-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NI6XWPmAQ9vDfZlNmVHpcaz+t/0QxRlxNUyEAYLU1NXl4HRH6tSlbQYC5A+IL5ge KHiDrF3sLzdVrHGeMAOyTw== 0001014897-04-000083.txt : 20040521 0001014897-04-000083.hdr.sgml : 20040521 20040521134055 ACCESSION NUMBER: 0001014897-04-000083 CONFORMED SUBMISSION TYPE: 10SB12G PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20040521 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Creative Beauty Supply of New Jersey CORP CENTRAL INDEX KEY: 0001290658 IRS NUMBER: 000000000 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10SB12G SEC ACT: 1934 Act SEC FILE NUMBER: 000-50773 FILM NUMBER: 04823597 BUSINESS ADDRESS: STREET 1: 380 TOTOWA ROAD CITY: TOTOWA STATE: NJ ZIP: 07512 BUSINESS PHONE: 973-904-0004 MAIL ADDRESS: STREET 1: 380 TOTOWA ROAD CITY: TOTOWA STATE: NJ ZIP: 07512 10SB12G 1 creativenj10sb.txt FORM 10SB SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10SB General Form for Registration of Securities of Small Business Issuers Under Section 12(b) or (g) of the Securities Exchange Act of 1934 Creative Beauty Supply of New Jersey Corporation (Exact name of Small Business Issuer in its charter) New Jersey Applied For (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification number) 380 Totowa Road Totowa, NJ 07512 (Address of principal executive offices) (Zip Code) Registrant's Telephone number, including area code: (973) 904-0004 Securities to be registered pursuant to Section 12(b) of the Act: None Securities to be registered pursuant to Section 12(g) of the Act: Common Stock, $.001 par value Forward-Looking Statements and Associated Risk. This Registration Statement contains forward-looking statements including statements regarding, among other items, Creative NJ's growth strategies, and anticipated trends in Creative NJ's business and demographics. These forward-looking statements are based largely on Creative NJ's expectations and are subject to a number of risks and uncertainties, certain of which are beyond Creative NJ's control. Actual results could differ materially from these forward-looking statements as a result of the factors, including among others, regulatory or economic influences. 2 ITEM 1. DESCRIPTION OF BUSINESS Creative Beauty Supply of New Jersey Corp was incorporated in the State of New Jersey on October 1, 2003. It was formed pursuant to a resolution of the board of directors of Creative Beauty Supply Inc., as a wholly owned subsidiary of that company, a publicly traded New Jersey corporation. On January 1, 2004, the assets and liabilities of CBS were contributed at book value to Creative NJ, and this subsidiary was then spun-off by CBS to its shareholders. This spin-off was done in contemplation of a merger which occurred on March 19, 2004 between CBS and Global Digital Solutions, Inc., a Delaware corporation, upon approval by vote of the stockholders of CBS and Global Digital whereby the former shareholders of CBS became the owners of 100 percent of the common stock of Creative NJ. Also, on January 1, 2004, Creative NJ commenced operations in the beauty supply industry at both the wholesale and retail levels. Creative NJ had no transactions between its date of incorporation and January 1, 2004. Therefore, as used throughout this registration statement, inception means January 1, 2004, the first date upon which a transaction occurred in Creative NJ. Pursuant to the terms of the spin-off arrangement, Global Digital will provide its shareholders as of January 1, 2004, one share of Creative NJ for every share of Global Digital owned as of the record date. There is not expected to be any material changes in Creative NJ's operations as a result of the spin-off. Corporate Operations. Creative NJ operates as a cosmetic and beauty supply distributor at both the retail and wholesale levels. Creative NJ's various beauty and cosmetic products are purchased by it from a number of unaffiliated suppliers and manufacturers and thereafter sold on its premises to retail "walk-in" customers or directly to beauty salons. Products. Creative NJ's beauty and cosmetic products primarily consist of the following items: Shampoos, conditioners, mousse, setting/styling and spray gels, lotions, lipstick and nail products and hair sprays as well as such beauty and cosmetic related appliances as blow dryers, curling irons, mirrors, air diffusers and hair trimmers. Many of the aforesaid products (at least 80%) may be considered to be "national" brands bearing consumer recognition with respect to the their respective names. Such consumer recognition of such "brand" names is considered by Creative NJ to be of assistance to it with respect to sale of such products since consumer recognition is advanced by national brand media advertising (at no cost to Creative NJ but to Creative NJ's benefit) when potential customers are already familiar with the product as a result of media advertising. Suppliers. The above indicated products are purchased by Creative NJ from a number of unaffiliated suppliers and management of Creative NJ does not contemplate or anticipate any significant difficulties with its ability to purchase such products from its current suppliers and/or from replacement and/or additional suppliers if and when necessary or advisable. Creative NJ does not have any written agreements with any of its suppliers. From inception to January 31, 2004, Creative NJ purchased approximately 56% of its products from one supplier. Management believes that other suppliers could provide similar products on comparable terms. A change in suppliers, however, could cause a delay in obtaining merchandise and possible loss of sales that could affect operating results. 3 Distribution. Creative NJ is currently distributing its products to approximately 200 nail and beauty salons. Its territory is principally and almost exclusively located within the northern and central portion of the State of New Jersey, in the counties of Essex, Hudson, Bergen, Passaic, Morris and Union. Creative NJ sells cosmetic and beauty supplies, both on the retail and wholesale levels to beauty salons and to the general public. Wholesale sales consist of sales to beauty salons of merchandise for resale. Sales of merchandise to these customers for consumption in the course of providing hair care services, and not for the resale are considered retail sales. All sales to the general public are also considered retail sales. Net sales are summarized as follows for the period from inception (January 1, 2004) through January 31, 2004: Retail $ 15,661 Wholesale 18,400 ---------- $ 34,061 ========== Competition. Competition is based on price. Creative NJ's price ranges of its various products are within the manufacturer-suggested prices, services and product lines. Creative NJ is competing with established companies and other entities (many of which may possess substantially greater resources than Creative NJ). Almost all of the companies with which Creative NJ competes are substantially larger, have more substantial histories, backgrounds, experience and records of successful operations, greater financial, technical, marketing and other resources, more employees and more extensive facilities than Creative NJ now has, or will have in the foreseeable future. It is also likely that other competitors will emerge in the near future. There is no assurance that Creative NJ's products will compete successfully with other established and/or well-regarded products. Inability to compete successfully might result in increased costs, reduced yields and additional risks to the investors herein. Marketing. Creative NJ has no formal marketing plan and no sales representatives. Creative NJ's products will be marketed through catalog advertising to the salon industry and special promotions. The salons order and receive their products weekly. No customer accounts for more than 20% of sales and there are no existing sales contracts. Backlog. Creative NJ services its wholesale accounts on two days notice. There is no backlog. If Creative NJ does not have a specific item, it is back ordered until the next delivery. Employees. Creative NJ currently has one full-time employee and one part-time employee. Creative NJ's operations do not depend nor are they expected to depend upon patents, copyrights, trade secrets, know-how or other proprietary information. No amounts have been expended by Creative NJ for research and development of any products nor does Creative NJ expect to expend any amounts this year or in the near future. 4 Creative NJ's business, products and properties are not subject to material regulation (including environmental regulation) by federal, state, or local governmental agencies. Seasonal Nature of Business Activities. Creative NJ's business activities are not seasonal. Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS Trends and Uncertainties. Demand for Creative NJ's products will be dependent on, among other things, market acceptance of Creative NJ's concept and general economic conditions, which are cyclical in nature. Inasmuch as a major portion of Creative NJ's activities is the receipt of revenues from the sales of its products, Creative NJ's business operations may be adversely affected by Creative NJ's competitors. Capital and Source of Liquidity. Creative NJ's lease, which was the obligation of the Creative NJ's parent, was assigned to Creative NJ on January 1, 2004. The lease expires on April 30, 2004 and has a monthly rent of $1,300. The future lease payments at January 31, 2004 are $3,900 For the period from inception (January 1, 2004) to January 31, 2004, Creative NJ had net cash acquired in spin-off of $256,668, received proceeds from parent company of $3,209 and paid $4,396 to parent company. Net cash acquired in spin-off transaction was comprised of assets acquired other than cash of $263,113, liabilities assumed of ($36,490) and common stock issued of ($483,291). As a result, Creative NJ had net cash provided by financing activities of $255,481 for the period from inception (January 1, 2004) to January 31, 2004. For the period from inception (January 1, 2004) to January 31, 2004, Creative NJ did not pursue any investing activities. Results of Operations. Creative NJ sells approximately 1,000 different products at varying mark ups ranging from 20 to 40 percent. Creative NJ has two types of customers, beauty salons and the general public. The gross profit margin on sales of merchandises to the general public ranges from 30 to 40 percent depending on the product sold. The gross margin on sales of merchandise to beauty salons is somewhat less ranging from 20 to 28 percent depending on the product sold and the discount given. For the period from inception (January 1, 2004) through January 31, 2004, Creative NJ had net sales of $34,061 and cost of sales of $11,649 resulting in gross profit of $22,412. Creative NJ had operating expenses of $9,422 for the period from inception (January 1, 2004) through January 31, 2004. These expenses primarily consisted of officer's salaries of $2,500, employee benefits of $999, professional fees of $2,000, rent of $1,300, and other general and administrative expenses of $2,623. Plan of Operation. During the next twelve months, Creative NJ may obtain new product lines by negotiating with various manufacturers. Creative NJ does not intend to hire any additional employees. Creative NJ's liquidity will be decreased due to little or no increase in revenue and higher operating costs. 5 Creative NJ is not delinquent on any of its obligations even though Creative NJ has had limited operating revenues. Creative NJ intends to market its products utilizing cash made available from the sale of its products. Creative NJ is of the opinion that revenues from the sales of its products and the proceeds from the sale of its securities will be sufficient to pay its expenses. Creative NJ does not have nor does it intend to have pension and/or other post-retirement benefits in the future. Creative NJ does not have any or intends to have any derivative instruments or hedging activities. Critical Accounting Policies The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in Creative NJ's financial statements and the accompanying notes. The amounts of assets and liabilities reported in our balance sheets and the amounts of revenues and expenses reported for each of our fiscal periods are affected by estimates and assumptions which are used for, but not limited to, the accounting for allowance for doubtful accounts, fair market values of marketable securities, asset impairments, inventory and income taxes. Actual results could differ from these estimates. The following critical accounting policies are significantly affected by judgments, assumptions and estimates used in the preparation of the financial statements. Revenue is recognized when earned in accordance with applicable accounting standards. Net sales are recognized at the time products are shipped to customers. Over-the-counter sales are recorded at point of sale. The allowance for doubtful accounts is based on Creative NJ's assessment of the collectability of specific customer accounts, credit worthiness and economic as well as the aging of the accounts receivable balances. If there is a deterioration of a major customer's credit worthiness or actual defaults are higher than Creative NJ's historical experience, Creative NJ's estimates of recoverability of amounts due Creative NJ could be adversely affected. Creative NJ has elected to classify all of its investments in equity securities as available-for-sale and report them at fair value. Realized gains and losses are recorded in earnings (loss) and changes in the unrealized gain or loss is excluded from earnings (loss) and reported as a component of other comprehensive income (loss). Creative NJ's inventory consists of finished goods and is valued at lower of cost or market with cost being determined on the first-in, first-out (FIFO) method. Creative NJ also considers obsolescense, excessive levels, deterioration and other factors in evaluating net realizable value. Creative NJ periodically evaluates the net realizable value of long- lived assets, including property and equipment, relying on a number of factors including operating results, business plans, economic projections and anticipated future cash flows. An impairment in the carrying value of an asset is recognized whenever future cash flows 6 (undiscounted) from an asset are estimated to be less than its carrying value. The amount of the impairment recognized is the difference between the carrying value of the asset and its fair value. New Accounting Standards: In December 2003 the Financial Accounting Standards Board (FASB) issued a revised Interpretation No. 46, "Consolidation of Variable Interest Entities-an Interpretation of ARB No. 51," which provides guidance on the identification of and reporting for variable interest entities including the criteria for consideration in determining whether a variable interest entity should be consolidated. Interpretation No. 46 is effective for Creative NJ beginning January 1, 2004. This statement was effective for Creative NJ beginning January 1, 2004 and had no impact on Creative NJ's financial position at that date, or results of operations for the period ended January 31, 2004 nor is it expected to have an impact in the future. In May 2003 the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity," (SFAS 150). This statement establishes standards for how an issuer classifies and measures financial instruments with characteristics of both liabilities and equity. SFAS 150 requires that instruments that are redeemable upon liquidation or termination of an issuing subsidiary that has a limited life are considered to be mandatorily redeemable shares in the financial statements of the parent. Accordingly, those non-controlling interests are required to be classified as liabilities and recorded at settlement value by this standard. This statement was effective for Creative NJ beginning January 1, 2004 and had no impact on Creative NJ's financial position at that date or results of operations for the period ended January 31, 2004 nor is it expected to have an impact in the future. In December 2003, the FASB revised SFAS No. 132, "Employers' Disclosures about Pensions and Other Post-Retirement Benefits," (SFAS 132). This statement revised employers' disclosures about pension plans and other post-retirement benefit plans. It requires additional disclosures to those in the original SFAS 132 about the plan assets, benefit obligations, cash flows and net periodic benefit cost of defined benefit pension plans and other defined post-retirement plans. This statement is effective for fiscal years ending after December 15, 2003 and quarters beginning after that date. Creative NJ adopted this statement on January 1, 2004 and it had no impact on its financial position at that date or results of operations for the period ended January 31, 2004, nor is it expected to have an impact in the future. Forward-Looking Statements This Form 10-KSB contains forward-looking statements within the meaning of the federal securities laws. These statements include those concerning the following: Our intentions, beliefs and expectations regarding the fair value of all assets and liabilities recorded; our strategies; growth opportunities; product development and introduction relating to new and existing products; the enterprise market and related opportunities; competition and competitive advantages and disadvantages; industry standards and compatibility of our products; relationships with our employees; our facilities, operating lease and our ability to secure additional space; cash dividends; excess inventory, our expenses; interest and other income; our beliefs and expectations about our future success and results; our operating results; our belief that our cash and cash equivalents will be 7 sufficient to satisfy our anticipated cash requirements; our expectations regarding our revenues and customers; investments and interest rates. These statements are subject to risk and uncertainties that could cause actual results and events to differ materially. Creative NJ undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-KSB. Controls and Procedures. The chief executive officer/chief financial officer of Creative NJ has made an evaluation of the disclosure controls and procedures relating to the financial statements of Creative NJ for the period from inception (January 1, 2004) through January 31, 2004 and have judged such controls and procedures to be effective as of January 31, 2004 (the evaluation date). There have not been any significant changes in the internal controls of Creative NJ or other factors that could significantly affect internal controls relating to Creative NJ since the evaluation date. ITEM 3. DESCRIPTION OF PROPERTY. Creative NJ's executive offices and showroom are located at 380 Totowa Road, Totowa, New Jersey 07512. Telephone No. (973) 904-0004. These offices consist of 1,400 square feet on a lease term. Creative NJ is obligated as assignee under a lease agreement with an unrelated party for the space occupied by its executive offices, store and warehouse facilities in Totowa, New Jersey. This lease, which was the obligation of the Creative NJ's parent, was assigned to Creative NJ on January 1, 2004. The lease expires on April 30, 2004 and has a monthly rent of $1,300. The future lease payments at January 31, 2004 are $3,900. Creative NJ owns its delivery vehicle and the computers used in the operation of the business. ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Currently Global Digital Solutions, Inc. is the sole shareholder holder of Creative NJ. The following tabulates holdings of shares of Creative NJ by each person who, adjusted for completion of the spin- off, will holders of record or is known by Management to own beneficially more than 5.0% of the common shares and, in addition, by all directors and officers of Creative NJ individually and as a group. Each named beneficial owner has sole voting and investment power with respect to the shares set forth opposite his name. Shareholdings at April 30, 2004 Adjusted for completion of the spin-off Percentage of Number & Class(1) Outstanding Name and Address of Shares Common Shares Carmine Catizone Common 1,308,000 (direct) 31.26% 10 1/2 Walker Avenue 80,600(2) (indirect) 1.93% Morristown, NJ 07960 8 Daniel T. Generelli Common 80,000 1.91% 24 Kansas Street Hackensack, NJ 07601 All Directors & Officers 1,468,600 35.10% as a group (2 persons) Pat Catizone Common 500,000 (direct) 11.95% 266 Cedar Street Common 10,000(3)(indirect) .24% Cedar Grove, NJ 07009 Ram Venture Holdings Corp. Common 630,000 15.06% 3040 E. Commercial Blvd. Fort Lauderdale, FL 33308 Cede & Co. Common 487,500 11.65% P.O. Box 20 Bowling Green Station New York, NY 10274
(1)Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended, beneficial ownership of a security consists of sole or shared voting power (including the power to vote or direct the voting) and/or sole or shared investment power (including the power to dispose or direct the disposition) with respect to a security whether through a contract, arrangement, understanding, relationship or otherwise. Unless otherwise indicated, each person indicated above has sole power to vote, or dispose or direct the disposition of all shares beneficially owned, subject to applicable unity property laws. (2)Carmine Catizone and Phyllis Catizone are husband and wife and are deemed to be the beneficial owners of each other's shares and custodial shares. (3)Pat Catizone and Barbara Catizone are husband and wife and are deemed to be the beneficial owners of each other's shares. ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS. Name Position Held Term of Office Carmine Catizone, age 54 President, Director October 1, 2003 to present Daniel Generelli, age 36 Secretary/Treasurer October 1, 2003 Vice-President/Director to present
Resumes: Carmine Catizone. Mr. Catizone has been President and a director of Creative NJ since its incorporation on October 1, 2003. From June 1988 to July 1994, Mr. Catizone was President and a Director of J&E Beauty Supply, Inc., a retail and wholesale beauty supply distributor. Mr. Catizone served as President and a director of C&C Investments, Inc., a blank check company (now known as T.O.P.S. Medical Corp., which provided chemicals for transportation of organs) from July 1977 to December 1984. From August 1995 to March 19, 2004, Mr. Catizone was President and a director of Creative Beauty Supply, Inc. Mr. Catizone is not currently involved with T.O.P.S. Medical Corp. From June 1980 to December 1985, Mr. Catizone had been district 9 sales manager (engaged in sales of cosmetics) for Chattem Labs. Mr. Catizone received his Bachelor of Science degree from Fairleigh Dickerson University in 1972. Daniel Generelli. Mr. Generelli has been Secretary-Treasurer and a director of Creative NJ since its incorporation on October 1, 2003. From August 1995 to March 19, 2004, Mr. Generelli was Secretary- Treasurer and a director of Creative Beauty Supply, Inc. From December 1989 to July 1995, Mr. Generelli was Secretary/Treasurer and a director of J&E Beauty Supply, Inc., a retail and wholesale beauty supply distributor. From December 1984 to December 1989, Mr. Generelli was employed as a distribution supervisor with Tags Beauty Supply, a retail and wholesale beauty supply distributor in Fairfield, NJ. Mr. Generelli graduated from Ramapo College of New Jersey with a Bachelor of Science degree in June of 1984. ITEM 6. EXECUTIVE COMPENSATION To date, Creative NJ has not entered into employment agreements nor are any contemplated.
Annual Compensation Awards Payouts --------------------------- ---------------------- ---------- Other Restricted Securities Annual Stock Underlying LTIP All Other Name and Position Year Salary($) Bonus($) Compensation($) Awards(#) Options/SARs(#) Payouts($) Compensation($) Carmine Catizone 2003 --- --- --- --- --- --- --- President Daniel Generelli 2003 2,170 ---- ---- ---- ---- ---- ---- Secretary/Treasuer/ Director
Board of Directors Compensation. Members of the Board of Directors may receive an amount yet to be determined annually for their participation and will be required to attend a minimum of four meetings per fiscal year. To date, Creative NJ has paid $0.00 in directors' expenses. ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Amount due from related party. From inception to January 31, 2004, amount due from related party is comprised of advances to Creative Beauty Supply Inc. the parent of Creative NJ, of $4,396, net of amounts transferred in from the parent of $3,209. On January 1, 2004, the assets and liabilities of CBS were contributed at book value to Creative NJ, and this subsidiary was then spun-off by CBS to its shareholders. This spin-off was done in contemplation of a merger which occurred on March 19, 2004 between CBS and Global Digital Solutions, Inc., a Delaware corporation, upon approval by vote of the stockholders of CBS and Global Digital, whereby the former shareholders of CBS became the owners of 100 percent of the common stock of Creative NJ. Pursuant to the Memorandum of Understanding between CBS and Global Digital, Creative NJ and Carmine Catizone, Pasquale Catizone and their families have agreed to indemnify Global from any claims arising from existing liabilities of CBS prior to the closing that occurred on March 19, 2004. Carmine Catizone was President and Chief Executive Officer 10 of CBS through the closing date of the merger, and is currently President of Creative NJ and Pasquale Catizone was a stockholder of CBS through the closing date of the merger. There are no other agreements between Global Digital Solutions, Inc. and Creative NJ post spin-off. The spin-off includes all the operations, assets and liabilities of the Creative NJ subsidiary. Global Digital does not retain any liability once the spin-off is completed and Global Digital and Creative NJ will mutually release each other from any claims after the spin-off. ITEM 8. DESCRIPTION OF SECURITIES The following statements constitute brief summaries of Creative NJ's Certificate of Incorporation and Bylaws, as amended. Common Stock. Creative NJ's articles of incorporation authorize it to issue up to 100,000,000 common shares, $.001 par value per common share. As of January 31, 2004, 3,494,650 common shares were issued and outstanding. Creative NJ is authorized to issue up to 10,000,000 preferred shares. As of January 31, 2004, no preferred shares were issued and outstanding. Liquidation Rights. Upon liquidation or dissolution, each outstanding common share will be entitled to share equally in the assets of Creative NJ legally available for distribution to shareholders after the payment of all debts and other liabilities. Dividend Rights. There are no limitations or restrictions upon the rights of the board of directors to declare dividends out of any funds legally available therefore. Creative NJ has not paid dividends to date and it is not anticipated that any dividends will be paid in the foreseeable future. The board of directors initially may follow a policy of retaining earnings, if any, to finance the future growth of Creative NJ. Accordingly, future dividends, if any, will depend upon, among other considerations, Creative NJ's need for working capital and its financial conditions at the time. Voting Rights. Holders of common shares of Creative NJ are entitled to voting rights of one hundred percent. Holders may cast one vote for each share held at all shareholders meetings for all purposes. Other Rights. Common shares are not redeemable, have no conversion rights and carry no preemptive or other rights to subscribe to or purchase additional common shares in the event of a subsequent offering. Our bylaws allow action to be taken by written consent rather than at a meeting of stockholders with the consent of the holders of a majority of shares entitled to vote. Transfer Agent. Continental Stock Transfer & Trust Company acts as Creative NJ's transfer agent. 11 PART II ITEM 1. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Market Information. Creative NJ's common stock is not included in the pink sheets or in the OTC Bulletin Board maintained by the NASD. Creative NJ plans to apply to the OTC Bulletin Board. There is no public trading market for Creative NJ common stock and there is no guarantee any trading market will develop. Holders. The sole shareholder of record of Creative NJ's common stock, as of January 31, 2004 was Creative Beauty Supply, Inc. As a result of the spin-off, the approximate number of record holders of Creative NJ will be 113. Dividends. Holders of Creative NJ's common stock are entitled to receive such dividends as may be declared by its board of directors after the spin-off has been completed. ITEM 2. LEGAL PROCEEDINGS Creative NJ is not a party to any legal proceedings nor is Creative NJ aware of any disputes that may result in legal proceedings. ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS. Since inception, there has been no changes in or disagreements with Creative NJ's principal independent accountant. ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES. On January 1, 2004, 3,494,650 common shares were issued to Creative Beauty Supply, Inc., the parent company for $.001 per common share. These common shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1934 to a sophisticated investor. ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS Indemnification. Creative NJ shall indemnify to the fullest extent permitted by, and in the manner permissible under the laws of the State of New Jersey, any person made, or threatened to be made, a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he is or was a director or officer of Creative NJ, or served any other enterprise as director, officer or employee at the request of Creative NJ. The board of directors, in its discretion, shall have the power on behalf of Creative NJ to indemnify any person, other than a director or officer, made a party to any action, suit or proceeding by reason of the fact that he/she is or was an employee of Creative NJ. Insofar as indemnification for liabilities arising under the Act may be permitted to directors, officers and controlling persons of Creative NJ, Creative NJ 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. 12 In the event that a claim for indemnification against such liabilities (other than the payment by Creative NJ of expenses incurred or paid by a director, officer or controlling person of Creative NJ in the successful defense of any action, suit or proceedings) is asserted by such director, officer, or controlling person in connection with any securities being registered, Creative NJ will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issues. INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE CORPORATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS THEREFORE UNENFORCEABLE. PART F/S The following financial statements required by Item 310 of Regulation S-B are furnished below: Independent Auditor's Report dated March 26, 2004 Balance Sheet - January 31, 2004 Statement of Operations for the period from inception (October 1, 2003) to January 31, 2004 Statement of Comprehensive Loss for the period from inception (October 1, 2003) to January 31, 2004 Statement of Changes In Stockholders' Equity for the period from inception (October 1, 2003) to January 31, 2004 Statement of Cash Flows for the period from inception (October 1, 2003) to January 31, 2004 Notes to Financial Statements 13 INDEPENDENT AUDITOR'S REPORT To the Board of Directors and Stockholders Creative Beauty Supply of New Jersey Corp. Totowa, New Jersey We have audited the accompanying balance sheet of Creative Beauty Supply of New Jersey Corp. as of January 31, 2004 and the related statement of operations, stockholders' equity and cash flows for the period from inception (January 1, 2004) through January 31, 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 Creative Beauty Supply of New Jersey Corp. as of January 31, 2004, and the results of its operations and its cash flows for the period from inception (January 1, 2004) through January 31, 2004 in conformity with accounting principles generally accepted in the United States of America. SAMUEL KLEIN AND COMPANY Newark, New Jersey March 26, 2004 14 CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORP. BALANCE SHEET JANUARY 31, 2004 January 31, 2004 ---------- ASSETS - ------ Current Assets: Cash and cash equivalents $ 260,003 Accounts receivable 1,376 Inventory 52,551 Investment in available for sale securities 440,000 Prepaid insurance 3,529 Due from related party 1,187 ---------- Total Current Assets 758,646 Property and equipment, net of accumulated depreciation of $108 at January 31, 2004 6,389 ---------- Total Assets $ 765,035 ========== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current Liabilities: Accounts payable and accrued expenses $ 28,353 Income taxes payable 2,946 ---------- Total Current Liabilities 31,299 Deferred Tax Liability 91,450 ---------- Total Liabilities 122,749 ---------- Commitments and Contingencies Stockholders' Equity: Preferred Stock ($.001 par value, 10,000,000 shares authorized, none outstanding at January 31, 2004) - Common stock ($.001 par value, 100,000,000 shares authorized, 3,494,650 issued and outstanding at January 31, 2004) 3,495 Additional paid in capital 479,796 Retained earnings 10,445 Accumulated other comprehensive income 148,550 ---------- Total Stockholders' Equity 642,286 ---------- Total Liabilities and Stockholders' Equity $ 765,035 ========== The accompanying notes are an integral part of these financial statements. 15 CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORP. STATEMENT OF OPERATIONS FOR THE PERIOD FROM INCEPTION (JANUARY 1, 2004) THROUGH JANUARY 31, 2004 Net Sales $ 34,061 Cost of Sales 11,649 ---------- Gross Profit 22,412 ---------- Operating Expenses Officer's salary 2,500 Employee benefits 999 Professional fees 2,000 Rent 1,300 Other general and administrative 2,623 ---------- Total Operating Expenses 9,422 ---------- Income from operations 12,990 Other Income: Interest income 401 ---------- Net Income Before Income Taxes 13,391 Provision for Income taxes 2,946 ---------- Net Income $ 10,445 Other Comprehensive Income, net of taxes arising from unrealized gain on available for sale securities 148,550 ---------- Total Comprehensive Income $ 158,995 ========== Earnings (loss) per Share: Basic and diluted net income per common share $ - ========== Basic and diluted weighted average common shares outstanding 3,494,650 ========== The accompanying notes are an integral part of these financial statements. 16 CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORP. STATEMENT OF STOCKHOLDERS' EQUITY FOR THE PERIOD FROM INCEPTION (JANUARY 1, 2004) THROUGH JANUARY 31, 2004
Common Stock $.001 Par Value Accumulated Number Common Additional Other of Stock Paid in Comprehensive Retained Shares Amount Capital Income Earnings Total ---------- ---------- ---------- ---------- ---------- ---------- Spin-off of net assets of parent company recorded as additional paid in capital, January 1, 2004 - $ - $ 483,291 $ - - $ 483,291 Issuance of common stock 3,494,650 3,495 (3,495) - - - Net unrealized gain on available for sale securities - - - 148,550 - 148,550 Net income for the period ended January 31, 2004 - - - - 10,445 10,445 ---------- ---------- ---------- ---------- ---------- ---------- Balances, January 31, 2004 3,494,650 $ 3,495 $ 479,796 $ 148,550 $ 10,445 $ 642,286 ========== ========== ========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements. 17 CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORP. STATEMENT OF CASH FLOWS FOR THE PERIOD FROM INCEPTION (JANUARY 1, 2004) THROUGH JANUARY 31, 2004 Cash Flows from Operating Activities: Net income $ 10,445 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 108 Changes in assets and liabilities, net of operating assets and liabilities acquired in spin-off: Decrease in accounts receivable 80 Decrease in inventory 1,309 Increase in prepaid expenses (2,229) Decrease in accounts payable and accrued expenses (8,137) Increase in income taxes payable 2,946 ---------- Net cash provided by operating activities 4,522 ---------- Cash Flows from Investing Activities: - ---------- Net cash used in investing activities - ---------- Cash Flows from Financing Activities: Net cash acquired in spin-off 256,668 Proceeds received from parent company 3,209 Amounts paid to parent company (4,396) ---------- Net cash provided by financing activities 255,481 ---------- Net Increase in Cash and Cash Equivalents 260,003 Cash and Cash Equivalents, beginning of period - ---------- Cash and Cash Equivalents, end of period $ 260,003 ========== Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest $ - ========== Income taxes $ - ========== Supplemental Disclosures of Non-Cash Investing and Financing Activities: Unrealized gain on available for sale securities $ 240,000 Deferred tax liability (91,450) ---------- Accumulated other comprehensive income $ 148,550 ========== Net cash acquired in spin-off transaction was comprised of: Assets acquired other than cash $ 263,113 Liabilities assumed (36,490) Common stock issued (483,291) ---------- Cash acquired $ 256,668 ========== Issuance of common stock, recorded as reclassification from additional paid in capital $ 3,495 ========== The accompanying notes are an integral part of these financial statements. 18 CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORP. NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2004 1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of the Business Creative Beauty Supply of New Jersey Corp (the Company), was incorporated in the State of New Jersey on October 1, 2003. It was formed pursuant to a resolution of the Board of Directors of Creative Beauty Supply Inc., (CBS) as a wholly owned subsidiary of that company, a publicly traded New Jersey corporation. On January 1, 2004, the assets and liabilities of CBS were contributed at book value to the Company, and this subsidiary was then spun-off by CBS to its shareholders. This spin-off was done in contemplation of a merger which occurred on March 19, 2004 between CBS and Global Digital Solutions, Inc. (Global), a Delaware corporation, upon approval by vote of the stockholders of CBS and Global whereby the former shareholders of CBS became the owners of 100 percent of the common stock of the Company. Also, on January 1, 2004, the Company commenced operations in the beauty supply industry at both the wholesale and retail levels. The Company had no transactions between its date of incorporation and January 1, 2004. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Use of Management's Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Revenue Recognition Sales are recognized when the products are shipped to customers. Over the counter sales are recognized at the point of sale. Investments in Available for Sale Securities The Company considers its investment in equity securities as available for sale and has therefore reflected the investment at fair value in the accompanying financial statements. Realized gains and losses are reported in current earnings (losses). Changes in unrealized gain or loss is excluded from current earnings (losses) and reported as a component of other comprehensive income (loss) in the stockholders' equity section of the balance sheet. Accounts Receivable Accounts receivable are unsecured customer obligations due under normal trade terms that require payment within thirty days from the invoice date or as specified by the invoice, and are stated at the amount billed to the customer. Customer account balances with invoices dated more that ninety days prior to the date of the financial statements, or over ninety days past the due date are considered delinquent. Payments of accounts 19 receivable are applied to the specific invoices identified on the customer's remittance advice, or if unspecified, to the earliest unpaid invoices. The carrying amount of accounts receivable is reduced by a valuation allowance that reflects management's estimate of the amounts that will not be collected. Management reviews all accounts receivable balances that are considered delinquent on an individual basis, and based on an assessment of current credit worthiness, and management's experience, estimates the portion of the balance that will not be collected. Management considered all accounts receivable at January 31, 2004 to be fully collectible, and accordingly no allowance for doubtful accounts was recorded at this date. Inventory Inventory, which consists of finished goods, is valued at the lower of cost or market determined on a first-in, first-out (FIFO) basis. The Company also considers obsolescence, excess quantities, deterioration and other factors in evaluating net realizable value. Impairment of Long-Lived Assets The Company periodically evaluates long-lived assets for impairment, including property and equipment, pursuant to the requirements of Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of," (SFAS 144). SFAS 144 requires that if events or changes in circumstances indicate that the cost of long-lived assets or asset groups may be impaired, an evaluation of recoverability would be performed by comparing the estimated future undiscounted cash flows associated with the asset or asset group to the asset's carrying value to determine if a writedown to market value would be required. Long- lived assets or asset groups that meet the criteria in SFAS 144 as being held for disposal by sale are reflected at the lower of their carrying amount or fair market value, less costs to sell. Property and Equipment Property and equipment are recorded at cost. Depreciation is computed over the estimated useful lives of the respective assets using the straight line method. The major classes of assets and their estimated useful lives are as follows: Years Delivery equipment 5 Furniture and office equipment 7 Repairs and maintenance are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the results of operations. Income Taxes Income tax provisions and credits are recorded at enacted tax rates for taxable items included in the statement of operations, regardless of the period for which such items are reported for tax purposes. Deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced 20 by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the related deferred tax asset will not be realized. Comprehensive Income The Company reports components of comprehensive income under the requirements of Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income," (SFAS 130). This statement establishes rules for the reporting of comprehensive income and its components which require that certain items such as unrealized gains and losses on certain investments in debt and equity securities, minimum pension liability adjustments and unearned compensation expense related to stock issuances to employees be presented as separate components of stockholders' equity. For the period presented the Company's other comprehensive income consisted only of unrealized gains on available for sale securities. Election of fiscal year The Company has elected the calendar year as their fiscal year. Earnings (Loss) Per Share The Company computes earnings (loss) per share in accordance with Statement of Financial Accounting Standards No. 128, "Earnings Per Share," (SFAS 128). Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed based upon the weighted average number of common shares and dilutive common equivalent shares outstanding, which include convertible debentures, stock options and warrants. There were no dilutive common equivalents for the period presented. Recent Accounting Pronouncements In December 2003 the Financial Accounting Standards Board (FASB) issued a revised Interpretation No. 46, "Consolidation of Variable Interest Entities-an Interpretation of ARB No. 51," which provides guidance on the identification of and reporting for variable interest entities including the criteria for consideration in determining whether a variable interest entity should be consolidated. Interpretation No. 46 is effective for the Company beginning January 1, 2004. This statement was effective for the Company beginning January 1, 2004 and had no impact on the Company's financial position at that date, or results of operations for the period ended January 31, 2004 nor is it expected to have an impact in the future. In May 2003 the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity," (SFAS 150). This statement establishes standards for how an issuer classifies and measures financial instruments with characteristics of both liabilities and equity. SFAS 150 requires that instruments that are redeemable upon liquidation or termination of an issuing subsidiary that has a limited life are considered to be mandatorily redeemable shares in the financial statements of the parent. Accordingly, those non-controlling interests are required to be classified as liabilities and recorded at settlement value by this standard. This statement was effective for the Company beginning January 1, 2004 and had no impact on the Company's financial position at that date or results of operations for the period ended January 31, 2004 nor is it expected to have an impact in the future. 21 In December 2003, the FASB revised SFAS No. 132, "Employers' Disclosures about Pensions and Other Post-Retirement Benefits," (SFAS 132). This statement revised employers' disclosures about pension plans and other post-retirement benefit plans. It requires additional disclosures to those in the original SFAS 132 about the plan assets, benefit obligations, cash flows and net periodic benefit cost of defined benefit pension plans and other defined post-retirement plans. This statement is effective for fiscal years ending after December 15, 2003 and quarters beginning after that date. The Company adopted this statement on January 1, 2004 and it had no impact on its financial position at that date or results of operations for the period ended January 31, 2004, nor is it expected to have an impact in the future. 2. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures its financial assets and liabilities in accordance with U.S. generally accepted accounting principles. For certain of the Company's financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short-term maturities. The Investment in available-for sale securities is recorded at fair value based on quoted market prices. 3. INVESTMENT IN AVAILABLE FOR SALE SECURITIES The Company's investment in available for sale securities is comprised solely of an equity holding as follows: January 31, 2004 ---------- Cost $ 200,000 Unrealized gains 240,000 ---------- Fair Value $ 440,000 There were no sales of securities during the period from inception (January 1, 2004) through January 31, 2004. 4. DUE FROM RELATED PARTY Amount due from related party is comprised of advances to Creative Beauty Supply Inc. the parent of the Company, of $4,396, net of amounts transferred in from the parent of $3,209. 5. PROPERTY AND EQUIPMENT At January 31, 2004 property and equipment consisted of delivery equipment with a cost of $6,497, and accumulated depreciation of $108. Depreciation expense for the period from inception (January 1, 2004) through January 31, 2004 was $108. Furniture and office equipment with a cost of $1,500 and accumulated depreciation of $1,500 was written off on January 31, 2004. 22 6. STOCKHOLDERS' EQUITY The authorized capital stock of the Company consists of 10,000,000 shares of preferred stock, $.001 par value of which there were no shares outstanding at January 31, 2004, and 100,000,000 of common stock, $.001 par value of which 3,494,650 shares were outstanding on this date. Holders of shares of common stock are entitled to one vote for each share or fraction thereof, on all matters to be voted on by the stockholders. Holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the Board of Directors in its discretion from funds legally available therefor. In the event of a liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share pro rata in all assets remaining after payment in full of all liabilities. All of the outstanding shares of common stock are fully paid and non-assessable. Holders of common stock have no preemptive rights to purchase the Company's common stock. There are no conversion or redemption rights or sinking fund provisions with respect to the common stock. 7. CONCENTRATIONS OF CREDIT RISK Financial instruments which potentially subject the Company to concentration of credit risk consist principally of short-term cash investments and trade receivables. The Company maintains substantially all of its banking activities with one bank and cash balances throughout the period presented in these financial statements generally exceeded the federally insured limits of the FDIC of $100,000. Management believes that its customer acceptance, credit and collection policies are adequate to minimize potential credit risk associated with trade receivables. 8. COMPONENTS OF REVENUE Wholesale sales consist of sales to beauty salons of merchandise for resale. Sales of merchandise to these customers for consumption in the course of providing hair care services to their customers, and not for resale are considered retail sales. All sales to the general public are also considered retail sales. Net sales are summarized as follows for the period from inception (January 1, 2004) through January 31, 2004: Retail $ 15,661 Wholesale 18,400 ---------- $ 34,061 9. COMMITMENTS AND CONTINGENCIES The Company is obligated as assignee under a lease agreement with an unrelated party for the space occupied by its executive offices, store, and warehouse facilities in Totowa, New Jersey. This lease, which was the obligation of the Company's parent, was assigned to the Company on January 1, 2004. The lease expires on April 30, 2004, and has a monthly rent of $1,300. The future lease payments at January 31, 2004 are $3,900. 23 10. PROVISION FOR INCOME TAXES Provision for income taxes for the period ended January 31, 2004 is as follows: Current: Federal $ 2,009 State 937 ---------- $ 2,946 Certain items of income and expense are recognized in different tax years for financial reporting and income tax purposes. Deferred income taxes are provided to recognize these temporary differences. The item that gives rise to the deferred income tax (liability) is as follows at January 31, 2004: Unrealized gain on available for sale securities $ (91,450) 11. SUBSEQUENT EVENTS On January 1, 2004, the assets and liabilities of CBS were contributed at book value to the Company, and this subsidiary was then spun-off by CBS to its shareholders. This spin-off was done in contemplation of a merger which occurred on March 19, 2004 between CBS and Global Digital Solutions, Inc. (Global), a Delaware corporation, upon approval by vote of the stockholders of CBS and Global, whereby the former shareholders of CBS became the owners of 100 percent of the common stock of the Company. Pursuant to the Memorandum of Understanding between CBS and Global, the Company and Carmine Catizone, Pasquale Catizone and their families have agreed to indemnify Global from any claims arising from existing liabilities of CBS prior to the closing that occurred on March 19, 2004. Carmine Catizone was President and Chief Executive Officer of CBS through the closing date of the merger, and is currently President of the Company and Pasquale Catizone was a stockholder of CBS through the closing date of the merger. 24 PART III ITEM 1. INDEX TO EXHIBITS (3) Charter and By-Laws ITEM 2. DESCRIPTION OF EXHIBITS (3.1) Articles of Incorporation (3.2) Bylaws (4) Form of Common Stock Certificate SIGNATURES In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. Creative Beauty Supply of New Jersey Corporation Date: May 5, 2004 /s/ Carmine Catizone --------------------- By: Carmine Catizone President, Chief Executive Officer EX-3.1 2 creativenj10sbex3-1.txt ARTICLES OF INCORPORATION NEW JERSEY DEPARTMENT OF TREASURY DIVISION OF REVENUE, BUSINESS GATEWAY SERVICES Certificate of Inc. (Profit) Creative Beauty Supply of New Jersey Corporation 0400039640 The above-named DOMESTIC PROFIT CORPORATION was duly filed in accordance with New Jersey State Law of 10/01/2003 and was assigned identification number 0400039640. Following are the articles that constitute its original certificate. 1. Name: CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATION 2. The Registered Agent: CARMINE CATIZONE 3. The Registered Office: 380 TOTOWA ROAD TOTOWA, NJ 07512 4. Business Purpose: General, For Any Lawful Purpose Under N.J.S.A. 14A:1-1 et seq. 5. Stock: 110,000,000 6. If applicable, set forth the designation of each class of shares, the number in each and a statement of the relative rights, preferences and limitations: THE AGGREGATE NUMBER OF SHARES WHICH THE CORPORATION SHALL HAVE THE AUTHORITY TO ISSUE IS 110,000,000 SHARES. ONE HUNDRED MILLION SHARES SHALL BE DESIGNATED COMMON STOCK AND SHALL HAVE A PAR VALUE OF .001. TEN MILLION SHARES SHALL BE DESIGNATED PREFERRED STOCK AND SHALL HAVE A PAR VALUE OF .001 PER SHARE. 7. If applicable, set forth a statement of authority vested in the board to divide the shares into classes or series of both and to determine or changing their designation, number relative rights, preferences and limitations: THE BOARD OF DIRECTORS OF THE CORPORATION IS AUTHORIZED TO ESTABLISH SUCH SERIES, TO FIX AND DETERMINE THE VARIATIONS AND THER ELATIVE RIGHTS AND PREFERENCES AS BETWEEN SERIES, AND TO THEREAFTER ISSUE SUCH STOCK FROM TIME TO TIME. 8. First Board of Directors: CARMINE CATIZONE 380 TOTOWA ROAD TOTOWA, NJ 07512 9. Incorporators: CARMINE CATIZONE 380 TOTOWA ROAD TOTOWA, NJ 07512 10. The Main Business Address: 380 TOTOWA ROAD TOTOWA, NJ 07512 Signatures: CARMINE CATIZONE IN TESTIMORNY WHEREOF, I have hereunto set my hand and affixed my Official Seal at Trenton, this 10/02/2003 John E. McCormac, CPA Treasurer of the State of New Jersey EX-3.2 3 creativenj10sbex3-2.txt BYLAWS BYLAWS OF CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATION A NEW JERSEY CORPORATION ARTICLE I OFFICES Section 1.01 Registered Office and Agent. The name of the registered agent and the location of the registered office of the Corporation in the State of New Jersey shall be Carmine Catizone, 380 Totowa Road, Totowa, New Jersey 07512, and such information shall be filed in the appropriate office of the State of New Jersey pursuant to applicable provisions of law. Section 1.02 Corporate Offices. The Corporation may have such corporate offices within and outside the State of New Jersey as the board of directors from time to time may direct or the Corporation may require. The principal office of the Corporation may be fixed and so designated from time to time by the board of directors, but the location or residence of the Corporation in New Jersey shall be deemed for all purposes to be in the county in which its principal office in New Jersey is maintained. The location of the principal office of the Corporation shall be 380 Totowa Road, Totowa, New Jersey 07512. Section 1.03 Records. The Corporation shall keep correct and complete books and records of account, minutes of proceedings of its shareholders and board of directors, and such other or additional records as may be required by law. The Corporation shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, either within or outside New Jersey, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of the shares held by each. ARTICLE II SHAREHOLDERS' MEETINGS Section 2.01 Place of Meeting. All meetings of the shareholders shall be held at the principal office of the Corporation, unless the board of directors designates some other place either within or outside the State of New Jersey. Unless specifically prohibited by law any meeting may be held at any place and at any time and for any purpose if consented to in writing by all of the shareholders entitled to vote at such meeting. Section 2.02 Annual Meetings. An annual meeting of shareholders shall be held of the 1st day of June of each year, unless notified of an alternate date in accordance with the provisions of these bylaws, at 3:00 p.m. for the purpose of electing directors and for the transaction of such other business as may properly come before it. If such day is a legal holiday, the meeting shall be on the next business day. Section 2.03 Special Meetings. Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the president, secretary or by the board of directors, and shall be called by the president at the request of holders of not less than 10% of all the outstanding shares of the Corporation entitled to vote at the meeting. No business other than that specified in the notice of the meeting shall be transacted at any such special meeting. Section 2.04 Notice of Meetings. Written or printed notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose for which the meeting is called, shall be delivered not less than ten days nor more than fifty days before the date of the meeting, either personally or by mail, by or at the direction of the board of directors, the president, the secretary, or the officer or person calling the meeting to each shareholder of record entitled to vote at such meeting; except that, if the authorized shares are to be increased at least thirty days' notice shall be given. Section 2.05 Fixing Record Date and Closing Transfer Books. The board of directors may fix a date not less than ten nor more than fifty days prior to any meeting as the record date for the purpose of determining shareholders entitled to notice of and to vote at such meetings, of the shareholders. The transfer books may be closed by the board of directors for a stated period not to exceed fifty days for the purpose of determining shareholders entitled to receive payment of any dividend or in order to make a determination of shareholders for any other purpose. In the absence of any action by the board of directors, the date upon which the board of directors adopts the resolution declaring the dividend shall be the record date. Section 2.06 Voting Lists. The officers or agent having charge of the stock transfer books for shares of the corporation shall make, at least ten days before each meeting of the shareholders, a complete record of the shareholders entitled to vote at the meeting or any adjournment thereof, arranged in alphabetical order with the address of, and the number of shares held by each. The record, for a period of ten days before such meeting, shall be kept on file at the principal office of the Corporation whether within or outside the State f New Jersey, and shall be subject to inspection by any shareholder for any purpose germane to the meeting at any time during normal business hours. Such record shall also be produced and kept open at the time and place of any purpose germane to the meeting during the whole time of the meeting. The original stock transfer book shall be prima facie evidence as to the shareholders who are entitled to examine the record or transfer books or to vote any meeting of shareholders. Section 2.07 Quorum. The holders of a majority of the shares who are entitled to vote at a shareholders meeting and who are present in person or by proxy shall be necessary for and shall constitute a quorum for the transaction of business at such meetings, except as otherwise provided by statute, by the Certificate of Incorporation or these Bylaws. If a quorum is not present or represented at a meeting of the shareholders, those present in person or represented by proxy shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At an adjourned meeting where a quorum is present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. Section 2.08 Majority Vote; Withdrawal of Quorum. When a quorum is present at a meeting, the vote of the holders of a majority of the issued and outstanding shares having voting power, present in person or represented by proxy, shall decide any question brought before the meeting, unless the question is one which, by express provision of the statutes, the Certificate of Incorporation or these Bylaws, requires a higher vote in which case the express provision shall govern. The shareholders present at a duly constituted meeting may continue to transact business until adjournment, despite the withdrawal of enough shareholders holding, in the aggregate, issued and outstanding shares having voting power to leave less than a quorum. Section 2.09 Proxies. At all meetings of shareholders, a shareholder may vote in person or by proxy executed in writing by the shareholder or by his or her duly authorized attorney in fact. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided by the proxy. Each proxy shall be filed with the secretary of the Corporation before or at the time of the meeting. Section 2.10 Voting. Each issued and outstanding share is entitled to its respective vote and each fractional share is entitled to a corresponding fractional vote on each matter submitted to a vote at a meeting of shareholders. The vote of a majority of the shares voting on any matter at a meeting of shareholders at which a quorum is present shall be the act of the shareholders on the matter, unless the vote of a greater number is required by law, the Certificate of Incorporation, or these Bylaws. Voting on all matters except the election of directors shall be by voice or by show of hands, unless the holders of one-tenth of the shares represented at the meeting shall, prior to the voting on any matter, demand a ballot vote on that particular matter. (A) Neither treasury shares nor shares held by another Corporation if the majority of the shares entitled to vote for the election of directors of such other Corporation is held by the Corporation shall be voted at any meeting or counted in determining the total number of issued and outstanding shares at any given time. (B) Shares standing in the name of another Corporation, domestic or foreign, may be voted by such officer, agent or proxy as the Bylaws of that Corporation may prescribe, or, in the absence of such provision, as the board of directors of that Corporation may determine. (C) Shares held by an administrator, executor, guardian, or conservator may be voted by him or her, either in person or by proxy, without the transfer of such shares into his name. Shares standing in the name of a trustee may be voted by him or her, either in person or by proxy, but no trustee shall be entitled to vote shares held by him or her without a transfer of the shares into his or her name. (D) Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer into his or her name if authority to do so is contained in an appropriate order of the court by which the receiver was appointed. (E) A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares transferred. (F) Redeemable shares which have been called for redemption shall not be entitled to vote on any matter and shall not be entitled to vote on any matter and shall not be deemed issued and outstanding shares on and after the date on which written notice of redemption has been mailed to shareholders and a sum sufficient to redeem such shares has been deposited with a bank or trust corporation with irrevocable instruction and authority to pay the redemption price to the holders of the shares upon surrender of their certificates. Section 2.11 Action Without Meeting. Any action required by statute to be taken at a meeting of the shareholders, or any action which may be taken at a meeting of the shareholders, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by holders representing a majority of shares entitled to vote with respect to the subject matter thereof and such consent shall have the same force and effect as a unanimous vote of the shareholders. The consent may be in more than one counterpart so long as each shareholder signs one of the counterparts. The signed consent, or a signed copy shall be placed in the minutes book. Section 2.12 Telephone and Similar Meetings. Shareholders may participate in and hold a meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation is such a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Section 2.13 Order of Business at Meetings. The order of business at annual meetings and so far as practicable at other meetings of shareholders shall be as follows unless changed by the board of directors: (a) call to order; (b) proof of due notice of meeting; (c) determination of quorum and examination of proxies: (d) announcement of availability of voting lists; (e) announcement of distribution of annual statement; (f) reading and disposing of minutes of last meeting of shareholders; (g) reports of officers and committees; (h) reports of directors; (l) opening of polls for voting; (m) recess; (n) reconvening, closing of polls; (o) report of voting inspectors; (p) other business; and (q) adjournment. ARTICLE III BOARD OF DIRCTORS Section 3.01 General Powers. The business and affairs of the Corporation shall be managed by its board of directors. The directors shall in all cases act as a board of directors, and they may adopt such rules and regulations for the conduct of their meetings and the management of the Corporation as they deem proper. Such rules and regulations may not be inconsistent with these Bylaws, the Certificate of Incorporation, and the laws of New Jersey. Section 3.02. Number, Tenure and Qualifications. The number of directors constituting the board of directors of this Corporation is one. The number of directors of this Corporation shall not be less than three; except that there need by only as many directors as there are shareholders in the event that the issued and outstanding shares are held of record by fewer than three shareholders. A director shall be elected by the shareholders to serve until the next annual meeting of shareholders, or until his or her death, or resignation and his or her successor is elected. A director must be at least eighteen years of age but need not be a shareholder in the Corporation nor a resident of the State of New Jersey. Section 3.03 Change in Number. The number of directors may be increased or decreased from time to time by amendment to these Bylaws but no decrease shall have the effect of shortening the term of any incumbent director. Any directorship to be filled by reason of an increase in the number of directors shall be filled by election at an annual meeting or at a special meeting of shareholders called for that purpose. Section 3.04 Election of Directors. The directors shall be elected at the annual meeting of shareholders and those persons who receive the highest number of votes shall be deemed to have been elected. Election of directors shall be by ballot. Section 3.05 Cumulative Voting. Directors shall be elected by majority vote. Cumulative voting shall be permitted. Section 3.06 Removal of Directors. A meeting called expressly for the purpose of removing a director, the entire board of directors or any lessor number may be removed, with or without cause, by a vote of the holders of the majority of the shares then entitled to vote at an election of directors. If any directors are so removed, new directors may be elected at the same meeting. Section 3.07 Resignation. Subject to Section 3.02, a director may resign at any time by giving written notice to the board of directors, the president, or the secretary of the Corporation and unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by the board of directors or such officer, and the acceptance of the resignation shall not be necessary to make it effective. Section 3.08 Vacancies. A vacancy occurring in the board of directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the board of directors remains. A director elected to fill a vacancy shall be elected for the unexpired term of his or her predecessor in office. Any directorship to be filled by reason of an increase in the number of directors shall be filled by election at an annual meeting of shareholders or at a special meeting of the shareholders called for that purpose. A director chosen to fill a position resulting from an increase in the number of directors shall holder office until his or her successor(s) shall have been qualified. Section 3.09 Compensation. By resolution of the board of directors, compensation may be paid to directors for their services. Also by resolution of the board of directors, a fixed sum and expenses for actual attendance at each regular or special meeting of the board of directors may also be paid. Nothing herein contained shall be construed to preclude any director form serving the Corporation in any other capacity and receiving compensation therefore. Members of the executive committee or of special or standing committees may, by resolution of the board of directors, be allowed like compensation for attending committee meetings. Section 3.10 First Meeting. The first meeting of a newly elected board shall be held without further notice immediately following the annual meeting of shareholders, and it shall be a the same place, unless by unanimous consent of the directors then electing and serving, the time or place is changed. Section 3.11 Regular Meetings. Regular meetings of the board of directors may be held without notice at such time and place as shall from time to time be determined by the board of directors. Section 3.12 Special Meetings. Special meetings of the board of directors may be called by the president on three days notice to each director, either personally or by mail or by telegram. Special meetings shall be called in like manner and on like notice on the written request of two directors. Except as otherwise expressly provided by statute, the Certificate of Incorporation or these Bylaws, neither the business to e transacted at, nor the purpose of any special meeting need be specified in a notice or waiver of notice. Section 3.13 Quorum; Majority Vote. At meetings of the board of directors a majority of the number of directors fixed by these Bylaws shall constitute a quorum for the transaction business. The act of a majority of the directors present at a meeting at which quorum is not present at a meeting at which quorum is not present at a meeting of the board of directors, the directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting until a quorum is present. Section 3.14 Procedure. The board of directors shall keep regular minutes of its proceedings. The minutes shall be placed in the minutes book of the Corporation. Section 3.15 Action Without Meeting. Any action required or permitted to be taken at a meeting of the board of directors may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all members of the board of directors. Such consent shall have the same force and effect as a unanimous vote at a meeting. The signed consent, or a signed copy, shall be placed in the minutes book. The consent may be in more than one counterpart so long as each director signs once of the counterparts. Section 3.16 Telephone and Similar Meetings. Directors may participate in and hold a meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting in not lawfully called or convened. Section 3.17 Interested Directors and Officers. No contract or transaction between the Corporation and one or more of its directors or officers, or any other corporation, firm, association, partnership or entity in which one or more of its directors of officers are directors or officers or are financially interested shall be either void or voidable solely because of such relationship or interest or solely because such directors or officers are present at the meeting of the board of directors or a committee thereof which authorizes, approves, or ratifies such contract or transaction or solely because their votes are counted for such purposes if: (1) in fact of the common directorship or financial interest is disclosed to or known by the board of directors or committee and noted in the minutes, and the board or committee which authorizes, approves, or ratifies the contract or transaction by a vote sufficient for the purpose without counting the votes or consents of such interested directors; or (2) the material facts of such relationship or financial interest is disclosed to or known by the shareholders entitled to vote thereon and they authorize, approve or ratify such contract or transaction in good faith by a majority vote or written consent of shareholders holding a majority of the shares the votes of the common or interested directors or officers shall be counted in any such vote of shareholders; or (3) the contract or transaction is fair and reasonable to the Corporation. (B) common or interested director may be counted in determining the presence of a quorum at a meeting of the board of directors or a committee thereof which authorizes, approves or ratifies such contract or transaction. ARTICLE IV EXECUTIVE COMMITTEE Section 4.01 Designation. The board of directors may from time to time, by resolution adopted by a majority of the whole board, designate an executive committee. Section 4.01 Number; Qualification and Term. The executive committee shall consist of one or more directors, one of whom shall be the president of the executive committee. The executive committee shall serve at the pleasure of the board of directors. Section 4.03 Authority. The executive committee, to the extent provided in such resolution, shall have and may exercise all of the authority of the board of directors in the management of the business and affairs of the Corporation, including authority over the use of the corporate seal. However, the executive committee shall not have the authority of the board of directors in reference to (a) amending the Certificate of Incorporation; (b) approving a plan of merger or consolidation; (c) recommending to the shareholders the sale, lease or exchange of all or substantially of the property and assets for the corporation other than in the usual and regular course of its business; (d) recommending to the shareholders a voluntary dissolution of the Corporation or a revocation thereof; (e) amending, altering, or repealing these Bylaws or adopting new Bylaws; (f) filling vacancies in or removing members of the board of directors or of any committee appointed by the board of directors; (g) electing or removing officers or members of any such committee; (h) fixing the compensation of any member of such committee; (I) altering or repealing any resolution of the board of directors which by its terms provides that it shall not be so amendable or repealable; (j) declaring a dividend; or (k) authorizing the issuance of shares of the Corporation. Section 4.04 Change in Number. The number of executive committee members may be increased or decreased from time to time by resolution adopted by a majority of the board of directors. Section 4.05 Removal. Any member of the executive committee may be removed by the board of directors by the affirmative vote of the majority of the board of directors, whenever in its judgement the best interests of the Corporation will be served thereby. Section 4.06 Vacancies. A vacancy occurring in the executive committee (by death, resignation, removal or otherwise) may be filled by the board of directors in the manner providing for original designation in Bylaw Section 4.01 Section 4.07 Resignation. A committee member may resign by giving written notice to the board of directors, the president or the secretary of the Corporation. The resignation shall take effect at the time specified in it, or immediately if no time is specified. Unless it specifies otherwise, a resignation takes effect without being accepted. Section 4.08 Meetings. Time, place and notice (if any) of executive committee meetings shall be determined by the executive committee. Section 4.09 Quorum; Majority Vote. At meetings of the executive committee, a majority of the number of members designated by the board of directors shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which a quorum is present shall be the act of the executive committee, except as otherwise specifically provided by statute, the Certificate of Incorporation or these Bylaws. If a quorum is not present at a meeting of the executive committee, the members present may adjourn the meeting from time to time, without notice other than an announcement at the meeting, until a quorum is present. Section 4.10 Compensation. By resolution of the board of directors, compensation may be paid to members of the executive committee for their services. Also by resolution of the board of directors, a fixed sum and expenses for actual attendance at each regular or special meeting of the executive committee may also be paid. Section 4.11 Procedure. The executive committee shall keep regular minutes of its proceedings and report the same to the board of directors when required. The minutes of the proceedings of the executive committee shall be placed in the minutes book of the Corporation. Section 4.12 Action Without Meeting. Any action required or permitted to be taken at a meeting of the executive committee may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all the members of the executive committee. Such consent shall have the same force and effect as a unanimous vote at a meeting. The signed consent, or a signed copy, shall be placed in the minutes book. Section 4.13 Telephone and Similar Meetings. Members of the executive committee may participate in and hold a meeting by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Section 4.14 Responsibility. The designation of an executive committee and the delegation of authority to it shall not operate to relieve the board of directors, or any member thereof, of any responsibility imposed upon it, him or her by law. ARTICLE V NOTICE Section 5.01 Method. Whenever by statute, the Certificate of Incorporation, these Bylaws or otherwise, notice is required to be given to a shareholder, director or committee member, and no provision is made as to how the notice shall be given, it shall not be construed to mean personal notice, but any such notice may be given: (a) in writing, by United States mail, certified, return receipt requested, postage prepaid, addressed to the shareholder, director or committee member at the address appearing on the books of the Corporation; or (b) in any other method permitted by law. Any notice required or permitted to be given by mail shall be deemed given at the time when the same is deposited in the United States mails. Section 5.02 Waiver. Whenever by statute, the Certificate of Incorporation or these Bylaws, notice is required to be given to a shareholder, committee member or director, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated in such notice. Attendance at a meeting shall constitute a waiver of notice of such meeting, except where a person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. ARTICLE VI OFFICERS AND AGENTS Section 6.01 Number, Qualification; Election; Term. (A) The Corporation shall have: (1) a president, a vice president, a secretary and a treasurer; and (2) such other officers (including a chairman of the board of directors and additional Vice Presidents) and assistant officers and agents as the board of directors may deem necessary. (B) No officer or agent need be a shareholder, a director or a resident of the state of incorporation. (C) Officers named in Bylaw Section 6.01 (A) (1) shall be elected by the board of directors on the expiration of an officer's term or whenever a vacancy exists. Officers and agents named in Bylaw Section (A) (2) may be elected by the Board of Directors at any meeting. (D) Unless otherwise specified by the board of directors at the time of election or appointment, or in an employment contract approved by the board of directors, each officer's and agent's term shall end at the first meeting of directors held after each annual meeting of the shareholders. He shall serve until the end of his or her term, or if earlier, until his or her death, resignation or removal. (E) Any two or more offices may be held by the same person, except that the president and the secretary shall not be the same person. Section 6.02 Election and Term of Office. The officers of the Corporation shall be elected annually by the board of directors at the first meeting of the board of directors held after each annual meeting of the shareholders. If the election officers shall not be held at such meeting, such election shall be held as soon thereafter as convenient. Each officer shall hold office until his or her successor shall have been duly elected and shall have qualified or until his or her death or until he or she shall resign or shall been removed in the manner hereinafter provided. Section 6.03 Resignation. Any officer may resign at any time by delivering a written resignation either to the board of directors, the president or the secretary of the Corporation. The resignation shall take effect at the time specified therein or immediately if no time is specified. Unless it specifies otherwise, a resignation takes effect without being accepted. Section 6.04 Removal. Any officer or agent elected or appointed by the board of directors may be removed by the board of directors, whenever, in its judgment, the best interest of the Corporation will be served thereby, but such removal shall be without prejudice to the contractual rights, if any, of the person so removed. Section 6.05 Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, creation of a new office, or otherwise, may be filled by the board of directors for the unexpired portion of the term. Section 6.06 Salaries and Compensation. The salaries or other compensation of the officers of the Corporation shall be fixed from time to time by the board of directors, except that the board of directors may delegate to nay person or group of persons the duty of fixing salaries or other compensation by reason of the fact that he or she is also a director of the Corporation. Section 6.07 Surety Bonds. In the event the board of directors shall so require, any officer or agent of the Corporation shall execute to the Corporation a bond in such sums and with such surety or sureties as the board of directors may direct, conditioned upon the faithful performance of his or her duties to the Corporation, including responsibility for negligence and for the accounting for all property, monies, or securities of the Corporation which may come into his or her hands. Section 6.08 President (A) The president shall be the chief executive and administrative officer of the Corporation. (B) The president shall preside at all meetings of the shareholders, and, in the absence of the chairman of the board of directors, at meetings of the board of directors. (C) The president shall exercise such duties as customarily pertain to the office of the president and shall have general and active supervision over the property, business and affairs of the Corporation and over its several officer. (D) The president may appoint officers, agents, or employees other than those appointed by the board of directors. (E) The president may sign, execute and deliver in the name of the Corporation powers of attorney, contracts, bonds and other obligations, and shall perform such other duties as may be prescribed from time to time by the board of directors or by the Bylaws. Section 6.09 Vice President. The vice president(s) in the order of their seniority, unless otherwise determined by the board of directors, shall, in the absence or disability of the president, perform the duties and have the authority and powers as the board of directors may from time to time prescribe or as the president may from time to time delegate. Section 6.10 Secretary (A) The secretary shall keep the minutes of all meetings of the shareholders and of the board of directors and, to the extent ordered by the board of directors or the president, the minutes of all committees. (B) The secretary shall cause notice to be given of meetings of shareholders, of the board of directors, and of any committee appointed by the board of directors. (C) The secretary shall have custody of the corporate seal and general charge of the records, documents and papers of the Corporation not pertaining to the performance of the duties vested in other officers, which shall at all reasonable times be open to the examination of any director. (D) secretary may sign or execute contracts with the president in the name of the Corporation and affix the seal of the Corporation thereto. (E) The secretary shall perform such other duties as may be prescribed from time to time by the board of directors or the bylaws. Section 6.11 Assistant Secretary. The assistant secretaries in the order of their seniority, unless otherwise determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and have the authority and exercise the powers of the secretary. They shall perform other duties and have such other powers as the board of directors may from time to time prescribe or as the president may from time to time delegate. Section 6.12 Treasurer. (A) The treasurer shall have general custody of the collection and disbursements of funds of the Corporation. (B) The treasurer shall endorse on behalf of the Corporation for collection, checks, notes and other obligations, and shall deposit the same to the credit of the Corporation in such bank or banks or depositories as the board of directors may direct. (C) The treasurer may sign, for the president and other persons as may be designated for the purpose by the board of directors, all bills of exchange or promissory notes of the Corporation (D) The treasurer shall enter or cause to be entered regularly in the books of the Corporation a full and accurate account of all monies received and paid by him or her on account of the Corporation; shall at all times exhibit his or her books and accounts to any director of the corporation upon application at the office of the Corporation during business hours; and, whenever required by the board of directors or the president, shall render statements of his or her accounts. The treasurer shall perform such other duties as may be prescribed from time to time by the board of directors or by the Bylaws. (E) If the board of directors require, the treasurer shall give bond for the faithful performance of his or her duties in such sum and with or without such surety as shall be approved by the board of directors. Section 6.13 Assistant Treasurer. The assistant treasurers in the order of their seniority, unless otherwise determined by the board of directors, shall, in the absence or disability of the treasurer, perform the duties and have the authority and exercise the powers of the treasurer. They shall perform such other duties and have such other powers as the board of directors may from time to time prescribe or the president may from time to time delegate. Section 6.14 Registered Agent. The Registered Agent shall serve as the agent of the Corporation for purposes of receiving service of process or any demand or notice authorized by law to be served on the Corporation. Section 6.15 Other Officers. Other officers shall perform such duties and have such powers as may be assigned to them by the board of directors or the president. Section 6.16 Delegation of Duties. If any officer of the Corporation is absent or unable to act for any other reason the board of directors may deem sufficient, the board of directors may delegate, for a period of time, some or all of the function, duties, powers and responsibilities of any officer to any other officer, agent or employee of the Corporation or other responsible person, provided a majority of the whole board of directors concurs therein. ARTICLE VII CONTRACTS, LOANS, DEPOSITS AND CHECKS Section 7.01 Contracts. The board of directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of an on behalf of the Corporation and such authority may be general or confined to specific instances. Section 7.02 Loans. No loans or advances shall be contracted on behalf of the Corporation; on negotiable paper or other evidence of its obligation under any loan or advance shall be issued in its name, and no property of the Corruption shall be mortgaged, pledged, hypothecated, or transferred as security for the payment of any loan, advance, indebtedness or liability of the Corporation unless and except as authorized by the board of directors. Any such authorization may be general or confined to specific instances. Section 7.03 Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, rust companies or other depositories as the board of directors may select, or as may be selected by an officer of agent authorized to do so by the board of directors. Section 7.04 checks and Drafts. All notes, drafts, acceptances, checks, endorsements, and evidences of indebtedness of the Corporation shall be signed by such officer or officers, or such agent or agents of the Corporation and in such manner as the board of directors from time to time may determine. ARTICLE VIII CAPITAL STOCK Section 8.01 Certificates. Certificates representing shares of the Corporation shall be issued, in such from as the board of directors shall be issued, in such form as the board of directors shall determine, to every shareholder for the fully paid shares owned by him. These certificates shall be signed by the president and the secretary. They shall be consecutively numbered or otherwise identified; and the name and address of the person to whom they are issued, with the number of shares and the date of issue, shall be entered on the stock transfer books of the Corporation. Section 8.02 Issuance. Shares (both treasury and authorized but unissued) may be issued for such consideration (not less than par value) and to such persons as the board of directors may determine from time to time. Shares may not be issued until the full amount of the consideration, fixed as provided by law, has been paid. Section 8.03 Payment of Shares. (A) The consideration for the issuance of shares shall consist of money paid, labor done (including the service actually performed for the Corporation) or property (tangible or intangible) actually received. Neither promissory notes nor the promise of future services shall constitute payment for shares. (B) In the absence of fraud in the transaction, the judgment of the board of directors as to the value of consideration received shall be conclusive. (C) When consideration, fixed as provided by law, ahs been paid, the shares shall be deemed to have been issued and shall be considered fully paid and nonassessable. (D) The consideration received for shares shall be allocated by the board of directors, in accordance with law, between stated capital and capital surplus accounts. Section 8.04 Subscriptions. Unless otherwise provided in the subscription agreement, subscriptions for shares, whether made before or after organization of the Corporation, shall be paid in full at such time or in such installments and at such times as shall be determined by the board of directors. Any call made by the board of directors for payment of subscriptions shall be uniform as to all shares of the same series. In case of default in the payment on any installment or call when payment is due, the Corporation may proceed to collect the amount due I the same manner as any dept due the Corporation. Section 8.05 Lien. For any indebtedness of a shareholder to the Corporation, the Corporation shall have a first and prior lien on all dividends or other distributions declared thereon. Section 8.06 Lost, Stolen or Destroyed Certificates. The Corporation shall issue a new certificate in place of any certificate for shares previously issued if the registered owner of the certificate: (a) makes proof in affidavit form that it has been lost, destroyed or wrongfully taken; (b) requests the issuance of a new certificate before the Corporation has notice that the certificate ahs been acquired by a purchaser for value in good faith and without notice of an adverse claim; (c) gives a bond in such form, and with such surety or sureties, with fixed or open penalty, as the Corporation may direct, to indemnify the Corporation (and its transfer agent and registrar, if any) against any claim that may be made on account of the alleged loss, destruction or theft of the certificate; and (d) satisfies any other reasonable requirements imposed by the Corporation. When a certificate has been lost, apparently destroyed or wrongfully take, and the holder of record fails to notify the Corporation within a reasonable time after he or she has notice of it, and the Corporation registers a transfer of the shares represented by the certificate before receiving such notification, the holder of record is precluded from making any claim against the Corporation for the transfer or for a new certificate. Section 8.07 Registration of Transfer. The Corporation shall register the transfer of a certificate for shares presented to it for transfer if: (a) the certificate is properly endorsed by the registered owner or by his or her duly authorized attorney; (b) the signature of such person has been notarized and reasonable assurance is given that such endorsements are effective; (c) the corporation has no notice of an adverse claim or has discharged any duty to inquire into such a claim; (d) any applicable law relating to the collection of taxes has been complied with; and (e) there is an opinion of counsel satisfactory to counsel of the Corporation that such transfer is made in accordance with all federal and state securities regulations. Section 8.08 Registered Owner. Prior to due presentment for registration of transfer of a certificate for shares, the Corporation may treat the registered owner as the person exclusively entitled to vote, to receive notices and otherwise to exercise all rights and powers of a shareholder. Section 8.09 Transfer of Shares. Transfer of shares of the Corporation shall be made only in the stock transfer books of the Corporation by the holder of record thereof or by his or her legal representative, who shall furnish proper evidence of authority to transfer, or by his attorney therein authorized by power of attorney duly executed and filed with the secretary of the Corporation and on surrender for cancellation of the certificate for such shares. The person in whose name the shares stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes by the stock transfer books shall be in the possession of the secretary or transfer agent or clerk of the Corporation. Section 8.10 Transfer Agent and Registrar. By resolution of the board of directors, the Corporation may from time to time appoint a transfer agent, and, if desired, a registrar, who will perform his or her duties in accordance with the terms and conditions the board of directors deems advisable; provided, however, that until and unless the board of directors appoints some other person, firm or Corporation as its transfer agent, the secretary of the Corporation shall act as transfer agent without the necessity of any formal action of the board of directors and he or she shall perform all of the duties thereof. ARTICLE LX INDEMNIFICATION Section 9.01 Indemnification. (A) No officer or director shall be personally liable for any obligations of the Corporation or for any duties or obligation of the Corporation or for any duties or obligations arising out of any actions or conduct of such officer or director or director performed for or on behalf of the Corporation. (B) The corporation shall and does hereby indemnify and hold harmless each person and his or her heirs and administrators who shall serve at any time hereafter as a director or officer of the Corporation from and against any and all claims, judgments and liabilities to which such person shall become subject by reason of his or her having heretofore or hereafter been a director officer of the Corporation or by reason of any action alleged to have heretofore or hereafter been taken or admitted to have been taken by him or her as such director or officer and shall reimburse each such persons for all legal and other expenses reasonably incurred by him or her in connection with any such claim or liability, including power to defend such person from all suits or claims as provided for under the laws of the state of New Jersey; provided, however, that no such person shall be indemnified against, or be reimbursed for, any expense incurred in connection with any claim or liability arising out of his or her negligence or willful misconduct. The rights accruing to any person under the foregoing provisions of this section shall not exclude any other right to which he or she may lawfully be entitled, nor shall anything herein contained restrict the right of the Corporation to indemnify or reimburse such person in any proper case, even though not specifically herein provided. The Corporation, its director, officers, employees and agent shall be fully protected in taking any action or making any payment in reliance upon the advice of counsel. Section 9.02 Other Indemnification. The indemnification herein provided shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any Bylaw, agreement, vote of shareholders, or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent, and shall inure to the benefit of the heirs, executors and administrators of such person. Section 9.03 Issuance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation or is or who was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against liability under the provisions of this section or the laws of the State of New Jersey. Section 9.04 Settlement by Corporation. The right of any person to be indemnified shall be subject always to the right of the corporation by its board of directors, in lieu of such indemnity, to settle any claim, action suit or proceeding at the expense of the Corporation by the payment of the amount of such settlement and the cost and expense incurred in connection therewith. ARTICLE X GENERAL PROVISIONS Section 10.01 Dividends and Reserves. (A) Subject to statue, the Certificate of Incorporation and these Bylaws, dividends may be declared by the board of directors at any regular or special meeting and may be paid in cash, in property, or in shares of the Corporation. The declaration and payment shall be at the discretion of the board of directors. (B) By resolution, the board of directors may create such reserve or reserves out of the earned surplus of the Corporation as the directors from time to time, in their discretion, think proper to provide for contingencies, or to equalize dividends, or to repair or maintain any property of the Corporation, or for any other purpose they think beneficial to the Corporation. The directors may modify or abolish any such reserve in the manner in which it was created. Section 10.02 Books and Records. The Corporation shall keep correct and complete books and records of account, shall keep minutes of the proceedings of its shareholders and board of directors, and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of shares held by each. Section 10.03 Annual Statement. The board of directors shall mail to each shareholder of record, at least ten days before each annual meeting a full and clear statement of the business and condition of the Corporation, including a reasonably detailed balance sheet, income statement, surplus statement, and statement of changes in financial position, for the last fiscal year and for the prior fiscal year, all prepared in conformity with generally accepted accounting principals applied on a consistent basis. Section 10.04 Checks and Notes. Checks, demands for money and notes of the Corporation shall be signed by officer(s) or other person(s) designated from time to time by the board of directors. Section 10.05 Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the board of directors. Section 10.06 Seal. The corporate seal of the Corporation (of which there may be one or more exemplars) shall contain the name of the corporation and the name of the state of incorporation. The seal may be use by impressing it or reproducing a facsimile of it, or otherwise. Section 10.07 Amendment of Bylaws. (A) These Bylaws may be altered, amended or repealed at any meeting of the board of directors at which a quorum is present, by the affirmative vote of a majority of the directors present at such meeting, provided notice of the proposed alteration, amendment, or repeal is contained in the notice of the meeting. (B) These Bylaws may also be altered, amended or repealed at any meeting of the shareholders at which a quorum is present or represented, by the affirmative vote of the holders of a majority of the shares present or represented at the meeting and entitled to vote thereat, provided notice of the proposed alteration, amendment or repeal is contained in the notice of the meeting. Section 10.08 Construction. Whenever the context so requires, the masculine shall include the feminine and neuter, and the singular shall include the plural, and conversely. If any portion of these bylaws shall be invalid or inoperative, then, so far as is reasonable and possible: (a) the remainder of these Bylaws shall be considered valid and operative and (b) effect shall be given to the intent manifested by the portion held invalid or inoperative. Section 10.09 Table of Contents; Headings. The table of contents and headings are for organization, convenience and clarity. In interpreting these bylaws, they shall be subordinated in importance to the other written material. Section 10.10 Relation to Certificate of Incorporation. These bylaws are subject to and governed by the Certificate of Incorporation. Adopted by the sole director on this 1st day of October, 2003. /s/Carmine Catizone - ------------------------------------- Carmine Catizone, Sole Director 19 EX-4 4 creativenj10sb3ex4.txt SAMPLE STOCK CERTIFICATE Incorporated under the laws of the State of New Jersey Number Shares CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATION This certifies that is the registered holder of shares of CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATION FULLY PAID AND NON-ASSESSABLE COMMON STOCK Transferable only on the books of the Corporation by the holder hereof in person or by Attorney upon surrender of this Certificate properly endorsed. In Witness Whereof, the said Corporation has caused this Certificate to be signed by its duly authorized officers and its Corporate Seal to be hereunto affixed this day of A.D. SECRETARY PRESIDENT -----END PRIVACY-ENHANCED MESSAGE-----