAS 159”) which permits entities to choose to measure many financial
instruments and certain other items at fair value at specified election dates. A
business entity is required to report unrealized gains and losses on items for
which the fair value option has been elected in earnings at each subsequent
reporting date. This statement is expected to expand the use of fair value
measurement. FAS 159 is effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal
years.
K-KITZ,
INC.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008 AND 2007
NOTE 3 -
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
|
Recent Issued Accounting
Standards (continued)
In July
2006, the FASB issued Interpretation No. 48 (FIN No. 48), “Accounting for
Uncertainty in Income Taxes.” This interpretation requires recognition and
measurement of uncertain income tax positions using a “more-likely-than-not”
approach. FIN No. 48 is effective for fiscal years beginning after December 15,
2006. Management is still evaluating what effect this will have on the Company’s
financial statements.
In
September 2006, the United States Securities and Exchange Commission (“SEC”)
issued SAB 108, “Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements.” This
SAB provides guidance on the consideration of the effects of prior year
misstatements in quantifying current year misstatements for the purpose of a
materiality assessment. SAB 108 establishes an approach that requires
quantification of financial statement errors based on the effects of each of the
company’s financial statements and the related financial statement disclosures.
SAB 108 permits existing public companies to record the cumulative effect of
initially applying this approach in the first year ending after November 15,
2006 by recording the necessary correcting adjustments to the carrying values of
assets and liabilities as of the beginning of that year with the offsetting
adjustment recorded to the opening balance of retained earnings. Additionally,
the use of the cumulative effect transition method requires detailed disclosure
of the nature and amount of each individual error being corrected through the
cumulative adjustment and how and when it arose. The Company does not anticipate
that SAB 108 will have a material impact on its financial
statements.
NOTE 4 -
|
MAJOR CUSTOMERS
/ VENDORS AND ACCRUED
EXPENSES
|
Major Customers and
Vendors
A major
customer or vendor is a customer or vendor that represents 10% of the Company’s
sales or purchases.
For the
year ended December 31, 2008 and December 31, 2007, K-Kitz had three major
customers representing approximately 80% of the Company’s sales and three major
customers representing approximately 69% of the Company’s sales,
respectively.
For the
year ended December 31, 2008 and December 31, 2007, K-Kitz had three major
vendors that represented approximately 91% of the Company’s purchases of
merchandise and four major vendors that represented approximately 89% of the
Company’s purchases of merchandise, respectively.
K-KITZ,
INC.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008 AND 2007
Accrued
Expenses
As of
December 31, 2008, the Company had accrued but unpaid audit fees of $12,500,
legal fees of $16,500 and payroll of $408. As of December 31, 2007,
the Company had incurred but unpaid audit fees of $6,250, legal fees of $12,500
and payroll of $183.
K-KITZ,
INC.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008 AND 2007
NOTE
5-
|
PROVISION FOR INCOME
TAXES
|
Deferred
income taxes are determined using the liability method for the temporary
differences between the financial reporting basis and income tax basis of the
Company’s assets and liabilities. Deferred income taxes are measured
based on the tax rates expected to be in effect when the temporary differences
are included in the Company’s tax return. Deferred tax assets and
liabilities are recognized based on anticipated future tax consequences
attributable to differences between financial statement carrying amounts of
assets and liabilities and their respective tax bases.
The
provision for income taxes is based on earnings before income taxes for
financial statement purposes an consisted of the following:
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
Current
income tax expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
1,481
|
|
|
$
|
1,374
|
|
State
|
|
|
531
|
|
|
|
492
|
|
Total
amount of tax expense
|
|
$
|
2,012
|
|
|
$
|
1,866
|
|
The
Company’s effective tax rates for the periods ended December 31, 2008 and 2007
are summarized below:
|
|
2008
|
|
|
2007
|
|
Federal
rate (net of State tax benefit)
|
|
|
14.24 |
% |
|
|
14.24 |
% |
State
rate
|
|
|
5.1 |
% |
|
|
5.1 |
% |
K-KITZ,
INC.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008 AND 2007
NOTE 6 -
|
EARNINGS PER
SHARE
|
Earnings Per Share of Common
Stock
Basic net
loss per common share is computed using the weighted average number of common
shares outstanding. Diluted earnings per share (EPS) includes
additional dilution from common stock equivalents, such as stock issuable
pursuant to the exercise of stock options and warrants. As of
December 31, 2007 and 2008, there were no common stock equivalents issued and
outstanding. Therefore, the basic and fully diluted earnings per
share are the same.
The
following is a reconciliation of the computation for basic and diluted earnings
per share:
|
|
December
31,
|
|
|
December
31,
|
|
|
|
2007
|
|
|
2008
|
|
|
|
|
|
|
|
|
Net
income
|
|
$ |
8,392 |
|
|
$ |
7,789 |
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares
outstanding (basic
and fully diluted)
|
|
|
100 |
|
|
|
100 |
|
|
|
|
|
|
|
|
|
|
Earnings
per share (basic and fully diluted)
|
|
$ |
83.92 |
|
|
$ |
77.89 |
|
K-KITZ,
INC.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008 AND 2007
NOTE
7-
|
STOCKHOLDERS’
EQUITY
|
The
Company has authorized two classes of stock: (a) Preferred stock – 5,000,000
shares authorized at a par value of $0.000001; and (b) Common stock – 95,000,000
shares authorized at a par value of $0.000001.
The
Company issued 100 shares of common stock to Kevin Lynch on August 8, 2006. On
January 24, 2009, the Company redeemed 100 common shares from Mr. Lynch
for a total cash payment of $1.00. Upon redemption, the shares were cancelled
and returned to the Company’s treasury. Also
on January 24, 2009, the Company issued Jennifer Jarvis 4,500,000 shares of
common stock.
The
Company’s founder contributed $19,397 in capital during the year ended December
31, 2006.
K-KITZ,
INC.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008 AND 2007
NOTE 8 -
|
RELATED PARTY
TRANSACTIONS
|
Jendco,
our largest vendor, is owned by the mother of Jennifer H. Jarvis, our President,
Chief Executive Officer and Chief Financial Officer. Our principal
executive offices and warehouse are located within a larger facility owned by
Jendco. Our lease at this location runs from month-to-month, and we
currently pay $1,300 in rent per month. We paid total rent of $15,600
in each of the years ended December 31, 2008 and 2007 to Jendco.
We sold
products to Jendco totaling $17,546 and $11,974 in the years ended December 31,
2008 and 2007, respectively, and had an accounts receivable from Jendco of
$13,276 and $6,735 as of December 31, 2008 and 2007, respectively. We
purchased raw materials from Jendco totaling $195,956 and $25,354 in the years
ended December 31, 2008 and 2007, respectively, and had an accounts payable from
Jendco of $51,480 and $0 as of December 31, 2008 and 2007,
respectively.
We
believe that all of such transactions and arrangements were advantageous to us
and were on terms no less favorable to us than could have been obtained from
unaffiliated third parties.
NOTE 9 -
|
SUBSEQUENT EVENTS
(UNAUDITED)
|
The
Company is currently engaged in an offering with total gross proceeds to be
raised ranging from $50,000 to $100,000.
On January 24, 2009, the Company redeemed 100 common shares
from Kevin Lynch for a total cash payment of $1.00. Upon redemption, the
shares were cancelled and returned to the Company’s treasury. Also
on January 24, 2009, the Company issued Jennifer Jarvis 4,500,000 shares of
common stock.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution.
The estimated expenses of the offering,
all of which are to be paid by the registrant, are as
follows:
SEC
Registration Fee
|
|
$ |
5.58 |
|
Accounting
Fees and Expenses
|
|
|
12,500.00 |
|
Legal
Fees and Expenses
|
|
|
25,000.00 |
|
Escrow
Agent Fees
|
|
|
400.00 |
|
Transfer
Agent Fees
|
|
|
1,000.00 |
|
Miscellaneous
|
|
|
94.42 |
|
Total
|
|
$ |
39,000.00 |
|
Our
estimated offering expenses will be paid from cash on hand.
Item
14. Indemnification of Directors and Officers.
The only
statute, charter provision, by-law, contract or other arrangement under which
any controlling person, director or officer of the registrant is insured or
indemnified in any manner against any liability which he may incur in his
capacity as such, is as follows:
Article
II of the By-laws of our company, filed as Exhibit 3.2 to the registration
statement.
The
general effect of the foregoing is to indemnify a control person, officer or
director from liability, thereby making the company responsible for any expenses
or damages incurred by such control person, officer or director in any action
brought against them based on their conduct in such capacity, provided they did
not engage in fraud or criminal activity.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 (the
"Act") may be permitted to directors, officers, and controlling persons against
liability under the Act, we have 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.
Item
15. Recent Sales of Unregistered Securities.
During
the past three years, the registrant has sold the following securities which
were not registered under the Securities Act of 1933:
Name and Address
|
|
Date
|
|
Shares
|
|
|
Consideration
|
|
|
|
|
|
|
|
|
|
|
Kevin
A. Lynch |
|
August
8, 2006 |
|
100
|
|
|
$ |
1.00
|
|
1309
S. Roosevelt |
|
|
|
|
|
|
|
|
Columbus,
Ohio 43209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jennifer
H. Jarvis
|
|
January
24, 2009
|
|
|
4,500,000 |
|
|
$ |
45,000 |
|
74
Auburn Ave.
|
|
|
|
|
|
|
|
|
|
|
Columbus,
Ohio 43205
|
|
|
|
|
|
|
|
|
|
|
We issued
the foregoing shares of common stock pursuant to Section 4(2) of the Securities
Act of 1933. Both Mr. Lynch and Ms. Jarvis were sophisticated investors,
and were in possession of all material information relating to the company.
Further, no commissions were paid to anyone in connection with the sale of the
shares and general solicitation was not made to anyone.
Item
16. Exhibits and Financial Statement Schedules.
The following exhibits are filed as
part of this registration statement, pursuant to Item 601 of Regulation
S-K.
Exhibit No.
|
|
Document Description
|
|
|
|
3.1
|
|
Certificate
of Incorporation, as amended.
|
3.2
|
|
By-laws.
|
5.1
|
|
Opinion
of Greenberg Traurig, LLP regarding the legality of the shares being
registered.
|
10.1
|
|
Form
of Sales Invoice provided to customers.
|
14.1
|
|
Code
of Business Conduct and Ethics.
|
14.2
|
|
Code
of Ethics for the CEO and Senior Financial Officers.
|
23.1
|
|
Consent
of Greenberg Traurig, LLP (included in the opinion filed as Exhibit
5.1).
|
23.2
|
|
Consent
of W.T. Uniack & Co. CPA’s P.C.
|
99.1
|
|
Subscription
Agreement.
|
99.2
|
|
Escrow
Agreement.
|
Item 17.
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;
(ii)
To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
(iii)
To include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement 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,
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.
(4) Intentionally
omitted.
(5) That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
(i)
Intentionally omitted.
(ii)
If the registrant is subject to Rule 430C, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement relating to an
offering, other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and
included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use.
(6) That,
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the
securities:
The undersigned registrant undertakes
that in a primary offering of securities of the undersigned registrant pursuant
to this registration statement, regardless of the underwriting method used to
sell the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or
sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating
to the offering required to be filed pursuant to Rule 424.
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of
the undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv) Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
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 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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Columbus, State of Ohio,
on March 30, 2009.
|
K-KITZ,
INC.
|
|
|
|
By:
|
/s/ Jennifer
H. Jarvis
|
|
|
Jennifer
H. Jarvis
|
|
|
President,
Chief Executive Officer and Chief
|
|
|
Financial
Officer
|
|
|
(principal
executive officer and principal financial
|
|
|
and
accounting officer)
|
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/Jennifer H. Jarvis
|
|
President, Chief Executive Officer, Chief
|
|
March 30, 2009
|
Jennifer H. Jarvis
|
|
Financial Officer and Director (principal
|
|
|
|
|
executive officer and principal financial
|
|
|
|
|
and accounting officer)
|
|
|
|
|
|
|
|
/s/
Michael J. Funtjar
|
|
Chief Operating Officer, Secretary and
|
|
March 30, 2009
|
Michael J. Funtjar |
|
Director
|
|
|
CERTIFICATE
OF AMENDMENT
OF
THE
CERTIFICATE
OF INCORPORATION
OF
K-KITZ,
INCORPORATED
(a
Delaware Corporation)
The
undersigned, Jennifer H. Jarvis, hereby certifies that:
1. She
is the President, Chief Executive Officer and Chief Financial Officer of K-Kitz,
Incorporated (the “Corporation”), a Delaware corporation, and is duly authorized
by the unanimous written consent of the Board of Directors of the Corporation to
execute this instrument.
2. The
name of the Corporation is “K-Kitz Incorporated.” The Corporation
filed its Certificate of Incorporation with the Secretary of State of the State
of Delaware on August 8, 2006.
3. This
Certificate of Amendment of the Certificate of Incorporation was duly approved
by the Corporation’s Board of Directors and duly adopted by written consent of
the stockholders of the Corporation in accordance with the applicable provisions
of Sections 228 and 242 of the General Corporation Law of the State of
Delaware.
4. The
fifth paragraph of the Certificate of Incorporation of the Corporation is
hereby amended to read in its entirety as follows:
The total
number of shares of all classes of stock which the Corporation shall have
authority to issue:
COMMON
STOCK:
|
Ninety
Five Million (95,000,000) with a par value of $0.000001
(USD)
|
|
|
PREFERRED
STOCK:
|
Five
Million (5,000,000) with a par value of $0.000001 (USD)
|
|
|
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment of the Certificate of Incorporation to be executed as of the 19th day of
December 2008.
|
By:
|
/s/
Jennifer H. Jarvis
|
|
|
|
Jennifer
H. Jarvis
|
|
|
|
President,
Chief Executive Officer and Chief
Financial
Officer
|
|
BYLAWS
K-Kitz,
Inc
A Delaware
Corporation
CORPORATE
BYLAWS
K-Kitz,
Inc.
A
Delaware Corporation
Article I - Shareholders'
Meetings
Section 1. Annual
meeting. The annual meeting of the shareholders for the election of
directors and the transaction of such other business as may properly come before
it shall be held at the time and place designated by the Board of Directors of
the Corporation. The annual meeting of shareholders for any year
shall be held no later than thirteen (13) months after the last preceding annual
meeting of shareholders. The Secretary shall give personally, by
mail, or electronic mail, not less than ten (10) nor more than fifty (50) days
before the date of the meeting to each shareholder entitled to vote at such
meeting, written notice stating the place, date, and hour of the meeting. If
mailed, the notice shall be addressed to the shareholder at his or her address
as it appears on the record of shareholders of the Corporation unless he or she
shall have filed with the Secretary of the Corporation a written request that
notices be mailed to a different address, in which case it shall be mailed to
the address designated in the request. If mailed, such notice shall
be deemed to be delivered when deposited in the United States mail addressed to
the shareholder at his address as it appears on the stock transfer books of the
Corporation, with postage thereon prepaid. Any notice of meetings may
be waived by a shareholder by submitting a signed waiver either before or after
the meeting, or by attendance at the meeting.
Section 2. Special
meeting. Special meetings of shareholders, other than those regulated by
statute, may be called at any time by the Board of Directors or the President,
and must be called by the President upon written request of the holders of not
less than ten percent (10%) of the outstanding shares entitled to vote at such
special meeting. Written notice of such meetings stating the place, the date and
hour of the meeting, the purpose or purposes for which it is called, and the
name of the person by whom or at whose direction the meeting is called shall be
given not less than ten (10) nor more than sixty (60) days before the date set
for the meeting. The notice shall be given to each shareholder of record in the
same manner as notice of the annual meeting. Notice of special meeting may be
waived by submitting a signed waiver or by attendance at the
meeting.
Section 3. Quorum. The presence, in person or
by proxy, of the holders of one-third (33.33%) of the outstanding shares
entitled to vote thereat shall be necessary to constitute a quorum for the
transaction of business at all meetings of shareholders. If, however, such
quorum shall not be present or represented at any meeting of the shareholders,
the shareholders entitled to vote thereat, present in person or represented by
proxy, shall have the power to adjourn the meeting to a future date at which a
quorum shall be present or represented. At such adjourned meeting, any business
may be transacted which might have been transacted at the meeting as originally
called. When a specified item of business is required to be voted on
by a class or series, a majority of the shares of such class or series shall
constitute a quorum for the transaction of such item of business by that class
or series. After a quorum has been established at a shareholders’
meeting, the subsequent withdrawal of shareholders, so as to reduce the number
of shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 4. Record
date. The
directors may fix in advance a date not less than ten (10) nor more than sixty
(60) days, prior to the date of any meeting of the shareholders or prior to the
last day on which the consent or dissent of or action by the shareholders may be
effectively expressed for any purpose without a meeting, as the record date for
the determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof, unless the Board of Directors fixes a new record date for the adjourned
meeting.
Section 5. Voting.
A shareholder entitled to vote at a meeting may vote at such meeting in person
or by proxy. Except as otherwise provided by Delaware General Corporation Law or
the Certificate of Incorporation, every shareholder shall be entitled to one (1)
vote for each share standing in his or her name on the record of shareholders.
Except as herein or in the Certificate of Incorporation otherwise provided, all
corporate action shall be determined by vote of a majority of the votes cast at
a meeting of shareholders by the holders of shares entitled to vote
thereon.
Treasury
shares shall not be voted, directly or indirectly, at any meeting, and shall not
be counted in determining the total number of outstanding shares at any given
time.
At each
election for directors, every shareholder entitled to vote at such election
shall have the right to vote, in person or by proxy, the number of shares owned
by him for as many persons as there are directors to be elected at that time and
for whose election he has a right to vote.
Shares
standing in the name of another corporation, domestic or foreign, may be voted
by the officer, agent, or proxy designated by the bylaws of the corporate
shareholder; or, in the absence of any applicable bylaw, by such person as the
Board of Directors of the corporate shareholder may designate. Proof
of such designation may be made by presentation of a certified copy of the
bylaws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the chairman of the board, president, any vice president,
secretary and treasurer of the corporate shareholder shall be presumed to
possess, in that order, authority to vote such shares.
Shares
held by an administrator, executor, guardian or conservator may be voted by him,
either in person or by proxy, without a transfer of such shares into his
name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his
name.
Shares
standing in the name of a receiver may be voted by such receiver, and shares
held by or under the control of a receiver may be voted by such receiver without
the transfer thereof into his name if authority so to do be contained in an
appropriate order of the court by which such receiver was
appointed.
A
shareholder whose shares are pledged shall be entitled to vote such shares until
the shares have been transferred into the name of the pledge, and thereafter the
pledge or his nominee shall be entitled to vote the shares so
transferred.
On and
after the date on which written notice of redemption of redeemable shares has
been mailed to the holders thereof and a sum sufficient to redeem such shares
has been deposited with a bank or trust company with irrevocable instruction and
authority to pay the redemption price to the holders thereof upon surrender of
certificates therefore, such shares shall not be entitled to vote on any matter
and shall not be deemed to be outstanding shares.
Section 6. Proxies.
Every proxy must be dated and signed by the shareholder or by his or her
attorney-in-fact. No proxy shall be valid after the expiration of eleven (11)
months from the date of its execution, unless otherwise provided therein. Every
proxy shall be revocable at the pleasure of the shareholder executing it, except
where an irrevocable proxy is permitted by statute.
The
authority of the holder of a proxy to act shall not be revoked by the
incompetence or death of the shareholder who executed the proxy unless, before
the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a
proxy for the same shares confers authority upon two (2) or more persons and
does not otherwise provide, a majority of them present at the meeting, or if
only one (1) is present then that person present, may exercise all the powers
conferred by the proxy; but if the proxy holders present at the meeting are
equally divided as to the right and manner of voting in any particular case, the
voting of such shares shall be prorated.
Section 7. Action
without a meeting. Pursuant to §228 of the
Delaware General Corporation Law, any action which may be authorized or taken at
a meeting of the shareholders may be authorized or taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the shareholders entitled to vote on
such matter having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. The writing or
writings shall be filed with or entered upon the records of the
Corporation. Notice shall be given to those shareholders who have not
consented in writing. The notice shall fairly summarize the material
features of the authorized action and, if the action be a merger, consolidated
or sale or exchange of assets for which dissenters rights are provided under
this act, the notice shall contain a clear statement of the right of
shareholders dissenting therefrom to be paid the fair value of their shares upon
compliance with further provisions of this act regarding the rights of
dissenting shareholders.
Section 8. Notice
of Adjourned Meetings. When a
meeting is adjourned to another time or place, it shall not be necessary to give
any notice of the adjourned meeting if the time and place to which the meeting
is adjourned are announced at the meeting at which the adjournment is taken, and
at the adjourned meeting any business may be transacted that might have been
transacted on the original date of the meeting. If, however, after
the adjournment, the Board of Directors fixes a new record date for the
adjourned meeting, a notice of the adjourned meting shall be given as provided
in this section to each shareholder of record on the new record date entitled to
vote at such meeting.
Section 9. Voting
Record. Pursuant to §219 and 220 of the Delaware General
Corporation Law, the officers or agent having charge of the stock transfer books
for shares of the Corporation shall make, at least ten (10) days before each
meeting of shareholders, a complete list of the shareholders entitled to vote at
such meeting or any adjournment thereof, with the address of and the number and
class and series, if any, of shares held by each. The list, for a
period of ten (10) days prior to such meeting, shall be kept on file at the
registered office of the Corporation, at the principal place of business of the
Corporation or at the office of the transfer agent or register of the
Corporation and any shareholder shall be entitled to inspect the list at any
time during usual business hours. The list shall also be produced and
kept open at the time and place of the meeting and shall be subject to the
inspection of any shareholder at any time during the meeting.
If the
requirements of this section have not been substantially complied with, the
meeting on demand of any shareholder in person or by proxy shall be adjourned
until the requirements are complied with. If no such demand is made,
failure to comply with the requirements of this section shall not affect the
validity of any action taken at such meeting.
Section 10. Voting
Trusts. Any
number of shareholders of this Corporation may create a voting trust for the
purpose of conferring upon a trustee or trustees the right to vote or otherwise
represent their shares. The voting trust agreement must be a written
agreement and must be file with the registered office of the Corporation in
Delaware. Where the counterpart of a voting trust agreement and the
copy of the record of the holders of voting trust certificates has been
deposited with the Corporation as provided by law, such documents shall be
subject to the same right of examination by a shareholder of the Corporation, in
person or by agent or attorney, as are the books and records of the Corporation,
and such counterpart and such copy of such record shall be subject to
examination by any holder or record of voting trust certificates either in
person or by agent or attorney, at any reasonable time for any proper
purpose.
Section 11. Shareholders’
Agreements. Two (2) or more shareholders of this Corporation may enter an
agreement providing for the exercise of voting rights in the manner provided in
the agreement or relating to any phase of the affairs of the Corporation as
provided by law. Nothing therein shall impair the right of this
Corporation to treat the shareholders of record as entitled to vote the shares
standing in their names.
Article II -
Directors
Section 1. Number
and qualifications. The entire Board of Directors shall consist of one
(1) natural person, all of whom shall be of the age and capacity to make binding
contractual agreements under Delaware law. The directors need not be
shareholders of the Corporation or residents of the State of Delaware. The
number of directors may be changed by an amendment to the Bylaws, adopted by the
shareholders.
Section 2. Manner
of election. The directors shall be elected at the annual meeting of
shareholders by a plurality vote except as otherwise prescribed by
statute.
Section 3. Election
and Term of office. Each person named in the
Articles of Incorporation as a member of the initial Board of Directors shall
hold office until the first annual meeting of shareholders, and until his
successor shall have been elected and qualified or until his earlier
resignation, removal from office or death. At the first annual
meeting of shareholders and at each annual meeting thereafter, the shareholders
shall elect directors to hold office until the next succeeding annual
meeting. Each director shall hold office for the term for which he or
she is elected and until his successor shall have been elected and qualified or
until his earlier resignation, removal from office or death.
Section 4. Duties
and powers. The Board of Directors shall have control and management of
the affairs and business of the Corporation. The directors shall in all cases
act as a Board, regularly convened, and, in the transaction of business the act
of a majority present at a meeting except as otherwise provided by law or the
Certificate of Incorporation shall be the act of the Board, provided a quorum is
present. The directors may adopt such rules and regulations for the conduct of
their meetings and the management of the Corporation as they may deem proper,
not inconsistent with law or these Bylaws.
Section 5. Meetings.
The Board of Directors shall meet for the election or appointment of officers
and for the transaction of any other business as soon as practicable after the
adjournment of the annual meeting of the shareholders, and other regular
meetings of the Board shall be held at such times as the Board may from time to
time determine.
Special
meetings of the Board of Directors may be called by the Chairman of the Board,
President, or upon the written request of any two (2) directors.
Members
of the Board of Directors may participate in a meeting of such board by means of
a conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other at the same
time. Participation by such means shall constitute presence in person
at a meeting.
Section 6. Notice
of meetings. No
notice need be given of any regular meeting of the Board. Notice of special
meetings shall be served upon each director either in person, electronic mail or
by U.S. mail addressed to him at his last-known post office address, at least
two (2) days prior to the date of such meeting, specifying the time and place of
the meeting and the business to be transacted thereat. At any meeting at which
all of the directors shall be present, although held without notice, any
business may be transacted which might have been transacted if the meeting had
been duly called.
Notice of
a meting of the Board of Directors need not be given to any director who signs a
waiver of notice either before or after the meeting. Attendance of a
director at a meeting shall constitute a waiver of notice of such meeting and
waiver of any and all objections to the place of the meeting, the time of the
meeting, or the manner in which it has been called or convened, except when a
director states, at the beginning of the meeting, any objection to the
transaction of business because the meeting is not lawfully called or
convened.
Section 7. Place of
meeting. The Board of Directors may hold its meeting either within or
without the State of Delaware, at such place as may be designated in the notice
of any such meeting.
Section 8. Quorum. At any meeting of the Board
of Directors, the presence of a majority of the Board shall be necessary to
constitute a quorum for the transaction of business. However, should a quorum
not be present, a lesser number may adjourn the meeting to some further
time.
Section 9. Voting. At all meetings of the
Board of Directors, each director shall have one vote irrespective of the number
of shares that he may hold. In the event there are an even number of
directors, tie votes on issues shall be resolved in favor of the Chairman of the
Board’s vote.
Section 10. Action
without a meeting. Any action which may be authorized or taken at a
meeting of the Board of Directors may be authorized or taken without a meeting
in a writing or writings signed by all of the directors, which writing or
writings shall be filed with or entered upon the records of the
Corporation.
Section 11. Compensation.
The Board of Directors shall have the authority to fix the compensation of
directors.
Section 12. Vacancies.
Any vacancy occurring in the Board of Directors by death, resignation, or
otherwise shall be filled promptly by a majority vote of the remaining directors
at a special meeting which shall be called for that purpose within thirty (30)
days after the occurrence of the vacancy. The director thus chosen shall hold
office for the unexpired term of his or her predecessor and the election and
qualification of his or her successor.
Section 13. Removal
of directors. Any director may be removed either with or without cause,
at any time, by a vote of the shareholders holding a majority of the shares then
issued and outstanding and who were entitled to vote for the election of the
director sought to be removed, at any special meeting called for that purpose,
or at the annual meeting. Except as otherwise prescribed by statute, a director
may be removed for cause by vote of a majority of the entire Board.
Section 14. Resignation.
Any director may resign at any time, such resignation to be made in writing and
to take effect immediately without acceptance.
Section 15. Duties
of Directors. A director shall perform his duties as a director,
including his duties as a member of any committee of the board upon which he may
serve, in good faith, in a manner he reasonably believes to be in the best
interests of the corporation, and with such care as an ordinarily prudent person
in a like position would use under similar circumstances. A director
who performs his duties in compliance with this section shall have no liability
by reason of being or having been a director of the corporation.
Section 16. Director
Conflicts of Interest. No contract or other transaction between this
Corporation and one (1) or more of its directors, or any other corporation,
firm, association or entity in which one (1) or more of the directors of this
Corporation are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose,
if:
a) The
fact of such relationship or interest is disclosed or known to the Board of
Directors or committee which authorizes approves or ratifies the contract or
transaction by a vote or consent sufficient for the purpose without counting the
votes or consents of such interested directors; or
b) The
fact of such relationship or interest is disclosed or known to the shareholders
entitled to vote and they authorize, approve or ratify such contract or
transaction by vote or written consent; or
c) The
contract or transaction is fair and reasonable as to the Corporation at the time
it is authorized by the board, a committee or shareholders.
Interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or a committee thereof which authorizes approves or
ratifies such contract or transaction.
Section 17. Executive
and Other Committees. The Board of Directors, by resolution
adopted by a majority of the full Board of Directors, may designate from among
its members an executive committee and one (1) or more other committees each of
which, to the extent provided in such resolution shall have and may exercise all
the authority of the Board of Directors, except that no committee shall have the
authority to:
a) approve
or recommend to shareholders actions or proposals required by law to be approved
by shareholders,
b) designate
candidates for the office of director, for purposes of proxy solicitation or
otherwise,
c) fill
vacancies on the Board of Directors or any committee thereof,
d) amend
the Bylaws
e) authorize
or approve the reacquisition of shares unless pursuant to a general formula or
method specified by the Board of Directors, or
f) authorize
or approve the issuance or sale of, or any contract to issue or sell shares or
designate the terms of a series of a class of shares, except that the Board of
Directors, having acted regarding general authorization for the issuance or sale
of shares, or any contract therefore, and, in the case of a series, the
designation thereof, may, pursuant to a general formula or method specified by
the Board of Directors, by resolution or by adoption of a stock option or other
plan, authorize a committee to fix the terms of any contract for the sale of the
shares and to fix the terms upon which such shares may be issued or sold,
including, without limitation, the price, the rate or manner of payment of
dividends, provisions for redemption, sinking fund, conversion, voting or
preferential rights, and provisions for other features of a class of shares, or
a series of a class of shares, with full power in such committee to adopt any
final resolution setting forth all the terms thereof and to authorize the
statement of the terms of a series for filing with the Department of
State.
The Board
of Directors, by resolution adopted in accordance with this section, may
designate one (1) or more directors as alternate members of any such committee,
who may act in the place and stead of any member or members at any meeting of
such committee.
Article III -
Officers
Section 1. Officers
and qualifications. The officers of the Corporation shall be a President,
a Secretary, a Treasurer, and such other officers as the Board of Directors may
determine. The failure to elect a President, Secretary or Treasurer shall not
affect the existence of this corporation.
Section 2. Election.
All officers of the Corporation shall be elected annually by the Board of
Directors at its meeting held immediately after the annual meeting of
shareholders.
Section 3. Term of
office. All officers shall hold office until their successors have been
duly elected and have qualified, or until removed as hereinafter
provided.
Section 4. Removal
of officers. Any officer may be removed either with or without cause by
the vote of a majority of the Board of Directors.
Section 5. Duties
of officers. The duties and powers of the officers of the Corporation
shall be as follows and as shall hereafter be set by resolution of the Board of
Directors:
President
a) The
President shall preside at all meetings of the Board of Directors and at all
meetings of the shareholders.
b) The
President shall present at each annual meeting of the shareholders and directors
a report of the condition of the business of the Corporation.
c) The
President shall cause to be called regular and special meetings of the
shareholders and directors in accordance with the requirements of Delaware
General Corporation Law and of these Bylaws.
d) The
President shall appoint, discharge, and fix the compensation of all employees
and agents of the Corporation other than the duly elected officers, subject to
the approval of the Board of Directors.
e) The
President shall sign all certificates representing shares.
f) The
President shall enforce these Bylaws and perform all the duties incident to such
office and which are required by law, and, generally, shall supervise and
control the business and affairs of the Corporation.
Secretary
a) The
Secretary shall keep the minutes of the meetings of the Board of Directors and
of the shareholders in appropriate books.
b) The
Secretary shall attend to the giving of notice of special meetings of the Board
of Directors and of all the meetings of the shareholders of the
Corporation.
c) The
Secretary shall be custodian of the records and seal of the Corporation and
shall affix the seal to the certificates representing shares and other corporate
papers when required.
d) The
Secretary shall keep at the principal office of the Corporation a book or record
containing the names, alphabetically arranged, of all persons who are
shareholders of the Corporation, showing their places of residence, the number
and class of shares held by them respectively, and the dates when they
respectively became the owners of record thereof. The Secretary shall keep such
book or record and the minutes of the proceedings of its shareholders open daily
during the usual business hours, for inspection, within the limits prescribed by
law, by any person duly authorized to inspect such records. At the request of
the person entitled to an inspection thereof, the Secretary shall prepare and
make available a current list of the officers and directors of the
Corporation.
e) The
Secretary shall attend to all correspondence and present to the Board of
Directors at its meetings all official communications received by the
Secretary.
f) The
Secretary shall perform all the duties incident to the office of Secretary of
the Corporation and perform such other duties as may be prescribed by the Board
of Directors or the President.
Treasurer
a) The
Treasurer shall have the care and custody of and be responsible for all the
funds and securities of the Corporation, and shall deposit such funds and
securities in the name of the Corporation in such banks or safe deposit
companies as the Board of Directors may designate.
b) The
Treasurer shall keep at the principal office of the Corporation accurate books
of account of all its business and transactions and shall at all reasonable
hours exhibit books and accounts to any director upon application at the office
of the Corporation during business hours.
c) The
Treasurer shall render a report of the condition of the finances of the
Corporation at each regular meeting of the Board of Directors and at such other
times as shall be required, and shall make a full financial report at the annual
meeting of the shareholders.
d) The
Treasurer shall further perform all duties incident to the office of Treasurer
of the Corporation, and shall perform such other duties as may be prescribed by
the Board of Directors or the President.
Other
Officers
Other
officers shall perform such duties and have such powers as may be assigned to
them by the Board of Directors.
Section 6. Vacancies. All vacancies in any office
shall be filled promptly by the Board of Directors, either at regular meetings
or at a meeting specially called for that purpose.
Section 7. Compensation
of officers. The officers shall receive such salary or compensation as
may be fixed by the Board of Directors.
Article IV -
Seal
Section 1. Seal.
The seal of the Corporation shall be as follows:
Article V – Stock
Certificates
Section 1. Certificates.
The shares of the Corporation shall be represented by certificates prepared by
the Board of Directors and signed by the President, and by the Secretary or the
Treasurer, and sealed with the seal of the Corporation or a facsimile. In case
any officer who signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer at the date of its issuance.
The
certificates shall be numbered consecutively and in the order in which they are
issued; they shall be bound in a book and shall be issued in consecutive order
therefrom, and in the margin thereof shall be entered the name of the person to
whom the shares represented by each such certificate are issued, the number and
class or series of such shares, and the date of issue. Each certificate shall
state the registered holder's name, the number and class of shares represented
thereby, the date of issue, the par value of such shares, or that they are
without par value.
Every
certificate representing shares which are restricted as to the sale, disposition
or other transfer of such shares shall state that such shares are restricted as
to transfer and shall set forth or fairly summarize upon the certificate, or
shall state that the corporation will furnish to any shareholder upon request a
full statement of such restrictions.
Section 2. Subscriptions. Subscriptions to the shares
shall be paid at such times and in such installments as the Board of Directors
may determine. If default shall be made in the payment of any installment as
required by such resolution, the Board may declare the shares and all previous
payments thereon forfeited for the use of the Corporation, in the manner
prescribed by statute.
Section 3. Transfer
of shares. The shares of the Corporation shall be assignable and
transferable only on the books and records of the Corporation by the registered
owner, or by his duly authorized attorney, upon surrender of the certificate
duly and properly endorsed with proper evidence of authority to transfer. The
Corporation shall issue a new certificate for the shares surrendered to the
person or persons entitled thereto.
Section 4. Return
certificates. All certificates for shares changed or returned to the
Corporation for transfer shall be marked by the Secretary ''Cancelled,'' with
the date of cancellation, and the transaction shall be immediately recorded in
the certificate book opposite the memorandum of their issue. The returned
certificate may be inserted in the certificate book.
Section 5. Lost,
Stolen, or Destroyed Certificates. The corporation shall issue a new
stock certificate in the place of any certificate previously issued if the
holder of record of the certificate (a) makes proof in affidavit form that it
has been lost, destroyed or wrongfully taken; (b) requests the issue of a new
certificate before the corporation has notice that the certificate has been
acquired by a purchaser for value in good faith and without notice of any
adverse claim; (c) gives bond in such form as the corporation may direct, to
indemnify the corporation, the transfer agent, and registrar against any claim
that may be made on account of the alleged loss, destruction, or theft of a
certificate; and (d) satisfies any other reasonable requirements imposed by the
Corporation.
Article VI – Books and
Records
Section 1. Books
and Records. This Corporation shall keep correct and complete
books and records of accounts and shall keep minutes of the proceedings of its
shareholders, board of directors and committees of directors.
This
Corporation shall keep at its registered office or principal place of business,
or at the office of its transfer agent or registrar, a record or its
shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
Section 2. Shareholders’
Inspection Rights. Pursuant to
§220(a)(1) of Delaware General Corporation Law, any record or beneficial holders
of Corporation stock may inspect the books and records of the Corporation upon
written demand stating the purpose thereof, and shall have the right to examine,
in person or by agent or attorney, at any reasonable time or times, for any
proper purpose. The Corporation shall grant the inspection of its
relevant books and records of accounts, minutes and records of shareholders and
to make extracts therefrom within five (5) days of the demand.
Section 3. Financial
Information. Not
later than four (4) months after the close of each fiscal year, this Corporation
shall prepare a balance sheet showing in reasonable detail the financial
condition of the corporation as of the close of its fiscal year, and a profit
and loss statement showing the results of the operations of the Corporation
during its fiscal year.
Upon the written request of any
shareholder or holder of voting trust certificates for shares of the
Corporation, the Corporation shall mail to such shareholder or holder of voting
trust certificates a copy of the most recent such balance sheet and profit and
loss statement.
The balance sheets and profit and loss
statements shall be filed in the registered office of the Corporation in
Delaware, shall be kept for at least five (5) years, and shall be subject to
inspection during business hours by any shareholder or holder of voting trust
certificates, in person or by agent.
Article VI -
Dividends
Section 1. Declaration
of dividends. The Board of Directors at any regular or special meeting
may declare dividends payable out of the surplus of the Corporation, whenever in
the exercise of its discretion it may deem such declaration advisable, except
when the Corporation is insolvent or when the payment thereof would render the
corporation insolvent or when the declaration or payment thereof would be
contrary to any restrictions contained in the Articles of Incorporation or
Delaware General Corporation Law. Such dividends may be paid in cash, property,
or shares of the Corporation, subject to the following provisions:
a) Dividends
in cash or property may be declared and paid, except as otherwise provided in
this section, only out of the unreserved and unrestricted earned surplus of the
corporation or out of capital surplus, howsoever arising but each dividend paid
out of capital surplus, and the amount per share paid form such surplus shall be
disclosed to the shareholders receiving the same concurrently with the
distribution.
b) Dividends
may be declared and paid in the corporation’s own treasury shares.
c) Dividends
may be declared and paid in the corporation’s own authorized but unissued shares
out of any unreserved and unrestricted surplus of the Corporation upon the
following conditions:
1) If
a dividend is payable in shares having a par value, such shares shall be issued
at not less than the par value thereof and there shall be transferred to stated
capital at the time such dividend is paid an amount of surplus equal to the
aggregate par value of the shares to be issued as a dividend.
2) If
a dividend is payable in shares without a par value, such shares shall be issued
at such stated value as shall be fixed by the Board of Directors by resolution
adopted at the time such dividend is declared, and there shall be transferred to
stated capital at the time such dividend is paid an amount of surplus equal to
the aggregate stated value so fixed in respect of such shares; and the amount
per share so transferred to stated capital shall be disclosed to the
shareholders receiving such dividend concurrently with the payment
thereof.
d) No
dividend payable in shares of any class shall be paid to the holders of shares
of any other class unless the articles of incorporation so provide or such
payment is authorized by the affirmative vote or the written consent of the
holders of at least a majority of the outstanding shares of the class in which
the payment is to be made.
e) A
split-up or division of the issued shares of any class into a greater number of
shares of the same class without increasing the stated capital of the
corporation shall not be construed to be a share dividend within the meaning of
this section.
Article VII - Bills, Notes,
Etc.
Section 1. Execution.
All bills payable, notes, checks, drafts, warrants, or other negotiable
instruments of the Corporation shall be made in the name of the Corporation and
shall be signed by such officer or officers as the Board of Directors shall from
time to time by resolution direct.
No
officer or agent of the Corporation, either singly or jointly with others, shall
have the power to make any bill payable, note, check, draft, or warrant, or
other negotiable instrument, or endorse the same in the name of the Corporation,
or contract or cause to be contracted any debt or liability in the name and on
behalf of the Corporation except as herein expressly prescribed and
provided.
Article VIII -
Offices
The
principal office of the Corporation shall be located in the City of Lexington,
County of Fayette, Commonwealth of Kentucky. The Board of Directors may change
the location of the principal office of the Corporation and may, from time to
time, designate other offices within or without the state as the business of the
Corporation may require.
Article IX -
Amendments
Section 1. Manner
of amending. These Bylaws may be altered, amended, repealed, or added to
by the affirmative vote of the holders of a majority of the shareholders
entitled to vote in the election of any director at an annual meeting or at a
special meeting called for that purpose, provided that a written notice shall
have been sent to each shareholder of record entitled to vote at such meeting at
his last-known post office address at least ten days before the date of such
annual or special meeting, which notice shall state the alterations, amendments,
additions, or changes which are proposed to be made in such Bylaws. Only such
changes shall be made as have been specified in the notice. The Bylaws may also
be altered, amended, repealed, or new Bylaws adopted by a majority of the entire
Board of Directors at a regular or special meeting of the Board. However, any
Bylaws adopted by the Board may be altered, amended, or repealed by the
shareholders.
Article X - Waiver of
Notice
Section
1. Authority to waive
notice. Whenever under the provisions of these Bylaws or of any statute
any shareholder or director is entitled to notice of any regular or special
meeting or of any action to be taken by the Corporation, such meeting may be
held or such action may be taken without the giving of such notice, provided
every shareholder or director entitled to such notice in writing waives the
requirements of these Bylaws in respect thereto.
Article XI-
Provisions
Should
any Article or provision in the Bylaws of this Corporation be found to be
contrary to Delaware law, said item shall be considered null and void, just as
if it had never appeared in these Bylaws, and it shall not affect the validity
of any other Article, provision, or these Bylaws as a whole. In such an
instance, the Article or provision shall be amended in the proper procedure to
comply with applicable law.
EXHIBIT
5.1
GREENBERG
TRAURIG
MetLife
Building
200 Park
Avenue, 15th
Floor
New York,
New York 10166
April 6,
2009
K-Kitz,
Inc.
1630
Integrity Drive East
Columbus,
Ohio 43209
Ladies
and Gentlemen:
We are
acting as counsel to K-Kitz, Inc., a Delaware corporation (the "Company"), in
connection with the Registration Statement on Form S-1, filed on April 6, 2009
(the "Registration Statement"), under the Securities Act of 1933, as amended
(the "Act"), covering up to 2,000,000 shares of the Company's common stock, par
value $0.000001 per share (the "Shares").
We have
examined the originals, or certified, conformed or reproduction copies, of all
such records, agreements, instruments and documents as we have deemed relevant
or necessary as the basis for the opinion hereinafter expressed. In
all such examinations, we have assumed the genuineness of all signatures on
originals or certified copies and the conformity to original or certified copies
of all copies submitted to us as conformed or reproduction copies. As
to various questions of fact relevant to such opinion, we have relied upon, and
assumed the accuracy of, certificates and oral or written statements and other
information of or from public officials, officers or representatives of the
Company, and others.
Based
upon the foregoing, we are of the opinion that the Shares have been, or when
issued, delivered and paid for will be, validly issued, fully paid and
non-assessable.
We hereby
consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to this firm under the caption "Legal Opinion" in
the Prospectus forming a part of the Registration Statement.
Very
truly yours,
|
|
|
|
/s/
Greenberg Traurig, LLP
|
|
|
|
GREENBERG
TRAURIG, LLP
|
|
K-KITZ,
INC.
Sales
Invoice
1. General. This
transaction, unless covered by an existing written contract between Customer and
K-Kitz, shall be governed by and subject to the following terms and
conditions. Any terms or conditions contained in Customer's
acknowledgement of this Sales Invoice which are different from or in addition to
the provisions hereof shall be void and of no force and effect, unless
incorporated into a writing signed by Customer and K-Kitz.
2. Taxes. Customer
shall reimburse K-Kitz the amount of any and all federal, state, local or
foreign taxes (excluding K-Kitz's income taxes), duties and other charges paid
by K-Kitz with respect to the production, sale, transportation, delivery and use
of the goods covered by this Sales Invoice.
3. Contingencies. Neither
party shall be liable to the other for failure or delay in performance hereunder
to the extent that such failure or delay is due to acts of God, fire, flood,
explosion, sabotage, war, accident, labor dispute or shortage, equipment
breakdown, governmental laws, ordinances, rules, regulations or rulings (whether
valid or invalid), inability to obtain equipment or fuel, or any other similar
or different contingency beyond such party's reasonable control, or if
occasioned by partial or complete suspension of operations at any of such
party's facilities. In the event of delay or default in delivery
caused by a contingency beyond K-Kitz's reasonable control, K-Kitz shall have
the right to allocate in a fair and reasonable manner among its customers and
K-Kitz's own requirements its available supply of goods available at the time of
such contingency.
4. WARRANTY AND
DISCLAIMER. K-KITZ WARRANTS THAT THE GOODS SOLD UNDER THIS
SALES INVOICE SHALL MEET THE SPECIFICATIONS SET FORTH HEREIN, OR, IF NO
SPECIFICATIONS ARE SET FORTH, THAT THE GOODS SHALL MEET K-KITZ'S STANDARD
SPECIFICATIONS. OTHER THAN THE FOREGOING, K-KITZ MAKES NO GUARANTY OR
WARRANTY, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THOSE OF
INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHT, MERCHANTABILITY OR SUITABILITY
OF THE GOODS FOR ANY SPECIFIC PURPOSE, EVEN IF THAT PURPOSE IS KNOWN TO
K-KITZ.
5. Limitation of Liability and
Remedies. K-Kitz shall not be liable on any claim under or
arising out of a breach of the terms and conditions of this Sales Invoice unless
action thereon shall be brought within ten days from the date of delivery of
goods covered by this Sales Invoice. Customer's failure to notify
K-Kitz shall constitute a waiver of all claims with respect to the goods, and in
any event, use of the goods shall be deemed to constitute satisfactory
performance on the part of the K-Kitz. K-Kitz's liability under this
Sales Invoice shall be limited to replacement of goods not meeting the
specifications set forth herein (or, if applicable, K-Kitz's standard
specifications) or refund of the purchase price thereof, at K-Kitz's
option. In no event shall K-Kitz be liable for any incidental or
consequential damages.
6. Indemnification. Customer
will indemnify K-Kitz against all claims, actions, suits, losses, judgments,
awards, damages of any nature and expense (including attorneys' fees and other
legal expenses) arising out of or in any manner resulting from Customer's
unloading, storage, handling or use of the goods covered by this Sales Invoice,
except for the portion of damages attributable to K-Kitz's breach of the limited
warranty set forth in this Sales Invoice. This indemnity shall
survive termination of this contract.
7. Waiver. Any
failure by K-Kitz to enforce any of the terms and conditions of this Sales
Invoice shall not constitute a waiver of any other term or
condition.
8. Governing
Law. The terms and conditions of this Sales Invoice shall be
governed by the law of the State of Ohio. The validity in whole or in
part of any of the terms and conditions of sale shall not affect the validity of
any other terms and conditions.
9. Assignment. Customer
shall have no right to assign its rights or interest under this Sales Invoice
without prior written permission of K-Kitz.
Exhibit
14.1
K-KITZ,
INC.
(the
“Company”)
CODE
OF BUSINESS CONDUCT AND ETHICS
Introduction
This Code
of Business Conduct and Ethics (the “Code”) covers a wide range of business
practices and procedures. It does not cover every issue that may
arise, but it sets out basic principles to guide the directors, officers, and
employees of the Company. All Company directors, officers, and
employees should conduct themselves accordingly and seek to avoid even the
appearance of improper behavior in any way relating to the
Company. In appropriate circumstances, this Code should also be
provided to and followed by the Company’s agents and representatives, including
consultants.
Any
director or officer who has any questions about this Code should consult with
the Chief Executive Officer or the General Counsel as appropriate in the
circumstances. If an employee has any questions about this Code, the
employee should ask his or her supervisor how to handle the situation, or if the
employee prefers, the Chief Executive Officer or General Counsel.
Scope
of Code.
This Code
is intended to deter wrongdoing and to promote the following:
|
·
|
honest
and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional
relationships;
|
|
·
|
full,
fair, accurate, timely, and understandable disclosure in reports and
documents the Company files with, or submits to, the Securities and
Exchange Commission (the “SEC”), and in other communications made by the
Company;
|
|
·
|
compliance
with applicable governmental laws, rules, and
regulations;
|
|
·
|
the
prompt internal reporting of violations of this Code to the appropriate
person or persons identified in this
Code;
|
|
·
|
accountability
for adherence to this Code; and
|
|
·
|
adherence
to a high standard of business
ethics.
|
Compliance
with Laws, Rules, and Regulations
Obeying
the law, both in letter and in spirit, is the foundation on which the Company’s
ethical standards are built. All directors, officers, and employees
should respect and obey all laws, rules, and regulations applicable to the
business and operations of the Company. Although directors, officers,
and employees are not expected to know all of the details of these laws, rules,
and regulations, it is important to know enough to determine when to seek advice
from the Chief Executive Officer, the General Counsel, supervisors, managers,
other officers or other appropriate Company personnel.
Conflicts
of Interest
A
“conflict of interest” exists when an individual’s private interest interferes
in any way – or even appears to conflict – with the interests of the
Company. A conflict of interest situation can arise when a director,
officer, or employee takes actions or has interests that may make it difficult
to perform his or her work on behalf of the Company in an objective and
effective manner. Conflicts of interest may also arise when a
director, officer, or employee, or a member of his or her family, receives
improper personal benefits as a result of his or her position with the
Company. Loans to, or guarantees of obligations of, employees and
their family members may create conflicts of interest.
Service
to the Company should never be subordinated to personal gain and
advantage. Conflicts of interest, whenever possible, should be
avoided. In particular, clear conflict of interest situations
involving directors, officers, and employees who occupy supervisory positions or
who have discretionary authority in dealing with any third party may include the
following:
|
·
|
any
significant ownership interest in any supplier or
customer;
|
|
·
|
any
consulting or employment relationship with any customer, supplier, or
competitor;
|
|
·
|
any
outside business activity or other interests that detracts from an
individual’s ability to devote appropriate time and attention to his or
her responsibilities to the Company or affects the individuals motivation
or performance as an Employee;
|
|
·
|
the
receipt of non-nominal gifts or excessive entertainment from any
organization with which the Company has current or prospective business
dealings
|
|
·
|
being
in the position of supervising, reviewing, or having any influence on the
job evaluation, pay, or benefit of any family member;
and
|
|
·
|
selling
anything to the Company or buying anything from the Company, except on the
same terms and conditions as comparable directors, officers, or employees
are permitted to so purchase or
sell.
|
It is
almost always a conflict of interest for a Company officer or employee to work
simultaneously for a competitor, customer, or supplier. No officer or
employee may work for a competitor as a consultant or board
member. The best policy is to avoid any direct or indirect business
connection with the Company's customers, suppliers, and competitors, except on
the Company's behalf.
Conflicts
of interest are prohibited as a matter of Company policy, except under
guidelines approved by the Board of Directors. Conflicts of interest
may not always be clear-cut and further review and discussions may be
appropriate. Any director or officer who becomes aware of a conflict
or potential conflict should bring it to the attention of the Chief Executive
Officer and the General Counsel as appropriate in the
circumstances. Any employee who becomes aware of a conflict or
potential conflict should bring it to the attention of the Chief Executive
Officer, the General Counsel, supervisor, manager, or other appropriate
personnel. Supervisors and all employees are obligated to make the
Chief Executive Officer and the General Counsel aware of any conflict or
potential conflict that they may be aware of regarding any employee of the
Company.
Insider
Trading
Directors,
officers, and employees who have access to confidential information relating to
the Company are not permitted to use or share that information for stock trading
purposes or for any other purpose except the conduct of the Company's
business. All non-public information about the Company should be
considered confidential information. To use non-public information
for personal financial benefit or to “tip” others who might make an investment
decision on the basis of this information is not only unethical and against
Company policy but is also illegal. Directors, officers, and
employees also should comply with insider trading standards and procedures
adopted by the Company. If a question arises, the director, officer,
or employee should consult with the Company’s General Counsel. The
Company, with the approval of the Board of Directors, may establish policies and
periods where directors or employees may buy or sell Company stock so long as
the director or employee conforms to applicable laws, Company policies and
attests that the individual does not have access or possess any material
non-public information.
Corporate
Opportunities
Directors,
officers, and employees are prohibited from taking for themselves personally or
directing to a third party any opportunity that is discovered through the use of
corporate property, information, or position without the consent of the Board of
Directors. No director, officer, or employee may use corporate
property, information, or position for improper personal gain, and no director,
officer, or employee may compete with the Company directly or
indirectly. Directors, officers, and employees owe a duty to the
Company to advance its legitimate interests when the opportunity to do so
arises.
Competition
and Fair Dealing
The
Company seeks to compete in a fair and honest manner. The Company
seeks competitive advantages through superior performance rather than through
unethical or illegal business practices. Stealing proprietary
information, possessing trade secret information that was obtained without the
owner’s consent, or inducing such disclosures by past or present employees of
other companies is prohibited. Each director, officer, and employee
should endeavor to respect the rights of and deal fairly with the Company’s
customers, suppliers, service providers, competitors, and employees, including
the making of unfair comments about competitor’s products. No
director, officer, or employee should take unfair advantage of anyone relating
to the Company’s business or operations through manipulation, concealment, or
abuse of privileged information, misrepresentation of material facts, or any
unfair dealing practice.
To
maintain the Company’s valuable reputation, compliance with the Company's
quality processes and safety requirements is essential. In the
context of ethics, quality requires that the Company's products and services
meet reasonable customer expectations and applicable published industry and
governmental standards. All inspection and testing documents must be
handled in accordance with all applicable regulations, and every employee is
obligated to assure complete and accurate record keeping and
documentation.
Illegal
Discrimination and Sexual and Other Verbal or Physical Harassment
The
Company is firmly committed to providing equal opportunity in all aspects of
employment and will not tolerate any illegal discrimination or illegal sexual
and other illegal verbal or physical harassment of any kind based on sex, age,
race, color, religion, national origin, disability, ancestry, marital or veteran
status, or any other legally protected status. Any director or
employee who is aware of any such conduct or perceived conduct must be promptly
reported to the Chief Executive Officer, the General Counsel or the head of
human resources, who will promptly conduct an investigation. The
Company may terminate for cause any employee who, as a result of its
investigation, it judges has violated this or other such Company
policy. Employees shall treat all persons with respect and fairness,
and all relationships (whether written, oral or electronic) shall be
businesslike and free of any illegal bias, prejudice, harassment, and
retaliation.
Health
and Safety
The
Company strives to provide each employee with a safe and healthful work
environment. Each officer and employee has responsibility for
maintaining a safe and healthy workplace for all employees by following safety
and health rules and practices and reporting accidents, injuries, and unsafe
equipment, practices, or conditions.
Violence
and threatening behavior are not permitted. Officers and employees
should report to work in a condition to perform their duties, free from the
influence of illegal drugs or alcohol. The use of illegal drugs in
the workplace will not be tolerated and must be promptly reported to the Chief
Executive Officer or the General Counsel, who will promptly conduct an
investigation. The Company may terminate for cause any employee who,
as a result of its investigation, it judges has violated this or other such
Company policy.
Record-Keeping
The
Company requires honest and accurate recording and reporting of information in
order to make responsible business decisions.
Directors,
officers and employees regularly use business expense accounts, which must be
documented and recorded accurately. If an officer or employee is not
sure whether a certain expense is legitimate, the employee should ask his or her
supervisor or the Company's controller. Rules and guidelines are
available from the Accounting Department.
All of
the Company’s books, records, accounts, and financial statements must be
maintained in reasonable detail, must appropriately reflect the Company’s
transactions, and must conform both to applicable legal requirements and to the
Company’s system of internal controls. Unrecorded or “off the books”
funds or assets should not be maintained unless permitted by applicable law or
regulation.
Business
records and communications often become public, and the Company and its officers
and employees in their capacity with the Company should avoid exaggeration,
derogatory remarks, guesswork, or inappropriate characterizations of people and
companies that can be misunderstood. This applies equally to e-mail,
internal memos, and formal reports. The Company’s records should
always be retained or destroyed according to the Company’s record retention
policies. In accordance with those policies, in the event of
litigation or governmental investigation, directors, officers, and employees
should consult with the Company’s General Counsel before taking any action
because it is critical that any impropriety or possible appearance of
impropriety be avoided.
Confidentiality
Directors,
officers, and employees must maintain the confidentiality of confidential
information entrusted to them by the Company or its customers, suppliers, joint
venture partners, or others with whom the Company is considering a business or
other transaction except when disclosure is authorized by an executive officer
or required or mandated by laws or regulations. Confidential
information includes all non-public information that might be useful or helpful
to competitors or harmful to the Company or its customers and suppliers, if
disclosed. It also includes information that suppliers and customers
have entrusted to the Company. The obligation to preserve
confidential information continues even after employment ends. Every
employee must sign the then current employee confidentially, non-disclosure and
assignment of invention agreement as a condition of employment and continued
employment.
Protection
and Proper Use of Company Assets
All
directors, officers, and employees should endeavor to protect the Company’s
assets and ensure their efficient use. Theft, carelessness, and waste
have a direct impact on the Company’s profitability. Any suspected
incident of fraud or theft should be immediately reported to the General Counsel
for investigation. Company assets should be used for legitimate
business purposes and should not be used for non-Company business.
The
obligation to protect the Company’s assets includes its proprietary
information. Proprietary information includes intellectual property,
such as trade secrets, patents, trademarks, and copyrights, as well as business,
marketing and service plans, engineering and manufacturing ideas, designs,
databases, records, salary information, and any unpublished financial data and
reports. Unauthorized use or distribution of this information would
violate Company policy. It could also be illegal and result in civil
or even criminal penalties.
Entertainment,
Gifts, Favors, and Gratuities
The
purpose of business entertainment and gifts in a commercial setting is to create
good will and sound working relationships, not to gain unfair advantage with
customers. No gift or entertainment should ever be offered, given,
provided, or accepted by a director, officer, or employee, family member of a
director, officer, or employee, or agent relating to the individual’s position
with the Company unless it (1) is not a cash gift, (2) is consistent with
customary business practices, (3) is not excessive in value, (4) cannot be
construed as a bribe or payoff, and (5) does not violate any laws or
regulations. A director or officer should discuss with the Chief
Executive Officer or General Counsel, and an employee should discuss with his or
her supervisor, or if he prefers, the Chief Executive Officer or General
Counsel, any gifts or proposed gifts that the individual is not certain are
appropriate. Anything having an aggregate value in excess of $100 may
create the possibility of a conflict and should be graciously declined with an
explanation that acceptance would be in violation of Company policy, unless
approved by the Chief Executive Officer and the General
Counsel.
Political
Contributions
The
Company will not contribute directly or indirectly to political parties or
candidates for office unless approved by the Board of Directors or the Audit
Committee, and by the CEO and the General Counsel, and only in accordance with
applicable laws.
Payments
to Government Personnel
The U.S.
Foreign Corrupt Practices Act prohibits giving anything of value, directly or
indirectly, to officials of foreign governments or foreign political candidates
in order to obtain or retain business. It is strictly prohibited to
make illegal payments to government officials of any country.
In
addition, the U.S. government has a number of laws and regulations regarding
business gratuities that may be accepted by U.S. government
personnel. The promise, offer, or delivery to an official or employee
of the U.S. government of a gift, favor, or other gratuity in violation of these
rules would not only violate Company policy but could also be a criminal
offense. State and local governments, as well as foreign governments,
may have similar rules.
Corporate
Disclosures
All
directors, officers, and employees should support the Company’s goal to have
full, fair, accurate, timely, and understandable disclosure in the periodic
reports required to be filed by the Company with the SEC. Although
most employees hold positions that are far removed from the Company’s required
filings with the SEC, each director, officer, and employee should promptly bring
to the attention of the Chief Executive Officer, the Chief Financial Officer,
the General Counsel, the Controller, or the Audit Committee, as appropriate in
the circumstances, any of the following:
|
·
|
Any
material information to which such individual may become aware that
affects the disclosures made by the Company in its public filings or would
otherwise assist the Chief Executive Officer, the Chief Financial Officer,
the General Counsel, the Controller, and the Audit Committee in fulfilling
their responsibilities with respect to such public
filings.
|
|
·
|
Any
information the individual may have concerning (a) significant
deficiencies in the design or operation of internal controls that could
adversely affect the Company's ability to record, process, summarize, and
report financial data or (b) any fraud, whether or not material, that
involves management or other employees who have a significant role in the
Company's financial reporting, disclosures, or internal
controls.
|
|
·
|
Any
information the individual may have concerning any violation of this Code,
including any actual or apparent conflicts of interest between personal
and professional relationships, involving any management or other
employees who have a significant role in the Company's financial
reporting, disclosures, or internal
controls.
|
|
·
|
Any
information the individual may have concerning evidence of a material
violation of the securities or other laws, rules, or regulations
applicable to the Company and the operation of its business, by the
Company or any agent thereof, or of violation of this
Code.
|
Corporate
Communications, Public Relations and Investor Relations
Only the
Chief Executive Officer and the Chief Financial Officer or their specific
designee are authorized to communicate on behalf of the Company with
shareholders, prospective investors, bankers, the press, broadcast media of the
general public. Any inquiries from these sources should promptly be
referred to on of these individuals without further comment.
Only
proper officers of the Company specifically designated by the CEO or CFO are
authorized to enter into and execute contracts (whether written or oral) on
behalf of the Company. All contracts must be approved by the General
Counsel and by the CFO or Controller. No other director, officer,
employee or agent of the Company has any authority (express, apparent, implied)
to obligate the Company in any manner, or hold himself or herself out to any
third party as having such authority.
Using
Company Computer and Communication Resources
Employees
may use the Company’s electronic equipment at their desk or work station for
incidental personal matters, however, employees are not guaranteed personal
privacy on the Company’s communications systems or of the information sent to,
from, or stored in Company communications. All documents, including
all electronic communications, whether business or personal related, are the
Company’s property, and they are subject to review by the Company at any time,
whether in your presence or not.
|
·
|
Employees
may not use Company computer and communication resources for
communications that contain or promote any of the
following:
|
|
·
|
abusive
or objectionable language;
|
|
·
|
information
that is illegal, obscene, or
pornographic;
|
|
·
|
messages
that are likely to result in the loss or damage of the recipient’s work or
system;
|
|
·
|
messages
that are defamatory;
|
|
·
|
use
that interferes with the work of the employee or others;
or
|
|
·
|
solicitation
of employees for any unauthorized
purpose.
|
Right
to Monitor/Right to Privacy
The
Company reserves the right to monitor any Company mail systems, including
electronic mail, computers, software, files or any other internal documents in
any media, including electronic and hard copy. Employees do not have
the right to privacy at his/her desk or work station and
computer.
Waivers
of the Code of Conduct
Any
waiver of this Code for directors or executive officers may be made only by the
Board of Directors or a committee of the Board and will be promptly disclosed to
stockholders as required by applicable laws, rules, and regulations, including
the rules of the SEC and under applicable exchange or Nasdaq
rules. Any such waiver also must be disclosed in a Form
8-K.
Alcohol
and Controlled Substances Abuse
The
Company recognizes that alcoholism and other drug addiction are illnesses that
are not easily resolved by personal effort and may require professional
assistance and treatment. Employees with alcohol or other drug problems are
strongly encouraged to take advantage of the diagnostic, referral, counseling
and preventive services available through our health insurance plan that have
been developed to assure confidentiality of participation.
Controlled
substance or alcohol abuse does not excuse Employees from neglect of their
employment responsibilities. Individuals whose work performance is
impaired as the result of the use or abuse of alcohol or other drugs may be
required to participate in an appropriate diagnostic evaluation and treatment
plan. Employees are prohibited from engaging in the unlawful
possession, use or distribution of alcohol or other illegal drugs on Company
property or as part Company activities. Further, use of alcohol or
controlled substantives off Company premises that in any way impairs work
performance is also prohibited.
The
unlawful manufacture, distribution, dispensation, possession or use of
controlled substances is prohibited on Company property or as a part of Company
activities. Individuals violating this policy are subject
disciplinary action, as well as termination and possible referral for criminal
prosecution.
Workplace
Violence and Weapons
It is a
violation of this policy to engage in Workplace Violence or use or to possess a
Weapon, as defined below, at any time on Company premises, including common
areas in the office building and in the parking lot or immediate surrounding
areas.
Workplace
Violence includes, but is not limited to, intimidation, threats, physical attack
or property damage.
|
·
|
Intimidation: Includes but is not
limited to stalking or engaging in actions intended to frighten, coerce,
or induce duress.
|
|
·
|
Threat: The expression of intent to
cause physical or mental harm. An expression constitutes a threat without
regard to whether the party communicating the threat has the present
ability to carry it out and without regard to whether the expression is
contingent, conditional or
future.
|
|
·
|
Physical Attack: Unwanted or hostile physical
contact such as hitting, fighting, pushing, shoving or throwing
objects.
|
|
·
|
Property
Damage: Intentional damage to property which includes property owned by
the Company, employees, visitors or
vendors.
|
Weapons
are defined as: (1) a loaded or unloaded firearm, whether operable or
inoperable, (2) a knife, stabbing instrument, brass knuckles, blackjack, club,
or other object specifically designed or customarily carried or possessed for
use as a weapon, (3) an object that is likely to cause death or bodily injury
when used as a weapon and that is used as a weapon or carried or possessed for
use as a weapon, or (4) an object or device that is used or fashioned in a
manner to lead a person to believe the object or device is a firearm or an
object which is likely to cause death or bodily injury. Employees
must report any real or reasonably perceived suspicious activities or
intimidating verbal or physical threats immediately to the local police and to
the CEO, the General Counsel or any other Company officer.
Reporting
any Illegal or Unethical Behavior or Violations of this Code of
Ethics
Directors
and officers are encouraged to talk to the Chief Executive Officer or the
General Counsel, and employees are encouraged to talk to Chief Executive
Officer, the General Counsel, supervisors, managers, or other appropriate
personnel when in doubt about the best course of action in a particular
situation. Directors, officers, and employees should report any
observed illegal or unethical behavior and any perceived violations of laws,
rules, regulations, or this Code to the Chief Executive Officer or General
Counsel or directly to any member of the Audit Committee of the Board of
Directors. It is the policy of the Company not to allow retaliation
for reports of misconduct by others made in good faith. Directors,
officers, and employees are expected to cooperate in internal investigations of
misconduct.
The
Company maintains a Whistleblower Policy attached hereto and incorporated herein
as Schedule A for (1) the receipt, retention, and treatment of complaints
received by the Company regarding accounting, internal accounting controls, or
auditing matters and (2) the confidential, anonymous submission by the Company’s
employees of concerns regarding questionable accounting or auditing
matters.
Enforcement
The Board
of Directors, the Audit Committee, or the CEO in consultation with the General
Counsel, and when they deem it appropriate, with the Board of Directors of the
Audit Committee, shall determine appropriate actions to be taken in the event of
violations of this Code. Such actions shall be reasonably designed to
deter wrongdoing and to promote accountability for adherence to this Code and to
these additional procedures, and may include written notices to the individual
involved that the Board has determined that there has been a violation, censure
by the Board, demotion or re-assignment of the individual involved, suspension
with or without pay or benefits (as determined by the Board), and termination of
the individual's employment or position. In determining the
appropriate action in a particular case, the Board of Directors or such designee
shall take into account all relevant information, including the nature and
severity of the violation, whether the violation was a single occurrence or
repeated occurrences, whether the violation appears to have been intentional or
inadvertent, whether the individual in question had been advised prior to the
violation as to the proper course of action, and whether or not the individual
in question had committed other violations in the past.
Publicly
Available: This Code shall be posted on the Company’s
website.
Schedule
A
K-KITZ
WHISTLEBLOWER POLICY
Introduction
The
Company has adopted a Code of Business Conduct and Ethics applicable to all
employees that urges employees promptly to discuss with or disclose to their
supervisor, the CEO, the General Counsel, or the Chairman of the Audit Committee
events of questionable, fraudulent, or illegal nature. In addition,
the Company recently adopted a Code of Ethics for the Chief Executive Officer
and senior financial officers that, among other things, requires prompt internal
reporting of violations of that Code, the Code of Business Conduct and Ethics,
fraud, and a variety of other matters.
As an
additional measure to support our commitment to ethical conduct, the Audit
Committee of our Board of Directors has adopted the following policies and
procedures for (i) the receipt, retention, and treatment of complaints
received by the Company regarding accounting, internal controls, or auditing
matters; and (ii) the confidential, anonymous submission by employees of
the Company of concerns regarding questionable accounting or auditing
matters.
1.
|
Reporting
of Concerns or Complaints Regarding Accounting, Internal Controls, or
Auditing Matters.
|
Taking
action to prevent problems is part of the Company's culture. If you
observe possible unethical or illegal conduct, you are encouraged to report your
concerns. Employees and others involved with the Company are urged to
come forward with any such information, without regard to the identity of
position of the suspected offender.
Employees
and others may choose any of the following modes of communicating suspected
violations of law, policy, or other wrongdoing, as well as any concerns
regarding questionable accounting or auditing matters (including deficiencies in
internal controls):
|
|
Report
the matter to your supervisor; or
|
|
|
Report
the matter to the Company's CEO or General Counsel;
or
|
|
|
Report
the matter to the Chairman of the Audit
Committee.
|
The
Company will treat all communications under this Policy in a confidential
manner, except to the extent necessary (a) to conduct a complete and fair
investigation, or (b) for reviews of Company operations by the Company's Board
of Directors, its Audit Committee, and the Company's independent public
accountants and the Company’s outside legal counsel.
Moreover,
if your situation requires that your identity be protected, you are still
encouraged to please submit an anonymous report to the Audit Committee
Chairman. Please call or have someone else call the CEO or General
Counsel requesting the name and address of the Audit Committee member, and if
they for any reason fail to provide you with the information at the time you
speak to one of them, call the Company’s external auditors to obtain such
information. In the alternative, you may contact the Chairman
directly by sending a letter addressed as follows: “Ms. Jennifer H.
Jarvis, K-Kitz, Inc., 1630 Integrity Drive East, Columbus, Ohio
43209.”
Retaliation.
Any
individual who in good faith reports a possible violation of the Company's Code
of Business Conduct and Ethics, the Code of Ethics for the Chief Executive
Officer and senior financial officers, or of law, or any concerns regarding
questionable accounting or auditing matters, even if the report is mistaken, or
who assists in the investigation of a reported violation, will be protected by
the Company. Retaliation in any form against these individuals will
not be tolerated. Any act of retaliation should be reported
immediately and will be disciplined appropriately.
Specifically,
the Company will not discharge, demote, suspend, threaten, harass, or in any
other manner discriminate or retaliate against any employee in the terms and
conditions of the employee's employment because of any lawful act done by that
employee to either (a) provide information, cause information to be provided, or
otherwise assist in any investigation regarding any conduct that the employee
reasonably believes constitutes a violation of any Company code of conduct, law,
rule, or regulation, including any rule or regulation of the Securities and
Exchange Commission or any provision of Federal law relating to fraud against
shareholders, or (b) file, cause to be filed, testify, participate in, or
otherwise assist in a proceeding filed or, to the employee's knowledge, about to
be filed relating to an alleged violation of any such law, rule, or
regulation.
Exhibit
14.2
K-KITZ,
INC.
(the
“Company”)
CODE
OF ETHICS FOR THE CEO AND SENIOR FINANCIAL OFFICERS
The
Company has a Code of Business Conduct and Ethics applicable to all directors
and employees of the Company. The Chief Executive Officer and all
senior financial officers, including the Chief Financial Officer and principal
accounting officer and Controller are bound by the provisions set forth therein
relating to ethical conduct, conflicts of interest, and compliance with
law. In addition to the Code of Business Conduct and Ethics, the
Chief Executive Officer and senior financial officers are subject to the
following additional specific policies:
|
1.
|
The
Chief Executive Officer and all senior financial officers are responsible
for full, fair, accurate, timely, and understandable disclosure in the
periodic reports required to be filed by the Company with the
SEC. Accordingly, it is the responsibility of the Chief
Executive Officer and each senior financial officer promptly to bring to
the attention of the General Counsel or, if appropriate, to outside
counsel, and if applicable, to the Audit Committee any material
information of which he or she may become aware that affects the
disclosures made by the Company in its public filings or otherwise assist
the General Counsel and the Audit Committee in fulfilling their
responsibilities.
|
|
2.
|
The
Chief Executive Officer and each senior financial officer shall promptly
bring to the attention of the General Counsel or, if appropriate, to
outside counsel, if applicable, and the Audit Committee any information he
or she may have concerning (a) significant deficiencies in the design or
operation of internal controls that could adversely affect the Company's
ability to record, process, summarize, and report financial data or (b)
any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's financial
reporting, disclosures, or internal
controls.
|
|
3.
|
The
Chief Executive Officer and each senior financial officer shall promptly
bring to the attention of the General Counsel or, if appropriate, to
outside counsel, and to the Audit Committee any information he or she may
have concerning any violation of this Code or the Company's Code of
Business Conduct and Ethics, including any actual or apparent conflicts of
interest between personal and professional relationships, involving any
management or other employees who have a significant role in the Company's
financial reporting, disclosures, or internal
controls.
|
|
4.
|
The
Chief Executive Officer and each senior financial officer shall promptly
bring to the attention of the General Counsel or, if appropriate, to
outside counsel, and if applicable, and the Audit Committee any
information he or she may have concerning evidence of a material violation
of the securities or other laws, rules, or regulations applicable to the
Company and the operation of its business, by the Company or any agent
thereof, or of violation of the Code of Business Conduct and Ethics or of
these additional procedures.
|
|
5.
|
The
Board of Directors or the Audit Committee shall determine, or designate
appropriate persons to determine, appropriate actions to be taken in the
event of violations of the Code of Business Conduct and Ethics or of these
additional procedures by the Chief Executive Officer and the Company's
senior financial officers. Such actions shall be reasonably
designed to deter wrongdoing and to promote accountability for adherence
to the Code of Business Conduct and Ethics and to these additional
procedures, and may include written notices to the individual involved
that the Board has determined that there has been a violation, censure by
the Board, demotion or re-assignment of the individual involved,
suspension with or without pay or benefits (as determined by the Board),
and termination of the individual's employment. In determining
the appropriate action in a particular case, the Board of Directors or
such designee shall take into account all relevant information, including
the nature and severity of the violation, whether the violation was a
single occurrence or repeated occurrences, whether the violation appears
to have been intentional or inadvertent, whether the individual in
question had been advised prior to the violation as to the proper course
of action, and whether or not the individual in question had committed
other violations in the past.
|
Publicly
Available: This Code shall be posted on the Company’s
website.
EXHIBIT
23.2
W.T.
Uniack & Co. CPA’s P.C.
Certified
Public Accountants & Consultants
Independent Registered
Public Accounting Firm’s Consent
We
consent to the inclusion in this Registration Statement of K-Kitz, Inc. on Form
S-1 of our report dated March 12, 2009 with respect to our audits of
the financial statements of K-Kitz, Inc. as of December 31, 2008 and 2007
and for the years ended December 31, 2008 and 2007, which report appears in the
Prospectus, which is part of this Registration Statement. We also consent to the
reference to our Firm under the heading “Experts” in such
Prospectus.
/s/ W.T.
Uniack & Co. CPA’s P.C.
W.T. Uniack & Co. CPA’s
P.C.
Alpharetta,
Georgia
March 31,
2009
Unassociated Document
K-KITZ,
INC.
SUBSCRIPTION
AGREEMENT
NO
NON-U.S. PURCHASER MAY ENGAGE IN ANY HEDGING TRANSACTIONS WITH RESPECT TO THE
SECURITIES.
1630
Integrity Drive East
Columbus,
Ohio 43209
|
Attn:
|
Ms.
Jennifer Jarvis
|
President
and Chief Executive Officer
This
Subscription Agreement sets forth the terms under which the undersigned
("Subscriber") will invest in K-Kitz, Inc., a Delaware corporation (the
"Corporation"). This Subscription is one of a limited number of subscriptions
for up to 2,000,000 shares of Common Stock at a price of $0.05 per share (the
"Shares" or the "Securities").
The
Shares are being offered to a limited number of Subscribers on behalf of the
Corporation.
Execution
of this Subscription Agreement by the Subscriber shall constitute an offer by
the Subscriber to subscribe for the Shares set forth in this Agreement on the
terms and conditions specified herein. The Corporation reserves the right to
reject such subscription offer, or, by executing a copy of this Subscription
Agreement, to accept such offer. If the Subscriber's offer is accepted, the
Corporation will execute this Subscription Agreement and return an executed copy
of the Subscription Agreement to the Subscriber. If the Subscriber's offer is
rejected, the payment accompanying this Subscription Agreement will be returned,
with the notice of rejection.
A.
|
NON-UNITED STATES
SUBSCRIBER DECLARATION
|
The
Subscriber acknowledges that the Subscriber is purchasing the Shares on a
private basis and the Subscriber represents that the Subscriber has the
following relationship with a director, officer or promoter of the Corporation
(check one):
Friend
|
|
|
|
|
|
Relative
|
|
|
|
|
|
Business associate
|
|
|
B.
|
UNITED STATES
SUBSCRIBER DECLARATION
|
If the
undersigned is a United States resident, the undersigned warrants and certifies
that the undersigned is an Accredited Investor as that term is defined in
Regulation D promulgated under the 1933 Act, by virtue of the undersigned's
qualification under one or more of the following categories (please check the
appropriate space or spaces):
_____ The
undersigned is a natural person whose individual net worth, or joint net worth
with the person's spouse exceeds $1,000,000.
_____ The
undersigned is a natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year.
_____ The
undersigned is a corporation, organization described in Section 501(c)(3) of the
United States Internal Revenue Code, Massachusetts Trust or similar business
trust, or partnership, not formed for the specific purpose of acquiring the
Securities, with total assets in excess of $5,000,000.
_____ The
undersigned is a trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the Securities, whose purchase is directed
by a sophisticated person.
_____ The
undersigned is a director or executive officer of the Corporation.
_____ The
undersigned is a private business development Corporation as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.
_____ The
undersigned is a bank as defined in Section 3(a)(2) of the 1933 Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the 1933 Act whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance corporation as defined in Section 2(13) of
the Act; an investment company registered under the Investment Company Act of
1940 or a business development company as defined in Section 2(a)(48) of that
Act; a Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958; a plan established and maintained by a state, its political
subdivision, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; an employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974 if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are accredited subscribers.
_____ The
undersigned is an entity in which all of the equity owners are accredited
subscribers under one or more of the categories set forth above.
All
Accredited Investors must initial the
following:
_____ I
understand that the representations contained in this section are made for the
purpose of qualifying me as an Accredited Investor as that term is defined
pursuant to Regulation D under the 1933 Act, for the purpose of inducing a sale
of Securities to me. I hereby represent that the statement or statements
initialed above are true and correct in all respect. I understand that a false
representation may constitute a violation of law, and that any person who
suffers damage as a result of a false representation may have a claim against me
for damages.
C.
|
TERMS,
CORPORATE DISCLOSURE AND GENERAL
|
|
SUBSCRIBER
ACKNOWLEDGEMENTS AND
WARRANTIES
|
|
1.
|
Use
of Funds of the Shares
|
The Subscriber acknowledges that the
funds to be raised from the Shares are to be employed for the business of the
Corporation in accordance with management's discretion as to the best use of the
same for the Corporation's business plans. The Corporation reserves the right at
any time to alter its business plans in accordance with management's
appreciation of the market for the goods and services of the
Corporation.
|
2.
|
Method
of Subscription and Terms of Fund
Release
|
A Subscription shall be made by
delivering to the Corporation a signed copy of this Subscription Agreement and
the Subscription Price made to the Corporation or such party as the Corporation
may direct. The funds will be employed by the Corporation immediately upon
acceptance of the subscription, or of the lesser amount if the full subscription
is not accepted.
The Corporation shall return to the
Subscriber the Subscription Price, or such amount as has not been accepted, as
to such part of the subscription which the Corporation has not
accepted.
The
Subscriber hereby agrees and acknowledges that:
(a) Further
Financing. The
Corporation may issue further offers similar to the within which may bear higher
or lower prices, as reasonably determined by the Corporation. The Corporation
may, and will, acquire debt and/or equity financing in the future if required or
advisable in the course of the Corporation's business development.
(b) Withdrawal or
Revocation. This
Subscription Agreement is given for valuable consideration and shall not be
withdrawn or revoked by the Subscriber once tendered to the Corporation with the
Subscription Price.
(c) Agreement to be
Bound. The
Subscriber hereby specifically agrees to be bound by the terms of this
Subscription Agreement as to all particulars hereof and hereby reaffirms the
acknowledgments, representations, and powers set forth in this Subscription
Agreement;
(d) Reliance on Subscriber's
Representations. The
Subscriber understands that the Corporation will rely on the acknowledgments,
representations, and covenants of the Subscriber herein in determining whether a
sale of the Shares to the Subscriber is in compliance with applicable securities
laws. The Subscriber warrants that all acknowledgments, representations and
covenants are true and accurate.
(e) Waiver of Preemptive
Rights. The
Subscriber hereby grants, conveys, and vests the Chief Executive Officer of the
Corporation as the Subscriber's power of attorney solely for the purpose of
waiving any prior or preemptive right which the Subscriber may have under
applicable law to further issues of Securities of the Corporation.
|
3.
|
Subscriber's
Representations, Warranties, and
Understandings
|
The
Subscriber represents and warrants to the Corporation and understands
that:
(a) Principal.
The
Subscriber is purchasing the Shares as principal for his own account and not for
the benefit of any other person except as otherwise stated herein, and not with
a view to the resale or distribution of all or any of the Shares.
(b) Decision to
Purchase. The
decision of the Subscriber to enter into this agreement and to purchase Shares
pursuant hereto has been based only on the representation of this agreement and
any collateral business plan or offering memorandum provided herewith or based
upon the Subscriber's relationship with the foregoing stated person of the
Corporation. It is not made on other information relating to the Corporation and
not upon any oral representation as to fact or otherwise made by or on behalf of
the Corporation or any other person. The Subscriber agrees that the Corporation
assumes no responsibility or liability of any nature whatsoever for the
accuracy, adequacy or completeness of any business plan information, which has
been created based upon the Corporation's management experience. In particular,
and without limiting the generality of the foregoing, the decision to subscribe
for Shares has not been influenced by:
|
·
|
Newspaper,
magazine or other media articles or reports related to the Corporation or
its business; or
|
|
·
|
Promotional
literature or other materials used by the Corporation for sales or
marketing purposes; or
|
|
·
|
Any
representation, oral or otherwise that the Corporation will become a
listed company, that the Shares will be repurchased or have any guaranteed
future realizable value, or that there is any certainty as to the success
of the Corporation or liquidity or value of the
Shares.
|
(c) Economic Risk.
The
Subscriber has such knowledge and experience in financial and business affairs
as to be capable of evaluation the merits and risks of his investment in the
Shares and the Subscriber is able to bear the economic risk of a total loss of
the Subscriber's investment in the Shares.
(d) Speculative
Investment. The
Subscriber understands that an investment in the Shares is a speculative
investment and that there is no guarantee of success of management's plans.
Management's plans are an effort to apply present knowledge and experience to
project a future course of action which is hoped will result in financial
success employing the Corporation's assets and present level of management's
skills, and those whom the Corporation will need to attract (which cannot be
assured). Additionally, all plans are capable of being frustrated by new or
unrecognized or unappreciated circumstances which can typically not be
accurately, or at all, predicted.
(e) Status.
If the
Subscriber is a U.S. person then such has been declared in this document and the
Subscriber qualifies as an eligible subscriber under the relevant state and
federal U.S. laws as elsewhere herein specified.
(f) Address.
The
Subscriber is resident as set out on the last page of this Agreement as the
"Subscriber's Address" and the address set forth on the last page of this
Agreement is the true and correct address of the Subscriber.
(g) Risk and Resale
Restriction. The
Subscriber is aware of the risks and other characteristics of the Securities and
of the fact that the Subscriber will not be able to resell the Securities except
in accordance with the applicable securities legislation and regulatory
policy.
(h) Receipt of
Information. The
Subscriber acknowledges that, to his satisfaction:
|
·
|
He
has either had access to or has been furnished with sufficient information
regarding the Corporation and the terms of this investment transaction to
his satisfaction;
|
|
·
|
He
has been provided the opportunity to ask questions concerning this
investment transaction and the terms and conditions thereof and all such
questions have been answered to his satisfaction;
and
|
|
·
|
He
has been given ready access to and an opportunity to review any
information, oral or written, that he has requested, in particular to any
offering memorandum or business plan of the Corporation, if available,
concurrent with or as a part of this
subscription.
|
(i) Confidentiality.
The
Subscriber understands that the Corporation's business plan and this Agreement
are confidential. The Subscriber has not distributed such, or divulged the
contents thereof, to anyone other than such legal or financial advisors as the
Subscriber has deemed desirable for purposes of evaluating an investment in the
Shares and the Subscriber has not made any copies thereof except for his own
records.
(j) Age of Majority.
The
Subscriber, if an individual, has attained the age of majority and is legally
competent to execute this Agreement and to take all actions required pursuant
hereto.
(k) Authorization and Formation
of Subscriber. The
Subscriber, if a corporation, partnership, trust or other form of business
entity, is authorized and otherwise duly qualified to purchase and hold the
Shares and such entity has not been formed for the specific purpose of acquiring
Shares in the Offering. If the Subscriber is one of the aforementioned entities,
it hereby agrees that upon request of the Corporation it will supply the
Corporation with any additional written information that may be requested by the
Corporation.
(l) Legal Obligation.
This
Agreement has been duly and validly authorized, executed and delivered by and
constitutes a legal, valid, binding and enforceable obligation of the
Subscriber.
(m) Compliance with Applicable
Laws. The
Subscriber knows of no reason why the delivery of this Agreement, the acceptance
of it by the Corporation and the issuance of the Shares or resultant Shares to
the Subscriber will not comply with all applicable laws of the Subscriber's
jurisdiction of residence or domicile, and all other applicable laws, and the
Subscriber has no reason to believe that such will cause the Corporation to
become subject to or required to comply with any additional disclosure,
prospectus or reporting requirements. The Subscriber will comply with all
applicable securities laws and will assist the Corporation in all reasonable
manners to comply with all applicable securities laws.
(n) Encumbrance or Transfer of
Shares. The
Subscriber will not sell, assign, gift, pledge or encumber in any manner
whatsoever the Shares herein subscribed without the prior written consent of the
Corporation and in accordance with applicable securities laws.
The Subscriber agrees that the above
representations and warranties of the Subscriber will be true and correct as of
the execution of and acceptance of this Agreement and will survive the
completion of the issuance of the Shares. The Subscriber understands that the
Corporation will rely on the representations and warranties of the Subscriber
herein in determining whether a sale of the Shares to the Subscriber is in
compliance with federal and applicable state or provincial securities laws and
the Subscriber warrants to indemnify and hold harmless the Corporation from all
damages or claims resulting from any misrepresentation by the
Subscriber.
The Subscriber undertakes to notify the
Corporation immediately should there be any material change in the foregoing
warranties and representations and provide the Corporation with the revised or
corrected information. The Subscriber hereby agrees to indemnify and hold the
Corporation and its affiliates, and the Escrow Agent harmless from and against
any and all liability, damage, cost or expense (including reasonable attorneys'
fees) incurred on account of or arising out of:
(a) Any
inaccuracy in the Subscriber's acknowledgments, representations or warranties
set forth in this Agreement;
(b) The
Subscriber's disposition of any of the Shares contrary to the Subscriber's
acknowledgments, representations or warranties in this Agreement;
(c) Any
suit or proceeding based upon a claim that said acknowledgments, representations
or warranties were inaccurate or misleading or otherwise cause for obtaining
damages or redress from the Corporation or its affiliates or the disposition of
all or any part of the Subscriber's Shares; and
(d) The
Subscriber's failure to fulfill any or all of the Subscriber's obligations
herein.
Each notice, demand or other
communication required or permitted to be given under this Agreement shall be in
writing and shall be sent by delivery (electronic or otherwise) or prepaid
registered mail deposited in a post office addressed to the Subscriber or the
Corporation at the address specified in this Agreement. The date of receipt of
such notice, demand or other communication shall be the date of delivery thereof
if delivered, or, if given by registered mail as aforesaid, shall be deemed
conclusively to be the fifth day after the same shall have been so mailed,
except in the case of interruption of postal services for any reason whatsoever,
in which case the date of receipt shall be the date on which the notice, demand
or other communication is actually received by the addressee.
Either party may at any time, and from
time to time, notify the other party in writing of a change of address and the
new address to which notice shall be given to it thereafter until further
change.
|
7.
|
Severability
and Construction
|
Each section, sub-section, paragraph,
sub-paragraph, term and provision of this Agreement, and any portion thereof,
shall be considered severable, and if, for any reason, any portion of this
Agreement is determined to be invalid, contrary to or in conflict with any
applicable present or future law, rule or regulation, that ruling shall not
impair the operation of, or have any other effect upon, such other portions of
this Agreement as may remain otherwise intelligible (all of which shall remain
binding on the parties and continue to be given full force and agreement as of
the date upon which the ruling becomes final). The word "he" in this Agreement
shall also mean she or it, relative of the Subscriber.
This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware. Any dispute
regarding matters as between the Subscriber and the Corporation, whether as a
Subscriber or Shareholder, and whether arising under this Agreement or pursuant
to the documents of the Corporation or applicable law, shall be adjudicated in
Delaware unless the Corporation shall determine or permit
otherwise.
|
9.
|
Survival
of Representations and
Warranties
|
The covenants, representations and
warranties contained herein shall survive the closing of the transactions
contemplated hereby.
This Agreement may be signed by the
parties hereto in as many counterparts as may be necessary, each of which so
signed shall be deemed to be an original, and such counterparts together shall
constitute one and the same instrument and notwithstanding the date of execution
will be deemed to bear the execution date as set forth in this Agreement. This
Agreement may be executed and exchanged by facsimile and such facsimile copies
shall be valid and enforceable agreements.
This Agreement constitutes the only
agreement between the parties with respect to the subject matter hereof and
shall supersede any and all prior negotiations and understandings. There are no
collateral agreements or understandings hereto and this Agreement, and the
documents contemplated herein, constitutes the totality of the parties'
agreement. This Agreement may be amended or modified in any respect by written
instrument only.
|
12.
|
Successors
and Assigns
|
The terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the Subscriber, the
Corporation, the other stated companies for which the Corporation acts as agent,
and their respective successors and lawfully permitted assigns; provided that,
except as herein provided, this Agreement shall not be assignable by any party
without the written consent of the other. The benefit and obligations of this
Agreement, insofar as they extend to or affect the Subscriber, shall pass with
any assignment or transfer of the Shares in accordance with the terms of this
Agreement.
|
13.
|
Subscription
Amount and Payments
|
Subscriber hereby subscribes for
______________ (Number) of Shares for a total purchase price of $________
(Number of Shares x $0.05) and hereby submits a check in the amount of $________
(Number of Shares x $0.05) made payable to:
K-Kitz,
Inc.
|
1630
Integrity Drive East
|
Columbus,
Ohio 43202
|
Attn: |
Ms.
Jennifer Jarvis
|
|
President and Chief
Executive
Officer
|
This Agreement shall take effect upon
the date of acceptance by the Corporation.
DATED at
__________, __________ on this _____ day of __________ 2009.
Name of
Subscriber (please print):
|
|
|
|
Social
Security Number / Corporate Federal ID Number:
|
|
|
|
|
|
Subscriber's
Address:
|
|
|
|
|
|
|
|
|
|
|
Subscriber's
email address:
|
|
|
|
|
Official
Capacity or Title (corporations only):
|
|
|
|
|
Telephone
Number:
|
|
|
|
|
|
Authorized
Signature:
|
|
|
|
|
|
ACCEPTANCE
The
Corporation hereby accepts the above subscription as of this _____ day of
________ 2009.
K-KITZ,
INC.
ESCROW
AGREEMENT
THIS ESCROW AGREEMENT (the
"Agreement"), is made and entered into as of the ___ day of __________ 2009, by
and between K-Kitz, Inc., a Delaware corporation (the "Corporation") with a
principal office at 1630 Integrity Drive East, Columbus, Ohio 43209, and Fifth
Third Bank, _________________________________ (the "Escrow Agent").
WHEREAS, the Corporation is
raising additional capital through the sale of up 2,000,000 shares of Common
Stock at a price of $0.05 per share (the "Shares" or the "Securities"), and this
is a "best efforts/no minimum" offering (the "Offering"), all as described in
the Subscription Agreement;
WHEREAS, the Corporation is
authorized and desires to commence this Offering promptly;
WHEREAS, the Corporation
wishes by this Agreement to provide for the periodic receipt, deposit,
safekeeping and disbursement of payments and subscription documents submitted by
persons subscribing to shares of common stock pursuant to the Offering;
and
WHEREAS, the Escrow Agent has
agreed to act as such for the Corporation for the Offering subject to the terms
and conditions of this Agreement.
WITNESSETH:
NOW, THEREFORE, for and in
consideration of certain payments to be made by Corporation to the Escrow Agent
in consideration of its services hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Corporation and the Escrow Agent do hereby covenant and agree as
follows:
1. Appointment of Escrow
Agent. The Corporation does hereby appoint the Escrow Agent as
escrow agent for the Offering to perform the functions and provide the services
hereinafter provided, and the Escrow Agent does hereby accept the appointment as
Escrow Agent upon the terms and conditions set forth in this
Agreement.
2. Receipt and Deposit of
Funds. Persons wishing to subscribe for Securities interests
under the offering are required to execute a Subscription Agreement. Prospective
investors must pay cash for their subscription. The prospective investor must
forward the Subscription Agreement and their subscription cash payment to the
Escrow Agent. Funds received by the Escrow Agent pursuant to the Offering shall
be held in escrow and deposited promptly and the Subscription Agreement shall be
held for the benefit of the Corporation pending disbursement in accordance with
the terms and conditions hereof. Checks and money orders should be made payable
to "Fifth Third Bank, K-Kitz, Inc. Escrow Account.” Recognizing that
in some cases checks and money orders may be made payable to the Corporation,
the Corporation does hereby appoint the Escrow Agent as its lawful
attorney-in-fact for the purposes of endorsing said checks and money orders,
which promptly upon receipt shall be deposited in a non-interest bearing escrow
account for the benefit of the Corporation pending disbursement and release of
the funds in accordance with the terms and conditions of this Agreement. The
Escrow Agent shall be charged with responsibility to exercise reasonable care
and due diligence in the deposit of funds received by it pursuant to the
Offering.
3. Records to Be Kept by the
Escrow Agent. The Escrow Agent shall maintain records of the
name, address, and subscription payments for each subscription it receives under
the Offering Bank. Subscription Agreements forwarded to the Escrow Agent shall
be directed to Fifth Third Bank at the above address for the Escrow Agent, or to
such other person as Escrow Agent shall designate in writing. Upon request, the
Escrow Agent shall forward to the Corporation a summary of subscriptions
received to date.
4. Funds and Documents to Be
Returned If Conditions Not Met. Subject to the other
provisions of this Agreement, the Escrow Agent shall return subscription
payments, and the proceeds of all closed subscription loans, plus the
Subscription Agreement to any subscriber from whom (a) the Corporation has not
accepted the Subscription Agreement, (b) has submitted a Subscription Agreement
after the termination of the Offering, which will be 180 days after the
offering, unless extended by the Corporation for an additional 90 days, or (c)
in the event that 1,000,000 shares are not sold within the 180 days, or within
the additional 90 days if extended. If at least 1,000,000 shares are sold within
180 days, or within the additional 90 days, if extended, all money received by
us will be retained by us and there will be no refund. There are no minimum
purchase requirements for each individual investor. The foregoing
notwithstanding, the Escrow Agent shall not be obligated, in any manner, to
return any subscription payments which have been disbursed by it in accordance
with Section 5 hereof. If the Escrow Agent is required to return documents and
the subscription payments pursuant to this paragraph, it shall do so within 14
days after termination of the Offering Period, including any extension
thereof.
5. Funds May Be Paid to
Corporation Once Subscription Conditions Are Met. Upon receipt
by the Escrow Agent of: (a) Executed acceptances by Corporation of Subscription
Agreements and (b) upon certification by securities counsel for Corporation that
the terms of the Offering have been met, and that the Corporation's Stock
Transfer Agent has been authorized and notified to duly issue certificates
evidencing ownership of the shares of the Corporation's corporate stock to each
investor whose Subscription Agreement has been accepted, then Escrow Agent shall
disburse the funds held by it in escrow to the Corporation. Funds will be held
in escrow by Fifth Third Bank until the Corporation sells at least 1,000,000
shares of common stock. Once the Corporation sells at least 1,000,000 shares of
common stock, Fifth Third Bank will release the funds from escrow to the
Corporation. If the Corporation does not accept the subscription of a
subscriber, as evidenced by written notice to the Escrow Agent, then the Escrow
Agent shall return the Subscription Agreement, all related documents, and
subscription payment without interest to the Subscriber.
6. Compensation for Escrow
Agent's Services. It is understood and agreed between the
parties to this Agreement that the compensation to be paid to the Escrow Agent
hereunder is intended primarily to compensate the Escrow Agent for the
record-keeping and processing associated with the performance of its obligations
hereunder. The compensation to be paid to the Escrow Agent for its services
rendered in connection with this Agreement shall be at its usual and customary
rates and it shall be reimbursed any and all expenses it incurs in performing
its duties herein.
7. Escrow Agent's Duties
Limited. The sole responsibility of the Escrow Agent shall be
to receive, hold and release the aforesaid Subscription Agreements, documents,
and funds in accordance with the provisions hereof. In disbursing funds, the
Escrow Agent may rely solely upon documents and events specified in this
Agreement. The Escrow Agent shall have no duties and obligations except such as
are specifically stated herein. It is specifically understood that Escrow Agent
has not rendered any other services or given advice regarding the Offering
including, but not limited to, the applicable securities laws or securities
aspects of this transaction, the tax laws or tax effect of this transaction, or
any assessment of the risks involved in the Offering or the qualifications for
any of the Subscribers, or given any investment advice or recommendations, and
will decline to do so if asked by the Corporation or any other party to this
transaction.
8. Escrow Agent's Liability
Limited. The Escrow Agent shall not be liable for any error of
judgment or act done or committed by it in good faith in connection with its
duties as Escrow Agent.
9. Reliance by Escrow Agent On
Documents Presented. The Escrow Agent hereby is authorized to
act upon the assumption that all agreements or documents delivered to it by
Corporation and the subscribers to this Offering are genuine and have been duly
signed by the proper party or parties. The Escrow Agent shall not be bound by
any modification of this Agreement unless the same shall be in writing and be
signed by all parties hereto.
10. Escrow Agent's Duties In the
Event of Adverse Claims. In the event of disagreement between
subscribers and Corporation, or upon the presentation an adverse claim or demand
on the escrowed funds, the Escrow Agent may, at its option, refuse to perform
its duties as Escrow Agent until such time as the disagreement or adverse claim
or demand has been fully resolved, judicially or otherwise, and in this regard
Escrow Agent shall not be liable for failure to perform its duties during this
time.
11. Escrow Agent Held
Harmless. It is expressly understood and agreed by the parties
to this Agreement, and their respective successors and assigns, that the Escrow
Agent shall be free and harmless from any and all claims, disputes or defenses
which may arise between Corporation or its legal successors and assigns, and the
subscribers or any other person which may for any reason have a claim against
the funds escrowed hereunder or against Corporation. Corporation hereby agrees
to hold the Escrow Agent harmless from and indemnify it for any liability or
expense that may be incurred by the Escrow Agent by virtue of any claim,
dispute, or defense. If any such claim is asserted, the Escrow Agent may engage
counsel of its choice and shall be entitled to reimbursement of reasonable legal
fees and expenses to defend it against such claim and, in the event any such
claimant is successful in establishing such a claim, Corporation will hold the
Escrow Agent harmless and make all payments required to be made pursuant to any
final order or judgment that may be entered against the Escrow Agent by a court
of competent jurisdiction.
12. Termination. This
Agreement may be terminated at any time by the written agreement of all
parties.
13. Notices. Until
further notice, all communications and notices given with respect to this
Agreement shall be made to the addresses first written above.
14. Headings. All
headings contained in this Agreement are for convenience and reference only, and
shall not constitute a part of this Agreement.
15. Entire
Agreement. This Agreement is the entire agreement and
understanding between the Corporation and the Escrow Agent, and there are no
representations, warranties, promises, inducements, covenants or conditions made
by any of the parties except as expressly contained herein.
16. Binding
Effect. This Agreement shall inure to the benefit, and the
binding upon, the representatives, successors and assigns of each
party.
17. Governing
Law. This Agreement shall be governed by and interpreted in
conformity with, the laws of the Commonwealth of Kentucky without regard to its
provisions governing the choice of laws.
18. Authority. Both
signatories to this Agreement warrant and represent that he has the appropriate
authority to execute this Agreement and bind the entity for whom he is signing
the Agreement.
IN WITNESS WHEREOF, the
parties have hereunto affixed the following signatures as of the day and year
first above written.
|
K-KITZ,
INC.
|
|
|
|
By:
|
|
|
|
Jennifer
Jarvis
|
|
|
President
and Chief Executive Officer
|
|
|
|
FIFTH
THIRD BANK, as Escrow Agent
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|