form10-k.htm
1/15/UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
[X]
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Annual
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
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For
the Fiscal Year Ended December 31,
2009
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[ ]
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Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
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For
the Transition Period from __________ to
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Commission
File Number: 333-153826
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FASHION
NET, INC.
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(Name
of small business issuer in its charter)
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Nevada
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26-0685980
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
employer identification number)
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222
Columbus Ave., Suite 410
San
Francisco, CA
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94133
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(Address
of principal executive offices)
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(Zip
code)
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Issuer’s
telephone number: (510)
552-2811
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Securities
Registered Pursuant to Section 12(b) of the Act:
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Title
of each class
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Name
of each exchange on which registered
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None
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None
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Securities
Registered Pursuant to Section 12(g) of the Act:
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None
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(Title
of class)
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(Title
of class)
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Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.
Yes
[ ] No [X]
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes [X] No
[ ]
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405) is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
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.:
Large
accelerated filer o
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Accelerated
filer
o
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Non-accelerated
filer o (Do not
check if a smaller reporting company)
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Smaller
reporting company x
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act)
Yes
[X] No [ ]
The
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the most recent price at which the
common equity were sold: $8,500 as of December 31,
2009.
The
number of shares outstanding of each of the issuer's classes of common equity,
as of December 31, 2009 was 10,170,000.
DOCUMENTS
INCORPORATED BY REFERENCE
If the
following documents are incorporated by reference, briefly describe them and
identify the part of the Form 10-K (e.g., Part I, Part II, etc.) into which the
document is incorporated: (1) any annual report to security holders; (2) any
proxy or information statement; and (3) any prospectus filed pursuant to Rule
424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The
listed documents should be clearly described for identification purposes (e.g.,
annual report to security holders for fiscal year ended December 24,
1990).
None.
Transitional
Small Business Disclosure Format (Check one): Yes [ ] No
[X]
FASHION
NET, INC.
FORM
10-K
For the
year ended December 31, 2009
TABLE
OF CONTENTS
PART
I
DESCRIPTION
OF BUSINESS
RISK
FACTORS
UNRESOLVED
STAFF COMMENTS
PROPERTIES
LEGAL
PROCEEDINGS
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART
II
MARKET
FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS MARKET
INFORMATION FOR COMMON STOCK
MANAGEMENT’S
DISCUSSION AND PLAN OF OPERATIONS
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS
CONTROLS
AND PROCEDURES
OTHER
INFORMATION
PART
III
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
EXECUTIVE
COMPENSATION
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
PRINCIPAL
ACCOUNTING FEES AND SERVICES
EXHIBITS
SIGNATURES
FORWARD
LOOKING STATEMENTS
This Annual Report contains forward-looking
statements about our business, financial condition and prospects that reflect
our management’s assumptions and beliefs based on information currently
available. We can give no assurance that the expectations indicated
by such forward-looking statements will be realized. If any of our
assumptions should prove incorrect, or if any of the risks and uncertainties
underlying such expectations should materialize, Fashion Net’s actual results
may differ materially from those indicated by the forward-looking
statements.
The key
factors that are not within our control and that may have a direct bearing on
operating results include, but are not limited to, acceptance of our services,
our ability to expand its customer base, managements’ ability to raise capital
in the future, the retention of key employees and changes in the regulation of
our industry.
There may
be other risks and circumstances that management may be unable to
predict. When used in this Report, words such as, "believes," "expects,"
"intends," "plans," "anticipates," "estimates" and similar
expressions are intended to identify and qualify forward-looking statements,
although there may be certain forward-looking statements not accompanied by such
expressions.
PART
I
Business
Development and Summary
Fashion
Net, Inc. was incorporated in the State of Nevada on August 7,
2007.
On
January 15, 2010, Kasian Franks acquired 10,000,000 shares, or approximately
98.3% of the issued and outstanding shares of our common stock, from Evelyn
Meadows, in a private transaction not involving the Company. On that
same date, Ms. Meadows resigned as our President, Secretary and
Treasurer. Our board of directors appointed Mr. Franks to all offices
vacated by Ms. Meadows. Mr. Franks was also appointed as a director
on such same date.
Our
administrative office is located at 222 Columbus Ave., Suite 410, San Francisco,
California 94133.
Our
fiscal year end is December 31.
Business
of Issuer
Principal
Products and Principal Markets
We are
planning to become a fashion marketing and consulting company serving couture
apparel designers, manufacturers and specialty fashion retailers. We
intend to assist clients implement marketing campaigns using the Internet or
offline digital media. It is our objective to use visual
merchandising to re-design retail formats and provide greater brand and market
awareness.
We
believe there exists a great demand for appealing and highly individualized
styles of clothing and related items. This demand presents tremendous
opportunities for us, as we plan to attempt to establish a niche market by
offering clients and consumers highly individualized merchandising
opportunities. Our approach is to display a potential client’s wares
in a virtual showroom, along with informative articles regarding fashion trends
or designer’s notes. Currently, most fashion houses and retailers,
such as Neiman Marcus and Giorgio Armani, display static pictures of individual
pieces of clothing worn by models. Our concept entails a single model
sporting various pieces of apparel and accessories from head to
toe. A consumer visiting the virtual showroom is expected to be able
to roll his or her mouse over any item to view additional pictures of that item
or clips of information. Our goal is to provide an interactive
experience, while providing information that a consumer would not normally
receive in a retail store setting.
At this
time, we do not anticipate functioning as a clothing retailer. We are
entirely a marketing company. Our management believes that the
services we intend to provide fill the gaps in the fashion industry’s marketing
process and trends. However, we are still in the development stage
and have no clients. Additionally, we have not identified
manufacturers or designers we plan to approach.
Distribution
Methods of the Products
We are
currently in the process of establishing a base of operations in the fashion
industry. We are designing a website that will be published at
www.fashionnetonline.com, which will serve as our store-front and primary means
of attracting clients. We have no methods of distribution in place,
nor will we have any merchandise to distribute.
Industry
Background and Competition
We
compete, in general, with advertising companies for the marketing budgets of
fashion industry participants. We believe there are a significant
number of advertising firms providing services similar and, in most cases,
significantly broader than those proposed to be provided by us. All
of these companies are significantly larger and have substantially greater
financial, technical, marketing and other resources and significantly greater
name recognition. In addition, many of our competitors have
well-established relationships with fashion marketing, consulting design and
retail channels or other similar entities. It is possible that new
competitors or alliances among competitors will emerge in the
future. Our expected competitors may be able to fulfill customer
requests more efficiently than we may be able to. There can be no
assurance that we will be able to compete successfully against present or future
competitors or that competitive pressures will not force us to cease our
operations.
Unfortunately,
we are a start-up company without a base of operations and lacking an ability to
generate sales. As such, our competitive position is unfavorable in
the general marketplace. Unless we implement our planned operations
and begin to generate revenues, we will not be able to maintain our
operations.
Seasonality
Our
future operating results may fluctuate significantly from period to period due
to our reliance on fashion designers, manufacturers and retailers, an industry
that possess intrinsic seasonality. For instance, retailers shift
their inventory from swimwear and light sportswear to coats and sweaters during
the late summer months, prior to the weather cooling, and vice
versa. As a marketing company, we expect the seasonality of our
prospective clients to be beneficial for our business, in that clients will
require our services year-round to update their virtual marketing
campaigns.
Number
of total employees and number of full time employees
Fashion
Net is currently in the development stage. We expect to rely on the
services of Kasian Franks, our sole officer and a director, to set up our
business operations. Mr. Franks currently works for us on a part-time
basis and expects to devote approximately 10-20 hours per week to our business,
or as needed. There are no other full- or part-time
employees. We believe that our operations are currently on a small
scale that is manageable by this one individual.
Reports
to Security Holders
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We
will furnish shareholders with annual financial reports certified by our
independent registered public
accountants.
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2.
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We
are a reporting issuer with the Securities and Exchange
Commission. We file periodic reports, which are required in
accordance with Section 15(d) of the Securities Act of 1933, with the
Securities and Exchange Commission to maintain the fully reporting
status.
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3.
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The
public may read and copy any materials we file with the SEC at the SEC's
Public Reference Room at 100 F Street, N.E., Washington, D.C.
20002. The public may obtain information on the operation of
the Public Reference Room by calling the SEC at
1-800-SEC-0330. Our SEC filings will be available on the SEC
Internet site, located at
http://www.sec.gov.
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RISK
FACTORS
Our sole officer and director work
for us on a part-time basis. As a result, we may be unable to develop
our business and manage our public reporting requirements.
Our
operations depend entirely on the efforts of Kasian Franks, our sole officer and
a director. Mr. Franks has no experience related to public company
management, nor as a principal accounting officer. Because of this,
we may be unable to develop and manage our business. We cannot
guarantee you that we will overcome any such obstacle.
Investors
may lose their entire investment if we fail to implement our business
plan.
Fashion
Net, Inc. was formed in August 2007. We have no demonstrable
operations record, on which you can evaluate our business and
prospects. Our prospects must be considered in light of the risks,
uncertainties, expenses and difficulties frequently encountered by companies in
their early stages of development. These risks include, without
limitation, competition, the absence of ongoing revenue streams, management that
is inexperienced in managing a public company, a competitive market environment
and lack of brand recognition. Fashion Net cannot guarantee that we
will be successful in establishing ourselves in the fashion industry or in
accomplishing our objectives. Since our inception, we have not
generated any revenues and may incur losses in the foreseeable
future. If we fail to implement and create a base of operations for
our proposed fashion marketing business, we may be forced to cease operations,
in which case investors may lose their entire investment.
If
we are unable to continue as a going concern, investors may face a complete loss
of their investment.
We have
yet to commence our planned operations. As of the date of this annual
report, we have had only limited start-up operations and generated no
revenues. Taking these facts into account, our independent registered
public accounting firm has expressed substantial doubt about our ability to
continue as a going concern in the independent registered public accounting
firm’s report to the financial statements included in this annual
report. If our business fails, the investors in this offering may
face a complete loss of their investment.
Investors
will have limited control over decision-making because principal stockholder,
officer and director of Fashion Net control the majority of our issued and
outstanding common stock.
Mr.
Franks, our sole officer and director, beneficially owns approximately 98% of
our outstanding common stock. As a result, this individual could
exercise control over all matters requiring stockholder approval, including the
election of directors and approval of significant corporate
transactions. This concentration of ownership limits the power to
exercise control by the minority shareholders that will have purchased their
stock in this offering.
Fashion
Net may not be able to attain profitability without additional funding, which
may be unavailable.
We have
limited capital resources. To date, we have not generated cash from
our fashion marketing consultation business. Unless we begin to
generate sufficient revenues from our proposed consulting services to finance
operations as a going concern, we may experience liquidity and solvency
problems. Such liquidity and solvency problems may force us to go out
of business if additional financing is not available. We have no
intention of liquidating. In the event our cash resources are
insufficient to continue operations, we intend to raise addition capital through
offerings and sales of equity or debt securities. In the event we are
unable to raise sufficient funds, we will be forced to go out of business and
will be forced to liquidate. A possibility of such outcome presents a
risk of complete loss of investment in our common stock.
Because
of competitive pressures from competitors with more resources, Fashion Net may
fail to implement its business model profitably.
Our sole
officer and director, in her singular and limited research and experience,
believes we compete, in general, with advertising companies for the marketing
budgets of fashion industry participants. We believe there are a
significant number of advertising firms providing services in direct competition
with, and exactly similar to, those proposed to be provided by
us. All of our competitors are significantly larger and have
substantially greater financial, technical, marketing and other resources and
significantly greater name recognition. In addition, many of our
competitors have well-established relationships with fashion marketing,
consulting design and retail channels or other similar entities. It
is possible that new competitors or alliances among competitors will emerge in
the future. Our expected competitors may be able to fulfill customer
requests more efficiently than we may be able to. There can be no
assurance that we will be able to compete successfully against present or future
competitors or that competitive pressures will not force us to cease our
operations.
We
may be unable to generate sales without marketing or distribution
capabilities.
We have
not commenced our planned consulting business and do not have any sales,
marketing or distribution capabilities. Additionally, we have not yet
established our Internet presence, upon which we expect to place significant
reliance to generate awareness of our company and services. We cannot
guarantee that we will be able to develop a sales and marketing plan or to
develop a fully operational and functional web site. In the event we
are unable to successfully implement any one or more of these objectives, we may
be unable to generate sales and operate as a going concern.
If
our computer systems and Internet infrastructure fail, we will be unable to
conduct our business.
We will
depend upon third-party Internet service providers for the design, hosting and
e-commerce capabilities for our proposed website. The performance of
such providers’ Internet infrastructure is critical to our business and
reputation, as well as out ability to attract web users, new customers and
commerce partners. Any system failure that causes an interruption in
service or a decrease in responsiveness of our web site could result in an
impairment of traffic on our web site and, if sustained or repeated, could
materially harm our reputation and the attractiveness of our brand
name. To the extent that we do not effectively address any capacity
constraints, such constraints would have a material adverse effect on its
business, result of operations and financial condition.
Failure
by us to respond to changes in customer preferences could result in lack of
sales revenues and may force us out of business.
Any
change in the preferences of our potential customers or to shifts in the
preferences of the end consumer that we fail to anticipate could reduce the
demand for the fashion consulting services we intend to
provide. Decisions about our focus and the specific services we plan
to offer are to be made in advance and we may be unable to anticipate and
respond to changes in consumer preferences and demands. Such a
failure could lead to, among other things, customer dissatisfaction, failure to
attract demand for our proposed services and lower profit margins.
Seasonality
and fluctuations in our business could make it difficult for you to evaluate our
operations on a period by period basis.
The
clothing industry is highly variable, with fashions changing with the
seasons. Although we believe such seasonality benefits our company’s
proposed services, in that manufacturers and retailers are expected to rely on
our services in reliable cycles, certain manufacturers and retailers may choose
to limit the amount of marketing they conduct during any given
season. For instance, a sportswear manufacturer that experiences the
bulk of its sales in the spring and summer months may reduce its marketing
budget during the fall and winter seasons, thus causing fluctuations in our
operating results. This seasonality, along with other factors that
are beyond our control, including general economic conditions, changes in
consumer behavior and periodic weather anomalies, could adversely affect our
operations and cause our results of operations to fluctuate. Results
of operations in any period should not be considered indicative of the results
to be expected for any future period.
Fashion
Net may lose its top management without employment agreements or due to
conflicts of interest.
Our
operations depend substantially on the skills and experience of Kasian Franks,
our sole director and a officer. We have no other full- or part-time
employees besides this individual. Mr. Franks is currently involved
in other business activities and may, in the future engage in further business
opportunities. Mr. Franks may face a conflict in selecting between
Fashion Net and other business interests. We have not formulated a
policy for the resolution of such conflicts. Furthermore, we do not
maintain key man life insurance on Mr. Franks. Without employment
contracts, we may lose our sole officer and director to other pursuits without a
sufficient warning and, consequently, go out of business.
Because
our common stock is deemed a low-priced “Penny” stock, an investment in our
common stock should be considered high risk and subject to marketability
restrictions.
Since our
common stock is a penny stock, as defined in Rule 3a51-1 under the Securities
Exchange Act, it will be more difficult for investors to liquidate their
investment even if and when a market develops for the common stock. Until the
trading price of the common stock rises above $5.00 per share, if ever, trading
in the common stock is subject to the penny stock rules of the Securities
Exchange Act specified in rules 15g-1 through 15g-10. Those rules require
broker-dealers, before effecting transactions in any penny stock,
to:
1.
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Deliver
to the customer, and obtain a written receipt for, a disclosure
document;
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2.
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Disclose
certain price information about the
stock;
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3.
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Disclose
the amount of compensation received by the broker-dealer or any associated
person of the broker-dealer;
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4.
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Send
monthly statements to customers with market and price information about
the penny stock; and
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5.
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In
some circumstances, approve the purchaser’s account under certain
standards and deliver written statements to the customer with information
specified in the rules.
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Consequently,
the penny stock rules may restrict the ability or willingness of broker-dealers
to sell the common stock and may affect the ability of holders to sell their
common stock in the secondary market and the price at which such holders can
sell any such securities. These additional procedures could also limit our
ability to raise additional capital in the future.
FINRA
sales practice requirements may also limit a stockholder's ability to buy and
sell our stock.
In
addition to the “penny stock” rules described above, the Financial Industry
Regulatory Authority (FINRA) has adopted rules that require that in recommending
an investment to a customer, a broker-dealer must have reasonable grounds for
believing that the investment is suitable for that customer. Prior to
recommending speculative low priced securities to their non-institutional
customers, broker-dealers must make reasonable efforts to obtain information
about the customer's financial status, tax status, investment objectives and
other information. Under interpretations of these rules, the FINRA believes that
there is a high probability that speculative low priced securities will not be
suitable for at least some customers. The FINRA requirements make it more
difficult for broker-dealers to recommend that their customers buy our common
stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for our shares.
Our
internal controls may be inadequate, which could cause our financial reporting
to be unreliable and lead to misinformation being disseminated to the
public.
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. As defined in Exchange Act Rule 13a-15(f),
internal control over financial reporting is a process designed by, or under the
supervision of, the principal executive and principal financial officer and
effected by the board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that: (i) pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of our
assets; (ii) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that our receipts and expenditures
are being made only in accordance with authorizations of our management and
directors, and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements.
You
may not be able to sell your shares in our company because there is no public
market for our stock.
There is
no public market for our common stock. The majority of our issued and
outstanding common stock, 98%, is currently held by Mr. Franks, our sole
officer, a director and an employee. Therefore, the current and
potential market for our common stock is limited. In the absence of
being listed, no market is available for investors in our common stock to sell
their shares. We cannot guarantee that a meaningful trading market
will develop.
If our
stock ever becomes tradable, of which we cannot guarantee success, the trading
price of our common stock could be subject to wide fluctuations in response to
various events or factors, many of which are beyond our control. In
addition, the stock market may experience extreme price and volume fluctuations,
which, without a direct relationship to the operating performance, may affect
the market price of our stock.
UNRESOLVED
STAFF COMMENTS
None.
PROPERTIES
Fashion Net, Inc. uses office space at 222
Columbus Ave., Suite 410, San Francisco, California 94133. Mr. Kasian
Franks, our sole officer, a director and a shareholder, is providing the office
space, at no charge to us. We believe that this arrangement is
suitable given that our current operations are primarily
administrative. We also believe that we will not need to lease
additional administrative offices for at least the next 12
months. There are currently no proposed programs for the renovation,
improvement or development of the facilities we currently use.
Our
management does not currently have policies regarding the acquisition or sale of
real estate assets primarily for possible capital gain or primarily for
income. We do not presently hold any investments or interests in real
estate, investments in real estate mortgages or securities of or interests in
persons primarily engaged in real estate activities.
LEGAL
PROCEEDINGS
No
Director, officer, significant employee, or consultant of Fashion Net, Inc. has
been convicted in a criminal proceeding, exclusive of traffic
violations.
No
Director, officer, significant employee, or consultant of Fashion Net, Inc. has
been permanently or temporarily enjoined, barred, suspended, or otherwise
limited from involvement in any type of business, securities or banking
activities.
No
Director, officer, significant employee, or consultant of Fashion Net, Inc. has
been convicted of violating a federal or state securities or commodities
law.
Fashion
Net, Inc. is not a party to any pending legal proceedings.
No
director, officer, significant employee or consultant of Fashion Net, Inc. has
had any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
PART
II
MARKET FOR REGISTRANT’S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS MARKET INFORMATION FOR COMMON STOCK
Market
information
There is
no established public trading market for our securities and a regular trading
market may not develop, or if developed, may not be sustained. A
shareholder in all likelihood, therefore, will not be able to resell his or her
securities should he or she desire to do so when eligible for public
resale. Furthermore, it is unlikely that a lending institution will
accept our securities as pledged collateral for loans unless a regular trading
market develops. We have no plans, proposals, arrangements or
understandings with any person with regard to the development of a trading
market in any of our securities.
Holders
As of the
date of this prospectus, Fashion Net, Inc. has 10,170,000 shares of $0.001 par
value common stock issued and outstanding held by twenty-eight shareholders of
record. Our Transfer Agent is Empire Stock Transfer, Inc., 1859
Whitney Mesa Dr., Henderson, NV 89014, Phone: (702) 818-5898.
Dividends
Fashion
Net, Inc. has never declared or paid any cash dividends on its common
stock. For the foreseeable future, Fashion Net intends to retain any
earnings to finance the development and expansion of its business, and it does
not anticipate paying any cash dividends on its common stock. Any
future determination to pay dividends will be at the discretion of the Board of
Directors and will be dependent upon then existing conditions, including our
financial condition and results of operations, capital requirements, contractual
restrictions, business prospects and other factors that the board of directors
considers relevant.
Recent
Sales of Unregistered Securities
In August
2007, we issued 10,000,000 shares of our common stock to Evelyn Meadows, our
founding shareholder and former officer and director. This sale of
stock did not involve any public offering, general advertising or
solicitation. The shares were issued in exchange for services
performed by the founding shareholder on our behalf in the amount of
$10,000. Ms. Meadows received compensation in the form of common
stock for performing services related to the formation and organization of our
Company, including, but not limited to, designing and implementing a business
plan and providing administrative office space for use by us; thus, these shares
are considered to have been provided as founder’s
shares. Additionally, the services are considered to have been
donated, and have resultantly been expensed and recorded as a contribution to
capital. At the time of the issuance, Ms. Meadows had fair access to
and was in possession of all available material information about our company,
as she is a former officer and director of Fashion Net, Inc. The
shares bear a restrictive transfer legend. On the basis of these
facts, we claim that the issuance of stock to our founding shareholder qualifies
for the exemption from registration contained in Section 4(2) of the Securities
Act of 1933.
In April
2008, we sold 170,000 shares of our common stock to 28 non-affiliated
shareholders. The shares were issued at a price of $0.05 per share
for total cash in the amount of $8,500. The shares bear a restrictive
transfer legend. This April 2008 transaction (a) involved no general
solicitation, (b) involved less than thirty-five non-accredited purchasers and
(c) relied on a detailed disclosure document to communicate to the investors all
material facts about Fashion Net, Inc., including an audited balance sheet,
statements of income, changes in stockholders’ equity and cash
flows. Each purchaser was given the opportunity to ask questions of
us. Thus, we believe that the offering was exempt from registration
under Regulation D, Rule 505 of the Securities Act of 1933, as
amended.
MANAGEMENT’S
DISCUSSION AND PLAN OF OPERATIONS
Forward-Looking
Statements
The
statements contained in all parts of this document that are not historical facts
are, or may be deemed to be, "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Such forward-looking
statements include, but are not limited to, those relating to the following: the
Company's ability to secure necessary financing; expected growth; future
operating expenses; future margins; fluctuations in interest rates; ability to
continue to grow and implement growth, and regarding future growth,
cash needs, operations, business plans and financial results and any other
statements that are not historical facts.
When used
in this document, the words "anticipate," "estimate," "expect," "may," "plans,"
"project," and similar expressions are intended to be among the statements that
identify forward-looking statements. Fashion Net, Inc.’s results may
differ significantly from the results discussed in the forward-looking
statements. Such statements involve risks and uncertainties,
including, but not limited to, those relating to costs, delays and difficulties
related to the Company’s dependence on its ability to attract and retain skilled
managers and other personnel; intense competition; the uncertainty of the
Company's ability to manage and continue its growth and implement its business
strategy; its vulnerability to general economic conditions; accuracy of
accounting and other estimates; the Company's future financial and operating
results, cash needs and demand for services; and the Company's ability to
maintain and comply with permits and licenses; as well as other risk factors
described in this Annual Report. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual outcomes may vary materially from those projected.
Management’s
Discussion and Analysis
Fashion
Net, Inc. was incorporated in Nevada on August 7, 2007. We are an
early stage company and have not yet realized any revenues since our
formation. Our singular goal is to establish ourselves as a marketing
consulting company for fashion designers, manufacturers and retailers, utilizing
the Internet as a virtual fashion show. To date, however, we have not
attracted any clients and, therefore, no revenues.
On
January 15, 2010, Kasian Franks acquired 10,000,000 shares, or approximately
98.3% of the issued and outstanding shares of our common stock, from Evelyn
Meadows, in a private transaction not involving the Company. On that
same date, Ms. Meadows resigned as our President, Secretary and
Treasurer. Our board of directors appointed Mr. Franks to all offices
vacated by Ms. Meadows. Mr. Franks was also appointed as a director
on such same date.
Our
efforts since our formation have focused primarily on the development and
implementation of our business plan. To that end, our net loss was
$12,265 for the year ended December 31, 2009, consisting solely of general and
administrative expenses. General and administrative expenses mainly
consist of office expenditures and consulting, accounting and legal
fees. During the year ended December 31, 2008, our net loss was
$7,595, all of which is attributable to general and administrative
costs. Losses in the year ended December 31, 2009 were higher than in
the prior year due primarily to consulting fees in the amount of
$5,000. Since our inception, we have accumulated a deficit of
$33,239, consisting of $10,000 in executive compensation paid to Ms. Evelyn
Meadows, a former officer and director, in the form of 10,000,000 shares of
common stock issued for services rendered and $23,239 in general and
administrative expenses. No development related expenses have been or
will be paid to any of our affiliates. We expect to continue to incur
general and administrative expenses for the foreseeable future, although we
cannot estimate the extent of these costs. We have no customers or
any revenue streams, thus, we anticipate incurring net losses for the
foreseeable future.
We are
unable to predict if and when we will begin to generate revenues or stem our
losses. However, our management does anticipate ongoing losses for at
least the next 12 months. There is significant uncertainty projecting
future profitability due to our relatively short operating period, our history
of losses and lack of revenues.
To date,
we had limited operations and minimal funds with which to finance our
operations. In consideration of this dilemma, we sought investment
from third-parties. As a result, since our incorporation, we have
raised capital through the following means:
1.
|
In
August 2007, we issued 10,000,000 shares of our common stock to Evelyn
Meadows, our sole officer and director, in exchange for services performed
valued at $10,000.
|
2.
|
In
April 2008, we sold 170,000 shares of our common stock to twenty-eight
non-affiliated purchasers for cash in the amount of $8,500, in an offering
made under Regulation D, Rule 505, of the Securities Act of 1933, as
amended.
|
3.
|
In
August 2009, a non-affiliated, third-party entity loaned us $1,000 in cash
for operating capital. The note carries no interest and is due
on demand.
|
4.
|
Through
December 31, 2009, Ms. Meadows has contributed cash in the amount of
$4,879 to us for operating capital. The funds were donated and
are not expected to be repaid.
|
We
believe that our cash on hand as of December 31, 2009 in the amount of $129 is
not sufficient to maintain our current level of operations for at least the next
12 months. As a result, our independent auditors have expressed
substantial doubt about our ability to continue as a going concern in the
independent auditors’ report to the financial statements included in this annual
report. If our business fails, our investors may face a complete loss
of their investment. We are currently contemplating requesting
further operating capital from our sole officer and director or seeking debt
financing from third-party sources, neither of which we can be assured of
obtaining. There are no plans to raise capital through sales of our
common equity.
Our
management does not anticipate the need to hire additional full- or part- time
employees over the next 12 months, as the services provided by our current
officers and directors appear sufficient at this time. Our officers
and directors work for us on a part-time basis, and are prepared to devote
additional time, as necessary. We do not expect to hire any
additional employees over the next 12 months.
Our
management does not expect to incur research and development costs.
We do not
have any off-balance sheet arrangements.
We
currently do not own any significant plant or equipment that we would seek to
sell in the near future.
We have
not paid for expenses on behalf of our directors. Additionally, we
believe that this fact shall not materially change.
We
currently do not have any material contracts and or affiliations with third
parties.
Off-Balance
Sheet Arrangements
We do not
have any off-balance sheet arrangements.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
The
following documents (pages F-1 to F-12) form part of the report on the Financial
Statements
|
PAGE
|
|
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
Balance
Sheets
|
F-2
|
Statements
of Operations
|
F-3
|
Statement
of Stockholders’ Equity (Deficit)
|
F-4
|
Statements
of Cash Flows
|
F-5
|
Footnotes
|
F-6
|
Report of Independent
Registered Public Accounting Firm
To The
Board of Directors and Stockholders
Fashion
Net, Inc.
Las
Vegas, NV
We have
audited the accompanying balance sheets of Fashion Net, Inc. (A Development
Stage Enterprise) as of December 31, 2009 and 2008, and the related statements
of operations, stockholders’ equity (deficit), and cash flows for the years then
ended and from inception (August 7, 2007) to December 31, 2009. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial statements based on our
audit.
We
conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Fashion Net, Inc. (A Development
Stage Enterprise) as of December 31, 2009 and 2008, and the results of their
operations and cash flows for the years then ended and from inception (August 7,
2007) to December 31, 2009 in conformity with accounting principles generally
accepted in the United States.
The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern. As discussed in Note 1 to the financial statements,
the Company has suffered recurring losses from operations, which 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 3. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
De Joya
Griffith & Company, LLC
/s/ De
Joya Griffith & Company, LLC
Henderson,
Nevada
February
26, 2010
2580
Anthem Village Drive, Henderson, NV 89052
Telephone
(702) 563-1600 ● Facsimile (702)
920-8049
F1
Fashion
Net, Inc.
(a
Development Stage Company)
Balance
Sheets
|
|
December
31,
|
|
|
December
31,
|
|
|
|
2009
|
|
|
2008
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash
|
|
$ |
129 |
|
|
$ |
2,854 |
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$ |
129 |
|
|
$ |
2,854 |
|
|
|
|
|
|
|
|
|
|
Liabilities
and Stockholders’ Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$ |
989 |
|
|
$ |
449 |
|
Total
current liabilities
|
|
|
989 |
|
|
|
449 |
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
$ |
989 |
|
|
$ |
449 |
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity (deficit):
|
|
|
|
|
|
|
|
|
Common
stock, $0.001 par value, 75,000,000 shares
|
|
|
|
|
|
|
|
|
authorized,
10,170,000 issued and outstanding
|
|
|
10,170 |
|
|
|
10,170 |
|
Additional
paid-in capital
|
|
|
22,209 |
|
|
|
13,209 |
|
(Deficit)
accumulated during development stage
|
|
|
(33,239 |
) |
|
|
(20,974 |
) |
Total
stockholders’ equity (deficit)
|
|
|
(860 |
) |
|
|
(20,974 |
) |
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders’ equity (deficit)
|
|
$ |
129 |
|
|
$ |
2,854 |
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial
statements.
F2
Fashion
Net, Inc.
(a
Development Stage Company)
Statements
of Operations
|
|
For
the years ended
|
|
|
Inception
|
|
|
|
December
31,
|
|
|
(August
7, 2007) to
|
|
|
|
2009
|
|
|
2008
|
|
|
December
31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
compensation
|
|
|
- |
|
|
|
- |
|
|
|
10,000 |
|
General
and administrative expenses
|
|
|
12,265 |
|
|
|
7,595 |
|
|
|
23,239 |
|
Total
expenses
|
|
|
12,265 |
|
|
|
7,595 |
|
|
|
33,239 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
before provision for income taxes
|
|
|
(12,265 |
) |
|
|
(7,595 |
) |
|
|
(33,239 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$ |
(12,265 |
) |
|
$ |
(7,595 |
) |
|
$ |
(33,239 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of
|
|
|
|
|
|
|
|
|
|
|
|
|
common
shares outstanding - basic
|
|
|
10,170,000 |
|
|
|
10,121,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss per share-basic
|
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial
statements.
F3
Fashion
Net, Inc.
(a
Development Stage Company)
Statements
of Stockholders’ Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
(Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
Common
Stock
|
|
|
Additional
|
|
|
During
|
|
|
Total
|
|
|
|
|
|
|
Paid-in
|
|
|
Development
|
|
|
Stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Stage
|
|
|
Equity
/ (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August
7, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Founders
shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
for services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.001
per share
|
|
|
10,000,000 |
|
|
$ |
10,000 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August
13, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donated
capital
|
|
|
- |
|
|
|
- |
|
|
|
200 |
|
|
|
- |
|
|
|
200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
13, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donated
capital
|
|
|
- |
|
|
|
- |
|
|
|
2,500 |
|
|
|
- |
|
|
|
2,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October
19, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donated
capital
|
|
|
- |
|
|
|
- |
|
|
|
120 |
|
|
|
- |
|
|
|
120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November
9, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donated
capital
|
|
|
- |
|
|
|
- |
|
|
|
299 |
|
|
|
- |
|
|
|
299 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(13,379 |
) |
|
|
(13,379 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2007
|
|
|
10,000,000 |
|
|
|
10,000 |
|
|
|
3,119 |
|
|
|
(13,379 |
) |
|
|
(260 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February
22, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donated
capital
|
|
|
- |
|
|
|
- |
|
|
|
600 |
|
|
|
- |
|
|
|
600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
7, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donated
capital
|
|
|
- |
|
|
|
- |
|
|
|
160 |
|
|
|
- |
|
|
|
160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April
16, 2008
|
|
|
- |
|
|
|
- |
|
|
|
1,000 |
|
|
|
- |
|
|
|
1,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April
17, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private
placement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.05
per share
|
|
|
170,000 |
|
|
|
170 |
|
|
|
8,330 |
|
|
|
- |
|
|
|
8,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(7,595 |
) |
|
|
(7,595 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2008
|
|
|
10,170,000 |
|
|
$ |
10,170 |
|
|
$ |
13,209 |
|
|
$ |
(20,974 |
) |
|
$ |
2,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assumption
of liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
by
officer/director
|
|
|
- |
|
|
|
- |
|
|
|
9,000 |
|
|
|
- |
|
|
|
9,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(12,265 |
) |
|
|
(12,265 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2009
|
|
|
10,170,000 |
|
|
$ |
10,170 |
|
|
$ |
22,209 |
|
|
$ |
(33,239 |
) |
|
$ |
(860 |
) |
The accompanying notes are an
integral part of these financial statements.
F4
Fashion
Net, Inc.
(a
Development Stage Company)
Statements
of Cash Flows
|
|
For
the years ended
|
|
|
Inception
|
|
|
|
December
31,
|
|
|
(August
7, 2007) to
|
|
|
|
2009
|
|
|
2008
|
|
|
December
31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$ |
(12,265 |
) |
|
$ |
(7,595 |
) |
|
$ |
(33,239 |
) |
Adjustments
to reconcile net (loss) to
|
|
|
|
|
|
|
|
|
|
|
|
|
net
cash (used) by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for executive compensation
|
|
|
- |
|
|
|
- |
|
|
|
10,000 |
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(decrease) in accounts payable
|
|
|
540 |
|
|
|
(11 |
) |
|
|
989 |
|
Net
cash (used) by operating activities
|
|
|
(11,725 |
) |
|
|
(7,606 |
) |
|
|
(22,250 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Donated
capital
|
|
|
9,000 |
|
|
|
1,760 |
|
|
|
13,879 |
|
Increase
in notes payable
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Issuances
of common stock
|
|
|
- |
|
|
|
8,500 |
|
|
|
8,500 |
|
Net
cash provided by financing activities
|
|
|
9,000 |
|
|
|
10,260 |
|
|
|
22,379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash
|
|
|
(2,725 |
) |
|
|
2,654 |
|
|
|
129 |
|
Cash
– beginning
|
|
|
2,854 |
|
|
|
200 |
|
|
|
- |
|
Cash
– ending
|
|
$ |
129 |
|
|
$ |
2,854 |
|
|
$ |
129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Income
taxes paid
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash
transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for executive compensation
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
10,000 |
|
Number
of shares issued for executive compensation
|
|
$ |
- |
|
|
$ |
- |
|
|
|
10,000,000 |
|
Forgiveness
of liabilities
|
|
$ |
9,000 |
|
|
$ |
- |
|
|
$ |
9,000 |
|
The
accompanying notes are an integral part of these financial
statements.
F5
Fashion
Net, Inc.
(a
Development Stage Company)
Notes
to Financial Statements
December
31, 2009
Note
1 – History and organization of the company
The
Company was organized August 7, 2007 (Date of Inception) under the laws of the
State of Nevada, as Fashion Net, Inc. The Company is authorized to
issue up to 75,000,000 shares of its common stock with a par value of $0.001 per
share.
The
business of the Company is to serve as a fashion marketing / consulting company
for specialty apparel goods for trendy consumers by introducing rapidly changing
market trends and reforming the business process and the supply process by
reconstructing the method of merchandising through an online
boutique. The Company has limited operations and in accordance with
FASB ASC 915-10, “Development Stage Entities,” the Company is considered a
development stage company.
Note
2 – Accounting policies and procedures
Year end
The
Company has adopted December 31 as its fiscal year end.
Use of
estimates
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.
The
Company maintains a cash balance in a non-interest-bearing account that
currently does not exceed federally insured limits. For the purpose
of the statements of cash flows, all highly liquid investments with an original
maturity of three months or less are considered to be cash
equivalents. There were no cash equivalents as of December 31, 2009
and 2008.
Concentrations of Risks:
Cash Balances
The
Company maintains its cash in institutions insured by the Federal Deposit
Insurance Corporation (FDIC). This government corporation insured
balances up to $100,000 through October 13, 2008. As of October 14,
2008 all non-interest bearing transaction deposit accounts at an FDIC-insured
institution, including all personal and business checking deposit accounts that
do not earn interest, are fully insured for the entire amount in the deposit
account. This unlimited insurance coverage is temporary and will
remain in effect for participating institutions until December 31,
2009.
All other
deposit accounts at FDIC-insured institutions are insured up to at least
$250,000 per depositor until December 31, 2009. On January 1, 2010,
FDIC deposit insurance for all deposit accounts, except for certain retirement
accounts, will return to at least $100,000 per depositor. Insurance
coverage for certain retirement accounts, which include all IRA deposit
accounts, will remain at $250,000 per depositor.
Revenue
recognition
The
Company recognizes revenue and gains when earned and related costs of sales and
expenses when incurred.
Loss per
share
Net loss
per share is provided in accordance with FASB ASC 260-10, “Earnings per
Share”. Basic loss per share is computed by dividing losses available
to common stockholders by the weighted average number of common shares
outstanding during the period. Diluted income (loss) per share gives
effect to all dilutive potential common shares outstanding during the period.
Dilutive loss per share excludes all potential common shares if their effect is
anti-dilutive. The Company had no dilutive common stock equivalents, such as
stock options or warrants as of December 31, 2009 and 2008.
F6
Fashion
Net, Inc.
(a
Development Stage Company)
Notes
to Financial Statements
December
31, 2009
Note
2 – Accounting policies and procedures (continued)
Advertising
costs
The
Company expenses all costs of advertising as incurred. There were no
advertising costs included in selling, general and administrative expenses at
December 31, 2009 and 2008.
Fair value of financial
instruments
Fair
value estimates discussed herein are based upon certain market assumptions and
pertinent information available to management as of December 31, 2009 and
2008. The respective carrying value of certain on-balance-sheet
financial instruments approximated their fair values. Fair values
were assumed to approximate carrying values for cash and payables because they
are short term in nature and their carrying amounts approximate fair values or
they are payable on demand.
Income
Taxes
The
Company follows FASB ASC 740-10, “Income Taxes” for recording the provision for
income taxes. Deferred tax assets and liabilities are computed based
upon the difference between the financial statement and income tax basis of
assets and liabilities using the enacted marginal tax rate applicable when the
related asset or liability is expected to be realized or
settled. Deferred income tax expenses or benefits are based on the
changes in the asset or liability each period. If available evidence
suggests that it is more likely than not that some portion or all of the
deferred tax assets will not be realized, a valuation allowance is required to
reduce the deferred tax assets to the amount that is more likely than not to be
realized. Future changes in such valuation allowance are included in
the provision for deferred income taxes in the period of change.
Deferred
income taxes may arise from temporary differences resulting from income and
expense items reported for financial accounting and tax purposes in different
periods. Deferred taxes are classified as current or non-current,
depending on the classification of assets and liabilities to which they
relate. Deferred taxes arising from temporary differences that are
not related to an asset or liability are classified as current or non-current
depending on the periods in which the temporary differences are expected to
reverse.
General and administrative
expenses
The
significant components of general and administrative expenses consist of meals
and entertainment expenses, legal and professional fees, outside services,
office supplies, postage, and travel expenses.
Segment
reporting
The
Company follows FASB ASC 220-10, “Comprehensive Income”. The Company operates as
a single segment and will evaluate additional segment disclosure requirements as
it expands its operations.
TheCompany
has not yet adopted any policy regarding payment of dividends. No
dividends have been paid or declared since inception.
Recent
pronouncements
In June
2009, the Financial Accounting Standards Board (“FASB”) issued FASB ASC 105-10,
“Generally Accepted Accounting Principles.” FASB ASC 105-10 sets
forth the level of authority to a given accounting pronouncement or document by
category. Where there might be conflicting guidance between two categories, the
more authoritative category will prevail. FASB ASC 105-10 will be effective for
financial statements issued for reporting periods that end after September 15,
2009.
In June
2009, the Financial Accounting Standards Board (“FASB”) issued FASB ASC
810-10, “Consolidation”. The
amendments include: (1) the elimination of the exemption for qualifying special
purpose entities, (2) a new approach for determining who should consolidate a
variable-interest entity, and (3) changes to when it is necessary to reassess
who should consolidate a variable-interest entity. SFAS 167 is effective for the
first annual reporting period beginning after November 15, 2009 and for interim
periods within that first annual reporting period. The Company will adopt FASB
ASC 810-10 in fiscal 2010. The Company does not expect that the adoption of FASB
ASC 810-10 will have a material impact on the financial statements.
F7
Fashion
Net, Inc.
(a
Development Stage Company)
Notes
to Financial Statements
December
31, 2009
Note
2 – Accounting policies and procedures (continued)
Recent
pronouncements
In
June 2009, the Financial Accounting Standards Board (“FASB”) issued FASB
ASC 860-10, “Transfers of and Servicing”, which eliminates the concept of a
“qualifying special-purpose entity,” changes the requirements for derecognizing
financial assets, and requires additional disclosures in order to enhance
information reported to users of financial statements by providing greater
transparency about transfers of financial assets, including securitization
transactions, and an entity’s continuing involvement in and exposure to the
risks related to transferred financial assets. FASB ASC 860-10 is effective for
fiscal years beginning after November 15, 2009. The Company will adopt
FASB ASC 860-10 in fiscal 2010. The Company does not expect that the adoption of
FASB ASC 860-10 will have a material impact on the financial
statements.
In June
2009, the Financial Accounting Standards Board (“FASB”) issued FASB ASC 855-10
“Subsequent Events,” FASB ASC 855-10 establishes general standards of accounting
for and disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. FASB ASC 855-10
applies to both interim financial statements and annual financial statements.
FASB ASC 855-10 is effective for interim or annual financial periods ending
after June 15, 2009. FASB ASC 855-10 did not have a material impact on our
financial statements.
Note
3 - Going concern
The
Company’s financial statements are prepared using generally accepted accounting
principles in the United States of America applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. The Company has not yet established an ongoing source
of revenues sufficient to cover its operating costs and allow it to continue as
a going concern. The Company had an accumulated deficit of $33,239. The ability
of the Company to continue as a going concern is dependent on the Company
obtaining adequate capital to fund operating losses until it becomes profitable.
If the Company is unable to obtain adequate capital, it could be forced to cease
operations.
In order
to continue as a going concern, the Company will need, among other things,
additional capital resources. The Company is contemplating conducting
an offering of its debt or equity securities to obtain additional operating
capital. The Company is dependent upon its ability, and will continue
to attempt, to secure equity and/or debt financing. There are no
assurances that the Company will be successful and without sufficient financing
it would be unlikely for the Company to continue as a going
concern.
The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. These financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts, or amounts
and classification of liabilities that might result from this
uncertainty.
Note
4 – Income taxes
For the
years ended December 31, 2009 and 2008, the Company incurred net operating
losses and, accordingly, no provision for income taxes has been
recorded. In addition, no benefit for income taxes has been recorded
due to the uncertainty of the realization of any tax assets. At December 31,
2009 and 2008, the Company had approximately $33,239 and $20,974 of federal and
state net operating losses. The net operating loss carryforwards, if
not utilized, will begin to expire in 2027. The provision for income taxes
consisted of the following components for the year ended December
31:
F8
Fashion
Net, Inc.
(a
Development Stage Company)
Notes
to Financial Statements
December
31, 2009
Note
4 – Income taxes (continued)
Components
of net deferred tax assets, including a valuation allowance, are as follows at
December 31:
|
|
December
31,
|
|
|
|
2009
|
|
|
2008
|
|
Deferred
tax assets:
|
|
|
|
|
|
|
Net
operating loss carryforwards
|
|
|
11,634 |
|
|
|
7,341 |
|
Valuation
allowance
|
|
|
(11,634 |
) |
|
|
(7,341 |
) |
Total
deferred tax assets
|
|
$ |
-0- |
|
|
$ |
-0- |
|
The
valuation allowance for deferred tax assets as of December 31, 2009 and 2008 was
$11,634 and $7,341, respectively. In assessing the recovery of the
deferred tax assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will not be realized. The
ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income in the periods in which those temporary differences become
deductible. Management considers the scheduled reversals of future
deferred tax liabilities, projected future taxable income, and tax planning
strategies in making this assessment. As a result, management
determined it was more likely than not the deferred tax assets would not be
realized as of December 31, 2009 and 2008, and recorded a full valuation
allowance.
Reconciliation
between the statutory rate and the effective tax rate is as follows at December
31, 2009:
2009 &
2008
Federal
statutory tax
rate (35.0) %
Permanent
difference and
other 35.0 %
Note
5 – Stockholders’ equity / (deficit)
The
Company is authorized to issue 75,000,000 shares of its $0.001 par value common
stock.
On August
7, 2007 the Company issued 10,000,000 shares of its $0.001 par value common
stock as founders’ shares to an officer and director in exchange for services
rendered valued at $10,000.
On August
13, 2007, an officer and director of the Company donated cash in the amount of
$200. The entire amount was donated, is not expected to be repaid and
is considered to be additional paid-in capital.
On
September 13, 2007, an officer and director of the Company donated cash in the
amount of $2,500. The entire amount was donated, is not expected to
be repaid and is considered to be additional paid-in capital.
On
October 19, 2007, an officer and director of the Company donated cash in the
amount of $120. The entire amount was donated, is not expected to be
repaid and is considered to be additional paid-in capital.
On
November 9, 2007, an officer and director of the Company donated cash in the
amount of $299. The entire amount was donated, is not expected to be
repaid and is considered to be additional paid-in capital.
On
February 22, 2008, an officer and director of the Company donated cash in the
amount of $600. The entire amount was donated, is not expected to be
repaid and is considered to be additional paid-in capital.
On March
7, 2008, an officer and director of the Company donated cash in the amount of
$160. The entire amount was donated, is not expected to be repaid and
is considered to be additional paid-in capital.
F9
Fashion
Net, Inc.
(a
Development Stage Company)
Notes
to Financial Statements
December
31, 2009
Note
5 – Stockholders’ equity / (deficit) (continued)
On April
16, 2008, an officer and director of the Company donated cash in the amount of
$1,000. The entire amount was donated, is not expected to be repaid
and is considered to be additional paid-in capital.
On April
17, 2008, the Company issued an aggregate of 170,000 shares of its $0.001 par
value common stock for total cash of $8,500 in a private placement pursuant to
Regulation D, Rule 505, of the Securities Act of 1933, as amended.
On
December 31, 2009, an officer and director agreed to assume $9,000 of accounts
payable and notes payable of the Company. The entire amount is not
expected to be repaid to the officer and director and is considered to be
additional paid-in capital.
As of
December 31, 2009, there have been no other issuances of common
stock.
Note
6 – Warrants and options
As of
December 31, 2009, there were no warrants or options outstanding to acquire any
additional shares of common stock.
Note
7 – Related party transactions
The
Company issued 10,000,000 shares of its par value common stock as founders’
shares to an officer and director in exchange for services rendered in the
amount of $10,000.
Since the
inception of the Company through the year ended December 31, 2008, a
shareholder, officer and director of the Company donated cash to the Company in
the amount of $4,879. This amount has been donated to the Company, is
not expected to be repaid and is considered additional paid-in
capital.
On
December 31, 2009, an officer and director agreed to assume $9,000 of accounts
payable and notes payable of the Company. The entire amount is not
expected to be repaid to the officer and director and is considered to be
additional paid-in capital.
The
Company does not lease or rent any property. Office services are
provided without charge by an officer and director of the
Company. Such costs are immaterial to the financial statements and,
accordingly, have not been reflected therein. The officers and
directors of the Company are involved in other business activities and may, in
the future, become involved in other business opportunities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business
interests. The Company has not formulated a policy for the resolution
of such conflicts.
Note
8 –Subsequent Events
The
Company has evaluated subsequent events through February 26, 2010, the date the
financial statements were available to be issued.
On
January 15, 2010, Kasian Franks acquired 10,000,000 shares, or approximately
98.3% of the issued and outstanding shares of common stock of the Company, from
Evelyn Meadows, in a private transaction.
On
January 15, 2010, Ms. Meadows resigned as President, Chief Executive Officer,
Secretary and Treasurer of the Company. The board of directors
appointed Mr. Franks to all offices vacated by Ms. Meadows. Mr.
Franks was also appointed as a director of the Company on such same
date.
F10
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS
None.
CONTROLS
AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
We
maintain a set of disclosure controls and procedures designed to ensure that
information we are required to disclose in reports filed under the Securities
Exchange Act is recorded, processed, summarized and reported within the time
periods specified by the SEC’s rules and forms. Disclosure controls
are also designed with the objective of ensuring that this information is
accumulated and communicated to our management, including our chief executive
officer and chief financial officer, as appropriate, to allow timely decisions
regarding required disclosure.
Based
upon their evaluation as of the end of the period covered by this report, our
chief executive officer and chief financial officer concluded that our
disclosure controls and procedures are not effective to ensure that information
required to be included in our periodic SEC filings is recorded, processed,
summarized, and reported within the time periods specified in the SEC rules and
forms.
Our Board
of Directors were advised by De Joya Griffith & Company, LLC, the Company’s
independent registered public accounting firm, that during their performance of
audit procedures for 2009 De Joya Griffith & Company, LLC identified a
material weakness as defined in Public Company Accounting Oversight Board
Standard No. 2 in the Company’s internal control over financial
reporting.
This
deficiency consisted primarily of inadequate staffing and supervision that could
lead to the untimely identification and resolution of accounting and disclosure
matters and failure to perform timely and effective reviews. However,
the size of the Company prevents us from being able to employ sufficient
resources to enable us to have adequate segregation of duties within our
internal control system. Management is required to apply its judgment
in evaluating the cost-benefit relationship of possible controls and
procedures.
Management’s
Annual Report on Internal Control over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial
reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the
Securities Exchange Act of 1934 as a process designed by, or under the
supervision of, the company’s principal executive and principal financial
officers and effected by the company’s board of directors, management and other
personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the
United States of America and includes those policies and procedures
that:
1.
|
Pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the
company;
|
2.
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America and that
receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company;
and
|
3.
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the company’s assets that
could have a material effect on the financial
statements.
|
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. All internal control
systems, no matter how well designed, have inherent
limitations. Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation. Because of the inherent limitations of
internal control, there is a risk that material misstatements may not be
prevented or detected on a timely basis by internal control over financial
reporting. However, these inherent limitations are known features of the
financial reporting process. Therefore, it is possible to design into
the process safeguards to reduce, though not eliminate, this risk.
As of
December 31, 2009, management assessed the effectiveness of our internal control
over financial reporting based on the criteria for effective internal control
over financial reporting established in Internal Control--Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
("COSO") and SEC guidance on conducting such assessments. Based on
that evaluation, they concluded that, during the period covered by this report,
such internal controls and procedures were not effective to detect the
inappropriate application of US GAAP rules as more fully described
below. This was due to deficiencies that existed in the design or
operation of our internal controls over financial reporting that adversely
affected our internal controls and that may be considered to be material
weaknesses.
The
matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee due
to a lack of a majority of independent members and a lack of a majority of
outside directors on our board of directors, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and
procedures; (2) inadequate segregation of duties consistent with control
objectives; and (3) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned material weaknesses were
identified by our Chief Executive Officer in connection with the review of our
financial statements as of December 31, 2009.
Management
believes that the material weaknesses set forth in items (2) and (3) above did
not have an effect on our financial results. However, management
believes that the lack of a functioning audit committee and the lack of a
majority of outside directors on our board of directors results in ineffective
oversight in the establishment and monitoring of required internal controls and
procedures, which could result in a material misstatement in our financial
statements in future periods.
This
annual report does not include an attestation report of the Corporation's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the
Corporation's registered public accounting firm pursuant to temporary rules of
the SEC that permit the Corporation to provide only the management's report in
this annual report.
Changes
in Internal Control over Financial Reporting
There
were no changes in our internal control over financial reporting that occurred
during our most recent fiscal quarter that have materially affected, or
reasonably likely to materially affect, our internal control over financial
reporting.
OTHER
INFORMATION
None.
PART
III
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Fashion
Net, Inc.'s Directors are elected by the stockholders to a term of one (1) year
and serve until their successors are elected and qualified. The
officers are appointed by the Board of Directors to a term of one (1) year and
serves until his/her successor is duly elected and qualified, or until he/she is
removed from office. The Board of Directors has no nominating,
auditing, or compensation committees.
The names
and ages of our directors and executive officers and their positions are as
follows:
Name
|
Position
|
Period
of Service(1)
|
|
|
|
Kasian
Franks(2)
|
President,
CEO and Director
|
January
2010 – August 2011
|
Notes:
1.
|
Our
director will hold office until the next annual meeting of the
stockholders, which shall be held in August of 2011, and until a
successor(s) has been elected and qualified. Our officer was
appointed by our sole director and will hold office until he resigns or is
removed from office.
|
2.
|
Mr.
Franks has obligations to entities other than Fashion Net. We
expect Mr. Franks to spend approximately 10-20 hours per week on our
business affairs, as necessary. At the date of this annual
report, Fashion Net is not engaged in any transactions, either directly or
indirectly, with any persons or organizations considered
promoters.
|
Background
of Directors, Executive Officers, Promoters and Control Persons
Kasian Franks: Mr. Franks
worked as software engineer and product developer specializing in pattern
matching algorithms and tools for companies and organizations such as Sun
Microsystems, Oracle, Motorola, Tivo, mPower, and X-Mine. Franks worked at the
U.S. Department of Energy’s Lawrence Berkeley National Laboratory (LBNL), Life
Sciences Division, as a Genomic Research Scientist from 2002-2005, where, along
with Raf Podowski, and Connie Myers, he developed the technology behind SeeqPod.
Franks began to study biomimetics along with pattern matching in data and
nature. This lead to 5 patents in the area of search and discovery. Later he
went on to start SeeqPod Inc. a music search, discovery and pattern matching
company in which the U.S. Department of Energy, along with Lawrence Berkeley
National Laboratory, holds a 5% stake. Under Steven Chu and Lawerence Berkeley
National Lab, Franks and SeeqPod won the 2008 R&D 100 award for biomimetic
search engines. A number of record companies have attempted to sue SeeqPod,
including Warner Music Group, Elektra Records, Rhino Records, and most recently
EMI and Capitol Records.
Family
Relationships
None.
Involvement
on Certain Material Legal Proceedings During the Last Five Years
No
director, officer, significant employee or consultant has been convicted in a
criminal proceeding, exclusive of traffic violations.
No
bankruptcy petitions have been filed by or against any business or property of
any director, officer, significant employee or consultant of the Company nor has
any bankruptcy petition been filed against a partnership or business association
where these persons were general partners or executive officers.
No
director, officer, significant employee or consultant has been permanently or
temporarily enjoined, barred, suspended or otherwise limited from involvement in
any type of business, securities or banking activities.
No
director, officer or significant employee has been convicted of violating a
federal or state securities or commodities law.
Audit
Committee and Financial Expert
We do not
have an Audit Committee. Our director performs some of the same functions of an
Audit Committee, such as: recommending a firm of independent certified public
accountants to audit the annual financial statements; reviewing the independent
auditors independence, the financial statements and their audit report; and
reviewing management's administration of the system of internal accounting
controls. The Company does not currently have a written audit committee charter
or similar document.
We have
no financial expert. We believe the cost related to retaining a financial expert
at this time is prohibitive. Further, because of our start-up operations, we
believe the services of a financial expert are not warranted.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our directors
and executive officers, and persons who beneficially own more than 10% of a
registered class of our equity securities, to file reports of beneficial
ownership and changes in beneficial ownership of our securities with the SEC on
Forms 3 (Initial Statement of Beneficial Ownership), 4 (Statement of Changes of
Beneficial Ownership of Securities) and 5 (Annual Statement of Beneficial
Ownership of Securities). Directors, executive officers and beneficial owners of
more than 10% of our Common Stock are required by SEC regulations to furnish us
with copies of all Section 16(a) forms that they file. As a company
with securities registered under Section 15(d) of the Exchange Act, our
executive officers and directors, and persons who beneficially own more than ten
percent of our common stock are not required to file Section 16(a)
reports.
Code
of Ethics
We have
not adopted a Code of Business Conduct and Ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions in that our sole officer and
director serves in all the above capacities.
Corporate
Governance
Nominating
Committee
We do not
have a Nominating Committee or Nominating Committee Charter. Our sole Director
performs some of the functions associated with a Nominating Committee. We have
elected not to have a Nominating Committee in that we are a development stage
company.
Director Nomination
Procedures
Nominees
for Directors are identified and suggested by the members of the Board or
management using their business networks. The Board has not retained any
executive search firms or other third parties to identify or evaluate director
candidates and does not intend to in the near future. In selecting a nominee for
director, the Board or management considers the following criteria:
1.
|
Whether
the nominee has the personal attributes for successful service on the
Board, such as demonstrated character and integrity; experience at a
strategy/policy setting level; managerial experience dealing with complex
problems; an ability to work effectively with others; and sufficient time
to devote to our affairs;
|
2.
|
Whether
the nominee has been the chief executive officer or senior executive of a
public company or a leader of a similar organization, including industry
groups, universities or governmental
organizations;
|
3.
|
Whether
the nominee, by virtue of particular experience, technical expertise or
specialized skills or contacts relevant to our current or future business,
will add specific value as a Board member;
and
|
4.
|
Whether
there are any other factors related to the ability and willingness of a
new nominee to serve, or an existing Board member to continue his
service.
|
The Board
or management has not established any specific minimum qualifications that a
candidate for director must meet in order to be recommended for Board
membership. Rather, the Board or management will evaluate the mix of skills and
experience that the candidate offers, consider how a given candidate meets the
Board’s current expectations with respect to each such criterion and make a
determination regarding whether a candidate should be recommended to the
stockholders for election as a Director. During 2009, we received no
recommendation for Directors from our stockholders.
We will
consider for inclusion in our nominations of new Board of Directors nominees
proposed by stockholders who have held at least 1% of our outstanding voting
securities for at least one year. Board candidates referred by such stockholders
will be considered on the same basis as Board candidates referred from other
sources. Any stockholder who wishes to recommend for our consideration a
prospective nominee to serve on the Board of Directors may do so by giving the
candidate’s name and qualifications in writing to our Secretary at the following
address: 11088 Arcadia Sunrise Drive, Henderson, Nevada 89052.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table sets forth, for the last completed fiscal years ended December
31, 2009 and 2008 the cash compensation paid by the Company, as well as certain
other compensation paid with respect to those years and months, to the Chief
Executive Officer and, to the extent applicable, each of the three other most
highly compensated executive officers of the Company in all capacities in which
they served:
Summary Compensation
Table
|
|
Name
and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards ($)
|
Option
Awards ($)
|
Non-Equity
Incentive Plan Compen-sation ($)
|
Non-qualified
Deferred Compen-sation Earnings ($)
|
All
Other Compen-sation ($)
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
Evelyn
Meadows
|
2009
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Former
President
|
2008
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
|
|
|
|
|
Kasian
Franks
|
2009
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Current
President
|
|
|
|
|
|
|
|
|
|
Directors'
Compensation
The
directors of the Registrant have not received compensation for their services as
directors nor have they been reimbursed for expenses incurred in attending board
meetings.
Employment
Contracts and Officers' Compensation
Since our
incorporation, we have not paid any compensation to our officers, directors and
employees. We do not have employment agreements. Any
future compensation to be paid will be determined by our Board of Directors, and
an employment agreement will be executed. We do not currently have
plans to pay any compensation until such time as we are cash flow
positive.
Stock
Option Plan And Other Long-term Incentive Plan
We
currently do not have existing or proposed option/SAR grants.
Certain
Relationships and Related Transactions
There
have not been any transactions, or proposed transactions, during the last two
years, to which the Registrant was or is to be a party, in which any director or
executive officer of the Registrant, any nominee for election as a director, any
security holder owning beneficially more than five percent of the common stock
of the Registrant, or any member of the immediate family of the aforementioned
persons had or is to have a direct or indirect material interest.
Indemnification
of Directors and Officers
The
Registrant will indemnify its directors and officers to the fullest extent
permitted by the General Corporation Law of the State of Nevada.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth certain information as of the date of this offering
with respect to the beneficial ownership of Fashion Net, Inc.’s common stock by
all persons known by Fashion Net to be beneficial owners of more than 5% of any
such outstanding classes, and by each director and executive officer, and by all
officers and directors as a group. Unless otherwise specified, the
named beneficial owner has, to our knowledge, either sole or majority voting and
investment power.
Title
Of Class
|
|
Name,
Title and Address of Beneficial Owner of Shares(1)
|
|
Amount
of Beneficial Ownership
|
|
Percent
of Class(3)
|
|
|
|
|
|
|
|
Common
|
|
Kasian
Franks, President and Director(2)
|
|
10,000,000
|
|
98.3%
|
|
|
|
|
|
|
|
|
|
All
Directors and Officers as a group (1 person)
|
|
10,000,000
|
|
98.3%
|
Notes:
1.
|
Unless
otherwise indicated in the footnotes to the table, each shareholder shown
on the table has sole voting and investment power with respect to the
shares beneficially owned by him or
it.
|
2.
|
Mr.
Franks is the Chief Executive Officer, Secretary and Director of the
Company.
|
3.
|
Based
on 10,170,000 shares of common stock
outstanding.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
In August
2007, we issued 10,000,000 shares of $0.001 par value common stock to Evelyn
Meadows, our founder and former officer and director, in exchange for services
performed valued at $10,000, related specifically to the formation and
organization of our corporation, as well as setting forth a business plan and
operational objectives.
From our
inception through December 31, 2009, Ms. Meadows donated cash to us in the
amount of $4,879. This amount has been donated to us and is not
expected to be repaid.
On
December 31, 2009, Ms. Meadows agreed to assume an aggregate of $9,000 of our
accounts payable and notes payable. The entire amount is not expected
to be repaid to Ms. Meadows.
On
January 15, 2010, Kasian Franks acquired from Ms. Evelyn Meadows an aggregate of
10,000,000 shares of common stock in a private transaction not involving the
Company. By virtue of this transaction, Mr. Franks obtained a
controlling 98.3% ownership interest in Fashion Net, Inc.
Additionally,
we use office space and services provided without charge by Mr.
Franks.
Director
Independence
The Board
of Directors has concluded that Director Kasian Franks is not independent in
accordance with the director independence standards of the American Stock
Exchange.
PRINCIPAL
ACCOUNTING FEES AND SERVICES
The
following table sets forth fees billed to us by our independent auditors for the
years ended 2009 and 2008 for (i) services
rendered for the audit of our annual financial statements and the review of our
quarterly financial statements, (ii) services rendered that are reasonably
related to the performance of the audit or review of our financial statements
that are not reported as Audit Fees, and (iii) services rendered in connection
with tax preparation, compliance, advice and assistance.
SERVICES
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
Audit
fees
|
|
$ |
6,500 |
|
|
$ |
6,000 |
|
Audit-related
fees
|
|
|
- |
|
|
|
- |
|
Tax
fees
|
|
|
- |
|
|
|
- |
|
All
other fees
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Total
fees
|
|
$ |
6,500 |
|
|
$ |
6,000 |
|
EXHIBITS
Exhibit
Number
|
Name
and/or Identification of Exhibit
|
|
|
3
|
Articles
of Incorporation & By-Laws
|
|
a. Articles
of Incorporation (1)
|
|
b. Bylaws
(1)
|
|
|
31
|
Rule
13a-14(a)/15d-14(a) Certification
|
|
|
32
|
Certification
under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section
1350)
|
|
|
Notes:
|
(1) Incorporated
by reference herein filed as exhibits to the Company’s Registration
Statement on Form S-1 previously filed with the SEC on October 3,
2008.
|
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereto duly
authorized.
FASHION
NET, INC.
|
(Registrant)
|
|
By:
/s/ Kasian Franks, President &
CEO
|
In
accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated:
Signature
|
Title
|
Date
|
|
|
|
/s/
Kasian Franks
|
President,
CEO and Director
|
March
11, 2010
|
Kasian
Franks
|
|
|
|
|
|
/s/
Kasian Franks
|
Chief
Financial Officer
|
March
11, 2010
|
Kasian
Franks
|
|
|
|
|
|
/s/
Kasian Franks
|
Chief
Accounting Officer
|
March
11, 2010
|
Kasian
Franks
|
|
|