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WE HAVE A LIMITED OPERATING HISTORY AND ANTICIPATE LOSSES IN THE FUTURE
The predecessor entity to the Company was formed on November 1, 1991. However,
the operational divisions of the Company were formed more recently and
accordingly, have a very limited operating history. To date, the Company as a
whole generated only minimal revenues or sales. In addition, our revenue model
is evolving and relies substantially upon the successful implementation of its
Internet business
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strategy. Our business must be considered in light of the risks, expenses and
problems frequently encountered by companies in their early stages of
development, particularly companies in highly competitive markets such as
Internet business and furniture design and installation. There can be no
assurance that we will be successful in addressing these risks, and any
failure to do so could have a material adverse effect on our business,
results of operations and financial condition. We anticipate that we will
incur net losses for the foreseeable future. We expect operating expenses to
increase significantly, especially in the areas of sales and marketing. As a
result, we will need to generate increased quarterly net revenue if
profitability is to be achieved. We believe that period-to-period comparisons
of our operating results will not be meaningful and that the results for any
period should not be relied upon as an indication of future performance. To
the extent that net revenue does not grow at rates we forecasted or that
increases in our operating expenses come earlier than expected, results of
operations and financial condition will be materially and adversely affected.
We cannot assure that our operating losses will not increase in the future or
that we will ever achieve or sustain profitability.
WE MAY NOT HAVE ENOUGH CAPITAL FROM THIS OFFERING TO CONTINUE OPERATIONS
Our Management believes that additional funds will be necessary for continued
operations and that the proceeds from the sale of the securities may not be
enough to last a significant period of time. In such event, we will be
required to seek additional debt and/or equity financing. We may not be able
to raise or obtain the additional capital or may have to do so on terms
unfavorable to us or to you or other new investors. If less than the maximum
number of Shares is purchased in this Offering, our business opportunities
will be limited. Accordingly, we would be forced to rely on operating results
to provide it with the necessary cash flow to meet its financial commitments,
or we may be required to seek additional capital. See "Use of Proceeds".
OUR BUSINESS IS SPECULATIVE
The commercial success of Internet startup companies and furniture design and
installation companies are often dependent on factors beyond our control,
including but not limited to technological advancement, consumer trends and
the general economy. Although we intend to fully assemble the management team
necessary to facilitate cost effective operations, neither the managers nor
other employees have been assembled as of the date of this Prospectus. We may
experience substantial cost overruns and may not have sufficient capital to
successfully complete any of our projects. Competent partners or joint
venture partners may not be available to assist us in the financing and
marketing efforts for the projects, if required. We may also incur uninsured
losses for liabilities that arise in the ordinary course of business which
are unforeseen. There is no assurance that you will not lose your entire
investment in the Shares. See "Business."
WE OPERATE OUR BUSINESS IN A COMPETITIVE FIELD
The Internet and furniture design industries are extremely competitive and
can be significantly affected by many factors, including changes in local,
regional or national economic conditions, changes in consumer preferences,
brand name recognition and marketing and the development of new and competing
technologies. We expect that existing businesses that compete with us and
which have greater resources than us will be able to implement more extensive
marketing campaigns and adopt more aggressive advertising sales policies.
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In addition, we may experience substantial competition in our efforts to
locate clients. Many of our competitors have greater experience, resources
and managerial capabilities than us and are in a better position to obtain
access to attract business prospects. The market is currently dominated by
large companies and many smaller companies. It is anticipated that many other
large companies which market or produce entertainment products such as films,
music CD's or tapes and books will enter the market in the future.
Consequently, we may encounter initial and continued resistance which could
challenge and slow our progress.
INTELLECTUAL PROPERTY PROTECTION
We believe that certain of our website and product content and information is
proprietary and we intend to protect that which is not already protected, under
copyright, trademark, and trade secret laws as well as through contractual
restrictions on disclosure, copying and distribution to the extent possible.
CONFLICTS OF INTEREST MAY EXIST
Our officers and directors are and may in the future be associated with other
firms involved in a range of business activities. Due to these affiliations,
there are potential inherent conflicts of interest in their acting as our
directors and officers. Conflicts of interest and non-arms-length transactions
may arise in the future in the event our officers or directors are involved in
the management of any firm with which we transact business. However, officers
and directors will be required to enter into non-competition agreements to be in
effect while they serve and for a period of 12 months thereafter.
WE MAY BE UNABLE TO MANAGE OUR GROWTH
Our ability to attract and maintain management will depend on many factors,
including competition and the overall labor market. The industries in which we
operate are subject to extreme competition for employees. We may be unable to
attract or retain management personnel necessary to operate the business or to
facilitate its further growth.
OUR OFFICERS AND DIRECTORS CONTROL OUR POLICIES
Our officers will be able to elect our Directors in the future and with certain
other votes from key shareholders can carry the vote required for authorization
of important transactions and events because of their substantial holding of our
Shares and voting power. As a result, the officers will be able to solely
control our management, policies and business operations. See "Principal
Shareholders."
RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act and Section 21E of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act") and we intend that any
forward-looking statements fit within the safe harbors for such statements under
such sections. Our forward-looking statements include the plans and objectives
of management for future operations, including plans and objectives relating to
our planned national marketing campaign and future economic performance. The
forward-looking statements and associated risks in this Prospectus include or
relate to: (i) our ability to maintain market share in its current operating
markets, (ii) our ability to integrate acquisitions, (iii) our ability to
develop product identification, (iv) our ability to make additional acquisitions
on advantageous terms and (v) our ability to find sufficient capital for our
future operations.
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The forward-looking statements are based on current expectations that involve
risks and uncertainties. These forward-looking statements are based on
assumptions that there will be no significant competitive changes in conditions
that would negatively effect our business, and that there will be no material
adverse change in our operations or business or in governmental regulations
affecting us or our suppliers. Our assumptions are based on may factors
including future economic, competitive and market conditions, and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond our control. Even though we believe that
these assumptions are reasonable, any such assumption could be inaccurate and
therefore we cannot assure that the results contemplated in forward-looking
statements will be realized. In addition, as disclosed elsewhere in the "Risk
Factors" section of this Prospectus, there are a number of other risks inherent
in our business and operations which could cause our operating results to vary
markedly and adversely from prior results or the results contemplated by the
forward-looking statements. Growth in absolute and relative amounts of cost of
goods sold and selling, general and administrative expenses or the occurrence of
extraordinary events could cause actual results to vary materially from the
results contemplated by the forward-looking statements. Management decisions,
including budgeting, are subjective in many respects and periodic revisions must
be made to reflect actual conditions and business developments, the impact of
which may cause us to alter marketing, capital investment and other
expenditures, which may also negatively affect our results of operations.
Because we cannot predict the accuracy of the forward-looking information
included in this Prospectus, you should not rely on this information as fact. |
