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EX-5.1 - EXHIBIT 5.1 - Southern Concepts Restaurant Group, Inc. | artdimensios1a7x51_1292009.htm |
As
filed with the Securities and Exchange
Commission on December 11, 2009
Registration No. 333-153683
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
______________________________
FORM
S-1/A
Amendment No
7
to
REGISTRATION STATEMENT
REGISTRATION STATEMENT
UNDER
SECURITIES
ACT OF 1933
______________________________
ART DIMENSIONS,
INC.
(Name of
small business issuer in its Charter)
Colorado
(State
or other jurisdiction of
incorporation
or organization)
|
5020
(Primary
Standard Industrial
Classification
Code Number)
|
80-0182193
(IRS
Employer
Identification
Number)
|
3636
S. Jason Street
Englewood,
Colorado 80110
(303)
781-7280
(Address,
including zip code, and
telephone number, including area code, of
Registrant's principal executive offices)
Rebecca
Gregarek
3636
S. Jason Street
Englewood,
Colorado 80110
(303)
781-7280
(Name, address and telephone
number of agent for service)
With
a Copy to:
|
David
J. Wagner, Esq.
|
David
Wagner & Associates, P.C.
|
Penthouse
Suite
|
8400
East Prentice Avenue
|
Greenwood
Village, Colorado 80111
|
Office(303)
793-0304
|
Fax
(303) 409-7650
|
____________________________
Approximate Date of Commencement of
Proposed Sale to the Public: from time to time after the
effective date of this Registration Statement as determined by market conditions
and other factors.
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box:
x
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please 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
If
delivery of the prospectus is expected to be made pursuant to Rule 434, please
check the following box.
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
(Do
not check if a smaller reporting company)
|
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(1)
|
Proposed
Maximum
Aggregate
Offering
Price(1)
|
Amount
of Registration Fee
|
Common
Stock, no par value
|
1,082,060
|
$0.01
|
$10,820
|
$30.00
|
TOTAL:
|
1,082,060
|
$0.01
|
$10,820
|
$30.00
|
_______________
(1)
|
Consists of Common Stock of ART
DIMENSIONS, INC. (“Art Dimensions”) to be distributed pro-rata to Art
Design, Inc. (ATDN) holders of record as of November
23, 2009 (the "Spin-off Record Date") to effect a
spin-off of our shares. The ATDN shareholders will not be charged or
assessed for the Art Dimensions Common Stock, and Art Dimensions will
receive no consideration for the distribution of the foregoing shares in
the spin-off. There currently exists no market for Art
Dimensions’ Common Stock.
|
The
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Prospectus
ART
DIMENSIONS, INC.
Spin-Off
of ART DIMENSIONS, INC. by the Distribution of
1,082,060
Shares of Common Stock
We are
furnishing this Prospectus to the shareholders of Art Design, Inc. (ATDN), a
Colorado corporation.
ATDN owns
the shares. Shareholders of ATDN will receive one (1) of our shares for every
ten (10) shares of ATDN which they owned on November 23, 2009, the record date
of the distribution. No fractional shares will be issued. These distributions
will be made within ten (10) days of the date of this Prospectus. ART
DIMENSIONS, INC. is bearing all costs incurred in connection with this
distribution.
Before
this offering, there has been no public market for our common stock and our
common stock is not listed on any stock exchange or on the over-the-counter
market. This distribution of our common shares is the first public distribution
of our shares. It is our intention to seek a market maker to publish
quotations for our shares on the OTC Electronic Bulletin Board; however, we have
no agreement or understanding with any potential market
maker. Accordingly, we can provide no assurance to you that a public
market for our shares will develop and if so, what the market price of our
shares may be.
Investing
in our common stock involves a high degree of risk.
You
should read the "Risk Factors" beginning on Page 5.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of the securities or passed on the adequacy or accuracy
of the disclosures in the prospectus. Any representation to the
contrary is a criminal offense.
The date
of this prospectus is December ,
2009.
-
2 -
Questions
And Answers About The Spin-Off
Q:
|
How
Many Art Dimensions Shares Will I Receive?
|
A:
|
Art
Dimensions will distribute to you one (1) share of our common stock for
every ten (10) shares of ATDN you owned on the record date. Fractional
shares will be rounded to the next whole share. No
fractional shares will be issued. Shareholders will be paid in cash for
fractional shares at the rate of $0.01 per
share.
|
Q:
|
What
Are Shares Of Art Dimensions Worth?
|
A:
|
The
value of our shares will be determined by their trading price after the
spin-off. We do not know what the trading price will be and we can provide
no assurances as to value.
|
Q:
|
What
Will Art Dimensions Do After The Spin-Off?
|
A:
|
We
plan to provide an art consulting and marketing service business and
represent individuals whom are in the business of creating, producing or
selling art. Secondarily, and as an adjunct to our primary
purpose, we also earn revenue from the sale of art and interior
design products. To
date, however, all of our revenue has come solely from the sale of
products. We anticipate that the sale of products will primarily be
to our artist clients but may also incidentally be to the general public.
We are currently in the development
stage.
|
Q:
|
Will
Art Dimensions Shares Be Listed On A National Stock Exchange Or The Nasdaq
Stock Market?
|
A:
|
Our
shares will not be listed on any national stock exchange or the Nasdaq
Stock Market. It is our hope that the shares will be quoted by
one or more market makers on the OTC Electronic Bulletin Board, although
we have no agreements or understandings with any market maker to do
so.
|
Q:
|
What
Are The Tax Consequences To Me Of The Spin-Off?
|
A:
|
We
do not believe that the distribution will qualify as a tax-free spin-off
under U.S. tax laws. Consequently, the total value of the distribution, as
well as your initial tax basis in our shares, will be determined by the
fair market value of our common shares at the time of the spin-off. A
portion of this distribution will be taxable to you as a dividend and the
remainder will be a tax-free reduction in your basis in your ATDN
shares.
|
Q:
|
What
Do I Have To Do To Receive My Art Dimensions
Shares?
|
A:
|
No
action by you is required. You do not need to pay any money or surrender
your ATDN common shares to receive our common shares. We will mail your
Art Dimensions shares to your record address as of the record
date.
|
About
this Prospectus
You should rely only on the information
contained in this prospectus. We have not, and ATDN has not,
authorized anyone to provide you with different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. ATDN and we believe that the information contained in this
prospectus is accurate as of the date on the cover. Changes may occur
after that date; ATDN and we may not update this information except as required
by applicable law.
-
3 -
Forward-looking
Statements
This prospectus contains statements
that plan for or anticipate the future. Forward-looking statements
include statements about our future business plans and strategies, and most
other statements that are not historical in nature. In this prospectus,
forward-looking statements are generally identified by the words "anticipate,"
"plan," "believe," "expect," "estimate," and the like. Although we believe that
any forward-looking statements we make in this prospectus are reasonable,
because forward-looking statements involve future risks and uncertainties, there
are factors that could cause actual results to differ materially from those
expressed or implied. For example, a few of the uncertainties that could affect
the accuracy of forward-looking statements, besides the specific factors
identified in the Risk Factors section of this prospectus,
include:
*
|
changes
in general economic and business conditions affecting the art consulting,
marketing and agent business and the art industry in general, especially
Art Dimensions operations;
|
|
*
|
changes
in our business strategies;
|
|
*
|
the
level of demand for our products and services;
and
|
|
*
|
the
availability of working
capital.
|
In light of the significant
uncertainties inherent in the forward-looking statements made in this
prospectus, particularly in view of our early stage of operations, the inclusion
of this information should not be regarded as a representation by our company or
any other person that our objectives and plans will be achieved.
Summary
About
Our Company
Please
note that throughout this prospectus the words “the Company,” "we," "our," or
"us" refers to ART DIMENSIONS, Inc (“Art Dimensions”).
Art
Dimensions is a wholly-owned subsidiary of Art Design,
Inc.(“ATDN”). On August 21, 2009, the directors of ATDN approved,
subject to the effectiveness of a registration with the Securities and Exchange
Commission, a spin-off to ATDN shareholders of record as of November
23, 2009 (the “Record Date”), on a pro rata basis, with one share each of ART
DIMENSIONS, Inc. to be issued for each ten shares issued and outstanding of
common stock owned by such ATDN shareholders as of the Record
Date. Since ATDN’s business is related to the current activities of
Art Dimensions, the ATDN directors decided it was in the best interest of ATDN
and Art Dimensions and ATDN's shareholders to spin-off Art Dimensions to
minimize any potential of conflict of interest by more clearly focusing each
company on their own, individual business plans. Also, the management of Art Design,
Inc. originally thought that the two companies would operate in a more
closely-related manner. However, management of Art Design, Inc. now believes
that the companies have two unique and distinct business plans and should not be
directly tied together in order to maximize the potential success of both. .
ATDN’s business is primarily the sale of products with service and consulting as
ancillary components. On the other hand, Art Dimensions business is to primarily
service and consulting with the sale of products as an ancillary component. To
the extent there may be an overlap of activities, a potential conflict of
interest may exist. However, each company will utilize its best efforts to
minimize any impact. Both companies plan to operate as separate, distinct
entities and neither company foresees any substantial potential for conflicts
after the spin-off.
The
shares of Art Dimensions are owned by ATDN, who will distribute the Art
Dimensions shares once the Form S-1 is effective with the Securities and
Exchange Commission. The shares will be distributed by Corporate
Stock Transfer, which acts as our transfer agent.
The
business of Art Dimensions is primarily to provide art consulting and marketing
services and advise or represent individuals whom are in the business of
creating, producing or selling art. Secondarily, and as an adjunct to
our primary purpose, we also earn revenue from the sale of art and interior
design products. We anticipate that the sale of products will primarily be to
our artist clients but may also incidentally be to the general public. Most
successful artists do not understand the nuances of business of
art. We expect to fill the void by helping artists place themselves
in the best position to successfully reap the maximum rewards possible from
their artistic talents by relying on Art Dimensions to advise them on marketing,
business development and business negotiation. We began
operations as of our date of incorporation, January 29, 2008. See “Business”
below.
-
4 -
On June 1, 2008, an organization named
Spyglass Investment Partnership (“Spyglass ”) agreed to provide operating
capital in the form of a loan of $250,000 to cover operating expenses. This loan
is evidenced by an unsecured promissory note which is due May 31,
2010. It should be noted that Spyglass is
under no obligation to lend us funds under the term of the
note.
We issued
have a total of 300,000 warrants to Spyglass , exercisable at a price of $0.001
per share subject to adjustment, for a period of five years from the date of
issuance. These warrants were issued as an additional inducement for Spyglass to
loan us $250,000. The warrants are subject to registration
rights.
Our
principal executive offices are located at 3636 S. Jason Street, Englewood,
Colorado 80110. Our telephone number is (303) 781-7820. We have no
website.
Risk
Factors
You
should carefully consider the risks and uncertainties described below and the
other information in this prospectus before deciding to invest in shares of our
common stock.
The
occurrence of any of the following risks could materially and adversely affect
our business, financial condition and operating result. In this case, the
trading price of our common stock could decline and you might lose all or part
of your investment.
We were recently
formed as a Colorado business entity, have a limited operating history, and have
never been profitable. Our limited
operating history makes it difficult for us to evaluate our future business
prospects and make decisions based on those estimates of our future
performance. We are inherently a risky investment. If we make poor
budgetary decisions as a result of unreliable historical data, we could continue
to incur losses, which may result in a decline in our stock price. We cannot
guarantee we will ever develop a substantial number of clients. Even if we
develop a substantial number of clients, there is no assurance that we will
become a profitable company. As a result, we
may never become profitable, and could go out of business.
We were
formed as a Colorado business entity in January 2008. At the present
time, we have a limited operating history and have never been
profitable. There can be no guarantee that we will ever be
profitable. From our inception on January 29, 2008 through September
30, 2009, we generated $147,611 in revenue. We had a net loss of
$9,980 for this period. Our revenues depend upon the number of
clients we can develop and service. Our limited operating history
makes it difficult to evaluate our business on the basis of historical
operations. As a consequence, our past results may not be indicative
of future results. Although this is true for any business, it is
particularly true for us because of our limited operating
history. Reliance on historical results may hinder our ability to
anticipate and timely adapt to increases or decreases in sales, revenues or
expenses. For example, if we overestimate our future sales for a
particular period or periods based on our historical growth rate, we may
increase our overhead and other operating expenses to a greater degree than we
would have if we correctly anticipated the lower sales level for that period and
reduced our controllable expenses accordingly. If we make poor
budgetary decisions as a result of unreliable historical data, we could continue
to incur losses, which may result in a decline in our stock price. We cannot
guarantee we will ever develop a substantial number of clients. Even
if we develop a substantial number of clients, there is no assurance that we
will become a profitable company. Because we are a company with a
limited history, the operations in which we engage in, the art consulting,
marketing and agent business, is an extremely risky business. We have no
historical frame of reference to determine whether this proposed business model
will be successful. We may never become profitable, and, as a result, we
could go out of business.
Because
we had incurred operating losses from our inception during our limited operating
history, our accountants have expressed substantial doubts about our ability to
continue as a going concern.
For the period ended December 31, 2008,
our accountants have expressed substantial doubt about our ability to continue
as a going concern as a result of our loss from operations and the requirement
of significant future expenditures in connection with marketing efforts and
general and administrative expenses. Our ability to achieve and
maintain profitability and positive cash flow is dependent
upon:
•
|
our ability to locate clients who will purchase our services;
and
|
•
|
our ability to generate
revenues.
|
-
5 -
Based
upon current plans, we may incur operating losses in future periods because we
may, from time to time, be incurring expenses but not generating sufficient
revenues. We expect between $10,000 and $20,000 in
operating costs over the next twelve months. We cannot guarantee that
we will be successful in generating sufficient revenues or other funds in the
future to cover these operating costs. Failure to generate sufficient
revenues will cause us to go out of business.
We
have a business plan which is expensive and may not generate increases in our
revenues.
We intend
to grow our business and have a business plan. In connection with this
plan, we anticipate that we will incur expenses associated with our growth and
expansion. Our funds may not be adequate to offset all of the
expenses we incur in expanding our business. We will need to generate
revenues to offset expenses associated with our growth, and we may be
unsuccessful in achieving revenues, despite our attempts to grow our
business. If our growth strategies do not result in significant
revenues, we may have to abandon our plans for further growth or may even cease
our operations.
Because
we are small and do not have much capital, we must limit our operations to the
Denver, Colorado metropolitan area. A company in our industry with limited
operations has a smaller opportunity to be successful. If we do not
make a profit, we may have to suspend or cease operations.
Because
we are small and do not have much capital, we must limit our
operations. We must limit our operations to the Denver, Colorado
metropolitan area as the only geographical area in which we
operate. Because we may have to limit our operations, we may not
generate sufficient sales to make a profit. If we do not make a
profit, we may have to suspend or cease operations.
-
6 -
Because
our current officers and directors are involved with other businesses in the
same industry, the manner in which we operate may create the possibility of a
conflict of interest.
Both Mrs.
Gregarek and Mrs. Sheehan are also involved with other businesses in the same
industry. Both are officers and directors of Art Design, Inc. Additionally, Mr.
and Mrs. Sheehan own the Accessory Warehouse, Inc. Mrs. Gregarek is an
independent contractor for interior design work. These other arrangements could
create conflict of interest with respect to our operations. We cannot guarantee
that any potential conflicts can be avoided.
We
are a company with limited operating history which intends to grow its
operations to become profitable as soon as possible. As a result, we must
effectively manage the growth of our operations, or we may outgrow our current
infrastructure.
We have
two part-time employees, Mrs. Gregarek, our President and Kathy Sheehan, our
Secretary-Treasurer. If we experience rapid growth of our operations,
we could see a backlog of client orders. We can resolve these
capacity issues by hiring additional personnel and upgrading our
infrastructure. However, we cannot guarantee that sufficient
additional personnel will be available or that we will find suitable personnel
to aid our growth. In any case, we will continue pursuing additional
sales growth for our company. Expanding our infrastructure will be expensive,
and will require us to train our workforce, and improve our financial and
managerial controls to keep pace with the growth of our operations.
Because
we are a company with limited operating history and revenues and only minimally
capitalized, we have a lack of liquidity and will need additional financing in
the future. Our future success depends, in large part, on the continued
financing of Spyglass. The loss of this financing would have a
material adverse effect on our business. Additional financing may not be
available when needed, which could delay our development or indefinitely
postpone it. Our investors could lose some or all of their
investment.
We are
only minimally capitalized. Because we are only minimally
capitalized, we expect to experience a lack of liquidity for the foreseeable
future in our operations. We will adjust our expenses as necessary to
prevent cash flow or liquidity problems. However, we expect we will
need additional financing of some type, which we do not now possess, to fully
develop our operations. We expect to rely principally upon our
ability to raise additional financing, the success of which cannot be
guaranteed. Spyglass is currently our only source of financing. It should
be noted that Spyglass is under no obligation to lend us funds under the term of
the note. We have no indication that Spyglass would refuse to lend us funds if
we should ask. Spyglass is owned, in part by Mrs. Gregarek’s husband. It
would be very difficult to find a financing source to replace
Spyglass. The loss of the Spyglass financing would have a
material adverse effect on our business. At the present time, we have no
definitive plans for financing in place, other than the funds which we have
already obtained. In the event that we need additional capital, we
will need to identify alternate sources of capital for working capital
purposes. To the extent that we experience a substantial lack of
liquidity, our development in accordance with our proposed plan may be delayed
or indefinitely postponed, our operations could be impaired, we may never become
profitable, fail as an organization, and our investors could lose some or all of
their investment.
Because
we are a company with limited operating history, we have no experience as a
public company. Our inability to operate as a public company could be the
basis of your losing your entire investment in us.
We have
never operated as a public company. We have no experience in
complying with the various rules and regulations which are required of a public
company. As a result, we may not be able to operate successfully as a
public company, even if our operations are successful. We plan to comply with
all of the various rules and regulations which are required of a public
company. However, if we cannot operate successfully as a public
company, your investment may be materially adversely affected. Our
inability to operate as a public company could be the basis of your losing your
entire investment in us.
-
7 -
Our
ability to grow our business depends on relationships with others. We have only
a few established relationships at this time. We may never
develop sufficient relationships to grow a successful business. Further, if we
were to lose those relationships, we could lose our ability to sell services. If
we lose enough clients, we could go out of business.
Eventually,
all of our revenue and gross profit are expected to come from consulting,
marketing and representing artists in their business
dealings. However, in the interim, we will also sell products. To
date, however, all of our revenue has come solely from the sale of
products. Nevertheless, our business plan is clearly focused to
develop revenue and gross profit primarily from consulting, marketing and
representing artists in their business dealings. While our relationships
will change from time to time, we must rely upon our clients for our
success. Our performance depends, in large part, on our ability to
engage with successful artists to perform consulting and marketing services and
advise or represent individuals whom are in the business of creating, producing
or selling art. Artists are skilled in their vocation, but often lack
the general business knowledge and expertise to obtain and secure
contracts. Most artists do not understand what they do not know and
therefore how to avoid them or what value an organization like ours
provides. This means that there can be no assurance that we
will be able to secure clients at fees they can afford or are willing to
pay. If we can identify and establish relationships with a select
group of clients that see value in and can afford the services we provide we
will be able to establish a reputation and develop and grow our niche market. At
the present time, we do not have a significant number of clients and
cannot guarantee we will ever develop sufficient numbers of clients to be
profitable. We plan to use the efforts of our management to develop our
clients. If we do develop such clients, we risk that a given client will
switch to utilizing similar services from another provider or decide to perform
the tasks on his or her own. Our ability to generate revenue from the sale
consulting, marketing and agent representation services would
diminish. If we lose enough clients, we could go out of
business.
We
are a relatively small company with limited resources compared to some of our
current and potential competitors, which may hinder our ability to compete
effectively. The art consulting industry is highly fractured
competitive. If we are not well received or successful, we may never
achieve profitability.
The art
consulting business is highly fractured with respect to price and services
offered. There are a handful of competitors that represent the very
successful artists. Many of these firms are well-established,
including national, regional and local organizations possessing substantially
greater financial, marketing, personnel and other resources than we
do. There can be no assurance that we will be able to respond to
various competitive factors affecting the art industry and be able to attract
and advise our clients accordingly. There is very little competition
for up and coming artists, but the demand for consulting, marketing and agent
representation services is hard to gauge. We believe that this market
is underserved, but most artists are not familiar with treating their vocation
as a business and may not believe they need our services. If we are
unable to develop an economical model to serve this market we will not be
profitable. We cannot guarantee that we will be able to successfully
compete in the highly competitive high-end or poorly served low-end
markets.
We
believe that the key to our success will be successful marketing of our service
and product offering. As a result, we may need to substantially invest in
marketing efforts in order to grow our business, which will be
expensive.
In order
to grow our business, we will need to develop and maintain widespread
recognition and acceptance of our company, our business model and our
services. We have only recently begun to present our service and
product offering to our potential market as we have identified it in our
business plan. We plan to rely primarily on word of mouth from
contacts we develop personally through our efforts to promote and market
ourselves. We plan to use the efforts of our management to develop these
contacts. In order to successfully grow our company, we may need to
significantly increase our financial commitment to creating awareness and
acceptance of our company among potential clients, which would be
expensive. To date, marketing and advertising expenses have been
negligible. We have not yet fully developed our marketing program and
do not know the specific cost of such a program, although we believe that it
will be expensive. If we fail to successfully market and promote our business,
we could lose potential clients to our competitors, or our growth efforts may be
ineffective. If we incur significant expenses promoting and marketing
ourselves, it could delay or completely forestall our
profitability.
-
8 -
We
have no agreement with any broker or dealer to act as a market maker for our
securities. The
lack of a broker or dealer to create or maintain a market in our stock could
adversely impact the price and liquidity of our
securities.
We have
no agreement with any broker or dealer to act as a market maker for our
securities and there is no assurance that we will be successful in obtaining any
market makers. Thus, no broker or dealer will have an incentive to make a market
for our stock. The lack of a market maker for our securities could adversely
influence the market for and price of our securities, as well as your ability to
dispose of, or to obtain accurate information about, and/or quotations as to the
price of, our securities.
We
are an art consulting, marketing and intermediary organization. Our
business is not diversified, which could result in significant fluctuations in
our operating results. A downturn in that sector may reduce our stock
price, even if our business is successful.
We are an
art consulting, marketing and intermediary organization, and, accordingly,
dependent upon trends in that business sector. Downturns in that
sector could adversely effect on our business. A downturn in that
sector may reduce our stock price, even if our business is
successful.
The
share control position of Rebecca Gregarek, David Gregarek, Kathy and Todd
Sheehan will limit the ability of other shareholders to influence corporate
actions.
After
distribution of our shares to the Art Design shareholders, our largest
shareholders, Rebecca Gregarek, David Gregarek, Kathy Sheehan and
Todd Sheehan will own and control 1,140,000 shares, after giving effect to the
Spyglass warrants and thereby control approximately 82.5% of our outstanding
shares. Because these individuals will beneficially control almost
83% of the outstanding shares they will have a significant role in controlling
the election or removal of our directors, the supervision and management of our
business or a change in control of or sale of our company, even if they believed
such changes were in the best interest of our shareholders generally.
-
9 -
Our
future success depends, in large part, on the continued service of our President
and Secretary-Treasurer.
We depend
almost entirely on the efforts and continued employment of Mrs. Gregarek, our
President and Kathy Sheehan, our Secretary-Treasurer. Mrs. Gregarek
is our primary executive officer, and we will depend on her for nearly all
aspects of our operations. Mrs. Sheehan is our primary financial officer, and we
will depend on her for nearly all aspects of our financial compliance. We do not
have an employment contract with either Mrs. Gregarek or Mrs. Sheehan, and we
do not carry key person insurance on either’s life. The loss of
the services of Mrs. Gregarek or Mrs. Sheehan through incapacity or otherwise,
would have a material adverse effect on our business. It would be
very difficult to find and retain qualified personnel such as Mrs. Gregarek or
Mrs. Sheehan.
Applicable
SEC rules governing the trading of “Penny Stocks” limit the liquidity of our
common stock, which may affect the trading price of our common stock. The over-the-counter market for stock
such as ours is subject to extreme price and volume fluctuations. You may
not able to sell your shares when you want to do so, if at all.
Our common stock is currently not
quoted in any market. If our common stock becomes quoted, we anticipate that it
will trade well below $5.00 per share. As a result, our common stock is
considered a “penny stock” and is subject to SEC rules and regulations that
impose limitations upon the manner in which our shares can be publicly
traded. The Exchange Act and such penny stock rules generally impose
additional sales practice and disclosure requirements on broker-dealers who sell
our securities to persons other than certain accredited investors who are,
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 spouse, or in transactions not recommended by the
broker-dealer. These regulations require the delivery, prior to any transaction
involving a penny stock, of a disclosure schedule explaining the penny stock and
the associated risks. Under these regulations, certain brokers who
recommend such securities to persons other than established customers or certain
accredited investors must make a special written suitability determination for
the purchaser and receive the written purchaser’s agreement to a transaction
prior to purchase. These regulations have the effect of limiting the
trading activity of our common stock and reducing the liquidity of an investment
in our common stock. The securities of companies such as ours have historically
experienced extreme price and volume fluctuations during certain periods. These
broad market fluctuations and other factors, such as new product developments
and trends in the our industry and in the investment markets generally, as well
as economic conditions and quarterly variations in our operational results, may
have a negative effect on the market price of our common stock. As a result of
any or all of these factors, you may not able to sell your shares when
you want to do so, if at all.
-
10 -
Resale Limitations imposed by most
states will limit the ability of our shareholders to sell their securities
unless they are Colorado residents. If no exemptions can be relied upon,
then the selling shareholders may have to hold the securities for an indefinite
period of time.
The only
state in which we plan to register this offering is Colorado. As a result, our
selling shareholders may be limited in the sale of their Shares. The laws of
most states require either an exemption from prospectus and registration
requirements of the securities laws to sell their shares or registration for
sale by this prospectus. These restrictions will limit the ability of
non-residents of Colorado to sell the securities. Residents of other states must
rely on available exemptions to sell their securities, such as Rule 144, and if
no exemptions can be relied upon, then the selling shareholders may have to hold
the securities for an indefinite period of time. Shareholders of states other
than Colorado should consult independent legal counsel to determine the
availability and use of exemptions to re-sell their securities.
We
have the authority to issue up to 50,000,000 shares of common stock, 1,000,000
shares of preferred stock, and to issue options and warrants to purchase shares
of our common stock without stockholder approval. We
are only planning to issue 1,082,060 shares
in this registration statement.
As a result, issuances of our stock could dilute current shareholders and
adversely affect the market price of our common stock, if a public trading
market develops.
We have
the authority to issue up to 50,000,000 shares of common stock, 1,000,000 shares
of preferred stock, and to issue options and warrants to purchase shares of our
common stock without stockholder approval. Although no financing is
planned currently, we may need to raise additional capital to fund operating
losses. If we raise funds by issuing equity securities, our existing
stockholders who receive shares in the spin-off may experience substantial
dilution. In addition, we could issue large blocks of our common
stock to fend off unwanted tender offers or hostile takeovers without further
stockholder approval.
The
issuance of preferred stock by our board of directors could adversely affect the
rights of the holders of our common stock. An issuance of preferred
stock could result in a class of outstanding securities that would have
preferences with respect to voting rights and dividends and in liquidation over
the common stock and could, upon conversion or otherwise, have all of the rights
of our common stock. Our board of directors' authority to issue
preferred stock could discourage potential takeover attempts or could delay or
prevent a change in control through merger, tender offer, proxy contest or
otherwise by making these attempts more difficult or costly to
achieve.
-
11 -
Colorado
law and our Articles of Incorporation protect our directors from certain types
of lawsuits, which could make it difficult for us to recover damages from them
in the event of a lawsuit.
Colorado
law provides that our directors will not be liable to our company or to our
stockholders for monetary damages for all but certain types of conduct as
directors. Our Articles of Incorporation require us to indemnify our
directors and officers against all damages incurred in connection with our
business to the fullest extent provided or allowed by law. The
exculpation provisions may have the effect of preventing stockholders from
recovering damages against our directors caused by their negligence, poor
judgment or other circumstances. The indemnification provisions may
require our company to use our assets to defend our directors and officers
against claims, including claims arising out of their negligence, poor judgment,
or other circumstances.
Because
we are a company with limited operating history, we do not expect to pay
dividends on common stock.
We have
not paid any cash dividends with respect to our common stock, and it is unlikely
that we will pay any dividends on our common stock in the foreseeable future.
Earnings, if any, that we may realize will be retained in the business for
further development and expansion.
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12 -
The
Spin-Off and Plan of Distribution
Distributing
Company
|
ART
DIMENSIONS, INC.
|
Shares
To Be Distributed
|
1,082,060
shares of our common stock, no par value. The shares to be distributed in
the spin-off will represent 100% of our total common shares
outstanding.
|
Distribution
Ratio
|
One (1) of our common shares for
every ten (10) common shares of ATDN owned of record on November 23, 2009.
No
fractional shares will be
issued.
|
No
Payment Required
No holder
of ATDN common shares will be required to make any payment, exchange any shares
or to take any other action in order to receive our common
shares.
Record
Date
The
record date for Art Dimension’s distribution shares is November 23, 2009. After
the record date, the ATDN common shares will be trading "ex dividend," meaning
that persons who have bought their common shares after the record date are not
entitled to participate in the distribution.
Prospectus
Mailing Date
December 15 , 2009 or within ten (10) days following the
date that the SEC declares effective the registration statement that includes
this prospectus, whichever is later. We have mailed this prospectus to you on or
about this date.
Distribution
Date
1,082,060
of our common shares, which are held by ATDN, will be delivered to the
distribution agent on this date, and the spin-off will be
completed.
The
distribution date will be a date within ten (10) days following the prospectus
mailing date designated above. You will be entitled to receive our shares even
if you sold your ATDN shares after the record date. A certificate representing
your shares of our common stock will be mailed to your address of record as of
the record date. The mailing process is expected to take about thirty (30)
days.
Distribution
Agent
The
distribution agent for the spin-off will be Corporate Stock Transfer, Denver,
Colorado.
Listing
and Trading of Our Shares
There is
currently no public market for our shares. We do not expect a market for our
common shares to develop until after the distribution date. Our shares will not
qualify for trading on any national or regional stock exchange or on the NASDAQ
Stock Market. We will attempt to have one or more broker/dealers
agree to serve as market makers and quote our shares on the over-the-counter
market on the OTC Electronic Bulletin Board maintained by the NASD. However, we
have no present agreement, arrangement or understanding with any broker/dealer
to serve as a market maker for our common shares. If a public trading market
develops for our common shares, of which there can be no assurance, we cannot
ensure that an active trading market will be available to you. Many factors will
influence the market price of our shares, including the depth and liquidity of
the market which may develop, investor perception of our business, growth
prospects and general market conditions.
Compensation
and Expenses
No
compensation will be paid in connection with this distribution. A total of
$12,000 in expenses are expected to be incurred in connection with this
distribution.
-
13 -
Background
and Reasons for the Spin-Off
Art
Dimensions is a corporation which was formed under the laws of the State of
Colorado on January 29, 2008. Our Articles of Incorporation authorize our
company to issue 50,000,000 shares of common stock with no par value per share
and 1,000,000 shares of preferred stock.
Art Dimensions was a wholly-owned
subsidiary of Art Design, Inc.(“ATDN”). On August 21, 2009, the
directors of ATDN approved, subject to the effectiveness of a registration with
the Securities and Exchange Commission, the pro rata spin-off of Art Dimensions
to ATDN shareholders of record on November 23, 2009 on a pro rata
basis. Since ATDN’s business is related to the current activities of
Art Dimensions, the ATDN directors decided it was in the best interest of ATDN
and Art Dimensions and ATDN's shareholders to spin-off Art Dimensions to
minimize any potential of conflict of interest by more clearly focusing each
company on their own, individual business plans. Also, the management of Art Design, Inc.
originally thought that the two companies would operate in a more
closely-related manner. However, management of Art Design, Inc. now wants the
companies to have two unique and distinct business plans and not be directly
tied together in order to maximize the potential success of both. ATDN’s
business is primarily the sale of products with service and consulting as
ancillary components. On the other hand, Art Dimensions business is
primarily to be service and consulting with the sale of products as an ancillary
component. To the extent there may be an overlap of activities, a potential
conflict of interest may exist. However, each company will utilize its best
efforts to minimize any impact. Both companies plan to operate as separate,
distinct entities and neither company foresees any substantial potential for
conflicts after the spin-off.
The
recent history of our Company has primarily involved sales of products, rather
than the sale of service and consulting. In order to develop our Company’s
business plan, its management felt that it was more important at this time to
take business where it was available. To date, this has involved the sale of
product, in large part, because the current state of the national and local
economy has made it difficult to develop the service and consulting aspect.
However, our Company has not abandoned its business plan and feels that this
business plan will be very viable once the national and local economy
recover.
In the
interim, both companies plan to operate as much in accordance with their
business plans as possible. To the extent that there may be conflicts of
interest with respect to specific business opportunities, the management of each
company will use their best efforts to resolve each situation. The standard
which each management will apply is the best interests of the shareholders in
each case. At the present time, the owners of both companies are identical since
our Company is currently a wholly-owned subsidiary of ATDN. Once this is no
longer the case, the companies’ management will use its best efforts to resolve
any potential conflicts.
However, it should be noted that both
Mrs. Gregarek and Mrs. Sheehan are also involved with other businesses in the
same industry. Both are officers and directors of Art Design, Inc. Additionally,
Mr. and Mrs. Sheehan own the Accessory Warehouse, Inc. Mrs. Gregarek is an
independent contractor for interior design work. These other arrangements could
create conflict of interest with respect to our operations. Each of our officers
and directors is aware of their responsibilities with respect to corporate
opportunities and plans to operate our Company in such a manner as to minimize
the effect of any conflict of interest. Each officer and director has agreed to
contract with the Company on the same or better terms and conditions than each
would with unaffiliated third parties. Each of these officers and directors will
use their best judgments to resolve all potential conflicts. We cannot guarantee
that any potential conflicts can be avoided.
The
shares of Art Dimensions are owned by ATDN, who will distribute the Art
Dimensions shares once the Form S-1 is effective with the Securities and
Exchange Commission. The shares will be distributed by Corporate
Stock Transfer, which acts as our transfer agent.
Mechanics
of Completing the Spin-Off
Within
ten (10) days following the date that the SEC declares effective the
registration statement that includes this prospectus, we will deliver to the
distribution agent, Corporate Stock Transfer, Inc., 1,082,060 shares of our
common stock to be distributed to the ATDN shareholders as of November 23, 2009,
pro rata.
You will
be entitled to receive our shares even if you sold your ATDN shares after the
record date. A certificate representing your shares of our common stock will be
mailed to your address of record as of the record date. The mailing process is
expected to take about thirty (30) days.
No
fractional shares will be issued.
No holder
of common shares of ATDN is required to make any payment or exchange any shares
in order to receive our common shares in the spin-off distribution.
If we are
unable to locate a shareholder entitled to receive our shares as part of the
dividend spin-off, then such shares will be returned to our parent company,
ATDN.
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14 -
Capitalization
The
following table sets forth our capitalization as of September 30, 2009.
This section should be read in conjunction with the consolidated financial
statements and related notes contained elsewhere in this
prospectus.
As
of
September
30, 2009 |
||||
Total
Current Assets
|
$
|
60,486
|
||
Total
Assets
|
60,486
|
|||
Total
current liabilities
|
65,059
|
|||
Total
Liabilities
|
65,059
|
|||
Shareholders'
(Deficit)
|
||||
Preferred
Stock, no par value, 1,000,000 shares authorized; no shares
outstanding
|
-0-
|
|||
Common Stock, no par value;
authorized 50,000,000 shares: 2,000,000 issued and
outstanding(1)
|
2,000
|
|||
Additional
paid-in capital
|
3,407
|
|||
Accumulated
(deficit) during developmental stage
|
(9,980
|
)
|
||
Total
shareholders' equity
|
(4,573
|
)
|
||
Total
liabilities and shareholders' equity
|
$
|
60,486
|
(1)
There are
currently 2,000,000 shares issued and outstanding. In connection with the
spin-off, ATDN will issue approximately 1,082,060 shares to ATDN shareholders.
As a result, ATDN will cancel and return to authorized shares a total of
approximately 917,940 shares, giving the ATDN shareholders one hundred percent
ownership of us. No fractional shares will result, based upon the final share
numbers as of November 23, 2009, the record date of the
transaction..
Certain
Market Information
There
currently exists no public trading market for our common stock. We do
not intend to develop a public trading market until the spin-off has been
completed. There can be no assurance that a public trading market
will develop at that time or be sustained in the future. Without an
active public trading market, you may not be able to liquidate your shares
without considerable delay, if at all. If a market does develop, the price for
our securities may be highly volatile and may bear no relationship to our actual
financial condition or results of operations. Factors we discuss in
this prospectus, including the many risks associated with an investment in our
company, may have a significant impact on the market price of our common
stock. Also, because of the relatively low price of our common stock,
many brokerage firms may not effect transactions in the common
stock.
Upon
effectiveness of this Form S-1, we plan to apply for quotation of the Common
Stock on the OTC Bulletin Board operated by the National Association of
Securities Dealers, Inc. Art Dimensions will have approximately
1,082,060 shares of common stock issued and outstanding.
-
15 -
Art
Dimensions has never paid a dividend on its common stock. We do not anticipate
paying any dividends on our common stock in the foreseeable future. Management
anticipates that earnings, if any, will be retained to fund our working capital
needs and the expansion of our business. The paying of any dividends is in the
discretion of the Board of Directors.
Following
the spin-off, we believe that there will be approximately one hundred
stockholders of record.
Selected
Financial Data
Set forth
below is our selected financial data as of and for the period ended September
30, 2009. This financial information is derived from our consolidated financial
statements and related notes included elsewhere in this prospectus and is
qualified by reference to these consolidated financial statements and the
related notes thereto.
Balance
Sheet Data
|
For
the
Period
Ended
September 30,
2009
|
|||
Total
assets
|
$
|
60,486
|
||
Current
assets
|
$
|
60,486
|
||
Current
liabilities
|
$
|
65,059
|
||
Shareholders'
equity
|
(4,573
|
) | ||
Operating
Statement Data
|
For
the
Period
Ended
September 30,
2009
|
|||
Revenues
|
$
|
59,750
|
||
Net
income (loss)
|
(3,391
|
) | ||
Weighted
average number of common shares
|
2,000,000
|
|||
Basic
and diluted income (loss) per common share
|
(0.00)
|
|||
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16 -
Management's
Discussion and Analysis of Financial Condition
and
Results of Operations
Certain statements in this Management's
Discussion and Analysis of Financial Condition and Results of Operations that
are not historical facts are forward-looking statements such as statements
relating to future operating results, existing and expected competition,
financing and refinancing sources and availability and plans for future
development or expansion activities and capital expenditures. Such
forward-looking statements involve a number of risks and uncertainties that may
significantly affect our liquidity and results in the future and, accordingly,
actual results may differ materially from those expressed in any forward-looking
statements. Such risks and uncertainties include, but are not limited to, those
related to effects of competition, leverage and debt service financing and
refinancing efforts, general economic conditions, and changes in applicable laws
or regulations. The following discussion and analysis should be read in
conjunction with the consolidated financial statements and notes thereto
appearing elsewhere in this report.
We have been in
operations for approximately eighteen months. Accordingly, management does not
consider the historical results of operations to be representative of our future
results of operation. We operate an art consulting, marketing in
addition to advising artists in their business dealings. Secondarily, and as an
adjunct to our primary purpose, we will also earn revenue from the sale of art
and interior design products. We anticipate that the sale of products will
primarily be to our artist clients but may also incidentally be to the general
public. See “Business” below.
Results
of Operations
We
operate an art consulting, marketing in addition to advising artists in
their business dealings. Secondarily, and as an adjunct to our primary purpose,
we also earn revenue from the sale of art and interior design products. We
anticipate that the sale of products will primarily be to our artist clients but
may also incidentally be to the general public. We earn revenue from the sale of
art products and consulting services, but do not separate sales into different
operating segments. To date, however, all of our revenue has come solely from
the sale of products
From
our inception on January 29, 2008 through September 30, 2009, all of our revenue
was generated from one client. We originally believed that our product sale of
$87,861 in revenue was a one-time occurrence. However, we have had subsequent
sales which account for all of our $147,611 in revenues. Because our primary
business model is in the art consulting and marketing service business and in
representing individuals whom are in the business of creating, producing or
selling art, we do not consider this relationship with this client to be
material to our future success. We may develop additional product sales with
this client but have no definitive plans at the present
time.
From
our inception on January 29, 2008 through December 31, 2008, we generated
$87,861 in revenue.
From
our inception on January 29, 2008 through December 31, 2008, we had
cost of goods sold of $84,942. This sale left us with a gross profit of
$2,919. The pricing margin of the products permitted us to have a small
gross profit. Our operating expenses included general and administrative
expenses of $4,101 for this period and compensatory equity issuances of $5,407,
mostly related to the issuance of stock warrants. We had a net loss of $6,589
for this period.
For the
nine months ended September 30, 2009, we generated $59,750 in
revenue.
Our cost
of goods sold was $59,750 for the nine months ended September 30, 2009, which
gave us a gross profit of $-0-. The pricing margin of the products was too small
to permit us to have a gross profit.
Operating
expenses, which consisted solely of general and administrative expenses, for the
nine months ended September 30, 2009 were $3,391.
As a
result of the foregoing, we had a net loss of $3,391 for the nine months ended
September 30, 2009
Comparing
the period from inception through September 30, 2008, we generated
$87,861 in revenue. All of this revenue came from one client.
Our cost of goods sold
was $84,942 from inception through September 30, 2008. This gave us a
gross profit of $2,919. The pricing margin of the products permitted us to have
a small gross profit.
-
17 -
Operating
expenses, which include general and administrative expenses, from inception
through September 30, 2008 were $8,698. The major component of
general and administrative expenses included a one-time charge for our warrant
issue.
As a
result of the foregoing, we had a net loss of $5,779 from inception through
September 30, 2008
Because
we do not pay salaries, and our major professional fees have been paid for the
year, operating expenses are expected to remain fairly constant.
We expect
to incur operating losses in future periods because we will be incurring
expenses and not generating sufficient revenues. We believe that we will be
required to make significant future expenditures in connection with marketing
efforts along with general administrative expenses. We expect approximately to
range between $10,000 and $20,000 in operating costs through December 31, 2009.
We cannot guarantee that we will be successful in generating sufficient revenues
or other funds in the future to cover these operating costs. Failure to generate
sufficient revenues or additional financing when needed could cause us to go out
of business.
Liquidity
and Capital Resources.
As of September
30, 2009, we had cash or cash equivalents of $736. As of September 30, 2008, we
had cash or cash equivalents of $1,282. As of December 31, 2008, we had cash or
cash equivalents of $2,127.
Net cash used for operating activities was $1,391 for the nine months ended
September 30, 2009. This compares to net cash provided by operating activities
of $1,282 from our inception on January 29, 2008 through
September 30, 2008. Net cash provided by operating activities was $736 from
our inception on January 29, 2008 through September 30, 2009. Net cash
provided by operating activities was $2,127, from our inception on January
29, 2008 through December 31, 2008.
Cash flows
provided by or used for investing activities were $-0- from our inception on
January 29, 2008 through September 30, 2009.
Cash flows provided
by or used for financing activities were $-0- from our inception on January 29,
2008 through September 30, 2009.
Over the next twelve
months we do not expect any material capital costs to develop operations.We do not plan to purchase real estate
or large capital items
On
June 1, 2008, an organization named Spyglass Investment Partnership (“Spyglass
”) agreed to provide operating capital in the form of a loan of $250,000 to
cover operating expenses. This loan is evidenced by an unsecured promissory note
which is due May 31, 2010.
This promissory note is under the same terms and conditions and same
amount as the prior promissory note with Spyglass. It should be noted that
Spyglass is under no obligation to lend us funds under the term of the
note.
We believe
that we have sufficient capital in the short term for our current level of
operations. Viewed from an historical perspective, we have had a $9,980 loss
from inception on revenues of $147,611. Our total operating expenses
since inception have only been $12,899. Further, we believe that we can attract
sufficient product sales and services within our present organizational
structure and resources to become profitable in our operations. We also have the
potential of additional capital from Spyglass. While additional resources would
be needed to expand into additional locations, which we have no plans to do at
this time.
We do not
know how long we will be required to rely upon our loan from Spyglass. We plan
to repay any loan amounts from our operations. It should be noted that we have
not had to draw down on this loan from Spyglass to date. If we are
unable to develop sufficient revenues or raise funds to cover any operating
deficit after May 31, 2010, our business may fail. We do not anticipate needing
to raise additional capital resources in the next twelve months, other than our
loan from Spyglass. It should be noted that Spyglass is under no obligation to
lend us funds under the term of the note. We have no indication that Spyglass
would refuse to lend us funds if we should ask. However, if such funds were
unavailable when needed, we would have a choice to substitute lenders, use
operations for our funds, or go out of business.
We believe that the combination of
revenues and funds which Spyglass can provide to offset any revenue shortfall
will sustain us at least through May 31, 2010. Based upon our past history of
operations, we estimate that we must generate between $10,000 and $20,000 in
gross profit to be profitable. We
do not know when we will be able to generate this level of gross profit. Our principal source of liquidity will
be our operations. We expect variation in revenues to account for the difference
between a profit and a loss. Also business activity is closely tied to the U.S.
economy, particularly the economy in Denver, Colorado. Our ability to achieve
and maintain profitability and positive cash flow is dependent upon our ability
to successfully develop our business and our ability to generate
revenues.
In any case, we try to operate with minimal overhead. Our primary activity will
be to seek to develop clients for our products and services and, consequently,
our sales. If we succeed in developing clients for our products and services and
generating sufficient sales, we will become profitable. We cannot guarantee that
this will ever occur. Our plan is to build our company in any manner which will
be successful.
Off-Balance
Sheet Arrangements
We have
no off-balance sheet arrangements with any party.
-
18 -
Critical
Accounting Policies
Our
discussion and analysis of results of operations and financial condition are
based upon our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these consolidated financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
sales and expenses, and related disclosure of contingent assets and liabilities.
We evaluate our estimates on an ongoing basis, including those related to
provisions for uncollectible accounts receivable, inventories, valuation of
intangible assets and contingencies and litigation. We base our estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.
We have
identified the following policies below as critical to our business and results
of operations.
Revenue
is recognized on an accrual basis as earned under contract terms, the product or
service price to the client is fixed or determinable, and collectibility is
reasonably assured. More specifically, revenue is recognized when ordered
products are shipped, and any corresponding consulting and design services have
been rendered. Services performed under contract, which may vary in length, are
recognized on an ongoing basis over the life of the contract as services are
performed. Our consulting service contracts
generally allow either party to terminate the contract upon reasonable notice.
General
and administrative costs include those costs allocated to the ongoing
expenditures of running our business including in general such items as office
overhead, professional fees and management compensation.
For
further discussion on the application of these and other accounting policies,
see Note 1 to the accompanying audited financial statements for the period ended
September 30, 2008, included elsewhere in this document. Our reported results
are impacted by the application of the following accounting policies, certain of
which require management to make subjective or complex judgments. These
judgments involve making estimates about the effect of matters that are
inherently uncertain and may significantly impact quarterly or annual results of
operations. For all of these policies, management cautions that future events
rarely develop exactly as expected, and the best estimates routinely require
adjustment. Specific risks associated with these critical accounting policies
are described in the following paragraphs.
Use
of Estimates in the Preparation of Financial Statements
The preparation of financial statements
in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates.
We have
had revenue during the period ended September 30, 2009. Anticipated
future operating revenue will come from art consulting, marketing and agent
representation services provided to individuals whom are in the business of
selling art. Such revenues will be recorded as the art services are
performed.
Secondarily,
and as an adjunct to our primary purpose, we also earn revenue from the
sale of art and interior design products. We anticipate that the sale of
products will primarily be to our artist clients but may also incidentally be to
the general public.
-
19 -
Financial
Position
At June 30, 2009, we had no commitments
for capital expenditures. In June 2008, Spyglass Investment
Partnership agreed to provide operating capital in the form of a loan of
$250,000 to cover operating expenses. The loan matured on May 31, 2009, and we
entered into a new loan. This promissory note is under the same terms and
conditions and same amount as the prior promissory note with
Spyglass. This loan is evidenced by an unsecured
promissory note which is due May 31, 2010. It should be noted that
Spyglass is under no obligation to lend us funds under the term of the note.
Management estimates it will take between $10,000 and $20,000 in
gross profit each fiscal year to fund operations. Since we have a limited
operating history, it is uncertain whether revenue from operations will be
sufficient to cover our operating expenses. We have no firm commitment for
funding after 2010. If we are unable to raise funds to cover any operating
deficit after May 31, 2010, our business may fail.
Trends
There are
no known trends, events or uncertainties that have had or that are reasonably
expected to have a material impact on the net sales or revenues or income from
our operations. Our management has not made any commitments, which
will require any material financial resources.
Business
Business
Development
Art Dimensions is a wholly-owned
subsidiary of Art Design, Inc.(“ATDN”). On August 21, 2009, the
directors of ATDN approved, subject to the effectiveness of a registration with
the Securities and Exchange Commission, a spin-off to ATDN shareholders of
record as of November 23, 2009 (the “Record Date”), on a pro rata
basis, with one share each of ART DIMENSIONS, Inc. to be issued for each ten
shares issued and outstanding of common stock owned by such ATDN shareholders as
of the Record Date. Since ATDN’s business is related to the current
activities of Art Dimensions, the ATDN directors decided it was in the best
interest of ATDN and Art Dimensions and ATDN's shareholders to spin-off Art
Dimensions to minimize any potential of conflict of interest by more clearly
focusing each company on their own, individual business plans. Also, the management of Art Design, Inc.
originally thought that the two companies would operate in a more
closely-related manner. However, management of Art Design, Inc. now believes
that the companies have and distinct business plans and should not be
directly tied together in order to maximize the potential success of both.
ATDN’s business is primarily the sale of products with service and consulting as
ancillary components. On the other hand, Art Dimensions business is
to primarily service and consulting with the sale of products as an
ancillary component. To date, however, all of our revenue has come solely from
the sale of products.
The
shares of Art Dimensions are owned by ATDN, who will distribute the Art
Dimensions shares once the Form S-1 is effective with the Securities and
Exchange Commission. The shares will be distributed by Corporate
Stock Transfer, which acts as our transfer agent.
The business of Art Dimensions is to
provide art consulting and marketing services and advise or represent
individuals whom are in the business of creating, producing or selling
art. Secondarily, and as an adjunct to our primary purpose, we also
earn revenue from the sale of art and interior design products. To date,
however, all of our revenue has come solely from the sale of
products. We anticipate that the sale of products
will primarily be to our artist clients but may also incidentally be to the
general public. Most successful artists do not understand the nuances of
business of art. We expect to fill the void by helping artists place
themselves in the best position to successfully reap the maximum rewards
possible from their artistic talents by relying on Art Dimensions to advise them
on marketing, business development and business negotiation. We
currently have operations.
On June 1, 2008, an organization
named Spyglass Investment Partnership (“Spyglass ”) agreed to provide operating
capital in the form of a loan of $250,000 to cover operating expenses. The loan
matured on May 31, 2009, and we entered into a new loan. This promissory
note is under the same terms and conditions and same amount as the prior
promissory note with Spyglass. This loan is evidenced by an unsecured
promissory note which is due May 31, 2010. It should be noted that Spyglass is
under no obligation to lend us funds under the term of the
note.
-
20 -
We have
issued a total of 300,000 warrants to Spyglass , exercisable at a price of
$0.001 per share subject to adjustment, for a period of five years from the date
of issuance. These warrants were issued as an additional inducement for Spyglass
to loan us $250,000. The warrants are subject to registration
rights.
Our
principal executive offices are located at 3636 S. Jason Street, Englewood,
Colorado 80110. Our telephone number is (303) 781-7820. We have no
website.
Business
Art Dimensions provides art consulting
and marketing services and advises or represent individuals who are in the
business of creating, producing or selling art. Secondarily, and as
an adjunct to our primary purpose, we also earn revenue from the sale of
art and interior design products. To date, however, all of our revenue
has come solely from the sale of products. We anticipate that the sale
of products will primarily be to our artist clients but may also incidentally be
to the general public. Our business plan is provide both services and products
to our clients. We provide art consulting, marketing services, and
representation to artists, as well as to sell them or their clients interior
design products. Interior design products are readily available from
a number of sources. We do not rely upon any single supplier. We estimate that
we must generate between $10,000 and $20,000 in gross profit in any fiscal year
to be profitable. These operating costs include insurance, taxes,
utilities, maintenance, contract services and all other costs of
operations. However, the operating costs and expected revenue
generation are difficult to predict. We expect to generate revenues
in the next twelve months from operations using referrals from ATDN and
unrelated individuals and entities that associate with or work with individuals
in the business of creating, producing or selling art. Since there
can be no assurances that revenues will be sufficient to cover operating costs
for the foreseeable future, it may be necessary to raise additional
funds. Due to our limited operating history, raising additional funds
may be difficult. In June 2008, an organization named Spyglass agreed
to provide operating capital in the form of a loan of $250,000 to cover
operating expenses. The loan matured on May 31, 2009, and we entered into a
new loan. This loan is evidenced by an unsecured promissory note
which is due May 31, 2010. It should be noted that Spyglass is under no
obligation to lend us funds under the term of the note. If we are unable to
raise funds to cover any operating deficit after May 31, 2010, our business may
fail.
We
generated revenues during the period ended September 30, 2009. We plan to
continue to increase our revenues with the addition of additional clients and
projects. We have no definitive agreements in place at this time for the
generation of revenues, however.
The
consulting and marketing services we provide to artists includes, but are not
limited to the following business activities such as: development of a business
plan and/or marketing plan; website analysis of the artist’s site;
how an artist should present oneself and his/her art; how to price
art for sale/exhibition; pricing art for sale; critical essay for an
exhibition catalogue; write/rewrite of an artist statement; provide custom
content for an artist or gallery website and provide seminars and lectures on
business aspects of art. The business representation services we
provide to artists includes but not limited to: contract review and/or
negotiation and mediation and dispute resolution. The consulting and
marketing services we provide to non-artists includes the following types of
activities or tasks: advice on whether to buy or sell a work of art;
advice on how to develop a collection; consulting on estate or
inheritance issues; expert witness testimony; assistance with
fundraisers or charity events; seminars and lectures on art business
issues; critical essay for an exhibition or collection catalogue and
estate planning for art.
We are
growing our business in the following manner. We market our services in a number
of different forums. We attend different gatherings where artists and
non-artist congregate such as trade shows, auctions and
exhibitions. We also market our services via the internet and at
events and activities sponsored by ATDN. Other sales channels include
print media focused on art or artists or art collectors. We also
market our services via direct sales campaigns to artists and non-artists
alike. We also believe that we must provide a high level of service
for our customers. We believe that it is our responsibility to make certain that
our products and services are satisfying for our
customers.
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21 -
Operations,
Management and Employees
Our plan
is to concentrate our operations in the Denver, Colorado metropolitan area and
online through a website, which we will eventually develop. We currently do not
have a website.
We have
two part-time employees. As we expand, we intend to hire
employees. However, we have no present plans to do so.
Marketing
and Promotion
We
generate revenues in the next twelve months from our operations using referrals
from ATDN and unrelated individuals and entities that operate in the art
consulting and artist representation business. We also market through direct
contact with prospective customers. We also use general solicitation
of customers through various forms of media advertising, including, but not
limited to, print media and the internet. We have no sales representatives who
solicit potential clients. We have not yet fully developed our marketing program
and do not know the specific cost of such a program, although we believe that it
will be expensive.
Patents
and Trademarks
We do not
currently have any patent or trademark protection. If we determine it is
feasible to file for such trademark protection, we still have no assurance that
doing so will prevent competitors from using the same or similar names, marks,
concepts or appearance.
Competition
We
have a limited operating history and, therefore, will have inherent difficulty
competing in the art consulting, marketing and business representation
business. Our performance depends, in large part, on our ability to
engage with successful artists to perform consulting and marketing services and
advise or represent individuals whom are in the business of creating, producing
or selling art. The art consulting business is highly fractured with
respect to price and services offered. There are a handful of
competitors that represent the very successful artists. Many of these
firms are well-established, including national, regional and local organizations
possessing substantially greater financial, marketing, personnel and other
resources than we do. There can be no assurance that we will be able
to respond to various competitive factors affecting the art industry and be able
to attract and advise our clients accordingly. There is very little
competition for up and coming artists, but the demand for consulting, marketing
and agent representation services is hard to gauge. We believe that
this market is underserved, but most artists are not used to treating their
vocation as a business and may not believe they need our services. If
we are unable to develop an economical model to serve this market we will not be
profitable. We cannot guarantee that we will be able to successfully
compete in the highly competitive high-end or poorly served low-end
markets. We cannot expect to be a significant factor in the
collectibles field in the foreseeable future.
Effect
of Governmental Regulations: Compliance with Environmental Laws
We do not
believe that we are subject to any material government or industry
regulation.
Property
We
currently use the offices of ATDN. We plan to occupy separate office facilities
and obtain office furniture and equipment after the spin-off. We own no real
estate nor have plans to acquire any real estate.
-
22 -
Legal
Proceedings
We are
not a party to any material legal proceedings, nor is our property the subject
of any material legal proceeding.
Management
Directors,
executive officers and key employees
Name:
|
Age
|
Position:
|
Rebecca
Gregarek
|
52
|
President
and Director
|
Kathy
Sheehan
|
44
|
Secretary-Treasurer
and Director
|
Rebecca Gregarek was appointed the
President and a Director of our company on January 29, 2008. She has
been involved in the interior design business in various capacities since 1975.
She has been a Director of ATDN since May, 2007. From 2005 to the
present, she has also been an Interior Design Consultant with By Design Group,
Englewood, Colorado. From 2001-2005, she was associated with Home Builders
Flooring, LLC- HBF Designs, Denver, Colorado. This group worked at
the Shea Design Center in Highlands Ranch, Colorado to develop custom window
Coverings and after-market sales for new home buyers. She oversaw a
sales team in training and developing marketing and advertising
strategies. Her group won the JD Powers Award for customer
satisfaction for 2001, 2002 and 2003. Ms. Gregarek does not hold an
academic degree but attended Arapahoe Community College, with courses in
Interior Design. She is a Certified Window Fashion Designer and a
member of American Society of Interior Designers. She will devote
approximately 20 hours per month to carry out her responsibilities for us and
approximately 10 hours per month to carry out her duties as a member of the ATDN
Board of Directors.
Kathy
Sheehan has been the Secretary-Treasurer, Chief Financial Officer and a Director
of our company since inception January 29, 2008. She has been the President
Chief Executive Officer, Treasurer, Chief Financial Officer and a Director of
ATDN. since inception in January, 2002. She has also been the
Chief Financial Officer, director and principal owner of Accessory Warehouse,
Inc., a private company in the wholesale art framing manufacturing and home
furnishing warehouse business, located in Denver, Colorado, from 1992 to the
present. She attended Front Range Community College from 1980 to 1983. She has
completed the Dale Carnegie Leadership Course. She will devote a minimum of 10
hours per month to our operations and
approximately 40 hours per month to carry out her duties as an officer and
director of ATDN..
Neither can
be considered to be an independent director. We do not presently have the
resources to hire one or more independent directors but plan to do so as soon as
we are able.
Committees
of the Board of Directors
Currently,
we do not have any committees of the Board of Directors.
Director
and Executive Compensation
No
compensation has been paid and no stock options granted to any officer or
director in the last three fiscal years.
Employment
Agreements
We have
no written employment agreements with our executive officer.
-
23 -
Equity
Incentive Plan
We have
not adopted an equity incentive plan, and no stock options or similar
instruments have been granted to any of our officers or directors.
Indemnification
and Limitation on Liability of Directors
Our
Articles of Incorporation limit the liability of our directors to the fullest
extent permitted by Colorado law. Specifically, our directors will not be
personally liable to our company or any of its shareholders for monetary damages
for breach of fiduciary duty as directors, except liability for (i) any breach
of the director's duty of loyalty to the corporation or its shareholders; (ii)
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) voting for or assenting to a distribution in
violation of Colorado Revised Statutes Section 7-106-401 or the articles of
incorporation if it is established that the director did not perform his duties
in compliance with Colorado Revised Statutes Section 7-108-401, provided that
the personal liability of a director in this circumstance shall be limited to
the amount of distribution which exceeds what could have been distributed
without violation of Colorado Revised Statutes Section 7-106-401 or the articles
of incorporation; or (iv) any transaction from which the director directly or
indirectly derives an improper personal benefit. Nothing contained in the
provisions will be construed to deprive any director of his right to all
defenses ordinarily available to the director nor will anything herein be
construed to deprive any director of any right he may have for contribution from
any other director or other person.
At present,
there is no pending litigation or proceeding involving any of our directors,
officers, employees or agents where indemnification will be required or
permitted. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to our directors, officers and
controlling persons pursuant to the foregoing provisions, or otherwise, we have
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable.
Certain
Relationships and Related Transactions
On June 1, 2008, an organization named
Spyglass Investment Partnership (“Spyglass ”) agreed to provide operating
capital in the form of a loan of $250,000 to cover operating expenses. The
husband of Mrs. Gregarek, our President, David Gregarek, is an owner of
Spyglass. The loan matured on May 31, 2009, and we entered into a new
loan. This loan is evidenced by an unsecured promissory note which is now
due May 31, 2010. The transaction was reviewed and approved by our
director, Mrs. Sheehan, who has no interest in Spyglass. At September 30, 2009 no amounts had
been borrowed by us under this agreement, nor is the lending party under any
binding obligation to lend to us.
We issued
have a total of 300,000 warrants to Spyglass, exercisable at a price of $0.001
per share subject to adjustment, for a period of five years from the date of
issuance. These warrants were issued as an additional inducement for Spyglass to
loan us $250,000. The warrants are subject to registration rights.
The husband of Mrs. Gregarek, our President, David Gregarek, is an owner of
Spyglass. We have not received anything else of value from Mr. Gregarek,
directly or indirectly, and have no plans to receive anything else.
Currently,
ATDN controls us because it owns 100% of our issued and outstanding shares of
common stock. Once the spin-off distribution is affected, Rebecca
Gregarek, our President, and , David Gregarek, her spouse, and an owner of
Spyglass will own approximately 45.2% of our issued and outstanding shares of
common stock, after giving effect to the exercise of the 300,000 warrants held
by Spyglass. Todd Sheehan and Kathy Sheehan, will own and control 515,000 shares
of stock thereby controlling approximately 37.3% of our issued and outstanding
shares of common stock. As a group, these individuals will own approximately
82.5% of our issued and outstanding shares of common stock.
We use
the offices of ATDN. No expense provision for this use has been provided since
it has been determined that it is immaterial.
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24 -
Principal
Stockholders
The
following table sets forth, as of September 30, 2009, information regarding the
anticipated future ownership of our common stock after the spin-off
by:
*
|
persons
who own more than 5% of our common stock;
|
|
*
|
each
of our directors and each of our executive officers;
and
|
|
*
|
all
directors and executive officers as a
group.
|
We had 2,000,000 shares issued and
outstanding as of September 30, 2009. The following table reflects
our stock ownership assuming the completion of the spin-off of our shares to the
shareholders of record of ATDN of November 23, 2009. Each person has sole voting
and investment power with respect to the shares shown, except as noted. In
connection with the spin-off, we estimate that ATDN will issue approximately
1,082,060 shares to ATDN shareholders. As a result, ATDN will cancel and return
to authorized shares a total of approximately 917,940 shares, giving the ATDN
shareholders one hundred percent ownership of us. No fractional shares will
result, based upon the final share numbers of November 23, 2009, the record date
of the transaction. For
the purposes of this table, we have used 1,382,060 shares as the total issued
and outstanding, to include the Spyglass warrants.
Name
and Address of
Beneficial
Owner
|
No.
of
Common
Shares
|
Percentage
of
Ownership
|
Todd
and Kathy Sheehan (1)
|
515,000
|
37.3%
|
3636
S. Jason Street
|
||
Englewood,
CO 80110
|
||
Rebecca
Gregarek (2)
|
625,000
|
45.2%
|
3636
S. Jason Street
|
||
Englewood,
CO 80110
|
||
All
Officers and Directors as a Group
|
1,140,000
|
82.5%
|
(two
persons) (3)
|
___________________
(1) Kathy and Todd
Sheehan are husband and wife. Kathy Sheehan owns 2,550,000 shares of record of
ATDN. Todd Sheehan owns 2,450,000 shares of record of ATDN. The minor children
of Mr. and Mrs. Sheehan own a total of 150,000 shares of record of
ATDN.
(2)Rebecca
Gregarek owns 3,200,000 shares of record of ATDN. Her husband, David, owns
100,000 shares of record of ATDN. Her minor child owns 50,000 shares of record
of ATDN. Her adult child owns 50,000 shares of record of ATDN, for
which she disclaims beneficial ownership. Her husband, David, is a part owner of
Spyglass, which has loaned funds to us and which has a warrant to purchase
300,000 shares of our common stock, which is included in this
table.
(3) Shares held by all officers and
directors as a group are also being beneficially held by other
individuals.
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25 -
Federal
Income Tax Considerations
General
The
following discusses U.S. federal income tax consequences of the spin-off
transactions to ATDN stockholders who hold ATDN common stock as a capital asset.
The discussion which follows is based on the Internal Revenue Code, Treasury
Regulations issued under the Internal Revenue Code, and judicial and
administrative interpretations of the Code, all as in effect as of the date of
this Prospectus, all of which are subject to change at any time, possibly with
retroactive effect. This summary is not intended as a complete description of
all tax consequences of the spin-off, and in particular may not address U.S.
federal income tax considerations applicable to ATDN stockholders who are
subject to special treatment under U.S. federal income tax law. Stockholders
subject to special treatment include, for example:
*
|
foreign
persons (for income tax purposes, a non-U.S. person is a person who is not
a citizen or a resident of the United States, or an alien individual who
is a lawful permanent resident of the United States, or meets the
substantial presence residency test under the federal income tax laws, or
a corporation, partnership or other entity that is not organized in or
under the laws of the United States or any state thereof or the District
of Columbia),
|
|
*
|
financial
institutions,
|
|
*
|
dealers
in securities,
|
|
*
|
traders
in securities who elect to apply a market-to-market method of
accounting,
|
|
*
|
insurance
companies,
|
|
*
|
tax-exempt
entities,
|
|
*
|
holders
who acquire their shares pursuant to the exercise of employee stock
options or other compensatory rights, and
|
|
*
|
holders
who hold ATDN common stock as part of a hedge, straddle, conversion or
constructive sale.
|
Further, no
information is provided in this Prospectus with respect to the tax consequences
of the spin-off under applicable foreign or state or local laws.
ATDN stockholders are urged to consult
with their tax advisors regarding the tax consequences of the spin-off to them,
as applicable, including the effects of U.S. federal, state, local, foreign and
other tax laws.
We
believe that the distribution will not qualify as a tax-free distribution
because we do not believe it meets the requirements of Section 355 of the
Code.
-
26 -
Based
upon the assumption that the spin-off fails to qualify as a tax-free
distribution under Section 355 of the Code, then each ATDN stockholder receiving
our shares of common stock in the spin-off generally would be treated as if such
stockholder received a taxable distribution in an amount equal to the fair
market value of our common stock when received. This would result
in:
*
|
a
dividend to the extent paid out of ATDN's current and accumulated earnings
and profits at the end of the year in which the spin-off occurs;
then
|
|
*
|
a
reduction in your basis in ATDN common stock to the extent that the fair
market value of our common stock received in the spin-off exceeds your
share of the dividend portion of the distribution referenced above; and
then
|
|
*
|
gain
from the sale or exchange of ATDN common stock to the extent the amount
received exceeds the sum of the portion taxed as a dividend and the
portion treated as a reduction in basis.
|
|
*
|
each
shareholder's basis in our common stock will be equal to the fair market
value of such stock at the time of the spin-off. If a public trading
market for our common stock develops, we believe that the fair market
value of the shares will be equal to the public trading price of the
shares on the distribution date. However, if a public trading market for
our shares does not exist on the distribution date, other criteria will be
used to determine fair market value, including such factors as recent
transactions in our shares, our net book value and other recognized
criteria of value.
|
Following
completion of the distribution, information with respect to the allocation of
tax basis among ATDN and our common stock will be made available to the holders
of ATDN common stock.
Back-up
Withholding Requirements
U.S.
information reporting requirements and back-up withholding may apply with
respect to dividends paid on and the proceeds from the taxable sale, exchange or
other disposition of our common stock unless the stockholder:
*
|
is
a corporation or comes within certain other exempt categories and, when
required, demonstrates these facts; or
|
|
*
|
provides
a correct taxpayer identification number, certifies that there has been no
loss of exemption from back-up withholding and otherwise complies with
applicable requirements of the back-up withholding
rules.
|
A
stockholder who does not supply ATDN with his, her or its correct taxpayer
identification number may be subject to penalties imposed by the I.R.S. Any
amount withheld under these rules will be creditable against the stockholder's
federal income tax liability. Stockholders should consult their tax advisors as
to their qualification for exemption from back-up withholding and the procedure
for obtaining such exemption. If information reporting requirements apply to the
stockholder, the amount of dividends paid with respect to the stockholder's
shares will be reported annually to the I.R.S. and to the
stockholder.
-
27 -
Federal
Securities Laws Consequences
Of the
1,082,060 shares of Art Dimensions common stock distributed to ATDN stockholders
in the spin-off, all 1,082,060 shares will be freely transferable under the act,
except for those securities received by persons who may be deemed to be
affiliates of Art Dimensions under Securities Act rules. Persons who may be
deemed to be affiliates of Art Dimensions after the spin-off generally include
individuals or entities that control, are controlled by or are under common
control with Art Dimensions, such as our directors and executive
officers.
Persons
who are affiliates of Art Dimensions generally will be permitted to sell their
shares of Art Dimensions common stock received in the spin-off only pursuant to
Rule 144 under the Securities Act. However, because the shares received in the
spin-off are not restricted securities, the holding period requirement of Rule
144 will not apply. As a result, Art Dimensions common stock received by Art
Dimensions affiliates pursuant to the spin-off may be sold if certain provisions
of Rule 144 under the Securities Act are complied with (e.g., the amount sold
within a three-month period does not exceed the greater of one percent of the
outstanding Art Dimensions common stock or the average weekly trading volume for
Art Dimensions common stock during the preceding four-week period, and the
securities are sold in "broker's transactions" and in compliance with certain
notice provisions under Rule 144).
Description
of Securities
We are
authorized to issue up to 50,000,000 shares of no par value common stock and
1,000,000 shares of preferred stock, to have such par value as may be determined
from time to time. As of September 30, 2009, 2,000,000 shares of Common Stock
and no shares of preferred stock were issued and
outstanding. Following the spin-off, we believe that there will be
approximately one hundred stockholders of record, based upon the number of
record holders of ATDN common shares as of the record date. The shares of
Art Dimensions are owned by ATDN, who will distribute the Art Dimensions shares
once the Form S-1 is effective with the Securities and Exchange Commission. The
shares will be distributed by Corporate Stock Transfer, which acts as our
transfer agent.
Common
Stock
The
holders of common stock are entitled to one vote for each share held. The
affirmative vote of a majority of votes cast at a meeting which commences with a
lawful quorum is sufficient for approval of most matters upon which
shareholders may or must vote, including the questions presented for approval or
ratification at the Annual Meeting. However, amendment of the articles of
incorporation require the affirmative vote of a majority of the total voting
power for approval. Common shares do not carry cumulative voting rights, and
holders of more than 50% of the common stock have the power to elect all
directors and, as a practical matter, to control the company. Holders of common
stock are not entitled to preemptive rights, and the common stock may only be
redeemed at our election.
Preferred
Stock
We are authorized to issue up to
1,000,000 shares of preferred stock. Our preferred shares have such par value as
may be determined from time to time and are entitled to such, rights, references
and limitations as determined by our board of directors. At the present time, no
rights, preferences or limitations have been established for our preferred
shares.
-
28 -
Although we currently do not have any
plans to issue shares of preferred stock or to designate any series of preferred
stock, there can be no assurance that we will not do so in the future. As a
result, we could authorize the issuance of a series of preferred stock which
would grant to holders preferred rights to our assets upon liquidation, the
right to receive dividend coupons before dividends would be declared to common
stockholders, and the right to the redemption of such shares, together with a
premium, prior to the redemption to common stock. Our common stockholders have
no redemption rights. In addition, our Board could issue large blocks of voting
stock to fend off unwanted tender offers or hostile takeovers without further
stockholder approval.
Warrants
We have
issued a total of 300,000 warrants to Spyglass , exercisable at a price of
$0.001 per share subject to adjustment, for a period of five years from the date
of issuance. These warrants were issued as an additional inducement for
Spyglass to loan us $250,000. The warrants are subject to
registration rights.
We issued
have a total of 50,000 warrants to David Wagner & Associates, P.C. ,
exercisable at a price of $0.001 per share subject to adjustment, for a period
of five years from the date of issuance. These warrants were issued as an
additional legal fee to our law firm. The warrants are subject to registration
rights.
Options
We have not issued any options or other
derivative securities.
Transfer
Agent
The stock transfer agent for our
securities is Corporate Stock Transfer of Denver, Colorado. Their
address is 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado
80209. Their phone number is (303) 282-4800.
Reports
to Stockholders
We will
to furnish annual reports to stockholders which will include audited financial
statements reported on by our independent certified public
accountants. In addition, we will provide unaudited quarterly or
other interim reports to stockholders to fulfill the reporting requirements
under the Securities Exchange Act of 1934, as amended.
Legal
Matters
The law firm of David Wagner &
Associates, P.C. of Greenwood Village, Colorado has passed upon the validity of
the shares being offered and certain other legal matters and is representing us
in connection with this offering. After the spin-off, an affiliate of this firm
will own 20,000 shares of our common stock. We also issued have a
total of 50,000 warrants to David Wagner & Associates, P.C. , exercisable at
a price of $0.001 per share subject to adjustment, for a period of five years
from the date of issuance. The warrants are subject to registration
rights.
-
29 -
Experts
The
financial statements of Art Dimensions as of and for the periods
ended December 31, 2008 and September 30, 2009 included herein and
elsewhere in the Registration Statement have been audited by Ronald R. Chadwick,
P.C. independent certified public accountants, to the extent set forth in their
report appearing herein and elsewhere in the Registration Statement. Such
financial statements have been so included in reliance upon the report of such
firm given upon their authority as experts in auditing and
accounting.
Where
You Can Find More Information
You may read and copy any document we
file at the Commission's Public Reference Room in Washington, D.C. The Public
Reference Room is located in Room 1580, 100 F Street N.E., Washington, D.C.
20549. Please call the Commission at 1-800-SEC-0330 for further information on
the Public Reference Rooms. You can also obtain copies of our Commission filings
by going to the Commission's website at http://www.sec.gov.
We have filed with the Commission a
Registration Statement on Form S-1 to register the shares of our common stock to
be distributed in the spin-off. This prospectus is part of that
Registration Statement and, as permitted by the Commission's rules, does not
contain all of the information set forth in the Registration Statement. For
further information about our company or our common stock, you may refer to the
Registration Statement and to the exhibits filed as part of the Registration
Statement.
We are not currently subject to the
informational filing requirements of the Exchange Act. However, as a result of
this offering, we will become subject to these requirements and will file
periodic reports, including annual reports containing audited financial
statements, reports containing unaudited interim financial statements, quarterly
and special reports, proxy statements and other information with the
Commission. We will provide without charge to each person who
receives this prospectus, copies of our reports and other information which we
file with the Commission. Your request for this information should be
directed to our President, Rebecca Gregarek, at our corporate office in Denver,
Colorado. You can also review this information at the public
reference rooms of the Commission and on the Commission's website as described
above.
-
30 -
ART
DIMENSIONS, INC.
FINANCIAL
STATEMENTS
with
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
December
31, 2008 &
September
30, 2009 (Unaudited)
-
31 -
ART
DIMENSIONS, INC.
(A
Development Stage Company)
Financial
Statements
TABLE
OF CONTENTS
Page
|
|
REPORT
OF INDEPENDENT REGISTERED
|
|
PUBLIC
ACCOUNTING FIRM
|
F-1
|
FINANCIAL
STATEMENTS
|
|
Balance sheet
|
F-2
|
Statement of
operations
|
F-3
|
Statement of stockholders’
equity
|
F-4
|
Statement of cash
flows
|
F-5
|
Notes to financial
statements
|
F-7
|
RONALD R.
CHADWICK, P.C.
Certified
Public Accountant
2851
South Parker Road, Suite 720
Aurora,
Colorado 80014
Telephone
(303) 306-1967
Fax (303)
306-1944
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of
Directors
Art
Dimensions, Inc.
Denver,
Colorado
I have
audited the accompanying balance sheet of Art Dimensions, Inc. (a development
stage company) as of December 31, 2008, and
the related statements of operations, stockholders' equity and cash flows for
the period from January 29, 2008 (inception) through December 31, 2008. These financial statements are
the responsibility of the Company's management. My responsibility is to express
an opinion on these financial statements based on my audit.
I
conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a
reasonable basis for my opinion.
In my
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Art Dimensions, Inc. as of December 31, 2008, and the results of its
operations and its cash flows for the period from January 29, 2008 (inception)
through December 31, 2008 in
conformity with accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 6 to the financial
statements the Company has suffered a loss from operations and has a
stockholders’ deficit that raise substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in Note 6. The financial statements do not include any adjustments
that might result from the outcome of this
uncertainty.
Aurora,
Colorado /s/ Ronald R.
Chadwick, P.C.
August
18,
2009
RONALD R. CHADWICK, P.C.
F
- 1
ART
DIMENSIONS, INC.
|
||||||||
(A
Development Stage Company)
|
||||||||
BALANCE
SHEETS
|
||||||||
September
30, 2009
|
||||||||
Dec.
31, 2008
|
(Unaudited)
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
|
$ | 2,127 | $ | 736 | ||||
Accounts
receivable
|
- | 59,750 | ||||||
Total current
assets
|
2,127 | 60,486 | ||||||
Total
Assets
|
$ | 2,127 | $ | 60,486 | ||||
LIABILITIES
&
|
||||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Current
liabilities
|
||||||||
Related
party payables
|
$ | 3,309 | $ | 65,059 | ||||
Total current
liabilities
|
3,309 | 65,059 | ||||||
Total
Liabilities
|
3,309 | 65,059 | ||||||
Stockholders'
Equity
|
||||||||
Preferred
stock, no par value;
|
||||||||
1,000,000
shares authorized;
|
||||||||
no
shares issued and outstanding
|
- | - | ||||||
Common
stock, no par value;
|
||||||||
50,000,000
shares authorized;
|
||||||||
2,000,000
shares issued and outstanding
|
2,000 | 2,000 | ||||||
Additional
paid in capital
|
3,407 | 3,407 | ||||||
Deficit
accumulated during the dev. stage
|
(6,589 | ) | (9,980 | ) | ||||
Total
Stockholders' Equity
|
(1,182 | ) | (4,573 | ) | ||||
Total
Liabilities and Stockholders' Equity
|
$ | 2,127 | $ | 60,486 |
The accompanying notes are an integral part of the financial statements.
F
- 2
ART
DIMENSIONS, INC.
(A
Development Stage Company)
STATEMENTS
OF OPERATIONS
Period
From
|
Period
From
|
|||||||||||||||
Period
From
|
Jan.
29, 2008
|
Jan.
29, 2008
|
||||||||||||||
Jan.
29, 2008
|
(Inception)
|
Nine
Months
|
(Inception)
|
|||||||||||||
(Inception)
|
Through
|
Ended
|
Through
|
|||||||||||||
Through
|
Sept.
30, 2008
|
Sept.
30, 2009
|
Sept.
30, 2009
|
|||||||||||||
Dec.
31, 2008
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
Sales
- net of returns
|
$ | 87,861 | $ | 87,861 | $ | 59,750 | $ | 147,611 | ||||||||
Cost
of goods sold - related party
|
84,942 | 84,942 | 59,750 | 144,692 | ||||||||||||
Gross
profit
|
2,919 | 2,919 | - | 2,919 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Compensatory
equity issuances
|
5,407 | 5,407 | - | 5,407 | ||||||||||||
General
and administrative
|
4,101 | 3,291 | 3,391 | 7,492 | ||||||||||||
9,508 | 8,698 | 3,391 | 12,899 | |||||||||||||
Gain
(loss) from operations
|
(6,589 | ) | (5,779 | ) | (3,391 | ) | (9,980 | ) | ||||||||
Other
income (expense):
|
||||||||||||||||
- | - | - | - | |||||||||||||
Income
(loss) before
|
||||||||||||||||
provision
for income taxes
|
(6,589 | ) | (5,779 | ) | (3,391 | ) | (9,980 | ) | ||||||||
Provision
for income tax
|
- | - | - | - | ||||||||||||
Net
income (loss)
|
$ | (6,589 | ) | $ | (5,779 | ) | $ | (3,391 | ) | $ | (9,980 | ) | ||||
Net
income (loss) per share
|
||||||||||||||||
(Basic
and fully diluted)
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
Weighted
average number of
|
||||||||||||||||
common
shares outstanding
|
2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 |
The
accompanying notes are an integral part of the financial
statements.
F
- 3
ART
DIMENSIONS, INC.
|
||||||||||||||||||||
(A
Development Stage Company)
|
||||||||||||||||||||
STATEMENTS
OF STOCKHOLDERS' EQUITY
|
||||||||||||||||||||
Deficit
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
Common
Stock
|
During
The
|
Stock-
|
||||||||||||||||||
Amount
|
Paid
In
|
Development
|
holders'
|
|||||||||||||||||
Shares
|
No
Par Value
|
Capital
|
Stage
|
Equity
|
||||||||||||||||
Balances
at Jan. 29, 2008 (Inception)
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Compensatory
stock issuance -
|
||||||||||||||||||||
January
29, 2009 shares issued for
|
||||||||||||||||||||
formation
services at service value
|
2,000,000 | 2,000 | 2,000 | |||||||||||||||||
Compensatory
warrant issuances -
|
||||||||||||||||||||
January
29, 2009 shares issued for
|
||||||||||||||||||||
consulting
services at service value
|
3,407 | 3,407 | ||||||||||||||||||
Net
income (loss) for the period
|
(6,589 | ) | (6,589 | ) | ||||||||||||||||
Balances
at Dec. 31, 2008
|
2,000,000 | $ | 2,000 | $ | 3,407 | $ | (6,589 | ) | $ | (1,182 | ) | |||||||||
Net
income (loss) for the period
|
(3,391 | ) | (3,391 | ) | ||||||||||||||||
Balances
at September 30, 2009
|
2,000,000 | $ | 2,000 | $ | 3,407 | $ | (9,980 | ) | $ | (4,573 | ) |
The
accompanying notes are an integral part of the financial
statements.
F
- 4
ART
DIMENSIONS, INC.
|
||||||||||||||||
(A
Development Stage Company)
|
||||||||||||||||
STATEMENTS
OF CASH FLOWS
|
||||||||||||||||
Period
From
|
Period
From
|
|||||||||||||||
Period
From
|
Jan.
29, 2008
|
Jan.
29, 2008
|
||||||||||||||
Jan.
29, 2008
|
(Inception)
|
Nine
Months
|
(Inception)
|
|||||||||||||
(Inception)
|
Through
|
Ended
|
Through
|
|||||||||||||
Through
|
Sept.
30, 2008
|
Sept.
30, 2009
|
Sept.
30, 2009
|
|||||||||||||
Dec.
31, 2008
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
Cash
Flows From Operating Activities:
|
||||||||||||||||
Net
income (loss)
|
$ | (6,589 | ) | $ | (5,779 | ) | $ | (3,391 | ) | $ | (9,980 | ) | ||||
Adjustments
to reconcile net loss to
|
||||||||||||||||
net
cash provided by (used for)
|
||||||||||||||||
operating
activities:
|
||||||||||||||||
Accounts
receivable
|
- | (32,788 | ) | (59,750 | ) | (59,750 | ) | |||||||||
Related
party payables
|
3,309 | 34,442 | 61,750 | 65,059 | ||||||||||||
Compensatory
stock issuances
|
2,000 | 2,000 | 2,000 | |||||||||||||
Compensatory
warrant issuances
|
3,407 | 3,407 | 3,407 | |||||||||||||
Net cash provided by (used
for)
|
||||||||||||||||
operating
activities
|
2,127 | 1,282 | (1,391 | ) | 736 | |||||||||||
Cash
Flows From Investing Activities:
|
||||||||||||||||
- | - | - | - | |||||||||||||
Net
cash provided by (used for)
|
||||||||||||||||
investing
activities
|
- | - | - | - | ||||||||||||
(Continued
On Following Page)
|
The
accompanying notes are an integral part of the financial
statements.
F
- 5
ART
DIMENSIONS, INC.
|
||||||||||||||||
(A
Development Stage Company)
|
||||||||||||||||
STATEMENTS
OF CASH FLOWS
|
||||||||||||||||
(Continued
From Previous Page)
|
||||||||||||||||
Period
From
|
Period
From
|
|||||||||||||||
Period
From
|
Jan.
29, 2008
|
Jan.
29, 2008
|
||||||||||||||
Jan.
29, 2008
|
(Inception)
|
Nine
Months
|
(Inception)
|
|||||||||||||
(Inception)
|
Through
|
Ended
|
Through
|
|||||||||||||
Through
|
Sept.
30, 2008
|
Sept.
30, 2009
|
Sept.
30, 2009
|
|||||||||||||
Dec.
31, 2008
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
Cash
Flows From Financing Activities:
|
||||||||||||||||
- | - | - | - | |||||||||||||
Net cash provided by (used
for)
|
||||||||||||||||
financing
activities
|
- | - | - | - | ||||||||||||
Net
Increase (Decrease) In Cash
|
2,127 | 1,282 | (1,391 | ) | 736 | |||||||||||
Cash
At The Beginning Of The Period
|
- | - | 2,127 | - | ||||||||||||
Cash
At The End Of The Period
|
$ | 2,127 | $ | 1,282 | $ | 736 | $ | 736 | ||||||||
Schedule Of Non-Cash Investing And Financing
Activities
|
||||||||||||||||
In
2008 the Company issued 2,000,000 common shares to its parent
|
||||||||||||||||
corporation for formation stage consulting servies valued | ||||||||||||||||
at
$2,000, and issued 350,000 common stock purchase
|
||||||||||||||||
warrants for consulting services valued at $3,407. | ||||||||||||||||
Supplemental Disclosure
|
||||||||||||||||
Cash
paid for interest
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Cash
paid for income taxes
|
$ | - | $ | - | $ | - | $ | - |
The
accompanying notes are an integral part of the financial
statements.
F
- 6
ART
DIMENSIONS, INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL
STATEMENTS
December
31, 2008 and September
30, 2009 (Unaudited)
NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
Art
Dimensions, Inc. (the “Company”), was incorporated in the State of Colorado on
January 29, 2008. The Company is a wholly owned subsidiary of Art Design, Inc.,
and was formed to provide art consulting and marketing services and advise or
represent individuals who are in the business of creating, producing and selling
art. While the Company intends to provide
consulting and marketing services in the future, the Company’s business to date
has consisted solely of selling pieces of art.
Interim
financial statements
The
unaudited interim financial statements at September 30, 2008 and 2009 include
all adjustments that, in the opinion of management are necessary to make the
financial statements not misleading.
Cash
and cash equivalents
The
Company considers all highly liquid investments with an original maturity of
three months or less as cash equivalents.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect 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.
Income
tax
The
Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 (“SFAS 109”). Under SFAS 109 deferred taxes are provided on a
liability method whereby deferred tax assets are recognized for deductible
temporary differences and operating loss carryforwards and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax assets will not be realized. Deferred
tax assets and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.
Net
income (loss) per share
The net
income (loss) per share is computed by dividing the net income (loss) by the
weighted average number of shares of common outstanding. Warrants, stock
options, and common stock issuable upon the conversion of the Company's
preferred stock (if any), are not included in the computation if the effect
would be anti-dilutive and would increase the earnings or decrease loss per
share. The Company’s weighted average shares of 2,000,000 as reported on the
Statements of Operations for the periods from January 29, 2008 (inception)
through December 31, 2008 and for the nine months ended September 30, 2009 do
not include 350,000 common shares issuable under warrants outstanding as
inclusion of those shares would be
anti-dilutive.
F
- 7
ART
DIMENSIONS, INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008 and September
30, 2009 (Unaudited)
NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued):
Inventories
Inventories,
consisting of finished art pieces and art design work in process, are stated at
the lower of cost or market (first-in, first-out method). Costs capitalized to
inventory include the purchase price of materials, transportation costs, labor
and design costs, and any other expenditures incurred in bringing art pieces to
the point of sale and putting them in saleable condition. Costs of good sold
include inventory costs for those items sold during the
period.
General and administrative
costs
General
and administrative costs include those costs allocated to the ongoing
expenditures of running the Company’s business including in general such items
as office overhead, professional fees and management compensation.
Revenue
recognition
Revenue
is recognized on an accrual basis as earned under contract terms, the product or
service price to the client is fixed or determinable, and collectibility is
reasonably assured. More specifically, revenue is recognized when ordered
products are shipped, and any corresponding consulting and design services have
been rendered. Services performed under contract, which may vary in length, are
recognized on an ongoing basis over the life of the contract as services are
performed. Billings are presented to clients for
time spent as opposed to being fixed price, with billing rates and product
prices agreed upon in advance of work performance or product shipment.
Any partial up-front payments received under contract are recorded as a deposit
liability until such time as services required under the contract are performed.
The Company’s consulting service contracts generally allow either party to
terminate the contract upon reasonable notice.
Property and
equipment
Property
and equipment are recorded at cost and depreciated under the straight line
method over each item's estimated useful life.
Financial
Instruments
The
carrying value of the Company’s financial instruments, as reported in the
accompanying balance sheet, approximates fair value.
Accounting
year
The
Company employs a fiscal accounting year ending December 31.
Stock based
compensation
The
Company accounts for employee and non-employee stock awards under SFAS 123(r),
whereby equity instruments issued to employees for services are recorded based
on the fair value of the instrument issued and those issued to non-employees are
recorded based on the fair value of the consideration received or the fair value
of the equity instrument, whichever is more reliably
measurable.
F
- 8
ART
DIMENSIONS, INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008 and September
30, 2009 (Unaudited)
NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued):
Products and services,
geographic areas and major customers
The
Company earns revenue from the sale of art products and consulting services, but
does not separate sales into different operating segments. All sales are
domestic and to external customers. All Company sales for the periods from
January 29, 2008 through December 31, 2008 and for the nine months ended
September 30, 2009 of $87,861 and $59,750 were to one
customer.
NOTE
2. INCOME TAXES
Deferred
income taxes arise from the temporary differences between financial statement
and income tax recognition of net operating losses. These loss carryovers are
limited under the Internal Revenue Code should a significant change in ownership
occur. The Company accounts for income taxes pursuant to SFAS 109. At December
31, 2008, the Company had approximately $6,589 in unused federal net operating
loss carryforwards, which begin to expire principally in the year 2028. A
deferred tax asset of approximately $630 resulting from the loss carryforward
has been offset by a 100% valuation allowance. The change in the valuation
allowance in fiscal year 2008 was approximately $630.
NOTE 3. NOTE
AGREEMENT
The
Company has entered into a note agreement with an outside party under which it
may borrow up to $250,000 at 15% per annum to fund Company operations. The
stated due date on any funds borrowed under the agreement is May 31, 2009, which
may be extended until May 31, 2010 upon payment of a 1.5% fee. The note
agreement calls for quarterly interest payments, with a rate of 24% per annum
accrued on late amounts. At December 31, 2008 no amounts had been borrowed by
the Company under this agreement, nor is the lending party under any binding
obligation to lend to the Company.
NOTE
4. STOCK COMPENSATION
In
January 2008 the Company issued its parent corporation 2,000,000 common shares
valued at $2,000 for formation stage consulting services.
Stock
options and warrants
At
December 31, 2008 and September 30, 2009 the Company had stock options and
warrants outstanding as described below.
Non-employee
stock options and warrants
F
- 9
ART
DIMENSIONS, INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
December
31, 2008 and September
30, 2009 (Unaudited)
NOTE
4. STOCK COMPENSATION (Continued):
The
Company accounts for non-employee stock options and warrants under SFAS 123(r),
whereby option and warrant costs are recorded based on the fair value of the
consideration received or the fair value of the equity instruments
issued, whichever is more reliably measurable. Unless otherwise provided for,
the Company covers option and warrant exercises by issuing new shares.
The
Company had no outstanding options or warrants at January 29, 2008. During the
period from January 29, 2008 (inception) through December 31, 2008 the Company
issued 350,000 common stock purchase warrants for $3,407 in services, allowing
the holder to purchase one share of common stock per warrant at an exercise
price of $.001, exercisable through May 13, 2013. The fair value of these
warrant grants were estimated on the date of grant using the Black-Scholes
option pricing model with the following assumptions: risk free interest rate of
3.52, dividend yield of 0%, expected life of 5 years, volatility of 142%.
Volatility was calculated using the historical, annualized standard deviation
method employing stock prices of a limited activity public entity. As there was
and is currently no trading market for the Company’s stock, it was impractical
for the Company to calculate volatility using its own share price, therefore the
Company used the stock price of a publicly traded company with limited activity
to approximate anticipated volatility of its own shares. The trading prices of a
limited activity public company was chosen to best estimate the Company’s own
stock price volatility as the Company currently conducts only limited operations
and there can be no guarantee of expanded operations in the future. No warrants
were exercised, expired or were cancelled during the period nor during the nine
months ended September 30, 2009, leaving a December 31, 2008 and September 30,
2009 balance of 350,000 non-employee stock warrants outstanding.
Employee
stock options
The
Company accounts for employee stock options under SFAS 123(r). Unless otherwise
provided for, the Company covers option exercises by issuing new shares. There
were no employee stock options issued or outstanding at December 31, 2008 and
September 30, 2009.
NOTE
5. CONTINGENCIES
The
Company’s parent corporation, Art Design, Inc. is planning to file a
registration statement with the SEC to spin-off the Company as an independent
entity.
NOTE
6. GOING CONCERN
The
Company has suffered a loss from operations and in all likelihood will be
required to make significant future expenditures in connection with marketing
efforts along with general administrative expenses. These conditions raise
substantial doubt about the Company’s ability to continue as a going
concern.
The
Company may raise additional capital through the sale of its equity securities,
through an offering of debt securities, or through borrowings from financial
institutions. By doing so, the Company hopes through marketing efforts to
generate revenues from sales of its art consulting and marketing services.
Management believes that actions presently being taken to obtain additional
funding provide the opportunity for the Company to continue as a going
concern.
F
- 10
Until
___________, 2010 (90 days after the date of this prospectus), all dealers
affecting transactions in the shares offered by this prospectus - whether
or not participating in the offering - may be required to deliver a copy
of this prospectus. Dealers may also be required to deliver a copy of this
prospectus when acting as underwriters and for their unsold allotments or
subscriptions.
|
Spin-Off
of
|
|
1,082,060
Shares
|
||
________________________
|
of
Common Stock
|
|
TABLE
OF CONTENTS
|
ART
DESIGN, INC
|
|
ART
DIMENSIONS, INC.
|
||
Questions
and Answers
|
|
|
About
the Spin-Off
|
3
|
|
About
the Prospectus
|
3
|
|
Forward-Looking
Statements
|
4
|
|
Summary
|
4
|
|
Risk
Factors
|
5
|
|
Spin-Off
and Plan of Distribution
|
13
|
Common
Stock
|
Capitalization
|
15
|
|
Certain
Market Information
|
15
|
|
Selected
Financial Information
|
16
|
|
Management's
Discussion and Analysis
|
17
|
|
Business
|
20
|
|
Management
|
23
|
____________________
|
Certain
Relationships and Related Transactions
|
24
|
|
Principal
Stockholders
|
25
|
PROSPECTUS
|
Federal
Income Tax Considerations
|
26
|
____________________
|
Federal
Securities Laws Consequences
|
28
|
|
Description
of Securities
|
28
|
|
Transfer
Agent
|
29
|
|
Legal
Matters
|
29
|
|
Experts
|
30
|
|
Where
You Can Find More Information
|
30
|
____________,
2009
|
Financial
Statements
|
31
|
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 borne by Art
Dimensions, are as follows:
SEC
Filing Fee
|
$
|
30.00
|
||
Printing
Expenses
|
1,000.00
|
|||
Accounting
Fees and Expenses
|
2,500.00
|
|||
Legal
Fees and Expenses
|
7,500.00
|
|||
Blue
Sky Fees and Expenses
|
200.00
|
|||
Registrar
and Transfer Agent Fee
|
500.00
|
|||
Miscellaneous
|
270.00
|
|||
Total
|
$
|
12,000.00
|
Item
14. Indemnification of Directors and
Officers.
Colorado
corporation law provides that a corporation may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, except an action by or in the right of the corporation, by reason
of the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with the action, suit or proceeding if he acted in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was
unlawful.
Colorado
corporation law also provides that to the extent that a director, officer,
employee or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding, or in defense of any
claim, issue or matter therein, the corporation shall indemnify him against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection with the defense.
The
Company's Articles of Incorporation limit the liability of its officers,
directors, agents, fiduciaries and employees to the fullest extent permitted by
the Colorado Revised Statutes. Specifically, directors of the Company will not
be personally liable to the Company or any of its shareholders for monetary
damages for breach of fiduciary duty as directors, except liability for (i) any
breach of the director's duty of loyalty to the corporation or its shareholders;
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law; (iii) voting for or assenting to a distribution
in violation of Colorado Revised Statutes Section 7-106-401 or the articles of
incorporation if it is established that the director did not perform his duties
in compliance with Colorado Revised Statutes Section 7-108-401, provided that
the personal liability of a director in this circumstance shall be limited to
the amount of distribution which exceeds what could have been distributed
without violation of Colorado Revised Statutes Section 7-106-401 or the articles
of incorporation; or (iv) any transaction from which the director directly or
indirectly derives an improper personal benefit. Nothing contained in the
provisions will be construed to deprive any director of his right to all
defenses ordinarily available to the director nor will anything herein be
construed to deprive any director of any right he may have for contribution from
any other director or other person.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933, as
amended, may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company is aware 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.
II
- 1
Item
15. Recent Sales of Unregistered
Securities.
Art
Dimensions is a wholly-owned subsidiary of ATDN.
On June
1, 2008, we issued a total of 300,000 warrants to Spyglass , exercisable at a
price of $0.001 per share subject to adjustment, for a period of five years from
the date of issuance. These warrants were issued as an additional inducement for
Spyglass to loan us $250,000. The warrants are subject to
registration rights.
On June 1, 2008, we issued have a total
of 50,000 warrants to David Wagner & Associates, P.C. , exercisable at a
price of $0.001 per share subject to adjustment, for a period of five years from
the date of issuance. These warrants were issued as an additional legal fee to
our law firm. The warrants are subject to registration
rights.
In the
transactions shown above, the issuance, delivery and sale of our common stock
were made pursuant to the private offering exemption within the meaning of
Section 4(2) of the Act because the offers were made to a limited number of
people, all of whom received all material information concerning the investment
and all of whom have had sophistication and ability to bear economic risk based
upon their representations to us and their prior experience in such
investments.
Item 16.
Exhibits and Financial Statement
Schedules.
a. The
following Exhibits are filed as part of this Registration Statement pursuant to
Item 601 of Regulation S-K:
Exhibit
|
|
Number
|
Description
|
3.1*
|
Articles
of Incorporation
|
3.2*
|
Bylaws
|
4.1*
|
Warrant
dated June 1, 2008 for Spyglass Investment
Partnership
|
4.2*
|
Warrant
dated June 1, 2008 for David Wagner & Associates,
P.C.
|
5.1
|
Opinion
re: Legality
|
10.1*
|
Promissory
note dated June 1, 2008 with Spyglass Investment
Partnership
|
10.2* |
Promissory
note dated June 1, 2009 with Spyglass Investment
Partnership
|
23.1*
|
Consent of Independent Auditors |
23.2
|
Consent of Counsel (See Exhibit 5.1) |
*
Previously filed
II
- 2
Item
17. Undertakings
The
Registrant hereby undertakes the following:
(1) To
file, during any period in which it offers or sells securities, a post-effective
amendment to this registration statement to:
(i) include
any Prospectus required by Section 10(a)(3) of the Securities
Act;
(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 in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of the 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 a prospectus filed with the
Commission pursuant to Rule 424(b)(Section 230.424(b) of this chapter) if, in
the aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the “Calculation of
Registration Fee” table in the effective registration statement,
and
(iii)
To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement 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.
II -
3
(4) That,
for the purpose of determining liability under the Securities Act to any
purchaser:
(a) If the
registrant is relying on Rule 430B(Section 230.430B of this
chapter):
(i)Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to
be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement;
and
(ii) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as
part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i),(vii), or (x) for the purpose of
providing the information required by section 10(a) of the Securities Act shall
be deemed to be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after effectiveness
for the date of the first contract of sale of securities in the offering
described in the prospectus. As provided in Rule 430B, for liability purposes of
the issuer and any person that is at that date an underwriter, such date shall
be deemed to be a new effective date of the registration statement relating to
the securities in the registration statement to which that prospectus relates,
and the offering of such securities at that time shall be deemed to be the
initial bona fide
offering thereof. 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 prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, 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 effective date.
(b) If the registrant is
subject to Rule 430C (Section 230.430C of this chapter), 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 a part of 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.
(5) That,
for the purpose of determining liability 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(Section 230.424 of this
chapter);
(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.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore,
unenforceable.
In the
event that a claim for indemnification against such liabilities (other than the
payment by us of expenses incurred or paid by one of our directors, officers, or
controlling persons in the successful defense of any action, suit or proceeding)
is asserted by one of our directors, officers, or controlling persons in
connection with the securities being registered, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification is
against public policy as expressed in the Securities Act, and we will be
governed by the final adjudication of such issue.
II
- 4
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 Englewood,
State of Colorado, on the 11th day of
December, 2009.
ART DIMENSIONS,
INC.,
a
Colorado corporation
|
||
|
|
|
By: | /s/ Rebecca Gregarek | |
|
Rebecca
Gregarek
President
and Chief Executive 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.
Date: December 11, 2009
|
By:
|
/s/ Kathy Sheehan
|
Kathy
Sheehan
|
||
Director,
Treasurer, Principal Accounting Officer, and Chief Financial
Officer
|
||
Date: December 11, 2009
|
By:
|
/s/ Rebecca Gregarek
|
Rebecca
Gregarek
|
||
Director
|
II -
4