Colorado
|
5020
|
86-1061005
|
(State
or other jurisdiction of incorporation)
|
(Primary
Standard
Industrial
Classification
Code
Number)
|
(IRS
Employer Identification No.)
|
3636
S. Jason
|
Englewood,
Colorado 80113
|
(303)
781-7280
|
(Address,
including zip code, and telephone number,
|
including
area code, of registrant's principal executive
offices)
|
Kathy
Sheehan
|
President
|
Art
Design, Inc
|
3636
S. Jason
|
Englewood,
Colorado 80113
|
(303)
781-7280
|
(Name,
address, including zip code, and telephone number,
including
|
area
code, 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
|
CALCULATION
OF REGISTRATION FEE
|
||||
|
|
|
|
|
Title
of
|
|
|
Proposed
|
|
each
Class
|
|
Proposed
|
Maximum
|
|
of
Securities
|
Amount
|
Offering
|
Aggregate
|
Amount
of
|
to
be
|
to
be
|
Price
|
Offering
|
Registration
|
Registered(2)
|
Registered
|
per
Share
(3)
|
Amount
|
Fee
(1)
|
|
|
|
|
|
Common
Stock
|
800,000
|
$0.25
|
$200,000
|
$100
|
|
(1)
|
Represents
the minimum registration fee.
|
|
(2)
|
We
intend to offer a minimum of 400,000 shares of our common stock (the
"Shares") up to a maximum of 800,000 Shares. We will establish an
escrow
account and all proceeds will be deposited into said account until
such
time as the minimum subscription, or $100,000 is raised, at which
time the
funds will be released to us for use in operations. In the event
we do not
raise the minimum proceeds before the expiration date of the offering,
all
funds raised will be returned promptly to the subscribers without
deductions or interest.
|
|
(3)
|
Estimated
solely for purposes of calculating the registration fee pursuant
to Rule
457(c).
|
|
Public
|
Underwriting
|
|
|
Offering
|
or
Sales
|
Proceeds
to
|
|
Price
|
Commissions
|
Art
Design, Inc.
|
|
|
|
|
Common
Stock
(1)
|
|
|
|
Total
Offering -
|
|
|
|
Minimum
Offering (2)(3)
|
$0.25
|
$
0
|
$100,000
|
Maximum
Offering
|
$0.25
|
$
0
|
$200,000
|
(1)
|
As
of the date of this prospectus, there is no public trading market
for our
common stock and no assurance that a trading market for our shares
will
ever develop.
|
(2)
|
Pending
the receipt and payment of any checks gathered to satisfy the $100,000
minimum, all proceeds will be held in a non-interest bearing escrow
account by the Escrow Agent for this offering. The Escrow Agent is
Community Banks of Colorado, who has the sole signature authority
over
this account and determines whether the minimum offering requirements
are
satisfied. Funds will be deposited in this escrow account no later
than
noon on the business day following receipt. In the event the minimum
is
not sold within the 120-day offering period or any extension of an
additional 90 days at our discretion, this offering will terminate
and all
funds will be returned promptly to subscribers by the Escrow Agent
without
any deductions or payment of interest. Subscribers will not be entitled
to
a return of funds from such escrow during the 120-day offering period
or
any extension period, for a potential total of 210 days. See "Use
of
Proceeds" and "Plan of
Distribution".
|
(3)
|
The
proceeds to the Company are shown before deduction for legal, accounting,
printing, and other expenses, estimated at $27,000. See "Use of Proceeds"
and "Dilution".
|
SUMMARY
OF PROSPECTUS
|
|
4
|
General Information about Our Company
|
|
4
|
The Offering
|
|
4
|
RISK
FACTORS
|
|
6
|
Risks Associated with Our Company
|
|
6
|
Risks Associated with this Offering
|
|
10
|
USE
OF PROCEEDS
|
|
11
|
DETERMINATION
OF OFFERING PRICE
|
|
12
|
DILUTION
OF THE PRICE YOU PAY FOR YOUR SHARES
|
|
12
|
INVESTOR
SUITABILITY REQUIREMENTS
|
|
14
|
Geographical Requirements
|
|
14
|
Requirements for Investors in Texas
|
|
14
|
PLAN
OF DISTRIBUTION
|
|
15
|
LEGAL
PROCEEDINGS
|
|
15
|
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
|
|
15
|
Background Information about Our Officers and Directors
|
|
16
|
EXECUTIVE
COMPENSATION
|
|
17
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
|
17
|
Future
Sales by Existing Stockholders
|
|
18
|
DESCRIPTION
OF SECURITIES
|
|
18
|
Common Stock
|
|
18
|
Preferred Stock
|
|
18
|
Options
|
|
18
|
Shares Eligible for Future Sale
|
|
18
|
Rule 144
|
|
18
|
INDEMNIFICATION
|
|
19
|
DESCRIPTION
OF BUSINESS
|
|
19
|
General Information
|
|
19
|
Overview of our Operations
|
|
19
|
Industry Overview
|
|
20
|
Operations, Management and Employees
|
|
20
|
Marketing and Promotion
|
|
21
|
Patents and Trademarks
|
|
21
|
Competition
|
|
21
|
Government and Industry Regulation
|
|
21
|
Employees and Employment Agreements
|
|
22
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
|
22
|
Results of Operations
|
|
23
|
Liquidity and Capital Resources
|
|
24
|
Plan of Operation
|
|
24
|
Proposed Milestones to Implement Business Operations
|
|
25
|
Recently Issued Accounting Pronouncements
|
|
26
|
Seasonality
|
|
26
|
DESCRIPTION
OF PROPERTY
|
|
26
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
|
26
|
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
|
|
26
|
Reports
|
|
28
|
Stock Transfer Agent
|
|
28
|
SUBSCRIPTION
AGREEMENT AND PROCEDURES
|
|
28
|
EXPERTS
AND LEGAL COUNSEL
|
|
28
|
AVAILABLE
INFORMATION
|
|
28
|
FINANCIAL
STATEMENTS
|
|
F-1
|
Securities
Being Offered
|
A
minimum of 400,000 shares and up to a
maximum
of 800,000 shares of common
stock,
par value $.001.
|
|
|
Offering
Price per Share
|
$0.25
|
|
|
Offering
Period
|
The
shares are being offered for a period not to exceed 120 days, unless
extended by our board of directors for an additional 90
days.
|
|
|
Gross
Proceeds to Our Company
|
$100,000
(Minimum Offering)
$200,000
(Maximum Offering)
|
|
|
Use
of Proceeds
|
We
intend to use the proceeds to pay for offering expenses and to develop
our
current business operations.
|
|
|
Number
of Shares Outstanding Before the Offering:
|
10,300,000
|
|
|
Number
of Shares Outstanding After the Offering:
|
10,700,000
(minimum offering)
11,100,000
(maximum offering)
|
|
|
Plan
of Distribution
|
This
is a self-underwritten offering. This prospectus is part of a registration
statement that permits our officers and directors to sell the Shares
directly to the public, with no commission or other remuneration
payable
to them for any Shares they sell. The officers and directors will
not
purchase Shares in this offering, including, but not limited to,
purchases
of Shares in order to reach the minimum offering
amount..
|
Escrow
Account
|
Pending
sale of the $100,000 minimum, all proceeds will be held in non-interest
bearing escrow account by the Escrow Agent for this offering. The
Escrow
Agent is Community Banks of Colorado. Funds will be deposited in
this
escrow account no later than noon on the business day following receipt.
In the event the minimum is not sold within the 120-day offering
period or
any extension of an additional 90 days at our discretion, this offering
will terminate and all funds will be returned promptly to subscribers
by
the Escrow Agent without any deductions or payment of interest.
Subscribers will not be entitled to a return of funds from such escrow
during the 120-day offering period or any extension period, for a
potential total of 210 days. See "Use of Proceeds" and "Plan of
Distribution".
|
|
|
Use
of Proceeds
|
The
proceeds of this Offering will be used to add inventory, to pay for
marketing activities, and for the costs of the Offering. See “Use of
Proceeds.”
|
|
|
Investor
Suitability Requirements
|
This
offering is limited to investors resident in Colorado and Texas.
Texas
residents must comply with certain requirements. See ”Investor Suitability
Requirements.” Purchasers in any subsequent trading market must comply
with the applicable securities laws of the State in which they purchase
our common stock.
|
|
|
Subscription
Agreement and Procedures
|
We
will accept no subscriptions or indications of interest until our
registration statement is effective. At that point, all subscriptions
must
be made by the execution and delivery of a subscription agreement,
a form
of which is attached to this prospectus as Annex A. Subscriptions
are not
binding until accepted.
|
|
|
Risk
Factors
|
An
investment in these securities involves an exceptionally high degree
of
risk and is extremely speculative in nature. You should carefully
consider
the information set forth in the “Risk Factors”
section.
|
|
|
|
·
|
our
ability to locate clients who will purchase our products and use
our
services; and
|
|
·
|
our
ability to generate revenues.
|
|
Minimum
|
Maximum
|
|
Offering
|
Offering
|
|
|
|
Total
Proceeds
|
$100,000
|
$200,000
|
Less:
Estimated Offering Expenses (1)
|
27,000
|
27,000
|
|
|
|
Proceeds
to Us:
|
$
73,000
|
173,000
|
|
|
|
Expand
Operations(2)
|
$
53,000
|
$153,000
|
Working
Capital(3)
|
$
20,000
|
$20,000
|
|
(1)
|
Offering
expenses include legal, accounting, printing, and escrow agent fees.
The
escrow agent fees are estimated at
$500.
|
|
(2)
|
We
plan to purchase additional inventory for our operations. The inventory
will consist of art work, accessories, and furniture in such combinations
as we feel may be most readily saleable. If we raise an amount between
the
minimum and maximum, we will use it for additional working capital,
at the
discretion of our board of
directors.
|
|
(3)
|
We
plan to spend our working capital in the following areas: marketing
and
sales of the Company's services and for general operations of the
Company.
Most of the funds will be used for mass marketing tools, such as
brochures
or leaflets. We may use some of the funds as refundable advances
for
commission salespeople. The amount and timing of working capital
expenditures may vary significantly depending upon numerous factors
such
as:
|
|
·
|
Sales
generated from present and anticipated
operations,
|
|
·
|
The
development of marketing and sales
resources,
|
|
·
|
Administrative
and legal expenses, and
|
|
·
|
Other
requirements not now known or
estimable.
|
|
|
Minimum
Offering
|
|
Maximum
Offering
|
|
||
|
|
|
|
|
|
||
Public
Offering Price Per Share
|
|
$
|
0.25
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
Net
Tangible Book Value Prior To This Offering
|
|
$
|
0.002
|
|
$
|
0.002
|
|
|
|
|
|
|
|
|
|
Net
Tangible Book Value After Offering
|
|
$
|
0.009
|
|
$
|
0.018
|
|
|
|
|
|
|
|
|
|
Immediate
Dilution Per Share To New Investors
|
|
$
|
0.241
|
|
$
|
0.232
|
|
|
|
Total
|
||
|
Price
Per Share
|
Number
of
Shares
Held
|
Percent
of Ownership
|
Consideration
Paid
|
Existing
Stockholders
|
$0.006
|
10,300,000
|
96%(minimum)
93%(maximum)
|
$65,199
|
|
|
|
|
|
Investors
in This Offering (Minimum)
|
$0.25
|
400,000
|
4%
|
$
100,000
|
|
|
|
|
|
Investors
in This Offering (Maximum)
|
$0.25
|
800,000
|
7%
|
$
200,000
|
Name
and Address
|
Age
|
Position(s)
|
Kathy
Sheehan
3636
S. Jason
Englewood,
Colorado 80113
|
44
|
President,
Chief Executive
Officer,
Treasurer, Chief
Financial
Officer and
Director
|
|
|
|
Todd
Sheehan
3636
S. Jason
Englewood,
Colorado 80113
|
52
|
Secretary
and Director
|
|
|
|
Rebecca
Gregarek
3636
S. Jason
Englewood,
Colorado 80113
|
51
|
Director
|
|
|
|
Percentage
of Ownership
|
||
|
No.
of
|
No.
of
|
|||
Name
and Address
|
Shares
|
Shares
|
Before
|
After
Offering
|
|
Beneficial
|
Before
|
After
|
Offering
|
||
Owner(1)
|
Offering
|
Offering
|
Min.
|
Max.
|
|
|
|
|
|
|
|
Kathy
Sheehan(2)
3636
S. Jason
Englewood,
Colorado 80113
|
5,150,000
|
5,150,000
|
50%
|
48%
|
46%
|
|
|
|
|
|
|
Todd
Sheehan(2)
3636
S. Jason
Englewood,
Colorado 80113
|
5,150,000
|
5,150,000
|
50%
|
48%
|
46%
|
|
|
|
|
|
|
Rebecca
Gregarek(3)
3636
S. Jason
Englewood,
Colorado 80113
|
3,350,000
|
3,350,000
|
33%
|
31%
|
30%
|
|
|
|
|
|
|
Sanders
Huttner Partnership
651
Bering Dr. #2002
Houston,
Texas 77057
|
700,000
|
700,000
|
7%
|
7%
|
6%
|
|
|
|
|
|
|
All
Officers and Directors as a Group (three persons)
|
8,500,000
|
8,500,000
|
83%
|
79%
|
76%
|
|
(1)
|
All
shares of owned beneficially or of record.
|
|
(2)
|
Kathy
and Todd Sheehan are husband and wife. Kathy Sheehan owns 2,550,000
shares
of record. Todd Sheehan owns 2,450,000 shares of record. The minor
children of Mr. and Mrs. Sheehan own a total of 150,000 shares of
record.
|
|
(3)
|
Rebecca
Gregarek owns 3,200,000 shares of record. Her husband owns 100,000
shares
of record. Her minor child owns 50,000 shares of record. Her adult
child
owns 50,000 shares of record, for which she disclaims beneficial
ownership.
|
|
·
|
design
companies selling solely through catalog and online;
|
|
·
|
regional
retailers specializing in design;
|
Balance
Sheet Data: 12/31/05
|
|
|
|
|
|
Cash
|
$6,090
|
|
Total
assets
|
$14,428
|
|
Total
liabilities
|
$50,881
|
|
Shareholders'
equity
|
($36,453)
|
|
|
|
|
|
|
|
Balance
Sheet Data: 9/30/06
|
|
|
|
|
|
Cash
|
$35,941
|
|
Total
assets
|
$66,993
|
|
Total
liabilities
|
$46,451
|
|
Shareholders'
equity
|
$20,542
|
Operating
Data: 12/31/05
|
|
|
|
|
|
Sales-net
of returns
|
$62,009
|
|
Cost
of Goods Sold
|
$54,183
|
|
Gross
Profit
|
$7,826
|
|
Operating
Expenses
|
$10,806
|
|
Net
Income
|
$(2,953)
|
|
|
|
|
Operating Data:
9/30/06
|
|
|
|
|
|
Sale-net
of returns
|
$19,894
|
|
Cost
of Goods Sold
|
$18,803
|
|
Gross
Profit
|
$1,091
|
|
Operating
Expenses
|
$12,812
|
|
Net
Income
|
$(11,704)
|
|
1.
|
Cease
operations and go out of business;
|
|
2.
|
Continue
to seek alternative and acceptable sources of
capital;
|
|
3.
|
Bring
in additional capital that may result in a change of control;
or
|
|
4.
|
Identify
a candidate for acquisition that seeks access to the public marketplace
and its financing sources.
|
· |
contains
a description of the nature and level of risk in the market for penny
stocks in both public offerings and secondary
trading;
|
· |
contains
a description of the broker's or dealer's duties to the customer
and of
the rights and remedies available to the customer with respect to
a
violation to such duties or other requirements of the Securities
Act of
1934, as amended;
|
· |
contains
a brief, clear, narrative description of a dealer market, including
"bid"
and "ask" prices for penny stocks and the significance of the spread
between the bid and ask price;
|
· |
contains
a toll-free telephone number for inquiries on disciplinary
actions;
|
· |
defines
significant terms in the disclosure document or in the conduct of
trading
penny stocks; and
|
· |
contains
such other information and is in such form (including language, type,
size
and format) as the Securities and Exchange Commission shall require
by
rule or regulation;
|
|
·
|
the
bid and offer quotations for the penny
stock;
|
|
·
|
the
compensation of the broker-dealer and its salesperson in the
transaction;
|
|
·
|
the
number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market
for such stock; and
|
|
·
|
monthly
account statements showing the market value of each penny stock held
in
the customer's account.
|
Page
|
|
REPORT
OF INDEPENDENT REGISTERED
|
|
PUBLIC
ACCOUNTING FIRM
|
F-1
|
FINANCIAL
STATEMENTS
|
|
Balance
sheets
|
F-
2
|
Statements
of operations
|
F-3
|
Statements
of stockholders’ equity
|
F-4
|
Statements
of cash flows
|
F-5
|
Notes
to financial statements
|
F-7
|
Sept.
30, 2006
|
|||||||||||||
Dec.
31, 2004
|
Dec.
31, 2005
|
(Unaudited)
|
|||||||||||
ASSETS | |||||||||||||
Current assets | |||||||||||||
Cash
|
$
|
15,902
|
$
|
6,090
|
$
|
35,941
|
|||||||
Accounts
receivable
|
4,510
|
2,751
|
3,597
|
||||||||||
Total
current assets
|
20,412
|
8,841
|
39,538
|
||||||||||
Deferred
offering costs
|
23,200
|
||||||||||||
Fixed
assets
|
13,269
|
13,269
|
13,269
|
||||||||||
Less
accumulated depreciation
|
(6,655
|
)
|
(7,682
|
)
|
(9,014
|
)
|
|||||||
6,614
|
5,587
|
27,455
|
|||||||||||
Total Assets
|
$
|
27,026
|
$
|
14,428
|
$
|
66,993
|
|||||||
LIABILITIES
& STOCKHOLDERS' EQUITY
|
|||||||||||||
Current liabilities
|
|||||||||||||
Accounts
payable
|
$
|
-
|
$
|
235
|
$
|
1,104
|
|||||||
Accounts
payable - related party
|
10,551
|
6,646
|
11,146
|
||||||||||
Unearned
revenue
|
5,975
|
||||||||||||
Note
payable - related party
|
44,000
|
44,000
|
34,201
|
||||||||||
Total
current liabilties
|
60,526
|
50,881
|
46,451
|
||||||||||
Total
Liabilities
|
60,526
|
50,881
|
46,451
|
||||||||||
Stockholders'
Equity
|
|||||||||||||
Preferred
stock, $.10 par value;
|
|||||||||||||
1,000,000
shares authorized;
|
|||||||||||||
No
shares issued & outstanding
|
-
|
-
|
-
|
||||||||||
Common
stock, $.001 par value;
|
|||||||||||||
50,000,000
shares authorized;
|
|||||||||||||
1,000
shares (2004 & 2005) and
|
|||||||||||||
10,300,000
shares (Sept. 2006)
|
|||||||||||||
issued
& outstanding
|
1
|
1
|
10,300
|
||||||||||
Additional
paid
in capital
|
6,999
|
12,999
|
71,399
|
||||||||||
Accumulated
deficit
|
(40,500
|
)
|
(49,453
|
)
|
(61,157
|
)
|
|||||||
Total Stockholders' Equity
|
(33,500
|
)
|
(36,453
|
)
|
20,542
|
||||||||
Total Liabilities and Stockholders' Equity
|
$
|
27,026
|
$
|
14,428
|
$
|
66,993
|
|
|
|
|
Nine
Months
|
|
Nine
Months
|
|
||||||
|
|
|
|
|
|
Ended
|
|
Ended
|
|
||||
|
|
Year
Ended
|
|
Year
Ended
|
|
Sept.
30, 2005
|
|
Sept.
30, 2006
|
|
||||
|
|
Dec.
31, 2004
|
|
Dec.
31, 2005
|
|
(Unaudited)
|
|
(Unaudited)
|
|||||
Sales
- net of returns
|
$
|
73,558
|
$
|
62,009
|
$
|
55,483
|
$
|
19,894
|
|||||
Cost
of goods sold
|
15,973
|
23,605
|
16,385
|
5,505
|
|||||||||
Cost
of goods sold - related party
|
46,511
|
30,578
|
21,263
|
13,298
|
|||||||||
Gross
profit
|
11,074
|
7,826
|
17,835
|
1,091
|
|||||||||
Operating
expenses:
|
|||||||||||||
Amortization
& depreciation
|
2,361
|
1,027
|
770
|
1,332
|
|||||||||
General
and administrative
|
12,547
|
9,779
|
8,263
|
6,980
|
|||||||||
General
and adm. - related party
|
18,000
|
6,000
|
4,500
|
4,500
|
|||||||||
32,908
|
16,806
|
13,533
|
12,812
|
||||||||||
Gain
(loss) from operations
|
(21,834
|
)
|
(8,980
|
)
|
4,302
|
(11,721
|
)
|
||||||
Other
income (expense):
|
|||||||||||||
Other
income
|
50
|
27
|
27
|
17
|
|||||||||
50
|
27
|
27
|
17
|
||||||||||
Income
(loss) before
|
|||||||||||||
provision
for income taxes
|
(21,784
|
)
|
(8,953
|
)
|
4,329
|
(11,704
|
)
|
||||||
Provision
for income tax
|
-
|
-
|
-
|
-
|
|||||||||
Net
income (loss)
|
$
|
(21,784
|
)
|
$
|
(8,953
|
)
|
$
|
4,329
|
$
|
(11,704
|
)
|
||
Net
income (loss) per share
|
|||||||||||||
(Basic
and fully diluted)
|
$
|
(21.78
|
)
|
$
|
(8.95
|
)
|
$
|
4.33
|
$
|
(0.00
|
)
|
||
Weighted
average number of
|
|||||||||||||
common
shares outstanding
|
1,000
|
1,000
|
1,000
|
5,489,333
|
|||||||||
Common
Stock
|
|
|
|
|
|
Stock-
|
|
|||||||||
|
|
|
|
Amount
|
|
Paid
in
|
|
Accumulated
|
|
holders'
|
|
|||||
|
|
Shares
|
|
($.001
Par)
|
|
Capital
|
|
Deficit
|
|
Equity
|
||||||
Balances
at December 31, 2003
|
1,000
|
$
|
1
|
$
|
999
|
$
|
(18,716
|
)
|
$
|
(17,716
|
)
|
|||||
Donated
services - officer
|
6,000
|
6,000
|
||||||||||||||
Gain
(loss) for the year
|
(21,784
|
)
|
(21,784
|
)
|
||||||||||||
Balances
at December 31, 2004
|
1,000
|
$
|
1
|
$
|
6,999
|
$
|
(40,500
|
)
|
$
|
(33,500
|
)
|
|||||
Donated
services - officer
|
6,000
|
6,000
|
||||||||||||||
Gain
(loss) for the year
|
(8,953
|
)
|
(8,953
|
)
|
||||||||||||
Balances
at December 31, 2005
|
1,000
|
$
|
1
|
$
|
12,999
|
$
|
(49,453
|
)
|
$
|
(36,453
|
)
|
|||||
Debt
conversion
|
4,899,000
|
4,899
|
4,900
|
9,799
|
||||||||||||
Issuance
of stock for cash
|
5,400,000
|
5,400
|
49,000
|
54,400
|
||||||||||||
Donated
services - officer
|
4,500
|
4,500
|
||||||||||||||
Gain
(loss) for the period
|
(11,704
|
)
|
(11,704
|
)
|
||||||||||||
Balances
at
|
||||||||||||||||
Sept.
30, 2006 (Unaudited)
|
10,300,000
|
$
|
10,300
|
$
|
71,399
|
$
|
(61,157
|
)
|
$
|
20,542
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
Nine
Months
|
|
Nine
Months
|
|
|||||
|
|
|
|
|
|
|
|
Ended
|
|
Ended
|
|
|||||
|
|
|
|
Year
Ended
|
|
Year
Ended
|
|
Sept.
30, 2005
|
|
Sept.
30, 2006
|
|
|||||
|
|
|
|
Dec.
31, 2004
|
|
Dec.
31, 2005
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|||||
Cash
Flows From Operating Activities:
|
|
|
|
|||||||||||||
Net
income (loss)
|
$
|
(21,784
|
)
|
$
|
(8,953
|
)
|
$
|
4,329
|
$
|
(11,704
|
)
|
|||||
Adjustments
to
reconcile net loss to
|
||||||||||||||||
net
cash provided by (used for)
|
||||||||||||||||
operating
activities:
|
||||||||||||||||
Amortization
& depreciation
|
2,361
|
1,027
|
770
|
1,332
|
||||||||||||
Donated
services
|
6,000
|
6,000
|
4,500
|
4,500
|
||||||||||||
Accounts
receivable
|
1,465
|
1,759
|
2,216
|
(846
|
)
|
|||||||||||
Accrued
payables - related party
|
6,476
|
(3,905
|
)
|
(5,551
|
)
|
4,500
|
||||||||||
Accrued
payables
|
-
|
235
|
235
|
869
|
||||||||||||
Unearned
revenue
|
-
|
(5,975
|
)
|
(5,975
|
)
|
-
|
||||||||||
Net
cash provided by (used for)
|
||||||||||||||||
operating
activities
|
(5,482
|
)
|
(9,812
|
)
|
524
|
(1,349
|
)
|
|||||||||
Cash
Flows From Investing Activities:
|
||||||||||||||||
Fixed
assets
|
(2,001
|
)
|
-
|
-
|
-
|
|||||||||||
Net
cash provided by (used for)
|
||||||||||||||||
investing
activities
|
(2,001
|
)
|
-
|
-
|
-
|
|||||||||||
Nine
Months
|
|
Nine
Months
|
|
|||||||||||||
|
|
|
|
|
|
|
|
Ended
|
|
Ended
|
|
|||||
|
|
|
|
Year
Ended
|
|
Year
Ended
|
|
Sept.
30, 2005
|
|
Sept.
30, 2006
|
|
|||||
|
|
|
|
Dec.
31, 2004
|
|
Dec.
31, 2005
|
|
(Unaudited)
|
|
(Unaudited)
|
||||||
Cash Flows From Financing Activities: | ||||||||||||||||
Note
payable - related party
|
|
15,000
|
|
-
|
$ | |||||||||||
Deferred
offering costs
|
(23,200
|
)
|
||||||||||||||
Issuance
of
common stock
|
54,400
|
|||||||||||||||
Net
cash provided by (used for)
|
||||||||||||||||
financing
activities
|
15,000
|
-
|
-
|
31,200
|
||||||||||||
Net
Increase (Decrease) In Cash
|
7,517
|
(9,812
|
)
|
524
|
29,851
|
|||||||||||
Cash
At The Beginning Of The Period
|
8,385
|
15,902
|
15,902
|
6,090
|
||||||||||||
Cash
At The End Of The Period
|
$
|
15,902
|
$
|
6,090
|
$
|
16,426
|
$
|
35,941
|
||||||||
Schedule
Of Non-Cash Investing And Financing Activities
|
||||||||||||||||
In
2006 the Company issued 4,899,000 shares valued at $9,799 for
|
||||||||||||||||
for
related party debt relief.
|
||||||||||||||||
Supplemental
Disclosure
|
||||||||||||||||
Cash
paid for interest
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Cash
paid for income taxes
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Sept.
30,
|
||||||||||
|
2004
|
2005
|
2006
|
|||||||
Furniture
& Fixtures
|
$
|
2,560
|
$
|
2,560
|
$
|
2,560
|
||||
Computers
|
6,511
|
6,511
|
6,511
|
|||||||
Leasehold
Improvements
|
4,198
|
4,198
|
4,198
|
|||||||
|
13,269
|
13,269
|
13,269
|
|||||||
Less
accumulated depreciation
|
(6,655
|
)
|
(7,682
|
)
|
(9,014
|
)
|
||||
Total
|
$
|
6,614
|
$
|
5,587
|
$
|
4,255
|
1. |
Subscription
|
|
1.1
|
The
undersigned hereby irrevocably subscribes, in accordance with the
terms
and conditions of this Subscription Agreement (the "Agreement"),
for the
purchase of the number of Shares, at the price per Share, set forth
on the
signature page to the Agreement. The undersigned hereby delivers to the
Company (i) an executed copy of this Agreement, (ii) an executed
copy of
the Investor Suitability Questionnaire, if applicable, and. (iii)
personal, bank, cashier's check or wire transfer for the aggregate
purchase price, as reflected on the signature page to this Agreement
(the
"Purchase Price") payable to "Community Banks of Colorado, Escrow
Agent,
for Art Design, Inc., as Escrow agent", as
follows:
|
|
1.2
|
The
Purchase Price and the executed Agreement will be held, for the benefit
of
the undersigned until accepted by the Company pursuant to Section
2 below.
If the Agreement is not accepted by _____ , 2006 in accordance with
Section 2 of this Agreement (the "Termination Date"), then, the Purchase
Price will be promptly returned to the
undersigned.
|
|
1.3
|
After
a determination has been made, based upon the undersigned's
representations herein, that the undersigned is a suitable purchaser
of
the Shares and the conditions set forth in Section 2 are met, the
Company
will accept this Agreement and the Escrow Agent will deliver the
Purchase
Price to the Company. Following delivery of the Purchase Price, the
Company shall promptly deliver to the undersigned a stock certificate
representing the number of Shares for which the undersigned hereby
subscribes.
|
2.
|
Acceptance
of Agreement. It is understood and agreed that the Company shall
have the
right to accept or reject this Agreement, in whole or in part, for
any
reason whatsoever. The shares will be offered at a price of $0.25
per
share for a period of one hundred and twenty (120) days from the
date of
this prospectus, subject to a ninety (90) day extension, for a potential
total of 210 days.
|
3.
|
Representations
and Warranties of Subscriber. Tie undersigned hereby represents and
warrants to the Company (knowing that the Company will be relying
on these
matters to determine the undersigned's suitability as an investor
and the
availability of securities law exemptions)
that:
|
|
3.1
|
The
undersigned has received the Prospectus. Additionally, the Company
has
afforded the undersigned or the undersigned's representative with
access
to and an opportunity to obtain other information regarding the Company
requested by the undersigned. The undersigned has not relied on any
oral
representations of any kind.
|
|
3.2
|
The
undersigned is not "accredited investor" as that term is defined
in Rule
501 of Regulation D under the Securities Act of 1933 (the `Securities
Act"), meaning that the undersigned has either (i) an individual
net worth
or joint net worth with the undersigned's spouse in excess of$l,000.000,
or(ii) an individual annual income in excess of $200,000 in each
of the
two most recent years r a joint income with the undersigned's spouse
in
excess of $300,000 in each of those years, and has a reasonable
expectation of reaching the same income level (ii) the current year,
or
(iii) if a corporation. trust or partnership net formed for the specific
purpose of the investment in the Shares, total assets in excess of
$7,000.000. All statements made by the undersigned in the Investor
Suitability Questionnaire are true, complete and
correct.
|
|
3.3
|
Immediately
prior to the undersigned's execution of this Agreement, the undersigned
had such knowledge and experience in financial and business matters:
(including experience with investments of a similar nature), that
the
undersigned was capable of evaluating the merits and risks of an
investment in the Shares.
|
|
3.4
|
The
undersigned recognizes that the purchase of the Shares is a speculative
investment that involves a high degree of risk, including but not
limited
to those risks referred to in the Prospectus, and is suitable only
for
persons with the financial capability of making and holding long-term
investments not readily reducible to
cash.
|
|
3.5
|
The
undersigned, if not an individual investor, is empowered and duly
authorized to enter into tins Agreement under its governing document,
trust instrument, pension plan, charter, certificate of incorporation,
bylaw provision and the like.
|
|
3.6
|
The type of ownership in which the undersigned is applying to purchase
Shares is as follows: (Check One)
|
_______
|
INDIVIDUAL
OWNERSHIP (One signature required)
|
_______
|
JOINT
TENANTS WITH RIGHT OF SURVIVORSHIP (Both parties must
sign)
|
_______
|
TRUST
(Please include name of trustee, date trust was formed and a copy
of the
Trust Agreement or other authorization)
|
_______
|
CORPORATION
(Please include Certified Corporate Resolution authorizing
signature)
|
_______
|
PARTNERSHIP
(Please include a copy of the Statement of Partnership or Partnership
Agreement authorizing signature)
|
_______
|
COMMUNITY
PROPERTY (Two signatures required)
|
_______
|
TENANTS-IN-COMMON
(Both parties must sign)
|
4.
|
|
Continuing
Obligation to Furnish Information. These representations and warranties
are true, complete and accurate as of the date hereof and shall be
true,
complete and accurate as of the date of delivery of the Purchase
Price to
the Company and shall survive such delivery. If, in ally respect,
such
representations and warranties shall not be true and accurate prior
to
receipt of notice of acceptance of this Agreement, the undersigned
shall
give written notice of such fact to the Company, specifying which
representations and warranties are not true and accurate and the
reasons
therefore.
|
5.
|
|
Miscellaneous.
|
|
5.1
|
Survival.
The representations and warranties made herein shall survive the
consummation of the transaction contemplated
hereby.
|
|
5.2
|
Governing
Law. This Agreement shall be governed by, and construed and enforced
in
accordance with, the laws of the State of Colorado, without regard
to
principles of conflicts of laws.
|
|
5.3
|
In
the event that any dispute where to arise in connection with this
Agreement or with the undersigned's investment in the Company, the
undersigned agrees, prior to seeking any other relief at law or equity,
to
submit the matter to binding arbitration in accordance with the rules
of
the National Association of Securities Dealers at a place to be designated
by the Company.
|
|
5.4
|
Entire
Agreement; Amendment. This agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and
supersedes all other written or oral agreements, understandings and
negotiations. This Agreement may not be amended except by a writing
signed
by both the Company and the
undersigned.
|
|
5.5
|
Attorneys'
Fees. If any action at law and in equity (including arbitration)
is
necessary to enforce or interpret the terms of this Agreement the
prevailing party shall be entitled to reasonable attorney's fees,
costs
and necessary disbursements in addition to any other relief to which
such
party maybe entitled.
|
|
5.6
|
Counterparts.
This Agreement may be executed in one or more counterparts, each
of which
shall be deemed an original and all of which together shall constitute
one
instrument.
|
Signature(s)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name(s)
of Subscriber(s)
|
|
|
|
$
|
20,000
|
|
|
Accounting
|
|
|
5,000
|
|
Registration
fees
|
|
|
100
|
|
Printing
of Prospectus
|
|
|
2,000
|
|
Miscellaneous
|
|
|
900
|
|
|
|
|
|
|
TOTAL
|
|
$
|
27,000
|
|
Name
|
Number
of Shares
|
Consideration
|
Kathy
Sheehan
|
2,449,500
|
$2,449.50
cash and debt cancellation
|
|
|
|
Todd
Sheehan
|
2,449,500
|
$2,449.50
cash and debt cancellation
|
|
|
|
Rebecca
Gregarek
|
3,200,000
|
$3,200
cash
|
|
|
|
Marion
Limited Liability Company
|
200,000
|
$200
cash
|
|
|
|
Total
|
8,299,000
|
|
|
|
|
Name
|
|
Number
of
Shares
|
|
|
|
|
|
|
|
Sanders
Huttner Partnership
|
|
600,000
|
|
|
Michael
Hopkins
|
|
200,000
|
|
|
Don
Weir
|
|
100,000
|
|
|
Mesia
Huttner
|
|
25,000
|
|
|
Maury
Bell
|
|
|
25,000
|
|
Chris
Bell
|
|
|
25,000
|
|
Aaron
Bell
|
|
|
25,000
|
|
|
|
|
|
|
Total
|
|
|
1,000,000
|
|
|
|
|
|
|
Name
|
Number
of
Shares
|
|
|
Jarrold
Bachmann
|
50,000
|
Bruce
Capra
|
20,000
|
Gloria
Colwell
|
10,000
|
Denise
Fernalld
|
10,000
|
Shaun
Forstrom
|
5,000
|
Gerald
Chiasson
|
50,000
|
David
Gregarek
|
100,000
|
Mat
Gregarek
|
50,000
|
Natalie
Gregarek
|
50,000
|
Julian
Shuman
|
50,000
|
Mark
Kinard
|
10,000
|
Tim
Kuzava
|
10,000
|
Damon
Lascala
|
10,000
|
Jennifer
Livermore
|
10,000
|
David
Lutz
|
10,000
|
Michael
Hopkins
|
50,000
|
Mark
Middleton
|
10,000
|
Gary
Miles
|
10,000
|
Michael
Padworski
|
40,000
|
Ruth
Roman
|
15,000
|
Sanders
Huttner Partnership
|
100,000
|
William
Secor
|
10,000
|
Jack
Sheehan
|
50,000
|
Joel
Sheehan
|
50,000
|
Kathy
Sheehan
|
100,000
|
Paige
Sheehan
|
50,000
|
Donna
Tracey
|
10,000
|
John
Warner
|
10,000
|
Bob
Wonish
|
50,000
|
|
|
Total
|
1,000,000
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
3.1
|
|
Articles
of Incorporation*
|
3.2
|
|
Amended
and Restated Articles of Incorporation*
|
3.3
|
|
Bylaws*
|
5.1
|
|
Opinion
re: Legality*
|
9.0
|
|
Form
of Escrow Agreement*
|
23.1
|
|
Consent
of Independent Auditors
|
23.2
|
|
Consent
of Counsel (See Exhibit 5.1)*
|
1.
|
To
file, during any period in which offers or sales are being made,
a
post-effective amendment to this registration statement
to:
|
|
|
(a)
Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
|
|
|
(b)
Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information set
forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered(if the total
dollar
value of securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with
the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in
volume and price represent no more than a 20 percent change in the
maximum
offering price set forth in the “Calculation of Registration Fee” table in
the effective registration statement;
and
|
|
|
(c)
Include any material information with respect to the plan of
distribution not previously disclosed in this registration statement
or any material change to such information in the registration
statement.
|
2.
|
For
determining liability under the Securities Act, treat each such
post-effective amendment as a new registration statement of the securities
offered, and the offering of such securities at that time to be the
initial bona fide offering.
|
3.
|
File
a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the
offering.
|
4.
|
For
determining liability of the undersigned registrant under the Securities
Act 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 the purchaser:
|
|
|
(i)
Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424
;
|
|
|
(ii)
Any free writing prospectus relating to the offering prepared by
or on
behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
|
|
|
(iii)
The portion of any other free writing prospectus relating to the
offering
containing material information about the undersigned registrant
or its
securities provided by or on behalf of the undersigned registrant;
and
|
|
|
(iv)
Any other communication that is an offer in the offering made by
the
undersigned registrant to the
purchaser.
|
|
|
Art
Design, Inc.
|
Date: DECEMBER
13, 2006
|
By
:
|
/s/
Kathy Sheehan
|
|
|
Kathy
Sheehan, President and
Chief Executive and Financial
Officer
|
Date: DECEMBER
13, 2006
|
By:
|
/s/
Kathy Sheehan
|
|
|
Kathy
Sheehan
|
|
|
Director,
Treasurer, Principal Accounting Officer, and Chief Executive and
Financial Officer
|
|
|
|
Date: DECEMBER
13, 2006
|
By:
|
/s/
Todd Sheehan
|
|
|
Todd
Sheehan
|
|
|
Director
and Secretary
|
|
|
|
Date: DECEMBER
13, 2006
|
By:
|
/s/
Rebecca Gregarek
|
|
|
Rebecca
Gregarek
|
|
|
Director
|