Document/ExhibitDescriptionPagesSize 1: SB-2 Registration of Securities by a Small-Business HTML 398K Issuer -- mainbody
2: EX-3.1 Articles of Incorporation/Organization or By-Laws HTML 47K
3: EX-3.2 Articles of Incorporation/Organization or By-Laws HTML 120K
4: EX-5.1 Opinion re: Legality HTML 15K
5: EX-23.1 Consent of Experts or Counsel HTML 9K
(Name, address and telephone of agent
for
service)
Registrant's telephone number, including
area
code: (702)
885-3072
Approximate date of commencement of
proposed
sale to the public:
As soon as practicable
after the effective date of this Registration Statement.
If
this
Form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |__|
If
any of
the securities being registered on the Form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box | |
If
this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. |__|
If
this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. |__|
If
delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. |__|
CALCULATION
OF REGISTRATION FEE
TITLE
OF EACH
CLASS OF
SECURITIES
TO BE
REGISTERED
AMOUNT TO BE
REGISTERED
PROPOSED
MAXIMUM
OFFERING
PRICE PER
SHARE (1)
PROPOSED
MAXIMUM
AGGREGATE
OFFERING
PRICE
(2)
AMOUNT
OF
REGISTRATION
FEE
Common Stock
1,590,000
shares
$0.0075
$11,925.00
$0.37
(1)
This
price was arbitrarily determined by Fairytale Ventures,
Inc.
(2)
Estimated
solely for the purpose of calculating the registration fee in accordance
with Rule 457(a) under the Securities
Act.
THE
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a),
MAY
DETERMINE.
The
selling shareholders named in this prospectus are offering up to 1,590,000
shares of common stock offered through this prospectus. We will not receive
any
proceeds from this offering and have not made any arrangements for the sale
of
these securities. We have, however, set an offering price for these securities
of $0.0075 per share. This offering will expire on February 28, 2008 unless
extended by the board of directors. The board of directors has discretion to
extend the offering period for a maximum of an additional six months.
Offering
Price
Underwriting
Discounts
and
Commissions
Proceeds
to
Selling
Shareholders
Per
Share
$0.0075
None
$0.0075
Total
$11,925.00
None
$11,925.00
Our
common stock is presently not traded on any market or securities exchange.
The
sales price to the public is fixed at $0.0075 per share until such time as
the
shares of our common stock are traded on the NASD Over-The-Counter Bulletin
Board. Although we intend to apply for quotation of our common stock on the
NASD
Over-The-Counter Bulletin Board, public trading of our common stock may never
materialize. If our common stock becomes traded on the NASD Over-The-Counter
Bulletin Board, then the sale price to the public will vary according to
prevailing market prices or privately negotiated prices by the selling
shareholders.
The
purchase of the securities offered through this prospectus involves a high
degree of risk. See section of this Prospectus entitled "Risk Factors."
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
The
information in this prospectus is not complete and may be changed. We may not
sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective. The prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities
in
any state where the offer or sale is not permitted.
We
were
organized as a Nevada corporation on May 1, 2007. We are a development stage
company preparing to offer unique “princess” tea parties and other themed
birthday parties and special event parties for children. Our service will
feature complete themed children’s parties, including food, costumes and props
for the birthday child and guests, and other features and amenities. Ours will
be a mobile party service that will stage the events in our customers’ homes or
other venues of their choice. Our business plans to begin operations in the
Las
Vegas, Nevada area. Upon establishing brand recognition for our unique,
Fairytale Parties on-site children’s party service, we plan to expand our
operations to other metropolitan areas through the use of a franchise affiliate
system.
We
are
now beginning to build our initial inventory of products and supplies and are
preparing to design our initial marketing campaign.
Since
we
are in the development stage of our business plan, we have only earned $200
in
gross revenues from operations as of July 31, 2007. As of July 31, 2007, we
had
$17,072 cash on hand and no current liabilities. Accordingly,
our working capital position as of January 31, 2007 was $17,072. Since our
inception through July 31, 2007, we have incurred a net loss of $153. We
attribute our net loss to having insufficient revenues to offset our expenses.
Offering
Price and Alternative Plan of Distribution
The
offering price of the common stock is $0.0075 per share. We intend
to
apply to the NASD over-the-counter bulletin board to allow the trading
of
our common stock upon our becoming a reporting entity under the Securities
Exchange Act of 1934. If our common stock becomes so traded and a
market
for the stock develops, the actual price of stock will be determined
by
prevailing market prices at the time of sale or by private transactions
negotiated by the selling shareholders. The offering price would
thus be
determined by market factors and the independent decisions of the
selling
shareholders.
Minimum
Number of Shares To Be Sold in This Offering
5,590,000
shares of our common stock are issued and outstanding as of the date
of
this prospectus. All of the common stock to be sold under this prospectus
will be sold by existing shareholders. There will be no increase
in our
issued and outstanding shares as a result of this
offering.
Use
of Proceeds
We
will not receive any proceeds from the sale of the common stock by
the
selling shareholders.
An
investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. Currently, shares of our common stock are not publicly traded.
In the event that shares of our common stock become publicly traded, the trading
price of our common stock could decline due to any of these risks, and you
may
lose all or part of your investment.
Our
future growth and profitability will depend in large part upon the effectiveness
and efficiency of this marketing program and future marketing efforts that
we
undertake, including our ability to:
•
create
greater awareness of our brand name and unique children’s experience;
•
identify
the most effective and efficient level of spending ;
determine
the appropriate creative message and media mix for marketing expenditures;
•
effectively
manage marketing costs (including creative and media) in order to
maintain
acceptable operating margins and return on marketing investment;
•
select
the right markets in which to market; and
•
convert
consumer awareness into actual contacts and engagements.
We believe that our success depends in large part upon our ability to
anticipate, gauge and respond in a timely manner to changing consumer
preferences and trends. We cannot assure you that there will be a significant
and continuing demand for our themed children’s party experience. A misjudgment
of consumer preferences or trends could have a negative impact on our business,
financial condition and results of operations.
The
success of our new service will depend upon a number of factors, including
our
ability to:
•
anticipate
customer needs;
•
innovate
and develop new services and related products;
•
price
our services competitively;
•
deliver
our service competently and in a manner that satisfies the consumer;
and
•
differentiate
our service offerings from those of our competitors.
We
are
highly dependent upon consumer perception regarding the desirability, safety
and
quality of our services, as well as any similar services which may be offered
by
other companies. A service may be received favorably, resulting in high revenues
associated with that service that may not be sustainable as consumer preferences
change.
The
market children’s products and services, especially experience-based luxury and
entertainment services like ours, is highly sensitive to the introduction of
new
products and services which may rapidly capture a significant share of the
market. Certain of our competitors may have significantly greater financial
and
marketing resources than we do. In addition, our competitors may be more
effective and efficient in introducing new products and services. We may not
be
able to compete effectively, and any of the factors listed above may cause
price
reductions, reduced margins and losses of our market share.
We
currently do not have any active operations and we have only nominal income
at
this time. Our business plan calls for expenses related to marketing, inventory,
and other start-up costs related to our planned mobile children’s theme party
service. We currently do not have any arrangements for financing and we may
not
be able to obtain financing when required. Obtaining additional financing would
be subject to a number of factors, including our ability to show strong early
revenues in our initial market. These factors may make the timing, amount,
terms
or conditions of additional financing unavailable to us.
If
we are
unable to generate significant revenues from our existing business or from
any
new business opportunities we may pursue, we will not be able to achieve
profitability or continue operations.
We
have
just completed the preliminary plans for our service and have only begun to
plan
our initial marketing campaign and to locate the required inventory of props,
costumes, gift items and other materials needed to commence our operations.
As a
result, we have no way to evaluate the likelihood that we will be able to
operate the business successfully. We were incorporated on May 1, 2007, and
to
date have been involved primarily in organizational and early planning
activities. We have only earned $200 in revenues as of the date of this
prospectus, and thus face a high risk of business failure.
Prior
to
our earning significant revenues, we anticipate that we will incur increased
operating expenses. We expect to incur continuing losses into the foreseeable
future. Our accumulated deficit will continue to increase as we continue to
incur losses. We may not be able to earn profits or continue operations if
we
are unable to generate significant revenues. There is no history upon which
to
base any assumption as to the likelihood that we will be successful, and we
may
not be able to generate any operating revenues or ever achieve profitable
operations. If we are unsuccessful in addressing these risks, our business
will
most likely fail.
We
plan
to rely in part on an affiliate franchise program for expansion beyond our
initial market in the Las Vegas metropolitan area. We cannot be certain that
any
future franchisees we select will
have
the
business acumen or financial resources necessary to operate successful
franchises in their franchise areas, and state franchise laws may limit our
ability to terminate or modify these franchise arrangements. Moreover,
franchisees may not successfully operate Fairytale party services in a manner
consistent with our standards and requirements, or may not hire and train
qualified personnel. The failure of franchisees to operate franchises
successfully could have a material adverse effect on us, our reputation, our
brand and our ability to attract prospective franchisees and could materially
adversely affect our business, financial condition, results of operations and
cash flows.
Ms.
Kumar, our president and chief financial officer, devotes 10 to 20 hours per
week to our business affairs. We do not have an employment agreement with Ms.
Kumar nor do we maintain a key man life insurance policy for her. Currently,
we
do not have any full or part-time employees. If the demands of our business
require the full business time of Ms. Kumar, it is possible that Ms. Kumar
may
not be able to devote sufficient time to the management of our business, as
and
when needed. If our management is unable to devote a sufficient amount of time
to manage our operations, our business will fail.
Ms.
Kumar
is our president, chief financial officer and sole director. She currently
owns
71.56% of the outstanding shares of our common stock. Accordingly, she will
have
a significant influence in determining the outcome of all corporate transactions
or other matters, including mergers, consolidations and the sale of all or
substantially all of our assets, and also the power to prevent or cause a change
in control. While we have no current plans with regard to any merger,
consolidation or sale of substantially all of our assets, the interests of
Ms.
Kumar may still differ from the interests of the other stockholders.
The
sale
of franchises is regulated by various states as well as the Federal Trade
Commission. The Federal Trade Commission requires that we make extensive
disclosures to prospective franchisees but does not require registration. A
number of states require registration or disclosure in connection with franchise
offers and sales. Additionally, several states have “franchise relationship
laws” or “business opportunity laws” that limit the ability of franchisors to
terminate franchise agreements or to withhold consent to the renewal or transfer
of these agreements. While we do not expect that our planned franchising
operations will materially adversely affected by such existing regulations
in
the foreseeable future, we cannot predict the effect any future legislation
or
regulation may have on our business operations or financial condition.
We
believe our success in the children’s party and entertainment business, where
personal trust and parent referrals play a key role, will be directly related
to
our reputation and favorable brand identity. We may be subject to claims and
litigation alleging negligence, inadequate supervision and other grounds for
liability arising from injuries or other harm to children. Any litigation and/or
adverse publicity concerning such incidents at one of our events, or at event
conducted by any competitors offering similar services, could greatly damage
our
reputation and could have a severe adverse effect on our revenues and financial
resources.
Currently,
we do not have liability insurance. Since we do not have liability insurance,
it
is possible that personal injury or other claims and the resulting adverse
publicity could negatively affect our business.
The
Sarbanes-Oxley
Act of 2002 was enacted in response to public concerns regarding corporate
accountability in connection with recent accounting scandals. The stated goals
of the Sarbanes-Oxley
Act are to increase corporate responsibility, to provide for enhanced penalties
for accounting and auditing improprieties at publicly traded companies, and
to
protect investors by improving the accuracy and reliability of corporate
disclosures pursuant to the securities laws. The Sarbanes-Oxley Act generally
applies to all companies that file or are required to file periodic reports
with
the SEC, under the Securities Exchange Act of 1934. Upon becoming a public
company, we will be required to comply with the Sarbanes-Oxley Act and it is
costly to remain in compliance with the federal securities regulations.
Additionally, we may be unable to attract and retain qualified officers,
directors and members of board committees required to provide for our effective
management as a result of Sarbanes-Oxley Act
of
2002.
The
enactment of the Sarbanes-Oxley Act
of
2002 has resulted in a series of rules and regulations by the SEC that increase
responsibilities and liabilities of directors and executive officers. The
perceived increased personal risk associated with these recent changes may
make
it more costly or deter qualified individuals from accepting these roles.
Significant costs incurred as a result of becoming a public company could divert
the use of finances from our operations resulting in our inability to achieve
profitability.
We
have
applied for registration of the name Fairytale Parties®
with the
United States Patent and Trademark Office. The success of our business strategy
will depend in part on our continued ability to use our trademarks and service
marks in order to increase brand awareness and further develop our branded
service. If our efforts to protect our intellectual property are not adequate,
or if any third party misappropriates or infringes on our intellectual property,
either in print, on the Internet or through other media, the value of our brand
may be harmed, which could have a material adverse effect on our business,
including the failure of our brand and branded service to achieve and maintain
market acceptance.
A
market
for our common stock may never develop. We currently plan to apply for quotation
of our common stock on the NASD over-the-counter bulletin board upon the
effectiveness of the registration statement of which this prospectus forms
a
part. However, our shares may never be traded on the bulletin board, or, if
traded, a public market may not materialize. If our common stock is not traded
on the bulletin board or if a public market for our common stock does not
develop, investors may not be able to re-sell the shares of our common stock
that they have purchased and may lose all of their investment.
The
selling shareholders are offering 1,590,000 shares of our common stock through
this prospectus. Our common stock is presently not traded on any market or
securities exchange, but should a market develop, shares sold at a price below
the current market price at which the common stock is trading will cause that
market price to decline. Moreover, the offer or sale of a large number of shares
at any price may cause the market price to fall. The outstanding shares of
common stock covered by this prospectus represent 28.44% of the common shares
outstanding as of the date of this prospectus.
Broker-dealer
practices in connection with transactions in "penny stocks" are regulated by
penny stock rules adopted by the Securities and Exchange Commission. Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on some national securities exchanges or quoted
on
Nasdaq). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also
must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and, if the broker-dealer is the sole market maker, the broker-dealer must
disclose this fact and the broker-dealer's presumed control over the market,
and
monthly account statements showing the market value of each penny stock held
in
the customer's account. In addition, broker-dealers who sell these securities
to
persons other than established customers and "accredited investors" must make
a
special written determination that the penny stock is a suitable investment
for
the purchaser and receive the purchaser's written agreement to the transaction.
Consequently, these requirements may have the effect of reducing the level
of
trading activity, if any, in the secondary market for a security subject to
the
penny stock rules, and investors in our common stock may find it difficult
to
sell their shares.
In
the
event that our shares are quoted on the over-the-counter bulletin
board,we
will
be required order to remain current in our filings with the SEC in order for
shares of our common stock to be eligible for quotation on the over-the-counter
bulletin board.
In the
event that we become delinquent in our required filings with the SEC, quotation
of our common stock will be terminated following a 30 or 60 day grace period
if
we do not make our required filing during that time. If our shares are not
eligible for quotation on the over-the-counter
bulletin board,
investors in our common stock may find it difficult to sell their shares.
This
prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements.
The
actual results could differ materially from our forward-looking statements.
Our
actual results are most likely to differ materially from those anticipated
in
these forward-looking statements for many reasons, including the risks faced
by
us described in this Risk Factors section and elsewhere in this
prospectus.
The
$0.0075 per share offering price of our common stock was arbitrarily chosen
using the last sales price of our stock from our most recent private offering
of
common stock. There is no relationship between this price and our assets,
earnings, book value or any other objective criteria of value.
We
intend
to apply to the NASD over-the-counter bulletin board for the quotation of our
common stock upon our becoming a reporting entity under the Securities Exchange
Act of 1934. We intend to file a registration statement under the Exchange
Act
concurrently with the effectiveness of the registration statement of which
this
prospectus forms a part. If our common stock becomes so traded and a market
for
the stock develops, the actual price of stock will be determined by prevailing
market prices at the time of sale or by private transactions negotiated by
the
selling shareholders. The offering price would thus be determined by market
factors and the independent decisions of the selling shareholders.
The
common stock to be sold by the selling shareholders is common stock that is
currently issued and outstanding. Accordingly, there will be no dilution to
our
existing shareholders.
The
selling shareholders named in this prospectus are offering all of the 1,590,000
shares of common stock offered through this prospectus. All of the shares were
acquired from us by the selling shareholders in an offering that was exempt
from
registration pursuant to Rule 504 of Regulation D of the Securities Act of
1933.
The selling shareholders purchased their shares in an offering completed on
July27, 2007.
The
following table provides information regarding the beneficial ownership of
our
common stock held by each of the selling shareholders as of July 31, 2007
including:
1.
the
number of shares owned by each prior to this offering;
2.
the
total number of shares that are to be offered by each;
3.
the
total number of shares that will be owned by each upon completion of the
offering;
4.
the
percentage owned by each upon completion of the offering; and
5.
the
identity of the beneficial holder of any entity that owns the
shares.
The
named
party beneficially owns and has sole voting and investment power over all shares
or rights to the shares, unless otherwise shown in the table. The numbers in
this table assume that none of the selling shareholders sells shares of common
stock not being offered in this prospectus or purchases additional shares of
common stock, and assumes that all shares offered are sold. The
percentages
are based on 5,590,000 shares of common stock outstanding on January 31,2007.
Name
of Selling Shareholder
Shares
Owned
Prior
to this
Offering
Total
Number of Shares to be Offered for Selling Shareholder Account
Total
Shares to be Owned Upon Completion of this Offering
None
of
the selling shareholders: (1) has had a material relationship with us other
than
as a shareholder at any time within the past three years; or (2) has ever been
one of our officers or directors.
on
such public markets or exchanges as the common stock may from time
to time
be trading;
2.
in
privately negotiated transactions;
3.
through
the writing of options on the common
stock;
4.
in
short sales, or;
5.
in
any combination of these methods of
distribution.
The
sales
price to the public is fixed at $0.0075 per share until such time as the shares
of our common stock become traded on the NASD Over-The-Counter Bulletin Board
or
another exchange. Although we intend to apply for quotation of our common stock
on the NASD Over-The-Counter Bulletin Board, public trading of our common stock
may never materialize. If our common stock becomes traded on the NASD
Over-The-Counter Bulletin Board, or another exchange, then the sales price
to
the public will vary according to the selling decisions of each selling
shareholder and the market for our stock at the time of resale. In these
circumstances, the sales price to the public may be:
1.
the
market price of our common stock prevailing at the time of sale;
2.
a
price related to such prevailing market price of our common stock,
or;
3.
such
other price as the selling shareholders determine from time to
time.
The
shares may also be sold in compliance with the Securities and Exchange
Commission's Rule 144.
The
selling shareholders may also sell their shares directly to market makers acting
as agents in unsolicited brokerage transactions. Any broker or dealer
participating in such transactions as an agent may receive a commission from
the
selling shareholders or from such purchaser if they act as agent for the
purchaser. If applicable, the selling shareholders may distribute shares to
one
or more of their partners who are unaffiliated with us. Such partners may,
in
turn, distribute such shares as described above.
We
are
bearing all costs relating to the registration of the common stock. The selling
shareholders, however, will pay any commissions or other fees payable to brokers
or dealers in connection with any sale of the common stock.
The
selling shareholders must comply with the requirements of the Securities Act
of
1933 and the Securities Exchange Act in the offer and sale of the common stock.
In particular, during such times as the selling shareholders may be deemed
to be
engaged in a distribution of the common stock, and therefore be considered
to be
an underwriter, they must comply with applicable law and may, among other
things:
1.
not
engage in any stabilization activities in connection with our common
stock;
2.
furnish each broker or dealer through which common stock may be offered, such
copies of this prospectus,
as amended from time to time, as may be required by such broker or dealer;
and;
3.
not
bid for or purchase any of our securities or attempt to induce any person to
purchase any of our
securities other than as permitted under the Securities Exchange
Act.
Our
executive officers and directors and their respective ages as of July 31, 2007
are as follows:
Directors:
Name
Age
Anusha
Kumar
28
Executive
Officers:
Name
Age
Office(s)
Anusha
Kumar
28
President,
CEO, CFO, Treasurer, Secretary,
Director
Set
forth
below is a brief description of the background and business experience of our
executive officers and directors.
Anusha
Kumar
is our
President, CEO, CFO, Secretary, Treasurer and sole director. As President,
Ms.
Kumar is responsible for the day-to-day management of the Company.
Ms.
Kumar
holds a B.A. in psychology from the University of Nevada, Las Vegas and is
currently a nursing student performing clinical rotations at Valley Hospital
in
Las Vegas, Nevada. Ms. Kumar has experience in the sales, childcare, banking,
event planning, and administrative fields. Immediately prior to undertaking
nursing studies, Ms. Kumar worked in the children’s mental health field,
performing youth counseling and behavioral intervention services for a private
foster care agency.
Ms.
Kumar
has not previously served as a director in any public company.
Term
of Office
Our
Directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.
We
conduct our business through agreements with consultants and arms-length third
parties. Current arrangements in place include the following:
1.
Verbal
agreements with our accountant to perform requested financial accounting
services.
2.
Written
agreements with auditors to perform audit functions at their respective
normal and customary rates.
3.
A
verbal agreement with Anusha Kumar to provide us with office space,
telephone answering and secretarial services
in
her home office for no charge during our first year of operations.
The
following table sets forth, as of July 31, 2007, certain information as to
shares of our common stock owned by (i) each person known by us to beneficially
own more than 5% of our outstanding common stock, (ii) each of our directors,
and (iii) all of our executive officers and directors as a group:
All
Officers and Directors as a Group (one person)
4,000,000
71.56%
Common
Stock
Other
5% Holders
None
None
(1)
The
percent of class is based on 5,590,000 shares of common stock issued
and
outstanding as of July 31, 2007.
The
persons named above have full voting and investment power with respect to the
shares indicated. Under the rules of the Securities and Exchange Commission,
a
person (or group of persons) is deemed to be a "beneficial owner" of a security
if he or she, directly or indirectly, has or shares the power to vote or to
direct the voting of such security, or the power to dispose of or to direct
the
disposition of such security. Accordingly, more than one person may be deemed
to
be a beneficial
owner of the same security. A person is also deemed to be a beneficial owner
of
any security, which that person has the right to acquire within 60 days, such
as
options or warrants to purchase our common stock.
Our
authorized capital stock consists of 90,000,000 shares of common stock, with
a
par value of $0.001 per share and 10,000,000 shares of preferred stock. As
of
July 31, 2007, there were 5,590,000 shares of our common stock issued and
outstanding. No preferred stock has been issued. Our shares are held by thirty
(30) stockholders of record.
Common
Stock
Our
common stock is entitled to one vote per share on all matters submitted to
a
vote of the stockholders, including the election of directors. Except as
otherwise required by law, the holders of our common stock will possess all
voting power. Generally, all matters to be voted on by stockholders must be
approved by a majority of the votes entitled to be cast by all shares of our
common stock that are present in person or represented by proxy. Holders of
our
common stock representing fifty percent (50%) of our capital stock issued,
outstanding and entitled to vote, represented in person or by proxy, are
necessary to constitute a quorum at any meeting of our stockholders. A vote
by
the holders of a majority of our outstanding shares is required to effectuate
certain fundamental corporate changes such as liquidation, merger or an
amendment to our Articles of Incorporation. Our Articles of Incorporation do
not
provide for cumulative voting in the election of directors.
The
holders of shares of our common stock will be entitled to such cash dividends
as
may be declared from time to time by our board of directors from funds available
therefore.
Upon
liquidation, dissolution or winding up, the holders of shares of our common
stock will be entitled to receive pro rata all assets available for distribution
to such holders.
In
the
event of any merger or consolidation with or into another company in connection
with which shares of our common stock are converted into or exchangeable for
shares of stock, other securities or property (including cash), all holders
of
our common stock will be entitled to receive the same kind and amount of shares
of stock and other securities and property (including cash).
Holders
of our common stock have no pre-emptive rights, no conversion rights and there
are no redemption provisions applicable to our common stock.
Dividend
Policy
We
have
never declared or paid any cash dividends on our common stock. We currently
intend to retain future earnings, if any, to finance the expansion of our
business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
Share
Purchase Warrants
We
have
not issued and do not have outstanding any warrants to purchase shares of our
common stock.
We
have
not issued and do not have outstanding any options to purchase shares of our
common stock.
Convertible
Securities
We
have
not issued and do not have outstanding any securities convertible into shares
of
our common stock or any rights convertible or exchangeable into shares of our
common stock.
Nevada
Anti-Takeover Laws
Nevada
Revised Statutes sections 78.378 to 78.379 provide state regulation over the
acquisition of a controlling interest in certain Nevada corporations unless
the
articles of incorporation or bylaws of the corporation provide that the
provisions of these sections do not apply. Our articles of incorporation and
bylaws do not state that these provisions do not apply. The statute creates
a
number of restrictions on the ability of a person or entity to acquire control
of a Nevada company by setting down certain rules of conduct and voting
restrictions in any acquisition attempt, among other things. The statute is
limited to corporations that are organized in the state of Nevada and that
have
200 or more stockholders, at least 100 of whom are stockholders of record and
residents of the State of Nevada; and does business in the State of Nevada
directly or through an affiliated corporation. Because of these conditions,
the
statute currently does not apply to our company.
No
expert
or counsel named in this prospectus as having prepared or certified any part
of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the common stock was employed on a contingency basis, or had,
or
is to receive, in connection with the offering, a substantial interest, direct
or indirect, in the registrant or any of its parents or subsidiaries. Nor was
any such person connected with the registrant or any of its parents or
subsidiaries as a promoter, managing or principal underwriter, voting trustee,
director, officer, or employee.
Marvin
L.
Longabaugh, Esq., our independent legal counsel, has provided an opinion on
the
validity of our common stock.
Moore
& Associates, Chtd. has audited our financial statements included in this
prospectus and registration statement to the extent and for the periods set
forth in their audit report. Moore & Associates, Chtd. has presented their
report with respect to our audited financial statements. The report of Moore
& Associates, Chtd. is included in reliance upon their authority as experts
in accounting and auditing.
Our
articles of incorporation provide that we will indemnify an officer, director,
or former officer or director, to the full extent permitted by law. We have
been
advised that in the opinion of the
Securities
and Exchange Commission indemnification for liabilities arising under the
Securities Act of 1933 is against public policy as expressed in the Securities
Act of 1933, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities is asserted by one of our directors,
officers, or controlling persons in connection with the securities being
registered, we will, unless in the opinion of our legal counsel the matter
has
been settled by controlling precedent, submit the question of whether such
indemnification is against public policy to a court of appropriate jurisdiction.
We will then be governed by the court's decision.
We
are a
development stage company preparing to offer unique “princess” tea parties and
other themed birthday parties and special event parties for children. Our
service will feature complete themed children’s parties, including food,
costumes and props for the birthday child and guests, and other features
and
amenities. Ours will be a mobile party service that will stage the events
in our
customers’ homes or other venues of their choice. Our business plans to begin
operations in the Las Vegas, Nevada area. Upon establishing brand recognition
for our unique, Fairytale Parties on-site children’s party service, we plan to
expand our operations to other metropolitan areas through the use of a franchise
affiliate system.
We
are
now purchasing our initial inventory and beginning to prepare our initial
advertising campaign with the Las Vegas metropolitan area.
Products
and Services
Children
wait anxiously for their birthdays every year. They anticipate the day, their
guests, and the presents that they will receive. What they anticipate the
most,
however, is what type of party they will have. Children, along with their
parents, want a special party that everyone will enjoy and remember. Children
desire a party of their dreams. They desire a Fairytale Party. Each Fairytale
Party derives from the imagination and dreams of the birthday child. Fairytale
Parties are customized and individualized, so that no two parties are identical.
Best of all, your Fairytale Party comes to you at your location.
Families
are too often consumed by impersonal, cookie-cutter parties like those hosted
by
costumed characters at pizza parlors. These types of events are hurried along
in
an assembly line manner, often leaving little time for the child to interact
with her guests or even to open presents. In addition, she simultaneously
shares
her birthday with up to a hundred other children that are part of other assembly
line style parties being held in the same room.
Fairytale
Party designers help to bring the desires of each child together into a complete
and special day; a day in which your child is the unique center of attention.
Her party was chosen by her, planned by her, and reflects her own personal
style.
Prior
to
the event, a Fairytale Party designer will meet with the parents and the
child
to visualize their dream party. A variety of party styles will be available
to
choose from:
Fairytale
Parties include all decorations, food, beverages, games, goodie bags, and
costuming tailored to the party theme of choice. This is primarily the
responsibility of the Fairytale Party planner. The parents and birthday child,
however, can be as active in the planning as they choose.
On
the
day of the event, the Fairytale Party designer and a party hostess will arrive
prior to the party to decorate and set up games. They will remain for the
event
to welcome guests, help the children into their themed costumes, serve food,
and
run the games and activities. In addition, the designer and hostess will
assist
with the opening of gifts and part clean-up.
By
way of
illustration, the following is a summary description of a Fairytale Princess
Party:
The
party
hostess and the designer arrive 1 ½ hours prior to the party. They place the
hors d’oevres in the oven and begin to decorate the party room. They set up the
tables and chairs, cover the tables with lace tablecloths and place vases
of
flowers on the table. The table is set with cups and tea pots filled with
lemonade and iced tea. The food is set out and hot foods are placed in warming
trays.
As
the
guests arrive, they are sent to a staging room to change into a princess
gown
and shoes of their choice. They choose a necklace, bracelets, and rings out
of a
large jewelry box and go to the make-up station. Each girl then gets her
hair,
make-up, and nails done and receives a special tiara to wear during the
party.
Each
guest chooses a princess name and is announced one-by-one to the parents
and
other guests as they show off their new look. A Polaroid picture is taken
at
this time and will be given to the guest as she departs.
The
guests are seated at the table and are served their tea and lunch by the
designer and the hostess. After lunch, the guests are given princess lessons.
They learn to introduce themselves, to curtsey, and how to waltz.
Later,
the guests work on a fun craft project. Each child is given a foam frame
and
princess foam stickers in order to make a picture frame that she had taken
earlier in the party. During the craft, the birthday girl is seated on a
special
“princess throne.”
The
cake
is prepared and brought out to the child while the Birthday Song is sung
by the
guests. The child blows out her candles and the crafts are collected by the
hostess. The cake is cut and distributed to the children.
While
the
guests are enjoying the cake, the designer puts together the picture frames
and
sets them by a princess treasure box near the exit of the venue. At this
time,
an announcement is made to open the gifts. The birthday girl is placed on
a
throne in an open area. The birthday guests line up with their gifts and
present
the gifts to the princess. The birthday girl’s parent announces the giver and
the gift while the designer documents the gifts and givers for future thank
you
notes. After the birthday girl has opened a guest’s gift, the guest gets a
princess wand as a souvenir. The guest can then choose to watch the opening
of
the other gifts or to change out of her costume and depart.
Upon
departure, each guest will receive their princess picture frame with their
photo
in it and their choice of item out of the treasure box. Treasures can include
such items as a small baby doll, a Barbie doll, a mini tea set, or similar
items.
At
the
end of the event, the hostess helps the guests change out of their costumes
and
return their costume accessories. As the party concludes, the hostess and
the
designer finish with clean-up and depart.
Our
pricing model for most types of events will feature a base price with certain
included features, together with a list of available options and
upgrades:
Large
tiara for princess and/or small tiaras for all guests ($10
each)
·
“Up-do’s”
for all girls ($5 each)
·
Celebrity
guest - Cinderella, Belle, Tinkerbelle, etc. ($50 -
$100)
·
Gifts
for each guest ($2 - $6 each)
Long
Term Growth and Expansion
The
future of Fairytale Parties includes growth beyond the Las Vegas metropolitan
area through a franchise program that would provide training, party templates,
supplies, and inventory in addition to the Fairytale Parties brand and the
strength of cooperative advertising and promotion.
Eventually,
we may expand beyond children’s theme parties and begin to offer other types of
events such as bridal and baby showers, sweet 16 parties, as well as ladies’
teas and other events. In order to supplement or core mobile party service,
we
may also consider acquisition of a building for use as a party venue. In
addition, we may believe that revenues and net profit per-event could be
significantly enhanced through the addition of several follow-on services
that
are a natural extension of our core business, including:
·
more
advanced catering
·
chair
and table rental
·
decorative
fountain rental
·
cotton
candy / snow cone machines
·
inflatable
jumpers
·
costumed
characters
Competitive
Business Conditions and Methods of Competition
The
primary competition for our service will come from well-established chain
venues
offering the typical pizza party event familiar to any family with small
children. We will offer a refreshing alternative to these standardized affairs
by offering a unique and memorable experience for each birthday child.
There
are
currently several “princess” or “tea-party” type birthday party services in
operation in most major U.S. cities. These services tend to be operated by
local
firms conducting the events in small, dedicated venues. In our opinion, the
majority of these services offer an over-priced and excessively standardized
product with too few available variations in party theme and with inflexible
limits in the number of party guests due to space constraints. We plan to
differentiate ourselves from these types of services by offering a mobile
service that can conduct events in
nearly
any venue at a reasonable price. In addition, we will offer a wider array
of
themes and will work with our clients to create a customized experience that
is
superior to the available alternatives. We plan to build strong brand
recognition for our Fairytale Parties service through a focused advertising
campaign and strong word-of-mouth referral from our customers. Ultimately,
we
hope to expand through the use of a franchise affiliate program and to become
the brand-name leader in our field.
Target
Market and Marketing Methods
We
plan
to market the Fairytale Parties service to parents and families with children
aged 3-12. For its initial marketing effort in the greater Las Vegas area,
we
envision a multi-faceted marketing plan using several channels to reach the
target market for Fairytale Parties.
A. Print
Advertising
One
of
the most effective means for promotion of the Fairytale Parties service in
its
initial market will be through advertising in local publications that are
geared
toward our target demographic of middle and upper income families with young
children.
Upon
receipt of proper funding, we plan to promote our service in such publications
as:
· Las
Vegas
Life
· Las
Vegas
Now
· Las
Vegas
Homes & Design
· Las
Vegas
Family
· Southern
Nevada Life
· 89123
Magazine and other Pinpoint publications
If
we are
successful in our long-term plan to begin expanding beyond the Las Vegas
area to
other metropolitan areas, we believe that advertising in publications like
the
following will be well- suited to helping build a national brand:
· Woman's
Day
· Better
Homes and Gardens
· Family
Fun
· Lady's
Home Journal
B.Radio
To
the
extent it is made feasible by future cash flows from operations and/or
investment in the Company, we believe a series of targeted local radio ads
may
be extremely helpful in raising awareness of the Fairytale Parties service
and
its unique advantages. In any radio advertising effort, we would seek to
target
our efforts by buying air time on stations with a high proportion women
listeners aged 20 to 45.
We
are
not currently subject to direct federal, state or local regulation other
than
regulations applicable to businesses generally. Management is unaware of
any
existing or probable governmental regulations which would materially affect
our
business.
Employees
Our
President, Anusha Kumar, is currently our only employee. Ms. Kumar devotes
10 to
20 hours per week to our business affairs. We do not have any full time
employees.
Research
and Development Expenditures
We
have
not incurred any research or development expenditures since our
incorporation.
The
Company has applied to register the Fairytale PartiesTM
trademark with the U.S. Patent and Trademark Office. We hope to build a unique
brand identity under our mark, and to seek protection for such additional
marks
as may be created in connection with our planned expansion beyond childrens’
parties and into theme parties and events for adults and for guests of all
ages.
For
the
fiscal year beginning August 1, 2007, we plan to incur the following
expenses:
Legal
$
2,000.00
Accounting
$
2,500.00
Advertising
$
6,000.00
Inventory
Acquisition
$
2,000.00
Equipment
and fixtures acquisition
$
1,500.00
Office
and related
$
500.00
$
14,500.00
The
above
budget includes general expenses necessary to operate our business for the
next
fiscal year and does not include foodstuffs, labor, and other consumable
supplies and inputs related to each individual party event. This budget assumes
that each of our Fairytale Parties will cause us to incur costs specific
to the
event that are less than the price received from the customer.
Business
Goals For The Fiscal Year Beginning August 1, 2007
During
the first and second quarters of our first full fiscal year, our primary
goal
will be to begin generating a steady flow of sales in the Las Vegas area.
By the
end of the third quarter, we hope to have achieved brand name recognition
throughout the greater Las Vegas area and to have attained a more significant
volume of sales through both referrals and the launch of our planned local
advertising campaign. By the end of our first fiscal year, we hope to have
designed our affiliate franchise program and to begin serious discussions
with
potential franchisees in at least one major metropolitan area outside of
Las
Vegas. The following is a schedule of our business development goals for
the
current fiscal year:
Time
Objective
· By
end of second quarter
Conduct
an average of 3 to 5 Fairytale Party events per week; gross revenues
in
excess of $3,500 per month
· By
mid-late third quarter
Begin
initial advertising campaign
· By
end of third quarter / or early fourth quarter
Conduct
an average of 8-10 Fairytale Party events per week; gross revenues
in
excess of $6,000 per month
· By
end of fourth quarter
Complete
design of affiliate franchise program; begin discussions with potential
franchisees in at least one major metropolitan area outside of
initial
market in Las Vegas
Liquidity
and Capital Resources
As
of
July 31, 2007, we had cash of $17,072 and working capital of $17,072. Our
cash
on hand will allow us to cover our anticipated expenses for the fiscal year
beginning August 1, 2007, but will not be sufficient to fund operations beyond
the current fiscal year and will not be sufficient to pay any significant
unanticipated expenses. We currently do not have any operations and we have
minimal income. We will require additional financing to sustain our business
operations if we are not successful in earning substantial revenues within
the
fiscal year beginning August 1, 2007. We currently do not have any arrangements
for financing and we may not be able to obtain financing when required.
We
have
not attained profitable operations and may be dependent upon obtaining financing
to pursue our long-term business plan. For these reasons our auditors stated
in
their report that they have substantial doubt we will be able to continue
as a
going concern.
Results
of Operations for Fiscal Year Ending July 31, 2007
We
did
not earned revenues of $200 from inception through the fiscal year ending
July31, 2007. We do not anticipate earning regular revenues until the end of
the
second quarter of the fiscal year beginning August 1, 2007. We are presently
in
the development stage of our business and we can provide no assurance that
we
will produce significant revenues from our services, or, if revenues are
earned,
that we will be profitable.
We
incurred operating expenses in the amount of $353 from our inception on May1,2007, through the remainder of the fiscal year ending July 31, 2007. Our
operating expenses from inception through January 31, 2007 consisted only
of
general administrative expenses. We anticipate our operating expenses will
increase as we undertake our plan of operations. The increase will be
attributable to the purchase of our initial stock of inventory and supplies,
the
preparation and launch of our initial marketing campaign and related activities
and the professional fees that we will incur in connection with the filing
of a
registration statement with the Securities Exchange Commission under the
Securities Act of 1933. We anticipate our ongoing operating expenses will
also
increase once we become a reporting company under the Securities Exchange
Act of
1934.
Off
Balance Sheet Arrangements
As
of
July 31, 2007, there were no off balance sheet arrangements.
Expected
Changes In Number of Employees, Plant, and Equipment
We
do not
have plans to purchase any physical plant or any significant equipment or
to
change the number of our employees during the next twelve months.
Except
as
described below, none of the following parties has, since our date of
incorporation, had any material interest, direct or indirect, in any transaction
with us or in any presently proposed transaction that has or will materially
affect us:
·
Any
of our directors or officers;
·
Any
person proposed as a nominee for election as a
director;
·
Any
person who beneficially owns, directly or indirectly, shares carrying
more
than 10% of the voting rights attached to our outstanding shares
of common
stock
·
Any
of our promoters;
·
Any
relative or spouse of any of the foregoing persons who has the same
house
address as such person.
1.
On
July 27, 2007, the Company borrowed $1,000 from its President, Anusha
Kumar, under the terms of a Promissory Note of the same date. The
Promissory Note payable to Ms. Kumar is due on July 31, 2009, accrues
interest at 8% per annum until paid, and is
unsecured.
No
Public Market for Common Stock.
There
is presently no public market for our common stock. We anticipate making
an
application for trading of our common stock on the NASD over the counter
bulletin board upon the effectiveness of the registration statement of which
this prospectus forms a part. We can provide no assurance that our shares
will
be traded on the bulletin board, or if traded, that a public market will
materialize.
The
Securities Exchange Commission has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. Penny stocks are
generally equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or quoted
on the
NASDAQ system, provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or system.
The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock, to deliver a standardized risk disclosure document prepared by the
Commission, that: (a) contains a description of the nature and level of risk
in
the market for penny stocks in both public offerings and secondary trading;(b)
contains a description of the broker's or dealer's duties to the customer
and of
he rights and remedies available to the customer with respect to a violation
to
such duties or other requirements of Securities' laws; (c) contains a brief,
clear, narrative description of a dealer market, including bid and ask prices
for penny stocks and the significance of the spread between the bid and ask
price;(d) contains a toll-free telephone number for inquiries on disciplinary
actions;(e) defines significant terms in the disclosure document or in the
conduct of trading in penny stocks; and;(f) contains such other information
and
is in such form, including language, type, size and format, as the Commission
shall require by rule or regulation.
The
broker-dealer also must provide, prior to effecting any transaction in a
penny
stock, the customer with; (a) bid and offer quotations for the penny stock;(b)
the compensation of the broker-dealer and its salesperson in the transaction;(c)
the number of shares to which such bid and ask prices apply, or other comparable
information relating to the depth and liquidity of the market for such stock;
and (d) a monthly account statements showing the market value of each penny
stock held in the customer's account.
In
addition, the penny stock rules require that prior to a transaction in a
penny
stock not otherwise exempt from those rules; the broker-dealer must make
a
special written determination that the penny stock is a suitable investment
for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability
statement.
These
disclosure requirements may have the effect of reducing the trading activity
in
the secondary market for our stock if it becomes subject to these penny stock
rules. Therefore, because our common stock is subject to the penny stock
rules,
stockholders may have difficulty selling those securities.
Currently,
we have thirty (30) holders of record of our common stock.
Rule
144 Shares
None
of
our common stock is currently available for resale to the public under Rule
144.
In
general, under Rule 144 as currently in effect, a person who has beneficially
owned shares of a company's common stock for at least one year is entitled
to
sell within any three month period a number of shares that does not exceed
the
greater of:
1.
one
percent of the number of shares of the company's common stock then
outstanding, which, in our case, will equal approximately 55,900
shares as
of the date of this prospectus, or;
2.
the
average weekly trading volume of the company's common stock during
the
four calendar weeks preceding the filing of a notice on form 144
with
respect to the sale.
Sales
under Rule 144 are also subject to manner of sale provisions and notice
requirements and to the availability of current public information about
the
company.
Under
Rule 144(k), a person who is not one of the company's affiliates at any time
during the three months preceding a sale, and who has beneficially owned
the
shares proposed to be sold for at least two years, is entitled to sell shares
without complying with the manner of sale, public information, volume limitation
or notice provisions of Rule 144.
Stock
Option Grants
To
date,
we have not granted any stock options.
Registration
Rights
We
have
not granted registration rights to the selling shareholders or to any other
persons.
We
are
paying the expenses of the offering because we seek to: (i) become a reporting
company with the Commission under the Securities Exchange Act of 1934; and
(ii)
enable our common stock to be traded on the NASD over-the-counter bulletin
board. We plan to file a Form 8-A registration statement with the Commission
to
cause us to become a reporting company with the Commission under the 1934
Act.
We must be a reporting company under the 1934 Act in order that our common
stock
is eligible for trading on the NASD over-the-counter bulletin board. We believe
that the registration of the resale of shares on behalf of existing shareholders
may facilitate the development of a public market in our common stock if
our
common stock is approved for trading on a recognized market for the trading
of
securities in the United States.
We
consider that the development of a public market for our common stock will
make
an investment in our common stock more attractive to future investors. We
believe that obtaining
reporting
company status under the 1934 Act and trading on the OTCBB should increase
our
ability to raise these additional funds from investors.
Dividends
There
are
no restrictions in our articles of incorporation or bylaws that prevent us
from
declaring dividends. The Nevada Revised Statutes, however, do prohibit us
from
declaring dividends where after giving effect to the distribution of the
dividend:
1.
we
would not be able to pay our debts as they become due in the usual course
of
business, or;
2.
our
total assets would be less than the sum of our total liabilities plus the
amount
that would be needed to satisfy the rights of shareholders who have preferential
rights superior to those receiving the distribution.
We
have
not declared any dividends and we do not plan to declare any dividends in
the
foreseeable future.
The
table
below summarizes all compensation awarded to, earned by, or paid to each
named
executive officer for our last two completed fiscal years for all services
rendered to us.
SUMMARY
COMPENSATION TABLE
Name
and
principal
position
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive
Plan
Compensation
($)
Nonqualified
Deferred
Compensation
Earnings
($)
All
Other
Compensation
($)
Total
($)
Anusha
Kumar,
CEO,
CFO, President, Secretary-Treasurer, & Director
2007
0
0
0
0
0
0
0
0
Outstanding
Equity Awards At Fiscal Year-end Table
The
table
below summarizes all unexercised options, stock that has not vested, and
equity
incentive plan awards for each named executive officer outstanding as of
the end
of our last completed fiscal year.
The
table
below summarizes all compensation paid to our directors for our last completed
fiscal year.
DIRECTOR
COMPENSATION
Name
Fees
Earned or
Paid
in
Cash
($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive
Plan
Compensation
($)
Non-Qualified
Deferred
Compensation
Earnings
($)
All
Other
Compensation
($)
Total
($)
Anusha
Kumar
0
0
0
0
0
0
0
Director
Compensation
Directors
do not currently receive any compensation from the Company for their service
as
members of the Board of Directors. The compensation summarized above reflects
the compensation each of our directors received in their capacities as executive
officers of the Company.
Employment
Agreements with Current Management
The
Company presently not does have employment agreements with any of its current
management and its management currently serves without compensation. The
Company
plans to develop a management compensation system when it becomes economically
feasible.
Stock
Option Grants
We
have
not granted any stock options to the executive officers since our
inception.
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the
Board of Directors
Fairytale
Ventures, Inc.
(A
Development Stage Company)
We
have
audited the accompanying balance sheet of Fairytale Ventures, Inc. as of
July31, 2007, and the related statements of operations, stockholders’ equity and
cash flows from inception on May 1, 2007 through July 31, 2007. These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based
on
our audits.
We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan
and perform the audits 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
audits provide 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 Fairytale Ventures, Inc. as
of July31, 2007 and the results of its operations and its cash flows from inception
on
May 1, 2007 through July 31, 2007, in conformity with accounting principles
generally accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that the
Company
will continue as a going concern. As discussed in Note 4 to the financial
statements, the Company has an accumulated deficit of $153 as of July 31,2007
and has no established source of revenue which raises substantial doubt
about
its ability to continue as a going concern. Management’s plans concerning these
matters are also described in Note 4. The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
Fairytale
Ventures, Inc. (the Company) was incorporated in the State of Nevada
on May 1,2007. The Company is engaged in the principal business activity of providing
on-location themed birthday parties and other special event parties for
children. The
Company has not realized significant revenues to date and therefore is
classified as a development stage company.
Use
of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management
to make
estimates and assumptions that affect the reported amounts of assets
and
liabilities 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.
Basic
(Loss) per Common Share
Basic
(loss) per share is calculated by dividing the Company’s net loss applicable to
common shareholders by the weighted average number of common shares during
the
period. Diluted earnings per share is calculated by dividing the Company’s net
income available to common shareholders by the diluted weighted average
number
of shares outstanding during the year. The diluted weighted average number
of
shares outstanding is the basic weighted number of shares adjusted for
any
potentially dilutive debt or equity. There are no such common stock equivalents
outstanding as of July 31, 2007.
(Loss)
(Numerator)
Shares
(Denominator)
Basic
(Loss) Per Share
Amount
For
the Period Ended
$
(153)
5,590,000
$
(0.00)
Revenue
Recognition
The
Company recognizes revenue when products are fully delivered or services
have
been provided and collection is reasonably assured.
Comprehensive
Income
The
Company has no component of other comprehensive income. Accordingly,
net income
equals comprehensive income for the periods ended July 31, 2007.
Advertising
Costs
The
Company’s policy regarding advertising is to expense advertising when incurred.
The Company had not incurred any advertising expense as of July 31,2007.
1.Summary
of Significant Accounting Policies (Continued)
Cash
and Cash Equivalents
For
purposes of the Statement of Cash Flows, the Company considers all highly
liquid
instruments purchased with a maturity of three months or less to be cash
equivalents to the extent the funds are not being held for investment
purposes.
Income
Taxes
The
Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. SFAS No. 109
Requires
the use of an asset and liability approach in accounting for income taxes.
Deferred tax assets and liabilities are recorded based on the differences
between the financial statement and tax bases of assets and liabilities
and the
tax rates in effect when these differences are expected to reverse. The
Company’s predecessor operated as entity exempt from Federal and State income
taxes.
SFAS
No.
109 requires the reduction of deferred tax assets by a valuation allowance
if,
based on the weight of available evidence, it is more likely than not
that some
or all of the deferred tax assets will not be realized.
The
provision for income taxes differs from the amounts which would be provided
by
applying the statutory federal income tax rate to net loss before provision
for
income taxes for the following reasons:
Due
to
the change in ownership provisions of the Tax Reform Act of 1986, net
operating
loss carry forwards for federal income tax reporting purposes are subject
to
annual limitations. Should a change in ownership occur net operating
loss carry
forwards may be limited as to use in future years.
1.Summary
of Significant Accounting Policies (Continued)
Impairment
of Long-Lived Assets
The
Company continually monitors events and changes in circumstances that
could
indicate carrying amounts of long-lived assets may not be recoverable.
When such
events or changes in circumstances are present, the Company assesses
the
recoverability of long-lived assets by determining whether the carrying
value of
such assets will be recovered through undiscounted expected future cash
flows.
If the total of the future cash flows is less than the carrying amount
of those
assets, the Company recognizes an impairment loss based on the excess
of the
carrying amount over the fair value of the assets. Assets to be disposed
of are
reported at the lower of the carrying amount or the fair value less costs
to
sell.
Accounting
Basis
The
basis
is accounting principles generally accepted in the United States of America.
The
Company has adopted a July 31 fiscal year end.
Inventory
The
Company accounts for inventory of raw materials and finished goods on
a cost
basis. The inventory is maintained on a first in- first out (FIFO)
basis.
The
Company adopted SFAS No. 123-R effective January 1, 2006 using the
modified prospective method. Under this transition method, stock compensation
expense includes compensation
expense for all stock-based compensation awards granted on or after
January 1,2006, based on the grant-date fair value estimated in accordance
with the provisions of SFAS No. 123-R.
Recent
Accounting Pronouncements
In
September 2006, the Financial Accounting Standards Board issued Statement
of
Financial Accounting Standards No. 157, “Fair Value Measurements” which defines
fair value, establishes a framework for measuring fair value in generally
accepted accounting principles (GAAP), and expands disclosures about
fair value
measurements. Where applicable, SFAS No. 157 simplifies and codifies
related guidance within GAAP and does not require any new fair value
measurements. SFAS No. 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within
those fiscal
years. Earlier
adoption is encouraged. The Company does not expect the adoption of SFAS
No. 157 to have a significant effect on its financial position or results
of operation.
1.Summary
of Significant Accounting Policies (Continued)
Recent
Accounting Pronouncements (Continued)
In
June
2006, the Financial Accounting Standards Board issued FASB Interpretation
No.
48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB
Statement No. 109”, which prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of
a tax
position taken or expected to be taken in a tax return. FIN 48 also provides
guidance on de-recognition, classification, interest and penalties, accounting
in interim periods, disclosure and transition. FIN 48 is effective for
fiscal
years beginning after December 15, 2006. The Company does not expect
the
adoption of FIN 48 to have a material impact on its financial reporting,
and the
Company is currently evaluating the impact, if any, the adoption of FIN
48 will
have on its disclosure requirements.
In
March
2006, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 156, “Accounting for Servicing of Financial Assets—an
amendment of FASB Statement No. 140.” This statement requires an entity to
recognize a servicing asset or servicing liability each time it undertakes
an
obligation to service a financial asset by entering into a servicing
contract in
any of the following situations: a transfer of the servicer’s financial assets
that meets the requirements for sale accounting; a transfer of the servicer’s
financial assets to a qualifying special-purpose entity in a guaranteed
mortgage
securitization in which the transferor retains all of the resulting securities
and classifies them as either available-for-sale securities or trading
securities; or an acquisition or assumption of an obligation to service
a
financial asset that does not relate to financial assets of the servicer
or its
consolidated affiliates. The statement also requires all separately recognized
servicing assets and servicing liabilities to be initially measured at
fair
value, if practicable, and permits an entity to choose either the amortization
or fair value method for subsequent measurement of each class of servicing
assets and liabilities. The statement further permits, at its initial
adoption,
a one-time reclassification of available for sale securities to trading
securities by entities with recognized servicing rights, without calling
into
question the treatment of other available for sale securities under
Statement 115, provided that the available for sale securities are identified
in
some manner as offsetting the entity’s exposure to changes in fair value of
servicing assets or servicing liabilities that a servicer elects to subsequently
measure at fair value and requires separate presentation of servicing
assets and
servicing liabilities subsequently measured at fair value in the statement
of
financial position and additional disclosures for all separately recognized
servicing assets and servicing liabilities. This statement is effective
for
fiscal years beginning after September 15, 2006, with early adoption
permitted
as of the beginning of an entity’s fiscal year. Management believes the adoption
of this statement will have no immediate impact on the Company’s financial
condition or results of operations.
On
May14, 2007, the Company received $4,000 from its founders for 4,000,000
shares of
its common stock. On June 22, 2007, the Company completed an unregistered
private offering under the Securities Act of 1933, as amended, relying
upon the
exemption from registration afforded by Rule 504 of Regulation D promulgated
there under. The Company sold 1,590,000 shares of its $0.001 par value
common
stock at a price of $0.075 per share for $11,925 in cash.
3.RELATED
PARTY TRANSACTIONS
The
Company has recorded expenses paid on its behalf of $300 by related parties
as a
contribution to capital.
The
Company has a note payable to a shareholder for $1,000. The note payable
is due
on July 31, 2009, accrues interest at 8% per annum and is
unsecured.
4.GOING
CONCERN
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principle, which contemplate continuation
of the
Company as a going concern. However, the Company has accumulated deficit
of $153
as of July 31, 2007. The Company currently has limited liquidity, and
has not
completed its efforts to establish a stabilized source of revenues sufficient
to
cover operating costs over an extended period of time.
Management
anticipates that the Company will be dependent, for the near future,
on
additional investment capital to fund operating expenses The Company
intends to
position itself so that it may be able to raise additional funds through
the
capital markets. In light of management’s efforts, there are no assurances that
the Company will be successful in this or any of its endeavors or become
financially viable and continue as a going concern.
We
have
filed a registration statement on form SB-2 under the Securities Act of 1933
with the Securities and Exchange Commission with respect to the shares of
our
common stock offered through this prospectus. This prospectus is filed as
a part
of that registration statement, but does not contain all of the information
contained in the registration statement and exhibits. Statements made in
the
registration statement are summaries of the material terms of the referenced
contracts, agreements or documents of the company. We refer you to our
registration statement and each exhibit attached to it for a more detailed
description of matters involving the company, and the statements we have
made in
this prospectus are qualified in their entirety by reference to these additional
materials. You may inspect the registration statement, exhibits and schedules
filed with the Securities and Exchange Commission at the Commission's principal
office in Washington, D.C. Copies of all or any part of the registration
statement may be obtained from the Public Reference Section of the Securities
and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
Please
Call the Commission at 1-800-SEC-0330 for further information on the operation
of the public reference rooms. The Securities and Exchange Commission also
maintains a web site at http://www.sec.gov that contains reports, proxy
Statements and information regarding registrants that files electronically
with
the Commission. Our registration statement and the referenced exhibits can
also
be found on this site.
If
we are
not required to provide an annual report to our security holders, we intend
to
still voluntarily do so when otherwise due, and will attach audited financial
statements with such report.
Until
________________, all dealers that effect transactions in these securities
whether or not participating in this offering may be required to deliver
a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
Our
officers and directors are indemnified as provided by the Nevada Revised
Statutes and our bylaws.
Under
the
governing Nevada statutes, director immunity from liability to a company
or its
shareholders for monetary liabilities applies automatically unless it is
specifically limited by a company's articles of incorporation. Our articles
of
incorporation do not contain any limiting language regarding director immunity
from liability. Excepted from this immunity are:
1.
a
willful failure to deal fairly with the company or its shareholders
in
connection with a matter in which the director has a material conflict
of
interest;
2.
a
violation of criminal law (unless the director had reasonable cause
to
believe that his or her conduct was lawful or no reasonable cause
to
believe that his or her conduct was
unlawful);
3.
a
transaction from which the director derived an improper personal
profit;
and
4.
willful
misconduct.
Our
bylaws provide that we will indemnify our directors and officers to the fullest
extent not prohibited by Nevada law; provided, however, that we may modify
the
extent of such indemnification by individual contracts with our directors
and
officers; and, provided, further, that we shall not be required to indemnify
any
director or officer in connection with any proceeding (or part thereof)
initiated by such person unless:
1.
such
indemnification is expressly required to be made by
law;
2.
the
proceeding was authorized by our Board of
Directors;
3.
such
indemnification is provided by us, in our sole discretion, pursuant
to the
powers vested in us under Nevada law; or;
4.
such
indemnification is required to be made pursuant to the
bylaws.
Our
bylaws provide that we will advance to any person who was or is a party or
is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
by
reason of the fact that he is or was a director or officer, of the company,
or
is or was serving at the request of the company as a director or executive
officer of another company, partnership, joint venture, trust or other
enterprise, prior to the final disposition of the proceeding, promptly following
request therefore, all expenses incurred by any director or officer in
connection with such proceeding upon receipt of an undertaking by or on behalf
of such person to repay said amounts if it should be determined ultimately
that
such person is not entitled to be indemnified under our bylaws or
otherwise.
Our
bylaws provide that no advance shall be made by us to an officer of the company,
except by reason of the fact that such officer is or was a director of the
company in which event this paragraph shall not apply, in any action, suit
or
proceeding, whether civil, criminal, administrative or investigative, if
a
determination is reasonably and promptly made: (a) by the board of directors
by
a majority vote of a quorum consisting of directors who were not parties
to the
proceeding, or (b) if such quorum is not obtainable, or, even if obtainable,
a
quorum of disinterested directors so directs, by independent legal counsel
in a
written opinion, that the facts known to the decision-making party at the
time
such determination is made demonstrate clearly and convincingly that such
person
acted in bad faith or in a manner that such person did not believe to be
in or
not opposed to the best interests of the company.
The
estimated costs of this offering are as follows:
Securities
and Exchange Commission registration
fee
$
0.37
Federal
Taxes
$
zero
State
Taxes and Fees
$
zero
Transfer
Agent Fees
$
450
Accounting
fees and expenses
$
3,000
Legal
fees and expenses
$
2,500
Total
$
5,950.37
All
amounts are estimates, other than the Commission's registration
fee.
We
are
paying all expenses of the offering listed above. No portion of these expenses
will be borne by the selling shareholders. The selling shareholders, however,
will pay any other expenses incurred in selling their common stock, including
any brokerage commissions or costs of sale.
We
closed
an issue of 4,000,000 shares of common stock on May 14, 2007 to Anusha Kumar,
our president, CEO, CFO, and sole director. Ms. Kumar acquired these shares
in
exchange for $4,000 at a price of $0.001 per share. These shares were issued
pursuant to Section 4(2) of the Securities Act of 1933 and are restricted
shares
as defined in the Securities Act. We did not engage in any general solicitation
or advertising.
We
completed an offering of 1,590,000 shares of our common stock at a price
of
$0.0075 per share to a total of twenty-nine (29) purchasers on July 27, 2007.
The total amount we received from this offering was $11,925. The identity
of the
purchasers from this offering is included in the selling shareholder table
set
forth above.
We
completed the offering pursuant Rule 504 of Regulation D of the Securities
Act
of 1933.
(1)
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
to
reflect in the prospectus any facts or events arising after the effective
date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change
in the information set forth in the registration statement. Notwithstanding
the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in the
effective registration statement; and (iii) to include any material information
with respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement.
(2)
That,
for the purpose of determining any liability under the Securities Act of
1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3)
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4)
That,
for the purpose of determining liability under the Securities Act to any
purchaser,
i.
Each
prospectus filed by the Company pursuant to Rule 424(b)(3) shall be deemed
to be
part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
ii.
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7)
as
part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose
of
providing the information required by section 10(a) of the Securities Act
shall
be deemed to be part of and included in the registration statement as of
the
earlier of the date such form of prospectus is first used after effectiveness
or
the date of the first contract of sale of securities in the offering described
in the prospectus. As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such date shall
be
deemed to be a new effective date of the registration statement relating
to the
securities in the registration statement to which that prospectus relates,
and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; provided, however, that no statement made in
a
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into
the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such effective
date, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made
in
any such document immediately prior to such effective date; or
Each
prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying on Rule
430B
or other than prospectuses filed in reliance on Rule 430A, shall be deemed
to be
part of and included in the registration statement as of the date it is first
used after effectiveness; provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into
the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such first
use,
supersede or modify any statement that was made in the registration statement
or
prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use.
(5)
That,
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of securities: The
undersigned registrant undertakes that in a primary offering of securities
of
the registrant pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to
the
purchaser and will be considered to offer and sell such securities to the
purchaser: (i) any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to Rule
424;
(ii) any free writing prospectus relating to the offering prepared by or
on
behalf of the undersigned registrant or used or referred to by the undersigned
registrant; (iii) the portion of any other free writing prospectus relating
to
the offering containing material information about the undersigned registrant
or
its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
(6)
Insofar as Indemnification for liabilities arising under the Securities Act
of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provision, or otherwise, the registrant
has
been advised that in the opinion of the Securities and Exchange Commission
such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being
registered, the registrant will, unless in the opinion of its counsel the
matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
In
accordance with the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of
the
requirements for filing on Form SB-2 and authorized this registration statement
to be signed on its behalf by the undersigned, in the City of Las Vegas,
Nevada,
on August 29, 2007.
President, Chief Executive Officer,
Chief
Financial Officer, Principal Accounting Officer and
Director
POWER
OF ATTORNEY
KNOW
ALL
PERSONS BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Anusha Kumar as his true and lawful attorney-in-fact
and agent, with full power of substitution and re-substitution, for him and
in
his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this registration statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the U.S. Securities and Exchange Commission, granting
unto said attorney-in-fact and agent, full power and authority to do and
perform
each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent
or any of them, or of their substitute or substitutes, may lawfully do or
cause
to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act, this registration statement has
been
signed by the following persons in the capacities and on the dates
stated.
