Cleo Perfume, Inc. - Page 6

                                        - 6 -                                         

          the consigned merchandise, less $100,000 which had been sold,               
          remained on hand.                                                           
               VIG, which prepared the financial statements for tax year              
          ended June 30, 1991, inquired in July 1991 as to why the $2,031,778         
          of trade accounts payable had been eliminated from the books.  Mr.          
          Rosales represented that CPI's officers had assumed responsibility          
          for the debt and that the amount was recorded as additional paid-in         
          capital. VIG requested and received a letter2 signed by                     

               2    The letter states:                                                
                    In connection with the audit of the financial                     
                    statements of Cleo Perfumes, Inc., for the                        
                    years ended June 30, 1990 and 1991, we have                       
                    made available to you all information related                     
                    to stockholder's equity.                                          
                    During 1991, the Company's stockholders                           
                    assumed personally and subsequently                               
                    capitalized as part of paid-in capital a note                     
                    receivable from stockholder in the amount of                      
                    $371,157, a trade accounts payable to an                          
                    unaffiliated company in the amount of                             
                    $2,031,778, and a note payable to bank in the                     
                    amount of $200,000.  The netting of these                         
                    transactions increased paid-in capital by                         
                    $1,860,621.                                                       
                    The undersigned stockholders of Cleo                              
                    Perfumes, Inc. hereby confirm to you that the                     
                    afore-mentioned [sic] transactions were in                        
                    due time properly and adequately approved by                      
                    the Board of Directors and also that Mr.                          
                    Oscar Campos, Sr., President of our                               
                                                             (continued...)           








Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  Next

Last modified: May 25, 2011