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+PROSPECTUS SUMMARY 1
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+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0000754673_suffolk_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0000754673_suffolk_prospectus_summary.txt
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+Table of Contents Fully Paid and Non-assessable All outstanding shares of our common stock are validly issued, fully paid and non-assessable. Transfer Agent and Registrar The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC. Anti-Takeover Provisions The following summarizes certain provisions of our certificate of incorporation and bylaws. The summary does not purport to be complete and is subject to and qualified in its entirety by reference to our certificate of incorporation and bylaws, as amended, which are incorporated by reference herein. General Some provisions of New York law, federal banking regulations, our certificate of incorporation and our bylaws, as amended, contain provisions that could make the following transactions more difficult: acquisition of us by means of a tender offer; acquisition of us by means of a proxy contest or otherwise; or removal of our incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that securityholders may otherwise consider to be in their best interests or in our best interests, including transactions that might result in a premium over the market price for our shares of common stock. These provisions, summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging these proposals because negotiation of these proposals could result in an improvement of their terms. New York Anti-Takeover Statute We are subject to Section 912 of the New York Business Corporation Law (the NYBCL ), which prohibits persons deemed interested shareholders from engaging in a business combination with a New York corporation for five years following the date these persons become interested shareholders unless the business combination is, or the transaction in which the person became an interested shareholder was, approved in a prescribed manner or another prescribed exception applies. Generally, an interested shareholder is a person who, together with affiliates and associates, owns, or within five years prior to the determination of interested securityholder status did own, 20% or more of a corporation s outstanding voting stock. Generally, a business combination includes a merger, consolidation, asset or stock sale or other transaction resulting in a financial benefit to the interested shareholder. The existence of this provision may have an anti-takeover effect with respect to transactions not approved in advance by the board of directors. The provisions of New York law, our certificate of incorporation and our bylaws, as amended, could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that securityholders may otherwise deem to be in their best interests. Classified Board Our board of directors is divided into three classes. Each class has a term of three years, with the term of each class expiring in successive years, and consists, as nearly as possible, of one-third of the number of directors constituting the entire board. Accordingly, at least two annual meetings of securityholders may be required to effect a change in a majority of our board. The classification of our board into three separate classes could discourage, delay or prevent a takeover of us. Table of Contents The information in this prospectus is not complete and may be changed. The selling securityholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting offers to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED JANUARY 4, 2013 PROSPECTUS SUFFOLK BANCORP 1,783,000 Shares of Common Stock This prospectus relates to up to 1,783,000 shares of our common stock, par value $2.50 per share, which may be offered for sale from time to time by the selling securityholders named in this prospectus. The shares of common stock may be sold at fixed prices, prevailing market prices at the times of sale, prices related to the prevailing market prices, varying prices determined at the times of sale or negotiated prices. The shares of common stock offered by this prospectus and any prospectus supplement may be offered by the selling securityholders directly to investors or to or through underwriters, dealers or other agents. We will not receive any of the proceeds from the sale of the shares of common stock sold by the selling securityholders. The registration of the shares of common stock covered by this prospectus does not necessarily mean that any of the shares will be offered or sold by the selling securitiyholders. Our common stock is listed for trading on the Nasdaq Global Select Market (the Nasdaq ) under the symbol SUBK. On January 3, 2013, the last reported sale price of our common stock on the Nasdaq was $13.15 per share. INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE RISK FACTORS ON PAGE 2 FOR INFORMATION YOU SHOULD CONSIDER BEFORE BUYING ANY SECURITIES. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER INSURER OR GOVERNMENTAL AGENCY. The date of this prospectus is [ ], 2013 Table of Contents The Bank is a full-service bank serving the needs of the local residents of Suffolk County. Most of the Bank s business is devoted to serving those residing in the immediate area of its main and branch offices. The Bank s services include checking accounts, savings accounts, time and savings certificates, money market accounts, negotiable-order-of-withdrawal accounts, holiday club accounts and individual retirement accounts; secured and unsecured loans, including commercial loans to individuals, partnerships and corporations, agricultural loans to farmers, installment loans to finance small businesses and automobile loans; home equity and real estate mortgage loans; safe deposit boxes; trust and estate services; the sale of mutual funds and annuities; and the maintenance of a master pension plan for self-employed individuals participation. Recent Developments Private Placement The securities offered in this prospectus relate to the potential resale of 1,783,000 shares of our common stock. We issued the 1,783,000 shares of common stock to the selling securityholders on September 19, 2012 in a private placement exempt from registration under the Securities Act of 1933, as amended (the Securities Act ), in reliance upon Rule 506 of Regulation D (the Private Placement ), at a price per share equal to $13.50 (which represents a discount of $2.60 or approximately 16% to the last reported sale price of our common stock on the Nasdaq on September 19, 2012), pursuant to separate Securities Purchase Agreements, each dated September 18, 2012, between each selling securityholder and Suffolk Bancorp (the Securities Purchase Agreements ). In connection with the Private Placement, we agreed to file this registration statement to register the shares of common stock issued to the selling securityholders pursuant to the Securities Purchase Agreements within sixty days from the closing of the Private Placement. We also agreed to use reasonable best efforts to cause such registration statement to be declared or become effective within such deadline and to keep it continuously effective and in compliance with the Securities Act until such time as the shares of common stock issued to the selling securityholders in the Private Placement (i) have been sold pursuant to an effective registration statement, (ii) cease to be outstanding or (iii) are sold in a private transaction in which the transferee does not acquire the transferor s rights under the Securities Purchase Agreement. In connection with the Private Placement, we sold an aggregate of 56,533 shares of common stock to certain of our directors and officers, pursuant to separate securities purchase agreements, each dated September 18, 2012, at a price per share equal to $16.44, which was the closing bid price immediately prior to the execution of the securities purchase agreements. The directors and officers were not granted registration rights in connection with this issuance. The Private Placement was completed concurrently with the sale of a portfolio of loans for aggregate proceeds of approximately $31 million with the objectives of improving the company s capital base, resolving legacy credit issues at the Bank and strengthening the overall financial position of the company and the Bank. The shares were sold to the selling securityholders in a private placement at a discount to the market price in order to complete the capital raise on a faster timeline than would otherwise be possible in a widespread public offering. We determined the purchase price and discount to the market price based on current and historical prices of our common stock, the form of the capital raise and the consequent ability to raise capital quickly and negotiations with the selling securityholders. The separate purchase price for the directors and officers was determined in compliance with Nasdaq guidance, which provides that we must sell shares to our directors and officers at a price no less than the market value of the common stock absent shareholder approval. We did not offer to sell shares of our common stock to all of our existing shareholders in the Private Placement because we would not be able to complete such a widespread offering quickly and concurrently with the loan sale. Gross proceeds from the Private Placement and the sale of shares to our directors and officers totaled $25 million. Expenses associated with the sale included $1,405,000 in placement fees and expenses; $600,000 in legal fees; $210,750 in accounting fees; $18,500 in listing fees; and $4,870 in other fees, resulting in net proceeds to us of $22,760,880. Legal Proceedings Update On July 11, 2011 a shareholder derivative action, Robert J. Levy v. J. Gordon Huszagh, et al., No. 11 Civ. 3321 (JS), was filed in the U.S. District Court for the Eastern District of New York against certain current and former directors of Suffolk Bancorp and a former officer of the Suffolk Bancorp. Suffolk Bancorp was named as a nominal defendant. The complaint seeks damages against the individual defendants in an unspecified amount, and alleges that the individual defendants breached their fiduciary duties by making improper statements regarding the sufficiency of our allowance for loan losses and loan portfolio credit quality, and by failing to establish sufficient allowances for loan losses and to establish effective credit risk management policies. On September 30, 2011, we and the current and former director defendants filed a motion to dismiss the complaint. On September 28, 2012, the court granted our motion to dismiss and granted the plaintiff leave to file an amended complaint. The SEC s New York regional office has formally requested certain loan files and other records from the company, and we are in the process of providing these files and records. The SEC has not asserted that any federal securities law violation has occurred. We believe the company is in compliance with all federal securities laws and are cooperating with the SEC s inquiry. Additional discussion of legal proceedings we face is contained in the documents incorporated herein by reference. For more information, see Information Incorporated by Reference. Regulatory Matters On October 25, 2010, the Bank, following discussion with the Office of the Comptroller of the Currency (the OCC ), entered into an agreement with the OCC (the OCC Agreement ) based on the OCC s findings of unsafe and unsound banking practices relating to asset quality, compliance and management at the Bank. The OCC Agreement requires the Bank to take certain actions, and the requirements of the OCC Agreement together with a description of the actions taken by the Bank to satisfy the requirements are set forth in our Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2012, which is incorporated by reference herein. The OCC Agreement will continue to be effective until amended by the parties or terminated by the OCC. The company is continuing to work to ensure adherence with the requirements of the OCC Agreement (including adherence to a three-year written strategic plan, a three-year capital program, an independent internal audit program, a written program to ensure compliance with the appraisal and evaluation requirements for loans and other real estate owned, a written program to improve credit risk management processes and practices to reduce the high level of credit risk in the Bank, a written asset diversification program, a written program of policies and procedures, staffing and training to provide for compliance with the Bank Secrecy Act, adequate management reports that enable the board and management to monitor the Bank s liquidity position on a monthly basis and a comprehensive, written information security program to ensure the safety and soundness of the Bank s operations to support its efforts to safeguard customer information) and to develop and improve its program for the maintenance of an adequate Allowance for Loan Losses and its program to improve credit risk management processes and practices.
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0000764667_sionix_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0000764667_sionix_prospectus_summary.txt
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+Prospectus Summary This summary provides a brief overview of the key aspects of our business and our securities. The reader should read the entire prospectus carefully, especially the risks of investing in our common stock discussed under Risk Factors. Some of the statements contained in this prospectus, including statements under Summary and Risk Factors as well as those noted in the documents incorporated herein by reference, are forward-looking statements and may involve a number of risks and uncertainties. We note that our actual results and future events may differ significantly based upon a number of factors. The reader should not put undue reliance on the forward-looking statements in this document, which speak only as of the date on the cover of this prospectus. References to we, our, us, the Company, the registrant, or Sionix refer to Sionix Corporation, a Nevada corporation. About Our Business Business Overview Sionix designs, develops, markets and sells cost-effective water management and treatment solutions intended for use in the oil and gas, agriculture, industrial, disaster relief, and municipal (both potable and wastewater) markets. The Company s Mobile Water Treatment System ( MWTS ) contains a Dissolved Air Floatation ( DAF ) system with patented technology that management estimates removes more than 99% of the organic, and most inorganic, particles in water. Historically, DAF systems created bubbles that were 50+ microns in size, which were unable to remove all contaminants due to their size. The Sionix MWTS utilizes and refines DAF technology to provide a pre-treatment process using ambient oxygen and minimal chemical flocculent aids that we believe is efficient and cost-effective. The patented Sionix technology makes micro-bubbles which allow a greater percentage of contaminants to be captured, floated to the surface and skimmed off, without harmful chemicals. The Company s MWTS is mobile and modular such that it can be transported easily to address a wide range of water treatment markets and can meet customers needs for new systems or to replace or integrate with existing filtration technologies. Industry Overview The water treatment recycling and reuse industry is highly fragmented, consisting of many companies involved in various operational capacities, including companies that design fully integrated systems for processing millions of gallons of water for municipal, industrial, and commercial applications. Demand for water treatment and purification has continued to grow due to economic expansion, population growth, scarcity of usable water, concerns about water quality and regulatory requirements. Many believe the world is facing a global crisis - in both supply and quality. Water is a natural resource that has a limited supply and no true substitute, and yet only a very small percentage of the earth s water is available for human consumption. Demand for water resources is compounded by a growing and developing world population, Third World urbanization, and increasing water usage in industries such as oil and gas, agriculture and food processing. It has been reported in a television broadcast by CNBC titled Liquid Assets: The Big Business of Water, aired originally in 2010, that by 2025, 48 countries will be without sufficient water to meet basic requirements. We believe the lack of water resources is directly linked to inadequate water management strategies on the part of governments, businesses, consumers and private individuals. We expect global water issues will continue to drive both domestic and international demand for water treatment and recycling. Our Solution Sionix MWTS The Sionix MWTS is a self-contained, mobile, customizable water treatment system or pre-treatment process that uses ordinary air, with minimal chemical flocculent aids. We believe that the MWTS is a cost-effective solution for a wide range of applications, including even the smallest water utilities or commercial applications. Our mobile treatment system technology enables water recycling and purification for oil and gas, agriculture, disaster relief, municipalities and other applications. Table of Contents The Sionix MWTS employs our patented DAF process and technology. The MWTS improves the efficiency of the standard DAF process by removing what management estimates as more than 99% of the organic, and most inorganic, particles in water. Generally, DAF systems create bubbles that are 50+ microns in size, which are unable to remove certain contaminants due to their size. The patented Sionix technology makes micro-bubbles which allow a much greater percentage of contaminants to be captured, floated to the surface and skimmed off, reducing or eliminating the use of potentially harmful chemicals. We believe the primary benefits of the Sionix MWTS include: Decreased Costs. The Sionix MWTS reduces costs associated with chemical treatments, energy usage, and day-to-day operations. Daily operations can be run with minimal staff or even remotely, via electronic communications networks. Customizable Solution. Each MWTS is completely modular and can either be used to replace, or integrate with, existing filtration and treatment technology. The equipment can be sized for almost any job as well as a wide range of influent water chemistry and desired effluent. Small, Mobile Footprint. Our MWTS units occupy a much smaller footprint than other types of water treatment facilities, ranging from 3,000 to 5,000 sq. ft. depending on the type of unit, are modular, self-contained and portable. The entire MWTS is built into one or more forty-foot ISO standard transportable containers. Portability and flexible positioning is important to many industries. Rapid Deployment. The Sionix product offers rapid deployment, with a 48-72 hour installation timeframe and four to six weeks for full commissioning. Should catastrophic damage be incurred, a replacement unit may be installed within a few days rather than many months or years as with in-ground systems. Regulatory Compliance. Our MWTS, by virtue of minimizing dangerous pathogens, also minimizes the necessity of using potentially cancer-causing disinfection products. Growth Strategy Our objective is to be a leading provider of patented water treatment technologies and services that can be used by our customers for water management and treatment solutions in multiple end markets. Our solutions are designed to make it more cost-effective for our customers to quickly deploy water treatment technologies. The principal elements of our strategy are to: Focus our sales efforts in the oil and gas markets where our technology and solutions can offer an immediate return on investment for our customers and also address their needs to be environmentally conscious. The Williston Basin The Marcellus Shale Other Shale Formations domestic and international; Expand domestic and international sales force with individuals who possess industry and application specific experience and relationships; Build relationships with engineering, procurement and construction ( EPC ) and other water treatment consulting companies that can serve as an indirect sales channel; Grow revenue through flexible business model, to include sales and leasing of water treatment equipment and contracted treatment services; Expand domestic and international partnerships with companies that have extensive experience and relationships in the water treatment market; and Continue to invest in research and development activities and expand our patent portfolio. As filed with the Securities and Exchange Commission on February __, 2013 Registration Statement No. 333-______________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Sionix Corporation (Exact name of registrant as specified in its charter) Nevada 3580 87-0428526 (State or Other Jurisdiction of Incorporation or Organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification No.) 914 Westwood Blvd., Box 801 Los Angeles, California 90024 (704) 971-8400 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) Kenneth Calligar Interim Chief Executive Officer Sionix Corporation 914 Westwood Blvd., Box 801 Los Angeles, California 90024 (704) 971-8400 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Kevin Friedmann, Esq. RICHARDSON & PATEL LLP 405 Lexington Avenue, 49th Floor New York, New York 10174 Tel: (212) 561-5559 Fax: (917) 591-6898 Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company Table of Contents Addressable Markets In the United States, we plan to target the established base of small to medium water systems, as well as industrial users (such as the oil and gas industry, agriculture and food producers, and pharmaceuticals) and disaster relief agencies with a need for a clean and consistent water supply. Our initial focus in domestic markets will be on oil and gas, as well as various industrial and agricultural markets. Outside the United States, we plan to market principally to local water systems, commercial developers, and international relief organizations. The international market for water recycling, reuse and treatment includes a broad array of commercial, industrial, agricultural, municipal and disaster relief applications. According to industry data, it is estimated that 1.1 billion people in the world do not have safe drinking water. There is significant market potential in Asian, African, and Latin American countries, where there is a severe lack of supply of clean and safe water for drinking and personal use. Strategic Partners In March, 2010 we announced our strategic alliance agreement with Pacific Advanced Civil Engineering, Inc. (PACE), an advanced water engineering firm headquartered in Fountain Valley, California. PACE has over 35 years of experience in all phases of water remediation, large and small, including storm water management, river engineering, floodplain mapping, watershed analysis and planning, GIS water resource applications, water quality assessment, water and wastewater treatment, potable water storage and distribution, and lake systems. Under this agreement, PACE has provided periodic engineering oversight of our MWTS and the units included in them. Pursuant to our arrangement, PACE is to receive a fee of 3% of the from the revenue earned from the sale of a MWTS for services provided on a per customer basis, to the extent that services are provided by PACE. Should we require additional services from PACE, the services will be charged either on a per-hour or fixed-price basis. We anticipate expanding this type of relationship with other firms who have industry or geographic expertise or relationships. We believe this will help us to validate the efficacy of our technology. We also believe that these relationships expose us to a potentially broader range of application opportunities and types of customers. Risks Related to Our Business Our business is subject to a number of risks. You should be aware of these risks before making an investment decision. These risks are discussed more fully in the section of this prospectus titled Risk Factors , which begins on page 6 of this prospectus. Information Regarding our Capitalization As of January 31, 2013, we had 415,368,608 shares of common stock issued and outstanding. This amount excludes the following securities that were outstanding as of September 30, 2012: $750,000 in principal amount of 12% Convertible Promissory Notes originally issued on July 28, 2008 and amended as of July 28, 2009 to include accrued interest as of that date for a new principal amount of $865,938, which have not yet been converted into shares of our common stock; based on an estimated conversion price of $0.06 per share, the principal amount of these notes and accrued interest of approximately $309,717 as of September 30, 2012 would be convertible into 19,594,254 shares of our common stock. $100,000 in principal amount of 10% Convertible Promissory Notes issued on January 25, 2013; based on an estimated conversion price of $0.02 per share, the principal amount of these notes as of January 31, 2012 would be convertible into 5,000,000 shares of our common stock. $40,000 in principal amount of 10% Convertible Promissory Notes issued on January 16, 2013; based on an estimated conversion price of $0.02 per share, the principal amount of these notes as of January 31, 2012 would be convertible into 2,000,000 shares of our common stock. $300,000 in principal amount of 12% Secured Promissory Notes originally issued on November 8, 2011 having matured on July 31, 2012. Sionix was required to redeem the debenture on the maturity date at a redemption premium of 7.5%. We are retiring the amounts owed by issuing shares of our common stock which are subsequently sold by the note holder, and the proceeds are used to pay down the balance due under this obligation. Table of Contents $170,000 in principal amount of our 8% Convertible Promissory Notes issued from April 28, 2010 to August 24, 2012. As of September 30, 2012, $530,000 in principal amount has been converted into 19,414,808 shares of our common stock. The conversion price of the remaining notes that are outstanding is based on the market value at the time of conversion. Based on an estimated $0.02 per share market value, the principal amount of these notes and accrued interest as of September 30, 2012 would be convertible into approximately an additional 8.5 million shares of our common stock. The actual amount of shares issued in full satisfaction of this obligation could vary. $400,000 in principal amount borrowed through a series of four, 6% Convertible Redeemable Notes originally issued on November 23, 2011 and maturing on November 23, 2012. The conversion price for each share of common stock is equal to 70% of the lowest closing bid price of the common stock for a period of five trading days, but no lower than $0.001 per share. As of September 30, 2012 we issued 13,203,492 shares of common stock to retire $397,490 in principal amount of the notes. Based on an estimated $0.02 per share market value, the principal amount of these notes and accrued interest as of September 30, 2012 would be convertible into approximately an additional 11 million shares of our common stock. The actual amount of shares issued in full satisfaction of this obligation could vary. $15,000 in principal amount of 10% Convertible Promissory Notes originally issued January 14, 2010, which have not yet been converted into shares of our common stock. The conversion price of the notes is $0.15 per share. Based on the outstanding principal amount and accrued interest as of September 30, 2012, the notes would be convertible into approximately 369,350 shares of our common stock. $1,025,000 in principal amount of 10% Convertible Promissory Notes issued on September 25, 2012, which have not yet been converted into shares of our common stock. The notes are convertible at any time at the option of the holders into shares of our common stock at a conversion price based on 80% of the average of the three lowest closing prices for the common stock during the ten consecutive trading days immediately preceding the conversion request, however the conversion price may not exceed $0.04, and may not be lower than $0.02 per share. Based on the outstanding principal amount of these notes and assuming that interest accrued through June 25, 2013, the due date, the notes would be convertible into approximately 23,125,000 shares of our common stock at a conversion price of $0.04 a share and 51,250,000 shares of our common stock at a conversion price of $0.02 a share. The notes were issued together with warrants for the purchase of 23,125,000 shares of our common stock. Warrants for the purchase of up to 114,460,085 shares of common stock at a weighted average exercise price of $0.121 per share. Options for the purchase of up to 43,716,316 shares of common stock at a weighted average exercise price of $0.119 per share. Unless otherwise specifically stated, information throughout this prospectus does not assume the exercise of outstanding options or warrants to purchase shares of our common stock or the conversion of convertible promissory notes. Table of Contents CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Amount to be Registered (1) Proposed Maximum Offering Price Per Unit (2) Proposed Maximum Aggregate Offering Price (2) Amount of Registration Fee (3) Common stock, $0.001 par value per share, underlying 8% convertible notes 10,164,706 $ 0.021 $ 213,459 $ 29.12 Common stock, $0.001 par value per share, underlying 10% convertible notes 63,375,000 $ 0.02 $ 1,267,500 $ 172.89 Common stock, $0.001 par value per share, underlying warrants 25,812,500 $ 0.08 $ 2,065,000 $ 281.67 TOTAL 99,352,206 $ 3,545,959 $ 483.68 (1) Pursuant to Rule 416 under the Securities Act of 1933, this Registration Statement also covers any additional securities that may be offered or issued in connection with any stock split, stock dividend or similar transaction. (2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, based on $0.02, the average of the bid and ask prices of the registrant s common stock on February 1, 2013. (3) Calculated in accordance with Rule 457(g) of the Securities Act of 1933 THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE. Table of Contents Securities to be Registered This prospectus relates to the resale of up to 99,352,206 shares of common stock underlying convertible notes and warrants issued in connection with a recent financing completed by the Company and described below. 8% Convertible Debentures (April 2012) In April, 2012 we entered into an agreement with Ascendiant Capital Group, LLC ("Ascendiant") for the sale of $550,000 of unsecured Convertible Debentures (the Primary Debentures ) to accredited investors (the Debenture Holders ) which bear an interest rate of 8% and are due to be repaid 18 months from the closing date. The Debenture Holders received guaranteed interest on the original principal amount for a twelve-month period. Ascendiant placed $200,000 of the Primary Debentures and we terminated the offering and the Primary Debentures were converted into common stock. The Primary Debentures were convertible into our common stock during the forty-five days following the issue date at a floor price of $0.08, and from the issue date until September 28, 2012 at a conversion price of no more than $0.13, based on the average of the three lowest closing bid prices for the common stock during the ten consecutive trading days immediately preceding the conversion request. After this period the conversion price was to be 75% of the average of the three lowest closing bid prices for the common stock during the ten consecutive trading days immediately preceding the conversion request. We had the right to demand immediate conversion of the Primary Debentures or some part of them if, at any time prior to the maturity date, had our common stock had, for any twenty consecutive trading-day period, reported a closing bid price of $0.40 per share or greater and reported daily trading volume of 300,000 shares or more. At the time the Primary Debentures were issued, we issued a total of 2,700,000 warrants to the Debenture Holders, which can be exercised for a period of 3 years from the closing date at an exercise price of $0.10. To induce conversion, the Company issued an additional 2,300,000 warrants to the Debenture Holders which can be exercised for a period of 5 years after the date issued at an exercise price of $0.08 per share. 10% Convertible Note and Warrant Financing (September 2012) On September 29, 2012 we entered into a securities purchase agreement dated September 25, 2012 with several accredited investors ( Holders ) for the purchase and sale of $1,025,000 of our convertible notes (the September 2012 Notes ) and warrants. The September 2012 Notes bear interest at the rate of 10% per annum beginning as of September 25, 2012, and mature on June 25, 2013. On the closing date, we paid to the Holders nine months of pre-paid interest on the original principal amount of the September 2012 Notes. The September 2012 Notes are convertible at any time at the option of the Holders into shares of our common stock at a conversion price based on 80% of the average of the three lowest closing prices for the common stock during the ten consecutive trading days immediately preceding the conversion request, however the conversion price may not exceed $0.04 and may not be lower than $0.02 per share. We may redeem the September 2012 Notes at any time prior to maturity with ten days prior notice to the Holders, and payment of a premium of 25% on the unpaid principal amount. In addition the September 2012 Notes and related securities purchase agreement contain representations, warranties and covenants that are customary for financings of this type. We also issued warrants ( Warrants ) to the Holders for the purchase of up to 23,125,000 shares of Company common stock, pro rata in proportion to the amount invested, which can be exercised for a period of five years from the closing date, with a fixed exercise price of $0.08 per share. We have agreed to register the common stock into which the September 2012 Notes may be converted, any shares of common stock that may be issued as payment of principal or interest, and the common stock underlying the Warrants, as well as any shares of common stock that may be issued as a result of any stock split, dividend or other distribution. We have agreed to file an initial registration statement within 30 days of the date of the registration rights agreement. If we fail to file a registration statement within this 30 day period, or to have it declared effective within 90 days after the date of the registration rights agreement, or to maintain its effectiveness (in addition to other events described in the full text of the registration rights agreement), we will be obligated to pay the investors liquidated damages equal to 2% of the principal amount of the September 2012 Notes per month until the event is cured, for up to one year, and 1% per month thereafter if the event continues uncured. Because we did not file the registration statement of which this prospectus is a part within 30 days of the date of the registration rights agreement, we accrued a penalty of $20,500. At the closing of the sale and issuance of the September 2012 Notes, we paid a cash placement fee to the placement agent amounting to 8.54% of the gross proceeds of the offering. Additional information regarding our issued and outstanding securities may be found in the section of this prospectus titled Description of Securities. 10% Convertible Note Financing (January 2013) On January 25, 2013 we entered into a securities purchase agreement dated January 25, 2013 with two accredited investors ( Holders ) for the purchase and sale of $140,000 of our convertible notes (the January 2013 Notes ). The January 2013 Notes bear interest at the rate of 10% per annum beginning as of January 25, 2013, and mature on September 30, 3014. The January 2013 Notes are convertible at any time at the option of the Holders (subject to an increase in our Authorized common shares, or a Reverse Split of our existing Outstanding common shares with no change to its Authorized common shares) into shares of our common stock at a conversion price based on 80% of the average of the three lowest closing prices for the common stock during the ten consecutive trading days immediately preceding the conversion request, however the conversion price may not exceed $0.04 and may not be lower than $0.02 per share. We may redeem the January 2013 Notes at any time prior to maturity with ten days prior notice to the Holders, and payment of a premium of 25% on the unpaid principal amount. In addition the January 2013 Notes and related securities purchase agreement contain representations, warranties and covenants that are customary for financings of this type. We have agreed to register the common stock into which the January 2013 Notes may be converted, any shares of common stock that may be issued as payment of principal or interest, and the common stock underlying the Warrants, as well as any shares of common stock that may be issued as a result of any stock split, dividend or other distribution. We have agreed to file an initial registration statement within 30 days of the date of the registration rights agreement. If we fail to file a registration statement within this 30 day period, or to have it declared effective within 90 days after the date of the registration rights agreement, or to maintain its effectiveness (in addition to other events described in the full text of the registration rights agreement), we will be obligated to pay the investors liquidated damages equal to 2% of the principal amount of the January 2013 Notes per month until the event is cured, for up to one year, and 1% per month thereafter if the event continues uncured. Additional information regarding our issued and outstanding securities may be found in the section of this prospectus titled Description of Securities. Table of Contents The information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is Subject to Completion, dated ________, 2013 ______________________________________________ PROSPECTUS SIONIX CORPORATION 99,352,206 Shares of Common Stock ______________________________________________ This prospectus covers the resale by the selling security holders named on page 40 of up to 99,352,206 shares of our common stock which include: 10,164,706 shares of common stock issued as a result of the conversion of our 8% convertible notes; 58,250,000 shares of common stock underlying 10% convertible notes; 5,125,000 shares of common stock underlying 10% convertible notes related to the penalty for filing this Form S-1 late; and 25,812,500 shares of common stock underlying common stock purchase warrants. Our common stock is quoted by the Over-the-Counter Bulletin Board under the symbol SINX. On February 1, 2013, the closing price per share of our common stock was $0.02. AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE RISK FACTORS BEGINNING ON PAGE 6 OF THE PROSPECTUS. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. You should rely only on the information contained in this prospectus in making any investment decision relating to our securities. We have not authorized anyone to provide you with different information. This prospectus may be used only where it is legal to sell these securities. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front page of this prospectus. The following table of contents has been designed to help you find important information contained in this prospectus. We encourage you to read the entire prospectus carefully. The date of this prospectus is _______, 2013 Table of Contents Corporate Information Our principal executive office is located at 914 Westwood Blvd., Box 801, Los Angeles, California 90024. Our telephone number is (704) 971-8400. Our web address is www.sionix.com. Information included on our website is not part of this prospectus.
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+PROSPECTUS SUMMARY This summary highlights selected information contained or incorporated by reference in this prospectus and may not contain all of the information that you need to consider in making your investment decision. To understand this offering fully, you should carefully read this summary together with the more detailed information contained in or incorporated by reference into this prospectus. You should carefully consider the section titled Risk Factors in this prospectus, our consolidated financial statements and the documents identified in the section Incorporation of Certain Information by Reference. The Company Tri-County Financial Corporation, headquartered in Waldorf, Maryland and organized in 1989, is the bank holding company for Community Bank, a Maryland-chartered commercial bank subject to supervision and regulation by the Federal Reserve and the Maryland Commissioner of Financial Regulation (the Maryland Commissioner ). Community Bank was founded in 1950 as Tri-County Building and Loan Association of Waldorf, a mutual savings and loan association. In 1986, the Bank converted to a federal stock savings bank and, in 1997, converted to a Maryland-chartered commercial bank and adopted its current name. Community Bank provides an array of financial products and services for businesses and retail customers primarily through its ten full-service offices located in Calvert, Charles and St. Mary s Counties in Southern Maryland (the tri-county area ) and one full-service branch office in King George County, Virginia. In addition, Community Bank originates loans through loan production offices in La Plata and Prince Frederick, Maryland and Fredericksburg, Virginia. Community Bank focuses its commercial business generation efforts on targeting small and medium sized businesses with revenues between $5.0 million and $35.0 million headquartered in Southern Maryland and in King George County and Fredericksburg, Virginia. In addition, Community Bank services the retail banking needs of the communities surrounding its 11 full-service branch locations with a full array of retail deposit and loan products. Community Bank s deposit accounts are insured by the Deposit Insurance Fund administered by the Federal Deposit Insurance Corporation (the FDIC ) to the maximum permitted by law. Effective October 18, 2013, Community Bank will change its name to Community Bank of the Chesapeake. This new name reflects Community Bank s recent expansion into the Northern Neck of Virginia and will align the Bank s name with its strategy of being the premier community banking institution throughout the Chesapeake Bay region. In addition, Tri-County Financial will change its name to The Community Financial Corporation, to better align the parent company name with the bank name. As of June 30, 2013, Tri-County Financial had consolidated assets of $980.1 million, consolidated deposits of $784.7 million and consolidated stockholders equity of $81.1 million. Shares of our common stock are traded on the OTCQB Marketplace under the trading symbol TCFC. Following the name change described above, shares of our common stock will continue to trade under the trading symbol TCFC. As of September 23, 2013, there were 3,045,543 shares of our common stock outstanding. Our Recent Growth and Performance With the efforts of our strong management team, we were able to continue our growth in loans and maintain our strong track record of performance through the recent economic recession. From December 31, 2008 through June 30, 2013, net loans grew 37.3%, from $543.0 million to $745.3 million. This growth was driven by our ability to provide superior service to our targeted small and medium sized business customers as compared to our larger, regional and national banking competition and our financial stability versus our locally-based competition. This loan growth was achieved while maintaining our focus on our strong underwriting standards, which has been reflected in our low net charge-off levels. Additionally, we have improved our net interest margin from 3.13% for the year ended December 31, 2008 to 3.50% for the six months ended June 30, 2013 (on an Table of Contents The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. Preliminary Prospectus Subject to completion, Dated September 24, 2013 1,400,000 Shares of Common Stock This prospectus describes the public offering of shares of common stock of Tri-County Financial Corporation, a bank holding company headquartered in Waldorf, Maryland. Our common stock is currently quoted on the OTCQB Marketplace under the symbol TCFC. On September 23, 2013, the last reported sale price of our common stock was $19.00 per share. We have applied to list our common stock on the NASDAQ Capital Market under the symbol TCFC. Investing in our common stock involves risks. For additional information, see the section of this prospectus captioned Risk Factors beginning on page 11 for a discussion of the factors you should consider before you make your decision to invest in our common stock. Per Share Total Public offering price of common stock $ $ Underwriting discounts and commissions $ $ Proceeds to us before expenses(1) $ $ (1) We have agreed to reimburse the underwriters for their expenses up to $150,000. See Underwriting . We have granted the underwriters a 30-day option to purchase up to 210,000 additional shares of our common stock at the public offering price, less underwriting discounts and commissions, to cover over-allotments, if any. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The securities are not savings accounts, deposits, or other obligations of any bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. The underwriters expect to deliver the shares of common stock in book-entry form through the facilities of the Depository Trust Company, against payment on or about , 2013. Sandler O Neill + Partners, L.P. The date of this prospectus is , 2013 Table of Contents asset quality, loan delinquency rates and levels of non-performing assets; impairment charges with respect to investment securities; current and future capital management programs; non-interest income levels; market share; our ability to control costs and expenses; and other business operations and strategies. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the PSLRA. We caution you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: the factors identified below and in this prospectus under the heading Risk Factors; prevailing economic conditions, either nationally or locally in some or all areas in which we conduct business, or conditions in the banking industry; interest rate trends, changes in interest rates, deposit flows, loan demand, real estate values and competition, which can materially affect, among other things, loan origination levels and the level of defaults, losses and prepayments on loans we have made and make; changes in the quality or composition of the loan or investment portfolios; factors driving impairment charges on investments; our ability to retain key members of management; our ability to successfully integrate any assets, liabilities, customers, systems and management personnel we may acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames; our timely development of new and competitive products or services in a changing environment, and the acceptance of such products or services by customers; operational issues and/or capital spending necessitated by the potential need to adapt to industry changes in information technology systems, on which we are highly dependent; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; litigation liabilities, including related costs, expenses, settlements and judgments, or the outcome of other matters before regulatory agencies, whether pending or commencing in the future; and other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services. Additionally, the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control. Investors in our common stock are cautioned not to place undue reliance on these forward-looking statements, which are made as of the date of this prospectus. Except as may be required by applicable law or regulation, we assume no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements. Table of Contents annualized basis) and our return on average common equity from 7.59% to 10.47% over the same time period. Our profitability has been positively impacted by our continued focus on lowering our cost of deposits, maintaining our yield on earning assets and controlling our credit costs. During the recent recession, we were able to achieve positive profitability in each quarter and, further, have achieved positive net income to our common shareholders each year for 27 consecutive years. Our Strategy Our strategies center on our approach as a full-service, community-oriented bank and the expansion of our market share. To realize these objectives, we are pursuing the following strategies: Continue to Grow Our Market Share. We employ a community banking strategy that emphasizes providing high-quality, responsive and personalized service to our business and retail customers. We believe there is a significant opportunity for us as a locally-managed, community-focused bank capable of providing a full-range of financial services to continue expanding our market share for both loans and deposits. By offering quicker decision making in the delivery of banking products and services, offering customized products where appropriate, and providing customer access to our senior decision makers, we distinguish ourselves from the larger, regional and national banks operating in our market areas, while our larger capital base and product mix enable us to compete effectively against smaller banks. As a result, according to the FDIC s website, as of June 30, 2012 (the latest date as of which such information was available), we held 20.0% of the deposits in Calvert, Charles and St. Mary s counties, Maryland, which represented the largest market share of deposits of the thirteen banking institutions in the tri-county area. Our goal is to continue to leverage on our excellent reputation and brand recognition to build market share in our existing Maryland markets and also to use the same, proven approach to build market share in King George County, Virginia, where we opened a branch office in June 2012. Improve Asset Quality. We have relied on the expertise of our lending and credit administration staff, executive officers, and our disciplined underwriting and credit monitoring processes to lower our level of non-performing assets, performing non-accrual loans and troubled debt restructurings ( TDRs ) from 4.58% of total assets at December 31, 2010 to 2.87% of total assets at June 30, 2013. We have achieved this decrease in non-performing assets without incurring significant charge-offs as net charge-offs to average loans was 0.16% (annualized), 0.27%, 0.61%, and 0.61% for the six months ended June 30, 2013 and the years ended December 31, 2012, 2011 and 2010, respectively. While overall credit losses and problem assets still remain elevated as compared to historic levels primarily due to tumultuous economic conditions, credit quality remains a primary focus. We are vigilant in rapidly responding to changing economic conditions and to specific problem credits, as well as working to minimize losses. Emphasize Commercial Lending. Net loans have increased $90.8 million, or 13.9%, from $654.5 million at December, 2010 to $745.3 million at June 30, 2013. During that time, we have focused on increasing our origination and retention of commercial loans (commercial real estate, commercial business loans and commercial equipment loans), which have increased from $458.8 million, or 69.2% of the loan portfolio, at December, 2010 to $537.0 million, or 71.2% of the total loan portfolio, at June 30, 2013. We believe the continuing transition of our balance sheet to resemble that of a commercial bank will improve our net interest margin and differentiate us in our marketplace, which contains few locally-based community banks with a commercial lending focus. To accelerate our loan growth, we operate three loan production offices, the most recent of which was opened in August 2013 in Fredericksburg, Virginia. Increase Transaction Accounts. A key part of our business strategy is focusing on the growth of transaction accounts, which include checking, money market and savings accounts. These deposits allow us to increase our banking relationships with our customers and provide a stable, low-cost funding source for our asset growth. Our level of transaction accounts has increased from 39.5% of Table of Contents Table of Contents total deposits at December 31, 2010 to 49.7% at June 30, 2013. This has contributed to the decrease in the average cost of funds from 1.78% for the year ended December 31, 2010 to 0.93% for the six months ended June 30, 2013. Our Competitive Advantages We believe the following competitive advantages will allow us to successfully execute our business strategies: Superior Customer Relationship Focus. We offer high-quality service by having locally-based lending teams in each of the counties we serve, minimizing personnel turnover, allowing customer access to senior decision makers and by providing more direct, personal attention than we believe is offered by competing financial institutions. The majority of our commercial lending competition is from banks headquartered outside of our market area, many of whom attempt to serve the market area through out-of-market loan production officers. By emphasizing the need for a professional, responsive and knowledgeable staff, we offer a superior level of service to our customers. Few Locally-Based, Commercial Focused Community Banking Competitors. Within our primary market area, there are few similarly sized, commercial lending focused institutions which can compete directly with us for lending relationships. The majority of our in-market competition comes from government sponsored credit unions or smaller commercial banking institutions that are not able to serve all of the loan and deposit needs of our targeted small and medium sized business customers. Additionally, we compete against larger banking institutions headquartered out of our market area. We believe our size combined with our legal lending limit of approximately $14.9 million provides us with a competitive advantage over smaller local institutions and our superior customer service provides us with a competitive advantage over larger out-of-market institutions competing for lending relationships in our market area. Experienced Management Team and Personnel. Our executive management team brings an average of nearly 30 years of experience in the banking industry. Additionally, our management team was responsible for guiding the Company through the recent economic recession without sustaining a single quarter of losses to common shareholders. In addition to their experience with the Company and the Bank, several members of our management team have a long history of banking experience in the Southern Maryland market with the former leading institution in the market, Mercantile Bankshares Corporation, which was acquired by PNC Financial Services Group, Inc. in 2007. Prior to and following the acquisition we were able to make several strategic hires within our executive management and locally-based lending teams. We believe the significant local banking experience of our employees throughout our organization provides us with a significant advantage over other competitors within the markets we serve. Market Reputation. We believe that our market reputation has become and will remain a competitive advantage within our historical markets in the tri-county area of Southern Maryland. During the recent economic recession, many of our competitors actively reduced lending to our targeted small and medium sized business customers. Our financial strength during this time allowed us to continue to expand our loan portfolio and service these customers, which enhanced our reputation as a lender and customer-focused banking institution. Accordingly, we have been able to focus our attention on building upon our strong relationships with these businesses and leveraging this reputation into additional relationships with new customers. We expect to continue to take advantage of the strong reputation and relationships that have been forged by our management team and our frontline lending staff in our legacy tri-county area, while leveraging our reputation to expand our market share in contiguous markets. Table of Contents Our Market Area The Bank considers its principal lending and deposit market area to consist of the tri-county area in Southern Maryland and King George County in Virginia. In addition, as a result of the Bank s expansion into the greater Fredericksburg market in 2013, it is expected that Stafford County will become part of the Bank s principal leading and deposit market area. One of the fastest growing regions in the country, this area is home to a mix of federal facilities, industrial and high-tech businesses. The 2010 U.S. Census estimates place King George County as the third fastest growing locality in Virginia with population growth of 40.36% since 2000. In addition, according to the U.S. Census Bureau, St. Mary s County s population has grown 22% over the past decade, the highest growth rate in Maryland between 2000 and 2010. According to St. Mary s County Department of Economic & Community Development, St. Mary s County was the third fastest growing county in Maryland from 2011 to 2012. Helping to spur this growth is the influence of several major federal facilities located both within the Bank s footprint and within adjoining counties. Major federal facilities include the Patuxent River Naval Air Station in St. Mary s County, the Indian Head Division, Naval Surface Warfare Center in Charles County and the Naval Surface Warfare Naval Support Facility in King George County. Collectively, these facilities employ over 33,000 people. According to the St. Mary s County Comprehensive Plan, the Patuxent Naval Air Station alone employs approximately 22,000 people and provides an approximate annual economic impact of $2.3 billion. In addition, there are several major federal facilities located in adjoining markets including Andrews Air Force Base and Defense Intelligence Agency & Defense Intelligence Analysis Center in Prince Georges County, Maryland and the U.S. Marine Base Quantico, Drug Enforcement Administration Quantico facility and Federal Bureau of Investigation Quantico facility in Prince William County, Virginia. The economic health of the region, while stabilized by the influence of the federal government, is not solely dependent on this sector. Calvert County is home to the Dominion Power Cove Point Liquid Natural Gas Terminal, which is one of the nation s largest liquefied natural gas terminals and Dominion Power is currently constructing liquefaction facilities for exporting liquefied natural gas. According to Dominion Power, the construction of these liquefaction facilities is expected to create 4,000 jobs in the state of Maryland during the construction phase and would support another 14,600 jobs once the facility is operational with approximately $1 billion annually of additional federal, state and local government revenues being generated. In addition, King George County has finalized an agreement with Columbia Gas to bring a high-pressure, steel pipe natural gas line into the county to service the King George Industrial Park in 2014. Even though Southern Maryland is generally considered to have more affordable housing than many other Washington and Baltimore area suburbs, during the recession, growth in the Bank s market area was dampened as the demand for new housing in the tri-county area fell in conjunction with the overall housing market. According to the Maryland Department of Planning, new housing unit starts fell from 2006 through 2010. However, after 2010, real estate values stabilized and there were positive trends in housing during 2012. According to Real Estate Business Intelligence, LLC, St. Mary s, Charles and Calvert Counties saw an increase in the average price of residential homes sold from 2011 to 2012 of 4.21%, 3.30% and 0.47%, respectively. Based on information from the U.S. Bureau of Labor Statistics, unemployment rates at July 2013 remained well below the national average (not seasonally adjusted) of 7.7% at 6.6%, 6.7% and 6.5% for St. Mary s County, Charles County and Calvert County, respectively, and 6.6% in King George County, Virginia. According to a University of Maryland study, projected job growth within the tri-county area from 2005 through 2030 is 31%, 28% and 45% in St. Mary s, Charles and Calvert Counties, respectively. Similarly, according to the King George County Comprehensive Plan, employment in King George County is projected to increase by 33% from 2010 to and 2020. The Bank is currently in the process of expanding in the greater Fredericksburg market and opened a loan production office in Fredericksburg, Virginia in August 2013. According to the Fredericksburg Regional Table of Contents Alliance, the Fredericksburg Region, including the City of Fredericksburg and the counties of Caroline, King George, Spotsylvania, and Stafford, Virginia, has been the fastest growing region in the Commonwealth of Virginia for the past eight years. Based on information from the Fredericksburg Regional Alliance, this region boasts an impressive array of over 10,000 small businesses and a highly skilled labor force of over one million within a 40-mile commute. The Bank s primary market area also boasts a strong median household income relative to the median household income of their respective states. According to the U.S. Census Bureau, the median household income from 2007 to 2011 was $82,529, $92,981, and $92,135 for St. Mary s, Calvert and Charles Counties, Maryland, respectively, compared to $72,149 for the State of Maryland. Similarly, according to the U.S. Census Bureau, the median household income from 2007 to 2011 was $82,173 and $94,658 for King George and Stafford Counties, Virginia, respectively, compared to $63,302 for the Commonwealth of Virginia. Management One of our key strengths is our executive management team, as this group of six executives brings an average of nearly 30 years in banking experience, including an average of 16 years with the Company. Further, our executive team s experience provides a beneficial mix of experience not only within the Company and the Bank, but also experience with larger institutions. Supported by our strong credit culture, the executive management team has successfully managed our credit risks through the recent challenging economic conditions. We also benefit from an involved board of directors, which is composed of accomplished local business executives with a wide array of leadership skills and experience beneficial to our organization. The interests of our executive management team and directors are aligned with those of our shareholders through common stock ownership. At September 23, 2013, our directors and officers beneficially owned approximately 19.5% of our outstanding common stock, excluding 158,577 shares that may be acquired upon the exercise of options. The table below highlights the key members of our management team and their positions with the Company and the Bank: Name Positions Michael L. Middleton Chairman and Chief Executive Officer of Tri-County Financial and Community Bank William J. Pasenelli President and Chief Financial Officer of Tri-County Financial and President of Community Bank James M. Burke Executive Vice President and Chief Risk Officer of Tri-County Financial and Community Bank Todd L. Capitani Executive Vice President and Senior Financial Officer of Tri-County Financial and Community Bank and Chief Financial Officer of Community Bank Gregory C. Cockerham Executive Vice President and Chief Lending Officer and Corporate Secretary of Tri- County Financial and Community Bank James F. DiMisa Executive Vice President and Chief Operating Officer of Tri-County Financial and Community Bank Risk Factors An investment in our common stock involves certain risks. You should carefully consider the risks described in the section entitled Risk Factors, as well as other information included or incorporated by reference into this prospectus, including our consolidated financial statements and the notes thereto, before making an investment decision. Table of Contents Corporate Information Our principal executive offices are located at 3035 Leonardtown Road, Waldorf, Maryland 20604 and our telephone number is (301) 645-5601. We maintain an Internet website at www.cbtc.com. Neither this website nor the information on this website is included or incorporated in, or is a part of, this prospectus. Additional information about us and our subsidiaries is included in documents incorporated by reference in this prospectus. See Where You Can Find Additional Information on page 90. Table of Contents
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+PROSPECTUS SUMMARY This summary highlights certain information about us, this offering and information appearing elsewhere in this prospectus and in the documents we incorporate by reference. This summary is not complete and does not contain all of the information that you should consider before investing in our securities. To fully understand this offering and its consequences to you, you should carefully read this entire prospectus and any free writing prospectus distributed by us, including the information contained under the heading Risk Factors in this prospectus beginning on page 5 and the financial statements and other information incorporated by reference into this prospectus before making an investment decision. Our Business Z Trim Holdings, Inc. is a bio-technology company that owns existing, and develops new, products and processes that transform agricultural by-products into multi-functional ingredients used in food manufacturing, energy and other industries. The Company currently sells a line of products to the food industry that can help manufacturers reduce their costs, improve the quality of finished goods, and also help solve many production problems. The Company s innovative technology provides value-added ingredients across virtually all food industry categories. These all-natural products offer a range of functional attributes, including helping to reduce fat and calories, adding fiber, improving shelf-stability, preventing oil migration, and enhancing binding capacity all without degrading the taste and texture of the final food products. Perhaps most significantly, Z Trim s ingredients can help extend the life of finished products, potentially increasing its customers gross margins. The Company, through an exclusive license to technology patented by the United States Department of Agriculture (the USDA ), has developed products that manage moisture to help reduce production costs and improve nutritional value in finished foods, while maintaining the essential taste and mouth-feel associated with full-fat products. The underlying patent for this technology expires in 2015. The global market for Z Trim s line of products spans the entire food and nutritional beverage industry, including fat-free, low-fat, reduced-fat and full-fat, across meats, baked goods, dairy and non-dairy products, snacks, beverages, dressings, sauces and dips. We currently manufacture our products at a facility owned by our toll manufacturer, AVEKA Nutra Processing, LLC ( ANP ), as discussed below. Our original facility, which we phased out in the third quarter of 2013, was a prototype plant, the first of its kind to produce our innovative products. In 2011, the Company and ANP entered into a tolling agreement, providing that ANP would build a facility capable of producing a minimum of 40,000 pounds per month of Z Trim ingredients and average volumes of 100,000 pounds per month, with the capability of scaling up to 1 million pounds per month. In late 2012, the ANP facility began to make Z Trim products and, although we experienced various start-up difficulties and issues with the relationship, ANP is currently in the process of ramping up to achieve initial, contracted-for capacity, and has recently achieved expected monthly production levels; however, we cannot provide assurances that these production levels will continue or that issues may not affect production in the future. In 2012, the Company opened an industrial products division focusing on the manufacture, marketing and sales of products designed specifically for industrial applications including oil drilling fluids, petroleum coke, charcoal briquettes, hydraulic fracturing, and paper and wood adhesives. When used in industrial operations, we believe that Z Trim s products can reduce costs, enhance supply-chain reliability, limit environmental impact, and improve finished product quality compared to current products such as guar gum, xanthan gum, CMC, lignosulfonates and starches used as binders, adhesives, viscofiers or emulsifiers. In January 2013, the Company entered into a joint development agreement with Newpark Drilling Fluids LLC, a subsidiary of Newpark Resources, Inc., to develop new, environmentally-friendly drilling fluids that incorporate Z Trim's proprietary industrial materials that could replace products such as guar and xanthan gums in drilling applications. In early 2013, the Company began manufacturing non-genetically modified organism ( non-GMO ) products with the intent to meet potentially expanding domestic and international demand, and on February 6, 2013, the Company announced that it had recorded its first sales of such products. On February 20, 2013, the Company announced its first sales of industrial grade Bio-Fiber Gum for use in the petroleum coke industry. Produced from the same raw material sources that the Company uses to produce its Z Trim ingredients, Bio-Fiber Gum is a soluble fiber with adhesive, binding and emulsifying properties suitable for industrial uses. Z Trim, jointly with the USDA Agricultural Research Service, filed a provisional patent for Bio-Fiber Gum in 2012. Corporate Information Z Trim Holdings, Inc. was incorporated in the State of Illinois in 1994. The Company has no operating subsidiaries. Our executive offices are located at 1011 Campus Drive, Mundelein, Illinois, 60060. Our phone number is (847) 549-6002. Our website is www.ztrim.com. The information on, or that may be accessed through, our website is not incorporated by reference into and should not be considered a part of this prospectus or the registration statement of which it is a part. Recapitalization and Recent Developments During the fourth quarter of 2012, Brightline Ventures I, LLC ( Brightline I and together with Brightline Ventures I-B, LLC and Brightline Ventures I-C, LLC, referred to collectively herein as Brightline ) converted $3,465,100 (including accrued dividends) of Series I Preferred Stock into 3,465,100 shares of the Company s common stock. In addition, the non-executive directors of the Company, Morris Garfinkle, Mark Hershhorn, Brian Israel and Ed Smith, each converted $17,403 shares of Series I Preferred Stock (including accrued dividends) into 17,403 shares of common stock or an aggregate of 69,612 shares, and another investor converted $290,000 (including accrued dividends) of the Series I Preferred Stock into 290,000 shares of common stock. Following those conversions, all outstanding shares of Series I Preferred Stock have been converted and none remain outstanding. On March 12, 2013, the Company announced that it concluded a warrant exercise program, which resulted in the exercise of 1,756,088 warrants into 1,756,088 shares of the Company s common stock. The warrant program, which was open to all holders of $1.50 warrants, allowed those warrant holders to exercise their warrants for a $1.25 strike price during February 2013; it also required a waiver of the anti-dilution provisions in these warrants until February 28, 2013 so that those provisions would not be triggered by the exercises. The exercise of these warrants raised approximately $2.2 million of additional capital for the Company. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT NO. 3 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Z Trim Holdings, Inc. (Exact name of registrant as specified in its charter) Illinois 2040 36-4197173 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 1011 Campus Drive Mundelein, Illinois 60060 (847) 549-6002 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) Steven J. Cohen President and Chief Executive Officer 1011 Campus Drive Mundelein, Illinois 60060 (847) 549-6002 (Name, address, including zip code, and telephone number, including area code, of agent for service) With copies to: Kenneth V. Hallett, Esq. Barry I. Grossman, Esq. Quarles & Brady LLP Benjamin S. Reichel, Esq. 411 East Wisconsin Avenue Ellenoff Grossman & Schole LLP Milwaukee, Wisconsin 53202 150 East 42nd Street, 11th Floor Phone: (414) 277-5000 New York, New York 10017 Phone: (212) 370-1300 Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o On March 18, 2013, Brightline converted all outstanding Series II Preferred Stock, plus accrued dividends, into 3,859,697 shares of the Company s common stock. Following this conversion, all outstanding shares of the Company s Series II Preferred Stock have been converted and none remain outstanding. On August 20, 2013, the Company raised additional capital by entering into a private placement subscription agreement with Brightline Ventures I-C, LLC, an affiliate of its controlling stockholder, pursuant to which it sold 376,000 shares of Common Stock, for a price of $1.25 per share (the 1.25 Raise ), and received gross proceeds of $470,000. Contemporaneous with the $1.25 Raise, the Company (i) allowed the holders of the Company s outstanding warrants with a $1.50 per share exercise price (the $1.50 Warrants ) with certain anti-dilution provisions contained in the related warrant agreements to choose to exercise their $1.50 Warrants on a cashless basis such that for every ten $1.50 Warrants exercised, the holder received 4.5 shares of Common Stock (fractional shares were rounded up) (the Cashless Exercise Program ), (ii) sought a temporary waiver from the holders of the $1.50 Warrants of the anti-dilution provisions in the warrant agreements with respect to the Cashless Exercise Program and potential capital-raising activities (other than the $1.25 Raise) by the Company by December 31, 2013, and (iii) asked the holders of the $1.50 Warrants to permanently amend the warrant agreements with respect to certain ratchet provisions so as to reduce the derivative liability the Company incurs as a result of those provisions in the agreements. The Cashless Exercise Program resulted in 7,172,751 of the $1.50 Warrants being converted into 3,227,742 shares of the Company s Common Stock (including 5,718,750 $1.50 Warrants that were converted by Brightline into 2,573,438 shares of Common Stock). As a result of the August 20, 2013 transaction with Brightline, pursuant to the anti-dilution provisions in the $1.50 Warrants that were not exercised as part of the Cashless Exercise Program, the Company reduced the exercise price of those warrants to $1.25 per share and adjusted the number of shares issuable upon the exercise of those warrants such that for every five warrants owned, each remaining holder of $1.50 Warrants received one additional warrant with an exercise price of $1.25. Thus, the Company issued an aggregate of 2,376,009 additional warrants at an exercise price of $1.25 per share (including 2,316,597 additional warrants that were issued to Brightline) to the holders of $1.50 Warrants that were not exercised as part of the Cashless Exercise Program. Following the above transactions, as of October 29, 2013, 14,256,056 of the $1.50 Warrants remain outstanding, which each have an exercise price of $1.25 per share. On September 18, 2013, the Company entered into another private placement subscription agreement with Brightline Ventures I-C, LLC, pursuant to which it sold 468,571 shares of Common Stock for a price of $1.05 per share, along with warrants to purchase 234,286 shares of Common Stock at an exercise price of $1.50 per share (the 1.05 Raise ), and received gross proceeds of $492,000. The waiver discussed above was effective for the $1.05 Raise; therefore, no additional warrants were issued and no exercise price adjustments were made pursuant to anti-dilution and ratchet provisions as a result of the $1.05 Raise. Based on the public offering price in this offering, the warrant agreements related to outstanding warrants for 162,611 underlying shares of Common Stock with an exercise price of $1.00 per share with ratchet and anti-dilution provisions will require the Company to reduce the exercise price to the public offering price and to adjust the number of shares issuable upon the exercise of those warrants, which would require the Company, upon exercise by those warrant holders, to issue an aggregate of [ ] additional shares. On October 21, 2013, the Company issued warrants to purchase up to 30,000 shares of Common Stock in a private placement transaction to a business consultant who will be assisting the Company in various product placement matters. The per share exercise prices of those warrants will be determined based on the market price of the Common Stock if and when certain sales targets are met; the warrants are exercisable through October 21, 2018. In addition, on October 28, 2013, the Company issued 220,000 shares of restricted stock in a private placement transaction to a business consulting firm that will be assisting the Company in evaluating various business and financial matters. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act. Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x (Do not check if a smaller reporting company) Calculation of Registration Fee Title of Each Class of Securities to be Registered Amount to be Registered (1) Proposed Maximum Offering Price Per Share (2) Proposed Maximum Aggregate Offering Price (2) Amount of Registration Fee (2) Common stock, par value $0.00005 per share 2,250,000 $1.14 $2,565,000 $330.38 Warrants to purchase shares of common stock 1,687,500 (4) (4) (5) Common stock issuable upon exercise of investor warrants (3) 1,687,500 $1.14 $1,923,750 $247.78 Total Registration Fee $4,488,750 $578.16 (6) (1) Pursuant to Rule 416 under the Securities Act, this Registration Statement shall also cover any additional shares of common stock which become issuable by reason of any stock dividend, stock split or other similar transaction effected without the receipt of consideration that results in an increase in the number of the outstanding shares of common stock of the registrant. (2) Calculated pursuant to Rule 457(c) of the rules and regulations under the Securities Act of 1933 based on the average of the high and low sales prices as reported on the OTC: QB marketplace on October 29, 2013. (3) The securities registered also include such indeterminate number of shares of common stock as may be issued upon exercise of warrants pursuant to the anti-dilution provisions of the warrants. (4) The price for the warrants to be issued to investors is included in the price of the common stock to be issued to investors. (5) No separate registration fee is required pursuant to Rule 457(g) of the Securities Act of 1933. (6) Previously paid by the registrant. The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. The Offering Issuer: Z Trim Holdings, Inc., an Illinois corporation Securities offered: Up to 2,250,000 shares of common stock Warrants to purchase up to 1,687,500 shares of common stock Common stock outstanding as of October 29, 2013: 37,018,414 shares (1) Common stock to be outstanding after the offering assuming the sale of all shares covered hereby and assuming no exercise of the warrants for the shares covered by this prospectus: 39,268,414 shares (1) Common stock to be outstanding after the offering assuming the sale of all shares covered hereby and assuming the exercise of all warrants for the shares covered by this prospectus: 40,955,914 shares (1) Term of the Company offering: This offering will terminate on [__________], 2013, unless the offering is fully subscribed before that date or we decide to terminate the offering prior to that date. In either event, the offering may be closed without further notice to you. Trading symbol: Our common stock is quoted on the OTC: QB marketplace under the symbol ZTHO. Use of proceeds: We estimate that we will receive up to $[___] in net proceeds from the sale of the securities in this offering, based on a per share purchase price of $[___] and after deducting Placement Agent fees and commissions and estimated offering expenses payable by us. We will use the proceeds from the sale of the securities for working capital needs and other general corporate purposes, which could include conducting research and development ( R&D ), hiring additional sales and R&D staff, and further protecting our intellectual property. See Use of Proceeds for more information.
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+PROSPECTUS SUMMARY The following is only a summary of the information, financial statements and the notes included in this Prospectus. You should read the entire Prospectus carefully, including Risk Factors and our Financial Statements and the notes to the Financial Statements before making any investment decision. Unless the context indicates or suggests otherwise, the terms Company , we, our and us means United Helium, Incorporated. Principal Offices Our principal executive offices are located at 7109 East 2nd Street, Suite G, Scottsdale, Arizona 85251. Our telephone number is 480-949-2755. Our Business United Helium, Incorporated ( UHEI , United Helium , or the "Company") was incorporated according to the laws of the State of Colorado on April 9, 1998. On June 6, 2013 the company changed its name to United Helium Incorporated from Cayenne Entertainment, Inc. On March 28, 2001, Cayenne Entertainment, Inc., organized in the State of Nevada on November 13, 2000, merged with Boeing Run, Inc., formerly a public company, organized in the State of Colorado with the Colorado entity being the legal survivor. The Company is engaged in the business of addressing the supply of helium to industry, government, medical and the research communities. The Company s helium and other reservoir gases, are contained in its working interests oil and gas lease holdings. Recoverable helium reserves contained in geologic structures, will be identified by drilling and third party engineering analysis. The field will be developed through production well drilling and completion, and infrastructure gathering system construction. United Helium will utilize its unique mobile processing equipment to separate and refine helium at the wellhead or from a field gathering system, and transport to its customers. Owners of oil and gas mineral rights have collectively contributed their reserves by assigning working interests to the Company which could not previously be economically produced and/or transported to commercial helium processing plants. This combined effort and unique approach will enable United Helium to unlock the potential that many in the industry have known existed, but previously were unable to successfully develop. The Company s technology and business methods will assure a future supply of this rare and important resource. Although not the primary focus of the Company, to the extent that hydrocarbons, including oil, are discovered on the leasehold properties, the Company intends to take advantage of those opportunities should they arise. We are committed to responsible stewardship in our operations, both above ground as well as below. In furtherance of this commitment, the Company intends, where practical to utilize indigenous sources, including natural gas and solar energy to reduce the energy costs of operations. The development and processing of helium makes us part of the community in many rural western locations. Being part of the community and making a difference is a priority for us, and a commitment we readily accept. The helium reserves controlled, or which may be acquired, by United Helium are in mineral leases issued by state, the Bureau of Land Management, or private land owners. Mineral rights leases (oil & gas) are obtained from the owner(s) who are compensated with a royalty interest and typically a per acre fee for the rights to extract oil and/or gases. Drilling permit applications are submitted to the governmental authority having jurisdiction over the leasehold and accepted applications will be issued a drilling permit. United Helium will operate each well during the drilling, completion and production phases. With respect to Mineral Rights Leases on federal lands, helium by statute, is reserved to the federal government which may enter into agreements with private parties, such as United Helium, for the recovery and disposal of helium on federal lands. United Helium will apply for the right to extract and sell the helium. United Helium will implement a compact mobile cryogenic plant, which produces commercial grade quality helium at the helium field. This mobile cryogenic plant eliminates the expensive two step processing to commercial grade helium, which requires gas transport to one of the few domestic cryogenic helium plants. Most cryogenic plants are generally large scale and are supplied with gas transported by pipeline from large natural gas fields or obtained from the Federal Helium Reserve. United Helium holds an 80% working interest (64.60% Net Revenue Interest NRI ) in the Holbrook North leases which encompasses 6,489 acres of State of Arizona leases and includes acreage that has contained some of the richest helium fields discovered in the world. (Rauzi, S.L. and Fellows L.D.; Arizona Has Helium , Arizona Geology, 2003, Vol. 33. No.4, Published by the Arizona, Geological Survey). United Helium holds an 87.5% working interest (70% Net Revenue Interest NRI ) in the Holbrook Central private land leases which encompasses 26,646 acres. United helium holds an 87.5% working interest (76.6% Net Revenue Interest NRI ) in the Holbrook Central State of Arizona leases which encompasses 2,607 acres. We are a developmental stage Company with minimal revenues and a limited operating history. As of the date of this prospectus, we have had minimal revenues, have not begun operations and have $ 18,036.62 in cash as of October 31, 2013. As of the date of this prospectus, the Company s offering expenses of approximately $23,325 have been paid. Our Company has no employees at the present time. All business functions are managed by our officers and directors. Any investment in the shares offered herein involves a high degree of risk. The principal risks and limitations that we face are those related to our business, our industry, our financial condition, and this offering. All of these risks are discussed in detail under the section "Risk Factors", which should be carefully read. You should only purchase shares if you can afford a loss of your investment. Our independent registered public accountant has issued an audit opinion for United Helium, Inc., which includes a statement expressing substantial doubt as to our ability to continue as a going concern. This means that we do not have adequate financial resources at this time to repay our debt and credit obligations, and without additional funding, we may not be able to remain in business. There is no current public market for our securities. As our stock is not publicly traded, investors should be aware they probably will be unable to sell their shares and their investment in our securities is not liquid. Penny Stock Rules Our common stock will be considered a penny stock , and subject to the requirements of Rule 15g-9, promulgated under the Securities Exchange Act of 1934, as amended. Penny stock is generally defined as any equity security not traded on an exchange or quoted on NASDAQ that has a market price of less than $5.00 per share. Under such rule, broker-dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements, including a requirement that they make an individualized written suitability determination for the purchaser and receive the purchaser's consent prior to the transaction. The Securities Enforcement Remedies and Penny Stock Reform Act of 1990, also requires additional disclosure in connection with any trades involving a stock defined as a penny stock. The required penny stock disclosures include the required delivery, prior to any transaction, of a disclosure schedule explaining the penny stock market and the risks associated with it. Such requirements could severely limit the market liquidity of the securities and the ability of purchasers to sell their securities in the secondary market. In addition, various state securities laws impose restrictions on transferring "penny stocks" and as a result, investors in the common stock may have their ability to sell their shares of the common stock impaired. As filed with the Securities and Exchange Commission on ________. Registration No._______ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 UNITED HELIUM, INCORPORATED (Name of small business issuer in its charter) COLORADO 2813 46-2906756 (State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.) 7109 East 2nd St., Suite G, Scottsdale, AZ 85251 (480)-949-2755 (Address and telephone number of principal executive offices and place of business) Peter G. Trimarco 10267 Celestine Place, Parker, Colorado 80134 (303)-910-1884 (Name, address and telephone number of agent for service) Copies of communication to: Aaron D. McGeary The McGeary Law Firm, P.C. 1600 Airport Fwy., Suite 300 Bedford, Texas 76022 Telephone (817)-282-5885 Fax (817)-282-5886 Approximate date of proposed sale to the public: The proposed date of sale will be as soon as practicable after the Registration Statement becomes effective. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o If delivery of the Prospectus is expected to be made pursuant to Rule 434, please check the following box. o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting Company. See the definitions of large accelerated filer, accelerated filer and smaller reporting Company in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer o Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company x CALCULATION OF REGISTRATION FEE Title of each class of Securities to be Registered Amount of Shares to be Registered Proposed Maximum offering Price per share Proposed Maximum Aggregate offering Price Amount of Registration Fee Common Stock 11,896,151 $5.00 $59,480,755 $7,661.12 Total 11,896,151 $5.00 $59,480,755 $7,661.12 (1) Registration Fee (to be paid). (2) The offering price was arbitrarily determined by United Helium, Incorporated (3) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457 under the Securities Act of 1933, as amended (the "Securities Act"). The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. The Offering Common stock offered by selling security holders 11,896,151 shares of common stock. This number represents 10.3375(%) percent of our current outstanding common stock (1). Common stock outstanding before the offering 115,078,000 common shares as of October 31, 2013. Common stock outstanding after the offering 115,078,000 shares. No Public Market There is no public market for our common stock. We cannot give any assurance that the shares being offered will have a market value, or that they can be resold at the offered price if and when an active secondary market might develop, or that a public market for our securities may be sustained even if developed. The absence of a public market for our stock will make it difficult to sell your shares. If in the future a market does exist for our securities, it is likely to be highly illiquid and sporadic. We intend to apply to the OTCBB, through a market maker that is a licensed broker dealer, to allow the trading of our common stock upon our becoming a reporting company. Terms of the Offering The selling security holders will offer the shares at $5.00 per share until a trading market for the shares develops, at which time the shares will be sold at market price. Termination of the Offering The offering will conclude upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) such time as all of the common stock becomes eligible for resale without volume limitations pursuant to Rule 144 under the Securities Act, or any other rule of similar effect. Use of proceeds We are not selling any shares of the common stock covered by this prospectus. Need for Additional Financing: We believe that we may need to raise additional capital in the future. Risk Factors An investment in our common stock involves a high degree of risk. You should carefully consider the risk factors set forth under Risk Factors on page 6 and the other information contained in this prospectus before making an investment decision regarding our common stock (1) Based on 115,078,000 shares of common stock outstanding as of October 31, 2013. The information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement is filed with the Securities and Exchange Commission and becomes effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED ________, 2013 UNITED HELIUM, INCORPORATED 11,896,151 Shares of Common Stock Our existing shareholders are offering for sale 11,896,151shares of common stock. There are no underwriters. By means of this prospectus a number of our shareholders are offering to sell up to 11,896,151 shares of our common stock at a price of $5.00 per share. If and when our stock becomes quoted on the OTC Bulletin Board ( OTCBB ) or listed on a securities exchange, the shares owned by the selling shareholders may be sold in the over-the-counter market, or otherwise, or at prices and terms then prevailing or at prices related to the then current market price, or in negotiated transactions. As of the date of this prospectus there was no public market for our common stock. We expect to apply for the inclusion of our common stock in the OTCBB; such efforts, however, may not be successful and a public market may never materialize. The Company is not a shell company as defined in Rule 405 under the Securities Act (17 CFR 230.405) and Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2). There are no underwriters, discounts or commissions. All proceeds will be distributed to the existing selling shareholders. This prospectus will not be used before the effective date of the registration statement. Information in this prospectus will be amended or completed as needed. This registration statement has been filed with the securities exchange commission. These securities will not be sold until the registration statement becomes effective. THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. FOR A DESCRIPTION OF CERTAIN IMPORTANT FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE UNDERSTAND RISK FACTORS STARTING ON PAGE 6 OF THIS PROSPECTUS. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE. The information in this Prospectus is not complete and may be changed. The Selling Security Holders may not sell these securities until the registration statement filed with the Securities and Exchange Commission becomes effective. This Prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted or would be unlawful prior to registration or qualification under the securities laws of any such state.
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001118417_model-n_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001118417_model-n_prospectus_summary.txt
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+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001138817_first_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001138817_first_prospectus_summary.txt
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+PROSPECTUS SUMMARY This prospectus summary highlights the information contained elsewhere in this prospectus. Because this is only a summary, it does not contain all of the information that you should consider before deciding whether to exercise your subscription rights. You should read this entire prospectus carefully, including the information set forth in Risk Factors, and the documents identified in the sections Where You Can Find More Information and Incorporation of Certain Documents by Reference in this prospectus, in their entirety before you decide to exercise your subscription rights. First Security Group, Inc. and FSGBank We are a bank holding company headquartered in Chattanooga, Tennessee. Founded in 1999, First Security's community bank subsidiary, FSGBank, has 30 full-service banking offices along the interstate corridors of eastern and middle Tennessee and northern Georgia. In Dalton, Georgia, FSGBank operates under the name Dalton Whitfield Bank, and along the Interstate 40 corridor in Tennessee, FSGBank operates under the name Jackson Bank & Trust. Through FSGBank, we offer a range of lending services that are primarily secured by single and multi-family real estate, residential construction and owner-occupied commercial buildings. In addition, we focus on serving the needs of small- to medium-sized businesses, by offering a range of lending, deposit and wealth management services to these businesses and their owners. Our principal source of funds for loans and securities is core deposits gathered through our branch network. We offer a wide range of deposit services, including checking, savings, money market accounts and certificates of deposit, and obtain most of our deposits from individuals and businesses in our market areas, including the vast majority of our loan customers. Our wealth management division offers private client services, financial planning, trust administration, investment management and estate planning services. We also provide mortgage banking and electronic banking services, such as Internet banking, online bill payment, cash management, ACH originations, and remote deposit capture. We actively pursue business relationships by utilizing the business contacts of our Board of Directors, senior management and local bankers, thereby capitalizing on our extensive knowledge of the local marketplace. As of June 30, 2013, we had total assets of approximately $1.1 billion, total deposits of approximately $957.8 million and tangible shareholders equity of approximately $86.2 million. The Recapitalization On February 25, 2013, the Company entered into a number of agreements in connection with its $91.1 million Recapitalization, including the Stock Purchase Agreement. Those agreements required the Company to issue and sell, in a Private Placement, 60,735,000 shares of common stock at the Purchase Price of $1.50 per share. The closing of the Private Placement took place over two days, with the issuance of 9,941,908 shares of common stock to Treasury in exchange for 33,000 shares of the Company s TARP Preferred Stock, the TARP Warrant to purchase 82,363 shares of common stock, and all accrued but unpaid dividends on the TARP Preferred Stock, and the sale by Treasury of such shares of common stock to investors occurring on the TARP Closing Date of April 11, 2013, and the sale of 50,793,092 shares of common stock directly to investors occurring on the Investor Closing Date, April 12, 2013. See Summary of the Recapitalization. Pursuant to the Stock Purchase Agreement, 60,735,000 shares of our common stock sold in the Recapitalization have been registered for resale on a registration statement on Form S-1 (File No. 333-188137) that was declared effective by the SEC on June 6, 2013. The investors in our Recapitalization are no longer subject to lock-up agreements or any other contractual agreements not to dispose of our shares and these shares are freely transferable. Regulatory Matters First Security Group, Inc. On September 7, 2010, the Company entered into a Written Agreement (the Agreement ) with the Federal Reserve Bank of Atlanta (the Federal Reserve ), the Company s primary regulator. The Agreement places restrictions on the Company that are designed to enhance the Company s ability to act as a source of strength to the Company's wholly owned subsidiary, FSGBank. The Agreement prohibits the Company from declaring or paying dividends without prior written consent of the Federal Reserve. The Company is also prohibited from taking dividends, or any other form of payment representing a reduction of capital, from FSG Bank without prior written consent. Within 60 days of the Agreement, the Company was required to submit to the Federal Reserve a written plan designed to maintain sufficient capital at the Company and the FSGBank. The Company submitted a copy of FSGBank s capital plan that had previously been submitted to FSGBank s primary regulator, the Office of the Comptroller of the Currency (the OCC ). During May 2013, the OCC requested updated capital and strategic plans based on the Recapitalization. On July 1, 2013, FSGBank submitted capital and strategic plans to the OCC. The plans were also submitted to the Federal Reserve by the Company. During August 2013, the OCC requested minor clarifications to the strategic plan. The Company anticipates providing such clarifications within the next 30-60 days. We can give no assurance that the Federal Reserve or the OCC will approve our capital and strategic plans. The Company is currently deemed not in compliance with several provisions of the Agreement. Any material noncompliance may result in further enforcement actions by the Federal Reserve. Management believes the successful execution of the strategic initiatives discussed below will improve compliance with the Agreement and ultimately position the Company for long-term growth and a return to profitability. On April 11-12, 2013, the Company issued 60,735,000 shares of common stock in the Private Placement. As of June 30, 2013, the first quarterly period following the Private Placement, the Company's regulatory capital ratios were as follows: Tier 1 leverage ratio was 8.5% and total risk-based capital ratio was 15.4%. The Agreement is incorporated by reference as Exhibit 10.20 to the registration statement of which this prospectus is a part and incorporated by reference herein. The foregoing summary is not complete and is qualified in all respects by reference to the actual language of the Agreement. FSGBank. On April 28, 2010, pursuant to a Stipulation and Consent to the Issuance of a Consent Order, FSGBank consented and agreed to the issuance of a Consent Order by the OCC (the Order ). FSGBank and the OCC agreed to the areas of FSGBank s operations that warrant improvement and on a plan for making those improvements. The Order required FSGBank to develop and submit written strategic and capital plans covering at least a three year period. The Board of Directors is required to ensure that competent management is in place in all executive officer positions to manage FSGBank in a safe and sound manner. In response, the Company and FSGBank underwent a restructuring of their executive and senior management teams. FSGBank is also required to review and revise various policies and procedures, including those associated with credit concentration management, the allowance for loan and lease losses, liquidity management, criticized assets, loan review and credit. FSGBank is continuing to work with the OCC to ensure the policies and procedures are both appropriate and fully implemented. Within 120 days of the effective date of the Order, FSGBank was required to achieve and thereafter maintain total capital at least equal to 13.0% of risk-weighted assets (also referred to as the total risk-based capital ratio) and Tier 1 capital at least equal to 9.0% of adjusted total assets (also referred to as the Tier 1 leverage ratio). FSGBank has not achieved compliance with the capital requirements of the Order. As of June 30, 2013, the first quarterly period following the Private Placement, FSGBank's regulatory capital ratios were as follows: Tier 1 leverage ratio was 7.5%, Tier 1 risk-based capital ratio was 12.8% and total risk-based capital ratio was 14.0%. FSGBank has notified the OCC of its compliance with the total-risk based capital ratio and non-compliance with the Tier 1 leverage ratio, as consistent with the requirements of the Order. During the third quarter of 2010, the OCC requested additional information and clarifications to FSGBank's submitted strategic and capital plans as well as the management assessments. Subsequent to the resignation of its chief executive officer in April 2011, FSGBank requested an extension on the submission date for the strategic and capital plans until a new chief executive officer was appointed and had sufficient time to modify the strategic plan. On July 1, 2013, FSGBank submitted capital and strategic plans to the OCC. During August 2013, the OCC requested minor clarifications to the strategic plan. The Company anticipates providing such clarifications within the next 30-60 days. Based on the last regulatory examination, the Bank is currently deemed not in compliance with several provisions of the Order, including the capital requirements and acceptable capital and strategic plans. Management believes that the completed Recapitalization and full implementation of the business plan will provide compliance with most requirements of the Order. However, in determining compliance of acceptable capital and strategic plans as well as the other sections of the Order, multiple factors may be considered, including a certain period of time after implementation. Accordingly, we can give no assurance that the Federal Reserve or the OCC will approve our capital and strategic plans and can give no assurance as to the timing, if at all, of relief from the Order. Effective with the Order, FSGBank has been restricted from paying interest on deposits that is more than 0.75% above the rate applicable to the applicable market of FSGBank as determined by the Federal Deposit Insurance Corporation (the FDIC ). Additionally, FSGBank may not accept, renew or roll over brokered deposits without prior approval of the FDIC. FSGBank is currently deemed not in compliance with several provisions of the Order, including the capital requirements. However, management believes that the completed Recapitalization will significantly improve compliance with the requirements of the Order. The Order is incorporated by reference in Exhibit 10.18 to the registration statement of which this prospectus is a part and incorporated by reference herein. The foregoing summary is not complete and is qualified in all respects by reference to the actual language of the Order. As of September 30, 2012, FSGBank's Tier I leverage ratio fell below the minimum level for an "adequately capitalized" bank of 4.0%. There are three classifications for banks that are below "adequately capitalized," as follows: "undercapitalized," "significantly undercapitalized," and "critically undercapitalized." As of December 31, 2012, FSGBank was reclassified from "undercapitalized" to "significantly undercapitalized" upon the filing of the call report on January 30, 2013. As of March 31, 2013, FSGBank was reclassified to "critically undercapitalized" upon the filing of the call report on April 30, 2013. Following the Recapitalization, on April 23, 2013, FSGBank filed a cash contribution to capital notice with the OCC certifying a $65.0 million capital contribution by the Company into FSGBank. With the capital contribution, FSGBank's regulatory capital ratios increased from March 31, 2013 to June 30, 2013 as follows: Tier 1 leverage ratio from 1.9% to 7.5%, Tier 1 risk-based capital ratio from 3.4% to 12.8% and total risk-based capital ratio from 4.7% to 14.0%. All regulatory capital measures exceed the percentages of a well capitalized institution as defined under applicable regulatory guidelines; however, FSGBank's Tier 1 leverage ratio continues to be below the 9.0% required by the Order. FSGBank will continue to be classified for regulatory purposes as adequately capitalized due to the capital requirements in the Order. Corporate Information Our common stock is traded on the NASDAQ Capital Market under the symbol FSGI. We were incorporated in the state of Tennessee on February 1, 1999. Our principal executive offices are located at 531 Broad Street, Chattanooga, Tennessee 37402, and our telephone number is (423) 266-2000. Our internet address is www.fsgbank.com. The information contained on our website is not part of this prospectus. Summary of Rights Offering The following summary describes the principal terms of the rights offering, but is not intended to be complete. See the information under the heading The Rights Offering in this prospectus for a more detailed description of the terms and conditions of the rights offering. Securities Offered We are distributing to Pre-Recapitalization Shareholders, at no charge, one non-transferable subscription right for each share of our common stock that you owned as of 5:00 p.m., Eastern Time, on April 10, 2013, either as a holder of record or, in the case of shares held of record by custodian banks, brokers, dealers or other nominees on your behalf, as a beneficial owner of such shares. Subscription Price $1.50 per share. Record Date 5:00 p.m., Eastern Time, on April 10, 2013. Expiration of the Rights Offering 5:00 p.m., Eastern Time, on September 20, 2013. We may extend the rights offering without notice to you until October 18, 2013. Use of Proceeds We expect the aggregate net proceeds from the rights offering to be approximately $4.469 million. We intend to use the proceeds of the rights offering to supplement the capital of FSGBank. Basic Subscription Privilege The basic subscription privilege of each subscription right entitles you to purchase two shares of our common stock at a subscription price of $1.50 per share. Over-Subscription Privilege In the event that you purchase all of the shares of our common stock available to you pursuant to your basic subscription privilege, you may also choose to subscribe for a portion of any shares of our common stock that are not purchased by our other Pre-Recapitalization Shareholders through the exercise of their basic subscription privileges. You may subscribe for shares of common stock pursuant to your over-subscription privilege, subject to the purchase and ownership limitations described below under the heading Limitations on the Purchase of Shares. Limitations on the Purchase of Shares Subject to the discretion of our board of directors, a person, together with certain related persons and associates, may not purchase a number of shares such that upon completion of the rights offering the person owns securities representing in excess of 4.9% of our common stock. Additionally, federal law generally requires prior regulatory approval for any person or persons acting in concert to acquire 10% or more of our common stock. We will not issue shares of our common stock pursuant to the exercise of basic subscription rights or over-subscription rights, to any person or entity who, in our sole opinion, could be required to obtain prior clearance or approval from or submit a notice to any state or federal bank regulatory authority to acquire, own or control such shares if, as of September 9, 2013, we determine that such clearance or approval has not been obtained and/or any applicable waiting period has not expired. Non-Transferability of Rights The subscription rights may not be sold, transferred or assigned and will not be traded on the NASDAQ Capital Market or on any other stock exchange or market. No Board Recommendation Our board of directors is making no recommendation regarding the exercise of your subscription rights. You are urged to make your decision based on your own assessment of our business and the rights offering. Revocation Except with regard to rights issued to accounts in the 401(k) Plan, all exercises of subscription rights are irrevocable, even if you later learn of information that you consider to be unfavorable to the exercise of your subscription rights. You should not exercise your subscription rights unless you are certain that you wish to purchase additional shares of our common stock in the rights offering at a subscription price of $1.50 per share. Note, however, that rights issued to accounts in the 401(k) Plan will not be exercised if the market price of our common stock is below $1.50 on the date the common stock is to be purchased. Purchase Intentions of Our Directors and Officers Our directors and executive officers collectively hold rights to purchase 109,038 shares of our common stock in the rights offering. Certain of our directors and executive officers have indicated an interest in participating in the rights offering. Collectively, we expect our directors and executive officers to purchase approximately 36,000 shares of our common stock under the basic subscription privilege in the rights offering and request an additional approximately 20,000 shares under the over-subscription privilege. Our directors and executive officers are entitled to participate in the rights offering on the same terms and conditions applicable to all other Pre-Recapitalization Shareholders. Maximum Offering The rights offering is subject to a limit of 3,329,234 shares of common stock. Material U.S. Federal Income Tax Considerations For U.S. federal income tax purposes, you should not recognize income or loss upon the receipt, exercise or lapse of the subscription rights. You should consult your own tax advisor as to the tax consequences to you of the receipt, exercise or lapse of the subscription rights in light of your particular circumstances. Extension and Cancellation Although we do not presently intend to do so, we have the option to extend the rights offering expiration date, but in no event will we extend the rights offering beyond October 18, 2013. Our board of directors may cancel the rights offering at any time. In the event that the rights offering is cancelled, all subscription payments received by the subscription agent will be promptly returned, without interest. Dealer Manager Raymond James & Associates, Inc. Shares Outstanding Before the Rights Offering 63,270,867 shares of our common stock were outstanding as of August 15, 2013. Shares Outstanding After Completion of the Rights Offering Assuming no options are exercised prior to the expiration of the rights offering and assuming all 3,329,234 shares of common stock are sold in the rights offering, we expect 66,600,101 shares of our common stock will be outstanding immediately after completion of the rights offering. Trading Symbol Shares of our common stock are currently traded on the NASDAQ Capital Market under the symbol FSGI.
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+PROSPECTUS SUMMARY 1
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+Prospectus summary This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before deciding to invest in our common stock, you should read this entire prospectus carefully, including the sections of this prospectus entitled Risk factors and Management s discussion and analysis of financial condition and results of operations and our financial statements and related notes. Unless the context otherwise requires, references in this prospectus to the company, Portola, we, us and our refer to Portola Pharmaceuticals, Inc. Portola Pharmaceuticals, Inc. We are a biopharmaceutical company focused on the development and commercialization of novel therapeutics in the areas of thrombosis, other hematologic disorders and inflammation for patients who currently have limited or no approved treatment options. Our current development-stage portfolio consists of three compounds discovered through our internal research efforts and one discovered by Portola scientists during their time at a prior company. Our two lead programs address significant unmet medical needs in the area of thrombosis, or blood clots. Our lead compound Betrixaban is a novel oral once-daily inhibitor of Factor Xa in Phase 3 development for extended duration prophylaxis, or preventive treatment, of a form of thrombosis known as venous thromboembolism, or VTE, in acute medically ill patients. Currently, there is no anticoagulant approved for extended duration VTE prophylaxis in this population. Our second lead development candidate (pINN) Andexanet alfa, formerly PRT4445, which has completed the first of a series of Phase 2 proof-of-concept studies, is a recombinant protein designed to reverse the anticoagulant activity in patients treated with a Factor Xa inhibitor who suffer an uncontrolled bleeding episode or undergo emergency surgery. Our third product candidate, PRT2070, is an orally available kinase inhibitor that inhibits spleen tyrosine kinase, or Syk, and janus kinases, or JAK, enzymes that regulate important signaling pathways and is being developed for hematologic, or blood, cancers and inflammatory disorders. In October 2013, we initiated a Phase 1/2 proof-of-concept study for PRT2070 in patients with non-Hodgkin s lymphoma, or NHL, or chronic lymphocytic leukemia, or CLL, who have failed or relapsed on existing marketed therapies or products in development, including patients with identified mutations. Our fourth program, PRT2607 and other highly selective Syk inhibitors, is partnered with Biogen Idec Inc., or Biogen Idec. Members of our management team, working together or individually, have played central roles at prior companies in discovering, developing and commercializing a number of successful therapeutics in the area of thrombosis, including Integrilin and Xarelto . Our approach has been to identify key enzymes and cellular signaling pathways and to apply our translational expertise to discover compounds with unique properties that have potential for clear clinical and pharmacoeconomic value. To increase the likelihood that our programs will succeed, we enhance our internal discovery and development expertise by collaborating with academic leaders at major universities, including Cornell University, Duke University, Harvard University, King s College, McMaster University, Stanford University and The University of Texas MD Anderson Cancer Center, and by proactively engaging regulatory authorities early in the development process. Table of Contents The information in this preliminary prospectus is not complete and may be changed. Neither we nor the selling stockholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities, and neither we nor the selling stockholders are soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted. Subject to completion, dated October 16, 2013 6,366,513 Shares Portola Pharmaceuticals, Inc. Common Stock We are offering 4,457,710 shares of our common stock and the selling stockholders are offering 1,908,803 shares of our common stock. We will not receive any proceeds from the sale of shares by the selling stockholders. Our common stock is listed on The NASDAQ Global Market under the trading symbol PTLA. On October 15, 2013, the last reported sale price of our common stock on The NASDAQ Global Market was $22.83 per share. We are an emerging growth company under the federal securities laws and are subject to reduced public company reporting requirements. Investing in our common stock involves a high degree of risk. See Risk factors beginning on page 12. Per Share Total Public offering price $ $ Underwriting discounts and commissions(1) $ $ Proceeds, before expenses, to us $ $ Proceeds, before expenses, to selling stockholders $ $ (1) See Underwriting for additional disclosure regarding underwriting discounts, commissions and expenses. To the extent that the underwriters sell more than 6,366,513 shares of common stock, the underwriters have an option to purchase 954,976 additional shares from us at the public offering price, after deducting underwriting discounts and commissions. The underwriters expect to deliver the shares against payment in New York, New York on , 2013. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. Morgan Stanley Credit Suisse Cowen and Company William Blair Sanford C. Bernstein , 2013 Table of Contents We have full worldwide commercial rights to Betrixaban and Andexanet alfa, and to PRT2070 for systemic indications. We believe we can maximize the value of our company by retaining substantial global commercialization rights to these three product candidates and, where appropriate, entering into partnerships to develop and commercialize our other product candidates. We plan on building a successful commercial enterprise to commercialize Betrixaban and Andexanet alfa globally, using a hospital-based sales team in the United States and possibly other major markets and with partners in other territories. We currently have the following product candidates in development: Development Pipeline Product Description Stage Indication Worldwide commercial rights Betrixaban Oral Factor Xa inhibitor Phase 3 Extended duration VTE prophylaxis in acute medically ill patients for up to 35 days Portola Andexanet alfa Antidote for Factor Xa inhibitors Phase 2 Reversal of Factor Xa inhibitor anticoagulation Portola PRT2070 Oral Dual Syk and JAK inhibitor Phase 1/2 B-cell hematologic cancers Hematologic cancer and other systemic indications: Portola Certain nonsystemic indications: 50/50 rights with Aciex PRT2607 Syk inhibitor Pre-clinical Allergic asthma and other inflammatory disorders Biogen Idec Betrixaban. Betrixaban is a novel oral once-daily inhibitor of Factor Xa in development for extended duration VTE prophylaxis in acute medically ill patients for up to 35 days. Acute medically ill patients are those who are hospitalized for serious non-surgical conditions, such as heart failure, stroke, infection, rheumatic disorders and pulmonary disorders. We estimate that in the G7 countries in 2012 there were 22.3 million acute medically ill patients for whom VTE prophylaxis was recommended by medical treatment guidelines. The current standard of care for VTE prophylaxis in this population is enoxaparin, an injectable drug that is approved for a usual administration period of 6 to 11 days and up to 14 days and is generally not prescribed for use outside of the hospital. According to IMS Health Incorporated, a healthcare industry information provider, worldwide sales of enoxaparin for the 12 months through June 2012 were in excess of $4.8 billion. We believe that the use of enoxaparin in acute medically ill patients accounted for at least $2 billion of these sales. Multiple large, global trials have demonstrated that there is substantial risk of VTE in acute medically ill patients with restricted mobility and other risk factors beyond the standard course of enoxaparin. For example, the MAGELLAN trial demonstrated that the incidence of VTE-related death rose four-fold over several weeks after hospital discharge and the discontinuation of treatment. However, there are no therapies approved for use beyond a typical hospitalization period of 6 to 14 days despite the ongoing risk of VTE faced by these patients for 35 days or more following hospital admission. We are developing Betrixaban to be the first oral Factor Xa inhibitor approved for use in acute medically ill patients and the first anticoagulant approved for extended duration VTE prophylaxis in these patients. Table of Contents Table of contents Prospectus summary 1
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+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus and does not contain all of the information you should consider in making your investment decision. You should read this summary together with the more detailed information, including our consolidated financial statements and the related notes thereto, included elsewhere in this prospectus. You should carefully consider, among other things, the matters discussed in the section entitled Risk Factors beginning on page 5 of this prospectus. Except where the context requires otherwise, the terms us, we, our, and the Company refer to MISCOR Group, Ltd., an Indiana corporation and, where appropriate, its subsidiaries. MISCOR Group, Ltd. Our Business The Company began operations in July 2000 with the purchase of the operating assets of an electric motor and magnet shop in South Bend, Indiana. Through acquisitions and internal growth, we expanded the nature of our operations as well as our geographic presence, which now includes locations in Indiana, Alabama, Ohio, West Virginia, Maryland, and California. In April 2004, we reorganized our operations into a holding company structure, forming Magnetech Integrated Services Corp. to act as the parent company. In September 2005, we changed our name from Magnetech Integrated Services Corp. to MISCOR Group, Ltd. Between 2005 and September 2008, we made a series of acquisitions allowing us to enter into Rail Services and expand our Construction and Engineering Services ( CES ) and Industrial Services businesses. Following experiences in the financial crisis of 2008 and 2009, we decided to reorient our growth strategy and to intensify our focus on industrial and utility services and divested certain operations. We have since operated primarily in two business segments: Industrial Services Providing maintenance and repair services to several industries, including electric motor repair and rebuilding; maintenance and repair of electro-mechanical components for the wind power industry; and the repairing, manufacturing, and remanufacturing of industrial lifting magnets for the steel and scrap industries. To supplement our industrial service offerings, we also provide on-site maintenance services and custom and standardized industrial maintenance training programs. Rail Services Manufacturing and rebuilding power assemblies, engine parts, and other components related to large diesel engines, and providing locomotive maintenance, remanufacturing, and repair services for the rail industry. Our objective is to be a leading provider of integrated mechanical and electrical products and services to industry, as well as a leading provider of manufactured and remanufactured engine components to the rail, marine, and power industries. To achieve that, we intend to position the Company in order to capitalize on long-term growth opportunities in the wind power and utility markets as well as the heavy industry market. We are continuing to assess the strategic fit of our various businesses and may explore a number of strategic alternatives for our non-strategic businesses including possible divestures. Financing We have financed our operations primarily through equity, convertible debt financings, and certain credit facilities. See Management s Discussion and Analysis of Financial Condition ( MD&A ) Prior Financing and Capital Transactions Involving Selling Shareholders in this prospectus for a description of certain of these financings. At September 30, 2012, we had total debt of approximately $7.782 million, which has been refinanced, as described more fully in MD&A Recent Developments. Table of Contents EXPLANATORY NOTE The purpose of this post-effective amendment to Reg. No. 333-129354 and Reg. No. 333-144557 is to provide an update of the financial statements and other information included in the prospectus forming a part of each such registration statement and to combine the prospecti with the prospectus contained in this registration statement registering 3,333,332 shares of our common stock, into a single prospectus. On November 1, 2005, MISCOR Group, Ltd. filed a registration statement on Form S-1 (No. 333-129354) to register 199,628,252 shares of its common stock, including shares issuable upon exercise of warrants or conversion of debt securities. The registration statement was declared effective on May 12, 2006. On November 2, 2006, MISCOR Group, Ltd. filed a registration statement on Form S-1 (Reg. No. 333-137940) to register the offer and sale of 375,000 shares of its common stock issuable upon exercise of certain warrants. The registration statement was declared effective on November 9, 2006. On April 27, 2007, MISCOR Group, Ltd. filed a Post-Effective Amendment No. 1 to the registration statement on Form S-1 (Reg. No. 333-137940), which, pursuant to Rule 429 under the Securities Act, also acted as Post-Effective Amendment No. 1 to the registrant s registration statement on Form S-1 (Reg. No. 333-129354). The post-effective amendment was declared effective on May 9, 2007. On January 14, 2008, the registrant effectuated a Reverse Stock Split thereby changing and combining each 25 shares of its common stock into one share. During the first quarter of 2010, certain warrants exercisable for 2,057 shares (after giving effect to the Reverse Stock Split) expired, and a conversion option on a note convertible into 1,200,000 shares (after giving effect to the Reverse Stock Split) of our common stock also expired. As a result of the Reverse Stock Split and the expiration of warrants and a conversion option on certain debentures, the prospectus included herein relates to 6,530,358 shares, including 697,026 shares related to Reg. No. 333-129354 and 2,500,000 shares related to Reg. No. 333-144557. The shares originally registered pursuant to Reg. No. 333-137940 related solely to 15,000 shares issuable upon the exercise of warrants, which have since expired. Table of Contents Registration Rights We granted registration rights to various investors in our prior financing transactions. The registration rights require us to register the common stock issued to the investors, as well as the common stock issuable upon exercise of certain warrants issued to the investors, with the Securities and Exchange Commission ( SEC ) for resale under the Securities Act of 1933, as amended (the Securities Act ). To comply with this obligation with respect to the selling shareholders (for the shareholders identified beginning on page 13), we filed certain registration statements of which this prospectus is a part. See Prior Financing and Capital Transactions Involving Selling Shareholders Registration Rights below. Corporate Information Our executive offices are located at 800 Nave Road SE, Massillon, OH 44646. Our telephone number is (330) 830-3500. We maintain a web site at the following Internet address: www.miscor.com. The information on our web site is not part of this prospectus. About this Prospectus You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information that is different from that contained in this prospectus. The selling shareholders are offering to sell, and are seeking offers to buy, shares of common stock only in jurisdictions where such offers and sales are permitted. The information in this prospectus is complete only as of the date on the front cover regardless of the time of delivery of this prospectus or of any shares. Table of Contents The information in this prospectus is not complete and may be changed. The selling shareholders may not sell or offer these securities until the registration statement filed with the Securities and Exchange Commission is declared effective. This prospectus is not an offer to sell these securities, and neither MISCOR Group, Ltd. nor the selling shareholders are soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted. Subject to Completion, dated February 14, 2013 PROSPECTUS MISCOR GROUP, LTD. 6,530,358 Shares of Common Stock This prospectus relates to the resale by the selling shareholders of 6,530,358 shares of our common stock, including 8,079 shares issuable upon the exercise of outstanding warrants. These shares were issued to the selling shareholders in transactions exempt from the registration requirements of the Securities Act of 1933, as amended. This prospectus relates to shares that are registered or are being registered pursuant to certain registration rights agreements with the selling shareholders. We will not receive any proceeds from any sales made by the selling shareholders, except to the extent that the selling shareholders that hold warrants exercise warrants to purchase 8,079 shares with an exercise price of $0.25 per share. We have agreed to bear all expenses in connection with this offering, including certain fees and expenses of counsel to the selling shareholders, but not including underwriting discounts, concessions, or commissions of the selling shareholders. The selling shareholders may sell the shares, from time to time, in ordinary brokerage transactions, or by any other means described herein in the section entitled Plan of Distribution, at prevailing market prices, at prices related to prevailing market prices, or at prices otherwise negotiated. Our common stock is currently quoted on the OTCQB under the symbol MIGL. On February 4, 2013, the last reported sales price of our common stock was $1.16 per share. Our business is subject to many risks and investment in our common stock offered through the prospectus will also involve a high degree of risk. You should carefully read and consider the section of this prospectus entitled Risk Factors beginning on page 5 of this prospectus before you make an investment in the securities. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities that may be offered under this prospectus, nor have any of these organizations determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is . Table of Contents The Offering Common stock outstanding 11,683,987 (1) Seller One or more selling shareholders; see Principal and Selling Shareholders. We are not selling any shares of our common stock under this prospectus or any prospectus supplement. Shares of common stock offered 6,530,358 (2) Market for our common stock Our common stock is traded on the OTCQB under the symbol MIGL. While trading in our stock has occurred, an established public trading market has not yet developed. Use of proceeds The selling shareholders will receive the net proceeds from the sale of shares. We will pay the expenses of this offering but will receive none of the proceeds from the sale of shares offered by this prospectus. We may, however, receive payment upon selling shareholders exercise of outstanding warrants. See Use of Proceeds. Any proceeds that we receive will be used for general corporate purposes, including working capital, capital expenditures, and repaying or refinancing our debt obligations.
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+Prospectus Summary This summary highlights information described more fully elsewhere in this prospectus. You should read the entire prospectus carefully. In this prospectus, USMetals, USMI , the Company, we, us and our refer to USMetals, Inc., a Nevada corporation. The Company USMetals was incorporated in 2000 and since 2002 has been a wholly owned subsidiary of USCorp, Inc. USMetals is the holder of 276 unpatented mining claims known as the Twin Peaks Project through its wholly owned subsidiary, AGC Corp, an Arizona corporation ( AGCAZ ), the record holder of the claims. The Twin Peaks mining claims are located in West-Central Arizona, in the Eureka Mining District of Yavapai County, Arizona, approximately 42 miles west of Prescott, Arizona. In 2007 USCorp conducted a so called feasibility study , actually a scoping study, on the Twin Peaks Project that identified mineralized material on the property. During fiscal 2009 and 2009 USCorp completed Phase 1, Phase 2 and Phase 2.5 of a 3-phase drilling program. In 2012 USCorp completed Phase 3 of the 2008 and 2009 drilling program. The scoping study was performed and used in preparation for the exploration program and is not to determine the feasibility of profitable exploration. In May 2012, USCorp determined that spinning off USMetals as a separate company would be the best method of pursuing exploration and development of the Twin Peaks Project. The record date for the spinoff is July 1, 2013. The Offering This prospectus relates to the offering of up to 74,714,452 shares of the common stock of USMetals, Inc., a Nevada corporation, $0.001 par value per share, to the stockholders of USCorp, a Nevada corporation, pursuant to a spinoff of the shares of the registrant held by USCorp and the resale of 35,297,886 shares of our common stock by non-affiliated stockholders. Please refer to Prospectus Summary - The Offering Selling Securities Holders and Plan of Distribution. We will not receive any proceeds as a result of the spinoff to the stockholders of USCorp, or from the sale of the shares of our common stock by the Selling Securities Holders. We will bear all expenses in connection with the registration of all of the shares of our common stock covered by this prospectus. We are offering the shares to the stockholders of USCorp without the use of any placement agent. Our fees and expenses associated with this offering are estimated to be $30,000. The Selling Securities Holders will be offering shares of our common stock. The Selling Securities Holders may sell all or a portion of these shares through registration under the Securities Act of 1933, as amended, from time to time in market transactions through any market on which our common stock is then traded, in negotiated transactions or otherwise, at a price of $0.001 per share for the duration of the offering pursuant to this prospectus. For additional information on the methods of sale, you should refer to the section in this prospectus entitled Plan of Distribution. USCorp, all of the Selling Securities Holders, and all of the intermediaries through whom the shares of the Selling Securities Holders may be sold are deemed to be underwriters within the meaning of the Securities Act of 1933, as amended, with respect to the securities offered hereby, and any profits realized or commissions received may be deemed underwriting compensation. We have agreed to indemnify the Selling Securities Holders against certain liabilities, including liabilities under the Securities Act. We will notify the Selling Securities Holders of their underwriting status and our agreement to indemnify them against certain liabilities, including liabilities under the Securities Act, pursuant to a letter in the form attached to this prospectus as Attachment A. The offering price per share of $0.001 is the par value of the shares to be issued in connection with the proposed spinoff. There will be no commissions paid in connection with the spinoff shares as described in this prospectus. Please refer to the Plan of Distribution section of this prospectus. The shares of our common stock are not currently listed for sale on any exchange, although we do plan to attempt to have our shares quoted for sale on the Pink Sheets or the OTC Bulletin Board after the effective date of this prospectus. However, there can be no assurance that we will be successful in having our shares quoted or traded on any public market. USMetals, Inc. (Exact name of registrant as specified in its charter) Nevada (State or other jurisdiction of Incorporation or organization) 1000 (Primary Standard Industrial Classification Code Number) 88-0463279 (I.R.S. Employer Identification No.) 4535 W. Sahara Avenue, Suite 200 Las Vegas, NV 89102 (702) 933-4034 (Address and Telephone Number of Registrant s Principal Executive Offices and Principal Place of Business) CSS NEVADA 4535 W. Sahara Avenue, Suite 200 Las Vegas, NV 89102 (702) 933-4030 (Name, Address and Telephone Number of Agent for Service) With a Copy to: Dennis Brovarone Attorney at Law 35 Pinyon Pine Road Littleton, CO 80127 Telephone No.: (303) 589-1388 The Spinoff On May 30, 2012, USCorp, a Nevada corporation, determined to spinoff all of the shares of USMetals, Inc., a Nevada corporation, held by USCorp to the holders of USCorp common and preferred stock. USMetals has been a wholly-owned subsidiary of USCorp since 2002. USCorp will affect the spinoff by distributing on the effective date as a non-taxable distribution, the shares at the rate of one share of USMI common stock for every ten shares of USCorp Common Stock outstanding, and one share of USMI common stock for every ten shares of Common Stock underlying the eight to one conversion rights of the outstanding USCorp Series A Preferred Stock and the two for one conversion rights of the outstanding Series B Preferred Stock. The revised record date for the dividend is July 1, 2013 and the distribution date will be set as soon as the registration of our common stock under the Securities Act of 1933 is effective and our filing with the Financial Industry Regulatory Agency (FINRA) is complete. The purpose of the distribution is to establish USMetals as a separate company and facilitate the financing and development of its business independently of other properties of USCorp and its subsidiaries. The following table illustrates the USCorp dividend distribution. Type of USCorp Equity Outstanding as of 7/1/2013 Right to Common Stock Dividend @ 1 for 10 A Preferred 25,600,000 204,800,000 20,480,000 B Preferred 105,000 210,000 21,000 Common 542,154,519 0 54,215,452 Total 74,714,452 Inasmuch as USCorp will distribute 74,714,452 shares of our common stock to the to the USCorp stockholders, following the spinoff, USCorp will own no shares of USMetals, which means that USMetals will be a fully independent company, although there may not be any active market for our shares. No vote of USCorp stockholders was required in connection with the spinoff, however on May 30, 2012 a majority of the voting shares of the company voted in favor of the spinoff. USCorp has approximately 1,200 stockholders of record, including the shares held by Cede & Co. for the benefit of various unknown stockholders. The USCorp stockholders will not be required to pay any cash or other consideration for the shares of USMetals common stock distributed to them as a result of the spinoff or to surrender or exchange their shares of USCorp common stock to receive the distribution of USMetals common stock. Reasons for the Spinoff USMetals, Inc. believes that our separation from USCorp will provide the following benefits: Improved positioning for each company to pursue distinct minerals exploration and development opportunities intended to facilitate capital formation and management expertise on distinct exploration and development projects. More efficient allocation of capital, which will allow each company to develop an independent investment program without the constraints of a holding company, conglomerate structure. Facilitate engaging separate management with the intention of focusing exclusively on the distinct exploration opportunities for stockholder value creation. USCorp also considered a number of potentially negative factors in evaluating the spinoff, including: The potential loss of synergies from operating as one company and potential increased costs; Approximate date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective. Potential loss of joint purchasing power; Potential disruptions to the businesses as a result of the spinoff; Risks of being unable to achieve the benefits expected to be achieved by the spinoff; The risk that the spinoff might not be completed; The costs of the spinoff; and The risk that the quoted price of a share of USCorp common stock after the spinoff plus the quoted price of a share of USMetals common stock distributed will, in the aggregate, be less than the quoted price of a share of USCorp common stock before the spinoff. USCorp concluded that the potential long-term benefits of the spinoff outweighed these factors. In view of the wide variety of factors considered in connection with the evaluation of the spinoff and the complexity of these matters, USCorp did not find it useful to, and did not attempt to, quantify, rank or otherwise assign relative weights to the factors considered. At the present time, USMetals is a subsidiary of USCorp, with our corporate activities directed by the USCorp board of directors. Following the spinoff USMetals will be owned by the USCorp stockholders as of July 1, 2013, and not USCorp. Management of USCorp will continue as our management. However, we intend to bring on additional management personnel and expand our board of directors as conditions and finances warrant. USMetals has no present plans to be acquired or to merge with another company nor does USMetals or USCorp have plans to enter into a change of control or similar transaction. Current Operations of USCorp USCorp will continue to be engaged in mineral exploration and development by virtue of its explorations operations through its wholly owned subsidiary Imperial Metals, Inc. When and How the USMetals Shares Will be Distributed The USMetals shares will be distributed by USMetals as of 5:00 p.m., New York, New York time, on the effective date of the registration statement of which this prospectus is a part (the Distribution Date ) by causing the shares of USMetals common stock to be registered in accounts established in the ownership records of USMetals. Registered Holders. If any USCorp stockholder owns shares in registered form, the USMetals shares distributed to him will be registered in his name, the USCorp common stockholder will become the record holder of that number of shares of USMetals common stock equal to 1 USMetals share for each 10 USCorp shares, with fractional shares rounded up to the next whole share. Registered Series A and Series B Preferred stockholders will receive a distribution of one share of USMI common stock for every ten shares of Common Stock underlying the eight to one conversion rights of the outstanding USCorp Series A Preferred Stock and the two for one conversion rights of the outstanding Series B Preferred Stock. Street Name Holders. If any USCorp stockholder shares are held in a brokerage account or with a nominee, the distribution will be credited to the account of his brokerage firm or nominee. The USCorp stockholder s broker/nominee will in turn credit his account for the USMetals shares that he is entitled to receive. This could take up to two weeks from the Distribution Date. Fractional Shares. We will not deliver any fractional shares of USMetals common stock in connection with the spinoff. Instead, we will round up to nearest whole and deliver rounded up shares to each USCorp stockholder. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. x If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer o Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company x CALCULATION OF REGISTRATION FEE Title of Each Class of Securities To Be Registered Amount To Be Registered Offering Price Per Share (1) Aggregate Offering Price Amount of Registration Fee Common stock (2) 74,714,452 $ 0.001 $ 74,715 $ 10.20 (1) Based on Rule 457 under the Securities Act. The offering price is the par value of $0.001 of the shares to be issued. (2) Represents shares held by the Selling Securities Holders, which include the shares to be issued to the USCorp stockholders in the spinoff and others. See Prospectus Summary - The Offering, Plan of Distribution, and Selling Securities Holders. The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. Book-Entry Registration. USMetals common stock will be issued in book-entry form through the Direct Registration System. USMetals transfer agent and registrar, Computershare, 350 Indiana Street, Suite 750, Golden CO 80401, telephone 1 303.262.0678, will hold each USCorp stockholder s book-entry shares. If an USCorp stockholder wishes to receive a physical certificate after the Distribution Date, he should contact Computershare. Distribution Statement. Following the Distribution Date, a distribution statement will be sent to each USCorp stockholder showing his ownership interest in USMetals common stock. We currently estimate that it will take up to 10 days from the Distribution Date to complete the mailings of distribution statements. Dissenters Right of Appraisal Nevada law does not provide for a right of a stockholder to dissent to the spinoff. U.S. Federal Income Tax Consequences We have not obtained any tax opinion with respect to the spinoff. Therefore, all USCorp stockholders should consult with their own tax advisers to determine whether or not the spinoff will be tax-free to our common stockholders for U.S. federal income tax purposes, specifically as to whether or not the USCorp common stockholders who receive our shares will recognize a gain or loss by reason of the receipt of shares of USMetals common stock as a result of the spinoff. We are an Emerging Growth Company Pursuant to Section 107 of the Jumpstart Our Business Startups Act (the JOBS Act ) which was signed into law on April 5, 2012, we have elected to claim the exemption provided to emerging growth companies. The JOBS Act provides an IPO on ramp for emerging growth companies (a newly created category of issuer under the Securities Act), which are issuers with annual gross revenues of less than $1 billion during the most recently completed fiscal year. Emerging growth companies may take advantage of the scaled disclosure requirements that already have been available to smaller reporting companies (defined by the Securities Act as companies having a public float of less than $75 million). The scaled disclosure includes a requirement to include only two, rather than three, years of audited financial statements in the issuer s initial public offering ( IPO ) registration statement and, during the IPO on ramp period, the ability to omit the auditor s attestation on internal control over financial reporting required by the Sarbanes-Oxley Act of 2002. Also during the IPO on ramp period, emerging growth companies would not need to submit say-on-pay votes to their stockholders (including say-on-pay frequency or golden parachute votes) and would face more limited executive compensation disclosure requirements than larger companies. Changes to the IPO process itself are likely the most significant aspects of the new emerging growth company regime. The JOBS Act allows an emerging growth company to submit its IPO registration statement on a confidential basis, with the result that any sensitive information contained in the registration statement would not be immediately publicly available. The ability for an emerging growth company to maintain confidentiality and avoid disclosing that it is contemplating an offering until it is ready to do so is significant. However, the initial confidential submission and any subsequent amendments must be publicly filed at least 21 days before the issuer s road show. In addition, the JOBS Act permits an emerging growth company to test the waters by communicating orally or in writing with qualified institutional buyers or other accredited investors to gauge interest in a contemplated securities offering, even if a registration statement has not yet been filed, and permits analysts to publish research reports about an emerging growth company that is going public even if the analyst s firm is one of the underwriters in the issuer s IPO. These emerging growth company and IPO on ramp provisions can be taken advantage of not only by any issuers who go public in the future, but also by any issuer that has consummated an IPO since December 9, 2011. The IPO on ramp period ends upon the earliest of: The last day of the fiscal year in which the issuer achieves annual gross revenues of at least $1 billion; The last day of the fiscal year following the fifth anniversary of the issuer s IPO; The issuance of more than $1 billion in non-convertible debt during the previous three years; or The issuer s becoming a large accelerated filer (which generally is an issuer with at least $700 million in public float). While the JOBS Act by no means overhauls the IPO process for emerging growth companies, it may help minimize the time to market and fill in a gap for companies wishing to undertake an IPO that now qualify as emerging growth companies but did not previously qualify as smaller reporting companies, and it reduces audit-related costs and lessens certain ongoing reporting requirements. The JOBS Act also provides scaled disclosure requirements within registration statement, as follows: Two years audited financials and two years selected financial data (in lieu of the former requirements for three years audited and five years selected financial data); The emerging growth company s management discussion and analysis only needs to cover years for which the company s financials are provided; and The SEC has indicated emerging growth companies currently in registration may amend to scale back disclosure; however, issuers may be required to add disclosure to explain changes. With respect to executive compensation, emerging growth companies can follow the disclosure requirements for smaller reporting company (generally companies with public float of less than $75 million) under Regulation S-K. However, unless the SEC issues guidance to the contrary, an already existing issuer that is an emerging growth company but does not qualify as smaller reporting company will not get benefit of reduced executive compensation disclosure. Under the JOBS Act, emerging growth companies need only provide the following with respect to executive compensation: Top three executives (principal executive officer plus two other most highly compensated who earned more than $100,000 in the last fiscal year), rather than the top five; One year of compensation disclosure required for a registration statement on Form S-1, the same as current rules (but going forward, only need two years instead of current three year requirement); and May omit compensation disclosure and certain compensation tables. Emerging growth companies have scaled disclosure after an initial public offering, as follows: After an IPO, an issuer can take advantage of additional exemptions and reduced disclosure requirements as long as it qualifies as an emerging growth company, including: Auditor attestation requirements of Section 404(b) of Sarbanes-Oxley Act of 2002; Compensation disclosure and other executive compensation disclosure as noted above; Disclosure required for the top three, rather than the top five named executive officers, as noted above; Disclosure required for two, rather than three years, as noted above; and Dodd-Frank compensation disclosure requirements (say on pay, say on pay frequency, say on golden parachute, pay for performance graph and chief executive officer pay ratio). Subject to Completion, September 4, 2013 USMetals, Inc. 74,714,452 Shares of Common Stock This prospectus relates to the offering of up to 74,714,452 shares of the common stock of USMetals, Inc., a Nevada corporation to the stockholders of USCorp, a Nevada corporation, pursuant to a spinoff of the shares of the registrant held by USCorp, and the resale of 35,297,886shares by non-affiliated stockholders. Please refer to Prospectus Summary - The Offering, Plan of Distribution, and Selling Securities Holders. We will not receive any proceeds as a result of the spinoff to the stockholders of USCorp or from the sale of the shares of our common stock by the Selling Securities Holders. We will bear all expenses in connection with the registration of all of the shares of our common stock covered by this prospectus. We are offering the shares to the stockholders of USCorp without the use of any placement agent. Our fees and expenses associated with this offering are estimated to be $30,000. The Selling Securities Holders will be offering shares of our common stock. The Selling Securities Holders may sell all or a portion of these shares through registration under the Securities Act of 1933, as amended, from time to time in market transactions through any market on which our common stock is then traded, in negotiated transactions or otherwise, at a price of $0.001 per share for the duration of the offering pursuant to this prospectus. For additional information on the methods of sale, you should refer to the section in this prospectus entitled Plan of Distribution. USCorp, and all of the Selling Securities Holders, and all of the intermediaries through whom the shares of the Selling Securities Holders may be sold are deemed to be underwriters within the meaning of the Securities Act of 1933, as amended, with respect to the securities offered hereby, and any profits realized or commissions received may be deemed underwriting compensation. We have agreed to indemnify the Selling Securities Holders against certain liabilities, including liabilities under the Securities Act. We will notify the Selling Securities Holders of their underwriting status and our agreement to indemnify them against certain liabilities, including liabilities under the Securities Act, pursuant to a letter in the form attached to this prospectus as Attachment A. We are an emerging growth company as described in the Jumpstart Our Business Startups Act (the JOBS Act ) which was signed into law on April 5, 2012. See Prospectus Summary. The shares of our common stock are not currently listed for sale on any exchange, although we do plan to attempt to have our shares quoted for sale on the Pink Sheets or the OTC Bulletin Board after the effective date of this prospectus. However, there can be no assurance that we will be successful in having our shares quoted or traded on any public market. THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. INVESTING IN OUR COMMON STOCK INVOLVES RISKS WHICH ARE DESCRIBED UNDER THE RISK FACTORS, SECTION OF THIS PROSPECTUS. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this prospectus is ________________, 2013 The information in this prospectus is not complete and may be changed. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. No one may sell these securities nor may offers to buy be accepted until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer, solicitation or sale is not permitted. After ceasing to qualify as an emerging growth company: The issuer must hold first say on pay vote not later than the end of one year period beginning on the date the issuer ceases to be an emerging growth company, or the end of the three year period beginning on the date the emerging growth company ceases to qualify as an emerging growth company, if issuer has been an emerging growth company for less than two years after its first registered sale of equity securities; Extended phase-in for new or revised accounting standards. An emerging growth company will not need to comply with such standards until those standards also apply to private companies; Emerging growth companies will also be permitted to use any longer phase-in periods for private companies for any new or revised accounting standards; PCAOB rules, including, exempted from any rules mandating audit firm rotation and auditor discussion and analysis if such rules are adopted, and any new rules subject to SEC determination that such rules are necessary or appropriate in the public interest after considering investor protection and whether the action will promote efficiency, competition and capital formation. Rules for research coverage for an emerging growth company have been changed to provide: New safe harbor rules that provides that broker-dealer publication of research report about an emerging growth company will not constitute an offer, even if broker-dealer is part of syndicate; FINRA research restrictions during post-offering period or prior to expiration of lockup under NASD Rule 2711(f) will not apply to post- IPO reports issued in connection with an emerging growth company; and Research analysts may meet with accountants or members of an emerging growth company s management before and after filing, including in presence of or in coordination with investment bankers. The JOBS Act does not explicitly preempt existing rules and does not expressly address rulemaking by national securities exchanges thus, it is unclear if the exchanges are still permitted to maintain independent conflict of interest rules. What continues to apply under the JOBS Act: Antifraud provisions regarding analyst research; Conflicts of interest rules between analysts and investment banking; Analyst certification requirements; and Restrictions on analyst conduct, compensation, supervision and related matters under NASD Rule 2711 and Global Research Analyst Settlement of 2003.
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+PROSPECTUS SUMMARY 1
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+Prospectus Summary 1
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+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that may be important to you in making your investment decision. You should read the entire prospectus, including the financial data and related notes and section entitled Risk Factors, before making an investment decision. Unless the context otherwise indicates, as used in this prospectus, the terms SunGard, we, our, us, and the company and similar terms refer to SunGard Data Systems Inc. and its subsidiaries on a consolidated basis. Some of the statements in this prospectus constitute forward-looking statements. See Forward-Looking Statements. Our Company We are one of the world s leading software and technology services companies. We provide software and technology services to financial services, education and public sector organizations. We also provide disaster recovery services, managed services, information availability consulting services and business continuity management software. We serve approximately 25,000 customers in more than 70 countries. Our high quality software solutions, excellent customer support and specialized technology services result in strong customer retention rates across all of our business segments and create long-term customer relationships. We operate our business in three segments: Financial Systems ( FS ), Availability Services ( AS ) and Public Sector & Education ( PS&E ), which is comprised of our Public Sector business ( PS ) and our K-12 Education business ( K-12 ). On January 19 and 20, 2012, the Company completed the sale of its Higher Education ( HE ) business, which is included in discontinued operations for purposes of this prospectus. FS provides mission-critical software and technology services to virtually every type of financial services institution, including buy-side and sell-side institutions, third-party administrators, wealth managers, retail banks, insurance companies, corporate treasuries and energy trading firms. Our broad range of complementary software solutions and associated technology services help financial services institutions automate the business processes associated with trading, managing portfolios and accounting for investment assets. AS provides disaster recovery services, managed services, information availability consulting services and business continuity management software to more than 8,000 customers in North America and Europe. With five million square feet of data center and operations space, AS assists IT organizations across virtually all industry and government sectors to prepare for and recover from emergencies by helping them minimize their computer downtime and optimize their uptime. Through direct sales and channel partners, AS helps organizations ensure their people and customers have uninterrupted access to the information systems they need in order to do business. PS&E (PS and K-12) provides software and technology services designed to meet the specialized needs of local, state and federal governments, public safety and justice agencies, public and private schools, utilities, nonprofits and other public sector institutions. We were acquired in August 2005 in a leveraged buy-out ( LBO ) by a consortium of private equity investment funds associated with Bain Capital Partners, The Blackstone Group, Goldman, Sachs & Co., Kohlberg Kravis Roberts & Co., Providence Equity Partners, Silver Lake and TPG (collectively, the Sponsors ). As a result of the LBO, we are highly leveraged and our equity is not publicly traded. Our Sponsors continually evaluate various strategic alternatives with respect to the Company. There can be no assurance that we will ultimately pursue any strategic alternatives with respect to any business segment, or, if we do, what the structure or timing for any such transaction would be. Table of Contents Table of Additional Registrant Guarantors Exact Name of Registrant Guarantor as Specified in its Charter State or Other Jurisdiction of Incorporation or Organization I.R.S. Employer Identification Number Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant Guarantor s Principal Executive Offices Advanced Portfolio Technologies, Inc. Delaware 22-3245876 340 Madison Avenue 8th Floor New York, NY 10173 Automated Securities Clearance LLC Delaware 22-3701255 545 Washington Blvd. 7th Floor Jersey City, NJ 07310 GL Trade Overseas, Inc. Delaware 06-1414402 340 Madison Avenue New York, NY 10173 Inflow LLC Delaware 84-1439489 680 E. Swedesford Rd. Wayne, PA 19087 Online Securities Processing Inc. Delaware 77-0589377 680 E. Swedesford Rd. Wayne, PA 19087 SIS Europe Holdings LLC Delaware 41-1511643 680 E. Swedesford Rd. Wayne, PA 19087 SRS Development Inc. Delaware 23-2746281 680 E. Swedesford Rd. Wayne, PA 19087 SunGard Ambit LLC Delaware 04-2766162 100 High Street 19th Floor Suffolk, MA 02110 SunGard Asia Pacific Inc. Delaware 51-0370861 601 Walnut St. Suite 1010 Philadelphia, PA 19106 SunGard Availability Services LP Pennsylvania 23-2106195 680 E. Swedesford Rd. Wayne, PA 19087 SunGard Availability Services Ltd. Delaware 23-3024711 680 E. Swedesford Rd. Wayne, PA 19087 SunGard AvantGard LLC California 95-3440473 23975 Park Sorrento 4th Floor Calabasas, CA 91302 SunGard Business Systems LLC Delaware 23-2139612 377 E. Butterfield Road Suite 800 Lombard, IL 60148 SunGard Computer Services LLC Delaware 68-0499469 600 Laurel Road Voorhees, NJ 08043 SunGard Consulting Services LLC Delaware 87-0727844 10375 Richmond Suite 700 Houston, TX 77042 SunGard CSA LLC Delaware 20-4280640 680 E. Swedesford Rd. Wayne, PA 19087 SunGard Development Corporation Delaware 23-2589002 680 E. Swedesford Rd. Wayne, PA 19087 Table of Contents Corporate Information SunGard Data Systems Inc. was incorporated under Delaware law in 1982. Our principal executive offices are located at 680 East Swedesford Road, Wayne, Pennsylvania 19087. Our telephone number is (484) 582-2000. Our corporate website is located at www.sungard.com. The information on, or accessible through, our corporate website is not a part of, or incorporated by reference in, this prospectus. Incorporation By Reference The SEC allows us to incorporate by reference the information we file with them into this prospectus. See Incorporation by Reference. Table of Contents Exact Name of Registrant Guarantor as Specified in its Charter State or Other Jurisdiction of Incorporation or Organization I.R.S. Employer Identification Number Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant Guarantor s Principal Executive Offices SunGard DIS Inc. Delaware 23-2829670 680 E. Swedesford Rd. Wayne, PA 19087 SunGard Energy Systems Inc. Delaware 13-4081739 601 Walnut St. Suite 1010 Philadelphia, PA 19106 SunGard eProcess Intelligence LLC Delaware 13-3217303 600 Lanidex Plaza Parsippany, NJ 07054 SunGard Financial Systems LLC Delaware 23-2585361 3 Van de Graff Drive Burlington, MA 01803-5148 SunGard Investment Systems LLC Delaware 23-2115509 377 E. Butterfield Road Suite 800 Lombard, IL 60148 SunGard Investment Ventures LLC Delaware 51-0297001 680 E. Swedesford Road Wayne, PA 19087 SunGard iWORKS LLC Delaware 23-2814630 11560 Great Oaks Way Suite 200 Alpharetta, GA 30022 SunGard iWORKS P&C (US) Inc. Delaware 13-3248040 200 Business Park Dr. Armonk, NY 10504 SunGard Kiodex LLC Delaware 13-4100480 59 Maiden Lane, 32nd Floor New York, NY 10038-4624 SunGard NetWork Solutions Inc. Delaware 23-2981034 680 E. Swedesford Rd. Wayne, PA 19087 SunGard Public Sector Inc. Florida 59-2133858 1000 Business Center Drive Lake Mary, FL 32746 SunGard Reference Data Solutions LLC Delaware 72-1571745 340 Madison Avenue 8th Floor New York, NY 10173 SunGard SAS Holdings Inc. Delaware 26-0052190 680 E. Swedesford Rd. Wayne, PA 19087 SunGard Securities Finance LLC Delaware 13-3799258 14 Manor Parkway Salem, NH 03079 SunGard Securities Finance International LLC Delaware 13-3809371 14 Manor Parkway Salem, NH 03079 SunGard Shareholder Systems LLC Delaware 23-2025519 2300 Main Street Suite 400 Kansas City, MO 64108 SunGard Software, Inc. Delaware 51-0287708 680 E. Swedesford Road Wayne, PA 19087 SunGard Systems International Inc. Pennsylvania 23-2490902 340 Madison Avenue 8th Floor New York, NY 10173 Table of Contents The Notes The summary below describes the principal terms of the notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. The sections captioned Description of Senior Notes Due 2018, Description of Senior Notes Due 2020 and Description of Senior Subordinated Notes in this prospectus contain a more detailed description of the terms and conditions of the notes. Issuer SunGard Data Systems Inc. Securities Offered 7 3/8% Senior Notes due 2018. 7 5/8% Senior Notes due 2020. 6.625% Senior Subordinated Notes due 2019. Maturity The senior notes due 2018 mature on November 15, 2018. The senior notes due 2020 mature on November 15, 2020. The senior subordinated notes mature on November 1, 2019. Interest Rate The senior notes due 2018 bear interest at a rate of 7 3/8% per annum. The senior notes due 2020 bear interest at a rate of 7 5/8% per annum. The senior subordinated notes bear interest at a rate of 6.625% per annum. Interest Payment Dates We pay interest on the senior notes due 2018 and the senior notes due 2020 on May 15 and November 15 and on the senior subordinated notes on May 1 and November 1. Interest accrues from the most recent date to which interest has been paid or, if no interest has been paid, the issue date of the notes. Guarantees Each of our 100% owned domestic subsidiaries that guarantees the obligations under our senior secured credit facilities are initially jointly and severally, fully and unconditionally guaranteeing the senior notes on a senior unsecured basis and the senior subordinated notes on an unsecured senior subordinated basis. Ranking The senior notes are our senior unsecured obligations and: rank senior in right of payment to our future debt and other obligations that are, by their terms, expressly subordinated in right of payment to the senior notes, including the senior subordinated notes; rank equally in right of payment to all of our existing and future senior debt and other obligations that are not, by their terms, expressly subordinated in right of payment to the senior notes; and are effectively subordinated in right of payment to all of our existing and future secured debt including obligations under our senior secured credit facilities and the 4.875% senior notes due 2014 (referred to in this prospectus as the senior secured notes ), to the extent of the value of the assets securing such debt, and are structurally subordinated to all obligations of each of our subsidiaries that is not a guarantor of the senior notes. Table of Contents Similarly, the guarantees of the senior notes are senior unsecured obligations of the guarantors and: rank senior in right of payment to all of the applicable guarantor s future debt and other obligations that are, by their terms, expressly subordinated in right of payment to the senior notes, including such guarantor s guarantee under the senior subordinated notes; rank equally in right of payment to all of the applicable guarantor s existing and future senior debt and other obligations that are not, by their terms, expressly subordinated in right of payment to the senior notes; and are effectively subordinated in right of payment to all of the applicable guarantor s existing and future secured debt (including such guarantor s guarantee under our senior secured credit facilities and the senior secured notes), to the extent of the value of the assets securing such debt, and are structurally subordinated to all obligations of any subsidiary of a guarantor if that subsidiary is not also a guarantor of the senior notes. The senior subordinated notes are our unsecured senior subordinated obligations and: rank senior in right of payment to our existing and future debt and other obligations that are, by their terms, expressly subordinated in right of payment to the senior subordinated notes; rank equally in right of payment to any or all of our future senior subordinated debt; are subordinated in right of payment to all of our existing and future senior debt (including our senior secured credit facilities, the senior secured notes and the senior notes); and are effectively subordinated in right of payment to all of our existing and future secured debt (including our senior secured credit facilities and the senior secured notes), to the extent of the value of the assets securing such debt, and are structurally subordinated to all obligations of each of our subsidiaries that is not a guarantor of the senior subordinated notes. Similarly, the guarantees of the senior subordinated notes are unsecured senior subordinated obligations of the guarantors and: rank senior in right of payment to all of the applicable guarantor s existing and future debt and other obligations that are, by their terms, expressly subordinated in right of payment to the senior subordinated notes; rank equally in right of payment to all of the applicable guarantor s existing and future senior subordinated debt; Table of Contents The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED JULY 31, 2013 PRELIMINARY PROSPECTUS SunGard Data Systems Inc. 7 3/8% Senior Notes due 2018 7 5/8% Senior Notes due 2020 6.625% Senior Subordinated Notes due 2019 The 7 3/8% Senior Notes due 2018 (the senior notes due 2018 ) were issued in exchange for the 7 3/8% Senior Notes due 2018 originally issued on November 16, 2010. The 7 5/8% Senior Notes due 2020 (the senior notes due 2020) were issued in exchange for the 7 5/8% Senior Notes due 2020 originally issued on November 16, 2010. The 6.625% Senior Subordinated Notes due 2019 (the senior subordinated notes ) were issued in exchange for the 6.625% Senior Subordinated Notes due 2019 originally issued on November 1, 2012. The senior notes due 2018, the senior notes due 2020 (collectively, the senior notes ) and the senior subordinated notes are collectively referred to herein as the notes, unless the context otherwise requires. The senior notes due 2018 bear interest at a rate of 7 3/8% per annum and mature on November 15, 2018. The senior notes due 2020 bear interest at a rate of 7 5/8% per annum and mature on November 15, 2020. Interest on the senior notes due 2018 and the senior notes due 2020 is payable on May 15 and November 15 of each year, beginning November 15, 2011. The senior subordinated notes bear interest at a rate of 6.625% per annum and mature on November 1, 2019. Interest on the senior subordinated notes due 2019 is payable on May 1 and November 1 of each year, beginning on November 1, 2013. We may redeem some or all of the notes at any time at the redemption prices set forth in this prospectus. The senior notes are our senior unsecured obligations and rank equal in right of payment to all of our existing and future senior indebtedness. The senior subordinated notes are our unsecured senior subordinated obligations and are subordinated in right of payment to all of our existing and future senior indebtedness, including the senior secured credit facilities, the existing senior notes and the senior notes offered hereby. Each of our 100% owned domestic subsidiaries that guarantees our senior secured credit facilities are initially unconditionally guaranteeing the senior notes with guarantees that rank equal in right of payment to all of the senior indebtedness of such subsidiary, and are initially unconditionally guaranteeing the senior subordinated notes with guarantees that are subordinated in right of payment to all existing and future senior indebtedness of such subsidiary. The notes and the guarantees are effectively subordinated to our existing and future secured indebtedness and that of the guarantors to the extent of the assets securing such indebtedness. This prospectus includes additional information on the terms of the notes, including redemption and repurchase prices, covenants and transfer restrictions. See Risk Factors beginning on page 11 for a discussion of certain risks that you should consider before investing in the notes. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the notes or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. This prospectus has been prepared for and may be used by Goldman, Sachs & Co. and other affiliates of The Goldman Sachs Group, Inc. in connection with offers and sales of the notes related to market-making transactions in the notes effected from time to time. Such affiliates of The Goldman Sachs Group, Inc. may act as principal or agent in such transactions, including as agent for the counterparty when acting as principal or as agent for both counterparties, and may receive compensation in the form of discounts and commissions, including from both counterparties, when it acts as agents for both. Such sales will be made at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices. We will not receive any proceeds from such sales. The date of this prospectus is , 2013. Table of Contents are subordinated in right of payment to all of the applicable guarantor s existing and future senior debt (including such guarantor s guarantee under our senior secured credit facilities, the senior secured notes and the senior notes) and other obligations that are not, by their terms, expressly subordinated in right of payment to the senior subordinated notes; and are effectively subordinated in right of payment to all of the applicable guarantor s existing and future secured debt (including such guarantor s guarantee under our senior secured credit facilities and the senior secured notes), to the extent of the value of the assets securing such debt, and are structurally subordinated to all obligations of any subsidiary of a guarantor if that subsidiary is not also a guarantor of the senior subordinated notes. As of March 31, 2013, (1) the notes and related guarantees ranked effectively junior to approximately $3,949 million of senior secured indebtedness (which includes $250 million face amount of our senior secured notes that are recorded at $247 million and $200 million under our receivables facility which is secured by accounts receivable of our subsidiaries that participate in the facility), (2) the senior notes and related guarantees ranked senior to the $1,000 million of senior subordinated notes, (3) the senior subordinated notes and related guarantees ranked junior to the senior indebtedness under the senior secured credit facilities, the senior secured notes, the senior notes, the receivables facility and $13 million of payment obligations relating to foreign bank debt and capital lease obligations, all of which totaled approximately $5,562 million, (4) we had an additional $828 million of unutilized capacity under our revolving credit facility, after giving effect to certain outstanding letters of credit and (5) our non-guarantor subsidiaries had approximately $211 million (of the $5,562 million described above), which relates to the receivables facility and payment obligations relating to foreign bank debt and capital lease obligations. Optional Redemption Prior to November 15, 2013, we have the option to redeem the senior notes due 2018, in whole or in part, at a price equal to 100% of their principal amount plus accrued and unpaid interest, if any, to the redemption date and a make-whole premium, as described under Description of Senior Notes due 2018 Optional Redemption. Beginning on November 15, 2013, we may redeem some or all of the senior notes due 2018 at the redemption prices listed under Description of Senior Notes Due 2018 Optional Redemption plus accrued and unpaid interest on the senior notes due 2018, if any, to the date of redemption. Prior to November 15, 2015, we have the option to redeem the senior notes due 2020, in whole or in part, at a price equal to 100% of their principal amount plus accrued and unpaid interest, if any, to the redemption date and a make-whole premium, as described under Description of Senior Notes due 2020 Optional Redemption. Table of Contents You should rely only on the information contained in this prospectus or incorporated by reference into this prospectus. We have not authorized anyone to provide you with different information from that contained in, or incorporated by reference into, this prospectus. The prospectus may be used only for the purposes for which it has been published and no person has been authorized to give any information not contained or incorporated by reference herein. If you receive any other information, you should not rely on it. We are not making an offer of these securities in any state where the offer is not permitted. You should assume that the information in this prospectus or incorporated by reference into this prospectus is accurate only as of the date on the front cover, regardless of the time of delivery of this prospectus or of any sale of our common stock. Our business, prospects, financial condition and results of operations may have changed since that date. TABLE OF CONTENTS Page Prospectus Summary 1
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--- /dev/null
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@@ -0,0 +1,2803 @@
+Summary Financial Information
+
+ 
+
+The following tables summarize historical
+financial data regarding our business and should be read together with the information in the section title "Management s
+Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and
+the related notes included in this prospectus.
+
+ 
+
+ 
+ Year Ended
+
+ January 31, 
+
+ 
+ 2013 
+ 2012 
+
+ 
+ 
+ 
+
+ Statements of Operations Data 
+ 
+ 
+
+ 
+ 
+ 
+
+ Revenues 
+ $ - 
+ $ - 
+
+ Loss from operations 
+ $ (1,302,303 ) 
+ $ (1,297,582 ) 
+
+ Net income (loss) 
+ $ 289,469 
+ $ (262,818 ) 
+
+ Net income (loss) per common share - basic and diluted 
+ $ 0.00 
+ $ (0.00 ) 
+
+ Statements of Cash Flows Data 
+ 
+ 
+
+ 
+ 
+ 
+
+ Net cash used in operating activities 
+ $ (697,231 ) 
+ $ (817,764 ) 
+
+ Net cash used in investing activities 
+ $ (40,000 ) 
+ $ (18,809 ) 
+
+ Net cash provided by financing activities 
+ $ 168,250 
+ $ 396,500 
+
+ Cash and cash equivalents, end of period 
+ $ 259,200 
+ $ 828,181 
+
+ 
+
+ 
+ At January 31, 
+
+ 
+ 2013 
+ 2012 
+
+ 
+ 
+ 
+
+ Balance Sheet Data 
+ 
+ 
+
+ 
+ 
+ 
+
+ Total current assets 
+ $ 275,483 
+ $ 861,644 
+
+ Total assets 
+ $ 372,837 
+ $ 917,009 
+
+ Total current liabilities 
+ $ 533,500 
+ $ 1,869,933 
+
+ Total liabilities 
+ $ 533,500 
+ $ 1,869,933 
+
+ Total stockholders equity (deficit) 
+ $ (160,663 ) 
+ $ (952,924 ) 
+
+ 
+
+ 4
+
+ 
+
+ 
+
+ 
+
+THE OFFERING
+
+ 
+
+ Common stock currently outstanding:
+ 
+ 115,201,260 shares (1)
+
+ 
+ 
+ 
+
+ Common stock offered by the selling stockholders:
+ 
+ 61,623,782 shares (2)
+
+ 
+ 
+ 
+
+ Common stock offered by the Company:
+ 
+ Up to 100,000,000 shares 
+
+ 
+ 
+ 
+
+ Company offering price per share:
+ 
+ $0.005
+
+ 
+ 
+ 
+
+ Common stock outstanding after the offering:
+ 
+ 154,747,454 shares (3)
+
+ 
+ 
+ 
+
+ Use of proceeds:
+ 
+ 
+ We will not receive any of the proceeds
+ from the sales of our common stock by the selling stockholders. However, we may receive the proceeds from the exercise of the warrants
+ held by the selling stockholders, to the extent the warrants are not exercised on a cashless basis.
+
+ 
+
+ There is no minimum number of shares
+ of our common stock that we must sell and no guarantee that we will sell any of our shares. Therefore, we cannot estimate net proceeds
+ from the sale by us of our common stock in this offering.
+
+ 
+
+ We anticipate that any net proceeds from
+ our sale of common stock will be applied towards the second year exploration expenditure requirements at the La Viuda Concessions,
+ and used for general corporate purposes and working capital. We may invest the net proceeds temporarily in our discretion in money
+ market accounts bearing interest at prevailing rates until allocated to the use of proceeds specified herein.
+
+ 
+ 
+ 
+
+ Market for common stock:
+ 
+ Our common stock is quoted on the Over-The-Counter Bulletin Board (the "OTCBB") and on the OTC Markets QB tier under the symbol "CLGL".
+
+ 
+ 
+ 
+
+ Risk Factors:
+ 
+ You should carefully consider the information set forth in this prospectus and, in particular, the specific factors set forth in the "Risk Factors" section beginning on page 6 of this prospectus before deciding whether or not to invest in shares of our common stock.
+
+ 
+
+ (1) As of May 9, 2013. 
+
+(2)Consists of 22,077,588 shares of common stock issued and outstanding and 39,546,194 shares
+of common stock issuable upon the exercise of outstanding warrants.
+
+(3)Includes 39,546,194 shares of common stock issuable upon the exercise of outstanding warrants.
+There is no minimum number of shares of our common stock that we must sell and no guarantee that we will sell any of our shares.
+Therefore, we do not include in this number any shares of our common stock to be offered by us under this prospectus.
+
+ 
+
+ 5
+
+ 
+
+ 
+
+ 
+
+NOTE REGARDING FORWARD-LOOKING STATEMENTS
+
+ 
+
+Various statements
+in this prospectus, including those that express a belief, expectation or intention, as well as those that are not statements of
+historical fact, are forward-looking statements. The forward-looking statements may include projections and estimates concerning
+the timing and success of specific projects, revenues, income and capital spending. We generally identify forward-looking statements
+with the words "believe," "intend," "expect," "seek," "may," "should,"
+"anticipate," "could," "estimate," "plan," "predict," "project"
+or their negatives, and other similar expressions. All statements we make relating to our estimated and projected earnings, margins,
+costs, expenditures, cash flows, growth rates, financial results and project developments and acquisitions or to our expectations
+regarding future industry or economic trends are forward-looking statements.
+
+ 
+
+These forward-looking
+statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially
+from those that we expected. The forward-looking statements contained in this prospectus are largely based on our expectations,
+which reflect many estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment
+based on currently known market conditions and other factors. Although we believe such estimates and assumptions are reasonable,
+we caution that it is very difficult to predict the impact of known factors and it is impossible for us to anticipate all factors
+that could affect our actual results. In addition, management s assumptions about future events may prove to be inaccurate.
+Management cautions all readers that the forward-looking statements contained in this prospectus are not guarantees of future performance,
+and we cannot assure any reader that such statements will be realized or the forward looking events and circumstances will occur.
+Actual results may differ materially from those anticipated or implied in the forward-looking statements due to the factors listed
+in the "Risk Factors" section and elsewhere in this prospectus. All forward-looking statements are based upon
+information available to us on the date of this prospectus. We undertake no obligation to update or revise any forward-looking
+statements as a result of new information, future events or otherwise, except as otherwise required by law. These cautionary statements
+qualify all forward-looking statements attributable to us, or persons acting on our behalf.
+
+ 
+
+ 6
+
+ 
+
+ 
+
+ 
+
+RISK FACTORS
+
+ 
+
+An investment in shares of our common
+stock is highly speculative and involves a high degree of risk. We face a variety of risks that may affect our operations or financial
+results and many of those risks are driven by factors that we cannot control or predict. Before investing in our common stock you
+should carefully consider the following risks, together with the financial and other information contained in this prospectus.
+If any of the following risks actually occurs, our business, prospects, financial condition and results of operations could be
+materially adversely affected. In that case, the trading price of our common stock would likely decline and you may lose all or
+a part of your investment. Only those investors who can bear the risk of loss of their entire investment should participate in
+this offering.
+
+ 
+
+RISKS RELATED TO OUR BUSINESS AND FINANCIAL
+CONDITION
+
+ 
+
+We are an exploration stage company
+with no history of operations and no current revenues. Our business plan depends on our ability to explore for and develop mineral
+reserves and place any such reserves into extraction. Because we have a limited operating history, it is difficult to predict our
+future performance.
+
+ 
+
+Although we were formed in April 2004,
+we have been and continue to be an exploration stage company. Therefore, we have limited operating and financial history available
+to help potential investors evaluate our past performance and the risks of investing in us. Moreover, our limited historical financial
+results may not accurately predict our future performance. Companies in their initial stages of development present substantial
+business and financial risks and may suffer significant losses. As a result of the risks specific to our new business and those
+associated with new companies in general, it is possible that we may not be successful in implementing our business strategy.
+
+ 
+
+We have generated no revenues to date and
+do not anticipate generating any revenues for the foreseeable future. Our activities to date have been limited to capital formation,
+organization, and development of our business. We have yet to generate positive earnings and there can be no assurance that we
+will ever operate profitably. Our success is significantly dependent on a successful exploration, mining and production program.
+Our operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties
+arising from the absence of a significant operating history. We may be unable to locate exploitable quantities of mineral resources
+or operate on a profitable basis. We are in the exploration stage and potential investors should be aware of the difficulties normally
+encountered by enterprises in the exploration stage. The likelihood of our success must be considered in light of the problems,
+expenses, difficulties, complication, and delays frequently encountered in connection with an exploration stage business, and the
+competitive and regulatory environment in which we will operate, such as under-capitalization, personnel limitations, and limited
+revenue sources. If our business plan is not successful, and we are not able to operate profitably, investors may lose some or
+all of their investment in us.
+
+ 
+
+We have not generated any revenues
+from operations. We have a history of losses and losses are likely to continue in the future.
+
+ 
+
+ We have
+not generated any revenues from operations. Our net income for the fiscal year ended January 31, 2013 totaled $289,469
+and was due to a large gain from hedging activities offsetting our operating expenses. Our net loss for the fiscal year ended
+2012 totaled $262,818. Cumulative losses since inception to January 31, 2013 totaled $2,832,452.
+We have incurred significant losses in the past and we will likely continue to incur losses in the future unless our exploration
+program proves successful. Even if our exploration program identifies tellurium, gold, silver or other mineral reserves, there
+can be no assurance that we will be able to commercially exploit these resources, generate any revenues or generate sufficient
+revenues to operate profitably. 
+
+ 
+
+We have no history as a mining company.
+
+ 
+
+We have no history of earnings or cash
+flow from mining operations. If we are able to proceed to production, commercial viability will be affected by factors that are
+beyond our control such as the particular attributes of the deposit, the fluctuation in metal prices, the cost of construction
+and operating a mine, prices and refining facilities, the availability of economic sources for energy, government regulations including
+regulations relating to prices, royalties, restrictions on production, quotas on exploration of minerals, as well as the costs
+of protection of the environment.
+
+ 
+
+ 7
+
+ 
+
+ 
+
+ 
+
+Exploring for rare metals such as
+tellurium and precious metals such as gold and silver is an inherently speculative business and there is substantial risk that
+our business could fail.
+
+ 
+
+Exploring for rare and precious metals
+is a business that by its nature is very speculative. There is a strong possibility that we will not discover any tellurium (or
+gold or silver) which can be mined at a profit. Even if we do discover tellurium or precious metal deposits, the deposits may not
+be of the quality or size necessary for us to make a profit from actually mining them. Few properties that are explored are ultimately
+developed into producing mines. Unusual or unexpected geological formations, geological formation pressures, fires, power outages,
+labor disruptions, flooding, explosions, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment
+or labor are just some of the many risks involved in mineral exploration programs and the subsequent development of rare and precious
+metal deposits. Because of these and other factors, we can make no assurances that we will be successful in our business.
+
+ 
+
+If we fail to make required payments
+on our mineral properties, we could lose our rights to the properties.
+
+ 
+
+We have entered into the AuroTellurio Option
+Agreement with Mexivada to acquire up to an 80% interest in the AuroTellurio Property. To acquire each 20% block of interest, we
+need to make certain annual cash payments to Mexivada and invest US $750,000 each year, by August 4th of each year,
+for four years, in an exploration program for the Property. If we fail to make these payments or investments, we may lose our right
+to acquire these interests in the Property. Although we have made the required payments and investments to acquire the first 20%
+block of interest, there can be no assurance that we will have the funds to acquire any additional interest in the Property.
+
+ 
+
+We will need to obtain additional
+financing to fund our exploration program and the acquisition of the remaining 60% interest in the Property.
+
+ 
+
+As a result of the closing of our 2010/2011
+private placement (discussed below), we had sufficient funds to finance the first year (US $750,000) of our La Viuda Concessions
+exploration program under the Mexivada AuroTellurio Option Agreement, which triggered the vesting in us of the first 20% interest
+in the Property. We do not have sufficient capital, however, to fund years two through four of our exploration program as it is
+currently planned (US $750,000 per year), to enable us to acquire up to an additional 60% interest in the Property, or to fund
+the acquisition and exploration of new properties. We estimate that we will need to raise at least an additional US $4 million
+to pay for years two through four of our exploration program, as it is currently planned and described in this prospectus, and
+our estimated administrative expenses, lease payments and estimated claim maintenance costs. We may be unable to secure
+such additional financing on terms acceptable to us, or at all, at times when we need such financing. Our inability to raise additional
+funds on a timely basis could prevent us from achieving our business objectives and could have a negative impact on our business,
+financial condition, results of operations and the value of our securities. If we raise additional funds by issuing
+additional equity or convertible debt securities, the ownership percentages of existing shareholders will be reduced and the securities
+that we may issue in the future may have rights, preferences or privileges senior to those of the current holders of our Common
+Stock. Such securities may also be issued at a discount to the market price of our Common Stock, resulting in possible further
+dilution to the book value per share of Common Stock. If we raise additional funds by issuing debt, we could be subject to debt
+covenants that could place limitations on our operations and financial flexibility.
+
+ 
+
+We do not own the land over which
+the La Viuda Concessions are located.
+
+ 
+
+Although we
+are acquiring up to an 80% interest in the La Viuda Concessions from Mexivada, neither we nor Mexivada owns the land where the
+Property is located. We have entered into a surface rights agreement with the local landowner enabling us to begin our exploration
+program. If we discover meaningful quantities of minerals on the Property, however, we will need to enter into additional agreements
+with the landowner to enable us to mine such minerals. There can be no assurance that the landowner will agree to such further
+agreements or, if he does, that they will be on terms economically acceptable to us. If we cannot reach agreement with the
+land owner with respect to our future exploration or potential mining activities, we would not be able to continue with the AuroTellurio
+project, our business plan would be negatively impacted and our business prospects would be damaged.
+
+ 
+
+ 8
+
+ 
+
+ 
+
+ 
+
+There are no confirmed mineral deposits
+on the Property from which we may derive any financial benefit.
+
+ 
+
+Neither the Company nor any independent
+geologist has confirmed commercially viable mineable deposits of tellurium, gold, silver or other minerals on the Property and
+there can be no assurances that there are such deposits on the Property.
+
+ 
+
+We are uncertain as to whether our
+exploration for tellurium or other mineral resources on the Property will lead to meaningful results.
+
+ 
+
+Resources are non-renewable and the exploration
+of new potential resources is crucial to a mining enterprise. Exploration of mineral resources is speculative in nature, so substantial
+expenses may be incurred from initial exploration to drilling to production. Tellurium is the ninth rarest element on earth and
+there are very few tellurium mines in operation around the world today. Although tellurium has been found on adjacent concessions
+and mined in the past to a limited extent, there is no assurance that exploration on the La Viuda Concessions will lead to the
+discovery of economically feasible quantities of tellurium (or gold or silver) or result in the mining of such elements and the
+generation of revenues. The exploration of the La Viuda Concessions is currently our only business. If we fail to discover economically
+viable quantities of tellurium (or gold or silver) on the Property, our current business plan will have failed and we may not be
+able to continue operations.
+
+ 
+
+There is no assurance that we can
+establish the existence of any mineral reserves on the Property in commercially exploitable quantities.
+
+ 
+
+We have not established that the La Viuda
+Concessions contain any meaningful levels of tellurium or other mineral reserves. A mineral reserve is defined by the SEC in its
+Industry Guide 7 as that part of a mineral deposit which could be economically and legally extracted or produced at the time of
+the reserve determination. There can be no assurance that we will ever establish any mineral reserves.
+
+(See http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7.)
+
+ 
+
+We will be relying on independent
+analysis to evaluate the Property and structure and carry out our planned exploration activities.
+
+ 
+
+We will rely on independent geologists
+to engage in field work at the Property, to analyze our prospects, plan and carry out our exploration program, including an exploratory
+drilling program, and to prepare resource reports on our La Viuda Concessions. While these geologists rely on standards established
+by various licensing bodies, there can be no assurance that their estimates or results will be accurate. Analyzing drilling results
+and estimating reserves or targeted drilling sites is not a certainty. Miscalculations and unanticipated drilling results may cause
+the geologists to alter their estimates. If this should happen, we may have devoted resources to areas where resources could have
+been better allocated, and as a result, our business could suffer.
+
+ 
+
+There is no assurance that we can
+establish successful mining operations.
+
+ 
+
+Even if we do eventually discover a meaningful
+tellurium or other mineral reserve on the Property, there can be no assurance that we will be able to develop the Property into
+producing mines and extract those resources. Both mineral exploration and development involve a high degree of risk and few properties
+which are explored are ultimately developed into producing mines. Furthermore, we cannot be sure that an overall exploration success
+rate or extraction operations within a particular area will ever come to fruition and, in any event, production rates inevitably
+decline over time.
+
+ 
+
+The commercial viability of an established
+mineral deposit will depend on a number of factors including, by way of example, the size, grade and other attributes of the mineral
+deposit, the proximity of the resource to infrastructure such as a smelter, roads and a point for shipping, government regulation
+and market prices. Most of these factors will be beyond our control, and any of them could increase costs and make extraction of
+any identified mineral resource unprofitable.
+
+ 
+
+We will require additional capital
+to develop producing mines if we find commercial quantities of minerals.
+
+ 
+
+If we do discover tellurium or other mineral
+resources in commercially exploitable quantities on the La Viuda Concessions, we will be required to expend substantial sums of
+money to establish the extent of the resource, develop processes to extract it and develop extraction and processing facilities
+and infrastructure. Although we may derive substantial benefits from the discovery of a major deposit, there can be no assurance
+that such a resource will be large enough to justify commercial operations. Nor can there be any assurance that we will be able
+to raise the funds required for development on a timely basis.
+
+ 
+
+ 9
+
+ 
+
+ 
+
+ 
+
+We have raised some capital to date, including
+through the sale of equity securities, but we currently do not have any contracts or firm commitments for additional financing.
+There can be no assurance that additional financing will be available in amounts or on terms acceptable to us, if at all. An inability
+to obtain additional capital would restrict our ability to grow and could diminish our ability to continue to conduct our business
+operations. If we are unable to obtain additional financing, we will likely be required to curtail exploration and development
+plans and possibly cease operations. Any additional equity financing may involve substantial dilution to then existing shareholders.
+
+ 
+
+It is possible investors may lose their entire investment
+in us.
+
+ 
+
+Prospective investors should be aware that
+if we are not successful in our endeavors, your entire investment in us could become worthless. Even if we are successful, in identifying
+mineral reserves that can be commercially developed, there can be no assurances that we will generate any revenues and our losses
+will continue.
+
+ 
+
+Mineral operations are subject to
+applicable law and government regulation which could restrict or prohibit the exploitation of any mineral resource that we might
+discover.
+
+ 
+
+Both mineral exploration and extraction
+require permits from various Mexican governmental authorities, whether federal, state or local, and are governed by laws and regulations,
+including those with respect to prospecting, mine development, mineral production, transport, export, taxation, labor standards,
+occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. There
+can be no assurance that we will be able to obtain or maintain any of the permits required for the continued exploration of our
+mineral properties or for the construction and operation of a mine on the Property at economically viable costs.
+
+ 
+
+We believe that we are in compliance with
+all material laws and regulations that currently apply to our activities but there can be no assurance that we can continue to
+remain in compliance. Current laws and regulations could be amended and we might not be able to comply with them, as amended. Further,
+there can be no assurance that we will be able to obtain or maintain all permits necessary for our future operations, or that we
+will be able to obtain them on reasonable terms. To the extent such approvals are required and are not obtained, we may be delayed
+or prohibited from proceeding with planned exploration or development of our mineral properties.
+
+ 
+
+We operate in a regulated industry
+and changes in regulations or violations of regulations may result in increased costs or sanctions that could reduce our revenues.
+
+ 
+
+Our operations will be subject to extensive
+and complex federal and state laws and regulations in Mexico. If we fail to comply with the laws and regulations that are directly
+applicable to our business, we could suffer civil and/or criminal penalties or be subject to injunctions or cease and desist orders.
+While we believe that we are currently compliant with applicable rules and regulations, if there are changes in the future, there
+can be no assurance that we will be able to comply in the future, or that future compliance will not significantly adversely impact
+our operations.
+
+ 
+
+Mineral exploration and development
+is subject to extraordinary operating risks which we do not currently insure against.
+
+ 
+
+Mineral exploration, development and production
+involve many risks which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Our operations
+will be subject to all the hazards and risks inherent in the exploration for mineral resources and, if we discover a mineral resource
+in commercially exploitable quantity, our operations could be subject to all of the hazards and risks inherent in the development
+and production of resources, including liability for pollution, cave-ins or similar hazards against which we cannot insure or against
+which we may elect not to insure. Any such event could result in work stoppages and damage to property, including damage to the
+environment. We do not currently maintain any insurance coverage against these operating hazards. The payment of any liabilities
+that arise from any such occurrence would have a material adverse impact on our Company.
+
+ 
+
+ 10
+
+ 
+
+ 
+
+ 
+
+Fluctuation in the market price of
+tellurium and other rare and precious metals may significantly affect the results of our operations.
+
+ 
+
+If we are successful in the future in mining
+commercial quantities of tellurium or other precious metals, the results of our operations will be significantly affected by the
+market price of such metals, which are subject to substantial price fluctuations. Our earnings will be particularly sensitive to
+changes in the market price of tellurium, gold, and other metals that we might sell. Market prices can be affected by numerous
+factors beyond our control, including international, economic and political trends, expectations of inflation, currency exchange
+fluctuations, interest rates, global or regional consumptive patterns, supply and demand, substitution of new or different products
+in critical applications, expectations with respect to the level of fossil fuel prices, speculative activities and increased production
+due to new extraction developments and improved extraction and production methods. The effect of these factors on the price of
+base and precious metals, and therefore the economic viability of our exploration program, cannot accurately be predicted. If prices
+should decline below our cash costs of production and remain at such levels for any substantial period, we could determine at a
+particular point in time in the future that it might not be economically feasible to begin or continue commercial production activities.
+
+ 
+
+Because tellurium is rare and its applications
+highly specific, there are no known hedging tools to utilize to protect us against price fluctuation. As such, our future ability
+to protect our operations against rare and precious metal price fluctuations is minimal.
+
+ 
+
+The mining industry is highly competitive,
+and we face competition from many established domestic and foreign companies. We may not be able to compete effectively with these
+companies.
+
+ 
+
+The markets in which we operate are highly
+competitive. The mineral exploration, development, and production industry is largely un-integrated. We compete against numerous
+well-established national and foreign companies in every aspect of the mineral mining industry. Some of our competitors have longer
+operating histories and greater technical facilities, and significantly greater recognition in the market and financial and other
+resources, than we have. We may not compete effectively with other exploration companies in locating and acquiring mineral resource
+properties, and customers may not buy any or all of the mineral products that we expect to produce. Additionally, we may not be
+able to compete with competitors located in developing countries such as China, where production costs may be lower.
+
+ 
+
+Because of growing demand for rare
+and precious metals, we may be subject to more competition in the near future.
+
+ 
+
+The forecasted growth in demand for rare
+metals, including tellurium which is used by the solar power industry, is expected to attract more mining companies and metal refiners
+into this industry and increase competition. Competition could arise from certain manufacturers, including First Solar, who use
+tellurium in their products and who decide to backwards integrate. We may not be able to compete with these new entrants in the
+market.
+
+ 
+
+Compliance with environmental and
+other government regulations could be costly and could negatively impact production.
+
+ 
+
+Our operations are subject to numerous
+federal, state and local laws and regulations in Mexico governing the operation of our business and the discharge of materials
+into the environment or otherwise relating to environmental protection. These laws and regulations may:
+
+ 
+
+ require that we acquire permits before commencing extraction operations;
+
+ 
+
+ restrict the substances that can be released into the environment in connection with mining and
+extraction activities;
+
+ 
+
+ limit or prohibit mining activities on protected areas such as wetland or wilderness areas; and
+
+ 
+
+ require remedial measures to mitigate pollution from former operations, such as dismantling abandoned
+production facilities.
+
+ 
+
+ 11
+
+ 
+
+ 
+
+ 
+
+Under these laws and regulations, we could
+be liable for personal injury and clean-up costs and other environmental and property damages, as well as administrative, civil
+and criminal penalties. We do not believe that insurance coverage for environmental damages that occur over time is available at
+a reasonable cost, and we do not maintain any such insurance. Also, we do not believe that insurance coverage for the full potential
+liability that could be caused by sudden and accidental environmental damages is available at a reasonable cost. Accordingly, we
+may be subject to liability or we may be required to cease operations including production (subsequent to any commencement) on
+the Property in the event of environmental damages.
+
+ 
+
+We may have difficulty managing growth
+in our business.
+
+ 
+
+Because of the small size of our business,
+growth in accordance with our long-term business plans, if achieved, will place a significant strain on our financial, technical,
+operational and management resources. As we increase our activities with respect to the La Viuda Concessions, there will be additional
+demands on our financial, technical, operational and management resources. The failure to continue to upgrade our technical, administrative,
+operating and financial control systems or the occurrence of unexpected expansion difficulties, including the recruitment and retention
+of required personnel could have a material adverse effect on our business, financial condition and results of operations and our
+ability to timely execute our business plan.
+
+ 
+
+If we are unable to keep our key
+management personnel, then we are likely to face significant delays at a critical time in our corporate development and our business
+is likely to be damaged.
+
+ 
+
+Our success depends upon the skills, experience
+and efforts of our management and other key personnel, including our Chief Executive Officer and Chief Operating Officer. As a
+relatively new company, much of our corporate, scientific and technical knowledge is concentrated in the hands of a few individuals.
+We do not have employment agreements with our Chief Executive Officer or Chief Operating Officer. Nor do we maintain key-man life
+insurance on these persons. The loss of the services of one or more of our present management or other key personnel could significantly
+delay our exploration and development activities as there could be a learning curve of several months or more for any replacement
+personnel. Furthermore, competition for the type of highly skilled individuals we require is intense and we may not be able to
+attract and retain new employees or contractors of the caliber needed to achieve our objectives. Failure to replace key personnel
+could have a material adverse effect on our business, financial condition and operations.
+
+ 
+
+Each of our Chief Executive Officer
+and Chief Operating Officer has other substantial business activities that limit the amount of time that he can devote to managing
+our business.
+
+ 
+
+Our Chief Executive Officer, James D. Davidson,
+and our Chief Operating Officer, George Duggan, currently serves as officers, and are involved in the running, of other companies.
+Accordingly, these officers are only able to devote a portion of their time to our activities. This may make it more difficult
+for our management to respond quickly and completely to challenges and opportunities that we may encounter, may limit our ability
+to timely consummate strategic relationships and may have an adverse effect on our results of operations.
+
+ 
+
+There may be challenges to our title
+in our mining properties.
+
+ 
+
+While we have conducted our own due diligence
+relating to Mexivada s title to the La Viuda Concessions prior to entering into the AuroTellurio Option Agreement, mining
+properties, in general, may be subject to prior unregistered agreements, transfers or claims and title may be affected by undetected
+defects. Should any of these conditions occur, we could face significant delays, added costs and the possible loss of any investments
+or commitment of capital.
+
+ 
+
+Difficult conditions in the global
+capital markets may significantly affect our ability to raise additional capital to continue operations.
+
+ 
+
+The ongoing worldwide financial and credit
+upheaval may continue indefinitely. Because of reduced market liquidity, we may not be able to raise additional capital when we
+need it. Because the future of our business will depend on our ability to explore and develop the mineral resources on our existing
+properties and, possibly, the acquisition of one or more additional mineral resource properties for which, most likely, we will
+need additional capital, we may not be able to complete such development and acquisition projects or develop or acquire revenue
+producing assets. As a result, we may not be able to generate income and, to conserve capital, we may be forced to curtail our
+current business activities or cease operations entirely.
+
+ 
+
+ 12
+
+ 
+
+ 
+
+ 
+
+Being a public company has increased
+our expenses and administrative workload.
+
+ 
+
+As a public company, we must comply with
+various laws and regulations, including the Sarbanes-Oxley Act of 2002 and related rules of the SEC. Complying with these laws
+and regulations requires the time and attention of our board of directors and management, and increases our expenses. Among other
+things, we must:
+
+ 
+
+ maintain and evaluate a system of internal controls over financial reporting in compliance with
+the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company
+Accounting Oversight Board;
+
+ 
+
+ maintain policies relating to disclosure controls and procedures;
+
+ 
+
+ prepare and distribute periodic reports in compliance with our obligations under federal securities
+laws;
+
+ 
+
+ institute a more comprehensive compliance function, including with respect to corporate governance;
+and
+
+ 
+
+ involve to a greater degree our outside legal counsel and accountants in the above activities.
+
+ 
+
+In addition, being a public company has
+made it more expensive for us to obtain director and officer liability insurance. In the future, we may be required to accept reduced
+coverage or incur substantially higher costs to obtain this coverage. These factors could also make it more difficult for us to
+attract and retain qualified executives and members of our board of directors, particularly directors willing to serve on an audit
+committee which we expect to establish.
+
+ 
+
+RISKS RELATED TO DOING BUSINESS IN MEXICO
+
+ 
+
+Local infrastructure may impact our
+exploration activities and results of operations.
+
+ 
+
+Mining, processing, development and exploration
+activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges and power and water supplies are
+important determinants that affect capital and operating costs. Unusual or infrequent weather phenomena sabotage or government
+or other interference in the maintenance or provision of such infrastructure could adversely affect our activities and future profitability.
+
+ 
+
+Our material property interests are
+in Mexico. Risks of doing business in a foreign country could adversely affect our results of operations and financial condition.
+
+ 
+
+We face risks normally associated with
+any conduct of business in a foreign country with respect to our La Viuda Concessions in Sonora, Mexico, including various levels
+of political and economic risk. The occurrence of one or more of these events could have a material adverse impact on
+our efforts or operations which, in turn, could have a material adverse impact on our cash flows, earnings, results of operations
+and financial condition. These risks include the following:
+
+ 
+
+ labor disputes,
+
+ 
+
+ invalidity of governmental orders,
+
+ 
+
+ uncertain or unpredictable political, legal and economic environments,
+
+ 
+
+ war and civil disturbances,
+
+ 
+
+ changes in laws or policies,
+
+ 
+
+ taxation,
+
+ 
+
+ 13
+
+ 
+
+ 
+
+ 
+
+ delays in obtaining or the inability to obtain necessary governmental permits,
+
+ 
+
+ governmental seizure of land or mining claims,
+
+ 
+
+ limitations on ownership,
+
+ 
+
+ limitations on the repatriation of earnings,
+
+ 
+
+ increased financial costs,
+
+ 
+
+ import and export regulations, including restrictions on the export of tellurium, gold and silver,
+and
+
+ 
+
+ foreign exchange controls.
+
+ 
+
+These risks may limit or disrupt our business,
+restrict the movement of our funds or impair contract rights or result in the taking of property by nationalization or expropriation
+without fair compensation.
+
+ 
+
+We are uncertain as to the termination
+and renewal of our concessions.
+
+ 
+
+Under Mexican law, mineral resources belong
+to the Mexican state and a concession from the Mexican federal government is required to explore for or exploit mineral reserves.
+Mexivada s mineral rights to the Property which we are acquiring from Mexivada derive from concessions granted by the Secretar a
+de Econom a, formerly known as Secretar a de Comercio y Fomento Industrial (the "Secretary of Economy"),
+through the General Bureau of Mines pursuant to the Ley Minera (the "Mining Law") and regulations thereunder.
+
+ 
+
+Our mining concessions may be terminated
+if the obligations of the concessionaires under the Mining Law, its regulations and related legal provisions are not satisfied.
+A concessionaire of a mining concession is obligated, among other things, to explore or exploit the relevant concession, to pay
+any relevant fees, to comply with all environmental and safety standards, and to provide information to the Secretary of Economy
+and permit inspections by the Secretary of Economy.
+
+ 
+
+Our property interests in Mexico
+are subject to risks from instability in that country.
+
+ 
+
+Our property interests in Mexico may be
+affected by additional foreign country risks associated with political or economic instability in that country. The risks with
+respect to Mexico specifically, include, but are not limited to: military repression, extreme fluctuations in currency exchange
+rates, criminal activity, lack of personal safety or ability to safeguard property, labor instability or militancy, mineral title
+irregularities and high rates of inflation. The effect of these factors cannot be accurately predicted but may adversely impact
+our proposed operations in Mexico.
+
+ 
+
+Increasing violence between
+the Mexican government and drug cartels may result in additional costs of doing business in Mexico.
+
+ 
+
+The state of Sonora where the La Viuda
+Concessions are located has not been adversely affected as a result of increasing violence between the Mexican government and drug
+cartels. We do not expect this violence to have any impact on our business operations. However, our management remains cognizant
+that the drug cartels may expand their operations or violence in areas in close proximity to our proposed operations. Should this
+occur, we may be required to hire security personnel and take other actions to protect our operations and personnel. Presently,
+we are not budgeting for increased security. However, if drug violence becomes a problem or, any other violence impacts our operations,
+the costs to protect our personnel and property will adversely impact our operations.
+
+ 
+
+We may be adversely affected by the
+imposition of more stringent environmental regulations in Mexico that would require us to spend additional funds.
+
+ 
+
+The mining and processing industries in
+Mexico are subject to federal and state laws and regulations (including certain industry technical standards) governing protection
+and remediation of the environment, mining operations, occupational health and safety and other matters. Mexican environmental
+regulations have become increasingly stringent over the last decade. This trend is likely to continue and may be influenced by
+the environmental agreement entered into by Mexico, the United States and Canada in connection with the North American Free Trade
+Agreement ("NAFTA "). Accordingly, although we believe that we will be able to comply with currently applicable
+environmental, mining and other laws and regulations, there can be no assurance that more stringent enforcement of existing laws
+and regulations or the adoption of additional laws and regulations would not have an adverse effect on our business, properties,
+results of operations, financial condition or prospects.
+
+ 
+
+ 14
+
+ 
+
+ 
+
+ 
+
+RISKS RELATED TO OUR COMMON STOCK
+
+ 
+
+There is not now, and there may not
+ever be, an active market for our common stock.
+
+ 
+
+There currently is a limited public market
+for our common stock. Further, although our common stock is currently quoted on the OTC Markets, trading of our common stock may
+be extremely sporadic. For example, several days may pass before any shares may be traded. As a result, an investor may find it
+difficult to dispose of, or to obtain accurate quotations of the price of, our common stock. Accordingly, investors must assume
+they may have to bear the economic risk of an investment in our common stock for an indefinite period of time. There can be no
+assurance that a more active market for our common stock will develop, or if one should develop, there is no assurance that it
+will be sustained. This severely limits the liquidity of our common stock, and would likely have a material adverse effect on the
+market price of our common stock and on our ability to raise additional capital.
+
+ 
+
+We cannot assure you that our common
+stock will become liquid or that it will be listed on a securities exchange.
+
+ 
+
+Until our common stock is listed on a national
+securities exchange such as the New York Stock Exchange or the Nasdaq National Market, we expect our common stock to remain eligible
+for quotation on the OTC Markets, or on another over-the-counter quotation system. In those venues, however, an investor may find
+it difficult to obtain accurate quotations as to the market value of our common stock. In addition, if we fail to meet the criteria
+set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons
+other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending
+or selling our common stock, which may further affect the liquidity of our common stock. This would also make it more difficult
+for us to raise capital.
+
+ 
+
+Our common stock is subject to the
+"penny stock" rules of the SEC and FINRA s sales practice requirements, and the trading market in our common
+stock is limited, which makes transactions in our common stock cumbersome and may reduce the value of an investment in the stock.
+
+ 
+
+The SEC has adopted Rule 15g-9 which establishes
+the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market
+price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any
+transaction involving a penny stock, unless exempt, the rules require:
+
+ 
+
+ that a broker or dealer approve a person s account for transactions in penny stocks; and
+
+ 
+
+ the broker or dealer receive from the investor a written agreement to the transaction, setting
+forth the identity and quantity of the penny stock to be purchased.
+
+ 
+
+In order
+to approve a person s account for transactions in penny stocks, the broker or dealer must:
+
+ 
+
+ obtain financial information and investment experience objectives of the person; and
+
+ 
+
+ make a reasonable determination that the transactions in penny stocks are suitable for that person
+and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions
+in penny stocks.
+
+ 
+
+The broker or dealer must also
+deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market,
+which, in highlight form sets forth:
+
+ 
+
+ the basis on which the broker or dealer made the suitability determination; and
+
+ 
+
+ 15
+
+ 
+
+ 
+
+ 
+
+ that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
+
+ 
+
+Generally, brokers may be less willing
+to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors
+to dispose of common stock and cause a decline in the market value of stock.
+
+ 
+
+Disclosure also has to be made about the
+risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both
+the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available
+to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price
+information for the penny stock held in the account and information on the limited market in penny stocks.
+
+ 
+
+In addition to the "penny stock"
+rules promulgated by the SEC, the Financial Industry Regulatory Authority (FINRA) has adopted rules that require that in recommending
+an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that
+customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make
+reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information.
+Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will
+not be suitable for at least some customers. FINRA s requirements make it more difficult for broker-dealers to recommend
+that their customers buy our common stock, which may limit your ability to buy and sell our stock.
+
+ 
+
+The price of our common stock may
+become volatile, which could lead to losses by investors and costly securities litigation.
+
+ 
+
+The trading price of our common stock is
+likely to be highly volatile and could fluctuate in response to factors such as:
+
+ 
+
+ actual or anticipated variations in our operating results;
+
+ 
+
+ announcements of developments by us, our strategic partners or our competitors;
+
+ 
+
+ announcements by us or our competitors of significant acquisitions, strategic partnerships, joint
+ventures or capital commitments;
+
+ 
+
+ adoption of new accounting standards affecting our industry;
+
+ 
+
+ additions or departures of key personnel;
+
+ 
+
+ sales of our common stock or other securities in the open market; and other events or factors,
+many of which are beyond our control.
+
+ 
+
+The stock market is subject to significant
+price and volume fluctuations. In the past, following periods of volatility in the market price of a company s securities,
+securities class action litigation has often been initiated against such company. Litigation initiated against us, whether or not
+successful, could result in substantial costs and diversion of our management s attention and resources, which could harm
+our business and financial condition.
+
+ 
+
+Compliance with U.S. securities laws,
+including the Sarbanes-Oxley Act, will be costly and time-consuming.
+
+ 
+
+We are a reporting company under U.S. securities
+laws and are obliged to comply with the provisions of applicable U.S. laws and regulations, including the Securities Act of 1933,
+as amended (the "Securities Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
+and the Sarbanes-Oxley Act of 2002 and the related rules of the SEC, and the rules and regulations of the relevant U.S. market,
+in each case, as amended from time to time. Preparing and filing annual and quarterly reports and other information with the SEC,
+furnishing audited reports to shareholders and other compliance with these rules and regulations will involve a material increase
+in regulatory, legal and accounting expenses and the attention of management, and there can be no assurance that we will be able
+to comply with the applicable regulations in a timely manner, if at all.
+
+ 
+
+ 16
+
+ 
+
+ 
+
+ 
+
+We do not anticipate dividends to
+be paid on our common stock, and investors may lose the entire amount of their investment.
+
+ 
+
+Cash dividends have never been declared
+or paid on our common stock, and we do not anticipate such a declaration or payment for the foreseeable future. We expect to use
+future earnings, if any, to fund business growth. Therefore, shareholders will not receive any funds absent a sale of their shares.
+We cannot assure shareholders of a positive return on their investment when they sell their shares, nor can we assure that shareholders
+will not lose the entire amount of their investment.
+
+ 
+
+If securities analysts do not initiate
+coverage or continue to cover our common stock or publish unfavorable research or reports about our business, this may have a negative
+impact on the market price of our common stock.
+
+ 
+
+The trading market for our common stock
+may be affected by, among other things, the research and reports that securities analysts publish about our business and the Company.
+We do not have any control over these analysts. There is no guarantee that securities analysts will cover our common stock. If
+securities analysts do not cover our common stock, the lack of research coverage may adversely affect its market price. If we are
+covered by securities analysts, and our stock is the subject of an unfavorable report, our stock price and trading volume would
+likely decline. If one or more of these analysts ceases to cover the Company or fails to publish regular reports on the Company,
+we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.
+
+ 
+
+State Blue Sky registration - potential
+limitations on resale of the shares.
+
+ 
+
+The holders of the shares of our common
+stock and persons, who desire to purchase the shares in any trading market that might develop in the future, should be aware that
+there may be significant state law restrictions upon the ability of investors to resell the securities. Accordingly, investors
+should consider the secondary market for our securities to be a limited one. It is the intention of our management to seek coverage
+and publication of information regarding the Company in an accepted publication which permits a "manuals exemption."
+This manuals exemption permits a security to be sold by shareholders in a particular state without being registered if the company
+issuing the security has a listing for that security in a securities manual recognized by that state. The listing entry must contain
+(i) the names of issuers, officers, and directors, (ii) an issuer s balance sheet, and (iii) a profit and loss statement
+for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations. The principal accepted
+manuals are those published by Standard and Poor s, and Mergent, Inc. Many states expressly recognize these manuals. A smaller
+number of states declare that they recognize securities manuals, but do not specify the recognized manuals. Among others, the following
+states do not have any provisions and, therefore, do not expressly recognize the manuals exemption: Alabama, California, Georgia,
+Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont, and Wisconsin.
+
+ 
+
+You may experience dilution of your
+ownership interests because of the future issuance of additional shares of our common stock.
+
+ 
+
+ In the future, we may issue our authorized
+but previously unissued equity securities, resulting in the dilution of the ownership interests of our present shareholders and
+the purchasers of our common stock offered hereby. We are currently authorized to issue an aggregate of 322,000,000 shares of
+capital stock, par value $0.001 per share, consisting of 300,000,000 shares of common stock and 22,000,000 shares of preferred
+stock, with the preferences and rights determined by our Board of Directors. As of May 9, 2013, there were 115,201,260 shares
+of our common stock and 22,000,000 shares of our preferred stock outstanding. As of May 9, 2013, there were 22,000,000 shares
+of our common stock reserved for issuance upon conversion of our Series A Preferred Stock (defined below), 16,000,000 shares of
+our common stock reserved for issuance under our 2007 Stock Option Plan (the " 2007 Plan "), 2,125,000 shares
+reserved for issuance upon the exercise of warrants issued in March 2012 (the "March 2012 Warrants"), and 39,546,194
+shares reserved for issuance upon the exercise of warrants issued from December 2010 through July 2011 (the "2010/2011
+Warrants"). 
+
+ 
+
+ 17
+
+ 
+
+ 
+
+ 
+
+Any future issuance of our equity or equity-backed
+securities may dilute then-current shareholders ownership percentages and could also result in a decrease in the fair market
+value of our equity securities, because our assets would be owned by a larger pool of outstanding equity. As described above, we
+may need to raise additional capital through public or private offerings of our common or preferred stock or other securities that
+are convertible into or exercisable for our common or preferred stock. We may also issue such securities in connection with hiring
+or retaining employees and consultants (including stock options issued under our equity incentive plans), as payment to providers
+of goods and services, in connection with future acquisitions or for other business purposes. Our Board of Directors may at any
+time authorize the issuance of additional common or preferred stock without common shareholder approval, subject only to the total
+number of authorized common and preferred shares set forth in our certificate of incorporation. The terms of equity securities
+issued by us in future transactions may be more favorable to new investors, and may include dividend and/or liquidation preferences,
+superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect. Also,
+the future issuance of any such additional shares of common or preferred stock or other securities may create downward pressure
+on the trading price of the common stock. There can be no assurance that any such future issuances will not be at a price (or exercise
+prices) below the price at which shares of the common stock are then traded.
+
+ 
+
+We may obtain additional capital
+through the issuance of preferred stock, which may limit your rights as a holder of our common stock.
+
+ 
+
+Without any shareholder vote or action,
+our Board of Directors may designate and approve for issuance additional shares of our preferred stock. The terms of any preferred
+stock may include priority claims to assets and dividends and special voting rights which could limit the rights of the holders
+of our common stock. The designation and issuance of preferred stock favorable to current management or shareholders could make
+any possible takeover of the Company or the removal of our management more difficult.
+
+ 
+
+Any failure to maintain effective
+internal control over our financial reporting could materially adversely affect us.
+
+ 
+
+Section 404 of the Sarbanes-Oxley Act of
+2002 will require us to include in our annual reports on Form 10-K, an assessment by management of the effectiveness of our internal
+control over financial reporting. While we intend to diligently and thoroughly document, review, test and improve our internal
+control over financial reporting in order to ensure compliance with Section 404, management may not be able to conclude that our
+internal control over financial reporting is effective. This could result in a loss of investor confidence in the reliability of
+our financial statements, which in turn could negatively impact the price of our common stock.
+
+ 
+
+In particular, we must perform system and
+process evaluation and testing of our internal control over financial reporting to allow management and our independent registered
+public accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section
+404. Our compliance with Section 404 will require that we incur substantial accounting expense and expend significant management
+efforts. We currently do not have an internal audit group, and we will need to retain the services of additional accounting and
+financial staff or consultants with appropriate public company experience and technical accounting knowledge to satisfy the ongoing
+requirements of Section 404. We intend to review the effectiveness of our internal controls and procedures and make any changes
+management determines appropriate, including to achieve compliance with Section 404 by the date on which we are required to so
+comply.
+
+ 
+
+Any significant deficiencies in our control
+systems may affect our ability to comply with SEC reporting requirements and any applicable listing standards or cause our financial
+statements to contain material misstatements, which could negatively affect the market price and trading liquidity of our common
+stock and cause investors to lose confidence in our reported financial information, as well as subject us to civil or criminal
+investigations and penalties.
+
+ 
+
+ 18
+
+ 
+
+ 
+
+ 
+
+SELLING SHAREHOLDERS
+
+ 
+
+The selling stockholders named in this
+prospectus are offering 61,623,782 shares of the common stock offered through this prospectus. All of these shares were
+acquired from us by the selling stockholders in private placement offerings that were exempt from registration pursuant
+to Section 4(2) and Regulation D as promulgated by the SEC under the Securities Act of 1933.
+
+ 
+
+ The following table sets forth
+the name of each selling shareholder, the number of shares of our common stock beneficially owned by such shareholder before
+this offering, the number of shares to be offered for such shareholder s account and the number and (if one percent or
+more) the percentage of the class to be beneficially owned by such shareholder after completion of the offering. The number
+of shares owned are those beneficially owned, as determined under the rules of the Securities and Exchange Commission, and
+such information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial
+ownership includes any shares of our common stock as to which a person has sole or shared voting power or investment power
+and any shares of common stock which the person has the right to acquire within 60 days after the date of this prospectus
+through the exercise of any option, warrant or right, through conversion of any security or pursuant to the automatic
+termination of a power of attorney or revocation of a trust, discretionary account or similar arrangement, and such shares
+are deemed to be beneficially owned and outstanding for computing the share ownership and percentage of the person holding
+such options, warrants or other rights, but are not deemed outstanding for computing the percentage of any other person.
+Beneficial ownership percentages are calculated based on 154,747,454 shares of common stock outstanding, including
+115,201,260 shares of our common stock issued and outstanding as of May 9, 2013 and 39,546,194 shares of common stock issuable
+upon the exercise of outstanding warrants. 
+
+ 
+
+Unless otherwise set forth below, based
+upon the information furnished to us, (a) the persons and entities named in the table have sole voting and sole investment power
+with respect to the shares set forth opposite the selling shareholder s name, subject to community property laws, where applicable,
+(b) no selling shareholder had any position, office or other material relationship within the past three years, with us or with
+any of our predecessors or affiliates, and (c) no selling shareholder is a broker-dealer. Selling shareholders who are affiliates
+of a broker-dealer are indicated by footnote. We have been advised that these affiliates of broker-dealers purchased our common
+stock and warrants in the ordinary course of business, not for resale, and at the time of purchase, did not have any agreements
+or understandings, directly or indirectly, with any person to distribute the related common stock.
+
+ 
+
+ Selling Stockholder 
+ Shares of
+ Common Stock
+ Beneficially
+ Owned Before
+ Offering 
+ Shares of
+ Common
+ Stock Being
+ Offered (a) 
+ Shares of
+ Common Stock
+ Beneficially
+ Owned Upon
+ Completion of the 
+ Offering (b) 
+ Percentage
+ of Common
+ Stock
+ Beneficially
+ Owned
+ Upon
+ Completion
+ of the 
+ Offering (c) 
+
+ 
+ 
+ 
+ 
+ 
+
+ 321 Gold Ltd (1) 
+ 3,520,833 
+ 1,520,833 
+ 2,000,000 
+ 1.29%
+
+ Alcone Services SA (2) 
+ 1,477,577 
+ 743,884 
+ 733,694 
+ * 
+
+ Nelson Barry Family Trust (3) 
+ 1,208,333 
+ 608,333 
+ 600,000 
+ * 
+
+ Baybak Family Partners Ltd (4) 
+ 15,027,364 
+ 6,819,341 
+ 8,208,023 
+ 5.30%
+
+ Michael and Betsy Brauser TBE (5) 
+ 6,041,667 
+ 3,041,667 
+ 3,000,000 
+ 1.94%
+
+ Brio Capital L.P. (6) 
+ 6,041,667 
+ 3,041,667 
+ 3,000,000 
+ 1.94%
+
+ Romualdo Wilson Cancado (7) 
+ 1,510,417 
+ 760,417 
+ 750,000 
+ * 
+
+ Dharma Fund PCC Limited (8) 
+ 6,041,667 
+ 3,041,667 
+ 3,000,000 
+ 1.94%
+
+ Dragon Equities Limited (9) 
+ 7,552,083 
+ 3,802,083 
+ 3,750,000 
+ 2.42%
+
+ E and P Fund Ltd. (10) 
+ 6,041,667 
+ 3,041,667 
+ 3,000,000 
+ 1.94%
+
+ David Elliot (11) 
+ 1,510,417 
+ 760,417 
+ 750,000 
+ * 
+
+ Fitel Nominees Limited A/C (12) 
+ 8,005,208 
+ 4,030,208 
+ 3,975,000 
+ 2.57%
+
+ General Research GMBH (13) 
+ 1,208,333 
+ 608,333 
+ 600,000 
+ * 
+
+ 
+
+ 19
+
+ 
+
+ 
+
+ 
+
+ Selling Stockholder 
+ Shares of
+ Common Stock
+ Beneficially
+ Owned Before
+ Offering 
+ Shares of
+ Common
+ Stock Being
+ Offered (a) 
+ Shares of
+ Common Stock
+ Beneficially
+ Owned Upon
+ Completion of the 
+ Offering (b) 
+ Percentage
+ of Common
+ Stock
+ Beneficially
+ Owned
+ Upon
+ Completion
+ of the 
+ Offering (c) 
+
+ Global Productions Group, Inc. (14) 
+ 1,510,417 
+ 760,417 
+ 750,000 
+ * 
+
+ Gottbetter & Partners, LLP (15) 
+ 15,027,364 
+ 6,819,341 
+ 8,208,023 
+ 5.30%
+
+ GRQ Consultants, Inc. 401K (16) 
+ 14,006,531 
+ 5,798,508 
+ 8,208,023 
+ 5.30%
+
+ Gregory Hall (17) 
+ 1,510,417 
+ 760,417 
+ 750,000 
+ * 
+
+ Holmes Revocable Trust (18) 
+ 3,020,833 
+ 1,520,833 
+ 1,500,000 
+ * 
+
+ Lenox Trading Group, LLC (19) 
+ 3,020,833 
+ 1,520,833 
+ 1,500,000 
+ * 
+
+ Mursi Labs SL (20) 
+ 2,416,667 
+ 1,216,667 
+ 1,200,000 
+ * 
+
+ Sam Quinn (21) 
+ 3,020,833 
+ 1,520,833 
+ 1,500,000 
+ * 
+
+ Richard Redfern (22) 
+ 1,510,417 
+ 760,417 
+ 750,000 
+ * 
+
+ Sandor Capital Master Fund, L.P. (23) 
+ 12,083,333 
+ 6,083,333 
+ 6,000,000 
+ 3.88%
+
+ Fuad Sillem (24) 
+ 1,510,417 
+ 760,417 
+ 750,000 
+ * 
+
+ Triumph Small Cap Fund, Inc. (25) 
+ 3,020,833 
+ 1,520,833 
+ 1,500,000 
+ * 
+
+ Andrew Williams (26) 
+ 1,510,417 
+ 760,417 
+ 750,000 
+ * 
+
+ Totals 
+ 128,356,545 
+ 61,623,782 
+ 66,732,763 
+ 
+
+ 
+
+* Less than 1%
+
+ Broker-Dealer or Affiliate of a Broker Dealer
+
+ 
+
+(a)An aggregate of 39,546,194 of the shares of common stock being offered by the selling stockholders
+are issuable upon exercise of outstanding warrants.
+
+ 
+
+(b)Assumes all of the shares of common stock to be registered on behalf of the selling stockholders
+on the registration statement of which this prospectus is a part, including all shares of common stock underlying warrants held
+by the selling stockholders, are sold in the offering and that shares of common stock beneficially owned by such selling stockholders
+but not being registered by this prospectus are not sold.
+
+ 
+
+ (c) Percentages are based on 154,747,454
+ shares outstanding, including 115,201,260 shares of our common stock
+ issued and outstanding as of May 9, 2013 and 39,546,194 shares issuable
+ upon the exercise of warrants described above and which may be sold
+ by the selling stockholders in the offering. Beneficial ownership is
+ determined in accordance with the rules of the SEC and generally includes
+ voting or investment power with respect to securities. Shares of common
+ stock subject to options or warrants currently exercisable or convertible,
+ or exercisable or convertible within 60 days of May 9, 2013 are deemed
+ outstanding for computing the percentage of the person holding such
+ option or warrant but are not deemed outstanding for computing the
+ percentage of any other person; provided, however, that
+ the 39,546,194 shares that may be sold by the selling stockholders
+ in the offering which are issuable upon exercise of warrants described
+ above are deemed outstanding upon completion of the offering. The
+ 100,000,000 shares that may be sold by us are not deemed outstanding
+ upon completion of the offering because there is no minimum number
+ of these shares that we must sell and no guarantee that we will sell
+ any of these shares. 
+
+ 
+
+(1)Includes 1,020,833 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Robert Moriarty has the power to vote and dispose of the shares being registered on behalf of 321
+Gold Ltd.
+
+ 
+
+(2)Includes 499,319 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Moises Agami has the power to vote and dispose of the shares being registered on behalf of Alcone
+Services SA.
+
+ 
+
+ 20
+
+ 
+
+ 
+
+ 
+
+(3)Includes 408,333 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Nelson C. and Jeanie M. Barry have the power to vote and dispose of the shares being registered
+on behalf of Nelson Barry Family Trust.
+
+ 
+
+(4)Includes 4,083,333 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Michael Baybak has the power to vote and dispose of the shares being registered on behalf of Baybak
+Family Partners, Ltd.
+
+ 
+
+(5)Includes 2,041,667 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Michael and Betsy Brauser have the power to vote and dispose of the shares being registered on behalf
+of Michael and Betsy Brauser TBE.
+
+ 
+
+(6)Includes 2,041,667 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Shaye Hirsch has the power to vote and dispose of the shares being registered on behalf of Brio
+Capital L.P.
+
+ 
+
+(7)Includes 510,417 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days.
+
+ 
+
+(8)Includes 2,041,667 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Jean-Francois Campos has the power to vote and dispose of the shares being registered on behalf
+of Dharma Fund PCC Limited.
+
+ 
+
+(9)Includes 2,552,083 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Fuad Sillam has the power to vote and dispose of the shares being registered on behalf of Dragon
+Equities Limited.
+
+ 
+
+(10)Includes 2,041,667 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Christian Naville and Oliver Couriol have the power to vote and dispose of the shares being registered
+on behalf of E and P Fund Ltd.
+
+ 
+
+(11)Includes 510,417 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days.
+
+ 
+
+(12)Includes 2,705,208 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. D.M. Barrow has the power to vote and dispose of the shares being registered on behalf of Fitel
+Nominees Limited A/C C054696.
+
+ 
+
+(13)Includes 408,333 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Dr. Georg Hochwimmer has the power to vote and dispose of the shares being registered on behalf
+of General Research GMBH.
+
+ 
+
+(14)Includes 510,417 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Anthony Thompson has the power to vote and dispose of the shares being registered on behalf of Global
+Productions Group, Inc.
+
+ 
+
+(15)Includes 4,083,333 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Adam S. Gottbetter has the power to vote and dispose of the shares being registered on behalf of
+Gottbetter & Partners, LLP.
+
+ 
+
+(16)Includes 3,062,500 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Barry Honig has the power to vote and dispose of the shares being registered on behalf of GRQ Consultants,
+Inc. 401K.
+
+ 
+
+ 21
+
+ 
+
+ 
+
+ 
+
+(17)Includes 510,417 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days.
+
+ 
+
+(18)Includes 1,020,833 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Gordon L. Holmes has the power to vote and dispose of the shares being registered on behalf of Holmes
+Revocable Trust.
+
+ 
+
+(19)Includes 1,020,833 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. David Greenberg has the power to vote and dispose of the shares being registered on behalf of Lenox
+Trading Group, LLC.
+
+ 
+
+(20)Includes 816,667 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Burta Frias has the power to vote and dispose of the shares being registered on behalf of Mursi
+Labs SL.
+
+ 
+
+(21)Includes 1,020,833 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days.
+
+ 
+
+(22)Includes 510,417 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days.
+
+ 
+
+(23)Includes 4,083,333 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. John S. Lemak has the power to vote and dispose of the shares being registered on behalf of Sandor
+Capital Master Fund, L.P.
+
+ 
+
+(24)Includes 510,417 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days.
+
+ 
+
+(25)Includes 1,020,833 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days. Kenneth Orr has the power to vote and dispose of the shares being registered on behalf of Triumph
+Small Cap Fund, Inc.
+
+ 
+
+(26)Includes 510,417 shares of common stock issuable upon exercise of warrants currently exercisable
+or exercisable within 60 days.
+
+ 
+
+USE OF PROCEEDS 
+
+ 
+
+We will not receive proceeds from the sale
+of common stock by selling shareholders under this prospectus. We could, however, receive proceeds from the selling stockholders
+if and when they exercise warrants the common stock underlying which is covered by this prospectus. We would use any proceeds received
+for working capital and general corporate purposes. The warrant holders may exercise their warrants at any time until
+their expiration, by cash payment of the exercise price or, for certain warrants and under certain circumstances, by "cashless
+exercise," as further described below under "Description of Securities." If the warrants are exercised
+in full, the estimated proceeds from such exercise would be up to $1,186,386 if all of the warrants are exercised through
+the payment of cash to the Company (assuming all 39,546,194 warrants exercised at $0.03 per share, the lowest exercise price as
+revised effective December 19, 2012). Because the warrant holders may exercise the warrants in their own discretion,
+if at all, we cannot plan on specific uses of proceeds beyond application of proceeds to general corporate purposes. We
+have agreed to bear the expenses (other than any underwriting discounts or commissions or agent s commissions) in connection
+with the registration of the common stock being offered hereby by the selling shareholders, but all selling and other expenses
+incurred by the selling shareholders will be borne by them.
+
+ 
+
+We are offering 100,000,000 shares of our
+common pursuant to this prospectus on a self-underwritten, best-efforts basis. The offering price per share is $0.005.
+
+ 
+
+ 22
+
+ 
+
+ 
+
+ 
+
+The following
+table sets forth the uses of proceeds assuming the sale of 25%
+($125,000), 50% ($250,000), 75% ($375,000) and 100% ($500,000), respectively, of the securities offered for sale by us.
+Because there is no minimum number of shares of our common stock that we must sell and no guarantee that we will
+sell any of these shares, this table reflects only estimates of net proceeds from the sale by us of our common stock in this
+offering.
+
+ 
+
+ 
+ If 25% of Shares
+ Sold 
+ If 50% of Shares
+ Sold 
+ If 75% of Shares
+ Sold 
+ If 100% of Shares
+ Sold 
+
+ GROSS PROCEEDS FROM THIS OFFERING 
+ $125,000 
+ $250,000 
+ $375,000 
+ $500,000 
+
+ 
+ 
+ 
+ 
+ 
+
+ EXPENSES RELATED TO THIS OFFERING - Estimated 
+ $66,000 
+ $66,000 
+ $66,000 
+ $66,000 
+
+ 
+ 
+ 
+ 
+ 
+
+ NET PROCEEDS FROM THIS OFFERING 
+ $59,000 
+ $184,000 
+ $309,000 
+ $434,000 
+
+ 
+ 
+ 
+ 
+ 
+
+ Phase I Drilling Program 
+ $- 
+ $- 
+ $309,000 
+ $350,000 
+
+ 
+ 
+ 
+ 
+ 
+
+ Remediation Costs Reserve 
+ $15,000 
+ $15,000 
+ $- 
+ $80,000 
+
+ 
+ 
+ 
+ 
+ 
+
+ Corporate Overhead 
+ $44,000 
+ $169,000 
+ $- 
+ $4,000 
+
+ 
+
+Actual costs may differ from our estimated
+amounts. Our estimated expenses of this offering reflect the Part II, item 13 expenses we have listed in the registration statement
+of which this prospectus is a part.
+
+ 
+
+We anticipate that that we will need approximately
+$350,000 for our 2013 Phase I drilling program at the La Viuda Concessions. If we sell at least 75% of the 100,000,000 shares we
+are offering pursuant to this prospectus, we will use the net proceeds of our offering for our drilling program with any excess
+funds (at the 100% level only) to be used for corporate overhead expenses. At the 75% level, no net proceeds of this offering would
+be available for corporate overhead or remediation costs and at both the 75% and 100% levels, net corporate overhead expenses,
+and at the 75% level, remediation costs as well, would be paid out of existing capital reserves. Should we sell less than 75% of
+the 100,000,000 shares we are offering pursuant to this prospectus, we will not have sufficient funds to begin our 2013 Phase I
+drilling program and we will use any net proceeds for corporate overhead purposes, with a reserve for remediation costs.
+
+ 
+
+We are calculating a monthly overhead cost,
+at a reduced level of operations, of approximately $25,000 per month. Under the 25% scenario we would have sufficient net funds
+from the offering to support this overhead burn rate for approximately two months, while under the 50% scenario, we would have
+overhead funds from the offering sufficient for approximately seven months. We estimate environmental remediation costs of $15,000
+if we are forced due to lack of funds to terminate our AuroTellurio exploration project prior to beginning our Phase I drilling
+program and $80,000 if we determine to terminate our exploration project after we complete the Phase I drilling program.
+
+ 
+
+If we net less than $350,000 from the sale
+of our shares in the offering, we will be required to raise additional funds to meet the minimum estimated $350,000 cost requirements
+of our 2013 phase I Drilling Program and to cover overhead costs. There can be no assurances that we will be able to raise these
+funds at all, or at a reasonable cost to us. If we are not able to raise these funds, we may have to scale back or curtail entirely
+our Phase I drilling program.
+
+ 
+
+We may invest the net proceeds from the
+sale of our shares temporarily in our discretion in money market accounts bearing interest at prevailing rates until allocated
+to the use of proceeds specified herein. 
+
+ 
+
+There is no minimum number of shares
+of our common stock that we must sell and no guarantee that we will sell any of our shares. 
+
+ 
+
+ 23
+
+ 
+
+ 
+
+ 
+
+DETERMINATION OF OFFERING PRICE
+
+ 
+
+There currently is a limited public market
+for our common stock. The selling shareholders will determine at what price they may sell the offered shares, and such sales may
+be made at prevailing market prices or at privately negotiated prices. See "Plan of Distribution" for more information.
+The offering price of the 100,000,000 shares being offered by us was derived from the "closing price" of the shares
+reported by the OTCBB quotation system on the date immediately preceding the date of this Prospectus.
+
+ 
+
+DILUTION
+
+ 
+
+If you invest
+in our common stock, your interest will be diluted to the extent of the difference between the price per share of our common stock
+and the net tangible book value per share of our common stock upon the completion of the sale of the 100,000,000 shares of our
+common stock pursuant to this prospectus.
+
+ 
+
+ Our
+net tangible book value as of January 31, 2013[1], was ($268,196) or ($0.002) per share of common stock. Net tangible
+book value per share is determined by dividing tangible net assets (total tangible assets less total liabilities) by the aggregate
+number of shares of common stock outstanding. Tangible assets represent total assets excluding intangible assets. Dilution in
+net tangible book value per share represents the difference between the amount per share paid by purchasers of shares of our common
+stock pursuant to this prospectus and the net tangible book value per share of our common stock immediately afterwards. After
+giving effect to our sale of common stock through this prospectus assuming an offering price of $0.005 per share, assuming
+all of the 100,000,000 shares sold and after deducting estimated offering expenses of $67,278,
+our pro forma net tangible book value at January 31, 2013 would have been $164,526, or $0.001 per share. This represents
+an immediate increase in net tangible book value of $0.003 per share to our existing stockholders and an immediate dilution
+of $0.004 per share to new stockholders purchasing shares of common stock through this prospectus. The following table illustrates
+this dilution per share[2]: 
+
+ 
+
+ Prospectus price per share 
+ 
+ $ 0.005 
+
+ Pro forma net tangible book value per share as of January 31, 2013 prior to offering 
+ $ (0.002 ) 
+ 
+
+ Increase in pro forma net tangible book value per share attributable to New investors purchasing
+ shares through this prospectus 
+ $ 0.003 
+ 
+
+ 
+ 
+ 
+
+ Pro forma net tangible book value per share after the sale of all of the 100,000,000 shares
+ post offering 
+ 
+ $ 0.001 
+
+ 
+ 
+ 
+
+ Dilution in pro forma net tangible book value per share to new investors 
+ 
+ $ 0.004 
+
+ 
+
+ If all of the outstanding warrants
+were deemed to have been exercised as at January 31, 2013, assuming an exercise price of $0.03
+per share for 39,546,195 warrants and $0.06 per share for 2,125,000 warrants: 
+
+ 
+
+ pro
+ forma net tangible book value per share after sale of all
+ of the shares by us under this prospectus (after deducting
+ estimated offering expenses of $67,278) would increase from
+ ($0.002) to $0.006, resulting in an immediate increase in
+ price to new investors of $0.008 per share; and 
+
+ 
+
+ 
+
+ [1] The calculations set forth above are
+unaudited, pro forma calculations that have been derived from our audited financial statements as of January 31, 2013, as filed
+with the SEC on our Form 10-K on May 7, 2013. 
+
+ 
+
+[2]. The above calculations
+exclude shares of common stock issuable upon the exercise or conversion of presently outstanding warrants and options.
+
+ 
+
+ 24
+
+ 
+
+ 
+
+ 
+
+ our existing stockholders would own approximately 61% and new investors,
+including the Agent(s), would own approximately 39% of the total number of shares of our common stock outstanding upon completion
+of sale of all of the shares by us under this prospectus.
+
+ 
+
+The shares of common stock to be sold by
+the selling stockholders are shares that are currently issued and outstanding. Accordingly, there will be no dilution
+to our existing stockholders from the sale of these shares.
+
+ 
+
+CAPITALIZATION
+
+ 
+
+ The following table
+sets forth our capitalization as of January 31, 2013 (a) on an
+actual basis and our capitalization on a pro forma as adjusted basis after giving effect to 
+
+ 
+
+ the sale of 100,000,000 shares of our common stock to be sold pursuant to this prospectus, and
+the application of net proceeds received therefrom (b). We are not required to sell a minimum number of these
+shares and there can be no guarantee that we will sell any of them.
+
+ 
+
+You should read this table in conjunction
+with the financial statements and the accompanying notes thereto attached hereto as Exhibits to this prospectus.
+
+ 
+
+ 
+ January 31, 2013 
+
+ 
+ Actual 
+ Pro Forma As 
+
+ Adjusted 
+
+ Stockholders equity: 
+ 
+ 
+
+ 
+ 
+ 
+
+ Preferred stock, undesignated, par value $0.001 per share, 22,000,000 shares authorized;
+ 22,000,000 shares issued and outstanding (actual); 22,000,000 pro forma (as adjusted) 
+ $ 22,000 
+ $ 22,000 
+
+ 
+ 
+ 
+
+ Common stock; par value $0.001 per share; 300,000,000 shares authorized; 115,201,260
+ issued and outstanding (actual); 215,201,260 pro forma (as adjusted)1 
+ $ 115,201 
+ $ 215,201 
+
+ 
+ 
+ 
+
+ Additional paid-in capital 
+ $ 2,534,588 
+ $ 2,867,310 (c) 
+
+ 
+ 
+ 
+
+ Accumulated deficit 
+ $ (2,832,452 ) 
+ $ (2,832,452 ) 
+
+ 
+ 
+ 
+
+ Total stockholders equity 
+ $ (160,663 ) 
+ $ 272,059 
+
+ 
+
+ 1 The adjusted number of
+ shares outstanding as of January 31, 2013 reflects
+ the sale of 100,000,000 shares of our common stock pursuant
+ to this prospectus. There is no minimum number of
+ shares of our common stock that we must sell and no guarantee
+ that we will sell any of these shares. 
+
+ 
+
+ (a) The calculations
+set forth in the table above are unaudited, pro forma calculations that have been derived from our unaudited financial statements
+as of January 31, 2013, as filed with our Form 10-K on May 7, 2013. 
+
+ 
+
+ (b) The above table
+does not give effect to the issuance of 41,671,195 shares of our common stock underlying the outstanding warrants and does not
+include 16,000,000 shares of our common stock reserved for issuance under the 2007 Plan. 
+
+ 
+
+ (c) Additional
+paid-in capital increased by the proceeds of issuance of 100,000,000 shares, net of estimated offering expenses of $67,278. 
+
+ 
+
+ 25
+
+ 
+
+ 
+
+ 
+
+MARKET FOR COMMON EQUITYAND RELATED STOCKHOLDER
+MATTERS
+
+ 
+
+Since February 26, 2007, our common stock
+has been listed for quotation on the OTC Markets, originally under the symbol "ARBU." In anticipation of the Cromwell
+Merger in 2007, we changed our name, and our symbol changed to "CWLU." Subsequent to the Cromwell Merger unwinding,
+we changed our name again and our symbol then changed to "USUI." Following our name change in August 2009 to California
+Gold Corp., our symbol changed to "CLGL."
+
+ 
+
+The following table sets forth the high
+and low closing bid prices for our common stock for the fiscal quarters indicated as reported on the OTC Markets. The quotations
+reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. Our common
+stock is thinly traded and, thus, pricing of our common stock on the OTC Markets does not necessarily represent its fair market
+value.
+
+ 
+
+ Period 
+ High 
+ Low 
+
+ 
+ 
+ 
+
+ Fiscal Year Ending January 31, 2011 
+ 
+ 
+
+ First Quarter 
+ $0.02 
+ $0.02 
+
+ Second Quarter 
+ 0.03 
+ 0.01 
+
+ Third Quarter 
+ 0.05 
+ 0.01 
+
+ Fourth Quarter 
+ 0.11 
+ 0.04 
+
+ 
+ 
+ 
+
+ Fiscal Year Ending January 31, 2012 
+ 
+ 
+
+ First Quarter 
+ $0.115 
+ $0.035 
+
+ Second Quarter 
+ 0.0869 
+ 0.045 
+
+ Third Quarter 
+ 0.07 
+ 0.042 
+
+ Fourth Quarter 
+ 0.04 
+ 0.015 
+
+ 
+ 
+ 
+
+ Fiscal Year Ending January 31, 2013 
+ 
+ 
+
+ First Quarter 
+ $0.093 
+ $0.02 
+
+ Second Quarter 
+ $0.027 
+ $0.011 
+
+ Third Quarter 
+ $0.0275 
+ $0.008 
+
+ Fourth Quarter 
+ $0.0170 
+ $0.005 
+
+ 
+
+ On May 9, 2013, there were 115,201,260 shares
+of our common stock outstanding, 22,000,000 shares of our Series A Preferred Stock outstanding, warrants outstanding exercisable
+for a total of 41,671,194 shares of our common stock and options outstanding exercisable for a total of 10,000,000 shares of our
+common stock 
+
+ 
+
+Dividends
+
+ 
+
+We have never declared any cash dividends
+with respect to our common stock. Future payment of dividends is within the discretion of our Board of Directors and will depend
+on our earnings, capital requirements, financial condition and other relevant factors. Other than provisions of the Nevada Revised
+Statutes requiring post-dividend solvency according to certain measures, there are no material restrictions limiting, or that are
+likely to limit, our ability to pay dividends on our common stock. Nonetheless, we presently intend to retain future earnings,
+if any, for use in our business and have no present intention to pay cash dividends on our common stock.
+
+ 
+
+Securities Authorized For Issuance Under
+Equity Compensation Plans
+
+ 
+
+In June 2007, we adopted our 2007 Plan.
+ The 2007 Plan was approved by our Board of Directors and the holders of a majority of the outstanding shares of our common
+stock. In December 2010, the number of shares reserved for issuance under the 2007 Plan was increased by the Board from 3,000,000
+shares to 16,000,000 shares of common stock, subject to adjustment under certain circumstances. This increase was approved
+by our then-majority stockholder. If an incentive award granted under the 2007 Plan expires, terminates, is unexercised or
+is forfeited, or if any shares are surrendered to us in connection with an incentive award, the shares subject to such award and
+the surrendered shares will become available for further awards under the 2007 Plan.
+
+ 
+
+ 26
+
+ 
+
+ 
+
+ 
+
+As of the date of this prospectus, we have
+outstanding 10,000,000 nonqualified stock options under the 2007 Plan, with a weighted average exercise price of $0.09 per share. 
+For all option grants, our Board of Directors has set (or will set) the exercise price of the options at a price equal to or greater
+than the fair market value of our common stock on the date of grant of the options. Of the outstanding options under
+the 2007 Plan, 6,666,667 have vested. All 6,666,667 of such options vested immediately on the date of grant, having
+a 10 year term. Another 3,333,333 outstanding options were included in grants under the 2007 Plan that will have vested
+on the second anniversary of the date of grants. 
+
+ 
+
+We have not maintained any other equity
+compensation plans since our inception.
+
+ 
+
+ The following table provides information
+as of May 9, 2013, with respect to the shares of common stock that may be issued under our existing equity compensation plans: 
+
+ 
+
+ Plan Category 
+ Number of securities to
+ be
+ issued upon exercise of
+ outstanding options,
+ warrants and rights 
+ Weighted-average
+ exercise price of
+ outstanding options,
+ warrants and rights 
+ Number of securities
+ remaining available for
+ future issuance under equity
+ compensation plans
+ (excluding securities reflected
+ in column (a)) 
+
+ 
+ (a) 
+ (b) 
+ (c) 
+
+ Equity compensation plans approved by security holders (1) 
+ 10,000,000 
+ $0.09 
+ 6,000,000 
+
+ Equity compensation plans not approved by security holders 
+ - 
+ - 
+ - 
+
+ Total 
+ 10,000,000 
+ $0.09 
+ 6,000,000 
+
+ 
+
+Holders
+
+ 
+
+ On May 9, 2013, we had 115,201,260 shares
+of our common stock issued and outstanding held by 109 shareholders of record, and 22,000,000 shares of our Series A Preferred
+Stock held by three (3) shareholders. 
+
+ 
+
+MANAGEMENT S DISCUSSION AND ANALYSIS
+OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
+
+ 
+
+ The following discussion and analysis
+of financial condition and results of operations should be read in conjunction with the financial information included elsewhere
+in this prospectus, including our audited financial statements for the years ended January 31, 2013 and 2012 and the related notes.
+References in this Management s Discussion and Analysis of Financial Condition and Results of Operations to "California
+Gold," "us," "we," "our," and similar terms refer to California Gold Corp., a Nevada
+corporation. This discussion includes forward-looking statements, as that term is defined in the federal securities laws, based
+upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations and intentions. Actual
+results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result
+of a number of factors. Words such as "anticipate," "estimate," "plan," "continuing,"
+"ongoing," "expect," "believe," "intend," "may," "will,"
+"should," "could," and similar expressions are used to identify forward-looking statements. 
+
+ 
+
+We caution you that these statements
+are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many
+of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements
+are based. See "Note Regarding Forward-Looking Statements." Our actual results could differ materially from those anticipated
+in the forward-looking statements as a result of certain factors discussed in "Risk Factors" and elsewhere in this
+prospectus. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations
+and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements
+could differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly
+update or revise any forward-looking statements, whether from new information, future events or otherwise.
+
+ 
+
+ 27
+
+ 
+
+ 
+
+ 
+
+ Overview 
+
+ 
+
+California Gold is an exploration stage
+mining company whose principal focus is the identification, acquisition, and development of rare and precious metals mining properties
+in the Americas.
+
+ 
+
+Our primary focus is on the exploration
+and development of the La Viuda Concessions south of Moctezuma, Sonora, Mexico, where, we believe, deposits of tellurium, gold
+and silver may exist in economically minable quantities. We are still in the exploration stage and have not generated any revenues
+from our mining properties in Mexico.
+
+ 
+
+The Mexivada Property Option Agreement
+
+ 
+
+ On February 11, 2011, we entered into
+the AuroTellurio Option Agreement with Mexivada to acquire up to an 80% interest in Mexivada s La Viuda and La Viuda-1 concessions
+comprising its AuroTellurio tellurium-gold-silver property south of Moctezuma, Sonora, Mexico. 
+
+ 
+
+Under the terms of the AuroTellurio Option
+Agreement, we will acquire up to an 80% legal and beneficial ownership interest in the AuroTellurio Property by, in addition to
+making certain cash payments and share issuances to Mexivada (as discussed above), incurring up to $3,000,000 in cumulative exploration
+expenditures on the Property over a four year period at an annual investment rate of at least $750,000 per year. We will earn a
+20% vested interest in the AuroTellurio Property in the first year of the AuroTellurio Option Agreement by investing $750,000 in
+an exploration program and up to an additional 60% interest in the Property, in blocks of 20% each, by investing an additional
+$750,000 in the exploration program in each of the following three years, or sooner, and meeting all of the other required terms
+of the AuroTellurio Option Agreement. Each 20% interest will vest earlier if each year s cash and stock payments to Mexivada
+and $750,000 exploration expenditure investment are completed earlier than scheduled.
+
+ 
+
+Although we
+are acquiring up to an 80% interest in the La Viuda Concessions from Mexivada, neither we nor Mexivada owns the land where the
+Property is located. We have entered into a surface rights agreement with the local landowner enabling us to begin our exploration
+program. This agreement is renewable through May 16, 2014. If we need additional time after that date to continue our exploration
+program or if we discover meaningful quantities of minerals on the Property, we will need to further extend the surface rights
+exploration agreement or enter into additional agreements (whether lease or purchase) with the landowner to enable us to mine such
+minerals. There can be no assurance that the landowner will agree to such further agreements or, if he does, that they will be
+on terms economically acceptable to us. If we cannot reach agreement with the land owner with respect to our future exploration
+or potential mining activities, we would not be able to continue with the AuroTellurio project, our business plan would be negatively
+impacted and our business prospects would be damaged.
+
+ 
+
+ Recent Developments 
+
+ 
+
+Vesting of First 20% Interest in
+the La Viuda Concessions 
+
+ 
+
+ On August 10, 2012, we made a payment
+to Mexivada of $40,000 and on August 28, 2012, we issued to Mexivada 250,000 shares of our restricted common stock. Having met
+all the required conditions for the vesting of the first 20% interest in the La Viuda Concessions under the AuroTellurio Option
+Agreement, including the required exploration program expenditure of $750,000, the first 20% interest in the La Viuda Concessions
+vested in us as of August 28, 2012. Although the terms of the Aurotellurio Option Agreement required that all conditions for the
+vesting of the first 20% interest in the AuroTellurio Property were to be met by the one year anniversary of the First Closing,
+that is, by August 4, 2012, Mexivada agreed to extend this deadline to August 28, 2012. We have made the appropriate filings with
+the Ministry of Mines in Mexico recording this 20% interest in our name. 
+
+ 
+
+ 28
+
+ 
+
+ 
+
+ 
+
+ Although
+we are acquiring up to an 80% interest in the La Viuda Concessions from Mexivada, neither we nor Mexivada owns the land where
+the Property is located. We have entered into a surface rights agreement with the local landowner enabling us to begin our exploration
+program. This agreement is renewable through May 16, 2014. If we need additional time after that date to continue our exploration
+program or if we discover meaningful quantities of minerals on the Property, we will need to further extend the surface rights
+exploration agreement or enter into additional agreements (whether lease or purchase) with the landowner to enable us to mine
+such minerals. There can be no assurance that the landowner will agree to such further agreements or, if he does, that they will
+be on terms economically acceptable to us. If we cannot reach agreement with the land owner with respect to our
+future exploration or potential mining activities, we would not be able to continue with the AuroTellurio project, our business
+plan would be negatively impacted and our business prospects would be damaged. 
+
+ 
+
+The AuroTellurio Property Exploration
+Program
+
+ 
+
+ As of the date hereof, we have expended
+an aggregate of $682,600 in exploration program costs towards the second 20% interest. Approximately $339,000 of this amount has
+already been approved by Mexivada as exploration expenses to be counted towards the second 20% interest in the La Viuda Concessions.
+We expect that the balance of exploration expenses to be applied towards the second 20% interest in the La Viuda Concessions not
+yet approved by Mexivada will be so approved at or prior to the time we notify Mexivada that we have completed all requirements
+for the vesting of the second 20% interest, including the required exploration program expenditure of $750,000, and that we intend
+to exercise our option for the second 20% interest. 
+
+ 
+
+ We have completed the majority of Phase
+1 of our exploration program including mapping, trenching and sampling programs as well as gravity and magnetic geophysical surveys
+at the AuroTellurio Property. We have renewed our surface rights agreement with the land owner in Moctezuma, where the La
+Viuda Concessions are located, to allow us to conduct our exploration of the La Viuda Concessions through May 16, 2014, and we
+have the option to further renew this agreement for an additional year. Our Phase I exploration activities have enabled us to
+delineate two primary drilling areas on the Property. We anticipate that that we will need approximately $350,000 for our Phase
+I drilling program at the La Viuda Concessions which, subject to raising the required funds, we expect to begin later in 2013.
+There can be no assurance, however, that we will be successful in raising the required drilling program funds. If we are unable
+to raise these funds, we will not be able to proceed with our Phase I drilling program and our entire investment in the AuroTellurio
+project and future business prospects will be jeopardized. 
+
+ 
+
+Results of Operations 
+
+ 
+
+ Fiscal Years Ended January 31, 2013
+and 2012 
+
+ 
+
+ We are still in our exploration stage
+and have generated no revenues to date. 
+
+ 
+
+ Our operating expenses remained flat
+and totaled $1,302,303 and $1,297,582 for the years ended January 31, 2013 and 2012, respectively. General and administrative
+expenses increased from $940,985 in the fiscal year ended January 31, 2012 to $1,066,824 in the fiscal year ended January 31,
+2013, or 13%, primarily due to stock-based compensation expense attributable to option awards granted to purchase 11,000,000 shares
+of the Company s common stock to its employees and outside consultants. 
+
+ 
+
+ We recorded non-operating income of
+$1,591,772 in the year ended January 31, 2013, compared to non-operating income of $1,034,764 in the year ended January 31, 2012.
+The increase of $557,008 over the prior year was primarily due to an increase in unrealized gain on derivative instruments related
+to the issuance of the 2010 and 2011 warrants as a result of the private placement offerings completed in December 2010 and January,
+April, June and July 2011. For the year ended January 31, 2013, we recorded a $1,591,424 unrealized gain on derivative instruments
+relating to the issuance of the 2010 and 2011 warrants as a result of the private placement offerings completed in December 2010
+and January 2011. 
+
+ 
+
+ We had net income
+of $289,469 for year ended January 31, 2013 and a net loss of $262,818 for the year ended January 31, 2012. 
+
+ 
+
+ We have generated no revenues, and
+our net operating loss from inception through January 31, 2013 was $2,832,452. 
+
+ 
+
+ 29
+
+ 
+
+ 
+
+ 
+
+Liquidity and Capital Resources
+
+ 
+
+ Our cash and cash equivalents balance
+as of January 31, 2013 was $259,200 compared to $828,181 as of January 31, 2012. 
+
+ 
+
+ In July 2011, we completed the final
+closing of the 2010/2011 Private Placement, in which we sold an aggregate of 77,478,258 units of our securities for gross proceeds
+of $1,936,956, at an offering price of $0.025 per Unit. 55,478,258 of the units consisted of one share of our common stock and
+an 18-month warrant to purchase one-half of one share of our common stock at an exercise price of $0.125 per whole share. As of
+February 1, 2012, we amended the terms of these warrants such that (i) their term has been extended by six months and (ii) one
+half of them (19,369,565) retain the exercise price of $0.125 per share and one half (19,369,564) have an exercise price of $0.05
+per share. The remaining 22,000,000 Units included our Series A Preferred Stock instead of our common stock and warrants exercisable
+for our common stock. 
+
+ 
+
+On December 19, 2012, our Board of Directors
+resolved to further amend the provisions of the warrants issued in the 2010/2011 Private Placement such that, effective as of December
+19, 2012, (i) the term of each of the warrants has been extended for an additional three years and (ii) the exercise price of the
+warrants shall be reduced to $0.03 per whole share through the third year, $0.04 per whole share through the fourth year and $0.05
+per whole share through the fifth year.
+
+ 
+
+ On March 16, 2012, we completed the
+closing of a private placement offering pursuant to which we sold to various accredited investors and non-U.S. persons 4,250,000
+units of our securities (the "2012 Units") for gross proceeds of $170,000, at an offering price of $0.04 per unit.
+Each of these units consisted of one share of our common stock and a warrant to purchase one-half share of our common stock at
+an exercise price of $0.06 per whole share. These warrants will be exercisable from issuance until twenty four (24) months after
+the closing of this offering. We raised these funds for general working capital purposes separate from our first year exploration
+program commitments under the AuroTellurio Agreement. 
+
+ 
+
+Due to our brief history and historical
+operating losses, our operations have not been a source of liquidity, and our sources of liquidity primarily have been debt
+and proceeds from the sale of units in our 2010/2011 Private Placement and in our March 2012 offering. Although we have begun the
+acquisition of the AuroTellurio Property, this property will require exploration and development that could take years to complete
+before it begins to generate revenues. There can be no assurances that the AuroTellurio Property will be successfully developed
+to the revenue producing stage. If we are not successful in our proposed rare and precious metals mining operations, our business,
+results of operations, liquidity and financial condition will suffer materially.
+
+ 
+
+ As a result of the 2010/2011 Private
+Placement, we have had sufficient funds to meet our first year requirements under the AuroTellurio Agreement, including the requirement
+that we invest $750,000 in the exploration program by August 4, 2012. If we determine to proceed with the exploration
+of the AuroTellurio Property after the first year, we will be required under the terms of the AuroTellurio Agreement to invest
+an additional $750,000 in the exploration program per year for each of the following three years. We will also be required to
+pay Mexivada $40,000 upon the first anniversary of the First Closing, $50,000 upon the second anniversary of the First Closing,
+$70,000 upon the third anniversary of the First Closing, and $100,000 upon the fourth anniversary of the First Closing, for a
+total of $290,000. We will also need additional funds for working capital purposes. We do not have this capital at this time and
+we will have to raise these amounts, plus additional amounts for general working capital purposes, in the capital markets. 
+
+ 
+
+We plan to seek to raise such capital through
+additional sales of our equity or debt securities. There can be no assurance, however, that such financing will be available to
+us or, if it is available, that it will be available on terms acceptable to us and that it will be sufficient to fund our expected
+needs. If we are unable to obtain sufficient financing, we may not be able to proceed with our exploration and development plans
+for the AuroTellurio Property after the first year of our exploration program or meet our ongoing operational working capital needs.
+
+ 
+
+ 30
+
+ 
+
+ 
+
+ 
+
+Various factors outside of our control,
+including the price of rare and precious metals, overall market and economic conditions, the downturn and volatility in the US
+equity markets and the trading price of our common stock may limit our ability to raise the capital needed to execute our plan
+of operations in the following years. We recognize that the US economy is currently experiencing a period of uncertainty and that
+the capital markets have been depressed from recent levels. These or other factors could adversely affect our ability to raise
+additional capital. As a result of an inability to raise additional capital, our short-term or long-term liquidity and our ability
+to execute our plan of operations, including our ability to exercise our rights to acquire up to an additional 60% interest in
+the La Viuda Concessions, could be significantly impaired.
+
+ 
+
+ Phase I Drilling Program Needs 
+
+ 
+
+ We have determined to proceed with
+the exploration of the AuroTellurio Property into the second year, for the second 20% interest in the La Viuda Concessions. Most
+immediately, we will need to raise at least $350,000 to begin and fund our AuroTellurio Phase I drilling program. We currently
+do not have sufficient capital to finance this drilling program. 
+
+ 
+
+ [We have filed a registration statement
+with the SEC to register for sale 100,000,000 shares of our common stock at an offering price of $0.005 per share. This registration
+statement has not yet been declared effective by the SEC. If and when the registration statement is declared effective, there
+is no minimum number of shares of our common stock that we must sell and no guarantee that we will be able to sell any of these
+shares.] 
+
+ 
+
+ As indicated above, we anticipate that
+that we will need approximately $350,000 for our Phase I drilling program at the La Viuda Concessions. If we sell at least 75%
+of the 100,000,000 shares we expect to be offering pursuant to the prospectus contained within the registration statement, we
+will use the net proceeds of the offering for our drilling program with any excess funds (at the 100% level only) to be used for
+corporate overhead expenses. At the 75% level, no net proceeds of this offering would be available for corporate overhead and
+at both the 75% and 100% levels, net corporate overhead expenses would be paid out of existing capital reserves. Should we sell
+less than 75% of the 100,000,000 shares we expect to be offering pursuant to the prospectus, we will not have sufficient funds
+to begin our 2013 Phase I drilling program and we will use any net proceeds for corporate overhead purposes, with a reserve for
+remediation costs. 
+
+ 
+
+ We are calculating a monthly overhead
+cost, at a reduced level of operations, of approximately $25,000 per month. Under the 25% scenario we would have sufficient net
+funds from the offering to support this overhead burn rate for approximately two months, while under the 50% scenario, we would
+have overhead funds from the offering sufficient for approximately seven months. We estimate environmental remediation costs of
+$15,000 if we are forced due to lack of funds to terminate our AuroTellurio exploration project prior to beginning our Phase I
+drilling program and $80,000 if we determine to terminate our exploration project after we complete the Phase I drilling program. 
+
+ 
+
+ If we net less than $350,000 from the
+sale of our shares in the offering, we will be required to raise additional funds to meet the minimum estimated $350,000 cost
+requirements of our phase I Drilling Program and to cover overhead costs. There can be no assurances that we will be able to raise
+these funds at all, or at a reasonable cost to us. If we are not able to raise these funds, we may have to scale back or curtail
+entirely our Phase I drilling program. 
+
+ 
+
+Off-Balance Sheet Arrangements
+
+ 
+
+We have no off-balance sheet arrangements.
+
+ 
+
+Critical Accounting Policies
+
+ 
+
+The preparation of financial statements
+in conformity with generally accepted accounting principles requires management to select appropriate accounting policies and to
+make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. See Note "
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001377040_avra_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001377040_avra_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..71925d6da36f347990569f81316803b7af46cc11
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001377040_avra_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY The following summary highlights selected information contained elsewhere in this prospectus. This summary is not complete and does not contain all the information that should be considered before investing in our common stock. Before making an investment decision, investors should carefully read the entire prospectus, paying particular attention to the risks referred to under the headings Risk Factors and Special Note Regarding Forward-Looking Statements and our financial statements and the notes to those financial statements. We have not authorized any other person to provide you with different information. This prospectus is not an offer to sell, nor is it seeking an offer to buy, these securities in any state where the offer or sale is not permitted. As used in this prospectus, unless the context requires otherwise, the terms Company, we, our and us refer to AVRA Surgical Robotics, Inc., a Delaware corporation formed on August 29, 2006 (formerly known as RFG Acquisition II Inc.). Company Overview We are a development stage company that designs and intends to market a medical robotic system for surgery and other medical procedures (ASRS). Based on the circumstances noted in the Company s previous filings, we have decided that the Company s future is better served by discontinuing product development through our currently 80% owned subsidiary, MIS-Robotics GmbH, a German corporation ( MIS-Robotics ) and we are in active negotiations to sell all or part of our interest therein. As a result of that decision, we are currently in negotiations with an existing scientific and engineering organization with experience in all aspects of medical robotics to continue development of our ASRS products to perform specific procedures with the intention of delivering an operating ASRS component to a medical center for testing in the near future. There are no assurances that we will be able to consummate a relationship with this engineering organization or any other engineering organization. If negotiations with this organization are not successful, and the Company is not able to finalize a relationship with this organization or another scientific and engineering organization to continue the development of the ASRS products in order to initiate testing, we may not be able to develop our business plan as expected and may have to cease operations. If we are not able to develop our products our shares of common stock may become worthless and you might lose your entire investment. While our system is expected to be procedurally competitive with broad multi-application systems, we intend to focus on defined procedures in orthopedics, neurosurgery, diagnosis (ultrasound, biopsy, skin scanning), therapy and medical activities, such as seeding, cryo-therapy and High Intensity Focused Ultrasound ( HIFU ), many of which may be performed with a single robotic arm, a usage for which our proposed modular configuration is expected to be tailored to, with its design, size and cost comparing favorably to existing systems. We believe that elements of our products will qualify for patent protection and we will file patent applications in jurisdictions in which we intend to distribute as development of our products proceeds. The Company believes that robotically controlled minimally invasive surgery ( MIS ) is now a generally accepted operating alternative to open or hand-manipulated laparoscopic surgery in an increasing number of soft tissue surgeries, and fully acknowledged as a major option, in, for example, prostatectomies and hysterectomies. The Company further believes that general surgery, cardiac, thoracic, head and neck, revascularization, pediatric, transoral, and otolaryngological procedures are all also increasingly employing robots as an operating platform. MIS operations have grown significantly over the past several years. It is estimated that the global surgical medical robotic market will grow from approximately $2.5 billion to $8.5 billion between now and 2018, a compounded annual growth rate of approximately 20%. Management believes that a large percentage of the total will come from outside the United States, where the markets for robotic surgery are still underserved, most likely in Europe, but also in emerging countries like India, China and Brazil. TABLE OF CONTENTS We are an emerging growth company under the federal securities laws and will be subject to reduced public company reporting requirements. An investment in our common stock may be considered speculative and involves a high degree of risk, including the risk of a substantial loss of your investment. See Risk Factors beginning on page 7 to read about the risks you should consider before buying shares of our common stock. An investment in our common stock is not suitable for all investors. We intend to continue to issue common stock in this offering and, as a result, your ownership in us is subject to dilution. See Risk Factors Risks Relating to this Offering and Our Common Stock. This prospectus contains important information that a prospective investor should know before investing in our common stock. Please read this prospectus before investing and keep it for future reference. We file annual, quarterly and current reports, proxy statements and other information about us with the SEC, as required. This information will be available free of charge by contacting us c/o Stamell & Schager, LLP, 1 Liberty Plaza, 23rd Floor, New York, New York 10006 or by telephone at (212) 566-4047. The SEC also maintains a website at www.sec.gov that contains such information. Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is , 2013. TABLE OF CONTENTS We believe our ASRS is the next generation in robotically controlled MIS systems in that it will offer a significantly more adaptable platform with modular design, size and compelling cost comparisons (system, service and tools) to current systems. In addition, we plan to deliver the system at a price point that we believe will open the market to users who are capital constrained in their medical device budgets. Private and public health insurers around the world are becoming more cost-conscious, forcing hospitals to re-evaluate their capital spending plans but strengthening the case for technologies that can reduce the cost of surgical procedures. We believe that our system will be particularly suitable to respond to those concerns. Further, we believe that there are many smaller surgical suites and even medical offices and centers for which the size and flexibility of our device could offer new operating opportunities. The Offering We are offering for direct sale no more than shares of our common stock. We will not raise more than the Maximum Offering Amount unless this offering is over-subscribed, in which case the Company may, in its sole discretion, sell up to an additional shares of common stock ($2,000,000) to cover such over-subscriptions (the Over-Subscription ). Presuming we successfully raise the Maximum Offering Amount, gross proceeds are expected to be approximately $15,000,000, excluding any Over-Subscription and up to a 7.5% commission paid to Selling Agents, to the extent the Company engages Selling Agents in connection with the offering. This offering will initially be conducted on a self-underwritten, best-efforts basis and some or all of the common stock may be sold by our officers and directors. The Company may not be able to sell the entire amount of securities available in this offering and a purchaser in the offering may be one of a very limited number of buyers. In order to implement our business plan, we require a minimum of $10,000,000 from this offering. However, sales under this offering on a best efforts basis have no minimum amount of shares required to be sold for the offering to proceed. If we raise only a nominal amount of proceeds we may be unable to implement our business plan and we may have to raise additional capital and/or suspend or cease operations and investors who participate in this offering may lose their entire investments. There are no assurances that the Company will be able to raise additional capital as may be needed, or increase revenue levels and profitability. See Risk Factors and Use of Proceeds. Information regarding our common stock is included in the section of this prospectus entitled Description of Securities. The proceeds from the sale of the shares in this offering will be payable to (the Escrow Agent ). All subscription agreements and checks are irrevocable and should be delivered to the Escrow Agent at the address provided in the Subscription Agreement. All subscription funds will be irrevocable and deposited in a noninterest-bearing account by the Escrow Agent and will be forwarded to the Company at the end of each week. The Company reserves the right to begin using these proceeds as soon as the funds have been received or any time thereafter and will retain broad discretion in the allocation of the net proceeds of this offering, provided the Company has received notification from the Escrow Agent that the Subscription Agreements are properly executed, funds have cleared before shares are released to investors and that investors receive shares when the Company receives funds. The precise amounts and timing of the Company s use of the net proceeds will depend upon market conditions and the availability of other funds, among other factors. See Use of Proceeds. The offering will be completed 180 days from the effective date of this prospectus, unless extended by our board of directors for an additional 180 days or the Maximum Offering Amount has been sold. All Subscription Agreements and checks for payment of shares are irrevocable. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 PRE-EFFECTIVE AMENDMENT NO. 1 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AVRA SURGICAL ROBOTICS, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 3841 35-2277305 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification No.) c/o Stamell & Schager, LLP 1 Liberty Plaza, 23rd Floor New York, New York 10006 (212) 566-4047 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) Jared B. Stamell Vice President, Secretary and Treasurer Stamell & Schager, LLP 1 Liberty Plaza, 23rd Floor New York, New York 10006 (212) 566-4047 Fax: (212) 566-4061 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: David N. Feldman, Esq. Richardson & Patel, LLP The Chrysler Building 405 Lexington Avenue, 49th Floor New York, NY 10174 (212) 869-7000 Fax: (917) 677-8165 As soon as practicable after the effective date of this Registration Statement. (Approximate date of commencement of proposed sale to the public) If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. x If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o TABLE OF CONTENTS TABLE OF CONTENTS Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001391636_cyan-inc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001391636_cyan-inc_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001391636_cyan-inc_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001394156_diversifie_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001394156_diversifie_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001394156_diversifie_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001412286_momentive_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001412286_momentive_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..4c75dc657e9b07e7a94eac45b7d4a51f724c30c9
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001412286_momentive_prospectus_summary.txt
@@ -0,0 +1 @@
+This summary highlights information about Momentive Performance Materials Inc. and the Notes contained elsewhere in this prospectus. This summary may not contain all the information that may be important to you. You should carefully read the entire prospectus before making an investment decision, especially the information presented under the heading Risk Factors. In this prospectus, except as otherwise indicated herein, or as the context may otherwise require, all references to: (i) Momentive, the Company, we, us and our refer to Momentive Performance Materials Inc. and its subsidiaries and (ii) the MPM Group refers to Momentive Performance Materials Holdings Inc. and its subsidiaries. Company overview Momentive Performance Materials Inc. was formed through the acquisition of GE Advanced Materials on December 3, 2006. We believe we are one of the world s largest producers of silicones and silicone derivatives and a global leader in the development and manufacture of products derived from quartz and specialty ceramics. For the twelve months ended December 31, 2012, silicones and quartz represented approximately 91% and 9% of our revenue, respectively. Silicones are a multi-functional family of materials used in a wide variety of products, and serve as a critical ingredient in many construction, transportation, healthcare, personal care, electronic, consumer and agricultural uses. Silicones are generally used as an additive to a wide variety of end products in order to provide or enhance certain of their attributes, such as resistance (heat, ultraviolet light and chemical), lubrication, adhesion or viscosity. Some of the most well-known end-use product applications include bath and shower caulk, pressure-sensitive adhesive labels, foam products, cosmetics and tires. Due to the versatility and high-performance characteristics of silicones, they are increasingly being used as a substitute for other materials. Our Quartz business manufactures quartz, specialty ceramics and crystal products for use in a number of high-technology industries, which typically require products made to precise specifications. The cost of our products typically represents a small percentage of the overall cost of our customers products. On October 1, 2010, our parent, Momentive Performance Materials Holdings Inc. ( MPM Holdings ) and Momentive Specialty Chemicals Holdings LLC (formerly known as Hexion LLC and referred to herein as MSC Holdings ), the direct parent company of Momentive Specialty Chemicals Inc. (formerly known as Hexion Specialty Chemicals, Inc. and referred to herein as MSC ), became subsidiaries of a newly formed holding company, Momentive Performance Materials Holdings LLC ( Momentive Holdings ). We refer to this event as the Momentive Combination. As a result of the Momentive Combination, Momentive Holdings became the ultimate parent entity of Momentive and MSC. Momentive Holdings is controlled by investment funds (the Apollo Funds ) managed by affiliates of Apollo Management Holdings, L.P. (together with Apollo Global Management, LLC and its subsidiaries, Apollo ). Apollo may also be referred to as the Company s owner. We believe that our scale and global reach provide significant efficiencies in our fixed and variable cost structure and that our breadth of related products provides significant operational, technological and commercial advantages. Our manufacturing capacity at our internal sites and our joint venture in China is sufficient to produce the substantial majority of one of our key intermediates, siloxane, which facilitates a low-cost operating structure and security of supply. We are one of two producers in the silicones market with global siloxane production capacity. As of December 31, 2012, we had 22 production sites strategically located around the world, which allows us to produce the substantial majority of our key products locally in the Americas, Europe and Asia. Through this worldwide network of production facilities, we serve more than 5,500 customers between our Silicones and Quartz businesses in over 100 countries. Our customers include leading companies in their respective industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L Oreal, BASF, The Home Depot and Lowe s. Table of Contents EXHIBIT INDEX Exhibit Number Description of Document 2.1 Stock and Asset Purchase Agreement, dated as of September 14, 2006, by and between General Electric Company and Momentive Performance Materials Holdings Inc. (formerly known as Nautilus Holdings Acquisition Corp.) (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 2.2 Amendment to Stock and Asset Purchase Agreement, dated as of December 3, 2006, by and between General Electric Company and Momentive Performance Materials Holdings Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.1 Certificate of Incorporation, as amended, of Momentive Performance Materials Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.2 Amended and Restated By-laws of Momentive Performance Materials Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.3 Certificate of Incorporation, as amended, of Momentive Performance Materials Worldwide Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.4 Amended and Restated By-laws of Momentive Performance Materials Worldwide Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.5 Certificate of Incorporation, as amended, of Momentive Performance Materials China SPV Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.6 Amended and Restated By-laws of Momentive Performance Materials China SPV Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.7 Certificate of Incorporation, as amended, of Momentive Performance Materials South America Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.8 Amended and Restated By-laws of Momentive Performance Materials South America Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.9 Amended and Restated Operating Agreement of MPM Silicones, LLC (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.10 Articles of Organization, as amended, of MPM Silicones, LLC (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.11 Certificate of Incorporation, as amended, of Momentive Performance Materials Quartz, Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.12 Amended and Restated By-laws of Momentive Performance Materials Quartz, Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.13 Certificate of Incorporation, as amended, of Momentive Performance Materials USA Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.14 Amended and Restated By-laws of Momentive Performance Materials USA Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.15 Operating Agreement of Juniper Bond Holdings I LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Table of Contents SCHEDULE A Guarantor State or Other Jurisdiction of Incorporation or Organization Address of Registrants Principal Executive Offices I.R.S. Employer Identification Number Momentive Performance Materials Worldwide Inc. Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 20-5748357 Momentive Performance Materials USA Inc. Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 20-5748388 Momentive Performance Materials China SPV Inc. Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 20-5748469 Momentive Performance Materials South America Inc. Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 20-5834895 MPM Silicones, LLC New York 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 22-3775481 Momentive Performance Materials Quartz, Inc. Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 34-1839929 Juniper Bond Holdings I LLC Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 26-1589631 Juniper Bond Holdings II LLC Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 26-1589692 Juniper Bond Holdings III LLC Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 26-1589765 Juniper Bond Holdings IV LLC Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 26-1589836 Table of Contents We have not authorized anyone to give you any information or to make any representations about us or the transactions we discuss in this prospectus other than those contained in this prospectus. If you are given any information or representations about these matters that is not discussed in this prospectus, you must not rely on that information. This prospectus is not an offer to sell or a solicitation of an offer to buy securities anywhere or to anyone where or to whom we are not permitted to offer or sell securities under applicable law. The delivery of this prospectus does not, under any circumstances, mean that there has not been a change in our affairs since the date of this prospectus. Subject to our obligation to amend or supplement this prospectus as required by law and the rules of the Securities and Exchange Commission, or the SEC, the information contained in this prospectus is correct only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of these securities. We will update this prospectus to the extent required by law. We are offering to sell the Notes only in jurisdictions where offers and sales are permitted. Table of Contents We believe we have created a value-added, technical service-oriented business model that enables us to target and participate in high-margin and high-growth specialty markets. These specialty markets account for the majority of our revenues and continue to be a growing part of our business. Revenue and Adjusted EBITDA (as defined in the section entitled Covenant Compliance elsewhere herein) for the twelve months ended December 31, 2012 were $2,357 million and $228 million, respectively. Net loss for the twelve months ended December 31, 2012 was $365 million. Our Strengths Our company has the following competitive strengths: Leading Global Silicones Producer. We believe we are one of the world s largest producers of silicones and silicone derivatives, with leading positions in various product lines and geographic areas. We believe our scale, global reach and breadth of product offerings provide us with significant advantages over many of our competitors by allowing us to serve global customers with precise specifications, particularly those expanding production in developing nations. Attractive Industry Growth Profile. The broad molecular characteristics of silicones continually lead to new uses and applications, which have led to worldwide industry growth in excess of GDP over the past 20 years. Drivers of growth include end-market growth and increased market penetration, with silicones increasingly being used as a value-added substitute for traditional materials or as a functional additive, which yields new properties for our customers products. For instance, silicones act as the conditioning ingredient in 2-in-1 shampoo. Broad-Based Diversification. Industry Diversification. Our Silicones business has a diversified revenue base across a variety of end-markets, reducing our vulnerability to industry trends. Furthermore, our products are often used in niche applications that represent a small portion of our customers material costs. Our leading end-markets are building and construction, which consists of industrial and infrastructure construction and repair, urethane foam additives and a number of other specialty products. Customer Diversification. We have a diverse customer base of more than 5,500 customers between our Silicones and Quartz businesses and are well balanced across multiple geographies. In 2012, our top 20 customers accounted for less than 22% of our total revenues, and no single customer accounted for more than 3% of our total revenues. We have maintained long-standing relationships with many of our customers. Geographic Diversification. We have a global sales presence, with approximately 38%, 31% and 31% of our 2012 and 2011 revenues generated in the Americas, Europe and Asia, respectively. Global Infrastructure. We are a global company with significant manufacturing capacity in each of the Americas, Europe and Asia. We have 22 production facilities located around the world, R&D centers on three continents and sales to customers in over 100 countries. The Silicones business has three siloxane production facilities located in Waterford, New York, Ohta, Japan and Leverkusen, Germany, as well as a siloxane manufacturing joint venture in Jiande, China, and two silanes production facilities in Sistersville, West Virginia and Termoli, Italy. The Quartz production sites are located in Ohio, Geesthacht, Germany, Kozuki, Japan and Wuxi, China. Table of Contents Exhibit Number Description of Document 3.16 Certificate of Formation of Juniper Bond Holdings I LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 3.17 Operating Agreement of Juniper Bond Holdings II LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 3.18 Certificate of Formation of Juniper Bond Holdings II LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 3.19 Operating Agreement of Juniper Bond Holdings III LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 3.20 Certificate of Formation of Juniper Bond Holdings III LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 3.21 Operating Agreement of Juniper Bond Holdings IV LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 3.22 Certificate of Formation of Juniper Bond Holdings IV LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 4.1 Indenture by and between Momentive Performance Materials Inc., Momentive Performance Materials Holdings Inc., Momentive Performance Materials Worldwide Inc., Momentive Performance Materials USA Inc., Momentive Performance Materials China SPV Inc., Momentive Performance Materials South America Inc., GE Quartz, Inc., GE Silicones, LLC and Momentive Performance Materials Inc., dated as of December 4, 2006, with respect to $500,000,000 11 1/2% Senior Subordinated Notes Due 2016 (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 4.2 11 1/2% Senior Subordinated Notes Due 2016 (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 4.3 Supplemental Indenture among Juniper Bond Holdings I LLC, Juniper Bond Holdings II LLC, Juniper Bond Holdings III LLC, Juniper Bond Holdings IV LLC and Wells Fargo Bank, N.A., dated as of December 20, 2007, with respect to the $500,000,000 11 1/2% Senior Subordinated Notes due 2016 (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 4.4 Agreement of registration, appointment and acceptance, effective as of June 8, 2009, by and among Momentive Performance Materials Inc., Wells Fargo Bank, N.A. and The Bank of New York Mellon Trust Company, N.A. (filed as exhibit 4.1 to our Form 8-K, filed on June 12, 2009) 4.5 Indenture, dated as of November 5, 2010, by and among Momentive Performance Materials Inc., the note guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent, including forms of the 9% Second-Priority Springing Lien Notes due 2021 (U.S. Dollar Denominated) and 9 1/2% Second-Priority Springing Lien Notes due 2021 (Euro Denominated) (filed as exhibit 4.1 to our Form 8-K, filed on November 12, 2010) 4.6 Indenture, dated as of May 25, 2012, by and among Momentive Performance Materials Inc., the Note Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent (filed as exhibit 4.1 to our Form 8-K, filed on June 1, 2012) Table of Contents The information in this preliminary prospectus is not complete and may be changed. The selling security holders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is declared effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. Subject to Completion, Dated May 7, 2013 PROSPECTUS Momentive Performance Materials Inc. $124,323,000 11 1/2% Senior Subordinated Notes due 2016 This prospectus covers resales by holders of the 11 1/2% Senior Subordinated Notes due 2016 issued by Momentive Performance Materials Inc. ( Momentive ) on December 4, 2006, which we refer to herein as the Notes. The Notes mature on December 1, 2016. Interest on the Notes is payable in cash at a rate of 11 1/2% per annum, from the issue date or from the most recent date to which interest has been paid or provided for, payable semiannually to holders of record at the close of business on May 15 or November 15 immediately preceding the interest payment date on June 1 and December 1 of each year commencing June 1, 2007. Momentive may redeem some or all of the Notes, at the redemption prices set forth in this prospectus. See Description of Notes Optional Redemption. If we experience certain kinds of changes in control, we must offer to purchase the Notes. The Notes are subordinated to all our existing and future senior debt, including the 8.875% First-Priority Senior Secured Notes due 2020, the 10% Senior Secured Notes due 2020, the Second-Priority Springing Lien Notes due 2021 (together, the Senior Notes ), the ABL Facility (as defined herein) and the Cash Flow Facility (as defined herein), rank equally with all our existing and future senior subordinated debt and rank senior to all our existing and future subordinated debt. The Notes are guaranteed on an unsecured senior subordinated basis by each of Momentive s existing U.S. subsidiaries that is a guarantor under its Cash Flow Facility and each of its future U.S. subsidiaries that guarantee any debt of the Company or the Note Guarantors (the Note Guarantors ). The majority of our business in conducted through non-U.S. subsidiaries that are not guarantors of the Notes. If the Company fails to make payments on the Notes, the Note Guarantors must make them instead (the Note Guarantees ). We have not applied, and do not intend to apply, for listing of the Notes on any national securities exchange or automated quotation system. The selling security holders may sell the Notes covered by this prospectus in one or more transactions, directly to purchasers or through underwriters, brokers or dealers or agents, in public or private transactions, at fixed prices, prevailing market prices at the times of sale, prices related to the prevailing market prices, varying prices determined at the times of sale or negotiated prices. See Plan of Distribution. Momentive will not receive any proceeds from the resale of the Notes hereunder. See Risk Factors beginning on page 13 of this prospectus for a discussion of certain risks that you should consider before investing in the Notes. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. The date of this prospectus is , 2013. Table of Contents We use our global platform to deliver products to companies efficiently on a worldwide basis. Many of our customers are expanding internationally to serve developing areas in Asia, Eastern Europe, Latin America, India and Russia. Maintaining close proximity to our international customers allows us to serve them more quickly and efficiently and thus build strong relationships. Attractive Intermediate Position. We produce siloxane, the key intermediate required to manufacture silicones, in the United States, Germany and Japan, and source siloxane from a joint venture in China. This manufacturing capacity is sufficient to meet the substantial majority of our current requirements for siloxane. We also source a portion of our requirements through long-term and/or supply agreements. We believe this combination of siloxane supply, along with our ability to purchase siloxane from other suppliers when pricing is advantageous, reduces our overall cost structure and strengthens our overall competitiveness. Leading Fused Quartz and Specialty Ceramics Producer. We believe we are a global leader in the fused quartz and ceramics product markets in which we compete. In particular, we believe we are the largest manufacturer of quartz products for the semiconductor end-market and the second largest manufacturer of quartz products for fiber optics. Our leadership position and profitability are driven by several factors, including strong customer relationships and the precise quality and purity specifications of our products. Additionally, we believe we are a leader in several ceramic materials end-markets, including cosmetic additives. Risk Factors Despite our competitive strengths discussed above, investing in the Notes involves a number of risks, including: Our substantial debt could adversely affect our operations and prevent us from satisfying our obligations under our debt obligations. As of December 31, 2012, we had $3,116 million of consolidated outstanding indebtedness, including short-term borrowings, and, based on the consolidated indebtedness, our annualized cash interest expense is projected to be approximately $291 million based on interest rates at December 31, 2012 without giving effect to any subsequent borrowings under the previous revolving credit facility, the ABL Facility or the Cash Flow Facility, of which $288 million would represent cash interest expense on fixed-rate obligations; If global economic conditions weaken, it will continue to negatively impact our business, results of operations and financial condition; We may be unable to achieve the cost savings or synergies that we expect to achieve from our strategic initiatives, including the Momentive Combination, which would adversely affect our profitability and financial condition; Fluctuations in direct or indirect raw material costs could have an adverse impact on our business; and We depend on certain of our key executives and our ability to attract and retain qualified employees. For a discussion of the significant risks associated with our business, our industry and investing in the Notes, you should read the
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+PROSPECTUS SUMMARY 1
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+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001477598_omthera_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001477598_omthera_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary provides an overview of selected information contained elsewhere in this prospectus and does not contain all of the information you should consider before investing in our common stock. You should carefully read this prospectus and the registration statement of which this prospectus is a part in their entirety before investing in our common stock, including the information discussed under "Risk Factors" and our financial statements and notes thereto that appear elsewhere in this prospectus. Unless otherwise indicated herein, the terms "we," "our," "us," "Omthera," or "the Company" refer to Omthera Pharmaceuticals, Inc. Omthera Pharmaceuticals, Inc. Overview We are an emerging specialty pharmaceutical company focused on the development and commercialization of new therapies for abnormalities in blood lipids, referred to as dyslipidemia, and the treatment of cardiovascular disease. Epanova, currently our sole product candidate, is a late-stage, novel, omega-3 free fatty acid composition that meaningfully reduces triglycerides, improves other key lipid parameters and is expected to increase patient convenience with 2-gram once-a-day dosing with or without meals. Epanova is a coated soft gelatin capsule containing a complex mixture of polyunsaturated free fatty acids derived from fish oils, including multiple long-chain omega-3 and omega-6 fatty acids, with eicosapentaenoic acid, or EPA, docosahexaenoic acid, or DHA, and docosapentaenoic acid being the most abundant forms of omega-3 fatty acids. We have completed pharmacokinetic and Phase III clinical studies to investigate the safety and efficacy profile of Epanova. In 2012 we reported positive results from our Phase III EVOLVE and ESPRIT trials, both of which were conducted under Special Protocol Assessment, or SPA, agreements with the U.S. Food and Drug Administration, or FDA. Based on our clinical experience to date, we expect to submit a New Drug Application, or NDA, with the FDA in mid-2013 to commercialize Epanova in the United States for the treatment of patients with triglyceride levels greater than or equal to 500 mg/dL, or severe hypertriglyceridemia. We expect to build a U.S.-based sales and marketing infrastructure to support a launch of Epanova in patients with severe hypertriglyceridemia and anticipate initially targeting specialists, cardiologists and primary care physicians who are the top prescribers of lipid-regulating therapies. The EVOLVE trial demonstrated in patients with severe hypertriglyceridemia that Epanova 2-, 3- and 4-gram doses administered once daily significantly reduced triglyceride levels and improved other lipid parameters and other markers of cardiovascular risk. In addition, the ESPRIT trial demonstrated Epanova's efficacy as an adjunct to a low-fat diet and statin therapy for the further reduction of non-HDL-Cholesterol, or non-HDL-C, and triglycerides in high cardiovascular risk patients with triglyceride levels above 200 mg/dL and less than 500 mg/dL, or high triglycerides. Triglycerides are fats that are carried in the blood, together with cholesterol, within lipoproteins. High levels of triglyceride-rich lipoproteins are associated with an increased risk of atherosclerotic cardiovascular disease and in the case of severe hypertriglyceridemia, acute pancreatitis. High levels of triglyceride-rich lipoproteins are due to both genetic and environmental factors and are associated with comorbid conditions such as diabetes, chronic renal failure and nephrotic syndrome. We own exclusive worldwide rights to develop and commercialize Epanova through a licensing agreement with Chrysalis Pharma AG, or Chrysalis. Epanova is currently protected by issued patents that we license from Chrysalis that run until at least 2025, and by pending patent applications, including applications that we jointly own with Chrysalis, that run to 2033 in the United States and other major pharmaceutical markets. We believe that one of the issued U.S. patents protecting Epanova as of the date of potential NDA approval may be eligible for patent term extension for a period of up to five years. In addition, we believe Epanova may also be eligible to obtain new chemical entity, or NCE, Table of Contents The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. Subject to Completion Preliminary Prospectus dated April 10, 2013 PROSPECTUS 5,775,000 Shares Common Stock Table of Contents status from the FDA, which could provide up to a five-year regulatory exclusivity that could further strengthen Epanova's exclusivity in the first five years after approval. Epanova is delivered in a patent-protected capsule, with a patent-protected coating designed to maximize bioavailability and tolerability. Currently, there are several marketed prescription omega-3 fatty acids approved for sale as anti-dyslipidemics in the United States, Europe and Japan. Lovaza, which is sold in the United States, Europe and Japan, is an omega-3 ethyl-ester comprised of EPA and DHA and is indicated for the treatment of severe hypertriglyceridemia in twice-daily doses of two 1-gram capsules or once-a-day dose of four 1-gram capsules. In addition, Vascepa and Epadel are two approved omega-3 ethyl-ester forms of EPA that are sold in the United States and Japan, respectively. Based on currently marketed products, we estimate the total prescription omega-3 market generated over $2 billion in sales worldwide in 2012. We believe that there will be increased growth in the prescription omega-3 market based on the expected introduction, and resulting increased promotion and awareness, of new prescription omega-3 products, as well as the emergence of new clinical data regarding the efficacy of omega-3s on cardiovascular health. Epanova's free fatty acid form of omega-3 differentiates it from competitors and we believe this distinction leads to numerous clinical advantages. In clinical studies, Epanova demonstrated improved, predictable absorption characteristics and bioavailability compared to Lovaza. Our Phase II ECLIPSE trial compared the bioavailability of Epanova and Lovaza and demonstrated that Epanova's free fatty acid form is less reliant on meal-fat content for optimal absorption than Lovaza's ethyl-ester omega-3 form, which required a high-fat meal for optimal absorption. This study also demonstrated that Epanova patients on a low-fat diet exhibited four times higher blood plasma levels of EPA and DHA relative to Lovaza. Additional benefits of Epanova's improved bioavailability include once-a-day dosing, reduced pill burden and accompanying heightened patient compliance as Epanova's 2-gram dose displays a similar efficacy to both Lovaza's and Vascepa's 4-gram dosages in reducing triglycerides. Epanova's lower starting 2-gram dosage provides physicians the opportunity to titrate to 4 grams should greater triglyceride reduction be necessary. Moreover, improved blood plasma levels of EPA and DHA have been shown to lead to decreased cardiovascular risk. After commercially launching Epanova in the severe hypertriglyceridemia indication, we will consider pursuing the development and commercialization of Epanova in combination with statins as a therapy for non-HDL-C and triglyceride reduction in high cardiovascular risk patients with high triglycerides, as well as other indications. Under the SPA for our ESPRIT study, we are able to submit a supplemental NDA for an indication for Epanova for the reduction of non-HDL-C and triglycerides in patients with high triglycerides in combination with statin therapy after we obtain approval for Epanova for patients with severe hypertriglyceridemia and are substantially underway with a cardiovascular outcomes study. While we do not intend to immediately pursue such an outcomes study and, therefore, be able to submit a supplemental NDA for this indication, we will review our strategy with respect to this second indication in light of Epanova's commercial success in severe hypertriglyceridemia and our ability to find a suitable pharmaceutical partner to enter into a development and commercial collaboration. We believe that based on Epanova's favorable clinical profile, as demonstrated in our Phase III ESPRIT and EVOLVE studies, we are well-positioned to capture a meaningful share of the overall prescription omega-3 market in the United States, which we expect will expand following increased promotion and emerging clinical data. We were incorporated in November 2008 and have funded our operations since inception through private placements of our common stock, issuance of convertible preferred stock and short-term loans and government grants. This is Omthera Pharmaceuticals' initial public offering. We are selling 5,775,000 shares of our common stock. We expect the public offering price to be between $12.00 and $14.00 per share. Currently, no public market exists for the shares. After pricing of the offering, we expect that the shares will trade on the NASDAQ Global Market under the symbol "OMTH." We are an "emerging growth company" under federal securities laws and, as such, will be subject to reduced public company disclosure standards. See "Prospectus Summary Implications of Being an Emerging Growth Company." Investing in our common stock involves risks that are described in the "Risk Factors" section beginning on page 9 of this prospectus. Table of Contents Our Strategy Our goal is to build a specialty pharmaceutical company focused on new therapies for dyslipidemia and cardiovascular disease. Key elements of our strategy to achieve this goal include: obtain U.S. regulatory approval for Epanova for the severe hypertriglyceridemia indication; establish in-house sales and marketing capabilities to effectively commercialize Epanova in the United States; pursue additional indications for Epanova beyond severe hypertriglyceridemia with a strategic partner; pursue partnerships to broadly commercialize Epanova outside the United States; and strengthen our patent portfolio and other means of protecting exclusivity. Selected Risk Factors Our business is subject to many risks and uncertainties of which you should be aware before you decide to invest in our common stock. These risks are discussed more fully under "Risk Factors" in this prospectus. Some of these risks include: we currently have no commercial products, and we have not received regulatory approval for, nor have we generated commercial revenue from, any products; we depend entirely on the success of Epanova. If we are unable to obtain required regulatory approvals of, commercialize, obtain and maintain patent protection for or gain sufficient market acceptance of Epanova, or experience significant delays in doing so, our business will be materially harmed and our ability to generate revenue will be materially impaired; we face significant competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively; we have not yet formed a sales or marketing organization to commercialize Epanova and a failure to do so successfully will adversely affect our efforts to become profitable; we may be unable to maintain and protect our proprietary intellectual property assets, which could impair our commercial opportunities; if we fail to obtain the capital necessary to fund our operations, we may be unable to commercialize Epanova in the United States for treatment of severe hypertriglyceridemia or pursue Epanova for other indications and we could be forced to share our rights to commercialize Epanova with third parties on terms that may not be favorable to us; we have incurred significant losses since our inception and, as of December 31, 2012, we had an accumulated deficit of $64.6 million. We expect to incur substantial losses for the foreseeable future and may never achieve or maintain profitability; and our independent registered public accounting firm has issued a going concern opinion, which could materially limit our ability to raise additional funds through the issuance of new debt or equity securities or otherwise. Implications of Being an Emerging Growth Company We qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As an emerging growth company, we may take advantage of Per Share Total Public offering price $ $ Underwriting discounts and commissions(1) $ $ Proceeds, before expenses, to us $ $ Table of Contents specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include: only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure; reduced disclosure about our executive compensation arrangements; no non-binding advisory votes on executive compensation or golden parachute arrangements; and exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting. We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.0 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of this offering; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission, or SEC. We may choose to take advantage of some but not all of these exemptions. We have taken advantage of reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock. Also, we have irrevocably elected to "opt out" of the exemption for the delayed adoption of certain accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Company and Other Information We were incorporated under the laws of the State of Delaware in November 2008. Our principal executive office is located at 707 State Road, Princeton, New Jersey 08540, and our telephone number is (908) 741-4399. Our website address is www.omthera.com. We do not incorporate the information on or accessible through our website into this prospectus, and you should not consider any information on, or that can be accessed through, our website as part of this prospectus. We own and license from a third party various U.S. federal trademark registrations and applications, and unregistered trademarks, including the following marks referred to in this prospectus: Omthera , our corporate logo and Epanova . All other trademarks or trade names referred to in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and trade names in this prospectus are referred to without the and symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. (1)We refer you to "Underwriting" beginning on page 123 of this prospectus for additional information regarding total underwriter compensation. The underwriters may also exercise their option to purchase up to an additional 866,250 shares of our common stock from us, at the public offering price, less the underwriting discount, for 30 days after the date of this prospectus. Certain of our existing stockholders have indicated an interest in purchasing an aggregate of up to approximately $16.7 million in shares of our common stock in this offering at the initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, these stockholders may determine to purchase fewer shares than they indicate an interest in purchasing or not to purchase any shares in this offering. It is also possible that these stockholders could indicate an interest in purchasing more shares of our common stock. In addition, the underwriters could determine to sell fewer shares to any of these stockholders than the stockholders indicate an interest in purchasing or not to sell any shares to these stockholders. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The shares will be ready for delivery on or about , 2013. Table of Contents
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001488501_metrospace_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001488501_metrospace_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights certain information contained elsewhere in this Prospectus. This summary does not contain all of the information that you should consider before investing in the Common Stock. You should carefully read the entire Prospectus, including the sections entitled "Risk Factors" and "Management s Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and related notes, before you decide whether to invest in the Common Stock. If you invest in the Common Stock, you are assuming a high degree of risk. See the section entitled "Risk Factors." References to "Metrospaces," "our," "we," "us," or "the Company" "our Company," refer to Metrospaces, Inc. and its subsidiaries, unless the context requires otherwise. "Urban Spaces" refers to Urban Spaces, Inc., a Nevada corporation and our wholly owned subsidiary. Overview We acquire land and design, build, develop and resell condominiums on it, principally in urban areas in Latin America, alone or together with investors; we are also acquiring condominiums that are under construction for resale, but do not intend to conduct business in this manner after these condominiums have been sold. We sell condominiums at different prices, depending principally on their location, size and level of options and amenities to customers who are able to make substantial payments upon signing purchase agreements and at agreed time as construction progresses. Our current projects are located in Buenos Aires, Argentina, and Caracas, Venezuela. One of these projects is nearing completion (see "Chacabuco Project" on page 26) and two are in the planning stage (see "Las Narnajas 320 Project" on page 26 and "Las Naranjas 450 Project" on page 28. We are considering projects in Peru and Colombia, but have taken no measures to implement them. We will market directly with our own sales force by personal contact, through real estate brokers and agents and internet websites. We will also manage these condominiums for customers who wish to lease them on a long- or short-term basis. For more detailed information about our business and operations, see "Description of Business" on page 25. The Company s operating subsidiary, Urban Spaces, which the Company acquired on August 13, 2012, commenced operations on April 3, 2012. The Company is a development-stage company. The address of the Company is 888 Brickell Key Drive, Unit 1102, Miami, FL 33131 and its telephone number is (305) 600-0407. Our consolidated financial statements include only the period commencing with the inception of our operating subsidiary, Urban Spaces, on April 3, 2012, includes the financial statements of Urban Spaces and its subsidiaries and do not include any historical financial data of the Company, which was incorporated on December 10, 2007, and which never conducted any business. Accordingly, these financial statements are those of Urban Spaces, which was the accounting acquirer in the merger which is discussed under the caption "Prospectus Summary - Our History – The Merger" on page 3. Potential investors in the Common Stock should consider the following matters, in addition to the Risk Factors commencing on page 5. Our Ability to Continue as a Going Concern Our independent auditor has expressed substantial doubt about our ability to continue as a going concern. Further, we incurred a net loss of $73,277 from the inception of Urban Spaces on April 3, 2012, through the end of our fiscal year on December 31, 2012. Our accumulated deficit at that date was $373,277. We expect to continue to incur losses at least for the next two fiscal years. For further information about our condition, financial and otherwise, see "Risk Factors," commencing on page 5, and in particular, those appearing under the caption "Risk Factors – Risk Factors Related to Our Financial Condition" on page 5 as well as "Management s Discussion and Analysis of Financial Condition and Results of Operations" on page 32. As used herein, the term "Inception" means April 3, 2012, which is the date on which Urban Spaces was incorporated and our present business commenced, as well as the date of the commencement of our fiscal year ended December 31, 2012. The Company, however, was incorporated on December 10, 2007. See "Prospectus Summary — Our History — Prior to the Merger" on page 2. If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] (Do not check if a smaller reporting company) Calculation of Registration Fee Title of Each Class of Securities to be Registered Amount to be Registered2 Proposed Maximum Offering Price Per Share Proposed Maximum Offering Price Registration Fee Common Stock, par value $0.000001 per share1 335,200,000 $0.0253 $8,380,000 $1,143.044 1 Represents outstanding shares of common stock offered for resale by certain selling stockholders. 2 Pursuant to Rule 416 under the Securities Act, the shares of common stock offered hereby also include an indeterminate number of additional shares of common stock as may from time to time become issuable by reason of anti-dilution provisions, stock splits, stock dividends, recapitalizations or other similar transactions. 3 Estimated pursuant to Rule 457(a) of the Securities Act of 1933 solely for the purpose of computing the amount of the registration fee, based on the sales price for the common stock of the Registrant in the private placement described in this Registration Statement, as there is currently no public market price for the Registrant s common stock. Such price was the price per share paid by the investors in said private placement on August 10, 2012, and was determined by the Registrant to be a bona fide estimate of the price per share of the Registrant s common stock. 4 Increased because the Proposed Maximum Offering Price has increased. The Registrant paid a filing fee of $5.46 when the Registration Statement was filed and has accordingly paid an additional filing fee of $1,137.58. The Registrant hereby amends this Registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Table of Contents Prospectus Summary 1
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+PROSPECTUS SUMMARY The following information is a summary of the prospectus and it does not contain all of the information you should consider before making an investment decision. You should read the entire prospectus carefully, including the financial statements and the notes relating to the financial statements. The Company s Board of Directors has the ability pursuant to the Company s Bylaws to restrict the transfer of the Company s shares. This may prevent you from transferring any shares purchased About Us Electric Tractor Corp. ( The Company, Us, or We ) was incorporated under the laws of the State of Wyoming on August 14, 2006 as Tabularasa Corp. The Company owned the rights to a plastic recycling technology. It acquired that technology from Blaine Froats, its previous CEO, in December 2007. On January 2, 2010, the Company purchased certain intellectual property and assets related to the design and manufacturing of small electric powered tractors. As part of this transaction the company issued 8,438,273 common shares to RA Zirger Holdings Inc. Now Richard A. Zirger is our CEO. The Company is no longer pursuing the commercialization of the plastic recycling technology. On March 19, 2010, the Company changed its name to Electric Tractor Corp. We expect that we will need $500,000 in new capital to begin assembly of our proposed Electric Tractor models. We are currently updating the controller (central processing unit) and body design in anticipation of manufacturing,. We have identified a location which have not yet secured. Additionally, we will need to hire additional personnel and enter into agreements to acquire the parts and machinery needed to begin production. We expect to have secured a location and the upgraded compenents by November 2013, which will allow us to begin manufacturing a small number of tractors shortly thereafter. SUMMARY FINANCIAL DATA Because this is only a summary of our financial information, it does not contain all of the financial information that may be important to you. Therefore, you should carefully read all of the information in this prospectus and any prospectus supplement, including the financial statements and their explanatory notes and the section entitled Management s Discussion and Analysis of Financial Condition and Results of Operations , before making a decision to invest in our common stock. The information contained in the following summary is derived from our financial statements since inception in August 2009. For financial statement purposes Electric Tractor Corp. (the entity from which the Registrant (formerly known as Tabularasa Corp. and now known as Electric Tractor Corp.) is the accounting acquirer and the financial statements are those of the original Electric Tractor Corp. Year Ended 12/31/2012 From Inception Through 12/31/2012 Revenues $ - 0 - $ - 0 - Cost of Sales - 0 - - 0 - Gross Profit - 0 - - 0 - Consulting Fees 26,971 42,592 Other Expenses 29,135 77,689 Total Operating Expense 56,106 120,281 Loss from Operations (56,106 ) (120,281 ) Other Income -0- -0- NET INCOME /LOSS $ (56,106 ) $ (120,281 ) Table of Contents
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+Table of Contents Joseph Mezey, President/Director. Mr. Mezey is our President and a member of the Board of Directors. In May 2010, Mr. Mezey co-founded The Graystone Company with Paul Howarth. In December 2010, Mr. Mezey became a member of the LLC Renard Properties. Mr. Mezey has no duties or responsibilities with regard to Renard Properties. Renard Properties acquires and invests in real estate throughout the US. Renard Properties is an affiliate of the Company due to the fact that it owns more than 10% of the Common Stock of the Company. Since July 2008, Mr. Mezey has worked as the President of WTL Group, Inc,, his family s company, which is in involved in the manufacturing and sell of products produced in China. WTL Group is an affiliate of the Company due to the fact that it owns more than 10% of the Common Stock of the Company. From August 2008 June 2010, Mr. Mezey was previously a member of the Board of Directors of Forterus, Inc. and served as its CEO from February through August 2008. Forterus is a behavioral health company focusing on drug and alcohol rehabilitation. From March 2007 - May 2008, Mr. Mezey was also the CEO of the Mezey Howarth Racing Stables which owned, raced and breed thoroughbreds throughout the United States. From January 2005 April 2007, Mr. Mezey was the President/COO of NAPP Tour, Inc. (North American Poker Tour). NAAP Tour created a new processional poker tour that was to be aired on television. From 2004 - 2005, Mr. Mezey was the Chief Legal Officer and Interim Chief Accounting Officer of College Partnership, Inc. College Partnership provided college preparatory services to high school student and their parents including SAT courses, selection of majors and college selection. While at College Partnership Mr. Mezey worked with the auditors and finance department to create a system of accounting control and procedures. From 2003 - 2004, Mr. Mezey worked for Vision Direct Marketing as its Vice-President of Operations and General Counsel. Mr. Mezey graduated from Georgetown University Law Center with an LL.M. in Securities and Financial Regulation. Mr. Mezey received his J.D., with cum laude honors, from New England School of Law and his B.S. from Virginia Commonwealth University. Except as stated above, none of the Companies or entities Mr. Mezey has previously worked for is a parent, subsidiary or other affiliate of the Company. The foregoing persons are promoters of The Graystone Company, Inc., as that term is defined in the rules and regulations promulgated under the Securities and Exchange Act of 1933. Directors are elected to serve until the next annual meeting of stockholders and until their successors have been elected and qualified. Officers are appointed to serve until the meeting of the board of directors following the next annual meeting of stockholders and until their successors have been elected and qualified. Our management has not been involved in any legal proceedings as described in Item 401(f) of Regulation S-K. Committees of the Board We do not have a separate audit committee at this time. Our entire board of directors acts as our audit committee. We intend to form an audit committee, corporate governance and nominating committee and a compensation committee once our board membership increases. Our plan is to start searching and interviewing possible independent board members in the next six months. Significant Employees There are no persons other than our executive officers who are expected by us to make a significant contribution to our business. Family Relationships There are no family relationships of any kind among our directors, executive officers, or persons nominated or chosen by us to become directors or executive officers. Involvement in Certain Legal Proceedings We are not currently involved in any legal proceedings and we are not aware of any pending or potential legal actions. Audit and Compensation Committees, Financial Expert We do not have a standing audit or compensation committee or any committee performing a similar function, although we may form such committees in the future. Our entire Board of Directors handles the functions that would otherwise be handled by an audit or compensation committee. Since we do not currently have an audit committee, we have no audit committee financial expert. Since we do not currently pay any compensation to our officers or directors, we do not have a compensation committee. If we decide to provide compensation for our officers and directors in the future, our Board of Directors may appoint a committee to exercise its judgment on the determination of salary and other compensation. Table of Contents Involvement in Certain Legal Our directors, executive officers and control persons have not been involved in any of the following events during the past ten years: Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time, or Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); or Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; or Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority, barring, suspending or otherwise limiting for more than 60 days his or her involvement in any type of business, securities or banking activities; or Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. Subject to, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended, or vacated, relating to the alleged violation of any Federal or State securities or commodities law or regulation, or any law or regulation respecting financial institutions or insurance companies, any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or Subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, self-regulatory organization (as defined by Section 3(a)(26) of the Exchange Act), any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member Controls and Procedures Evaluation of disclosure controls and procedures. Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of Paul Howarth, Chief Executive Officer and Joseph Mezey our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon and as of the date of that evaluation, Messrs. Howath and Mezey concluded that our disclosure controls and procedures are not effective to ensure that information required to be disclosed in our reports filed and submitted under the Exchange Act is recorded, processed, summarized and reported as and when required. The reason we believe our disclosure controls and procedures are not effective is because: 1. No independent directors; 2. No segregation of duties; 3. No audit committee; and 4. Ineffective controls over financial reporting. The Company has concluded that these are not material weaknesses. However, the Company intends to remedy these factors as follows: Independent Directors: The Company intends to obtain at least 2 independent directors at its next annual shareholder meeting (expected to occur in August 2011). The cost associated to the addition in minimal and not deemed material. Table of Contents No Segregation of Duties/ Ineffective controls over financial reporting: The company intends to hire additional staff members as its capital position allows. These additional staff members will be responsible for making sure that information required to be disclosed in our reports filed and submitted under the Exchange Act is recorded, processed, summarized and reported as and when required and will the staff members will have segregated responsibilities with regard to these responsibilities. The costs associated with the hiring the additional staff members will increase the Company's Sales, General and Administration (SG&A) Expense. It is anticipated the cost of the new staff members will be approximately $40,000 per year. No audit committee: After the election of the independent directors at the next annual shareholder meeting, the Company expects that an Audit Committee will be established. The cost associated to the addition an audit committee are minimal and not deemed material. Executive Compensation The Companies officers and director have receive any annual salary of $1.00 per year for the services rendered on behalf of the Company. Name and Stock All other Principal Position Year Salary Bonus Awards Compensation TOTAL Paul Howarth, 2012 $ 1.00 0 0 216,550 (1) 216,551 Chairman and CEO Joseph Mezey, President, CFO 2012 $ 1.00 0 0 216,550 (2) 216,551 Director (1) This represents $93,750 which was paid to Renard Properties, and $115,000 which was paid to Renard in the form of a restrictive stock grant under the Company s qualified employee stock plan. This also included a monthly $650 cell phone and car allowance paid to Mr. Howarth. (2) This represents $93,750 which was paid to JW Group, and $115,000 which was paid to JW Group in the form of a restrictive stock grant under the Company s qualified employee stock plan. This also included a monthly $650 cell phone and car allowance paid to Mr. Mezey. Director Independence Our Board of Directors has determined that none of our directors are independent. Policies and Procedures with Respect to Related Party Transactions As of the date hereof, our Board of Directors has not adopted formal written policies or procedures regarding the review, approval or ratification of related party transactions. It is the Company s intention to adopt such policies and procedures in the immediate future. Such policies will include, among other things, descriptions of the types of transactions covered, the standards to be applied in reviewing such transactions, the process for review of such transactions, and the individuals on the Board of Directors or otherwise who are responsible for implementing the policies and procedures. It is our intention that our audit committee, which will be comprised entirely of independent directors, will be responsible for such matters on an ongoing basis, consistent with its written charter. Notice of the Company s adoption of these policies and procedures will be given to all appropriate Company personnel. Conflicts of Interest and Corporate Opportunities The officers and directors have acknowledged that under Delaware Corporate law that they must present to the Company any business opportunity presented to them as an individual that met the Delaware's standard for a corporate opportunity: (1) the corporation is financially able to exploit the opportunity; (2) the opportunity is within the corporation's line of business; (3) the corporation has an interest or expectancy in the opportunity; and (4) by taking the opportunity for his own, the corporate fiduciary will thereby be placed in a position inimical to their duties to the corporation. This is enforceable and binding upon the officers and directors as it is part of the Code of Ethics that every officer and director is required to execute. However, the Company has not adopted formal written policies or procedures regarding the process for how these corporate opportunities are to be presented to the Board. It is the Company s intention to adopt such policies and procedures in the immediate future. Security Ownership of Certain Beneficial Owners and Management The following table sets forth, as of the date of this filing, certain information concerning the beneficial ownership of our common stock by (i) each stockholder known by us to own beneficially five percent or more of our outstanding common stock; (ii) each director; (iii) each named executive officer; and (iv) all of our executive officers and directors as a group, and their percentage ownership and voting power. Table of Contents Unless otherwise indicated below, to our knowledge, all persons named in the table have sole voting and investment power with respect to their shares of our common stock, except to the extent authority is shared by spouses under community property laws. Except as otherwise indicated in the table below, addresses of named beneficial owners are in care of the Company, 2620 Regatta Drive, Ste 102, Las Vegas, NV 89128. Class A Common Stock Percent Class B Common Stock Percent Total Name Number of Shares of Class Number of Shares of Class Voting Power Paul Howarth, CEO(1) 84,573,703 25.03 % 2,500,000 50.00 % 39.93 % Joseph Mezey, CFO 84,372,127 24.97 % 2,500,000 50.00 % 39.91 % Totals 168,945,830 50.001 % 5,000,000 100.00 % 79.84 % 1. This includes 82,770,501 Class A shares and 5,000,000 lass B held by Renard Properties, LLC. Mr. Howarth has voting and dispositive power of these shares. 2. This includes 82,741,875 Class A and 5,000,000 Class B held by WTL Group, Inc. which Mr. Mezey s family owns and he is the President/CEO. Certain Relationships and Related Transactions, and Director Independence On July, 5, 2012, the Company agreed to acquire the rights to 100 oil and gas leases from Avenill Ventures, LLC for $700,000. Avenhill is beneficially owned by Paul Howarth and Joseph Mezey, our officers and directors. The Company agreed to issue to $100,000 in Company stock at the closing market price on July 5, 2012 which was $0.002. As such on July 9, 2012.the Company issued 25,000,000 shares of its Class A Common Stock to Renard Properties, LLC (which is beneficially owned by Paul Howarth) and 25,000,000 shares of its Class A Common Stock to JW Group, Inc. (which is beneficially owned by Joseph Mezey). The remaining $600,000 is owed as a note in the amounts of: $200,000 Renard Properties, LLC, $200,000 to JW Group, Inc. and $200,000 to an unrelated 3rd party. On July 5, 2012, the Company issued 25,000,000 shares of Class A Common stock to Renard Properties, LLC at a price of $.002. The shares issued are restricted under Rule 144. Renard Properties is beneficially owned by Paul Howarth our CEO. On July 5, 2012, the Company issued 25,000,000 shares of Class A Common stock to JW Group, Inc. at a price of $.002. The shares issued are restricted under Rule 144. Renard Properties is beneficially owned by Joseph Mezey our CFO. On July 10, 2012, the Company issued 10,000,000 shares of Class A Common stock to Renard Properties, LLC at a price of $.0056. The shares issued are restricted under Rule 144. Renard Properties is beneficially owned by Paul Howarth our CEO. On July 5, 2012, the Company issued 10,000,000 shares of Class A Common stock to JW Group, Inc. at a price of $.0056. The shares issued are restricted under Rule 144. Renard Properties is beneficially owned by Joseph Mezey our CFO. On August 21, 2012, the Company issued 8,000,000 shares of Class A Common stock to Renard Properties, LLC at a of $.0122. The shares issued are restricted under Rule 144. Renard Properties is beneficially owned by Paul Howarth our CEO. On August 21, 2012, the Company issued 8,000,000 shares of Class A Common stock to JW Group, Inc. at a price of $.0122. The shares issued are restricted under Rule 144. Renard Properties is beneficially owned by Joseph Mezey our CFO. On September 1, 2012, the Company issued 625,000 shares of Class A Common stock to Renard Properties, LLC at a of $.008. The shares issued are restricted under Rule 144. Renard Properties is beneficially owned by Paul Howarth our CEO. On September 1, 2012, the Company issued 625,000 shares of Class A Common stock to JW Group, Inc. at a price of $.008. The shares issued are restricted under Rule 144. Renard Properties is beneficially owned by Joseph Mezey our CFO. On August 14, 2012, the Company issued 1,000,000 shares of Class A Common stock to JW Group, Inc. at a price of $.0195. The shares issued are restricted under Rule 144. JW Group is beneficially owned by Joseph Mezey our CFO. On August 20, 2012, The Company s officers, Paul Howarth and Joseph Mezey, agreed to purchase on behalf of the company a sluice box. The officers agreed to pay the $150,000 for the equipment in exchange for the shares purchase on August 9-14, 2012 and a promissory note for the remaining amount. Table of Contents During the three months ending September 30, 2012, the Company received short term loans in the total amount of $273,330 from Renard Properties which includes the purchase of equipment for the company, short term loans for cash flow purposes and consulting fees. Consulting fees totaled $31,500 for the $15,625 per month the Company accrues. During the three months ending September 30, 2012, the Company re-paid short term loans in the total amount of $279,411 to Renard Properties. The note payable includes the purchase of equipment for the company, short term loans for cash flow purposes and consulting fees. The Company still owes Renard Properties $122,207 as of September 30, 2012. During the three months ending September 30, 2012, the Company received short term loans in the total amount of $291,350 from JW Group, Inc. which includes the purchase of equipment for the company, short term loans for cash flow purposes and consulting fees. Consulting fees totaled $31,500 for the $15,625 per month the Company accrues. During the three months ending September 30, 2012, the Company re-paid short term loans in the total amount of $275,950 to JW Group. The note payable includes the purchase of equipment for the company, short term loans for cash flow purposes and consulting fees. The Company still owes JW Group $3,165 as of September 30, 2012. On October 1, 2012, the Company received a loan from Renard Properties for $40,000 which was used to purchase mining equipment in Peru. On October 1, 2012, the Company received a loan from JW Group for $40,000 which was used to purchase mining equipment in Peru. On September 30, 2012 , the Company reversed the transaction on July 5, 2012 regarding the lease on the oil well. On October 1, 2012, the Company received a loan from Renard Properties for $40,000 which was used to purchase mining equipment in Peru. On October 1, 2012, the Company received a loan from JW Group for $40,000 which was used to purchase mining equipment in Peru. On November 5, 2012, the Company and its CEO and CFO agreed to a revolving line of credit in the amount of $100,000. The Company s CEO and CFO will provide a line of credit to the Company in the total amount of $100,000 which shall be used for short term cash flows needs and shall bear no interest. On December 6, 2012, the Renard Properties, LLC (a 10% shareholder and beneficially owned by our CEO Paul Howarth) purchased 6,000,000 shares for $38,000 or a price per share of $.006. The shares will be restricted until December 31, 2015. On December 6, 2012, JW Group, Inc. (a 10% shareholder and beneficially owned by our CFO Joseph Mezey) purchased 6,000,000 shares for $38,000 or a price per share of $.006. The shares will be restricted until December 31, 2015. On December 10, 2012, the Renard Properties, LLC (a 10% shareholder and beneficially owned by our CEO Paul Howarth) purchased 3,000,000 shares for $13,500 or a price per share of $.0045. The shares will be restricted until December 31, 2015. On December 10, 2012, JW Group, Inc. (a 10% shareholder and beneficially owned by our CFO Joseph Mezey) purchased 3,000,000 shares for $13,500 or a price per share of $.0045. The shares will be restricted until December 31, 2015. On December 19, 2012, the Company s officers and directors have agreed to invest into the Company $50,000 for the initial investment for the joint venture in Suriname. The Company agreed to issue 25,000,000 shares of its Series A Preferred Stock in exchange for this investment. Item 11A: Material Changes. Not Applicable. Table of Contents Item 12: Incorporation of Certain Information by Reference. We are incorporating he information contained in the following 8-K filings: (1) 8-K filed January 8, 2013 (2) 8-K filed December 31, 2012 (3) 8-K filed December 28, 2012 (4) 8-K filed December 19, 2012 (5) 8-K filed December 18, 2012 (6) 8-K/A filed December 17, 2012 (7) 8-K filed December 11, 2012 (8) 8-K filed December 7, 2012 (9) 8-K filed November 30, 2012 (10) 8-K filed November 27, 2012 (11) 8-K filed November 20, 2012 (12) 8-K filed November 14, 2012 (13) 8-K filed November 5, 2012 (14) 8-K filed October 22, 2012 (15) 8-K filed October 10, 2012 (16) 8-K filed October 2, 2012 (17) 8-K filed October 1, 2012 And 10-Q and 10-K s filed on (1) 10-Q filed November 19, 2012 (2) 10-Q filed August 20, 2012 (3) 10-Q/A filed June 5, 2012 (4) 10-K filed April 13, 2012 Item 12A: Commission Position of Indemnification for Securities Act Liabilities Our directors and officers are indemnified as provided by the Section 145 of the General Corporation Law of Delaware and our Bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act of 1933. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our 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 Securities Act and will be governed by the final adjudication of such issue. We have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court s decision. WHERE YOU CAN FIND ADDITIONAL INFORMATION The public may read and copy any materials the Company files with the SEC in the SEC's Public Reference Section, Room 1580, 100 F Street N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Section by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov. Table of Contents ITEM 26: EXHIBITS SCHEDULE The following exhibits are filed with this prospectus: Exhibit Description 3.1 Restated Articles of Incorporation 3.2 By-Laws 10.1 SC Capital Investment Agreement 5.1 Legal Opinion 23.1 Auditors Consent ITEM 27: UNDERTAKING The undersigned Registrant hereby undertakes: 1. To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to: (a) include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (b) reflect in the prospectus any facts or events which, individually or, together, represent a fundamental change in the information in the registration statement. Notwithstanding the forgoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (c) include any additional or changed material information on the plan of distribution. Provided however, That: i. Paragraphs (1)(a) and (1)(b) of this section do not apply if the registration statement is on Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement; and ii. Paragraphs (1)(a), (1)(b) and (1)(c) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement. Table of Contents 2. For determining liability under the Securities Act, to treat each such post-effective amendment as a new registration statement of the securities offered, and the offering of such securities at that time to be the initial bona fide offering. 3. To file a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. 4. For determining liability of the undersigned small business issuer under the Securities Act to any purchaser in the initial distribution of the securities, that in a primary offering of securities of the undersigned small business issuer pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned small business issuer will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: i. Any preliminary prospectus or prospectus of the undersigned small business issuer relating to the offering required to be filed pursuant to Rule 424; ii. Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned small business issuer or used or referred to by the undersigned small business issuer; iii. The portion of any other free writing prospectus relating to the offering containing material information about the undersigned small business issuer or its securities provided by or on behalf of the undersigned small business issuer; and iv. Any other communication that is an offer in the offering made by the undersigned small business issuer to the purchaser. 5. For the purpose of determining liability under the Securities Act to any purchaser each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectus filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue. Table of Contents Signatures Pursuant to the requirements of the Securities Act of 1933, The Graystone Company has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Huntington Beach in the State of California, on January 15, 2013. The Graystone Company, Inc. By: /s/ Joseph Mezey Joseph Mezey President Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date Chairman of the Board /s/ Paul Howarth Director, Principal Executive Officer January 15, 2013 Paul Howarth President, Director, Secretary /s/ Joseph Mezey Principal Accounting Officer January 15, 2013 Joseph Mezey Principal Financial Officer Table of Contents Table of Contents TABLE OF CONTENTS Page Prospectus Summary 1
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+the related notes appearing elsewhere in this prospectus before deciding whether to purchase notes. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from any results discussed in the forward-looking statements as a result of certain factors, including those set forth under Risk Factors and Forward-Looking Statements. Overview We are a leading global provider of information and risk management solutions. We provide these solutions to businesses across multiple industries and to individual consumers. Our technology and services enable businesses to make more timely and informed credit granting, risk management, underwriting, fraud protection and customer acquisition decisions by delivering high quality data, integrated with analytics and decisioning capabilities. Our interactive website provides consumers with real-time access to their personal credit information and analytical tools that help them understand and proactively manage their personal finances. Over a million unique consumers visit our website each month. We have operations in the United States, Africa, Canada, Latin America, Asia Pacific and India and provide services in 33 countries. Since our founding in 1968, we have built a diversified and stable customer base in multiple industries, including financial services, insurance, healthcare, automotive, retail and communications. Businesses use our data for their daily risk-management processes. Consumers use our data to help them understand their credit profile and protect themselves against identity theft. We obtain financial, credit, identity, bankruptcy, lien, judgment, insurance claims, automotive and other relevant information from thousands of sources, including credit-granting institutions, private databases and public records depositories, much of which is provided to us at little or no cost. We refine and enhance this data to create proprietary databases, processing approximately two billion updates monthly in the United States. We combine our data with our analytics and decisioning technology to deliver additional value to our customers. Our analytics, such as predictive modeling and scoring, customer segmentation, benchmarking and forecasting, enable businesses and consumers to efficiently monitor and manage risk. Our decisioning technology, which is delivered on a software-as-a-service platform, enables businesses to interpret data and scores and apply their specific qualifying criteria to make real-time decisions at the point of interaction with their customers. Collectively, our data, analytics and decisioning technology allow businesses to more effectively identify and acquire new customers, manage risk associated with existing customers, generate cross-selling opportunities and reduce loss from fraud and identity theft. We have a global customer base that includes many of the largest companies in each of the primary industries we serve. For example, in the United States, we contract with eight of the ten largest banks, all of the major credit card issuers, nine of the ten largest property and casualty insurance carriers and we provide services to thousands of healthcare providers. In addition, we provide subscription-based interactive services to a growing base of over one million consumers. We manage our business through three operating segments: U.S. Information Services ( USIS ), International and Interactive. USIS, which represented approximately 64% of our revenue in 2012, and 63% of our revenue in the six months ended June 30, 2013, provides consumer reports, credit scores, verification services, analytical services, revenue management and decisioning technology to businesses in the United States. USIS offers these services to customers in the financial services, insurance, healthcare and other industries, and delivers them through both direct and indirect channels. Table of Contents Table of Registrant Guarantors Exact Name of Registrant Guarantors as Specified in Its Charter State or Other Jurisdiction of Incorporation or Organization I.R.S. Employer Identification Number Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant Guarantor s Principal Executive Offices Diversified Data Development Corporation. California 95-2902153 555 West Adams Street Chicago, IL 60661 (312) 985-2000 TransUnion Corp. Delaware 74-3135689 555 West Adams Street Chicago, IL 60661 (312) 985-2000 TransUnion Healthcare LLC Delaware 27-1491512 555 West Adams Street Chicago, IL 60661 (312) 985-2000 TransUnion Interactive, Inc. Delaware 13-4117314 555 West Adams Street Chicago, IL 60661 (312) 985-2000 TransUnion Rental Screening Solutions, Inc.. Delaware 52-2139271 555 West Adams Street Chicago, IL 60661 (312) 985-2000 TransUnion TeleData LLC Oregon 20-5618633 555 West Adams Street Chicago, IL 60661 (312) 985-2000 Visionary Systems, Inc.. Georgia 58-2255788 555 West Adams Street Chicago, IL 60661 (312) 985-2000 Table of Contents Under the terms of the indenture relating to the notes, the Issuers have agreed that, whether or not we are required to do so by the rules and regulations of the SEC, for so long as any of the notes remain outstanding, we will furnish to the trustee and holders of the notes the information specified in the indenture. See Description of the Notes. Forward-Looking Statements This prospectus contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any statements made in this prospectus that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plans and strategies. These statements often include words such as anticipate, expect, suggest, plan, believe, intend, continue, estimate, target, project, forecast, should, could, would, may, will and other similar expressions. We base these forward-looking statements on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances and at the time such statements were made. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements. Factors that may materially affect such forward-looking statements include: macroeconomic and industry trends and adverse developments in the debt, consumer credit and financial services markets; our ability to maintain the security and integrity of our data; our ability to deliver services timely without interruption; our ability to maintain our access to data sources; government regulation and changes in the regulatory environment; litigation or regulatory proceedings; our ability to effectively develop and maintain strategic alliances and joint ventures; our ability to make acquisitions and integrate the operations of other businesses; our ability to timely develop new services; our ability to manage and expand our operations and keep up with rapidly changing technologies; our ability to manage expansion of our business into international markets; economic and political stability in international markets where we operate; our ability to effectively manage our costs; our ability to provide competitive services and prices; our ability to make timely payments of principal and interest on our indebtedness; our ability to satisfy covenants in the agreements governing our indebtedness; our ability to maintain our liquidity; fluctuations in exchange rates; changes in federal, state, local and foreign tax laws; Table of Contents International, which represented approximately 20% of our revenue in 2012, and 20% of our revenue in the six months ended June 30, 2013, provides services similar to our USIS and Interactive segments, and provides services in 32 countries outside the United States. Our International segment also provides automotive information and commercial data to our customers in select geographies. Interactive, which represented approximately 16% of our revenue in 2012, and 17% of our revenue in the six months ended June 30, 2013, provides services to consumers that help them understand and proactively manage their personal finances and protect them from identity theft. We sell our subscription-based interactive services primarily through our website, www.transunion.com. Our Industry Evolution to mission critical role. Credit bureaus were formed in the nineteenth century to help provide better credit information to local and regional lenders so they could make more informed credit decisions. As consumer lending expanded, credit bureaus became an integral part of the lending process and now play a critical role in the intermediation between lenders and borrowers. Credit bureaus developed a variety of methods to collect, maintain and analyze information concerning the ability of consumers and businesses to meet their obligations. Consumers and commercial lenders have increasingly used these services to make more informed credit decisions. As a result, credit bureaus have positioned themselves as mission critical partners to financial services institutions around the world. Three major providers with sustainable competitive advantage. As financial services institutions grew in scale and geographic scope, credit bureaus extended their reach by coordinating and forming strategic alliances with other credit reporting providers to share data across large territories through a hub and spoke system. Three credit bureaus have since consolidated into large, international organizations that can provide a wide range of data services and analytical applications to their larger and increasingly demanding financial services customers. As a result of this consolidation, TransUnion, Equifax and Experian have emerged as the global leaders in the industry. The largest U.S. customers of these global credit bureaus typically use the services of all three providers to validate consistency and ensure reliability. Development of the business information service providers. Over the past decade, credit bureaus have devoted significant resources to enhance the quality of their data sets by developing a variety of proprietary information databases. Credit bureaus have evolved from being collectors and sellers of credit information to providers of more advanced information services. Given the increased consumer demand for monitoring their own credit, the credit bureaus have also begun to market and sell these services directly to consumers. The development of these more advanced services has enabled credit bureaus to diversify their revenue base, accelerate growth and evolve into business information service providers. Market Opportunity We believe several important trends in the global macroeconomic environment, as well as within the key industries we serve, are driving development of the market for information and risk management solutions. Large and Growing Market for Data and Analytics. We believe that the business information services market is large and growing. We believe that the demand for targeted data and sophisticated analytical tools will continue to grow meaningfully as businesses seek real-time access to more granular data in order to better understand their customers. Table of Contents The information in this prospectus is not complete and may be changed. We may not offer or sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, SEPTEMBER 18, 2013 Prospectus Trans Union LLC TransUnion Financing Corporation 11.375% Senior Notes due 2018, Series B The 11.375% Senior Notes due 2018, Series B were issued by Trans Union LLC and TransUnion Financing Corporation, which we refer to together as the Issuers, in exchange for the 11.375% Senior Notes due 2018 originally issued by the Issuers on June 15, 2010. The 11.375% Senior Notes due 2018, Series B are referred to herein as the 11.375% notes, or the notes, unless the context otherwise requires. The notes bear interest at a rate of 11.375% per annum and mature on June 15, 2018. We are registering the notes under the Securities Act of 1933 for market-making transactions, as described below. The notes will mature on June 15, 2018. The Issuers have the option to redeem all or a portion of the notes at any time on or after June 15, 2014 at the redemption prices set forth in this prospectus plus accrued and unpaid interest. The Issuers also have an option to redeem all or a portion of the notes at any time before June 15, 2014, at a redemption price equal to 100% of the aggregate principal amount of the notes to be redeemed plus a make-whole premium and accrued and unpaid interest. The notes are the Issuers senior unsecured obligations and rank equal in right of payment with all of the Issuers existing and future senior debt. The Issuers parent company, TransUnion Corp., and each of TransUnion Corp. s direct and indirect subsidiaries that guarantee Trans Union LLC s credit facilities have unconditionally guaranteed the notes on a senior unsecured basis with guarantees that rank pari passu in right of payment with all existing and future senior indebtedness of each entity. The notes and the guarantees are effectively subordinated to the existing and future secured indebtedness of the Issuers and guarantors to the extent of the value of the collateral securing such indebtedness. This prospectus includes additional information on the terms of the notes, including redemption and repurchase prices, covenants and transfer restrictions. There is no established trading market for the notes offered hereby. We do not intend to list the notes on any securities exchange or seek approval for quotation through any automated trading system. See Risk Factors beginning on page 15 for a discussion of certain risks that you should consider before investing in the notes. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. This prospectus has been prepared for and may be used by Goldman, Sachs & Co. and other affiliates of The Goldman Sachs Group, Inc. in connection with offers and sales of the notes related to market-making transactions in the notes effected from time to time. Such affiliates of The Goldman Sachs Group, Inc. may act as principal or agent in such transactions, including as agent for the counterparty when acting as principal or as agent for both counterparties, and may receive compensation in the form of discounts and commissions, including from both counterparties, when it acts as agents for both. Such sales will be made at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices. We will not receive any proceeds from such sales. GOLDMAN, SACHS & CO. The date of this prospectus is , 2013 Table of Contents our ability to protect our intellectual property; our ability to retain or renew existing agreements with long-term customers; our ability to access the capital markets; further consolidation in our end customer markets; reliance on key management personnel; and
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001513518_transunion_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001513518_transunion_prospectus_summary.txt
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+the related notes appearing elsewhere in this prospectus before deciding whether to purchase notes. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from any results discussed in the forward-looking statements as a result of certain factors, including those set forth under Risk Factors and Forward-Looking Statements. Overview We are a leading global provider of information and risk management solutions. We provide these solutions to businesses across multiple industries and to individual consumers. Our technology and services enable businesses to make more timely and informed credit granting, risk management, underwriting, fraud protection and customer acquisition decisions by delivering high quality data, integrated with analytics and decisioning capabilities. Our interactive website provides consumers with real-time access to their personal credit information and analytical tools that help them understand and proactively manage their personal finances. Over a million unique consumers visit our website each month. We have operations in the United States, Africa, Canada, Latin America, Asia Pacific and India and provide services in 33 countries. Since our founding in 1968, we have built a diversified and stable customer base in multiple industries, including financial services, insurance, healthcare, automotive, retail and communications. Businesses use our data for their daily risk-management processes. Consumers use our data to help them understand their credit profile and protect themselves against identity theft. We obtain financial, credit, identity, bankruptcy, lien, judgment, insurance claims, automotive and other relevant information from thousands of sources, including credit-granting institutions, private databases and public records depositories, much of which is provided to us at little or no cost. We refine and enhance this data to create proprietary databases, processing approximately two billion updates monthly in the United States. We combine our data with our analytics and decisioning technology to deliver additional value to our customers. Our analytics, such as predictive modeling and scoring, customer segmentation, benchmarking and forecasting, enable businesses and consumers to efficiently monitor and manage risk. Our decisioning technology, which is delivered on a software-as-a-service platform, enables businesses to interpret data and scores and apply their specific qualifying criteria to make real-time decisions at the point of interaction with their customers. Collectively, our data, analytics and decisioning technology allow businesses to more effectively identify and acquire new customers, manage risk associated with existing customers, generate cross-selling opportunities and reduce loss from fraud and identity theft. We have a global customer base that includes many of the largest companies in each of the primary industries we serve. For example, in the United States, we contract with eight of the ten largest banks, all of the major credit card issuers, nine of the ten largest property and casualty insurance carriers and we provide services to thousands of healthcare providers. In addition, we provide subscription-based interactive services to a growing base of over one million consumers. We manage our business through three operating segments: U.S. Information Services ( USIS ), International and Interactive. USIS, which represented approximately 64% of our revenue in 2012, and 63% of our revenue in the six months ended June 30, 2013, provides consumer reports, credit scores, verification services, analytical services, revenue management and decisioning technology to businesses in the United States. USIS offers these services to customers in the financial services, insurance, healthcare and other industries, and delivers them through both direct and indirect channels. Table of Contents Table of Registrant Guarantors Exact Name of Registrant Guarantors as Specified in Its Charter State or Other Jurisdiction of Incorporation or Organization I.R.S. Employer Identification Number Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant Guarantor s Principal Executive Offices Diversified Data Development Corporation. California 95-2902153 555 West Adams Street Chicago, IL 60661 (312) 985-2000 TransUnion Corp. Delaware 74-3135689 555 West Adams Street Chicago, IL 60661 (312) 985-2000 TransUnion Healthcare LLC Delaware 27-1491512 555 West Adams Street Chicago, IL 60661 (312) 985-2000 TransUnion Interactive, Inc. Delaware 13-4117314 555 West Adams Street Chicago, IL 60661 (312) 985-2000 TransUnion Rental Screening Solutions, Inc.. Delaware 52-2139271 555 West Adams Street Chicago, IL 60661 (312) 985-2000 TransUnion TeleData LLC Oregon 20-5618633 555 West Adams Street Chicago, IL 60661 (312) 985-2000 Visionary Systems, Inc.. Georgia 58-2255788 555 West Adams Street Chicago, IL 60661 (312) 985-2000 Table of Contents Under the terms of the indenture relating to the notes, the Issuers have agreed that, whether or not we are required to do so by the rules and regulations of the SEC, for so long as any of the notes remain outstanding, we will furnish to the trustee and holders of the notes the information specified in the indenture. See Description of the Notes. Forward-Looking Statements This prospectus contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any statements made in this prospectus that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plans and strategies. These statements often include words such as anticipate, expect, suggest, plan, believe, intend, continue, estimate, target, project, forecast, should, could, would, may, will and other similar expressions. We base these forward-looking statements on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances and at the time such statements were made. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements. Factors that may materially affect such forward-looking statements include: macroeconomic and industry trends and adverse developments in the debt, consumer credit and financial services markets; our ability to maintain the security and integrity of our data; our ability to deliver services timely without interruption; our ability to maintain our access to data sources; government regulation and changes in the regulatory environment; litigation or regulatory proceedings; our ability to effectively develop and maintain strategic alliances and joint ventures; our ability to make acquisitions and integrate the operations of other businesses; our ability to timely develop new services; our ability to manage and expand our operations and keep up with rapidly changing technologies; our ability to manage expansion of our business into international markets; economic and political stability in international markets where we operate; our ability to effectively manage our costs; our ability to provide competitive services and prices; our ability to make timely payments of principal and interest on our indebtedness; our ability to satisfy covenants in the agreements governing our indebtedness; our ability to maintain our liquidity; fluctuations in exchange rates; changes in federal, state, local and foreign tax laws; Table of Contents International, which represented approximately 20% of our revenue in 2012, and 20% of our revenue in the six months ended June 30, 2013, provides services similar to our USIS and Interactive segments, and provides services in 32 countries outside the United States. Our International segment also provides automotive information and commercial data to our customers in select geographies. Interactive, which represented approximately 16% of our revenue in 2012, and 17% of our revenue in the six months ended June 30, 2013, provides services to consumers that help them understand and proactively manage their personal finances and protect them from identity theft. We sell our subscription-based interactive services primarily through our website, www.transunion.com. Our Industry Evolution to mission critical role. Credit bureaus were formed in the nineteenth century to help provide better credit information to local and regional lenders so they could make more informed credit decisions. As consumer lending expanded, credit bureaus became an integral part of the lending process and now play a critical role in the intermediation between lenders and borrowers. Credit bureaus developed a variety of methods to collect, maintain and analyze information concerning the ability of consumers and businesses to meet their obligations. Consumers and commercial lenders have increasingly used these services to make more informed credit decisions. As a result, credit bureaus have positioned themselves as mission critical partners to financial services institutions around the world. Three major providers with sustainable competitive advantage. As financial services institutions grew in scale and geographic scope, credit bureaus extended their reach by coordinating and forming strategic alliances with other credit reporting providers to share data across large territories through a hub and spoke system. Three credit bureaus have since consolidated into large, international organizations that can provide a wide range of data services and analytical applications to their larger and increasingly demanding financial services customers. As a result of this consolidation, TransUnion, Equifax and Experian have emerged as the global leaders in the industry. The largest U.S. customers of these global credit bureaus typically use the services of all three providers to validate consistency and ensure reliability. Development of the business information service providers. Over the past decade, credit bureaus have devoted significant resources to enhance the quality of their data sets by developing a variety of proprietary information databases. Credit bureaus have evolved from being collectors and sellers of credit information to providers of more advanced information services. Given the increased consumer demand for monitoring their own credit, the credit bureaus have also begun to market and sell these services directly to consumers. The development of these more advanced services has enabled credit bureaus to diversify their revenue base, accelerate growth and evolve into business information service providers. Market Opportunity We believe several important trends in the global macroeconomic environment, as well as within the key industries we serve, are driving development of the market for information and risk management solutions. Large and Growing Market for Data and Analytics. We believe that the business information services market is large and growing. We believe that the demand for targeted data and sophisticated analytical tools will continue to grow meaningfully as businesses seek real-time access to more granular data in order to better understand their customers. Table of Contents The information in this prospectus is not complete and may be changed. We may not offer or sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, SEPTEMBER 18, 2013 Prospectus Trans Union LLC TransUnion Financing Corporation 11.375% Senior Notes due 2018, Series B The 11.375% Senior Notes due 2018, Series B were issued by Trans Union LLC and TransUnion Financing Corporation, which we refer to together as the Issuers, in exchange for the 11.375% Senior Notes due 2018 originally issued by the Issuers on June 15, 2010. The 11.375% Senior Notes due 2018, Series B are referred to herein as the 11.375% notes, or the notes, unless the context otherwise requires. The notes bear interest at a rate of 11.375% per annum and mature on June 15, 2018. We are registering the notes under the Securities Act of 1933 for market-making transactions, as described below. The notes will mature on June 15, 2018. The Issuers have the option to redeem all or a portion of the notes at any time on or after June 15, 2014 at the redemption prices set forth in this prospectus plus accrued and unpaid interest. The Issuers also have an option to redeem all or a portion of the notes at any time before June 15, 2014, at a redemption price equal to 100% of the aggregate principal amount of the notes to be redeemed plus a make-whole premium and accrued and unpaid interest. The notes are the Issuers senior unsecured obligations and rank equal in right of payment with all of the Issuers existing and future senior debt. The Issuers parent company, TransUnion Corp., and each of TransUnion Corp. s direct and indirect subsidiaries that guarantee Trans Union LLC s credit facilities have unconditionally guaranteed the notes on a senior unsecured basis with guarantees that rank pari passu in right of payment with all existing and future senior indebtedness of each entity. The notes and the guarantees are effectively subordinated to the existing and future secured indebtedness of the Issuers and guarantors to the extent of the value of the collateral securing such indebtedness. This prospectus includes additional information on the terms of the notes, including redemption and repurchase prices, covenants and transfer restrictions. There is no established trading market for the notes offered hereby. We do not intend to list the notes on any securities exchange or seek approval for quotation through any automated trading system. See Risk Factors beginning on page 15 for a discussion of certain risks that you should consider before investing in the notes. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. This prospectus has been prepared for and may be used by Goldman, Sachs & Co. and other affiliates of The Goldman Sachs Group, Inc. in connection with offers and sales of the notes related to market-making transactions in the notes effected from time to time. Such affiliates of The Goldman Sachs Group, Inc. may act as principal or agent in such transactions, including as agent for the counterparty when acting as principal or as agent for both counterparties, and may receive compensation in the form of discounts and commissions, including from both counterparties, when it acts as agents for both. Such sales will be made at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices. We will not receive any proceeds from such sales. GOLDMAN, SACHS & CO. The date of this prospectus is , 2013 Table of Contents our ability to protect our intellectual property; our ability to retain or renew existing agreements with long-term customers; our ability to access the capital markets; further consolidation in our end customer markets; reliance on key management personnel; and
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001515735_juniper_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001515735_juniper_prospectus_summary.txt
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+This summary highlights information about Momentive Performance Materials Inc. and the Notes contained elsewhere in this prospectus. This summary may not contain all the information that may be important to you. You should carefully read the entire prospectus before making an investment decision, especially the information presented under the heading Risk Factors. In this prospectus, except as otherwise indicated herein, or as the context may otherwise require, all references to: (i) Momentive, the Company, we, us and our refer to Momentive Performance Materials Inc. and its subsidiaries and (ii) the MPM Group refers to Momentive Performance Materials Holdings Inc. and its subsidiaries. Company overview Momentive Performance Materials Inc. was formed through the acquisition of GE Advanced Materials on December 3, 2006. We believe we are one of the world s largest producers of silicones and silicone derivatives and a global leader in the development and manufacture of products derived from quartz and specialty ceramics. For the twelve months ended December 31, 2012, silicones and quartz represented approximately 91% and 9% of our revenue, respectively. Silicones are a multi-functional family of materials used in a wide variety of products, and serve as a critical ingredient in many construction, transportation, healthcare, personal care, electronic, consumer and agricultural uses. Silicones are generally used as an additive to a wide variety of end products in order to provide or enhance certain of their attributes, such as resistance (heat, ultraviolet light and chemical), lubrication, adhesion or viscosity. Some of the most well-known end-use product applications include bath and shower caulk, pressure-sensitive adhesive labels, foam products, cosmetics and tires. Due to the versatility and high-performance characteristics of silicones, they are increasingly being used as a substitute for other materials. Our Quartz business manufactures quartz, specialty ceramics and crystal products for use in a number of high-technology industries, which typically require products made to precise specifications. The cost of our products typically represents a small percentage of the overall cost of our customers products. On October 1, 2010, our parent, Momentive Performance Materials Holdings Inc. ( MPM Holdings ) and Momentive Specialty Chemicals Holdings LLC (formerly known as Hexion LLC and referred to herein as MSC Holdings ), the direct parent company of Momentive Specialty Chemicals Inc. (formerly known as Hexion Specialty Chemicals, Inc. and referred to herein as MSC ), became subsidiaries of a newly formed holding company, Momentive Performance Materials Holdings LLC ( Momentive Holdings ). We refer to this event as the Momentive Combination. As a result of the Momentive Combination, Momentive Holdings became the ultimate parent entity of Momentive and MSC. Momentive Holdings is controlled by investment funds (the Apollo Funds ) managed by affiliates of Apollo Management Holdings, L.P. (together with Apollo Global Management, LLC and its subsidiaries, Apollo ). Apollo may also be referred to as the Company s owner. We believe that our scale and global reach provide significant efficiencies in our fixed and variable cost structure and that our breadth of related products provides significant operational, technological and commercial advantages. Our manufacturing capacity at our internal sites and our joint venture in China is sufficient to produce the substantial majority of one of our key intermediates, siloxane, which facilitates a low-cost operating structure and security of supply. We are one of two producers in the silicones market with global siloxane production capacity. As of December 31, 2012, we had 22 production sites strategically located around the world, which allows us to produce the substantial majority of our key products locally in the Americas, Europe and Asia. Through this worldwide network of production facilities, we serve more than 5,500 customers between our Silicones and Quartz businesses in over 100 countries. Our customers include leading companies in their respective industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L Oreal, BASF, The Home Depot and Lowe s. Table of Contents EXHIBIT INDEX Exhibit Number Description of Document 2.1 Stock and Asset Purchase Agreement, dated as of September 14, 2006, by and between General Electric Company and Momentive Performance Materials Holdings Inc. (formerly known as Nautilus Holdings Acquisition Corp.) (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 2.2 Amendment to Stock and Asset Purchase Agreement, dated as of December 3, 2006, by and between General Electric Company and Momentive Performance Materials Holdings Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.1 Certificate of Incorporation, as amended, of Momentive Performance Materials Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.2 Amended and Restated By-laws of Momentive Performance Materials Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.3 Certificate of Incorporation, as amended, of Momentive Performance Materials Worldwide Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.4 Amended and Restated By-laws of Momentive Performance Materials Worldwide Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.5 Certificate of Incorporation, as amended, of Momentive Performance Materials China SPV Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.6 Amended and Restated By-laws of Momentive Performance Materials China SPV Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.7 Certificate of Incorporation, as amended, of Momentive Performance Materials South America Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.8 Amended and Restated By-laws of Momentive Performance Materials South America Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.9 Amended and Restated Operating Agreement of MPM Silicones, LLC (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.10 Articles of Organization, as amended, of MPM Silicones, LLC (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.11 Certificate of Incorporation, as amended, of Momentive Performance Materials Quartz, Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.12 Amended and Restated By-laws of Momentive Performance Materials Quartz, Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.13 Certificate of Incorporation, as amended, of Momentive Performance Materials USA Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.14 Amended and Restated By-laws of Momentive Performance Materials USA Inc. (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 3.15 Operating Agreement of Juniper Bond Holdings I LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) Table of Contents SCHEDULE A Guarantor State or Other Jurisdiction of Incorporation or Organization Address of Registrants Principal Executive Offices I.R.S. Employer Identification Number Momentive Performance Materials Worldwide Inc. Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 20-5748357 Momentive Performance Materials USA Inc. Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 20-5748388 Momentive Performance Materials China SPV Inc. Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 20-5748469 Momentive Performance Materials South America Inc. Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 20-5834895 MPM Silicones, LLC New York 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 22-3775481 Momentive Performance Materials Quartz, Inc. Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 34-1839929 Juniper Bond Holdings I LLC Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 26-1589631 Juniper Bond Holdings II LLC Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 26-1589692 Juniper Bond Holdings III LLC Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 26-1589765 Juniper Bond Holdings IV LLC Delaware 260 Hudson River Road Waterford, NY 12188 (518) 237-3330 26-1589836 Table of Contents We have not authorized anyone to give you any information or to make any representations about us or the transactions we discuss in this prospectus other than those contained in this prospectus. If you are given any information or representations about these matters that is not discussed in this prospectus, you must not rely on that information. This prospectus is not an offer to sell or a solicitation of an offer to buy securities anywhere or to anyone where or to whom we are not permitted to offer or sell securities under applicable law. The delivery of this prospectus does not, under any circumstances, mean that there has not been a change in our affairs since the date of this prospectus. Subject to our obligation to amend or supplement this prospectus as required by law and the rules of the Securities and Exchange Commission, or the SEC, the information contained in this prospectus is correct only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of these securities. We will update this prospectus to the extent required by law. We are offering to sell the Notes only in jurisdictions where offers and sales are permitted. Table of Contents We believe we have created a value-added, technical service-oriented business model that enables us to target and participate in high-margin and high-growth specialty markets. These specialty markets account for the majority of our revenues and continue to be a growing part of our business. Revenue and Adjusted EBITDA (as defined in the section entitled Covenant Compliance elsewhere herein) for the twelve months ended December 31, 2012 were $2,357 million and $228 million, respectively. Net loss for the twelve months ended December 31, 2012 was $365 million. Our Strengths Our company has the following competitive strengths: Leading Global Silicones Producer. We believe we are one of the world s largest producers of silicones and silicone derivatives, with leading positions in various product lines and geographic areas. We believe our scale, global reach and breadth of product offerings provide us with significant advantages over many of our competitors by allowing us to serve global customers with precise specifications, particularly those expanding production in developing nations. Attractive Industry Growth Profile. The broad molecular characteristics of silicones continually lead to new uses and applications, which have led to worldwide industry growth in excess of GDP over the past 20 years. Drivers of growth include end-market growth and increased market penetration, with silicones increasingly being used as a value-added substitute for traditional materials or as a functional additive, which yields new properties for our customers products. For instance, silicones act as the conditioning ingredient in 2-in-1 shampoo. Broad-Based Diversification. Industry Diversification. Our Silicones business has a diversified revenue base across a variety of end-markets, reducing our vulnerability to industry trends. Furthermore, our products are often used in niche applications that represent a small portion of our customers material costs. Our leading end-markets are building and construction, which consists of industrial and infrastructure construction and repair, urethane foam additives and a number of other specialty products. Customer Diversification. We have a diverse customer base of more than 5,500 customers between our Silicones and Quartz businesses and are well balanced across multiple geographies. In 2012, our top 20 customers accounted for less than 22% of our total revenues, and no single customer accounted for more than 3% of our total revenues. We have maintained long-standing relationships with many of our customers. Geographic Diversification. We have a global sales presence, with approximately 38%, 31% and 31% of our 2012 and 2011 revenues generated in the Americas, Europe and Asia, respectively. Global Infrastructure. We are a global company with significant manufacturing capacity in each of the Americas, Europe and Asia. We have 22 production facilities located around the world, R&D centers on three continents and sales to customers in over 100 countries. The Silicones business has three siloxane production facilities located in Waterford, New York, Ohta, Japan and Leverkusen, Germany, as well as a siloxane manufacturing joint venture in Jiande, China, and two silanes production facilities in Sistersville, West Virginia and Termoli, Italy. The Quartz production sites are located in Ohio, Geesthacht, Germany, Kozuki, Japan and Wuxi, China. Table of Contents Exhibit Number Description of Document 3.16 Certificate of Formation of Juniper Bond Holdings I LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 3.17 Operating Agreement of Juniper Bond Holdings II LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 3.18 Certificate of Formation of Juniper Bond Holdings II LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 3.19 Operating Agreement of Juniper Bond Holdings III LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 3.20 Certificate of Formation of Juniper Bond Holdings III LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 3.21 Operating Agreement of Juniper Bond Holdings IV LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 3.22 Certificate of Formation of Juniper Bond Holdings IV LLC (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 4.1 Indenture by and between Momentive Performance Materials Inc., Momentive Performance Materials Holdings Inc., Momentive Performance Materials Worldwide Inc., Momentive Performance Materials USA Inc., Momentive Performance Materials China SPV Inc., Momentive Performance Materials South America Inc., GE Quartz, Inc., GE Silicones, LLC and Momentive Performance Materials Inc., dated as of December 4, 2006, with respect to $500,000,000 11 1/2% Senior Subordinated Notes Due 2016 (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 4.2 11 1/2% Senior Subordinated Notes Due 2016 (filed as the exhibit of the same number to our Form S-4 Registration Statement, filed on September 14, 2007) 4.3 Supplemental Indenture among Juniper Bond Holdings I LLC, Juniper Bond Holdings II LLC, Juniper Bond Holdings III LLC, Juniper Bond Holdings IV LLC and Wells Fargo Bank, N.A., dated as of December 20, 2007, with respect to the $500,000,000 11 1/2% Senior Subordinated Notes due 2016 (filed as the exhibit of the same number to our Post-Effective Amendment No. 1 to Form S-4 Registration Statement, filed on January 28, 2008) 4.4 Agreement of registration, appointment and acceptance, effective as of June 8, 2009, by and among Momentive Performance Materials Inc., Wells Fargo Bank, N.A. and The Bank of New York Mellon Trust Company, N.A. (filed as exhibit 4.1 to our Form 8-K, filed on June 12, 2009) 4.5 Indenture, dated as of November 5, 2010, by and among Momentive Performance Materials Inc., the note guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent, including forms of the 9% Second-Priority Springing Lien Notes due 2021 (U.S. Dollar Denominated) and 9 1/2% Second-Priority Springing Lien Notes due 2021 (Euro Denominated) (filed as exhibit 4.1 to our Form 8-K, filed on November 12, 2010) 4.6 Indenture, dated as of May 25, 2012, by and among Momentive Performance Materials Inc., the Note Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent (filed as exhibit 4.1 to our Form 8-K, filed on June 1, 2012) Table of Contents The information in this preliminary prospectus is not complete and may be changed. The selling security holders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is declared effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. Subject to Completion, Dated May 7, 2013 PROSPECTUS Momentive Performance Materials Inc. $124,323,000 11 1/2% Senior Subordinated Notes due 2016 This prospectus covers resales by holders of the 11 1/2% Senior Subordinated Notes due 2016 issued by Momentive Performance Materials Inc. ( Momentive ) on December 4, 2006, which we refer to herein as the Notes. The Notes mature on December 1, 2016. Interest on the Notes is payable in cash at a rate of 11 1/2% per annum, from the issue date or from the most recent date to which interest has been paid or provided for, payable semiannually to holders of record at the close of business on May 15 or November 15 immediately preceding the interest payment date on June 1 and December 1 of each year commencing June 1, 2007. Momentive may redeem some or all of the Notes, at the redemption prices set forth in this prospectus. See Description of Notes Optional Redemption. If we experience certain kinds of changes in control, we must offer to purchase the Notes. The Notes are subordinated to all our existing and future senior debt, including the 8.875% First-Priority Senior Secured Notes due 2020, the 10% Senior Secured Notes due 2020, the Second-Priority Springing Lien Notes due 2021 (together, the Senior Notes ), the ABL Facility (as defined herein) and the Cash Flow Facility (as defined herein), rank equally with all our existing and future senior subordinated debt and rank senior to all our existing and future subordinated debt. The Notes are guaranteed on an unsecured senior subordinated basis by each of Momentive s existing U.S. subsidiaries that is a guarantor under its Cash Flow Facility and each of its future U.S. subsidiaries that guarantee any debt of the Company or the Note Guarantors (the Note Guarantors ). The majority of our business in conducted through non-U.S. subsidiaries that are not guarantors of the Notes. If the Company fails to make payments on the Notes, the Note Guarantors must make them instead (the Note Guarantees ). We have not applied, and do not intend to apply, for listing of the Notes on any national securities exchange or automated quotation system. The selling security holders may sell the Notes covered by this prospectus in one or more transactions, directly to purchasers or through underwriters, brokers or dealers or agents, in public or private transactions, at fixed prices, prevailing market prices at the times of sale, prices related to the prevailing market prices, varying prices determined at the times of sale or negotiated prices. See Plan of Distribution. Momentive will not receive any proceeds from the resale of the Notes hereunder. See Risk Factors beginning on page 13 of this prospectus for a discussion of certain risks that you should consider before investing in the Notes. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. The date of this prospectus is , 2013. Table of Contents We use our global platform to deliver products to companies efficiently on a worldwide basis. Many of our customers are expanding internationally to serve developing areas in Asia, Eastern Europe, Latin America, India and Russia. Maintaining close proximity to our international customers allows us to serve them more quickly and efficiently and thus build strong relationships. Attractive Intermediate Position. We produce siloxane, the key intermediate required to manufacture silicones, in the United States, Germany and Japan, and source siloxane from a joint venture in China. This manufacturing capacity is sufficient to meet the substantial majority of our current requirements for siloxane. We also source a portion of our requirements through long-term and/or supply agreements. We believe this combination of siloxane supply, along with our ability to purchase siloxane from other suppliers when pricing is advantageous, reduces our overall cost structure and strengthens our overall competitiveness. Leading Fused Quartz and Specialty Ceramics Producer. We believe we are a global leader in the fused quartz and ceramics product markets in which we compete. In particular, we believe we are the largest manufacturer of quartz products for the semiconductor end-market and the second largest manufacturer of quartz products for fiber optics. Our leadership position and profitability are driven by several factors, including strong customer relationships and the precise quality and purity specifications of our products. Additionally, we believe we are a leader in several ceramic materials end-markets, including cosmetic additives. Risk Factors Despite our competitive strengths discussed above, investing in the Notes involves a number of risks, including: Our substantial debt could adversely affect our operations and prevent us from satisfying our obligations under our debt obligations. As of December 31, 2012, we had $3,116 million of consolidated outstanding indebtedness, including short-term borrowings, and, based on the consolidated indebtedness, our annualized cash interest expense is projected to be approximately $291 million based on interest rates at December 31, 2012 without giving effect to any subsequent borrowings under the previous revolving credit facility, the ABL Facility or the Cash Flow Facility, of which $288 million would represent cash interest expense on fixed-rate obligations; If global economic conditions weaken, it will continue to negatively impact our business, results of operations and financial condition; We may be unable to achieve the cost savings or synergies that we expect to achieve from our strategic initiatives, including the Momentive Combination, which would adversely affect our profitability and financial condition; Fluctuations in direct or indirect raw material costs could have an adverse impact on our business; and We depend on certain of our key executives and our ability to attract and retain qualified employees. For a discussion of the significant risks associated with our business, our industry and investing in the Notes, you should read the
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+PROSPECTUS SUMMARY This summary highlights some information from this prospectus, and it may not contain all of the information that is important to you. You should read the following summary together with the more detailed information regarding our company and the common stock being sold in this offering, including Risk Factors and our consolidated financial statements and related notes, included elsewhere in, or incorporated by reference into, this prospectus. Except as otherwise indicated, as used in this prospectus, references to the Company , Areti Web , we , us , or our refer to Areti Web Innovations, Inc. and its wholly-owned subsidiaries.
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+Prospectus Summary Prospectus Summary 1
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+This summary highlights information contained in this prospectus, but may not contain all of the information that may be important to you in making your investment decision. You should read the entire prospectus carefully, including the risk factors and the financial statements. Our company We are Jamaica s largest banking and financial services group, based on consolidated total assets at September 30, 2012. We provide individual consumers, small- and medium-sized enterprises, or SMEs, large corporations and government institutions with banking, wealth management, insurance and pension fund management products and services. We provide a wide range of financial products and services to our customers, including loan and investment products, deposits, remittance services, electronic banking, payment services, credit cards, structured finance, trade finance, foreign exchange, wealth management, insurance, pension fund management, annuities, and trust and registrar services. For fiscal years 2008 through 2012, we had an average annual return on shareholders equity of 24.2% and an average dividend yield of 6.7%. As of September 30, 2012, we had a 30.4% share of the Jamaican banking and financial services market regulated by the Bank of Jamaica, as measured by consolidated total assets. We operate our business through seven segments (of which the Retail & SME, Payment Services, Corporate Banking and Treasury & Correspondent Banking segments are our commercial banking segments): Retail & SME: We offer a broad range of banking products and services to Jamaica s consumer and SME market and Jamaican government agencies. We provide these products and services through 38 full service branches, four agencies and 173 automated teller machines, or ATMs, across Jamaica. We had the largest commercial bank branch network in Jamaica at September 30, 2012. Our ATMs accounted for 35.0% and 34.2% of all ATM transactions in Jamaica for fiscal years 2011 and 2012, respectively. We were the first bank in Jamaica to offer dedicated business bankers and specialized product bundles to SMEs, which provide SMEs with tailored products and services and special pricing on certain loans and deposits. We, through our Retail & SME segment, issue debit cards to our consumer customers. Our debit cards represented 31.3% of debit cards in circulation in Jamaica at September 30, 2012. While the issuance of debit cards is a significant component of our Retail & SME segment from an operational and marketing perspective, no revenue is generated from the issuance of these cards and the fees generated from their use at point of sale terminals are recorded in our Payment Services segment. Our Retail & SME segment also includes our remittance business, which allows our customers to send and receive money from London through our subsidiary, NCB Remittance Services (UK) Limited, and worldwide through our contractual relationship with MoneyGram International, Inc. Our Retail & SME segment accounted for 8.3% and 11.7% of our total segment operating profit for fiscal years 2011 and 2012, respectively. Payment Services: We, through our Payment Services segment, issue Visa , MasterCard and our proprietary Keycard credit cards to our consumer, SME and corporate customers. We also issue our proprietary Keycard Cash prepaid card to our consumer customers as well as our SME Table of Contents The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. Subject to completion, dated February 5, 2013 Prospectus 16,071,429 American depositary shares National Commercial Bank Jamaica Limited (incorporated in Jamaica) Representing 803,571,450 ordinary shares This is the initial public offering of our American depositary shares, or ADSs, each of which represents 50 of our ordinary shares, no par value. The ADSs will be evidenced by American depositary receipts, or ADRs. Of the ADSs to be sold in the offering, we are selling 12,500,000 ADSs and the selling shareholders are selling 3,571,429 ADSs. We will not receive any of the proceeds from the ADSs being sold by the selling shareholders. We expect the initial public offering price will be between US$13.00 and US$15.00 per ADS. Our ordinary shares are listed on the Jamaica Stock Exchange, or JSE, and the Trinidad and Tobago Stock Exchange, or TTSE, under the symbol NCBJ. On January 21, 2013, the closing price of our ordinary shares on the JSE was J$21.40 per ordinary share, which is equivalent to US$0.23 per ordinary share, based upon an exchange rate of J$93.0344 to US$1.00 on that date. On January 21, 2013, the closing price of our ordinary shares on the TTSE was TT$1.40 per ordinary share, which is equivalent to US$0.22 per ordinary share, based upon an exchange rate of TT$6.4085 to US$1.00 on that date. We have been authorized to list the ADSs on The New York Stock Exchange. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. Per ADS Total Initial public offering price US$ US$ Underwriting discount(1) US$ US$ Proceeds to us (before expenses) US$ US$ Proceeds to the selling shareholders (before expenses) US$ US$ (1) We have agreed to reimburse the underwriters for some of the expenses they incur in connection with this offering. See Underwriting beginning on page 297 of this prospectus. We have granted the underwriters an option for a period of 30 days to purchase from us up to 2,410,714 additional ADSs to cover over-allotments, if any. Investing in the ADSs involves a high degree of risk. We meet the definition of an emerging growth company as defined under federal securities laws but have determined not to avail ourselves of any reduced reporting requirements applicable to emerging growth companies. See Risk factors beginning on page 24 of this prospectus for certain factors you should consider before investing in the ADSs. Delivery of the ADSs will be made on or about , 2013. Global Coordinator and Joint Bookrunner Joint Bookrunner J.P.Morgan Macquarie Capital Co-managers Canaccord Genuity CIBC , 2013 Table of Contents Presentation of financial and other information In this prospectus, references to J$ are to Jamaican dollars, references to TT$ are to Trinidad and Tobago dollars, and references to U.S. dollars and US$ are to United States dollars. Solely for the convenience of the reader, we have translated certain Jamaican dollar amounts in this prospectus into U.S. dollars at a rate equal (unless otherwise indicated) to J$89.7207 per US$1.00, which is the average of the buying and selling J$/US$ exchange rates reported by the Bank of Jamaica for September 30, 2012. These translations should not be construed as a representation that any such amounts have been, would have been or could be converted at this or any other exchange rate. For information concerning Jamaican dollar/U.S. dollar exchange rates as reported by the Bank of Jamaica since October 1, 2007, see Exchange rates. In addition, solely for the convenience of the reader, we have translated certain Trinidad and Tobago dollar amounts in this prospectus into U.S. dollars at a rate equal (unless otherwise indicated) to TT$6.4183 per US$1.00, which is the average of the buying and selling TT$/US$ exchange rates reported by the Central Bank of Trinidad and Tobago for September 30, 2012. These translations should not be construed as a representation that any such amounts have been, would have been or could be converted at this or any other exchange rate. Financial statements We have included in this prospectus our consolidated financial statements, which are presented in Jamaican dollars. Our fiscal year ends on September 30 of each calendar year. We prepare and issue audited financial statements at and for the fiscal year ended September 30 of each calendar year and unaudited financial statements at, and for each of the three, six and nine months ended, December 31, March 31 and June 30, respectively, of each calendar year. In this prospectus, references to, for example, fiscal year 2012 are to the fiscal year ended September 30, 2012. We prepare our consolidated financial statements in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Auditing Standards Board, or the IASB, which differ in certain significant respects from generally accepted accounting principles in the United States, or U.S. GAAP. The summary and selected financial data at September 30, 2012, 2011, 2010, 2009 and 2008 and for the fiscal years ended September 30, 2012, 2011, 2010, 2009 and 2008 included in this prospectus have been derived from our consolidated financial statements audited by PricewaterhouseCoopers. Our financial statements for fiscal year 2011 have been restated to account for our acquisition of Jamaica Money Market Brokers Limited, or JMMB. Our financial statements for fiscal year 2011 were initially prepared using the interim financial statements of JMMB at June 30, 2011 and have been restated to include the fair value of intangible assets, as determined by an independent, qualified valuator. See note 49 to our consolidated financial statements included herein. Market share, industry and economic information In this prospectus, we present statements about our competitive position and market share in, and the market size of, the commercial banking and financial services industry in Jamaica, and about the Jamaican economy and participants in the Jamaican economy. We have made these Table of Contents and corporate customers for use by their employees. Our Payment Services segment includes both our credit card issuing business and fees that we collect for transactions in which merchants using our card-processing point of sale, or POS, machines accept for payment any credit or debit card issued by us and other banks, which we refer to as our acquiring business. Credit cards issued by us represented 41.0% of credit cards in circulation in Jamaica at September 30, 2012. At that date, over 10,000 of our POS machines were installed in stores and other locations across Jamaica, representing 66.7% of all POS machines in Jamaica. Our POS machines processed 76.9% and 77.4% of total credit card merchant transactions in Jamaica, representing 64.7% and 62.9% of the total Jamaican dollar amount of credit card merchant transactions, for fiscal years 2011 and 2012, respectively. Our POS machines also processed 72.2% and 71.0% of total debit card merchant transactions in Jamaica, representing 77.1% and 77.7% of the total Jamaican dollar amount of debit card merchant transactions, for fiscal years 2011 and 2012, respectively. Our Payment Services segment accounted for 10.0% and 14.1% of our total segment operating profit for fiscal years 2011 and 2012, respectively. Corporate Banking: We, through our Corporate Banking segment, offer large corporations and Jamaican government agencies loans, structured financings and foreign exchange transactions in addition to other banking products and services. We believe that we are the leader in originating loans to large corporations and government enterprises in Jamaica. Our Corporate Banking segment accounted for 12.6% and 0.7% of our total segment operating profit for fiscal years 2011 and 2012, respectively. Treasury & Correspondent Banking: We conduct foreign exchange transactions and manage our liquidity and investments through our Treasury & Correspondent Banking segment. A dedicated financial institutions relationship team manages relationships with local financial institutions and correspondent banks. Our investments consist principally of Jamaican government debt securities. As an institution licensed to carry on banking business in Jamaica, we are able to transact in debt securities directly with the Jamaican government and the Bank of Jamaica in the primary and secondary markets. Our Treasury & Correspondent Banking segment accounted for 26.3% and 26.9% of our total segment operating profit for fiscal years 2011 and 2012, respectively. Wealth Management: We, through our wholly-owned subsidiary, NCB Capital Markets Limited, offer repurchase agreements, brokerage services and portfolio management services to individual investors. We also offer these products and services, as well as certain corporate finance services, to our corporate customers. Repurchase agreements are a form of financing under which we sell Jamaican government debt securities to our customers and then reacquire those securities for a higher price at a later date, typically one to 12 months after the original sale. Our corporate customers accounted for 41.8% and 38.0% of the repurchase agreement balances of our Wealth Management segment for fiscal years 2011 and 2012, respectively. Net interest income earned from funding provided by repurchase agreements accounted for a substantial portion of our Wealth Management segment s total segment operating profit for fiscal years 2011 and 2012. This segment also includes our offshore banking subsidiary, NCB (Cayman) Limited, which principally provides offshore banking services to our Jamaican customers. Our Wealth Management segment accounted for 28.2% and 29.6% of our total segment operating profit for fiscal years 2011 and 2012, respectively. Table of Contents Table of Contents statements on the basis of statistics and other information from third-party sources including, among others, the Bank of Jamaica (the Central Bank of Jamaica), that we believe are reliable. September 30, 2012 is the most recent date for which certain Bank of Jamaica data are available regarding our competitive position and market share in, and the market size of, the commercial banking and financial services industry in Jamaica, and about the Jamaican economy and participants in the Jamaican economy. Rounding and table formats We have made rounding adjustments to some of the tables included in this prospectus. Accordingly, totals in certain tables in this prospectus may differ from the sum of the individual items in these tables due to rounding. Table of Contents Insurance & Pension Fund Management: We, through our wholly-owned subsidiary, NCB Insurance Company Limited, offer a broad range of products and services including bancassurance (a product that combines investment and life insurance features), pension fund administration and investment management services, annuities and group life insurance. At December 31, 2011 (the most recent date for which comparative market data are available), we managed J$51,668 million in pension fund assets, representing an 18.3% market share of all pension fund assets under management in the country. At September 30, 2012, we managed J$48,510 million in pension fund assets. We provide investment advisory services to pension funds managed by us, although the fund trustees retain ultimate discretion over all investment decisions. Our Insurance & Pension Fund Management segment accounted for 14.4% and 17.8% of our total segment operating profit for fiscal years 2011 and 2012, respectively. Other: We, through our Other segment, which includes our subsidiaries N.C.B. Jamaica (Nominees) Limited, Mutual Security Insurance Brokers Limited and West Indies Trust Company Limited, offer registrar and transfer agent, insurance brokerage and trustee services, respectively. This segment also includes our subsidiary DataCap Processing Limited, which provides security services to certain of our key employees. Our Other segment accounted for 0.6% and 0.2% of our total segment operating profit for fiscal years 2011 and 2012, respectively. At September 30, 2012, we had J$379,436 million (US$4,229 million) in total assets, J$111,905 million (US$1,247 million) in net loans, J$210,654 million (US$2,348 million) in investment securities, J$162,930 million (US$1,816 million) in customer deposits and J$66,343 million (US$739 million) in shareholders equity. We had net profit of J$13,885 million (US$155 million) and J$10,046 million (US$112 million) for fiscal years 2011 and 2012, respectively. Our return on average shareholders equity was 24.2% and our return on average total assets was 3.4% for fiscal years 2008 through 2012. We have received numerous international and local awards and recognitions. In 2011, The Banker ranked us third in return on capital and 14th in return on assets among the 267 largest banks worldwide by institutions with Tier I capital of under US$255 million. In a related ranking of banks in Latin America and the Caribbean in 2011, The Banker ranked us first based on both of these metrics. In 2011, we were named Best Bank in Jamaica by Global Banking and Finance, and we also received the Euromoney Award for Excellence: Best Bank in Jamaica. In 2008, 2009, 2010, 2011 and 2012, The Banker named us Bank of the Year, Jamaica. World Finance magazine named us the Best Banking Group in Jamaica for 2010, Most Innovative Bank for 2009 and 2010 and Best Pension Fund Manager in the Caribbean for 2009 and 2010. We also received a number of Best Practices Awards from the JSE, including the Governor General s Award for Overall Excellence, Best Annual Report, Corporate Disclosure and Investor Relations in 2009 and 2011 and the Stockbrokerage Website Award in 2009. We were also the recipient of the Private Sector of Jamaica/JSE Awards for Corporate Governance for 2009, 2010 and 2011. In 2010, 2011 and 2012, Latin Finance named us Best Bank in Jamaica. In 2010, 2011 and 2012, the Human Resource Management Association of Jamaica awarded us the prestigious Golden Leader Award for innovation. We are controlled by our chairman, Mr. Michael Lee-Chin (our controlling shareholder ), who beneficially owned, directly and indirectly, approximately 64.0% of our ordinary shares at January 16, 2013. Mr. Lee-Chin would have beneficially owned approximately 43.6% of our Table of Contents ordinary shares on a pro forma basis at January 16, 2013 after giving effect to this offering (assuming that the underwriters exercise their over-allotment option in full). As of January 16, 2013, approximately 1,177.0 million, or 74.6%, of the ordinary shares beneficially owned by Mr. Lee-Chin had been pledged as security for loans from different lenders to Mr. Lee-Chin and his affiliates. Mr. Lee-Chin has advised us that he and his affiliates are in full compliance with the terms and conditions of these loans. Mr. Lee-Chin may, or may be required to, make additional pledges of ordinary shares beneficially owned by him in the future. Mr. Lee-Chin is a dual Canadian and Jamaican citizen, and has been our chairman since purchasing a majority beneficial interest in the Bank through AIC (Barbados) Limited, which he controls, in 2002. Mr. Lee-Chin has a broad range of other business interests, including financial services, real estate, telecommunications, media, healthcare and power generation. The Jamaican market Substantially all of our operations are conducted in Jamaica, which is the fifth largest country in the Caribbean, based on real gross domestic product, or GDP, of J$731,854 million for the 12 months ended June 30, 2012 and population of approximately 2.7 million people at July 2012. Jamaica has a free market economy that includes primarily private sector businesses and a limited number of state-owned enterprises. The Jamaican financial services industry has been largely privatized. Major sectors of the economy include wholesale and retail trade; government services; transport, storage and communication; finance and insurance services; real estate renting; manufacturing; construction; hotels and restaurants; agriculture, forestry and fishing; electricity and water supply; and mining and quarrying. The Jamaican economy has, in recent years, been affected by, among other factors, the global economic and financial crisis and its aftermath, a high ratio of public debt to GDP, low tax revenues, natural disasters, and crime and civil unrest in the country. Jamaica s real GDP was J$731,854 million for the 12 months ended June 30, 2012 (US$8,165 million) compared to J$729,174 million for the 12 months ended June 30, 2011. Real GDP declined by 0.2% for the quarter ended June 30, 2012 compared to the quarter ended June 30, 2011 and by 0.1% for the quarter ended March 31, 2012 compared to the quarter ended March 31, 2011. Jamaica recorded year-over-year growth in GDP of 0.4% for the year ended June 30, 2011 compared to the year ended June 30, 2010, representing the first year in which there had been an increase as compared to the previous year since the year ended March 31, 2008. The macroeconomic environment has weakened during 2012 as reflected in GDP performance for the first and second quarters of the 2012 calendar year, an unemployment rate of 12.8% for July 2012, and net international reserves, or NIR, which fell to US$1,078 million as of November 30, 2012 from US$1,962 million as of November 30, 2011. The latest NIR update as of November 30, 2012 represented approximately 12.9 weeks of goods and services imports. The Jamaican dollar has depreciated swiftly against the U.S. dollar; the exchange rate decreased by 5.8% for November 2012 compared to November 2011. These unfolding events have increased market uncertainty and have raised further questions about default risks. The fragile recovery in 2011 coupled with 2012 performance to-date has resulted in the lowering of future fiscal projections by the International Monetary Fund, or IMF. The IMF estimates that Jamaica s real GDP will grow at 1.3% by the year ending March 31, 2016, which reflects a Table of Contents reduction by approximately one-half of IMF forecasts issued in 2010. For the quarter ending December 31, 2012, the Bank of Jamaica is forecasting a contraction in real GDP in the range of 0.7% to 1.7%. The negative outlook is influenced by the preliminary estimate of the damage caused by the recent passage of Hurricane Sandy, with the agriculture and tourism sectors projected to be severely impacted as a result of the hurricane. The primary surplus is estimated at 3.1% of current GDP for the government s fiscal year ended March 31, 2012, reflecting lower tax revenues associated with cuts in fuel taxes, weak tax administration, and widespread use of tax incentives and waivers. Recurrent expenditures have remained flat, with a higher wage bill offset by lower capital expenditure. As a result, the fiscal deficit was 6.4% of current GDP for the government s fiscal year ended March 31, 2012. The ratio of government debt to GDP has remained high, at about 130% while gross financing requirements rose, as the effects of the 2010 debt exchange have now diminished. The outlook is for low growth, as well as weaker fiscal and debt positions, in the absence of strong fiscal and structural reforms. In this context, real GDP growth is expected to remain at around 1% a year, the fiscal deficit is expected to increase to approximately 9%, and debt is expected to exceed 150% of GDP over the medium term. However, the IMF expects ongoing improvements to Jamaica s regulatory and supervisory frameworks and the existing crisis management framework to contain financial sector risks. There are downside risks to this outlook arising from uncertainties about the pace of the global recovery and world commodity prices, as well as the possibility of natural disasters. In 2010, Jamaica s macroeconomic environment was affected by consummation of the Jamaica Debt Exchange, or JDX, which was designed to alleviate the debt service burden on the Jamaican government and foster a lower interest rate environment. Under the JDX, the Jamaican government exchanged approximately J$695.6 billion (US$7,985 million) of domestic debt for an equivalent principal amount of debt securities with lower interest rates and longer maturities. The Jamaican government was required to effect the JDX and take other actions, including adopting a tax policy package yielding approximately 2% of GDP, as a condition to the signing of a 27-month Stand-By Arrangement with the IMF in February 2010. The Stand-By Arrangement outlined a medium-term reform program aimed at enhancing fiscal and debt sustainability and enabled access by the Jamaican government to funding from multilateral financial institutions. The Stand-By Arrangement was suspended as a result of, among other matters, delays in the implementation of agreed upon measures and subsequently expired. The Jamaican government initiated formal talks with the IMF in January 2012 with a view towards entering into a new agreement. After meeting with key government officials, IMF representatives stated that the implementation of improved fiscal policies, a reduction in debt and unemployment levels, and policies geared towards sustainable growth would be among the objectives of any new program. Discussions between the government and the IMF are ongoing over an economic program that could be supported under an IMF financing arrangement. The Jamaican government and the IMF have so far agreed in principle as to the need for a medium-term economic program with the following elements: promotion of a growth-oriented environment aimed at improving productivity and competitiveness while raising efficiency; strong macroeconomic policies, reflected in significantly higher primary fiscal surpluses, a narrower current account deficit, fiscal and financial reforms, and strong financial sector regulation and supervision; and initiatives to foster social cohesion, including through well-targeted health care and education spending and a Table of Contents more effective social safety net. We expect that the Jamaican government will soon engage in voluntary liability management transactions with regard to its outstanding debt, which would include Jamaican government debt securities held by us. We cannot provide any assurance as to whether any such transactions will occur, the terms thereof or the effect they may have on the value of Jamaican government debt securities held by us. Any such transactions may have an adverse effect on our overall financial condition and results of operations. Jamaica s long-term foreign currency credit ratings were downgraded by Standard & Poor s Financial Services LLC, or S&P, Moody s Investor Services LLC, or Moody s, and Fitch, Inc., or Fitch, between August 2009 and January 2010 to selective default categories CCC, Caa 1 and CCC, respectively, but were subsequently upgraded in the first quarter of 2010, following consummation of the JDX. Jamaica s current long-term foreign currency credit ratings by the respective agencies are as follows: B- by S B3 by Moody s; and B- by Fitch. On October 31, 2011, S&P revised the outlook on Jamaica to negative from stable but affirmed its B- long-term foreign currency credit rating. On November 6, 2012, S&P re-affirmed the negative outlook on Jamaica and the B-long-term foreign currency credit rating. On January 18, 2013, Fitch revised its rating outlook on Jamaica s sovereign ratings to negative from stable but affirmed its B- long-term foreign currency credit rating. Our credit ratings have historically been affected by changes to Jamaica s sovereign credit rating and accordingly, on January 25, 2013, Fitch revised its outlook on us to negative from stable and affirmed its B- long-term foreign currency credit rating. The Jamaican financial system has continued to develop in terms of participants and stability and increasingly interacts with global financial markets. At September 30, 2012, there were 13 supervised deposit-taking institutions, consisting of seven commercial banks (one of which is a branch of a U.S. bank and three of which are subsidiaries of other non-Jamaican banks), two merchant banks and four building societies (i.e., thrift institutions) in Jamaica. At that date, there were also 50 securities dealers and six life insurance companies. These institutions are regulated by the Bank of Jamaica, which primarily supervises deposit-taking institutions, and the Financial Services Commission, which supervises most non-deposit-taking financial institutions, including insurance companies and securities brokers. The Ministry of Finance, in conjunction with the Bank of Jamaica and the Financial Services Commission, formulates policies concerning specified aspects of the operations of financial institutions. The Bank of Jamaica, together with the Ministry of Finance, is responsible for the execution of monetary policy and the regulation of the Jamaican economy. Companies whose securities are publicly traded, including our company, are also subject to regulation by the JSE. The Jamaican commercial banking industry has grown substantially in the past decade. Total assets (including acceptances, guarantees and letters of credit, which are off-balance sheet items) in the commercial banking sector were J$629,204 million (US$7,013 million) at September 30, 2012 compared to J$265,074 million at September 30, 2002, representing a 10-year compound annual growth rate, or CAGR, of 9.0%. Total loans (net of provisions) in the commercial banking sector were J$290,887 million (US$3,242 million) at September 30, 2012 compared to J$63,169 million at September 30, 2002, representing a 10-year CAGR of 16.5%. Total deposits in the commercial banking sector were J$415,028 million (US$4,626 million) at September 30, 2012 compared to J$177,802 million at September 30, 2012, representing a 10-year CAGR of 8.8%. Foreign currency-denominated loans made up 36.7% of total loans at September 30, 2012, compared to 36.5% at September 30, 2002, and foreign currency-denominated deposits made up 38.3% of total deposits at September 30, 2012, compared to 29.5% at September 30, 2002. Table of Contents Our competitive strengths We believe that the following competitive strengths position us for continued growth and future profitability: Market leadership: We are Jamaica s largest financial services group, based on consolidated total assets at September 30, 2012. With 38 full service branches and four agencies, we had the largest commercial bank branch network in Jamaica at September 30, 2012. Our ATMs accounted for 34.2% of all ATM transactions in Jamaica for fiscal year 2012. At September 30, 2012, we had over 10,000 POS machines, representing 66.7% of all POS machines in Jamaica. Our POS machines processed 74.4% and 74.3% of total credit and debit card merchant transactions in Jamaica for fiscal years 2011 and 2012, respectively. We believe that our market leadership position contributes to our strong brand recognition in Jamaica and helps us to preserve and expand our customer base. The following table presents our market shares in the Jamaican commercial banking industry (as determined in accordance with Bank of Jamaica regulations and excluding certain lending operations). At September 30, Market share data 2012 2011 2010 2009 2008 Market share (based on assets) 40.7% 40.0% 39.3% 37.5% 39.6% Market share (based on deposits) 37.9% 39.1% 36.7% 34.7% 36.2% Market share (based on net loans) 38.1% 36.9% 34.6% 34.6% 35.3% Source: Bank of Jamaica Solid track record of financial performance and growth: We have grown substantially in terms of profit, assets and shareholders equity over the five years ended September 30, 2012, principally due to organic growth. For fiscal year 2012, despite a reduction in profits when compared with fiscal year 2011, the growth in assets and shareholders equity continued. For fiscal year 2007, we had net profit of J$6,601 million compared to net profit of J$10,046 million for fiscal year 2012, representing a five-year CAGR of 8.8%. We had total assets of J$254,183 million at September 30, 2007 compared to total assets of J$379,436 million at September 30, 2012, representing a five-year CAGR of 8.3%. We had total shareholders equity of J$28,554 million at September 30, 2007 compared to total shareholders equity of J$66,343 million at September 30, 2012, representing a five-year CAGR of 18.4%. We achieved continued positive growth even during the recent global economic and financial crisis. Table of Contents The following table presents selected financial metrics for the periods indicated. At and for fiscal year ended September 30, 2012 At and for fiscal year ended September 30, 2007 CAGR Loans and advances, net of provision for credit losses (J$ in thousands) 111,904,854 56,525,224 14.6% Investment securities (J$ in thousands) 210,653,557 142,955,539 8.1% Customer deposits (J$ in thousands) 162,930,350 118,518,051 6.6% Repurchase agreements (J$ in thousands) 101,890,449 51,305,167 14.7% Liabilities under annuity and insurance contracts (J$ in thousands) 25,194,324 14,487,602 11.7% Shareholders equity (J$ in thousands) 66,343,321 28,554,026 18.4% Credit card receivables (J$ in thousands) 9,047,106 4,463,215 15.2% Earnings per share (J$) 4.08 2.69 Book value per share (J$) 26.95 11.60 Dividends paid per share (J$) 1.10 0.73 Dividend yield (1) 5.02% 3.26% Shareholders equity as a percentage of total assets 17.48% 11.23% Return on average total assets(1) 2.75% 2.76% Efficiency ratio(1) 56.01% 57.28% Loans and advances, net of provision for credit losses, as a percentage of customer deposits 68.68% 47.69% Loans and advances, net of provision for credit losses, as a percentage of total assets 29.49% 22.24% (1) For definitions of dividend yield, return on average total assets and efficiency ratio, see the footnotes to the tables set forth under Summary financial and operating data. Innovation: We offer a broad range of financial products and services that we continually seek to expand to respond to the needs of our customers. For example, in 1981, we were the first bank in Jamaica to launch a local credit card, and, today, our Keycard credit card remains the only proprietary credit card offered in Jamaica and accounted for 24.0% of our total acquiring volumes and 18.4% of the total acquiring volumes in Jamaica for fiscal year 2011 and 19.4% of our total acquiring volumes and 14.9% of the total acquiring volumes in Jamaica for fiscal year 2012. Our proprietary credit card has also helped us maintain leadership in our card acquiring business because merchants must maintain an NCB POS machine in order to process Keycard transactions. We were the first bank in Jamaica to introduce drive-through ATMs in 2002 and payroll-backed loans in 2003. In 2004, our subsidiary, NCB Insurance Company Limited, became the first insurance company in Jamaica to offer a long-term tax-advantaged life insurance policy specially designed for families to save for higher education costs. In 2005, we were the first to launch mobile credit top-up services, which allow mobile telephone customers to add minutes to their prepaid mobile telephone accounts at our ATM and POS machines. We remain Table of Contents the only bank in Jamaica to offer a loan product, also introduced in 2005, that allows merchants to borrow against future POS receivables. We were also the first bank in Jamaica to introduce handheld POS terminals in 2006 and online loan applications in 2008. In May 2010, we introduced a loan product that allows customers to borrow based on the equity in their motor vehicles and, in March 2012, we began to offer Jamaican dollar residential mortgage products in the mortgage loan sector historically dominated by building societies. Local decision-making: We make all major decisions locally in Jamaica. We are not required to consult an international parent company, as is the case with many of our competitors. We believe that local decision-making contributes to customer loyalty, as we have insight into local circumstances and conditions and often are able to provide faster credit decisions than many of our peers. Customer-focused staff: We strive to provide prompt, friendly and knowledgeable service, which we believe helps us to achieve a high level of customer satisfaction and loyalty. We invest in our staff to enable them to acquire expertise and knowledge in their respective areas of responsibility. In fiscal year 2012, our staff members spent an average of 30 hours in training courses. These training courses are conducted in person at our Corporate Learning Campus, which delivered 62 instructor-led courses during fiscal year 2012, as well as online through our eCampus portal, which offered over 180 courses during the same fiscal year. Experienced team of executive officers: Our executive officers have broad experience in the Jamaican financial services industry. Patrick Hylton, our Group Managing Director (chief executive officer), is a former president of the Jamaica Bankers Association and former managing director of Financial Sector Adjustment Company Limited, which was established in 1997 by the Jamaican government to restore stability in the financial sector. Our team of executive officers has an average of more than 19 years of experience in the financial services industry. We believe that the experience of our executive officers has allowed us to deliver high-quality and innovative products and services to our customers, which has positioned us to capitalize on future growth opportunities. While we believe the above competitive strengths position us for continued growth and future profitability, our future business, results of operations and financial condition will be materially affected by economic, social and political conditions in Jamaica and the financial condition of the Jamaican government. Our debt securities portfolio primarily consists of Jamaican government debt securities, such that a significant decline in the market value of those debt securities, or any inability of the Jamaican government to service those debt securities, could require us to record impairment losses or to experience increased realized or unrealized losses. Accordingly, our competitive strengths described above should be considered in conjunction with the risks described under Risk factors beginning on page 24. Table of Contents Our business strategy Our vision is to capitalize on our competitive strengths and become the premier Caribbean financial institution delivering superior products and services to satisfy the needs of our customers while developing our human resources and building better communities. We intend to focus on continuous improvement of our business model to meet new opportunities within the banking and financial services sector in Jamaica and, over the long-term, in the Caribbean. The key elements of our strategy include the following: Pursuit of growth opportunities: We plan to increase our revenues and market shares while managing our costs. By leveraging our extensive branch and payment services network, along with our leading market share in the debit and credit card industry, we are well-positioned to achieve growth in areas such as loans to the consumer and SME market. We are also seeking to improve our sales capabilities through enhanced productivity of our employees, better use of customer analytics and marketing campaign management methodologies to drive cross-selling, an increased number and value of products per customer, or wallet share penetration, and the leveraging of electronic channels, external partnerships and our customer care center. We are also expanding our operations through strategic investments in Jamaica and may in the future pursue acquisitions and investment opportunities in both Jamaica and the broader Caribbean region. For example, in August 2011, we acquired 29.3% of JMMB, the largest investment brokerage house in Jamaica, measured by assets under management, for approximately J$2,221 million, including certain fees and costs. During fiscal year 2012, JMMB acquired the entire share capital of Capital & Credit Financial Group Limited, or CCFG, a Jamaican financial institution providing banking services, investment services, remittance services, pension investment and administrative services, unit trust funds and international broker/dealer services, for consideration consisting of cash and the issuance of new shares to the former shareholders of CCFG. The shares of JMMB issued to the former shareholders of CCFG resulted in a dilution of our ownership in JMMB from 29.30% to 26.30%. We are also in the process of acquiring AIC Finance Limited, a licensed financial institution in Trinidad and Tobago providing stock brokerage, trade finance, merchant banking, deposit, fixed income securities and foreign exchange services, and a 96.24% interest in Advantage General Insurance Co. Ltd., a leading general insurer in Jamaica. See Recent developments. Efficiency and productivity initiatives: In 2010, we commenced an information technology transformation initiative with the goals of adopting world class standards, and leveraging technology to improve efficiency and our ability to meet changing customer needs. This transformation is expected to continue through fiscal year 2014. During fiscal year 2012, we relocated our primary data center facility to an off-premises data center. We expect this relocation to provide increased security and versatility and substantially reduce downtime. We are seeking to improve our efficiency and functionality in key areas such as treasury management, card acquiring and issuing and anti-money laundering compliance through new applications and processes. We are partnering with a leading consulting firm which will support us through our lean transformation initiative across the NCB Group. The initiative will commence in January 2013 and the major output of the initial phase will be the development of an operating model for the NCB Group and the execution of two pilot projects, the objective of which will be to validate our LEAN model, which is a model that has been developed by the consulting firm and will form the foundation for our lean transformation Table of Contents initiative. The philosophy driving and supporting the LEAN model is based on applying the principles of centralization, consolidation, automation, paperless and straight-thru-processing to the processes in operation throughout the NCB Group. The entire initiative is expected to generate significant process efficiency, improved productivity, cost reduction, business agility and the development of internal expertise to ensure that our lean transformation initiative effectively takes place across the NCB Group. Continued focus on risk management: We continually review our risk management policies and procedures in order to enhance our capabilities in identifying, reporting and managing the risks faced in our business, including credit, interest rate, foreign exchange and liquidity risks. We plan to continue to focus on stringent underwriting standards for lending and other transactions. In addition, for our lending business, we engaged a leading international consulting firm during fiscal year 2012 to assist us in the design and implementation of improvements to our credit policies and procedures, including our credit-scoring methodologies. This engagement recently ended and we are in the process of implementing the consulting firm s recommendations. Further development of human resources: We plan to continue to seek a high level of employee engagement and foster an innovative culture. We are seeking to further build employee capabilities, with a view toward maintaining our leadership position in the Jamaican financial services market and as an institution that is a leading place in which to work. We are currently implementing initiatives to strengthen performance management and assessment; integrate workforce analytics to monitor employee satisfaction and effectiveness; and support the professional development of our employees. Table of Contents Our organizational structure The following chart identifies the principal shareholders of our company and our principal subsidiaries at January 16, 2013 and immediately following this offering. Except as otherwise noted below, all of our subsidiaries are wholly-owned and incorporated or organized in Jamaica. (1) Includes shares held directly by Mr. Lee-Chin and indirectly by Mr. Lee-Chin through certain family trusts and the following entities: AIC Barbados Limited, AIC Global Holdings Inc., Portland (Barbados) Limited, Advantage General Insurance Limited, AIC Finance Limited and AIC Financial Group. (2) Incorporated in the United Kingdom. (3) Incorporated in the Cayman Islands. (4) NCB Remittance Services (Cayman) Limited has surrendered its remittance license and is in the process of winding up its operations pending the completion of a loan transaction in which it is involved. (5) Charitable organization that receives funding from us. One of our directors is chairman of the board of the N.C.B. Foundation and some of our executive officers serve as directors and executive officers of the N.C.B. Foundation. Table of Contents Recent developments The Bank of Jamaica is requiring all commercial banks in Jamaica, including the Bank, to facilitate comprehensive supervision of their businesses. To meet these requirements, we may opt to convert to a holding company structure. The specific timing for a holding company conversion, if any, has not yet been determined. We expect that any such conversion will involve the Bank becoming a subsidiary of a holding company incorporated in Jamaica upon approval of the transaction by a Jamaican court following a hearing. In connection with any such holding company conversion, holders of our ordinary shares, including the depositary for the ADSs being offered pursuant to this prospectus, will exchange their ordinary shares for ordinary shares in the holding company whose ordinary shares will be listed on the JSE and TTSE, and holders of our ADSs will accordingly become holders of ADSs of the holding company. There will not be any Jamaican tax implications for holders of our ordinary shares or the ADSs in connection with any such conversion. U.S. Holders (as defined in Taxation U.S. federal income tax considerations ) will not recognize any gain or loss for U.S. federal tax purposes as a result of any such conversion, assuming it occurs as we intend it to occur (as described in Taxation U.S. federal income tax considerations Income tax consequences of conversion to a holding company structure ) and assuming no changes in applicable law occur between the date hereof and the date of the conversion. However, U.S. Holders of our ordinary shares and/or ADSs who will own 5% or more (by vote or value and including by attribution) of the holding company s ordinary shares and/or ADSs immediately after any such conversion must enter into a five-year gain recognition agreement with the U.S. Internal Revenue Service to avoid the recognition of any gain realized on the conversion to a holding company. Each such U.S. Holder should consult its own tax advisor regarding the U.S. federal income tax consequences of a possible holding company conversion, including, without limitation, whether it has information reporting and record retention responsibilities in connection with the conversion, and whether it should enter into a five-year gain recognition agreement with respect to the conversion. In addition, holders of our ADSs should consult their tax advisors with respect to the tax laws of other jurisdictions. During fiscal year 2012, NCB Capital Markets Limited, or NCBCM, signed agreements with AIC (Barbados) Limited and ACF Holdings Insureco Limited, the legal and beneficial owners of 96.24% of the issued share capital of Advantage General Insurance Company Limited, or AGI, for the purchase of their shareholdings in AGI for aggregate consideration of approximately J$3,090 million (US$34 million), subject to adjustment based on the book value of AGI at closing. Both AIC (Barbados) Limited and ACF Holdings Insureco Limited are controlled by our chairman and controlling shareholder. The transaction was approved for the Bank by a special committee appointed by the board of directors, which included independent directors constituting less than a majority of the special committee, and for NCBCM by its board of directors, which included independent directors constituting less than a majority of the board of directors. The completion of the transaction is subject to regulatory approval. We commissioned an independent valuation which valued AGI at an amount approximating the proposed acquisition price. AGI (formerly known as United General Insurance Company Limited from 1986 to 2007 and Central Fire Insurance Company from 1964 to 1986) is licensed by the Financial Services Commission to market motor, property, pecuniary loss, liability and accident insurance. AGI is currently one of the leading general insurers in Jamaica. Table of Contents NCBCM has announced its intention to acquire AIC Finance Limited, a licensed financial institution in Trinidad and Tobago. This acquisition will provide us with entry into the Trinidad and Tobago market and an opportunity to further diversify our revenues. The transaction is pending regulatory approval in both Trinidad and Tobago and Jamaica. AIC Finance Limited is an indirect subsidiary of AIC (Barbados) Limited, which is controlled by our chairman and controlling shareholder. The proposed acquisition price is approximately TT$15 million (US$2.3 million), subject to adjustment based on AIC Finance Limited s final audited financial statements. We commissioned an independent valuation which valued AIC Finance Limited in excess of the proposed acquisition price. The transaction was approved for the Bank by a special committee appointed by the board of directors, which included independent directors constituting less than a majority of the special committee, and for NCBCM by its board of directors, which included independent directors constituting less than a majority of the board of directors. Recent results (preliminary and unaudited) Our consolidated financial statements at and for the three months ended December 31, 2012 and the related release that will be filed with the JSE and the TTSE has not yet been finalized. The unaudited preliminary financial information set forth below reflects our expectations of the results we will report once the release is completed. Our independent registered public accounting firm has not audited or reviewed this unaudited preliminary financial information and does not express an opinion or any other form of assurance with respect to this financial information. Our actual results may differ from these expectations. Any such differences could be material. Financial operational item As and for three months ended December 31, 2012(*) As and for three months ended December 31, 2012 As and for three months ended September 30, 2012 As and for three months ended December 31, 2011 (US$ in millions, except where noted and per share data) (J$ in millions, except where noted and per share data) Net interest income 64 5,900 5,447 5,340 Total operating expenses 62 5,700 5,111 5,070 Share of profit of associates 2 165 466 145 Net profit 30 2,800 2,685 2,769 Investment securities(1) 2,280 211,000 210,654 202,863 Loans and advances, net of provision for credit losses 1,264 117,000 111,905 101,209 Total assets 4,289 397,000 379,436 360,512 Customer deposits 1,912 177,000 162,930 155,284 Repurchase agreements 1,102 102,000 101,890 86,872 Total shareholders equity 724 67,000 66,343 62,640 Return on average shareholders equity (%)(2) N/A 16.70 16.46 17.78 Return on average total assets (%)(3) N/A 2.90 2.83 3.08 Efficiency ratio (%)(4) N/A 55.50 52.50 56.20 Risk-based capital adequacy ratio (Bank only) (%)(5) N/A 12.90 12.96 15.08 Earnings per share(J$) N/A 1.13 1.10 1.12 Table of Contents (*) We have translated U.S. dollar amounts from Jamaican dollars at the exchange rate of J$92.5637 per US$1.00, which is the average of the buying and selling J$/US$ exchange rates reported by the Bank of Jamaica for December 31, 2012. (1) Investment securities consist of investment securities at fair value through profit or loss and investment securities classified as available-for-sale and loans and receivables. At December 31, 2012, we had investment securities at fair value through profit or loss of approximately J$380 million and investment securities classified as available-for-sale and loans and receivables of approximately J$210,770 million. (2) Return on average shareholders equity is calculated as net profit (annualized for the interim periods presented) divided by average shareholders equity (shareholders equity at the end of the quarter plus shareholders equity at the end of the previous quarter, divided by two). (3) Return on average total assets is calculated as net profit (annualized for the interim periods presented) divided by average total assets (total assets at the end of the quarter plus total assets at the end of the previous quarter, divided by two). (4) Efficiency ratio is calculated as the sum of staff costs, depreciation and other operating expenses for the period divided by total operating income for the period. (5) Risk-based capital adequacy ratio (Bank only) is calculated as qualifying capital divided by total risk weighted assets. Qualifying capital is the sum of Tier 1 and Tier 2 capital less prescribed deductions for investment in associated companies and subsidiaries, intangible assets and any accumulated losses in subsidiaries. See Regulation and supervision.
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+Item 3. Prospectus Summary. This summary highlights certain information contained elsewhere in this prospectus. You should read the following summary together with the more detailed information regarding Royal Bees Company, Inc. ( Us, We, Our, Royal Bees, the Company, or the Corporation ) and our financial statements and the related notes appearing elsewhere in this prospectus. The Company Our Business Royal Bees specializes in commercial pollination, harvesting honey and developing and producing various honey products. Royal Bees has been doing business under their current name since June 16, 2010, when it was organized in the state of Nevada. Our initial focus is on providing pollination services, harvesting pure raw honey and selling honey products in Southern California. We currently have approximately 65 hives that we rent to local farmers for pollination services. We sell honey bottled in varying size jars, honey stix and ambrosia, a mixture of honey and bee pollen. As the business grows, we intend to broaden our market area. We had no honey yield for 2012 due to inclement weather and we reduced our inventory of hives to 65 from the 270 we had at the beginning of 2012. Because we had no honey yield for 2012, we have a very limited amount of existing inventory to sell. As of the date of this prospectus, we have commenced only limited operations. We have not yet established profitable operations although we have generated revenue. We had net sales of $25,361 with a net loss of ($43,748) for the year ended December 31, 2011. For the year ended December 31, 2012 we had net sales of $48,968 with a net loss of ($46,476). We estimate our monthly burn rate at $2,000 per month and we will likely need additional capital to continue operations. We may raise additional needed capital by selling our common stock or borrowing funds. We have no commitments from any source to provide additional funding. If we are unable to obtain funding it is likely our business will suffer significantly. We have had ($129,968) in cumulative losses since our inception through March 31, 2013. These factors raise substantial doubts about our ability to continue as a going concern. Further, there is no guarantee that our business will grow. Our Statement of Organization: We were incorporated in Nevada on June 16, 2010, as Royal Bees Company, Inc. Our principal executive offices are located at 123 W. Nye Lane, Ste. 129, Carson City, NV 89706. Our phone number is 760-613-0041. The Offering Number of Shares Being Offered: The selling security holders may sell up to 1,855,000 shares of common stock at $0.12 per share. Issuance of these shares to the selling security holders was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended. Affiliated selling security holders and Non-affiliated selling security holders will sell at the fixed price of $0.12 for the duration of the offering. Selling shareholders are underwriters as defined under the Securities Act of 1933. We will not receive any proceeds from the sale of our common stock by our selling shareholders. Number of Shares Outstanding After the Offering: 10,855,000 shares of our common stock are issued and outstanding. We have no other securities issued. Aggregate Market Price Based on Offering Price of $0.12 Per Share Our aggregate market price is $1,302,600 based on 10,855,000 shares at a price of $0.12. Stockholders Equity (deficit)as of March 31, 2013 ($99,370) Selected Financial Data - Annual December 31, December 31, 2012 2011 Current assets 800 7,260 Total assets 27,601 41,990 Total current liabilities 108,649 76,562 Total stockholders' equity (deficit) (81,048) (34,572) Working Capital (107,849) (69,302) Net Cash (Used) Provided by Operating Activities (13,326) (18,201) Year Ended December 31, 2012 2011 Statement of Operations Gross Profit 23,414 6,014 Operating Expenses (69,890) (49,762) Net loss (46,476) (43,748) Selected Financial Data- Interim March 31, March 31, 2013 2012 Current assets 812 2,571 Total assets 22,141 43,406 Total current liabilities 121,511 86,140 Total stockholders' equity (deficit) (99,370) (42,735) Working Capital (120,699) (83,569) Net Cash (Used) Provided by Operating Activities (10,597) (5,057) 3 months Ended March 31, 2013 2012 Statement of Operations Gross Profit (loss) (574) 9,299 Operating Expenses (17,748) (17,461) Net loss (18,322) (8,162)
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001541165_one-4-art_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001541165_one-4-art_prospectus_summary.txt
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+++ b/parsed_sections/prospectus_summary/2013/CIK0001541165_one-4-art_prospectus_summary.txt
@@ -0,0 +1,509 @@
+PROSPECTUS SUMMARY
+ 
+ 
+ To understand this offering fully, you should read the entire prospectus carefully, including the risk factors beginning on page 9 and the financial statements.
+ 
+
+ General
+ US Parts Online Inc. was incorporated under the laws of the state of Nevada on October 17, 2011. 
+ 
+
+ Our principal executive offices are located at 2360 Corporate Circle Suite 400, Henderson NV 89074. Our phone number is (678) 804-8036
+ 
+ Operations
+ We are a development stage company, formed to resell used and brand new auto parts.
+ 
+
+ We plan on reselling auto parts from USA based vendors to European market via an internet shop. We have developed our business plan, earned a $ 8,000 gross profit on the sale of auto parts and consulting and executed an agreement with LT United Inc.
+ 
+
+ 
+
+ We anticipate that we will derive our income from buying auto parts at discounted prices and resell it via an internet shop with product to be delivered by mail. We do not anticipate earning revenues until such time as we enter into commercial operation. Since we are presently in the development stage of our business, we can provide no assurance that we will successfully assemble, construct and sell any products or services related to our planned activities.
+ 
+
+ From inception until the date of this filing, we have had no revenues and very limited operating activities. Our financial statements from inception October 17, 2011 
+ 
+
+ 
+
+ 6
+ 
+
+ 
+
+ Through May 31 , 2013, report revenues $15,000 and a net loss of $ 10,274 . Our independent registered public accounting firm has issued an audit opinion for US Parts Online Inc. which includes a statement expressing substantial doubt as to our ability to continue as a going concern. 
+ 
+
+ Our only operations to date have been making a deposit for salvaged car parts. Given that our business plan consists of reselling used and new auto parts, our activities to date constitute nominal operations. As a result, we are a shell company.
+ 
+
+ Market for our common stock. 
+ Our common stock is not quoted on a market or securities exchange. We cannot provide any assurance that an active market in our common stock will develop. We intend to quote our common shares on a market or securities exchange. Based on 5,000,000 common stock outstanding and the proposed offering price of $0.01, our implied aggregate market value is $50,000. Our total stockholders equity balance as of February 28, 2013 is -$994.
+ 
+
+ 
+ 
+ 
+
+ Common Shares being sold in this offering:
+ 
+ 8,000,000 shares of common stock
+
+ Terms of Offering
+ This is a self-underwritten public offering with no minimum purchase requirement. Common shares will be offered on a best efforts basis and we do not intend to use an underwriter for this offering. We do not have an arrangement to place the proceeds from this offering in an escrow, trust or similar account. Any funds raised from the offering will be immediately available to use for our immediate use.
+
+ 
+
+ 
+
+ 7
+ 
+
+ 
+
+ 
+
+ 
+ Price Per Share:
+ 
+ $0.01
+
+ Duration of the Offering:
+ 
+ The offering will commence on the effective date of this prospectus and will terminate on or before April 1, 2014. In our sole discretion, we may terminate the offering before all of the common shares are sold.
+
+ 
+
+ 
+ Use of proceeds
+ 
+ We will use the net proceeds of this offering to develop and maintain our website, purchase inventory and tools and to advertise.
+
+ Securities Issued and Outstanding:
+ 5,000,000 shares of common stock 
+ 
+
+ 
+
+ 8
+ 
+
+ 
+
+ 
+
+ RISK FACTORS
+ 
+
+ Our business is subject to numerous risk factors, including the following.
+ 
+
+ Risks Associated with Our Business
+ 1. We are a development stage company but have not yet commenced significant operations. We expect to incur operating losses for the foreseeable future. Potential investors have a high probability of losing their entire investment.
+ 
+
+ We were incorporated on October 17, 2011 and, to date, have been involved primarily in organizational activities. We have not yet commenced business operations. Further, we have not yet fully developed our business plan, or our management team, nor have we targeted or assembled any real or intangible property rights. Accordingly, we have no way to evaluate the likelihood that our business will be successful. 
+ 
+
+ As of the date of this prospectus, we have earned $15,000 . Potential investors should be aware of the difficulties normally encountered by new internet sales companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the operations that we plan to undertake.
+ 
+
+ These potential problems include, but are not limited to, unanticipated problems relating to the ability to generate sufficient cash flow to operate our business, and additional costs and expenses that may exceed current estimates. 
+ 
+
+ Prior to having an inventory of auto parts to sell, we anticipate that we will incur increased operating expenses without realizing any revenues. We expect to incur significant losses into the foreseeable future. We recognize that if the effectiveness of our business plan is not forthcoming, we will not be able to continue business operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and it is doubtful that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail. 
+ 
+
+ 2. We have yet to earn revenue and our ability to sustain our operations is dependent on our ability to raise financing. As a result, there is substantial doubt about our ability to continue as a going concern.
+ 
+
+ We have accrued net losses of $ 10,274 for the period from our inception on October 17, 2011 to May 31 , 2013, and have incurred $15,000 revenues to date. Our future is dependent upon our ability to obtain financing and upon future profitable operations from our acquisition development, and management of real and intangible property and the provision of expertise. 
+ 
+
+ 
+
+ 9
+ 
+
+ 
+
+ Further, the finances required to fully develop our plan cannot be predicted with any certainty and may exceed any estimates we set forth. These factors raise substantial doubt that we will be able to continue as a going concern. KLJ & Associates, our independent registered public accountant, has expressed substantial doubt about our ability to continue as a going concern. This opinion could materially limit our ability to raise funds. If we fail to raise sufficient capital, we will not be able to complete our business plan. As a result we may have to liquidate our business and you may lose your investment. You should consider our independent registered public accountant s comments when determining if an investment in US Parts Online Inc. is suitable.
+ 
+
+ If we experience a shortage of funds prior to funding during the next 12 months, we may utilize funds from Dmitrijs Podlubnijs, our sole officer and director, who has informally agreed to advance funds to allow us to pay for professional fees, including fees payable in connection with the filing of this registration statement and operation expenses, however he has no formal commitment, arrangement or legal obligation to advance or loan funds to the company. We will require the funds from this offering to proceed.
+ 
+ If we are successful in raising the funds from this offering, we plan to commence activities to raise the funds required for the development program. We cannot provide investors with any assurance that we will be able to raise sufficient funds to proceed with any work or activities of the development program. 
+ 
+
+ 3. Purchasers of aftermarket auto parts may not choose to shop online, which would prevent us from acquiring customers who are necessary to the growth of our business.
+ 
+
+ The online market for aftermarket auto parts is less developed than the online market for many other business and consumer products. Our success will depend in part on our ability to attract new customers and customers who have historically purchased auto parts through traditional retail and wholesale operations. Furthermore, we may have to incur significantly higher and more sustained advertising and promotional expenditures or price our products more competitively than we currently anticipate in order to attract additional online consumers to our websites and convert them into purchasing customers
+ 
+
+ 4. New tax treatment of companies engaged in internet commerce may adversely affect the commercial use of our services and our financial results.
+ 
+
+ Due to the global nature of the internet, it is possible that various states or foreign countries might attempt to regulate our transmissions or levy sales, income or other taxes relating to our activities. Tax authorities at the international, federal, state and local levels are currently reviewing the appropriate treatment of companies engaged in internet commerce. New or revised international, federal, state or local tax regulations may subject us or our subscribers to additional sales, income and other taxes. We cannot predict the effect of current attempts to impose sales, income or other taxes on commerce over the internet. New or revised taxes and, in particular, sales taxes, VAT and similar 
+ 
+
+ 
+
+ 10
+ 
+
+ 
+
+ taxes would likely increase the cost of doing business online and decrease the attractiveness of advertising and selling goods and services over the internet. New taxes could also create significant increases in internal costs necessary to capture data, and collect and remit taxes. Any of these events could have an adverse effect on our business and results of operations.
+ 
+
+ The European Union (EU) requires non-EU firms to pay value added tax (VAT) on e-commerce transactions to customers in the EU. EU firms pay the single VAT rate for the country where they are located. If a non-EU firm establishes a subsidiary in an EU country, it can follow the tax rules for EU companies and pay a single rate. Otherwise, non-EU firms are required to register in one EU country but pay the VAT at the rate applicable in each customer s country. The firm is to remit all tax to the country in which it is registered. The member state of registration is then responsible for distributing the appropriate amount of revenue due to each of the other member countries of the EU, based on the firm s sales to customers in each country. EU duty rates on auto parts from USA range from 0% to 5%.
+ 
+
+ We will have to pay VAT. VAT in EU is from 15% in Cyprus and Luxembourg to 25% in Denmark and Sweden. Our prices may be less attractive in some countries with high VAT, unless we set up business establishments in low VAT EU member countries in order to benefit from low VAT rate.
+ 
+
+ 5. We will face intense competition and operate in an industry with limited barriers to entry, and some of our competitors may have greater resources than us and may be better positioned to capitalize on the growing e-commerce auto parts market.
+ 
+
+ The auto parts industry is competitive and highly fragmented, with products distributed through multi-tiered and overlapping channels. We compete with both online and offline retailers who offer OEM and aftermarket auto parts.
+ 
+
+ Barriers to entry are low, and current and new competitors can launch websites at a relatively low cost. Many of our current and potential offline competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, marketing, technical, management and other resources than we do. In addition, some of our competitors have used and may continue to use aggressive pricing tactics and devote substantially more financial resources to website and system development. We expect that competition will further intensify in the future as Internet use and online commerce continue to grow worldwide. Increased competition may result in reduced operating margins, reduced profitability, loss of market share and diminished brand recognition.
+ 
+
+ 6. If we do not attract customers, we will not make a profit, which will ultimately result in a cessation of operations.
+ 
+
+ 
+
+ 11
+ 
+
+ 
+
+ We currently have only two customers who purchased services from us. We have not identified any additional customers and we cannot guarantee we ever will have any customers. Even if we obtain customers, there is no guarantee that we will generate a profit. If we cannot generate a profit, we will have to suspend or cease operations. You are likely to lose your entire investment if we cannot sell auto parts at prices which generate a profit.
+ 
+
+ 7. We rely on key personnel and may need additional personnel for the success and growth of our business.
+ 
+
+ Our business is largely dependent on the personal efforts and abilities of key personnel including Dmitrijs Podlubnijs. We do not maintain key person life insurance on any officer or employee. Our performance also depends on our ability to identify, attract, retain and motivate highly skilled technical, managerial, merchandising, marketing and customer service personnel. Competition for such personnel is intense, and we cannot assure you that we will be successful in attracting and retaining such personnel. 
+ 
+
+ The loss of any key employee or our inability to attract or retain other qualified employees could harm our business and results of operations.
+ 
+
+ 8. We will invest significant resources in our product catalog. If the catalog s database is stolen or misappropriated, or if a competitor is able to create a substantially similar catalog without infringing our rights, then we may lose an important competitive advantage.
+ 
+
+ We will invest significant resources and time to build and maintain our product catalog, which is maintained in the form of an electronic database, and maps to relevant product applications based on vehicle makes, models and years. We believe that our future product catalog will provide us with an important competitive advantage in both driving traffic to our websites and converting that traffic to revenue by enabling customers to quickly locate the products they require. We cannot assure you that we can protect our product catalog from unauthorized copying or theft by a third party. In addition, it is possible that a competitor could develop a catalog or database that is similar to or more comprehensive than ours, without infringing our rights. In the event our product catalog is stolen, copied or otherwise replicated by a competitor, whether lawfully or not, we may lose an important competitive advantage and our business could be harmed.
+ 
+
+ 9. Because we plan to export auto parts overseas, we could be affected by disruptions in delivery.
+ 
+
+ Because we intend to export auto parts and deliver them directly to our potential customers in foreign countries, disruptions in shipping deliveries may affect us. Deliveries of our products may be disrupted through factors such as:
+ 
+
+ 
+
+ 12
+ 
+
+ 
+
+ 
+
+ (i)
+ work stoppages, strikes and political unrest;
+ (ii)
+ problems with ocean shipping, including work stoppages and shipping container shortages;
+ (iii)
+ increased inspections of import shipments or other factors causing delays in shipments; and
+ (iv)
+ Economic crises, international disputes and wars. 
+ 
+
+ Any of the foregoing disruptions could disrupt our operations and lead to a complete loss of your investment.
+ 
+
+ 10. Our future operating results may fluctuate and may fail to meet market expectations, which could adversely affect the market price of our common stock.
+ 
+
+ We expect that our revenue and operating results will continue to fluctuate from quarter to quarter due to various factors, many of which are beyond our control. If our quarterly revenue or operating results fall below the expectations of investors or securities analysts, the price of our common stock could significantly decline. 
+ 
+
+ The factors that could cause our operating results to fluctuate include, but are not limited to:
+ 
+
+ 
+ price competition on the Internet or among offline retailers for auto parts;
+ 
+ our ability to attract visitors to our websites and convert those visitors into customers;
+ 
+ our ability to maintain and expand our supplier and distribution relationships;
+ 
+ the effects of seasonality on the demand for our products;
+ 
+ our ability to accurately forecast demand for our products and maintain appropriate inventory levels;
+ 
+ our ability to build and maintain customer loyalty;
+ 
+ the success of our brand-building and marketing campaigns;
+ 
+ technical difficulties, system downtime or Internet brownouts; and
+ 
+ 11. Currency rate fluctuations may have a negative effect on our profitability.
+ 
+
+ We will endeavor to source our potential clients around the world, so we are likely to be affected by changes in foreign exchange rates. To protect our business, we may enter into foreign currency exchange contracts with major financial institutions to hedge the overseas purchase transactions and limit our exposure to those fluctuations. If we are not able to successfully protect ourselves against those currency rate fluctuations, then our profits on the products subject to those fluctuations would also fluctuate and could cause us to be less profitable or incur losses, even if our business is doing well.
+ 
+
+ 
+
+ 13
+ 
+
+ 
+
+ 12. We are dependent upon third parties for distribution and fulfillment operations with respect to many of our products.
+ 
+
+ We have limited control over how and when orders are fulfilled. We will have limited control over the products that our distributors purchase or keep in stock. Most of our vendors will not set aside any amount of inventory to fulfill our orders or to give our orders priority over other resellers to whom they sell. Our distributors may not accurately forecast the products that will be in high demand or they may allocate popular products to other resellers, resulting in the unavailability of certain products for sale on our websites. Any inability to offer a broad array of products at competitive prices and any failure to deliver those products to our future customers in a timely and accurate manner may damage our reputation and could cause us to lose customers. 
+ 
+
+ US Parts Online Inc. does not have long-term arrangements with any of its vendors to guarantee availability of merchandise, particular payment terms or credit terms. If US Parts Online Inc. vendors were to stop selling merchandise (including as a result of one or more vendor bankruptcies or due to poor economic conditions), US Parts Online Inc. may then be unable to procure products from other vendors in a timely and efficient manner and on acceptable terms, or even at all.
+ 
+
+ 13. If we fail to offer a broad selection of products and brands at competitive prices to meet our customers demands, our revenue could decline.
+ 
+
+ We must successfully offer, on a continuous basis, a broad selection of auto parts that meet the needs of our future customers. Our auto parts will used by consumers for a variety of purposes, including repair, performance, improved aesthetics and functionality. In addition, to be successful, our product offerings must be broad and deep in scope, competitively priced, well-made, innovative and attractive to a wide range of consumers. We cannot predict with certainty that we will be successful in offering products that meet all of these requirements. If our product offerings fail to satisfy our customers requirements or respond to changes in customer preferences, our future revenue could decline.
+ 
+
+ 14. We could be liable for breaches of security on our websites.
+ 
+
+ A fundamental requirement for e-commerce is the secure transmission of confidential information over public networks.. We may be required to expend significant capital and other resources to protect against potential security breaches or to alleviate problems caused by any breach. We will rely on licensed encryption and authentication technology to provide the security and authentication necessary for secure transmission of confidential information, including credit card numbers. Advances in computer capabilities, new discoveries in the field of cryptography, or other events or developments may result in a compromise or breach of the algorithms that we will use to 
+ 
+
+ 
+
+ 14
+ 
+
+ 
+
+ protect customer transaction data. In the event someone circumvents our security measures, it could seriously harm our business and reputation and we could lose customers. Security breaches could also expose us to a risk of loss or litigation and possible liability for failing to secure confidential customer information.
+ 
+
+ 15. If we do not respond to technological change, our websites could become obsolete and our financial results and conditions could be adversely affected.
+ 
+
+ We will maintain website which require substantial development and maintenance efforts and significant technical and business risks. To remain competitive, we must enhance and improve constantly the responsiveness, functionality and features of our website. The Internet and the e-commerce industry are characterized by rapid technological change, the emergence of new industry standards and practices and changes in customer requirements and preferences. Therefore, we may be required to license emerging technologies, enhance our website, develop new services and technology that address the increasingly sophisticated and varied needs of our prospective customers, and adapt to technological advances and emerging industry and regulatory standards and practices in a cost-effective and timely manner. Our ability to remain technologically competitive may require substantial expenditures and lead time and our failure to do so may harm our business and results of operations.
+ 
+
+ 16. There is no minimum offering amount or no escrow account. Offering proceeds shall be deposited directly into our operating account. Because we are not making provisions for a refund to investors, you may lose your entire investment.
+ 
+
+ Even though our business plan is based upon the complete subscription of the common shares offered through this offering, the offering makes no provisions for refund to an investor. We will utilize all amounts received from newly issued common stock purchased through this offering even if the amount obtained through this offering is not sufficient to enable us to go forward with our planned operations. Any funds received from the sale of newly issued stock will be placed into our corporate bank account. We do not intend to escrow any funds received through this offering. Once funds are received as a result of a completed sale of common stock being issued by us, those funds will be placed into our corporate bank account and may be used at the discretion of management.
+ 
+
+ 17. Because our current president has other business interests, he may not be able or willing to devote a sufficient amount of time to our business operations, causing our business to fail.
+ 
+
+ Dmitrijs Podlubnijs, our President, currently devotes approximately 50% of his time to our operations only. While he presently possesses adequate time to attend to our interest, it is possible that the demands on him from other obligations could increase, with the result that he would no longer be able to devote sufficient time to the management of our 
+ 
+
+ 
+
+ 15
+ 
+
+ 
+
+ business. The loss of Mr. Podlubnijs to our company could negatively impact our business development.
+ 
+
+ 18. Because our sole officer and director will own 38.5% or more of our outstanding common stock, if maximum offering shares are sold, he will make and control corporate decisions that may be disadvantageous to minority shareholders.
+ 
+
+ If maximum offering shares will be sold, Mr.Podlubnijs, our sole officer and director, will own 38.5% of the outstanding shares of our common stock. Accordingly, he will have significant influence in determining the outcome of all corporate transactions or other matters, including the election of directors, mergers, consolidations and the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. The interests of Mr.Podlubnijs may differ from the interests of the other stockholders and may result in corporate decisions that are disadvantageous to other shareholders.
+ 
+
+ 19. It is likely that we will add additional transaction costs and delays to our clients transactions.
+ 
+
+ Most of our manufacturers and suppliers have their own websites where purchasers can buy the supplies we intend to sell. It is likely that we will add additional transaction costs to our clients because we will need to pass on the additional costs of running our company. We could be subject to increased shipping cost and delays as well as the potential inability of our third-party transportation providers to deliver on a timely basis.
+ 
+
+ 20. As an emerging growth company under the JOBS Act, we are permitted to rely on exemptions from certain disclosure requirements. 
+ 
+
+ We qualify as an emerging growth company under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to: 
+ -
+ have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; 
+ -
+ comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); 
+ -
+ submit certain executive compensation matters to shareholder advisory votes, such as say-on-pay and say-on-frequency; and 
+ -
+ disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive s compensation to median employee compensation. 
+ 
+
+ 
+
+ 16
+ 
+
+ 
+
+ In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
+ 
+
+ We will remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a large accelerated filer as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
+ 
+
+ Until such time, however, we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
+ 
+
+ 21. Our target market is a niche market and because of the lack of official data, there may be a limited market for U.S.-based parts for U.S. made cars in Europe. This potentially limited market may inhibit the growth of our business or result in unpredictable revenues.
+ 
+
+ There is no guarantee that there will be a large enough market for our goods for us to become profitable. Our business plan relies on there being a consistent market for U.S. based parts for U.S. made cars in Europe. If this market does not develop appropriately, we may be unable to grow as a company. We do not have any official data regarding the extent of this market, and as a result, we cannot be sure that the market will be able to support our business plan.
+ Risks Relating to this Offering and Ownership of Our Common Stock
+ 
+
+ 22. We do not meet the requirements for our stock to be quoted on NASDAQ, American Stock Exchange or any other senior exchange and the tradability in our stock will be limited under the penny stock regulation. The liquidity of our common stock is restricted as our common stock falls within the definition of a penny stock.
+ 
+
+ Under the rules of the Securities and Exchange Commission, if the price of the registrant's common stock on the OTC Bulletin Board is below $5.00 per share, the 
+ 
+
+ 
+
+ 17
+ 
+
+ 
+
+ registrant's common stock will come within the definition of a "penny stock." As a result, the registrant s common stock is subject to the "penny stock" rules and regulations. Broker-dealers who sell penny stocks to certain types of investors are required to comply with the Commission's regulations concerning the transfer of penny stock. These regulations require broker-dealers to:
+ 
+
+ - Make a suitability determination prior to selling penny stock to the purchaser;
+ - Receive the purchaser's written consent to the transaction; and
+ - Provide certain written disclosures to the purchaser.
+ 
+
+ These requirements may restrict the ability of broker/dealers to sell the registrant's common stock, and may affect the ability to resell the registrant's common stock.
+ 
+
+ We do not have a public market in our securities. If our common stock has no active trading market, you may not be able to sell your common shares at all.
+ 
+
+ 23. We do not have a public market for our common shares. Our securities are not traded on any exchange. We cannot assure you that an active public market will ever develop. Consequently, you may not be able to liquidate your investment in the event of an emergency or for any other reason.
+ 
+
+ Our stock price may be volatile, which may result in losses to our stockholders
+ 
+
+ 24. The market prices of e-commerce companies generally have been extremely volatile and have recently experienced sharp share price and trading volume changes. The trading price of our common stock is likely to be volatile and could fluctuate widely in response to, among other things, the risk factors described in this prospectus and other factors beyond our control such as fluctuations in the operations or valuations of companies perceived by investors to be comparable to us and conditions or trends in the Internet or auto parts industries.
+ 
+
+ The stock markets have historically experienced significant price and trading volume fluctuations. These fluctuations, as well as general economic and political conditions unrelated to our performance, may adversely affect the price of our common stock. In particular, following initial public offerings, the market prices for stocks of Internet and technology-related companies often reach levels that bear no established relationship to the operating performance of these companies. 
+ 
+
+ These market prices are generally not sustainable and could vary widely. In the past, following periods of volatility in the market price of a public company s securities, securities class action litigation has often been initiated. Securities litigation against us could result in substantial costs and divert our management s attention from other business concerns, which could seriously harm our business.
+ 
+
+ 
+
+ 18
+ 
+
+ 
+
+ 25. We are selling this offering without an underwriter and may be unable to sell any common shares.
+ 
+
+ This offering is self-underwritten, that is, we are not going to engage the services of an underwriter to sell the shares; we intend to sell our shares through our chief executive officer, who will receive no commissions.
+ 
+
+ He will offer the shares to friends, family members, and business associates; however, there is no guarantee that he will be able to sell any of the shares. Unless he is successful in selling all of the shares and we receive the proceeds from this offering, we may have to seek alternative financing to implement our business plan.
+ 
+
+ 26. Our common shares are not registered under the Exchange Act. As a result, we will not be subject to the federal proxy rules and our directors, executive officers and 10% beneficial holders will not be subject to Section 16 of the Exchange Act. In additional our reporting obligations under Section 15(d) of the Exchange Act may be suspended automatically if we have fewer than 300 shareholders of record on the first day of our fiscal year.
+ 
+
+ Our common shares are not registered under the Securities Exchange Act of 1934, as amended, and we do not intend to register our common shares under the Exchange Act for the foreseeable future, provided that, we will register our common shares under the Exchange Act if we have, after the last day of our fiscal year, more than 500 shareholders or record, in accordance with Section 12(g) of the Exchange Act). As a result, although, upon the effectiveness of the registration statement of which this prospectus forms a part, we will be required to file annual, quarterly, and current reports pursuant to Section 15(d) of the Exchange Act, as long as our common shares are not registered under the Exchange Act, we will not be subject to Section 14 of the Exchange Act, which, among other things, prohibits companies that have securities registered under the Exchange Act from soliciting proxies or consents from shareholders without furnishing to shareholders and filing with the Securities and Exchange Commission a proxy statement and form of proxy complying with the proxy rules. In addition, so long as our common shares are not registered under the Exchange Act, our directors and executive officers and beneficial holders of 10% or more of our outstanding common shares will not be subject to Section 16 of the Exchange Act. Section 169a) of the Exchange Act requires executive officers and directs, and persons who beneficially own more than 10% of a registered class of equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of common shares and other equity securities, on Forms 3, 4 and 5, respectively. Such information about our directors, executive officers, and beneficial holders will only be available through this (and any subsequent) registration statement, and periodic reports we file thereunder. 
+ 
+
+ 
+
+ 19
+ 
+
+ 
+
+ Furthermore, so long as our common shares are not registered under the Exchange Act, our obligation to file reports under Section 15(d) of the Exchange Act will be automatically suspended if, on the first day of any fiscal year (other than a fiscal year in which a registration statement under the Securities Act has gone effective), we have fewer than 300 shareholders of record. This suspension is automatic and does not require any filing with the SEC. In such an event, we may cease providing periodic reports and current or periodic information, including operational and financial information, may not be available with respect to our results of operations. 
+ 
+
+ 27. State securities laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell the shares offered by this prospectus. 
+ 
+
+ Secondary trading in common stock sold in this offering will not be possible in any state until the common stock is qualified for sale under the applicable securities laws of the state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, the common stock in any particular state, the common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the liquidity for the common stock could be significantly impacted thus causing you to realize a loss on your investment. 
+ 
+
+ 28. We have not yet adopted of certain corporate governance measures. As a result, our stockholders have limited protections against interested director transactions, conflicts of interest and similar matters. 
+ 
+
+ The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges and the Nasdaq Stock Market, as a result of Sarbanes-Oxley, requires the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than necessary, we have not yet adopted these measures. 
+ 
+
+ Because our sole director is non-independent, we do not currently have independent audit or compensation committees. As a result, the sole director has the ability, among other things, to determine his own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without 
+ 
+
+ 
+
+ 20
+ 
+
+ 
+
+ protections against interested director transactions, conflicts of interest and similar matters and investors may be reluctant to provide us with funds necessary to expand our operations. 
+ 
+
+ 29. We may be unsuccessful in implementing required internal controls over financial reporting. 
+ 
+
+ We are not currently required to comply with the SEC s rules implementing Section 404 of the Sarbanes-Oxley Act of 2002, and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. Upon becoming a public company, we will be required to comply with the SEC s rules implementing Section 302 of the Sarbanes-Oxley Act of 2002, which will require our management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of our internal control over financial reporting. We will not be required to make our first assessment of our internal control over financial reporting until the year following our first annual report required to be filed with the SEC. To comply with the requirements of being a public company, we will need to create information technology systems, implement financial and management controls, reporting systems and procedures and contract additional accounting, finance and legal staff. 
+ 
+
+ Any failure to develop or maintain effective controls, or any difficulties encountered in our implementation of our internal controls over financial reporting could result in material misstatements that are not prevented or detected on a timely basis, which could potentially subject us to sanctions or investigations by the SEC or other regulatory authorities. Ineffective internal controls could cause investors to lose confidence in our reported financial information.
+ 
+
+ 30. The costs to meet our reporting and other requirements as a public company subject to the Exchange Act of 1934 will be substantial and may result in us having insufficient funds to expand our business or even to meet routine business obligations. 
+ 
+
+ If we become a public entity, subject to the reporting requirements of the Exchange Act of 1934, we will incur ongoing expenses associated with professional fees for accounting, legal and a host of other expenses for annual reports and proxy statements. We estimate that these costs could range up to $15,000 per year for the next few years and will be higher if our business volume and activity increases but lower during the first year of being public because our overall business volume will be lower, and we will not yet be subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. As a result, we may not have sufficient funds to grow our operations. 
+ 
+
+ 
+
+ 21
+ 
+
+ 
+
+ 31. Should we have troubles raising the appropriate capital to continue operations, our ability to complete projects will be dependent upon a verbal lending agreement with Mr. Podlubnijs, and will be limited by his personal budget.
+ 
+
+ If we are unable to raise sufficient capital to continue operations, we have a verbal agreement with Mr. Podlubnijs that states that he will lend the company funds out of his personal budget to fund projects that he deems necessary, as determined on a project-by-project basis. As a result, we cannot guarantee that Mr. Podlubnijs will approve of or have the ability to fund any proposed project. 
+ 
+
+ FORWARD LOOKING STATEMENTS
+ 
+
+ This prospectus contains
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001544116_durata_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001544116_durata_prospectus_summary.txt
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@@ -0,0 +1 @@
+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001553304_galt_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001553304_galt_prospectus_summary.txt
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@@ -0,0 +1 @@
+PROSPECTUS SUMMARY Except as otherwise indicated, as used in this prospectus, references to the Company, Galt, we, us, or our refer to Galt Petroleum, Inc. The following summary highlights selected information contained in this prospectus, and it may not contain all of the information that is important to you. Before making an investment decision, you should read the entire prospectus carefully, including Risk Factors and our financial statements and related notes, included elsewhere in, or incorporated by reference into, this prospectus. Corporate Background Galt Petroleum, Inc. was incorporated under the laws of the State of Nevada on August 29, 2011. Galt was created to capitalize on the ever-growing demand for domestic oil sources and production. Galt has taken full advantage of this demand by leveraging the combined experience of personnel to turn this scarcity into opportunity. As such, our mission is to carefully identify existing and mature oil and gas leases for purchase and then to rehabilitate and revive them, resulting in lower risk oil production. Our independent public accounting firm has issued an audit opinion, which includes a statement that the results of our operations and our financial condition raise substantial doubt about our ability to continue as a going concern. Where You Can Find Us Our offices are currently located at Galt Petroleum, Inc., 175 South Main St., 15th Floor, Salt Lake City, Utah, 84111. Our telephone number is (801) 719-7258. Summary of the Offering Securities being registered by the Selling Security Holders: 328,000 shares of common stock Offering price: $1.00 per share until a market develops and our shares are quoted on the OTC Bulletin Board or another quotation board (such as OTC QB) and thereafter at market prices or prices negotiated in private transactions Newly issued common stock being registered pursuant to the Primary Offering: 1,000,000 shares of common stock Offering price: $1.00 per share Number of shares outstanding prior to the offering: 4,000,000 shares of common stock Number of shares outstanding after the offering: 5,000,000 shares of common stock Market for the common stock: There has been no market for our securities. Our common stock is not traded on any exchange or on the Over-The-Counter market. After the effective date of the registration statement relating to this prospectus, we hope to have a market maker file an application with FINRA for our common stock to eligible for trading on the Over The Counter Bulletin Board. We do not yet have a market maker who has agreed to file such application. There is no assurance that a trading market will develop, or, if developed, that it will be sustained. Consequently, a purchaser of our common stock may find it difficult to resell the securities offered herein should the purchaser desire to do so when eligible for public resale. Use of proceeds: We will receive approximately $1,000,000 in gross proceeds if we sell all of the shares in the Primary Offering, we will receive estimated net proceeds of approximately $967,736.42 if we sold all of those shares. We will receive none of the proceeds from the sale of shares by the Selling Security Holders. See Use of Proceeds for a more detailed explanation of how the proceeds from the Primary Offering will be used.
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001553588_sfx_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001553588_sfx_prospectus_summary.txt
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+Prospectus summary This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information that is important to you. Before investing in our common stock, you should read this prospectus carefully in its entirety, especially the risks of investing in our common stock that we discuss in the "Risk Factors" section of this prospectus and the financial statements and related footnotes beginning on page F-1. In this prospectus, unless otherwise stated or the context otherwise requires, references to "SFX" and "the Company" refer to SFX Entertainment, Inc. and references to "we," "us," "our" and similar references refer to SFX Entertainment, Inc. together with its consolidated subsidiaries, in each case after giving effect to our completed acquisitions, the planned acquisitions disclosed herein, and the formation of our joint venture. To date, SFX has acquired four businesses and acquired an interest in one joint venture. SFX also expects to complete four acquisitions simultaneously with or shortly after the closing of this offering: its acquisition of (1) 100% of the worldwide business (the "ID&T Business") of ID&T NewHolding B.V. (such entity, together with One of Us B.V. (f/k/a ID&T Holding B.V.), "ID&T"), which includes the acquisition of the remaining interests in ID&T/SFX North America LLC, its North American joint venture with ID&T (the "ID&T JV"), (2) 100% of i-Motion GmbH Events & Communication ("i-Motion"), (3) 100% of Totem Onelove Group Pty Ltd and Totem Industries Pty Ltd (collectively, "Totem") and (4) a 70% equity interest in Made Event, LLC and EZ Festivals, LLC (collectively, "Made"). Although we consider these acquisitions to be "probable" within the meaning of Rule 3-05 of Regulation S-X and present information herein on a basis that assumes we complete these acquisitions, their consummation remains subject to closing conditions and other potential impediments. Therefore, we cannot provide any assurance that any of our planned acquisitions will be consummated. We discuss the terms of these acquisitions and the conditions to closing in "Risk Factors Risks Related to Our Acquisition Strategy" and "Business Our History and Acquisitions Planned acquisitions." One of SFX's completed acquisitions is Dayglow LLC and its affiliates (now known as SFX-LIC Operating LLC or "Life in Color"), which for accounting purposes has been determined to be the predecessor entity of SFX. We refer to our predecessor entity as our "Predecessor." SFX is not the same company as, or in any legal way connected to, SFX Entertainment Inc., which was sold to Clear Channel Communications Inc. in 2000, although the Company and SFX Entertainment Inc. do share similar founders and management teams. COMPANY OVERVIEW We believe we are the largest producer of live events and entertainment content focused exclusively on the electronic music culture ("EMC"), based on attendance and revenue. We view EMC as a global generational movement driven by a rapidly developing community of avid followers among the millennial generation. Our mission is to enable this movement by providing our fans with the best possible live experiences, music discovery and connectivity with other fans and events. We have significant and growing scale with our global live events. On a pro forma basis for our completed acquisitions, we attracted 1.3 million fans in 2012 (a 36.0% increase from 2011), and on a pro forma basis for our completed and planned acquisitions, we attracted 2.8 million fans in 2012 (a 22.2% increase from 2011). We believe the broad appeal of EMC beyond festival attendance is demonstrated by the deep engagement of our fans, which is evidenced by the time they devote to EMC-related social media and digital activities. For example, the 2012 Tomorrowland festival in Belgium had 7.9 million live views on YouTube and the official Tomorrowland long-form after movies have had over 157 million online views to date. We present leading EMC festivals and events, many of which have more than a decade of history, passionate followers and vibrant social communities. We have presented Life in Color events and two Sensation festivals and have acquired the rights to the Tomorrowland, Mysteryland and Q-Dance AMENDMENT NO. 7 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Table of Contents festivals in North America. Through planned acquisitions, we expect to acquire the rights to those festivals worldwide, as well as the rights to Stereosonic, Electric Zoo, Decibel, Nature One, MayDay and Ruhr-in-Love, among others. We are continually investing in our festivals and events to add new and exciting creative elements, expand into new markets, and launch new events, all in order to provide the best entertainment experiences in the world for EMC fans. Many of the festivals we have presented or expect to present have a long history and have achieved substantial popularity and success in Europe while also attracting fans globally. For example, Tomorrowland sold out all of its approximately 180,000 tickets to the 2013 festival in Belgium in one second and saw significant demand from U.S.-based fans, each seeking to purchase multiple tickets. To meet the growing demand of the EMC community in the United States and other regions around the world, we plan to introduce some of the most popular festivals and events to certain areas for the first time. At its original location in Amsterdam, Sensation has consistently sold out since its inception in 2000, including all 37,000 tickets for 2013. Our ID&T JV has held two Sensation festivals in North America in 2013, its inaugural festival in Toronto, which attracted over 24,000 attendees, and a second festival in Oakland. We have announced three additional Sensation events in North America for 2013, which will be held in Las Vegas, Miami and New York. Our ID&T JV sold more than 120,000 tickets to the first North American Tomorrowland festival, TomorrowWorld, which we held outside of Atlanta from September 27 through September 29, 2013. We are also addressing the demand from the growing EMC community for music, engaging content and social connectivity between and around live events. A key component of this initiative is Beatport, which is the principal source of music for EMC DJs and a trusted destination for the growing EMC community. Beatport is a vital channel for over 200,000 registered DJs and artists to launch music and connect with fans. In addition, Beatport has a rapidly growing fan community, with approximately 40 million unique visitors in 2012 (according to Google Analytics), who primarily use the site to discover and stream music, follow DJs and keep abreast of EMC news, information and events. The global market directly associated with electronic dance music is projected to be approximately $4.5 billion in 2013, according to the International Music Summit Business Report. Electronic music has a history of over 20 years of mainstream popularity in Europe and has more recently evolved into a widely followed genre of music in the United States and other international markets. For example, total attendance at what are currently the five largest U.S. EMC festivals grew 41% annually from 2007 to 2012 (although there is no guarantee that this growth rate will continue in the future). This compares to 2% annual revenue growth for the overall North American concert market during the same period, according to Pollstar, a concert industry trade publication. Further reflecting this trend, in 2012 the National Academy of Recording Arts and Sciences added a Dance/Electronic category for the Grammy Awards, Billboard launched a Dance/Electronic chart, and in February 2013, a Dance/Electronic song reached #1 on the Billboard Hot 100 chart for the first time. EMC festivals and events typically feature many different artists and DJs, as well as elaborate sets, lighting and special effects centered on different creative themes. These festivals and events have become highly experiential and social happenings that are enjoyed by thousands of fans. These experiences, further propelled via social media and shared by millions of fans globally, are at the heart of the generational movement that is EMC. Our market is characterized by a high degree of ownership fragmentation, and we believe it is well positioned for consolidation. We have a disciplined acquisition strategy that utilizes our in-house expertise and experience to identify, evaluate and integrate acquisitions. We plan to implement best practices across acquired companies and provide active business development, managerial support and financial discipline to achieve operational efficiencies. This will allow us to bring our fans more and higher quality EMC experiences while preserving the unique identities of these events. We have acquired and formed, or plan to acquire simultaneously with or shortly after consummation of this offering, the following businesses in pursuit of this strategy. Table of Contents Asset/Status Ownership 2012 Events/ Festivals 2012 Total Attendance (000s) Description BEATPORT, LLC "Beatport" Completed 100 % NA NA Principal online resource and destination for EMC DJs and enthusiasts, offering music for purchase in multiple downloadable formats (including uncompressed, high quality audio files) and providing unique music discovery tools for DJs and fans. Disco Donnie Presents "DDP" Completed 100 % 600 / 8 867 Promoter of EMC events in North America since 2000, including ownership interests in large EMC festivals. ID&T Planned(a) 100 % 39 / 29 961 One of the largest content providers and producers of international EMC live events across 19 countries and four continents. ID&T-branded festivals include Tomorrowland, Mysteryland, Sensation, Q-Dance, B2S, Decibel and Defqon.1. At the same time as this acquisition, we will increase our interest in our North American joint venture with ID&T from 51% to 100%, with an economic effect as of July 1, 2013. i-Motion GmbH Events & Communication "i-Motion" Planned(b) 100 % 7 / 5 208 Leading promoter and producer of EMC festivals and events in Germany, with key brands including Nature One, Germany's largest open-air EMC festival. Life in Color "LIC" Completed 100 % 138 / 4 437 Promoter and organizer of branded events that feature live music by DJs, acrobatic acts and "paint blasts." Made Event, LLC and EZ Festivals, LLC collectively, "Made" Planned(c) 70 % 14 / 1 130 Promoter and producer of EMC festivals and events in the United States, including Electric Zoo, held annually in New York City. MMG Nightlife LLC "MMG" Completed 80 % NA NA Management company that manages some of the most popular EMC venues in South Beach, Florida. Totem Onelove Group Pty Ltd and Totem Industries Pty Ltd collectively, "Totem" Planned(d) 100 % 15 / 5 247 Promoter and producer of leading Australian EMC festival, Stereosonic, a five city touring outdoor festival held annually in summer (November/December) in conjunction with a touring and promotion business. (a)If our acquisition of the worldwide business (the "ID&T Business") of ID&T does not close by October 31, 2013 (which may be extended to November 15, 2013 under certain circumstances), SFX Entertainment, Inc. 430 Park Avenue New York, New York 10022 (646) 561-6400 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Table of Contents One of Us Holding B.V., the seller of the ID&T Business (the "ID&T Seller"), will be entitled to terminate the stock purchase agreement and retain all acquisition consideration paid to date by us to the ID&T Seller. (b)If we do not complete this offering by October 16, 2013, then each party to the i-Motion share purchase agreement will be entitled to rescind the agreement by giving written notice to the other party. (c)If this acquisition does not close by October 31, 2013, the principals of Made are entitled to retain our advance of $3.75 million. If we fail to close this acquisition by the applicable deadline, we may be required to renegotiate the terms of the acquisition in their entirety. (d)If this acquisition does not close by October 31, 2013, for any reason other than a breach of the asset contribution agreement by Totem, Totem will be entitled to retain our deposit of AUD$5.0 million (or $4.8 million as of May 22, 2013). We have agreed to the following terms in respect of the four planned acquisitions described above. We intend to use the proceeds of this offering to fund the cash portion of the consideration for these acquisitions and consummate them simultaneously with or shortly after the closing of this offering. Under a stock purchase agreement with the ID&T Seller, we have agreed to acquire 100% of the equity interests of ID&T (the "ID&T Acquisition"). On March 20, 2013, we paid $2.5 million in cash and issued 2,000,000 shares of our common stock as consideration for an option to purchase a 75% ownership interest in the ID&T Business (the "ID&T Option"). On August 8, 2013, in connection with our exercise of the ID&T Option, we paid an advance of $10.0 million to the ID&T Seller and caused a $7.5 million non-recourse loan that ID&T/SFX North America LLC (the "ID&T JV") made to ID&T to be transferred to the ID&T Seller, effectively cancelling the repayment obligation for that loan. On September 23, 2013, we signed an agreement to purchase the remaining 25% interest in the ID&T Business not covered by the ID&T Option. Upon closing the ID&T Acquisition, we will pay additional cash consideration of $50.4 million and issue to the ID&T Seller $10.4 million of our common stock at the price to the public in this offering and a $10.4 million promissory note that matures in June 2014 and bears an interest rate of 3.0%. At closing, we will also make a cash payment to settle certain working capital adjustments that we preliminarily estimate to be $5.9 million. The final working capital adjustment will be based on final analysis subsequent to the close of the ID&T Acquisition. Following the closing of the ID&T Acquisition, our ownership interest in the ID&T JV will increase from 51% to 100%, with an economic effect as of July 1, 2013. Under a share purchase agreement with i-Motion, our acquisition of the 100% ownership interest of i-Motion will cost (i) $16.0 million (or, if greater, the U.S. dollar equivalent of 12.6 million, based on the exchange rate on the day prior to closing) in cash and (ii) $5.0 million (or, if greater, the U.S. dollar equivalent of 3.9 million, based on the exchange rate on the day prior to closing) in shares of our common stock at the price to the public in this offering. We have entered into an asset contribution agreement with Totem, under which we have agreed to pay AUD$90.0 million, consisting of AUD$75.0 million (or $70.4 million) in cash and AUD$15.0 million (or $14.1 million) in shares of our common stock at the price to the public in this offering to acquire 100% of Totem. The cash payment is divided into three parts, a deposit of AUD$5.0 million (or $4.8 million as of May 22, 2013) that we funded on May 22, 2013, AUD$65.0 million (or $61.1 million) to be paid at closing and AUD$5.0 million (or $4.7 million) to be paid by February 28, 2014. We have entered into a membership interest purchase agreement with Made, under which we have agreed to pay $35.0 million, consisting of $20.0 million in cash, $5.0 million in our common stock at the lower of $12.75 per share or the price to the public in this offering and $10.0 million in promissory notes for a 70% ownership interest in Made. On June 24, 2013, we advanced Robert F.X. Sillerman Chief Executive Officer and Chairman SFX Entertainment, Inc. 430 Park Avenue New York, New York 10022 (646) 561-6400 (Name, address, including zip code, and telephone number, including area code, of agent for service) Table of Contents $2.5 million towards the purchase price for this transaction, and on August 21, 2013, we advanced an additional $1.25 million towards the purchase price. We will be required to purchase in 2018 the remaining 30% that is not being sold. We describe the terms of these planned acquisitions in greater detail under "Business Our History and Acquisitions Planned acquisitions." Although, we consider each of these acquisitions to be a "probable acquisition" for the purposes of Rule 3-05 of Regulation S-X, in each case, there are substantial potential impediments that could cause us to fail to close a given acquisition or otherwise prevent it from being successful. For more information, see "Risk Factors Risks Related to Our Acquisition Strategy." Currently, we generate revenue from several sources. These include the sale of products on Beatport and the sale of merchandise at live events (19.6% and 26.2% of total revenue on a pro forma basis for the year ended December 31, 2012 and the six months ended June 30, 2013, respectively), service revenues earned from ticket sales and food and beverage concession fees (63.9% and 56.9% of total revenue on a pro forma basis for the year ended December 31, 2012 and the six months ended June 30, 2013, respectively), and other sources of service revenue including promoter fees, license fees, sponsorships and management fees (collectively, 16.5% and 16.9% of total revenue on a pro forma basis for the year ended December 31, 2012 and the six months ended June 30, 2013, respectively). On a pro forma basis for our completed and planned acquisitions, we generated revenue of $238.6 million and Adjusted EBITDA of $14.6 million and incurred a net loss of $67.4 million for the year ended December 31, 2012, and generated revenue of $92.3 million and Adjusted EBITDA of $(15.2) million and incurred a net loss of $71.3 million for the six months ended June 30, 2013. COMPETITIVE STRENGTHS We believe we are the largest company exclusively focused on the EMC community, with innovative festivals, live events and premier managed venues. In addition, we attract a large and growing community of EMC followers and key influencers around the world. History of creativity and innovation. We create and produce what we believe are many of the most recognized and well attended EMC festivals and events in the world, including, on a historical basis, Life in Color and Sensation, and, on a pro forma basis for our completed and planned acquisitions, Tomorrowland, Mysteryland, Q-Dance, Stereosonic, Electric Zoo, Decibel, Nature One, MayDay and Ruhr-in-Love. At our events and festivals, we use artistic, interactive, performance and visual elements, in addition to the music, to create an all-encompassing and compelling fan experience. For example, Life in Color shows include acrobatic acts and "paint blasts" in addition to DJs, and our other festivals include production elements such as elaborate sets, themes, lasers, fog machines and videos. We believe the appeal of our festivals and events is demonstrated by consistent attendance growth and ticket demand that often outstrips the available capacity. For example, in 2013, Tomorrowland sold out its 180,000 tickets, which was more than triple the tickets it sold in 2009. Active, year-round relationship with the large and growing EMC community. We use social media, engaging content and our online property, Beatport, to maintain an active relationship with trend setters and influencers in the broader EMC community, including professional DJs, bloggers and passionate consumers. Beatport has a large community of influencers, including over 200,000 registered DJs. Beatport also has a Klout score (an aggregated measure of social media activity and influence) of 91 out of 100, comparable with other high profile music services such as Spotify (91) and iTunes (93) as of August 2013. While Beatport experienced net losses of $1.5 million in 2012 and $1.4 million in 2011, we believe our ability to create closer partnerships between Beatport and the most important EMC festivals and events will enable us to deliver more to the EMC community between and around live events. Copies to: Aron Izower Reed Smith LLP 599 Lexington Avenue New York, New York 10022 (212) 521-5400 Colin Diamond F. Holt Goddard White & Case LLP 1155 Avenue of the Americas New York, New York 10036 (212) 819-8200 Table of Contents Substantial global scale and diversification. We believe our scale and diversification enables us to serve our fans more effectively than other participants in the EMC market that have typically focused on one geographic market or a narrow portfolio of events. On a pro forma basis for our completed acquisitions in 2012, we produced 12 festivals (defined as having an attendance of 10,000 or more fans) and 738 events (defined as having attendance of fewer than 10,000 fans). On a pro forma basis for our completed and planned acquisitions in 2012, we produced 52 festivals and 813 events. Together these attracted 2.8 million attendees in 2012 and included large and small scale events, presented in 25 countries on five continents, that targeted different subsets of the EMC community. In addition, our managed EMC venues hosted over 400,000 attendees and our online properties attracted millions of users around the world in the year ended December 31, 2012. Early access to emerging talent and trends. Through our managed venues, Beatport and relationships with influencers, we are able to identify new trends and support new artists, introducing them across our network. Our premier managed EMC venues in South Beach, Florida have proven to be a breeding ground for some of the top DJs in the industry. Similarly, Beatport serves as an important channel for DJs to gain recognition. In addition to influential charts and other discovery tools, Beatport hosts mix contests and other programs to support aspiring DJs. For example, Zedd, one of today's leading DJs, was discovered after he won several remix contests on Beatport and has gone on to play at several of our venues and festivals. Experienced management team. We believe our management team's reputation and experience in music, live entertainment, consumer internet and related businesses make us a valuable partner to creative talent, independent operators and the EMC community more broadly. Members of our senior management team have previously built businesses in live events and entertainment and executed and integrated a number of acquisitions during their careers. We also believe our management's experience strengthens our ability to effectively integrate and operate our acquired businesses. We are an early stage company that has not yet taken full advantage of these strengths, and we are not yet profitable due to the costs associated with startup activities, including making acquisitions, the limited time integrating and managing the businesses we have acquired and intend to acquire and because certain of our completed and planned acquisition targets were not yet profitable at the time of their acquisition. In addition, some of these companies have experienced increased costs in connection with their own growth strategies, resulting in declines in net income, such as ID&T, which increased revenue from 2011 to 2012, but suffered a decline in net income from 3.6 million (or $4.6 million) to 1.1 million (or $1.5 million) during the same period. GROWTH STRATEGY Our goal is to grow our business by supporting the development of the EMC movement. Key elements of our strategy include the following. Enhance the fan experience. We strive to continually enhance the experience that new and existing fans enjoy at our live events or online. Our live events include innovative and state-of-the-art sets and performer lineups, featuring both top talent and up-and-coming artists. We are pursuing many initiatives to enhance the fan experience, including continuing to invest in leading edge production, providing smart tickets/event passes, facilitating high quality travel and accommodation logistics, using wireless technologies to ease on-site logistics and social media interaction and featuring quality concessions in partnership with top-tier food and beverage partners. We plan to complement our fans' experience at live events by meeting their demand for information, quality content and connectivity with artists and the broader EMC community away from and around the events. Grow our partnerships. We believe the value of the experiences we offer is compelling enough to attract one or more partners willing to support multiple free events, sponsorship of festivals or our platform generally, and other fan-friendly initiatives. We are in advanced discussions with several Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective. If any of the securities being registered on this Form are offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Securities Exchange Act of 1934. Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company Table of Contents such partners, which we call our "revolution partners," to support these initiatives and enhance the access and experience of our fans. We and our planned acquisitions have already attracted multiple well known, corporate brand partners, such as Anheuser-Busch, Heineken, Labatt and Samsung, including for multi-event and repeat sponsorships. In addition, we received a strategic investment from WPP, one of the largest global advertising agencies, in April 2013. Going forward, we intend to expand these partnerships to enable us to offer innovative services and further enhance our fans' experience at our live events and across our digital offerings. Bring our festivals into new markets and expand current offerings. Many of our EMC festivals and events are well known, have an existing global following and have begun to expand geographically. We are using our considerable resources, including managerial talent and local expertise, to accelerate the expansion of our festivals and events into new geographies, many of which have an underserved EMC fan community. For example, in 2012, Tomorrowland, a festival produced by ID&T, one of our planned acquisitions, saw demand from approximately 200,000 U.S.-based fans seeking to purchase multiple tickets each, of which only 2,000 were successful. We intend to bring some of the most successful festivals in the world to North America, including TomorrowWorld, the first international version of Tomorrowland, which our ID&T JV presented outside of Atlanta from September 27 through September 29, 2013, selling more than 120,000 tickets. In response to increasing demand for our events, we are also expanding some of our festivals by increasing their length and capacity. For example, in 2010, Tomorrowland was a two-day festival, with an attendance of 45,000 per day (90,000 total). In 2013, Tomorrowland lasted three days, and we sold 60,000 tickets, the maximum capacity, for each of the three days (180,000 total). Foster deeper engagement within the EMC community. We believe our scale of festivals and events, combined with our new generation of executive talent, helps us support the growth of the EMC community. Creating and mixing electronic music is a collaborative process that is highly accessible given the ready availability of music and mixing tools. In addition, the music is typically enjoyed as part of a communal experience, which in turn is commonly shared and perpetuated via social media. We seek to improve our fans' experiences by responding to their growing demand to engage with EMC content and the EMC community. We also plan to create closer partnership and integration between our online properties, such as Beatport, and live EMC happenings to enhance the fan experience between and around events. Acquire and integrate leading live event and online properties. We seek to acquire the highest quality festivals, event operators and promoters worldwide, as well as other businesses that are important to the EMC community. We have completed four acquisitions and acquired an interest in one joint venture to date, and we plan to close four more acquisitions on or shortly after the closing of this offering. We are also in active negotiations to acquire several other businesses. To mitigate acquisition risks, we typically seek to retain management teams of the acquired companies under long-term agreements and incentivize them to continue to manage the operations and expansion of the businesses. In addition, we intend to use our senior management's expertise in live events, consumer internet and EMC broadly, to promote best practices across our entire network in order to enhance the fan experience, improve operating and financial performance and ensure the health and safety of our fans, all while allowing producers to maintain creative independence. RISKS RELATED TO OUR BUSINESS Investing in our common stock involves substantial risk. You should carefully consider all of the information in this prospectus prior to investing in our common stock. There are several risks related to our business that are described under the section titled "Risk Factors" elsewhere in this prospectus. Among these important risks are the following: Our success relies, in part, on the strength of our festival and online properties' appeal to fans, and if any of them were to become less popular, our business could suffer. Notes to consolidated financial statements (Continued) (in thousands except share data) are classified in stockholders' equity. The Company has estimated the fair value of these warrants as $3,190 at December 31, 2012 using the Black-Scholes option pricing model. Warrants issued Strike Price 100,000 $ 0.01 700,000 $ 5.00 700,000 $ 7.50 700,000 $ 10.00 The following assumptions were used to calculate the fair value of the Company's warrants on the date of grant: 2012 2011 Risk-free interest rate 1.18 % N/A Dividend yield N/A Volatility factors 60 % N/A Weighted average expected life (in years) The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Table of Contents We can give no assurance as to when, or if, we will consummate our planned acquisitions. We may be unsuccessful in developing and expanding our music, video and other content offerings. We are vulnerable to the potential difficulties associated with rapid growth. The number of EMC festivals and events may grow faster than the public's demand which could make it difficult for us to attract customers to our festivals and events. A number of other companies are seeking to make acquisitions in our industry, which may make our acquisition strategy more difficult or expensive to pursue. Our business and growth may suffer if we are unable to attract and retain key officers or employees, including our Chairman and Chief Executive Officer, Robert F.X. Sillerman, including any loss of officers or employees due to illness or other events outside of our control. We may be unsuccessful in our future acquisition endeavors, if any, which may have an adverse effect on our business; in addition, some of the businesses we acquire may incur significant losses from operations. We may seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing capital stock that would dilute your ownership. Some of our stockholders have repurchase rights that require us to purchase their shares under certain conditions, and our financial position would be adversely impacted if those stockholders exercise such rights. See "Description of Capital Stock Repurchase Rights" for the terms of the repurchase rights. We are an emerging growth company as defined in Section 2(a)(19) of the Securities Act and Section 3(a)(80) of the Exchange Act. Pursuant to Section 102 of the Jumpstart Our Business Startups Act (the "JOBS Act"), we have provided reduced executive compensation disclosure and have omitted a compensation discussion and analysis from this prospectus. Pursuant to Section 107 of the JOBS Act, we have elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Under the NASDAQ rules, a company of which more than 50% of the voting power is held by a person or group of persons acting together is a "controlled company" and may elect not to comply with certain NASDAQ corporate governance requirements. Robert F.X. Sillerman, who is our founder, Chief Executive Officer and Chairman of our board of directors, controls 58.8% of our voting power. Assuming that we sell the number of shares set forth on the cover page of this prospectus, after this offering Mr. Sillerman would control approximately 46.7% of our voting power (or 45.3% if the underwriters fully exercise their over-allotment option). Mr. Sillerman also holds unvested options to purchase 11,350,000 shares of our common stock, which, if exercised after vesting, would increase his voting power. If Mr. Sillerman were to hold greater than 50% of our voting power, we would be eligible to take advantage of this "controlled company" exemption. We do not, however, plan to take advantage of such exemption. We have grown our business principally through acquisitions, and we have indebtedness of approximately $75.0 million as of September 30, 2013 in connection with our acquisition strategy, including $75.0 million under the First Lien Term Loan Facility. This level of indebtedness involves substantial risks, including that we may not be able to repay or refinance this indebtedness at maturity. You should read, "Risk Factors Risks Related to our Acquisition Strategy We have incurred significant indebtedness in connection with our growth strategy, which may grow with future acquisitions, and this increases risk for holders of our common stock and could adversely affect our profitability and financial condition" for a discussion of risks related to our level of indebtedness. Table of Contents The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities, and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted. PRELIMINARY PROSPECTUS Subject to Completion October 2, 2013 16,666,667 Shares SFX Entertainment, Inc. Common Stock Table of Contents OUR HISTORY SFX was incorporated in the State of Delaware on June 5, 2012. Between June 5, 2012 and February 13, 2013, SFX was named SFX Holding Corporation. We started our business on July 7, 2011 as SFX EDM Holdings Corporation, which is now a wholly-owned subsidiary of SFX Entertainment, Inc. Our principal executive offices are located at 430 Park Avenue, 6th Floor, New York, New York 10022 and our telephone number is (646) 561-6400. All trademarks and product names or brands appearing in this prospectus are the property of their respective owners. Combined notes to the financial statements (Unaudited) (Continued) June 30, 2013 and 2012 Intangibles (Continued) Amortizable intangible assets, trademarks, at each period end consist of the following: Trademarks Period end Years to next renewal * Gross Accumulated amortization Net AUD AUD AUD June 30, 2013 7.5 26,717 5,300 21,417 June 30, 2012 8.5 18,316 2,988 15,328 December 31, 2012 8 23,120 4,143 18,977 December 31, 2011 This is an initial public offering of our common stock. No public market currently exists for our common stock. We are selling all of the shares of common stock offered by this prospectus. We expect the public offering price to be between $11.00 and $13.00 per share. Our common stock has been approved for listing on the The Nasdaq Global Select Market under the symbol "SFXE." We are an "emerging growth company," as defined under the federal securities laws, and, as such, may elect to comply with certain reduced public company reporting requirements for future filings. Investing in our common stock involves a high degree of risk. Before buying any shares, you should carefully read the discussion of material risks of investing in our common stock in "Risk Factors" beginning on page 15 of this prospectus. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Per Share Total Public offering price $ $ Underwriting discounts and commissions(1) $ $ Proceeds, before expenses, to us $ $ (1)See "Underwriting" for a description of the compensation payable to the Underwriters. The underwriters may also purchase up to an additional 2,500,000 shares of our common stock at the public offering price, less the underwriting discounts and commissions payable by us, to cover over-allotments, if any, within 30 days from the date of this prospectus. If the underwriters exercise this option in full, the total underwriting discounts and commissions will be $ and our total proceeds, after underwriting discounts and commissions but before expenses, will be $ . The underwriters are offering the common stock as set forth under "Underwriting." Delivery of the shares will be made on or about , 2013. UBS Investment Bank Jefferies Deutsche Bank Securities The number of shares of common stock that will be outstanding after this offering is based on 63,614,154 shares outstanding as of September 30, 2013, and excludes: 21,438,500 shares of common stock issuable upon the exercise of options to purchase common stock that were outstanding as of September 30, 2013, with a weighted average exercise price of $5.38 per share, and options to purchase approximately 665,000 shares of common stock with an exercise price equal to the price per share to the public in this offering, which we intend to issue at the pricing of this offering; Table of Contents 233,000 shares of restricted stock to Mr. Sillerman, which we intend to issue immediately prior to the closing of this offering; 500,000 shares of common stock issuable upon the exercise of warrants to purchase common stock that were outstanding as of September 30, 2013, with a weighted average exercise price of $2.50 per share; 2,646,500 shares of common stock available for future issuance under our 2013 Equity Compensation Plan; and approximately 2,852,800 shares of common stock (based on the midpoint of the price range set forth on the cover of this prospectus) we expect to issue in order to close our pending acquisitions. Unless otherwise indicated, all information in this prospectus: assumes the underwriters do not exercise their option to purchase additional shares; and assumes the shares are offered at $12.00 per share (the midpoint of the price range set forth on the cover of this prospectus). We have also filed with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on Form S-1 (the ``resale registration statement") relating to the offering and sale from time to time of up to 26,197,277 shares of our common stock by certain of our existing stockholders named as selling stockholders therein. The offer and sale of these shares are not included in the registration statement of which this prospectus is a part, and none of those shares will be included in this offering. In the event that any of the selling stockholders sell shares of our common stock under the resale registration statement, we will not receive any proceeds from those sales. Each of the selling stockholders have signed lock-up agreements with our underwriters that prohibit them, subject to certain exceptions, from selling their shares during the period ending 180 days after the date of this prospectus, and many of them have signed separate lock-up agreements with us. We intend for the resale registration statement to be declared effective by the SEC following the effectiveness of this prospectus and after we have closed one or more of our planned acquisitions. Notes to financial statements (Continued) Concentrations Financial instruments which potentially subject the Company to credit risks consist primarily of excess cash over insured limits by the Federal Deposit Insurance Corporation and concentration of trade receivables and payables. At times throughout the year cash balances may be in excess of the Federal Deposit Insurance Corporation. Concentration of credit risk in amounts due from and to promoters is generally not diversified due to the limited number of promoters that the Company works with. The following tables represent a breakdown of concentrations at December 31, 2011 and 2010: Percentage of Due from Promoters at December 31, 2011 2010 Promoter A 21 % 27 % Promoter B 24 % * Promoter C * 39 % Promoter D * Table of Contents Summary historical consolidated financial information and other data The following table sets forth the summary historical and pro forma consolidated financial information for SFX Entertainment, Inc. (Successor), or "SFX," and the summary historical financial information for Life in Color or "LIC" (Predecessor). The historical results of operations for SFX, as Successor, for the year ended December 31, 2011 do not reflect any of the operations of LIC, as Predecessor. The historical results of operations for SFX, as Successor, for the year ended December 31, 2012 reflect the operations of LIC only from the date of our acquisition of LIC on July 31, 2012. We derived the summary historical consolidated financial data for SFX as of and for the years ended December 31, 2011 and December 31, 2012 from the audited consolidated financial statements you can find elsewhere in this prospectus. We derived the summary historical consolidated financial data for LIC as of and for the year ended December 31, 2011, for the period from January 1, 2012 through July 31, 2012 and as of July 31, 2012 from the audited consolidated financial statements you can find elsewhere in this prospectus. We derived the summary historical consolidated financial data for SFX as of June 30, 2013 and for the three and six months ended June 30, 2012 and 2013 from the unaudited consolidated financial statements you can find elsewhere in this prospectus. We derived the summary unaudited pro forma condensed combined financial data for SFX for the year ended December 31, 2012 and as of and for the three and six months ended June 30, 2013 from the unaudited pro forma condensed combined financial statements you can find elsewhere in this prospectus. These pro forma financial data give effect to our completed and planned acquisitions, our issuances and sales of equity that have occurred since January 1, 2012, and our subsidiary's borrowing under the First Lien Term Loan Facility, as if each of these had occurred on January 1, 2012 (in the case of the consolidated income data) and on June 30, 2013 (in the case of the consolidated balance sheet data). You should read these data in conjunction with the information set forth under "Unaudited Pro Forma Condensed Combined Financial Information," which describes these transactions and the related adjustments in greater detail. The financial data set forth below are only a summary and are not complete. They also do not necessarily indicate or represent anything about our future operations. You should read these summary financial data in conjunction with the disclosure under "Use of Proceeds," "Capitalization," "Unaudited Pro Forma Condensed Combined Financial Information," "Selected Historical Financial Information and Other Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and the related notes thereto included elsewhere in this prospectus. (1)We define Adjusted EBITDA as net income (loss) before other income (loss), interest expense, income taxes, depreciation and amortization, equity-based compensation expense, and non-recurring items. Adjusted EBITDA is not a recognized term under U.S. generally accepted accounting rules ("GAAP") and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. We present Adjusted EBITDA in this prospectus to provide investors with supplemental information regarding our financial results and operating performance. Adjusted EBITDA should not be used as an indicator of, or an alternative to, net income (as determined in accordance with GAAP) as a measure of our operating performance or to net cash provided by operating, investing or financing activities (as determined in accordance with GAAP) or as a measure of our ability to meet cash needs. (a)Other (income) expense represents gain on a sale of assets and other miscellaneous non-recurring items. (b)These include acquisition related costs at acquired entities. These do not include expenses incurred in connection with SFX's formation, the evaluation, negotiation and consummation of acquisitions and this offering and the resale shelf registration statement, which were $0, $0, $101, $8,330, $8,562, $8,330 and $8,562, respectively. (c)Represents ID&T's non-consolidated affiliates' share of interest expense, income taxes and depreciation and amortization. TABLE OF CONTENTS
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+PROSPECTUS SUMMARY AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, "WE," "US," "OUR," AND "INTERUPS INC.." REFERS TO INTERUPS INC. BECAUSE THIS IS A SUMMARY, IT MAY NOT CONTAIN ALL OF THE INFORMATION THAT IS IMPORTANT TO YOU. YOU SHOULD READ THE ENTIRE PROSPECTUS BEFORE MAKING AN INVESTMENT DECISION TO PURCHASE OUR COMMON STOCK. The following summary is qualified in its entirety by the more detailed information and the financial statements and notes thereto appearing elsewhere in this Prospectus. Prospective investors should consider carefully the information discussed under "RISK FACTORS" and "USE OF PROCEEDS" sections, commencing on pages and , respectively. An investment in our securities presents substantial risks, and you could lose all or substantially all of your investment. General Interups Inc. was incorporated under the laws of the state of Nevada on April 11, 2012. Our principal executive offices are located at 2360 Corporate Circle Suite 400, Henderson NV 89074. Our phone number is (718)717-2607 Business We are a development stage company formed to provide secure and reliable connections for merchants to consumers by offering goods and services at a discount prices. Going Concern From inception until the date of this filing, we have had no revenues and very limited operating activities. Our financial statements from inception April 11, 2012 through November 30, 2012 reports no revenue and net loss of $8,295. Our independent registered public accounting firm has issued an audit opinion for Interups Inc. which includes a statement expressing substantial doubt as to our ability to continue as a going concern. Market for our common stock Our common stock is not quoted on a market or securities exchange. We cannot provide any assurance that an active market in our common stock will develop. We intend to quote our common shares on a market or securities exchange. Risk Factors See "Risk Factors" and other information in this prospectus for a discussion of the factors you should consider before deciding to invest in shares of our common stock. Common shares outstanding prior to Offering 4,000,000 Common Shares Being Offered 10,000,000 self-underwritten, best-efforts offering with no minimum subscription requirement. Duration of the Offering The offering shall terminate on the earlier of (i) the date when the sale of all 10,000,000 common shares is completed; (ii) one year from the date of this prospectus; or (iii) prior to one year at the sole determination of the board of directors. SELECTED FINANCIAL DATA The summarized financial data presented below is derived from, and should be read in conjunction with, our financial statements and related notes from April 11, 2012 (date of inception) to November 30, 2012, included on Page F-1 in this prospectus. The summarized financial data presented below is derived from, and should be read in conjunction with, our financial statements and related notes from April 11, 2012 (date of inception) to November 30, 2012, included on Page F-1 in this prospectus. As of November 30, 2012 ----------------- (unaudited) BALANCE SHEET Total Assets $ 3,042 Total Liabilities $ 7,337 Stockholders' Equity (Deficit) $ (4,295) Period from April 11, 2012 (date of inception) to November 30, 2012 ----------------- INCOME STATEMENT Revenue $ -- Total Expenses $ 8,295 Net Loss $ 8,295
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+PROSPECTUS SUMMARY 1
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+Prospectus Summary
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+ 1
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+Summary Financials
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+ 3
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+Risk Factors
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+ 4
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+Use of Proceeds
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+ 12
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+Determination of Offering Price
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+ 12
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+Dilution
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+ 12
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+Selling Shareholders
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+ 12
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+Plan of Distribution
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+ 14
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+Description of Securities to be Registered
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+ 15
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+Interests of Named Experts and Counsel
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+ 16
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+Description of Business
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+ 16
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+Description of Property
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+19
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+Legal Proceedings
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+19
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+Market for Common Equity and Related Stockholder Matters
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+19
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+Index to Financial Statements
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+ F-1 - F-23
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+Management Discussion and Analysis of Financial Condition and Financial Results
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+20
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+Plan of Operations
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+20
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+Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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+24
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+Directors, Executive Officers, Promoters and Control Persons
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+24
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+Executive Compensation
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+25
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+Security Ownership of Certain Beneficial Owners and Management
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+26
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+Transactions with Related Persons, Promoters and Certain Control Persons
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+27
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+ 
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+Please read this prospectus carefully. It describes our business, our financial condition and results of operations. We have prepared this prospectus so that you will have the information necessary to make an informed investment decision.
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+You should rely only on information contained in this prospectus. We have not authorized any other person to provide you with different information. This prospectus is not an offer to sell, nor is it seeking an offer to buy, these securities in any state where the offer or sale is not permitted. The information in this prospectus is complete and accurate as of the date on the front cover, but the information may have changed since that date.
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+Table of Contents
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+PROSPECTUS SUMMARY
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+ 
+
+This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information that you should consider before investing in the common stock. You should carefully read the entire prospectus, including Risk Factors , Management s Discussion and Analysis of Financial Condition and Results of Operations and the Financial Statements, before making an investment decision. In this Prospectus, the terms Wally World, Company, we, us and our refer to Wally World Media, Inc.
+
+ 
+
+Overview
+
+ 
+
+Wally World Media, Inc. was incorporated in the State of Nevada on May 17, 2012. We are a start-up business and are still developing our software and platform. Our principal business is focused on creating an internet network that allows users that register on the Company s website to place job offerings for a service on the Company s YouPop platform, a social media website. The YouPop platform is not yet operational. We are a development stage company. We are still developing the platform by building the database structure, user interface, transaction processes, notifications and payment processing system. The site is not available to the public at this time but we expect to be able to go live and introduce this platform by April 2013. We expect that our platform would list a range of micro-services (small tasks offered online for a small fee), such as a video of a personalized birthday wish, a practical joke, a dare, or creating a logo for a business. We will generate revenue by charging both the person looking for services to be provided and the service provider with a transaction fee or service charge equal to up to 15% from each transaction.
+
+ 
+
+Where You Can Find Us
+
+ 
+
+We presently maintain our principal offices at 200 Centennial Avenue, Suite 200, Piscataway, New Jersey 08854. Our telephone number is 732-377-2017.
+
+ 
+
+Implications of Being an Emerging Growth Company
+
+ 
+
+We qualify as an emerging growth company as that term is used in the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:
+
+ 
+
+ 
+
+ 
+
+ 
+
+A requirement to have only two years of audited financial statements and only two years of related MD 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Exemption from the auditor attestation requirement in the assessment of the emerging growth company s internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002;
+
+ 
+
+ 
+
+ 
+
+ 
+
+Reduced disclosure about the emerging growth company s executive compensation arrangements; and
+
+ 
+
+ 
+
+ 
+
+ 
+
+No non-binding advisory votes on executive compensation or golden parachute arrangements.
+
+ 
+
+We have already taken advantage of these reduced reporting burdens in this prospectus, which are also available to us as a smaller reporting company as defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the Exchange Act ).
+
+ 
+
+In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the Securities Act ) for complying with new or revised accounting standards. We have elected to use the extended transition period provided above and therefore our financial statements may not be comparable to companies that comply with public company effective dates.
+
+ 
+
+We could remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a large accelerated filer as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
+
+ 
+
+For more details regarding this exemption, see Management s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Policies. 
+
+ 
+
+ 
+
+-1-
+
+Table of Contents
+
+ 
+
+The Offering
+
+ 
+
+Common stock offered by selling security holders
+
+ 
+
+5,480,000 shares of common stock. This number represents 23.74% of our current outstanding common stock (1).
+
+ 
+ 
+ 
+
+Common stock outstanding before the offering
+
+ 
+
+23,080,000
+
+ 
+ 
+ 
+
+Common stock outstanding after the offering
+
+ 
+
+23,080,000
+
+ 
+ 
+ 
+
+Terms of the Offering
+
+ 
+
+The selling security holders will determine when and how they will sell the common stock offered in this prospectus.
+
+ 
+ 
+ 
+
+Termination of the Offering
+
+ 
+
+The offering will conclude upon the earliest of (i) such time as all of the common stock has been sold pursuant to the
\ No newline at end of file
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@@ -0,0 +1,1137 @@
+Summary Financial Information 
+
+The following financial information summarizes the more complete historical financial information at the end of this prospectus.
+
+ 
+
+As of November 30, 2012 (
+
+Unaudited)
+
+Balance Sheet 
+
+ 
+ 
+ 
+
+Total Assets 
+
+ 
+
+$
+
+ 29,026
+
+Total Liabilities 
+
+ 
+
+$
+
+ 217 
+
+Stockholders Equity 
+
+ 
+
+$
+
+ 28,809
+
+ 
+
+ Period from April 27, 2012 (date of inception) to November 30,2012 (Unaudited) 
+
+Income Statement 
+
+ 
+ 
+ 
+
+Revenue 
+
+ 
+
+$
+
+ -
+
+Total Expenses 
+
+ 
+
+$
+
+ 3,191
+
+Net Loss 
+
+ 
+
+$
+
+(3,191)
+
+Risk Factors related to our Business and Industry
+
+AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW AND THE OTHER INFORMATION IN THIS PROSPECTUS BEFORE INVESTING IN OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS OCCUR, OUR BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION COULD BE SERIOUSLY HARMED. WE DO NOT CURRENTLY HAVE A TRADING PRICE FOR OUR COMMON STOCK. IF AND WHEN OUR COMMON STOCK BECOME ELIGIBLE FOR TRADING ON THE OVER-THE-COUNTER BULLETIN BOARD, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE DUE TO ANY OF THESE RISKS, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT. THERE IS NO ASSURANCE OUR COMMON STOCK WILL BE ELIGIBLE FOR TRADING ON THE OTCBB.
+
+BECAUSE OUR AUDITORS HAVE RAISED A GOING CONCERN, THERE IS A SUBSTANTIAL UNCERTAINTY THAT WE WILL CONTINUE OPERATIONS IN WHICH CASE YOU COULD LOSE YOUR INVESTMENT.
+
+Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an ongoing business for the next twelve months. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue in business. As such we may have to cease operations and you could lose your investment.
+
+WE LACK AN OPERATING HISTORY AND THERE IS NO ASSURANCE OUR FUTURE OPERATIONS WILL RESULT IN REVENUES OR PROFITABILITY. IF WE CANNOT GENERATE SUFFICIENT REVENUES TO OPERATE PROFITABLY, WE MAY SUSPEND OR CEASE OPERATIONS.
+
+We were incorporated on April 27, 2012, and our net loss since inception is $3,191. We have very little operating history upon which an evaluation of our future success or failure can be made. Based upon current plans, we expect to incur operating losses in the foreseeable future because we will be incurring large expenses associated with SEC filings, establishing office, website development and purchasing of additional cars for resale without generating revenues. Failure to generate significant revenues in the future will cause us to go out of business.
+
+6 | Page
+
+IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
+
+While on November 30, 2012, we had cash on hand of $29,026 we have accumulated a deficit of $3,191 in business development and administrative expenses and professional fees. Our current cash reserves are not sufficient to meet our obligations for the next twelve-month period. We anticipate that the minimum additional capital necessary to fund our planned operations for the 12-month period will be approximately $5,000 and will be needed for general administrative expenses, business development, marketing costs, support materials and costs associated with being a publicly reporting company. In order to expand our business operations, we anticipate that we will have to raise additional funding. There is no assurance that we will be able to raise additional funding. If we are not able to raise the capital necessary to fund our business expansion objectives, we may have to delay the implementation of our business plan.
+
+We do not currently have any arrangements for financing. Obtaining additional funding will be subject to a number of factors, including general market conditions, investor acceptance of our business plan and initial results from our business operations. These factors may impact the timing, amount, terms or conditions of additional financing available to us. Management s time that may be spent trying to secure additional financing will take away time that management could spend on our operations.
+
+We are not raising any money in this offering. The most likely source of future funds available to us is through the sale of additional shares of common stock or advances from our sole officer and director. Issuance of loans or debt instruments will have principal and interest payment obligations. Any additional funding we arrange through the sale of our common stock will result in dilution to existing shareholders. Olga Chernetckaia, our sole officer and director, has agreed to loan the Company funds to meet our obligations and complete our 12-months business plan. However, Ms. Chernetckaia has no firm commitment, arrangement or legal obligation to advance or loan funds to the Company. There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us. Failure to raise additional financing will cause us to go out of business. If this happens, you could lose all or part of your investment.
+
+LACK OF REVENUES TO DATE CAUSES A SUBSTANTIAL DOUBT AS TO WHETHER WE WILL CONTINUE OPERATIONS. IF WE DISCONTINUE OPERATIONS, YOU COULD LOSE YOUR INVESTMENT.
+
+We are a development stage company. We have incurred total losses since inception of $3,191. Accordingly, you cannot evaluate our business, and therefore our future prospects, due to a lack of operating history and small revenues. To date, our business operations have been limited to primarily, the development of a business plan, the completion of private placements for the offer and sale of our common stock, and purchasing a car. Potential investors should be aware of the difficulties normally encountered by development stage companies and the high rate of failure of such enterprises. In addition, there is no guarantee that we will be able to expand our business operations. Even if we expand our operations, at present, we do not know precisely when this will occur.
+
+We cannot guarantee that we will be successful in generating revenues and profit in the future. Failure to generate revenues and profit will cause us to suspend or cease operations. If this happens, you could lose all or part of your investment.
+
+WE FACE STRONG COMPETITION FROM LARGER AND WELL ESTABLISHED COMPANIES, WHICH COULD HARM OUR BUSINESS AND ABILITY TO OPERATE PROFITABLY.
+
+Our industry is highly competitive. There are many different distributors of used cars in Russia. Even though the industry is highly fragmented, it has a number of large and well established companies, which are profitable and have developed a brand name. Aggressive marketing tactics implemented by our competitors could impact our limited financial resources and adversely affect our ability to compete in our market.
+
+7 | Page
+
+COMPETITORS WITH MORE RESOURCES MAY FORCE US OUT OF BUSINESS.
+
+Many competitors with similar products are significantly larger and have substantially greater financial, marketing and other resources and have achieved public recognition for their services. Competition by existing and future competitors could result in an inability to secure adequate consumer relationships sufficient enough to support Company endeavors. We cannot be assured that we will be able to compete successfully against present or future competitors or that the competitive pressure we may face will not force us to cease our operations.
+
+WE MAY BE SIGNIFICANTLY AFFECTED BY CHANGING RETAIL PRICES.
+
+Any significant changes in retail prices for used and new vehicles could reduce our sales and margins. If any of our competitors seek to gain or retain market share by reducing prices for used or new vehicles, we would likely reduce our prices in order to remain competitive, which could result in a decrease in our sales and profitability and require a change in our operating strategies
+
+BECAUSE WE PLAN TO SELL MOST OF OUR CARS IN RUSSIA, WE CAN BE AFFECTED BY DISRUPTION IN THE DELIVERY.
+
+We plan to sell most of our cars in Russia. Because we plan to deliver cars directly to our customers, we believe that disruptions in shipping deliveries may affect us. Deliveries of our products may be disrupted through factors such as:
+
+- raw material shortages, work stoppages, strikes and political unrest;
+
+- fuel price increases;
+
+- problems with ocean shipping, including work stoppages and shipping;
+
+- container shortages;
+
+- increased inspections of import shipments or other factors causing delays in shipments; and
+
+- economic crises, international disputes and wars.
+
+Any of the foregoing disruptions could disrupt our operations and lead to a complete loss of your investment.
+
+BECAUSE OUR PRINCIPAL ASSETS ARE LOCATED OUTSIDE OF THE UNITED STATES AND OLGA CHERNETCKAIA, OUR SOLE DIRECTOR AND OFFICER, RESIDES OUTSIDE OF THE UNITED STATES, IT MAY BE DIFFICULT FOR AN INVESTOR TO ENFORCE ANY RIGHT BASED ON U.S. FEDERAL SECURITIES LAWS AGAINST US AND/OR MS. CHERNETCKAIA, OR TO ENFORCE A JUDGMENT RENDERED BY A UNITED STATES COURT AGAINST US OR MS. CHERNETCKAIA.
+
+ 
+
+Our principal operations and assets are located outside of the United States, and Olga Chernetckaia, our sole officer and director, is a non-resident of the United States. Therefore, it may be difficult to effect service of process on Ms. Chernetckaia in the United States, and it may be difficult to enforce any judgment rendered against Ms. Chernetckaia. As a result, it may be difficult or impossible for an investor to bring an action against Ms. Chernetckaia, in the event that an investor believes that such investor s rights have been infringed under the U.S. securities laws, or otherwise. Even if an investor is successful in bringing an action of this kind, the laws of Russia may render that investor unable to enforce a judgment against the assets of Ms. Chernetckaia. As a result, our shareholders may have more difficulty in protecting their interests through actions against our management, director or major shareholder, compared to shareholders of a corporation doing business and whose officers and directors reside within the United States.
+
+Additionally, because of our assets are located outside of the United States, they will be outside of the jurisdiction of United States courts to administer, if we become subject of an insolvency or bankruptcy proceeding. As a result, if we declare bankruptcy or insolvency, our shareholders may not receive the distributions on liquidation that they would otherwise be entitled to if our assets were to be located within the United States under United States bankruptcy laws.
+
+OUR SOLE OFFICER AND DIRECTOR HAS LACK OF EXPERIENCE MANAGING PUBLIC REPORTING COMPANY AND ACCOUNTING WHICH IS REQUIRED TO ESTABLISH AND MAINTAIN DISCLOSURE CONTROL AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING.
+
+We have never operated as a public company. Olga Chernetckaia, our sole officer and director has no experience managing a public company that is required to establish and maintain disclosure controls and
+
+procedures and internal control over financial reporting. Also, Ms. Olga Chernetckaia has only limited experience in accounting. As our operations become more complex we will be required to hire additional
+
+accounting personal to comply with our reporting obligations. If we cannot operate successfully as a public company, your investment may be materially adversely affected.
+
+8 | Page
+
+BECAUSE OUR SOLE OFFICER AND DIRECTOR OWNS 67.48% OF OUR ISSUED AND OUTSTANDING COMMON STOCK, SHE WILL HAVE THE ABILITY TO MAKE AND CONTROL CORPORATE DECISIONS THAT MAY BE DISADVANTAGEOUS TO MINORITY SHAREHOLDERS.
+
+Our sole officer and director, Olga Chernetckaia, owns approximately 67.48% of the outstanding shares of our common stock. Accordingly, she will have the ability to determine the outcome of all corporate transactions or other matters, including mergers, consolidations, and the sale of all or substantially all of our assets. She will also have the power to prevent or cause a change in control. The interests of our sole officer and director may differ from the interests of the other stockholders and thus result in corporate decisions that are disadvantageous to other shareholders.
+
+BECAUSE OUR SOLE OFFICER AND DIRECTOR HAS OTHER BUSINESS INTERESTS, SHE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS OPERATIONS, CAUSING OUR BUSINESS TO FAIL. 
+
+Our sole officer and director, Ms. Olga Chernetckaia, will only be devoting limited time to our operations. Ms. Chernetckaia intends to devote approximately 20 hours a week of her business time to our affairs. Because our sole officer and director will only be devoting limited time to our operations, our operations may be sporadic and occur at times which are convenient to her. As a result, our operations may be periodically interrupted or suspended which could result in a lack of revenues and a possible cessation of operations. It is possible that the demands on Ms. Chernetckaia from her other obligations could increase with the result that she would no longer be able to devote sufficient time to the management of our business. In addition, Ms. Chernetckaia may not possess sufficient time for our business if the demands of managing our business increase substantially beyond current levels.
+
+Our sole director Ms. Chernetckaia is associated with another company that is engaged in business activities similar to those conducted by us. Ms. Chernetckaia works as a sole proprietor in the automobile industry and she is engage in the business of exporting and reselling Japanese cars in Russia. Potential conflict of interest may arise in future that may cause our business to fail, including conflict of interest in allocating Ms. Chernetckaia s time to our company as well as additional conflict of interests over determining to which entity a particular business opportunity should be presented. We do not currently have a right of first refusal pertaining to business opportunities that come to management's attention. As a result, in determining to which entity particular business opportunities should be presented, our sole officer and director Ms. Chernetckaia may favor her own interests over our interests and those of our shareholders, which could have a material adverse effect on our business and results of operations.
+
+IF MS. CHERNETCKAIA, OUR SOLE OFFICER AND DIRECTOR, SHOULD RESIGN OR DIE, WE WILL NOT HAVE AN OFFICER OR A DIRECTOR. THIS COULD RESULT IN OUR OPERATIONS SUSPENDING, AND YOU COULD LOSE YOUR INVESTMENT.
+
+We extremely depend on the services of our sole officer and director, Ms. Chernetckaia, for the future success of our business. The loss of the services of Ms. Chernetckaia could have an adverse effect on our business, financial condition and results of operations. If she should resign or die we will not have a chief executive officer. If that should occur, until we find another person to act as our chief executive officer, our operations could be suspended. In that event it is possible you could lose your entire investment.
+
+AS AN EMERGING GROWTH COMPANY UNDER THE JOBS ACT, WE ARE PERMITTED TO RELY ON EXEMPTIONS FROM CERTAIN DISCLOSURE REQUIREMENTS. 
+
+We qualify as an emerging growth company under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to: 
+
+- have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; 
+
+- comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); 
+
+- submit certain executive compensation matters to shareholder advisory votes, such as say-on-pay and say-on-frequency; and 
+
+- disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive s compensation to median employee compensation. 
+
+9 | Page
+
+ 
+
+In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
+
+We will remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a large accelerated filer as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period. Even if we no longer qualify for the exemptions for an emerging growth company, we may still be, in certain circumstances, subject to scaled disclosure requirements as a smaller reporting company. For example, smaller reporting companies, like emerging growth companies, are not required to provide a compensation discussion and analysis under Item 402(b) of Regulation S-K or auditor attestation of internal controls over financial reporting. 
+
+Until such time, however, we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
+
+ANY ADDITIONAL FUNDING WE ARRANGE THROUGH THE SALE OF OUR COMMON STOCK WILL RESULT IN DILUTION TO EXISTING SHAREHOLDERS.
+
+We must raise additional capital in order for our business plan to succeed. We are not raising any money in this offering. Our most likely source of additional capital will be through the sale of additional shares of common stock. Such stock issuances will cause stockholders' interests in our company to be diluted. Such dilution will negatively affect the value of investors shares.
+
+OUR SHARES OF COMMON STOCK ARE SUBJECT TO THE PENNY STOCK RULES OF THE SECURITIES AND EXCHANGE COMMISSION AND THE TRADING MARKET IN OUR SECURITIES WILL BE LIMITED, WHICH WILL MAKE TRANSACTIONS IN OUR STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.
+
+The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in "penny stocks. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the SEC, which specifies information about penny stocks and the nature and significance of risks of the penny stock market. A broker-dealer must also provide the customer with bid and offer quotations for the penny stock, the compensation of the broker-dealer, and sales person in the transaction, and monthly account statements indicating the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for stock that becomes subject to those penny stock rules. If a trading market for our common stock develops, our common stock will probably become subject to the penny stock rules, and shareholders may have difficulty in selling their shares.
+
+10 | Page
+
+IF OUR SHARES OF COMMON STOCK COMMENCE TRADING ON THE OTC BULLETIN BOARD, THE TRADING PRICE MAY FLUCTUATE SIGNIFICANTLY AND STOCKHOLDERS MAY HAVE DIFFICULTY RESELLING THEIR SHARES.
+
+As of the date of this Registration Statement, our common stock does not yet trade on the Over-the-Counter Bulletin Board. If our shares of common stock commence trading on the Bulletin Board, there is a volatility associated with Bulletin Board securities in general and the value of your investment could decline due to the impact of any of the following factors upon the market price of our common stock: (i) disappointing results from our development efforts; (ii) failure to meet our revenue or profit goals or operating budget; (iii) decline in demand for our common stock; (iv) downward revisions in securities analysts' estimates or changes in general market conditions; (v) technological innovations by competitors or in competing technologies; (vi) lack of funding generated for operations; (vii) investor perception of our industry or our prospects; and (viii) general economic trends.
+
+We do not have a market maker. There is no current trading market for our securities and if a trading market does not develop, purchasers of our securities may have difficulty selling their shares. In addition, stock markets have experienced price and volume fluctuations and the market prices of securities have been highly volatile. These fluctuations are often unrelated to operating performance and may adversely affect the market price of our common stock. As a result, investors may be unable to sell their shares at a fair price and you may lose all or part of your investment.
+
+THERE IS NO CURRENT TRADING MARKET FOR OUR SECURITIES AND IF A TRADING MARKET DOES NOT DEVELOP, PURCHASERS OF OUR SECURITIES MAY HAVE DIFFICULTY SELLING THEIR SHARES.
+
+There is currently no established public trading market for our securities and an active trading market in our securities may not develop or, if developed, may not be sustained. We intend to have a market maker apply for admission to quotation of our securities on the Over-the-Counter Bulletin Board after the Registration Statement relating to this prospectus is declared effective by the SEC. We do not yet have a market maker who has agreed to file such application. If for any reason our common stock is not quoted on the Over-the-Counter Bulletin Board or a public trading market does not otherwise develop, purchasers of the share may have difficulty selling their common stock should they desire to do so. No market makers have committed to becoming market makers for our common stock and none may do so.
+
+WE MAY BE EXPOSED TO POTENTIAL RISKS AND SIGNIFICANT EXPENSES RESULTING FROM THE REQUIREMENTS UNDER SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002.
+
+We will be required, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, to include in our annual report our assessment of the effectiveness of our internal control over financial reporting. We expect to incur significant continuing costs, including accounting fees and staffing costs, in order to maintain compliance with the internal control requirements of the Sarbanes-Oxley Act of 2002. Development of our business will necessitate ongoing changes to our internal control systems, processes and information systems. If our business develops and grows, our current design for internal control over financial reporting will not be sufficient to enable management to determine that our internal controls are effective for any period, or on an ongoing basis. Accordingly, as we develop our business, such development and growth will necessitate changes to our internal control systems, processes and information systems, all of which will require additional costs and expenses.
+
+11 | Page
+
+In the future, if we fail to complete the annual Section 404 evaluation in a timely manner, we could be subject to regulatory scrutiny and a loss of public confidence in our internal controls. In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. However, as an emerging growth company, as defined in the JOBS Act, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an emerging growth company. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.
+
+THE COSTS TO MEET OUR REPORTING AND OTHER REQUIREMENTS AS A PUBLIC COMPANY SUBJECT TO THE EXCHANGE ACT OF 1934 ARE SUBSTANTIAL AND MAY RESULT IN US HAVING INSUFFICIENT FUNDS TO EXPAND OUR BUSINESS OR EVEN TO MEET ROUTINE BUSINESS OBLIGATIONS.
+
+As a public entity subject to the reporting requirements of the Exchange Act of 1934, we incur ongoing expenses associated with professional fees for accounting, legal and SEC filings and compliance. We estimate that these costs will increase if our business volume and activity increases. As a result of such expenses, we may not have sufficient funds to grow our operations.
+
+BECAUSE WE ARE A SHELL COMPANY , THE HOLDERS OF OUR RESTRICTED SECURITIES WILL NOT BE ABLE TO SELL THEIR SECURITIES IN RELIANCE ON RULE 144, UNTIL WE CEASE BEING A SHELL COMPANY .
+
+We are a shell company as that term is defined by the applicable federal securities laws. Specifically, because of the nature and amount of our assets and our very limited operations, pursuant to applicable federal rules, we are considered a shell company . As a result, we are prohibited to utilize registration statements on Form S-8. In addition, applicable provisions of Rule 144 specify that during that time that we are a shell company and for a period of one year thereafter, holders of our restricted securities can not sell those securities in reliance on Rule 144, which will reduce liquidity of our securities. As result, one year after we cease being a shell company, assuming we are current in our reporting requirements with the Securities and Exchange Commission, holders of our restricted securities may then sell those securities in reliance on Rule 144 (provided, however, those holders satisfy all of the applicable requirements of that rule). For us to cease being a shell company we must have more than nominal operations and more that nominal assets or assets which do not consist solely of cash or cash equivalents.
+
+Forward-Looking Statements
+
+This prospectus contains forward-looking statements that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in the Risk Factors section and elsewhere in this prospectus. 
+
+Use of Proceeds
+
+We will not receive any proceeds from the sale of the common stock offered through this prospectus by the selling shareholders. 
+
+Determination of Offering Price 
+
+The selling shareholders will sell our shares at $0.03 per share
+
+. We determined this offering price arbitrarily, by adding a $0.02 premium to the last sale price of our common stock to investors. This offering is priced at the time of the commencement of the offering and must remain offered at such price during the entire duration of the. The selling shareholders will be considered to be underwriters of this offering.
+
+Dilution
+
+The common stock to be sold by the selling shareholders is common stock that is currently issued and outstanding. Accordingly, there will be no dilution to our existing shareholders. 
+
+12 | Page
+
+Selling Shareholders 
+
+The selling shareholders named in this prospectus are offering all of the 2,650,000 shares of common stock offered through this prospectus. These shares were acquired from us in private placements that were exempt from registration under Regulation S promulgated pursuant to the Securities Act of 1933. All shares were acquired outside of the United States by non-U.S. persons. The shares include the following: 
+
+- 2,650,000 shares of our common stock that the selling shareholders acquired from us in an offering that was completed on August 17, 2012.
+
+The selling shareholders will be considered to be underwriters of this offering.
+
+The following table provides as of the date of this prospectus, information regarding the beneficial ownership of our common stock held by each of the selling shareholders, including: 
+
+1. the number of shares owned by each prior to this offering;
+
+2. the total number of shares that are to be offered for each;
+
+3. the total number of shares that will be owned by each upon completion of the offering; and
+
+4. the percentage owned by each upon completion of the offering.
+
+Name Of Selling Shareholder
+
+Shares Owned Prior To This Offering
+
+Total Number Of Shares To Be Offered For Selling Shareholders Account
+
+Total Shares to Be Owned Upon Completion Of This Offering
+
+Percentage of Shares owned Upon Completion of This Offering
+
+Ugis Karandzejs
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Guntis Upmanis
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Peteris Strods
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Anatoliy Zamozdra
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Carmen Emilia Penaherrera Romero
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Juan Javier Conforme Macias
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Oksana Vashukevich
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Tatyana Torbeyeva
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Walter Manuel Velez Burgos
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Marina Elizabeth Flor Acevedo 
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Yulia Lyalina
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Juan Gabriel Cedeno Quintana 
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Anisa Bulueva
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Diego Armando Espinoza Pacheco 
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Olga Churinova
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Luis Eduardo Sabando Velez 
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Silvia Adriana Rivera Leon 
+
+80,000
+
+80,000
+
+Nil
+
+Nil
+
+Janis Poznaks
+
+100,000
+
+100,000
+
+Nil
+
+Nil
+
+Andrejs Levaskovics
+
+100,000
+
+100,000
+
+Nil
+
+Nil
+
+Valentina Levaskovica
+
+100,000
+
+100,000
+
+Nil
+
+Nil
+
+Edgars Ozolins-ozols
+
+100,000
+
+100,000
+
+Nil
+
+Nil
+
+Arvids Streikus
+
+100,000
+
+100,000
+
+Nil
+
+Nil
+
+Alexander Kryukov 
+
+100,000
+
+100,000
+
+Nil
+
+Nil
+
+Frantisek Baroch
+
+100,000
+
+100,000
+
+Nil
+
+Nil
+
+Petr Hampel
+
+100,000
+
+100,000
+
+Nil
+
+Nil
+
+Tatiana Bunaeva
+
+100,000
+
+100,000
+
+Nil
+
+Nil
+
+Roman Volodchenko
+
+120,000
+
+120,000
+
+Nil
+
+Nil
+
+Pavel Churinov
+
+120,000
+
+120,000
+
+Nil
+
+Nil
+
+Hye Eun Kim
+
+150,000
+
+150,000
+
+Nil
+
+Nil
+
+13 | Page
+
+The named party beneficially owns and has sole voting and investment power over all shares or rights to these shares. The numbers in this table assume that none of the selling shareholders sells shares of common stock not being offered in this prospectus or purchases additional shares of common stock, and assumes that all shares offered are sold. The percentages are based on 2,650,000 shares of common stock issued and outstanding on the date of this prospectus. 
+
+Other than disclosed above, none of the selling shareholders: 
+
+1. has had a material relationship with us other than as a shareholder at any time within the past three years; 
+
+2. has ever been one of our officers or directors;
+
+3. is a broker-dealer; or a broker-dealer's affiliate.
+
+Plan of Distribution 
+
+The selling shareholders may sell some or all of their common stock in one or more transactions, including block transactions. There are no arrangements, agreements or understandings with respect to the sale of these securities. 
+
+The selling shareholders will sell our shares at $0.03 per share
+
+. We determined this offering price arbitrarily by adding a $0.02 premium to the last sale price of our common stock to investors. This offering is priced at the time of the commencement of the offering and must remain offered at such price during the entire duration of the offering. The selling shareholders will be considered to be underwriters of this offering.
+
+The shares may also be sold in compliance with the Securities and Exchange Commission's Rule 144, when eligible.
+
+If applicable, the selling shareholders may distribute shares to one or more of their partners who are unaffiliated with us. Such partners may, in turn, distribute such shares as described above. If these shares being registered for resale are transferred from the named selling shareholders and the new shareholders wish to rely on the prospectus to resell these shares, then we must first file a prospectus supplement naming these individuals as selling shareholders and providing the information required concerning the identity of each selling shareholder and he or her relationship to us. There is no agreement or understanding between the selling shareholders and any partners with respect to the distribution of the shares being registered for resale pursuant to this registration statement. 
+
+We can provide no assurance that all or any of the common stock offered will be sold by the selling shareholders. 
+
+We are bearing all costs relating to the registration of the common stock. The selling shareholders, however, will pay any commissions or other fees payable to brokers or dealers in connection with any sale of the common stock. 
+
+14 | Page
+
+The selling shareholders must comply with the requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934 in the offer and sale of the common stock.
+
+The selling shareholders are underwriters in this offering and must comply with the enumerated conditions for the duration of the offering
+
+: 
+
+ 
+
+1.
+
+Not engage in any stabilization activities in connection with our common stock;
+
+ 
+
+ 
+ 
+
+ 
+
+2.
+
+Furnish each broker or dealer through which common stock may be offered, such copies of this prospectus, as amended from time to time, as may be required by such broker or dealer; and
+
+ 
+
+ 
+ 
+
+ 
+
+3.
+
+Not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Securities Exchange Act.
+
+The Securities and Exchange Commission (the Commission ) has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). 
+
+The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the Commission, which contains: 
+
+- a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
+
+- a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements;
+
+- a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask price;
+
+- a toll-free telephone number for inquiries on disciplinary actions;
+
+- a definition of significant terms in the disclosure document or in the conduct of trading penny stocks; and
+
+- such other information and is in such form (including language, type, size, and format) as the Commission shall require by rule or regulation.
+
+The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: 
+
+- bid and offer quotations for the penny stock;
+
+- the compensation of the broker-dealer and its salesperson in the transaction;
+
+- the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and
+
+- monthly account statements showing the market value of each penny stock held in the customer's account.
+
+In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling those securities. 
+
+15 | Page
+
+Description of Securities 
+
+General 
+
+Our authorized capital stock consists of 75,000,000 shares of common stock at a par value of $0.001 per share. 
+
+Common Stock 
+
+As of
+
+January 8, 2013
+
+ there were 8,150,000 shares of our common stock issued and outstanding held by 30 stockholders of record. 
+
+Holders of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of common stock do not have cumulative voting rights. Therefore, holders of a majority of the shares of common stock voting for the election of directors can elect all of the directors. Holders of our common stock representing a majority of the voting power of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our articles of incorporation. 
+
+Holders of common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. In the event of liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock. 
+
+Preferred Stock
+
+We do not have an authorized class of preferred stock. 
+
+Dividend Policy 
+
+We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future. 
+
+Share Purchase Warrants 
+
+We have not issued and do not have any outstanding warrants to purchase shares of our common stock. 
+
+Options 
+
+We have not issued and do not have any outstanding options to purchase shares of our common stock. 
+
+Convertible Securities 
+
+We have not issued and do not have any outstanding securities convertible into shares of our common stock or any rights convertible or exchangeable into shares of our common stock. 
+
+16 | Page
+
+Interests of Named Experts and Counsel 
+
+No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, an interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee. 
+
+Zouvas Law Group, P.C. has provided an opinion on the validity of our common stock.
+
+The financial statements included in this prospectus and the registration statement have been audited by Ronald R. Chadwick, P.C. to the extent and for the periods set forth in their report appearing elsewhere in this document and in the registration statement filed with the SEC, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.
+
+Description of Business 
+
+Overview 
+
+We are a development stage company which plans to engage in the business of selling used automobiles. We plan to sell used automobiles exclusively in Russia.. We were incorporated in the State of Nevada on April 27, 2012 and cannot state with certainty whether we will achieve profitability. To date, our business operations have been limited to primarily, the development of a business plan and the completion of private placements for the offer and sale of our common stock. On August 22, 2012 we purchased one car for resale for $7,800 which we sold on November 21, 2012 for $8,900. Therefore, gross profit of $1,100 was recognized from the sale transaction. We have incurred losses since inception in the amount of $3,191. Our plan of operation is forward-looking. It is likely that we will not be able to achieve profitability and might need to cease operations due to the lack of funding. Our business office is located at 2360 Corporate Circle, Ste. 400, Henderson, Nevada 89074. Our telephone number is (702) 997-3119.
+
+Our management believes that the used car market is more stable than the new car market. We believe that the used car market will grow in the nearest future because of relatively low level of car ownership 260 vehicles per 1000 people vs. 800 in the USA and around 550 in many European countries
+
+ (Source: TNS Blogs, a blog regarding the Russian car industry)
+
+. 
+
+We believe that
+
+Russia represents a significant growth potential for the automotive industry.
+
+ However, we do not know whether any increase in the sale of used cars in Russia is attributable to the increased sale of U.S.-made vehicles in Russia. 
+
+Our current cash reserves are not sufficient to meet our obligations for the next twelve-month period. As a result, we will need to seek additional funding in the near future. The most likely source of this additional capital is through the sale of additional shares of common stock, bay way of a privet debt or advances from our sole officer and director. Olga Chernetckaia, our sole officer and director, has agreed to loan the Company funds to meet our obligations and complete our 12-months business plan. However, Ms. Chernetckaia has no firm commitment, arrangement or legal obligation to advance or loan funds to the Company. 
+
+Product Description
+
+We intend to buy used cars in the United States and sell them in Russia. We plan to specialize in the eastern part of Russia where the car market mostly consists of used Japanese cars due to its close proximity to Japan. Japanese cars are of much better quality and reliability than domestic, Russian cars. Although Russian drivers drive on the right-hand side of the road, almost all imported used Japanese cars are designed for left-hand side driving, with the steering wheel on the right side of the car. This makes cars imported from the United States, which are designed for right-hand side driving, more attractive to Russian consumers. Our director, Olga Chernetckaia, has worked as a used Japanese car importer for many years. We will rely on her knowledge and expertise of importing cars to Russia in conducting our operations. 
+
+17 | Page
+
+In most cases we will take prepayments from our clients prior to shipment of the cars. Potential customers will have two options to pay for cars: by wire transfer or by sending a check/money order. Our customers will be responsible to cover the shipping costs, custom duties, taxes or any other additional charges that might incur. This apportionment of responsibility will increase the prices of our used cars. It has the potential to make our used cars more expensive that used cars offered by other source within the Russian used car market that will negatively affect our business. All shipments will be 100% insured for the value of the shipping, and the insurance cost for risk of damage or loss will be customers responsibility. In some cases if we have available funds we may take a partial deposit or an agreement, buy and ship a car at our own expense and risk. In such cases we plan to charge our clients a higher fee. When we do not take prepayment and buy cars at our own expense there is a chance that we will not sell these cars for a long period of time or never at all, which will result in loss of revenue and disruption of our business. Our cars will be offered at prices marked-up from 10% to 20% of our cost. 
+
+Our business presumes that prospective purchasers of used cars will be willing to prepay for a used car and assume to risk of shipping the car. We believe this to be the case because we believe that our cars will be priced lower than those of competitors who already have inventory in Russia and may not require a prepayment. We also believe this to be the case because our President, Olga Chernetckaia, export and resell used Japanese cars in Russia in the same way. In the case that such an assumption about consumer preferences is incorrect, we not be able to garner a profit and our shareholders could lose their entire investment. We plan to secure commitment for cars from purchasers prior to the purchase of any cars. Initially, our sole officer and director, Olga Chernetckaia, will look for potential customers through her network of friends and business associates in the automobile industry. We plan to develop a website to market our services. We intend to use marketing strategies, such as web advertisements, direct mailing, and phone calls. We also expect to get new clients from Internet, social networking and "word of mouth" advertising.
+
+On August 22, 2012 we purchased first used car for $7,800 from a car dealer in the United States that allowed us to store the car on its parking place while we prepare it for shipping. The car was sold on November 21, 2012 for $8,900 and gross profit of $z was recognized from the sale transaction.
+
+Suppliers of Automobiles
+
+We plan to purchase used cars from car dealers and from car auctions. Our sole officer and director, Olga Chernetckaia, has contacted several car dealers, which she founds through her network of contacts in the automobile industry. They agreed to supply cars for us, inspect them, arrange shipment, and provide any necessary documentation. We can also purchase cars from private sellers in the U.S. by finding them through eBay or classified ads. We plan to purchase used cars only form the listed sources and only in the United States. We may also hire and use the services of a part-time contractor which will be responsible for inspection and shipment of the vehicles in the U.S. 
+
+Marketing Our Product
+
+We plan to market our services in Russia. Initially, our products will be promoted by our sole officer and director, Ms. Olga Chernetckaia. We intend to develop and maintain a database of potential clients who may want to buy used cars. We will follow up with these clients periodically and offer special discounts from time to time. Our methods of communication will include: phone calls, email, and regular mail. We will ask our satisfied clients for referrals. We intend to hire an outside web designer to assist us in designing and building our website. We will display the cars and their prices which will be available for purchase on our web site. We intend to attract traffic to our website by a variety of online marketing tactics such as registering with top search engines using selected key words (meta tags) and utilizing link and banner exchange options. We intend to promote our website by displaying it on our promotion materials. We will market and advertise our web site to find potential clients and also promote our services through the network of our director s contacts in the automobile industry.
+
+To draw attention from potential customers we plan to market and advertise our company though social networking. Websites such as Facebook and Twitter have come a long way in only a few years to be household names all over the world. We intend to use these websites to spread out information about our cars and services. We intend to implement word of mouth advertising into our business model. We believe a huge marketing opportunity on the internet is spreading word of mouth, a form of free advertising.
+
+18 | Page
+
+Competition
+
+Our competition varies by model lines, customer classification and geographic market. The principal competitive factors in our industry are the pricing and availability of products, services, delivery capabilities, customer relationships, geographic coverage and breadth of product offerings. We will compete with many local and regional car distributors and dealers, as well with private distributors. In addition, some potential clients often buy cars from overseas countries by themselves and import them to Russia, and the volume of such direct purchases will likely increase in the future. Many of our competitors have greater financial resources and may be able to withstand sales or commission decreases better than we can. We also expect to continue to face competition from new market entrants. We may be unable to continue to compete effectively with these existing or new competitors, which could have a material adverse effect on our financial condition and results of operations.
+
+Description of property 
+
+We do not have an ownership or leasehold interest in any property. We have no plans to hold inventory of cars in the United States or in Russia, and we have no plans to obtain the space necessary to hold such inventory. 
+
+Insurance
+
+We do not maintain any insurance and do not intend to maintain insurance in the future. Because we do not have any insurance, if we are made a party of a products liability action, we may not have sufficient funds to defend the litigation. If that occurs a judgment could be rendered against us that could cause us to cease operations. 
+
+Employees. Identification of Certain Significant Employees
+
+We are a development stage company and currently have no employees, other than our sole officer and director Ms. Olga Chernetckaia. We intend to hire additional employees on an as needed basis. 
+
+Research and Development Expenditures 
+
+We have not incurred any other research or development expenditures since our incorporation. 
+
+Government Regulation
+
+We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to export and import of used car and operation of any facility in any jurisdiction which we would conduct activities. We do not believe that regulation will have a material impact on the way we conduct our business. We do not need to receive any government approvals necessary to conduct our business, however we will have to comply with all applicable export and import regulations.
+
+Subsidiaries 
+
+We do not have any subsidiaries.
+
+Patents and Trademarks 
+
+We do not own, either legally or beneficially, any patents or trademarks. 
+
+Offices
+
+Our office is currently located at 2360 Corporate Circle, Ste. 400, Henderson, Nevada 89074. Our telephone number is (702) 997-3119. This is the office provided by our incorporator, Incorp Services, Inc. and is included in their Services Package. We do not pay any rent to Incorp Services, Inc. and there is no agreement to pay any rent in the future. As of the date of this prospectus, we have not sought or selected a new office location. We plan to establish an office in Russia by the end of December, 2012.
+
+19 | Page
+
+Legal Proceedings 
+
+We are not currently a party to any legal proceedings. Our address for service of process in Nevada is 2360 Corporate Circle, Ste. 400 Henderson, Nevada 89074-7722.
+
+Market for Common Equity and Related Stockholder Matters
+
+No Public Market for Common Stock 
+
+There is presently no public market for our common stock. We anticipate applying for trading of our common stock on the over the counter bulletin board upon the effectiveness of the registration statement of which this prospectus forms a part. However, we can provide no assurance that our shares will be traded on the bulletin board or, if traded, that a public market will materialize.
+
+Stockholders of Our Common Shares
+
+As of the date of this registration statement we have 30 registered shareholders. 
+
+Rule 144 Shares 
+
+A total of 5,500,000 shares of common stock were issued to our sole officer and director, all of which are restricted securities, as defined in Rule 144 of the Rules and Regulations of the SEC promulgated under the Securities Act. As we are a shell company as that term is defined by the applicable federal securities laws, because of the nature and amount of our assets and our very limited operations, applicable provisions of Rule 144 specify that during that time that we are a shell company and for a period of one year thereafter, holders of our restricted securities can not sell those securities in reliance on Rule 144. 
+
+The ability of shareholders to rely on Rule 144 under the Securities Act of 1933, as amended, is contingent upon the filing of Form 10 information with the Commission reflecting the fact that
+
+we no longer qualify as a shell company. 
+
+As result, one year after we cease being a shell company, assuming we are current in our reporting requirements with the Securities and Exchange Commission, holders of our restricted securities may then sell those securities in reliance on Rule 144 (provided, however, those holders satisfy all of the applicable requirements of that rule). For us to cease being a shell company we must have more than nominal operations and more that nominal assets or assets which do not consist solely of cash or cash equivalents. Shares purchased in this offering, which will be immediately resalable, and sales of all of our other shares after applicable restrictions expire, could have a depressive effect on the market price, if any, of our common stock and the shares we are offering. 
+
+20 | Page
+
+Stock Option Grants 
+
+To date, we have not granted any stock options. 
+
+Registration Rights 
+
+We have not granted registration rights to the selling shareholders or to any other persons. 
+
+Dividends 
+
+There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend: 
+
+1. 
+
+we would not be able to pay our debts as they become due in the usual course of business; or
+
+ 
+
+ 
+
+2. 
+
+our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
+
+ 
+
+We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future. 
+
+Plan of Operation
+
+We are a development stage corporation. To date, our business operations have been limited to primarily, the development of a business plan and the completion of private placements for the offer and sale of our common stock. On August 22, 2012 we purchased one car for resale. As of today, we have realized revenue in the amount of $8,900 and have incurred losses since inception. Our plan of operation is forward-looking. It is likely that we will not be able to achieve profitability and might need to cease operations due to the lack of funding.
+
+Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. We are not raising any money in this offering. Our only sources for cash at this time are investments by shareholders in our company and cash advances from our sole officer and director Olga Chernetckaia. There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us. Failure to raise additional financing will cause us to go out of business. If this happens, you could lose all or part of your investment.
+
+Our office is currently located at 2360 Corporate Circle, Ste. 400, Henderson, Nevada 89074. Our telephone number is (702) 997-3119. This is the office provided by our incorporator, Incorp Services, Inc. and is included in their Services Package. We do not pay any rent to Incorp Services, Inc. and there is no agreement to pay any rent in the future. As of the date of this prospectus, we have not sought or selected a new office location. We plan to establish an office in Russia by the end of December, 2012. We will not be conducting any product research or development. We do not expect to purchase or sell plant or significant equipment. Further we do not expect significant changes in the number of employees. Upon completion of our public offering, our specific goal is to profitably sell our services. Azure Holding Group Corp. is not a Blank Check company. We have no any plans, arrangements, commitments or understandings to engage in a merger with or acquisition of another company.
+
+ 
+
+21 | Page
+
+We qualify as an emerging growth company under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to: 
+
+ 
+
+ 
+
+ 
+
+ 
+
+have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; 
+
+ 
+
+ 
+
+ 
+
+ 
+
+comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); 
+
+ 
+
+ 
+
+ 
+
+ 
+
+submit certain executive compensation matters to shareholder advisory votes, such as say-on-pay and say-on-frequency; and 
+
+ 
+
+ 
+
+ 
+
+ 
+
+disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO s compensation to median employee compensation. 
+
+ 
+
+In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. 
+
+We will remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a large accelerated filer as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
+
+Following the date of this registration statement, our business plan for the next 12 months is as follows:
+
+October, 2012-December, 2012: Set up Office. Estimated cost $2,500.
+
+By the end of December, 2012, we plan to set up office in and acquire the necessary equipment to begin our business operations. We believe that it will cost at least $4,000 to set up office and obtain the necessary equipment to begin operations. Our sole officer and director will handle our administrative duties. 
+
+Minimum office requirements:
+
+ 
+
+ PC $ 1,000
+
+ Print/Scan/Fax $ 500
+
+ Phone $ 100
+
+ Furnishings $ 500
+
+ Misc $ 400
+
+22 | Page
+
+December, 2012 February, 2013: Negotiate agreements with suppliers.
+
+During this period, we plan to contact and start negotiation with used car suppliers, car auction dealers, freight-forward agents, customs brokers and other agents. Our sole officer and director, Ms. Chernetckaia, will look for potential suppliers and agents. We will negotiate prices and fees, and terms and conditions of collaboration. As of the date of this prospectus we have not signed any agreements. Even though the negotiation agreements with potential suppliers will be ongoing during the life of our operations, we cannot guarantee that we will be able to find successful agreements, in which case our business may fail and we will have to cease our operations. 
+
+January, 2013- May, 2013: Develop Our Website and Commence Marketing Campaign. Estimated cost $7,000.
+
+Our director, Ms. Chernetckaia will be in charge of registering our web domain. We have not registered any web domain as of the date of this prospectus. Once we register our web domain, we plan to hire a web designer to help us design and develop our website. We do not have any written agreements with any web designers at current time. The website development costs, including site design and implementation will be approximately $2,000. Updating and improving our website will continue throughout the lifetime of our operations. Our website should become important tool for the marketing program.
+
+Once we execute agreements with suppliers and commence website development, we will begin to market our products. Initially, our sole officer and director, Olga Chernetckaia, will look for potential customers through her network of friends and business associates in the automobile industry. We intend to use marketing strategies, such as web advertisements, direct mailing, and phone calls. We also expect to get new clients from Internet, social networking and "word of mouth" advertising. We intend to spend about $5,000 on marketing efforts during the first year. Marketing is an ongoing matter that will continue during the life of our operations. 
+
+We plan to secure commitment for cars from purchasers prior to the purchase of any cars. Even though our business presumes that prospective purchasers of used cars will be willing to prepay for a used car and assume to risk of shipping the car, we believe this to be the case because we believe that our cars will be priced lower than those of competitors who already have inventory in Russia and may not require a prepayment. We also believe this to be the case because our President, Olga Chernetckaia, export and resell used Japanese cars in Russia in the same way. In the case that such an assumption about consumer preferences is incorrect, we not be able to garner a profit and our shareholders could lose their entire investment.
+
+March, 2013- July, 2013: Purchase of additional car for resale. Estimated cost $7,000.
+
+If we have available funds, we plan to buy an additional car during this period. Once we begin generating revenue, we will keep buying more cars for resale. However, there is no guarantee that we will continue selling our cars and generate any revenue. 
+
+May, 2013-August, 2013: Hire a Salesperson. 
+
+Initially, our sole officer and director will look for potential customers for our product. Once we begin to sell our cars we may hire one part-time salesperson with good knowledge and broad connections to the automobile industry to introduce our cars. This individual will be an independent contractor compensated solely in the form of commissions. 
+
+We therefore expect to incur the following costs in the next 12 months in connection with our business operations:
+
+Office set up
+
+$2,500
+
+Marketing costs
+
+$5,000
+
+Website development costs
+
+ $2,000
+
+Purchase of an additional car
+
+ $7,000
+
+Estimated cost of this offering
+
+ $10,000
+
+Costs associated with being a publicly reporting company
+
+$10,000
+
+Total
+
+ $36,500
+
+23 | Page
+
+Our current cash reserves are not sufficient to meet our obligations for the next twelve-month period. As a result, we will need to seek additional funding in the near future. We are not raising any money in this offering. Our only sources for cash at this time are investments by shareholders in our company and cash advances from our sole director Ms. Olga Chernetckaia. There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us. Failure to raise additional financing will cause us to go out of business. If this happens, you could lose all or part of your investment.
+
+ 
+
+Limited operating history; need for additional capital 
+
+There is no historical financial information about us upon which to base an evaluation of our performance. We are in start-up stage operations and have generated just $8,900 in revenue. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products. 
+
+Our current cash reserves are not sufficient to meet our obligations for the next twelve-month period. As a result, we will need to seek additional funding in the near future. 
+
+We anticipate that additional funding will be from the sale of additional common stock. We may seek to obtain short-term loans from our director as well, although there is no guarantee that we will be able obtain such funds. Olga Chernetckaia, our sole officer and director, has verbally agreed to loan the company funds. However, there is no written agreement in place and no limit on the amount of funds that she has agreed to provide has been indicated. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our director to meet our obligations over the next twelve months. We do not have any arrangements in place for any future equity financing. If we are unable to raise the required financing, our operations could be materially adversely affected and we could be forced to cease operations.
+
+Results of Operations for Period Ending November 30, 2012 
+
+Since our inception on April 27, 2012 to November 30, 2012, we incurred net loss of $3,191. As of November 30, 2012 we had cash of $29,026 in our bank accounts. However, we anticipate that we will incur substantial losses over the next 12 months. 
+
+We have not attained profitable operations and are dependent upon obtaining financing to continue with our business plan. For these reasons, there is substantial doubt that we will be able to continue as a going concern. 
+
+Changes In and Disagreements with Accountants 
+
+We have had no changes in or disagreements with our accountants. 
+
+ Available Information
+
+We have filed a registration statement on Form S-1 under the Securities Act of 1933 with the Securities and Exchange Commission with respect to the shares of our common stock offered through this prospectus. This prospectus is filed as a part of that registration statement, but does not contain all of the information contained in the registration statement and exhibits. Statements made in the registration statement are summaries of the material terms of the referenced contracts, agreements or documents of the company. We refer you to our registration statement and each exhibit attached to it for a more detailed description of matters involving the company, and the statements we have made in this prospectus are qualified in their entirety by reference to these additional materials. You may inspect the registration statement, exhibits and schedules filed with the Securities and Exchange Commission at the Commission s principal office in Washington, D.C. Copies of all or any part of the registration statement may be obtained from the Public Reference Section of the Securities and Exchange Commission, 100 F Street NE, Washington, D.C. 20549. D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms.
+
+24 | Page
+
+The Securities and Exchange Commission also maintains a web site at http://www.sec.gov that contains reports, proxy statements and information regarding registrants that file electronically with the Commission. Our registration statement and the referenced exhibits can also be found on this site. 
+
+Reports to Security Holders
+
+Upon effectiveness of this Prospectus, we will be subject to the reporting and other requirements of the Exchange Act. We will make available to our shareholders annual reports containing financial statements audited by our independent auditors and our quarterly reports containing unaudited financial statements for each of the first three quarters of each year; however, we will not send the annual report to our shareholders unless requested by an individual shareholder. 
+
+The public may read and copy any materials that we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that site is www.sec.gov. 
+
+Directors, Executive Officers, Promoters and Control Persons
+
+Our executive officer and director and his age as of the date of this prospectus is as follows: 
+
+Director: 
+
+Name of Director 
+
+ 
+
+Age 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ Olga Chernetckaia
+
+ 
+
+31
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Executive Officers: 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+Name of Officer 
+
+ 
+
+Age 
+
+ 
+
+Office 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ Olga Chernetckaia
+
+ 
+
+31
+
+ 
+
+President, Chief Executive Officer, Treasurer, Chief Financial Officer and Chief Accounting Officer, Secretary
+
+Biographical Information 
+
+Set forth below is a brief description of the background and business experience of our officers and sole director for the past five years. 
+
+Ms. Olga Chernetckaia has acted as our President, Chief Executive Officer, Treasurer, Chief Financial Officer, Chief Accounting Officer, Secretary and sole member of our board of directors since our incorporation on April 27, 2012. Ms. Chernetckaia owns 67.48% of the outstanding shares of our common stock. As such, it was unilaterally decided that Ms. Chernetckaia was going to be our sole President, Chief Executive Officer, Treasurer, Chief Financial Officer, Chief Accounting Officer, Secretary and sole member of our board of directors. This decision did not in any manner relate to Ms. Chernetckaia s previous employments. Ms. Chernetckaia graduated with a Bachelor degree in World Economy from International Department of Irkutsk State Technical University in 2003. After graduation until present time, Ms. Chernetckaia has been working as sole proprietor in the automobile industry. She is involved in the business of exporting and reselling of used Japanese cars in Russia. Ms. Chernetckaia intends to devote close to 50% (20 hours /week) of her time to planning and organizing activities of Azure Holding Group Corp.
+
+25 | Page
+
+During the past ten years, Ms. Chernetckaia has not been the subject to any of the following events:
+
+ 1. Any bankruptcy petition filed by or against any business of which Ms. Chernetckaia was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time.
+
+ 2. Any conviction in a criminal proceeding or being subject to a pending criminal proceeding.
+
+ 3. An order, judgment, or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting Mr. Chernetckaia s involvement in any type of business, securities or banking activities.
+
+ 4. Found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Future Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.
+
+Significant Employees 
+
+We have no significant employees other than our officers and sole director. 
+
+Audit Committee Financial Expert
+
+We do not have an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we have no operations, at the present time, we believe the services of a financial expert are not warranted.
+
+Conflicts of Interest 
+
+Ms. Olga Chernetckaia, our President will be devoting approximately50% (20 hours/week) of her time to our operations. Because Ms. Chernetckaia will only be devoting limited time to our operations, our operations may be sporadic and occur at times which are convenient to her. As a result, operations may be periodically interrupted or suspended which could result in a lack of revenues and a cessation of operations.
+
+Executive Compensation
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001555814_jmgt_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001555814_jmgt_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..109b69b2bd696044be49390cc85b3cf34e07e23c
--- /dev/null
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@@ -0,0 +1 @@
+(1) Estimated solely for the purposes of computing the amount of the registration fee, in accordance with Rule 457(a) promulgated under the Securities Act of 1933. (2) Includes offering price of shares that the underwriters have the option to purchase to cover over-allotments, if any. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. Table of Contents These credit risks arise from cancelled transactions caused by unauthorized use, disputes, theft or fraud. In addition, the agreement between the Company and its clients, and customers for allocation of these risks will be in electronic form. Although this agreement is accepted upon user registration, it will not be manually signed and may not be enforceable. Finally, the Company may be subject to merchant fraud, involving false sales transactions or false credits. To minimize losses from cancelled transactions, fraud or errors, the Company intends to use various risk management systems, internal controls and system security. However, there can be no assurance that the Company's risk management practices or reserves will be sufficient to protect the Company from cancelled transactions, merchant fraud or erroneous transmissions which could have a material adverse effect on the Company's business, operations or financial condition. Service Failure; Security Risks The company's operations are dependent on its ability to protect its website from interruption by damage from fire, earthquake, power loss, telecommunications failure, unauthorized entry or other events beyond the Company's control. While the Company believes that the website hosting company that supports its website has existing and planned precautions of regular data backups and other procedures, it is not known if the support will be adequate to prevent any significant system outage or data loss, there can be no assurance that unanticipated problems will not cause such failure or loss. Best Efforts Offering The Class B Units are offered by the Company on a best efforts non-minimum basis. There is no assurance that all or any specified number of the Class B offered will be sold and the desired capital raised. The offering has no minimum amount, and the Company will escrow all proceeds. The Company has not entered into any agreement with a broker-dealer to be a placement agent for the sale of the Class B. Dependence on Management and Corporate Governance The business of the Company may be dependent upon the continuing services of its current Management. The success of the Company will be dependent its Corporate Governance policy and on its ability to hire and retain highly qualified personnel. The loss of the services of any key individuals may be detrimental to the development of the Company s business and could adversely affect the conduct of the Company s business. The Company is currently researching companies for key-man life insurance but has not obtained insurance to cover the risk that key management personnel might become disabled or otherwise unable to render services to the Company. The company has implemented its Corporate Governance policy although it remains a controlled company for the purposes of Section 303A and will comply with all remaining provisions of Section 303A during any listing process. Table of Contents Corporate Governance Policy (Implemented Working Draft) Section 303A Corporate Governance Rules What follows are the corporate governance rules the Company is implementing. As a Controlled Company or company that maintains more than 50% of the voting power the company has an exemption of the requirements of Sections 303A.01, .04 or .05. To be disclosed in its annual proxy statement or annual report on Form 10-K filed with the SEC when applicable. CONTENTS: Corporate Governance Policies 1.1 Governance Guideline 1.2 Business Conduct Policies 1.3 Code Of Ethics for the CEO, CFO and Other Financial Professionals 1.3 Disclosed Governance Policies and Ethics Code 1.4 Accountability to Shareowners 1.5 Shareowner Participation 1.6 Business Practices and Corporate Citizenship 1.7 Governance Practices at Public and Private Companies 1.8 Reincorporation 1.1 Nature and Purpose of our Company s Corporate Governance Policies: Company policies are designed to provide information to current shareowners. 1.2 Federal and State Law Compliance: The Company expects to comply with all applicable federal and state laws and regulations and stock exchange listing standards. Note: Disclosed Governance Policies and Ethics Code. The Company s written and disclosed governance procedures, policies, and ethics applies to all employees and directors, and maintains provisions for strict enforcement. The Company will post its corporate governance policies on its Web site (www.jmgtventures.com); to keep shareowners interests at the forefront of our minds. 1.1 Governance Guideline: As a private company in the process of going public we strive to practice good governance. JMGT Studios Satellite Television Network is a values-based company. Our Values guide our behavior at every level and apply across the company on a global basis. We expect all directors, officers and other JMGT Studios Satellite Television Networkians to conduct business in compliance with our Business Conduct Policies, and we survey compliance with these policies on an annual basis. JMGT Studios Satellite Television Network endorses a Business Roundtable Principles of Corporate Governance; which will be a comprehensive statement of responsible corporate governance principles. These principles will provide the foundation on which our Corporate Governance Guidelines and our board committee charters are based. Director responsibilities The core responsibility of the directors is to exercise their business judgment and act in what they reasonably believe to be the best interests of the company. Serving on a board requires significant time and attention on the part of directors. Directors should participate in board meetings, review relevant materials, serve on board committees and prepare for meetings and discussions with management. Directors are encouraged to attend the annual meeting of shareholders. Form S-1 Page 3 of 51 The information in this prospectus is not complete and may be changed. We may not sell these securities until the Securities and Exchange Commission declares our registration statement effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED MARCH 31, 2013 Prospectus Units JMGT Studios Satellite Television Network, LLC. Class B Units This is the initial public offering of JMGT Studios Satellite Television Network LLC. No public market currently exists for our Class B Units. We currently anticipate the initial public offering price of our Class B Units to be between $and $ per interest. The company expects to apply to quote/list our Class B Units on an approved OTC Bulletin Board and other exchanges under an approved symbol. Investing in our common stock involves a high degree of risk. See Risk Factors beginning on page 4. _________________________________________________________________________________ Per Interest Total Public Offering Price $ $ Underwriting Discount $ $ Proceeds, Before Expenses, to JMGT Studios Satellite Television Network LLC $ $ _________________________________________________________________________________ We have granted the underwriters a 30-day option to purchase up to additional shares to cover any over-allotments. Delivery of shares will be made on or about , 2013. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. JMGT Studios Satellite Television Network, LLC. Manager The date of this prospectus is, 2013 Table of Content Directors are expected to maintain an attitude of constructive involvement and oversight; they are expected to ask incisive, probing questions and require accurate, honest answers; they are expected to act with integrity; and they are expected to demonstrate a commitment to the company, its values and its business plan and to long-term shareholder value. In performing their oversight responsibilities, directors rely on the competence and integrity of management in carrying out their responsibilities. It is the responsibility of management to operate the Company in an effective and ethical manner in order to produce value for shareholders. Director qualification standards A majority of directors must be "independent" under the listing standards of the New York Stock Exchange and JMGT Studios Satellite Television Network's Director Independence Standards, as determined by the Board of Directors. Board independence depends not only on directors' individual relationships, but also on the board's overall attitude. Providing objective, independent judgment is at the core of the board's oversight function, and the board's composition should reflect this principle. Prospective candidates to the Board of Directors will be identified and evaluated pursuant to appropriate criteria, objectives and procedures established from time to time by the Board or by its Governance and Nominating Committee. As a general policy, no director should stand for election or re-election to the board if the director has reached age 75 before the date of election. This policy may be waived by a majority of the Board of Directors. If a director will reach age 75 during a three-year term, the Governance and Nominating Committee should take this fact into account in determining whether to recommend the nomination of the director. Directors who have a substantial change in their principal responsibilities should tender their resignation from the board so that the Governance and Nominating Committee can consider whether to accept the resignation. It is the sense of the board that directors should not necessarily leave the Board upon a change in responsibilities, however the Governance and Nominating Committee should be in a position to consider the change in evaluating the appropriate mix of skills and experience necessary for the board to perform its oversight function effectively. Directors bring to the company a range of experience, knowledge and judgment. Directors should not represent the interests of particular constituencies. Director access to management and, as necessary and appropriate, independent advisors The board must have accurate, complete information to do its job; the quality of information received by the board directly affects its ability to perform its oversight function effectively. Directors should be provided with, and review, information from a variety of sources, including management, board committees, outside experts, auditor presentations and other reports. The board should be provided with information before board and committee meetings with sufficient time to review and reflect on key issues and to request supplemental information as necessary. Effective corporate directors are diligent monitors, but not managers, of business operations. Directors should have access to management, as needed, to fulfill their oversight responsibilities. Any meetings outside of regularly scheduled meetings that a director wishes to initiate with management should be coordinated through the Chairman and CEO or the Corporate Secretary. Director compensation Directors are expected to invest more than 25% of their annual cash compensation in JMGT Studios Satellite Television Network shares/interest until they satisfy the Director Share Guidelines adopted from time to time by the Board, and they are required to maintain that investment in JMGT Studios Satellite Television Network shares/interests in a manner that promotes confidence to the investing public until they retire from the board. It is the sense of the board that this policy reinforces a focus on long-term shareholder value. Form S-1 Page 4 of 51 Table of Content Compensation paid to directors at similarly situated companies will be considered when establishing the amount paid to directors. Compensation for service as a director (and related benefits provided to directors) is the only form of remuneration directors should receive from the company. Director orientation and continuing education Materials and briefings are provided to new directors, on an individualized basis, to permit them to become familiar with the company's business, industry and corporate governance practices. The company also provides additional formal and informal opportunities to directors (including site visits to business operations) on an ongoing basis to enable them to better perform their duties and to recognize and deal appropriately with issues that arise. Management succession The paramount duty of the Board of Directors is to select a Chief Executive Officer and to oversee the CEO and other senior management in the competent and ethical operation of the company. The board should identify, and periodically update, the qualities and characteristics necessary for an effective CEO of this company. With these principles in mind, the board should periodically monitor and review the development and progression of potential internal candidates against these standards. Advance planning for contingencies such as the departure, death or disability of the CEO or other top executives is necessary so that, in the event of an untimely vacancy, the company has in place an emergency succession plan to facilitate the transition to both interim and longer-term leadership. Communications with third parties The board believes that management speaks for the company. It is expected that board members would not speak for the company, absent unusual circumstances (or as required by regulations, listing standards or the board). Annual performance evaluation of the board Meaningful board evaluation requires an assessment of the effectiveness of the full board, the operations of its committees and the contributions of individual directors. The performance of the full board should be evaluated annually, as should the performance of its committees. The board should have a process for evaluating whether the individuals sitting on the board bring the skills and expertise appropriate for the company and how they work as a group. Board positions should not be regarded as permanent. Directors should serve only so long as they add value to the board, and a director's ability to continue to contribute to the board should be considered each time the director is considered for re-nomination. Majority Vote Policy In any uncontested election of directors (an election in which the number of nominees is the same as the number of directors to be elected), any incumbent director nominee who receives a greater number of votes "withheld" from his or her election than votes "for" such election shall tender his or her resignation within 30 days of the final vote tally. The Board of Directors will decide whether to accept the resignation at its next regularly scheduled board meeting, through a process managed by the Governance and Nominating Committee, excluding the director in question. Thereafter, the Board of Directors promptly will disclose its decision whether to accept the director's resignation offer (and the reasons for rejecting the resignation, if applicable) in a document filed with the Securities and Exchange Commission. In reaching its decision, the board may consider any factors it deems relevant, including the director's qualifications, the director's past and expected future contributions to the company, the overall composition of the board and whether accepting the tendered resignation would cause the company to fail to meet any applicable rule or regulation, including New York Stock Exchange listing requirements and federal securities laws. Table of Contents TABLE OF CONTENTS Page Prospectus Summary 06
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001555946_lost_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001555946_lost_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..b5a7bcf9dce95677ce2c834a399567c941f1c555
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001555946_lost_prospectus_summary.txt
@@ -0,0 +1 @@
+The following summary highlights some of the information in this prospectus. It may not contain all of the information that is important to you. To understand this offering fully, it is important that you read the entire prospectus carefully, including the "RISK FACTORS" and our financial statements and the notes accompanying the financial statements that appear elsewhere in this prospectus. Unless otherwise specifically noted, the terms "Company," "we," "us" or "our" refers to LOST HILLS MINING INC. CORPORATE BACKGROUND AND INFORMATION LOST HILLS MINING INC. Lost Hills Mining Inc. was organized under the laws of the State of Nevada on June 1, 2012, to explore mineral properties in North America. Lost Hills Mining Inc. is engaged in the exploration for uranium and other minerals. The Company has acquired one MTO mineral claim containing 20 cell claim units totaling 381.90 hectares. It is in the Chilcotin region of central British Columbia, about 75 km southwest of the City of Williams Lake, BC. We refer to these mining claims as the Ventura Property. This property is without known reserves. The Ventura Property comprises one MTO mineral claim containing 19 cell claim units totaling 381.90 hectares. BC Tenure # Work Due Date Units Total Area (Ha.) ----------- ------------- ----- ---------------- 983142 May 1, 2013 19 381.90 We require an estimated total of $360,000 to implement the three phases of our exploration plan. We have not yet commenced our exploration plan. We are an exploration stage company and we have not realized any revenues to date. We do not have sufficient capital to enable us to commence and complete our exploration program. We will require financing in order to conduct the exploration program described in the section entitled, "Business of the Issuer." Our auditors have issued a going concern opinion, raising substantial doubt about Lost Hills Mining Inc.'s financial prospects and the Company's ability to continue as a going concern. We are not a "blank check company," as we do not intend to participate in a reverse acquisition or merger transaction. Securities laws define a "blank check company" as a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person. With its current assets, the Company can remain operational through 2013 if it does not complete Phase 1 of its program and only pays the government fees to keep the claims valid. However, the Company plans to raise the capital necessary to fund our business through a private placement and public offering of our common stock. The Company intends to work directly with private placees once this registration statement is declared effective. The Company anticipates that they will have either a private placement or additional funding from its founder by the end of 2013 in order to conducts its operations. Our offices are located at: Edificio Terramar, Torre 2000, 17D, Panama City, Panama. THE OFFERING Securities offered 10,000,000 shares of common stock Selling stockholder David Richer Offering price $0.002 per share Shares outstanding prior to the offering 18,000,000 shares of common stock Shares to be outstanding after the offering 18,000,000 shares of common stock Use of proceeds The Company will not receive any proceeds from the sale of the common stock by the selling stockholder. SUMMARY FINANCIAL INFORMATION The following tables set forth the summary financial information for the Company. You should read this information together with the financial statements and the notes thereto appearing elsewhere in this prospectus and the information under "Plan of Operation." CONSOLIDATED STATEMENTS OF INCOME Period Ended Period Ended August 31, November 30, 2012 2012 ---------- ---------- Revenues 0 0 Operating expenses 13,675 1,995 Net loss from operations 13,675 1,995 Net loss before taxes 13,675 1,995 Loss per share - basic and diluted 0.00 0.00 Weighted average shares outstanding basic 18,000,000 18,000,000 BALANCE SHEET DATA At At August 31, November 30, 2012 2012 ---------- ---------- Cash and cash equivalents 16,325 16,325 Total current assets 16,325 16,325 Total assets 16,325 16,325 Management Accrual Fee 0 1,995 Total liabilities 0 1,995 Common stock 18,000 18,000 Additional paid-in capital 12,000 12,000 Deficit accumulated during exploration period (13,675) (15,670) Total stockholders' equity 16,325 16,325
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001555972_sterling_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001555972_sterling_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..c2ef216a7fc45cd9e6aeb087a79429f97e6eb7cd
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+PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information that you should consider before investing in the common stock. You should carefully read the entire prospectus, including "Risk Factors", "Management s Discussion and Analysis of Financial Condition and Results of Operations" and the Financial Statements, before making an investment decision. In this prospectus, the terms "Sterling Consolidated," the "Company," "we," "us" and "our" refer to Sterling Consolidated Corp. Sterling Seal refers to our wholly-owned subsidiary Sterling Seal & Supply, Inc., a New Jersey corporation. ADDR refers to our wholly-owned subsidiary ADDR Properties, LLC. Q5 refers to our wholly-owned subsidiary Q5 Ventures, LLC. Overview We were incorporated in the State of Nevada as Oceanview Acquisition Corp. on January 31, 2011. On May 18, 2012, we amended our Articles of Incorporation to change our name to Sterling Consolidated Corp. Our largest subsidiary is Sterling Seal & Supply, Inc. ("Sterling Seal"), a New Jersey corporation which was incorporated in 1997. Its predecessor was Sterling Plastic & Rubber Products, Inc., incorporated in New Jersey and was founded in 1970. Sterling Seal engages primarily in the distribution and sale of O-rings, rubber seals, oil seals, custom molded rubber parts, custom Teflon parts, Teflon rods, O-ring cord, bonded seals, O-ring kits, and stuffing box sealant. We also own real property through our subsidiaries ADDR Properties, LLC ("ADDR") and Q5 Ventures, LLC ("Q5"). ADDR owns a 28,000 square foot facility in Neptune, New Jersey, that is primarily used by Sterling Seal for its operations. ADDR also owns another property in Cliffwood Beach, New Jersey, that was previously occupied by Sterling Seal and is now rented out to tenants. Q5 owns a 5,000 square foot facility that is used by Sterling Seal in Florida. On April 29, 2013, the Company entered into a sales agreement to sell the Cliffwood Beach property. The sale price is for $650,000 and contains various contingencies. The property has a book value of $655,081 as of June 30, 2013. In addition, our subsidiary Integrity Cargo Freight Corporation ("Integrity") is a freight forwarding business. Integrity shares a facility with Sterling Seal and manages the importation of Sterling Seal s products and exports products on behalf of Sterling Seal to various countries. Risk Factors Our ability to successfully operate our business and achieve our goals and strategies is subject to numerous risks as discussed in the section titled "Risk Factors," beginning on page 3. Emerging Growth Company Status We are an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We have decided to take advantage of these exemptions. As a result, some investors may find our common stock less attractive as a result. The result may be a less active trading market for our common stock and our stock price may be more volatile. In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period. We could remain an "emerging growth company" for up to five years, or until the earliest of (a) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (b) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (c) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period. Investment Agreement with SurePoint On August 19, 2013, we entered into an investment agreement, (the "SurePoint Investment Agreement") with SurePoint Capital, a Delaware limited liability company ("SurePoint"). Pursuant to the terms of the SurePoint Investment Agreement, SurePoint committed to purchase up to $1,000,000 of our common stock over a period of up to twenty-four (24) months. From time to time during the twenty-four (24) month period commencing from the effectiveness of the registration statement, we may deliver a put notice to SurePoint which states the dollar amount that we intend to sell to SurePoint on a date specified in the put notice. The maximum investment amount per notice shall be no more than $50,000 worth of common stock so long as such amount does not exceed 4.99% of the outstanding shares of the Company. The purchase price per share to be paid by SurePoint shall be calculated at a ten percent (10%) discount to the average of the three lowest closing bids during the five (5) consecutive trading days immediately prior to the receipt by SurePoint of the put notice. We have reserved 4,830,918 shares of our common stock for issuance under the SurePoint Investment Agreement. Additionally, we issued SurePoint 125,000 shares of our common stock in May of 2013. The SurePoint Investment Agreement and SurePoint s obligations thereunder are not transferable and cannot be assigned. The SurePoint Investment Agreement shall terminate upon any of the following events: (i) an aggregate of One Million Dollars is purchased under this SurePoint Investment Agreement; (ii) the date which is twenty four months following the date of the SurePoint Investment Agreement; or (iii) the date that this Registration Statement is no longer effective. The SurePoint Investment Agreement will be suspended and shall remain suspended if any of the following occurs and is not rectified: (i) the trading of the Company s stock is suspended by the Securities and Exchange Commission; or (ii) the Common Stock ceases to be quoted, listed or traded on the Principal Market. We are currently obligated to file reports with the SEC under Section 15(d) of the Securities Act. The requirement for an issuer that has filed a registration statement to file pursuant to Section 15(d) of the Securities Exchange Act is suspended for any fiscal year, except for the fiscal year in which such registration statement becomes effective, if, at the beginning of the fiscal year, the issuer has fewer than 300 shareholders. We currently have fewer than 300 shareholders and expect to maintain a base of fewer than 300 shareholders. If we do continue to have fewer than 300 shareholders, we will be exempt from the filing requirements as required pursuant to Section 13 of the Securities Exchange Act and will not be required to file any periodic reports, including Form 10Q and 10K filings, with the SEC subsequent to the Form 10K required for the fiscal year in which our registration statement is effective. If we are only a reporting company because of our obligations under Section 15(d) of the Securities Act and after the fiscal year we no longer have the obligation under either Section 13(a) or 15(d) of the Securities to file reports with the SEC, we may be ineligible for quotation on the OTCBB. If this occurs, the SurePoint Investment Agreement would be suspended and we would no longer be able to access this capital until the issue was rectified. In connection with the SurePoint Investment Agreement, we also entered into a registration rights agreement with SurePoint, pursuant to which we are obligated to file a registration statement with the Securities and Exchange Commission (the "SEC") covering 4,955,918 shares of our common stock underlying the SurePoint Investment Agreement within 21 days after the closing of the transaction. In addition, we are obligated to use all commercially reasonable efforts to have the registration statement declared effective by the SEC after the closing of the transaction and maintain the effectiveness of such registration statement until termination of the SurePoint Investment Agreement. The 4,955,918 shares to be registered herein represent 11.8% of the shares issued and outstanding, assuming that the selling stockholder will sell all of the shares offered for sale. At an assumed purchase price of $0..207 (equal to 90% of the closing price of our common stock of $0.23 on August 16, 2013), we will be able to receive up to $1,000,000 in gross proceeds, assuming the sale of the entire 4,830,918 shares being registered hereunder pursuant to the SurePoint Investment Agreement, excluding the 125,000 commitment shares Accordingly, we will not be required to register additional shares under the SurePoint Investment Agreement. We are currently authorized to issue 200,000,000 shares of our common stock. SurePoint has agreed to refrain from holding an amount of shares, which would result in SurePoint owning more than 4.99% of the then-outstanding shares of our common stock at any one time. There are substantial risks to investors as a result of the issuance of shares of our common stock under the SurePoint Investment Agreement. These risks include dilution of stockholders percentage ownership, significant decline in our stock price and our inability to draw sufficient funds when needed. SurePoint will periodically purchase our common stock under the SurePoint Investment Agreement and will, in turn, sell such shares to investors in the market at the market price. This may cause our stock price to decline, which will require us to issue increasing numbers of common shares to SurePoint to raise the same amount of funds, as our stock price declines. The aggregate investment amount of $1 million was determined based on numerous factors, including the following: it is a quantity sufficient to execute our stated strategy of acquiring other companies in our industry. While it is difficult to estimate the likelihood that the Company will need the full investment amount, we believe that the Company may need the full amount of $1 million funding under the SurePoint Investment Agreement. Where You Can Find Us Our principal executive office is located at 1105 Green Grove Road, Neptune, NJ 07753 and our telephone number is (732) 918-8004.
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001556416_biohemp_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001556416_biohemp_prospectus_summary.txt
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+Prospectus Summary This summary contains basic information about us and the offering. Because it is a summary, it does not contain all the information that you should consider before investing. You should read the entire prospectus carefully, including the risk factors and our financial statements and the related notes to those statements included in this prospectus. Except as otherwise required by the context, references in this prospectus to we, our, us, and Book It Local, refer to Book It Local, Inc. Book It Local, Inc. is a development stage company incorporated in the State of Nevada in August of 2012. Book It Local s address and phone number is: Book It Local, Inc. 2003 Symphony Lane Indian Trail, NC 28079 980-216-1342 Telephone Operating History Book It Local, Inc. is a recently incorporated development stage company with no operating results to date other than organizational activities. The purpose of the company is to offer consumers looking to book entertainment for events a centralized online database through which they may post events and receive bids from entertainers that may provide such services. To date, operations have been on an extremely limited basis. Company Assets Book It Local s principal assets ( Assets ) consisted of cash totaling $10,935 as of August 31, 2012. Company Cash Flow The Company has cash assets derived from a private placement of its stock. For the period from its inception through the period ending August 31, 2012 the Company had Gross Revenues of $0. From inception to the period ending August 31, 2012, the Company had Total Operating Expenses of $0, Net Profit of $0, Total Current Assets of $10,935, Total Assets of $10,935, Total Current Liabilities of $0, and Total Stockholders Equity (Deficit) of $10,935. Future Assets and Growth Over the next year, there are three main goals that, if accomplished, will set us up for success moving forward. First, we need to develop an online bidding system that will supply customers with competitive bids from entertainers; second, we must develop strategic relationships with businesses and websites whose customers use their services to plan weddings, parties, and other events in order to develop a pipeline for customers; lastly, we need to organize and connect the fragmented marketplace of musicians and entertainers into a searchable database. However, it should be noted that our independent auditor has expressed concern about our ability to continue as a going concern. The Company has yet to develop a website or marketing presence, but over the next year we will continue to develop our marketing strategy and web presence through which we will run our booking system once it is fully developed. We hope to differentiate ourselves from the many other booking services by offering the ability to book directly with the entertainer online. Our marketing will focus on highlighting the ease of using our service. The Company had a Net Profit of $0 for the period from inception to August 31 2012 and anticipates it will operate at a deficit for its next fiscal year and may expend most of its available capital. The Company s cash on hand is, primarily, budgeted to cover the anticipated operating costs for the development of our marketing plan and legal, accounting, and Transfer Agent services. We believe the Company will have sufficient capital to operate its businesses over the next twelve months. There can be no assurances, however, that actual expenses incurred will not materially exceed our estimates or that cash flows from existing assets will be adequate to maintain our businesses. We will look to provide a relatively new service to online merchants, focusing on positioning our service as one that will save time for the person seeking the entertainment for the event as there will be a wide swath of potential entertainers available for perusal in one centralized online location. The Company may lose money in its first, full year of operation and it shall require raising additional capital to develop its services. We have elected to become a public company at this early stage of development for a number of reasons. First and foremost, it is because our need for capital is substantial and our principal feels his time devoted to the Company is best served developing the business plan rather than developing a network of people to invest into a private offering for a company of this type. Mr. McMurry believes that he can raise more capital in less time through future public offerings rather than through private offerings. Furthermore, our plan is contingent upon establishing relatively quick growth relative to our competitors and there is a degree of credibility inherent in a public company. We do understand as a company the disadvantages of going public such as the increased costs of ongoing reporting and scrutiny from the relevant governmental agencies. However, we believe that such a time and financial investment in the short term will be worth the long-term benefits of being a public entity. The Company currently has one manager, Joseph McMurry, and no employees. Terms of the Offering The selling shareholders named in this prospectus are offering all of the shares of common stock offered through this prospectus. The selling stockholders are selling shares of common stock covered by this prospectus for their own account. We will not receive any of the proceeds from the resale of these shares. The offering price of $0.05 was determined by the price shares were sold to our shareholders in a private placement memorandum which was dated August 16, 2012 and closes on January 1, 2013 where shares have been sold to investors at $.01 per share plus an increase based on the fact the shares will be liquid and registered. $0.05 is a fixed price at which the selling security holders will sell their shares for the duration of the offering . There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders. Additional shares have been issued to G9 Holdings, LLC and GW Grace, LLC for consulting services rendered with regard to the development of the business plan as well as coordination of this Registration Statement. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001559004_american_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001559004_american_prospectus_summary.txt
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+prospectus summary is qualified in its entirety by, and should read in conjunction with, the more detailed information and our Financial Statements and Notes thereto appearing elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read the entire prospectus carefully. Organization We were formed on February 3, 2005 as Phillips Sales & Marketing, Inc., a Florida corporation, and changed our name to American Retail Alliance, Corp., a Florida corporation, on January 23, 2012. Our address is 2979 West Bay Drive Suite 2, Belleair Bluffs, FL 33770. Telephone: 727-581-1500 Business As used in this registration statement, the following terms have the following meanings: We are the vendor of the products Our customers are the retail facilities to which we sell the products for resale to the ultimate consumer. Our clients are the third party owner of the products we sell. These could be a manufacturer of the product or someone who owns the rights to the product and has it made by a third party manufacturer for sale to us. We are the vendor of a variety of consumer non-durable and durable products which we acquire from our clients. We sell these products in the United States through customers such as Walgreens, CVS, Rite Aid, McKesson, Kerr Drug, Amway and independent pharmacies as well as product specific catalogs. Our current product offerings are designed to appeal to a broad range of consumers. We maintain vendor relationships with customers such as Walgreens, CVS, Rite Aid, McKesson, Kerr Drug and Amway. In general, products cannot be sold to these customers by us or by any other party without a vendor relationship being in place. In order to obtain a vendor relationship, we must undergo an extensive application and screening process by a customer. Once we are qualified by a customer, we are assigned a Vendor Number which allows us to sell to the customer. We must follow sales procedures as specified by each customer. However, products are sold to customers on a purchase order basis. Customers are not obligated to purchase products from us and may stop purchasing products from us at any time. We have no written agreements with our clients. Products are purchased from clients on a purchase order basis. We are not obligated to purchase any products from clients, and clients are not obligated to sell products to us and may stop selling products to us at any time. In our fiscal year ended December 31, 2011, the following products accounted for the following amounts and percentages of our total revenues: Name of Product Amount of Revenues Percentage of Revenues Snap It Eye Glass Repair Kit $ 34,055 12 % Avenger Bed Bug Killer $ 127,764 45 % CitiKitty $ 37,455 13 % In our fiscal year ended December 31, 2011, the following customers accounted for the following amounts and percentages of our total revenues: Name of Customer Amount of Revenues Percentage of Total Revenues Magellan s $ 84,643 30 % Walgreens $ 59,487 21 % Rite Aid $ 33,039 12 % Access Business Group $ 30,392 11 % Our corporate website is http://www.americanretailalliance.com/. Nothing on our website is part of this prospectus. The terms "Our Company" "we," "us" and "our" as used in this prospectus refer to American Retail Alliance, Corp. Emerging Growth Company We are an emerging growth company under the JOBS Act. We shall continue to be deemed an emerging growth company until the earliest of: (a) the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more; (b) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective IPO registration statement; (c) the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or (d) the date on which such issuer is deemed to be a large accelerated filer , as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto. As an emerging growth company we are exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures. Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting. As an emerging growth company we are also exempt from Section 14A (a) and (b) of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes. These exemptions are also available to us as a Smaller Reporting Company. We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. The Offering We are offering for sale 2,000,000 shares of our common stock. We will sell the shares we are registering only to those individuals who have received a copy of the prospectus. There is no trading market for our common stock. We are not currently listed or quoted on any exchange or market. We hope to have our common stock quoted on the Over the Counter Bulletin Board and OTCQB although we do not have any current plans in place to have our common stock quoted. We cannot guarantee that our common stock will be quoted on the Over the Counter Bulletin Board or OTCQB. The aggregate market price of our common stock is $46,200,000 based on the proposed offering price of $1.50 per share and 30,800,000 issued and outstanding shares of common stock. As of September 30, 2012, our total stockholders equity balance is ($172,211). We currently have 28,800,000 shares of our common stock issued and outstanding. After the offering, there may be up to 30,800,000 shares of our common stock issued and outstanding if all of the offered shares are sold. We will receive $3,000,000 if all of the offered shares are sold and $1,500,000 if half the offered shares are sold. If all of the offered shares are purchased, we intend to use the proceeds for inventory, marketing & advertising, working capital and to repay debt. Offering expenses are estimated to be $45,420. This is a best efforts offering with no minimum offering amount. There is no guarantee that we will even raise enough funds to cover the expenses of this offering. Selected Financial Data Because this is only a financial summary, it does not contain all the financial information that may be important to you. Therefore, you should carefully read all the information in this prospectus, including the financial statements and their explanatory notes before making an investment decision. This information should be read in conjunction with Management s Discussion and Analysis of Financial Condition and Results of Operations as well as the audited financial statements and footnotes thereto contained in this report. For the Year Ended December 31, 2011 2010 SUMMARY OF OPERATIONS Net Revenues $ 284,377 $ 154,347 Cost of Sales 187,345 56,972 Gross Margin 97,032 97,375 Operating Expenses 192,953 99,526 Other Expenses 4,818 1,031 NET LOSS (100,739 ) (3,182 ) NET LOSS PER SHARE (0.00 ) (0.00 ) BALANCE SHEET DATA Total Current Assets $ 86,430 $ 25,722 Total Assets 89,852 28,452 Total Current Liabilities 176,982 44,804 Total Liabilities 176,982 44,804 For the Nine-Months Ended September 30, (Unaudited) 2012 2011 SUMMARY OF OPERATIONS Net Revenues $ 289,169 $ 215,269 Cost of Sales 182,643 133,297 Gross Margin 106,526 81,972 Operating Expenses 187,397 125,795 Other Expenses 7,210 1,243 NET LOSS (88,081 ) (45,066 ) NET LOSS PER SHARE (0.00 ) (0.00 ) BALANCE SHEET DATA Total Current Assets $ 100,926 Total Assets 103,607 Total Current Liabilities 275,818 Total Liabilities 275,818
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001559954_maniatv_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001559954_maniatv_prospectus_summary.txt
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+PROSPECTUS SUMMARY
+ 
+
+ This summary highlights selected information contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and financial statements included elsewhere in this prospectus. This summary may not contain all of the information that you should consider before deciding to invest in our Class A common stock. You should read this entire prospectus carefully, including the sections entitled Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations and our financial statements and accompanying notes before making an investment decision. 
+ 
+
+ maniaTV Inc. 
+ 
+
+ Who We Are
+ 
+
+ We were founded in 2009 by Drew Massey to build a leading pop-culture Internet, mobile and app-based video entertainment destination. Mr. Massey has over 20 years of experience in the media and entertainment industries and has extensive experience working with leading advertising agencies and brands, producing online content, building media businesses, and developing relationships with top talent agencies and celebrities. We are currently in operations with the website www.maniaTV.com which has entertainment content and generates pageviews and advertising revenue. We intend to leverage our founder s experience in Internet television, brand advertising, and premium celebrity shows, to build a leading network of original pop-culture Internet TV shows that will be available through our maniaTV jukebox . 
+ 
+
+ Mr. Massey is our founder, Chairman and Chief Executive Officer. From January 2003 until July 2007, he served as the Chief Executive Officer of The ManiaTV! Network, Inc., an Internet television pioneer. While at The ManiaTV! Network, he initiated a strategy of creating professionally produced pop-culture programming anchored by well-known celebrity hosts. His first celebrity show was a live nightly Internet TV talk show with comedian and actor Tom Green, Tom Green Live! , which launched in 2006. Prior to Tom Green Live! , Mr. Green had his own late-night talk show on MTV, had previously served as guest host for The Late Show with David Letterman, and was married to actress Drew Barrymore. We believe the Tom Green Live! show was the first live celebrity Internet TV show, and its launch was covered in dozens of media outlets including a live interview of Tom Green on The Tonight Show with Jay Leno and a national syndicated story by the Associated Press. Following the successful launch of the Tom Green Live! show, Mr. Massey introduced a weekly Internet TV talk show with musician Dave Navarro named Spread TV , which launched in 2007. Mr. Navarro is a popular American guitarist and television personality who is currently hosting the second season of Spike TV s Ink Master . Navarro previously hosted CBS s Rock Star and co-starred with Carmen Electra in MTV s 'Til Death Do Us Part: Carmen & Dave . During the production of these shows, Mr. Massey and his team developed new production techniques and ways to leverage new, emerging technologies that enabled them to produce professional-looking, network-style programming for a fraction of the cost of cable and TV networks. One of our principal operating strategies will be to develop professionally produced, pop-culture programming including: celebrity talk shows; reality shows; celebrity, athlete, artist and band interviews; concerts and other music-related shows; comedy shows; and game shows. 
+ 
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+ 
+
+ 5
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+ Drew Massey has over 20 years of experience working in the media and entertainment industries. He started his career in 1992 working in the publishing industry for Forbes, Inc. where he created a new division, the American Heritage Custom Publishing Group. Following his tenure at Forbes, Mr. Massey founded P.O.V. (Point of View), a lifestyle magazine for young, professional men. P.O.V. launched in 1995 and received various industry accolades, including being named the Adweek Startup of the Year and the Adweek Hot Up & Comer . From 1995 to 2000, Massey and his team sold advertising to nearly 200 different brands while working with leading advertising agencies and attracted a number of well-known celebrities and athletes to appear on the magazine s cover including: Michael Richards (Seinfeld), Matthew Perry (Friends), Samuel Jackson, Matt Dillon, Tyra Banks, John Cusack, Kiefer Sutherland, Jeff Goldblum, KISS, Brett Farve, Ashley Judd, Grant Hill, Eric Lindros, Edward Burns, Matthew Broderick, Minnie Driver, Joaquin Phoenix, Stephen Dorff, Jon Favreau, Jenna Elfman, Mira Sorvino, Oscar de la Hoya, Jeff Goldberg, Jeff Gordon, Anna Kournikova, Debra Messing, Mena Suvari, and Daniela Pestova. 
+ 
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+ We largely plan to make money the way that television always has through the sale of advertising. Internet advertising consists of advertising that appears on desktop and laptop computers, as well as mobile phones and tablets. A September 2012 report by eMarketer projects that Internet advertising will grow from approximately $26 billion in 2010 to approximately $52 billion in 2015, or a 5-year compound annual growth rate of approximately 14.9%. We plan to initially target the display advertising segment of the U.S. Internet advertising market and, to a lesser degree, the mobile advertising segment. 
+ 
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+ We intend to focus our pop-culture programming on the youth and young adult population. This demographic is critical to advertisers because of the strong influence that youth and young adults typically have on the spending habits of family members and others. Youth and young adults are often so-called early adopters , setting trends that are later adopted by other demographic groups, and consequently we believe that savvy marketers are keenly interested in how to more effectively reach and influence them. 
+ 
+
+ Our Strategy
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+
+ Our mission is to build a leading Internet, mobile and app-based video entertainment destination website that houses a jukebox of original, pop-culture oriented Internet TV shows. Our strategy is centered on the development of a production studio, the maniaTV Creative Show Factory, that will enable us to work with producers, writers, celebrities and other Hollywood talent to create original, network-style shows, available both live and on-demand and delivered via the Internet, that are designed to appeal to the pop-culture interests of youth and young adults. Key elements of our strategy include: 
+ 
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+ Opening the maniaTV Creative Show Factory - We plan to open a production studio to create original programming with producers, writers, celebrities and other talent and build our jukebox of pop-culture content. 
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+ 6
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+ Building an exclusive library of content focused on pop culture that will appeal to youth and young adults We plan to develop an exclusive library of professionally produced, pop-culture programming, including celebrity talk shows, reality shows, concerts and celebrity interviews, that we believe will appeal to younger audiences, primarily 18-34 year olds, who have become increasingly more difficult to access through traditional media such as television, newspapers, magazines and radio. 
+ 
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+ 
+ Producing network-style programming at a fraction of network and cable TV costs - We intend to leverage our founder s knowledge and experience to produce high-quality, network-style programming at a fraction of the production costs of comparable shows produced for network and cable television. 
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+ Leveraging celebrity endorsements and active celebrity participation in our marketing and branding efforts - We plan to anchor our pop-culture programming with established celebrity personalities and leverage their fan bases and social followers, marketability and press worthiness to grow our audience and create brand awareness. 
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+ Providing anytime-anywhere access to our programming - Our maniaTV Jukebox provides anytime, on-demand access to our content library, and we intend to create a downloadable App for viewing our content anywhere on a host of platforms. 
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+ Leveraging our high-quality programming and production capabilities to build strong, direct relationships with advertising agencies and brands - We believe that our studio and production capabilities and our celebrity-based, pop-culture programming will enable us to sell highly customizable advertising solutions directly to advertising agencies at rates higher than standard advertising network rates. 
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+ Risks Related to Our Business
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+
+ Our business is subject to a number of risks of which you should be aware before making an investment decision. These risks are discussed more fully under the caption Risk Factors, and include but are not limited to the following: 
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+ We may not be successful in our efforts to grow our audience and successfully monetize our programming content; 
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+ We generate substantially all of our revenue from advertising. The loss of advertisers, reduction in spending by advertisers, or failure to add new advertisers could seriously harm our business; 
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+ Our business requires us to invest in new programming before we will receive any revenue therefrom, and audiences may not like our programming and other entertainment content which would adversely affect our results of operations; 
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+ We face many competitive challenges, any of which could adversely affect our prospects, results of operations and financial condition; 
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+
+ 
+ Our business is subject to complex and evolving laws and regulations regarding privacy, data protection, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, which could harm our business; 
+ 
+
+ 
+ Our CEO has control over key decision making as a result of his control of a majority of our voting stock; 
+ 
+
+ 
+ The market price of our Class A common stock may be volatile or may decline, and you may not be able to resell your shares at or above the initial public offering price; and 
+ 
+
+ 
+ Substantial blocks of our total outstanding shares may be sold into the market as further described in Shares Eligible for Future Sale. If there are substantial sales of shares of our common stock, the price of our Class A common stock could decline significantly. 
+ 
+
+ Corporate Information
+ 
+
+ We were incorporated in the State of Colorado on April 8, 2009 under the name M Incorporated and changed our name in September 2012 to maniaTV Inc. We have a December 31 fiscal-year end. Accordingly, all references herein to a fiscal year refer to the 12 months ended December 31 of such year. 
+ 
+
+ ManiaTV , the maniaTV logo, and other common law trademarks or services marks of maniaTV appearing in this prospectus are the exclusive property of maniaTV Inc. All other service marks, trademarks and trade names referred to in this prospectus are property of their respective holders. 
+ 
+
+ Our headquarters are currently located at 8335 Sunset Boulevard, West Hollywood, California 90069. Once we complete this offering, we intend to lease a studio in the Los Angeles area that we will use to produce programming and for our executive offices. Our phone number is (855) 886-2642. Our website is www.maniaTV.com. The information that can be accessed through our website is not part of, and is not incorporated, into this prospectus. 
+ 
+
+ The Offering
+ 
+
+ Following is a brief summary of this offering. Please see the Plan of Distribution section for a more detailed description of the terms of the offering.
+ 
+
+ 
+ Securities Being Offered
+ 
+ We are offering 1,111,111 shares of our Class A common stock on a best-efforts basis with a minimum of 555,556 shares and a maximum of 1,111,111 shares. 
+
+ 
+ 
+ 
+
+ Offering Price per Share
+ 
+ $0.90
+
+ 
+ 
+ 
+
+ Offering Period
+ 
+ The 1,111,111 shares are being offered for a period not to exceed 150 days, unless extended by our board of directors for an additional 90 days. 
+
+ 
+
+ 
+
+ 8
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+ 
+ 
+
+ Gross Proceeds to Our 
+ Company
+ 
+ $ 500,000 (Minimum Offering)
+ $1,000,000 (Maximum Offering)
+
+ 
+ 
+ 
+
+ Use of Proceeds
+ 
+ We intend to use the proceeds of this offering to open a studio in the Los Angeles area in order to produce fresh premium content, to hire core staff on the programming and advertising sides of our business, to make technological investments in backend broadband servers, to begin developing a maniaTV mobile app, for general and administrative expenses, and for the costs of the offering. See Use of Proceeds. 
+
+ 
+ 
+ 
+
+ Class A common stock outstanding before the offering
+ 
+ 1,127,779 shares
+
+ 
+ 
+ 
+
+ Class B common stock outstanding before the offering
+ 
+ 7,205,555 shares
+
+ 
+ 
+ 
+
+ Class A common stock to be outstanding after the offering
+ 
+ 1,683,335 (Minimum offering)
+ 2,238,890 (Maximum offering)
+
+ 
+ 
+ 
+
+ Class B common stock to be outstanding after the offering
+ 
+ 7,205,555 (Minimum offering)
+ 7,205,555 (Maximum offering)
+
+ 
+ 
+ 
+
+ Total Class A and Class B common stock to be outstanding after the offering
+ 
+ 8,888,890 (Minimum offering)
+ 9,444,445 (Maximum offering)
+
+ 
+ 
+ 
+
+ Voting Rights
+ 
+ Shares of Class A common stock are entitled to one vote per share.
+ 
+
+ Shares of Class B common stock are entitled to ten votes per share.
+ 
+
+ Holders of our Class A common stock and Class B common stock will generally vote together as a single class, unless otherwise required by law. Mr. Massey, who after our initial public offering will control approximately 97.4% of the voting power of our outstanding capital stock, assuming that the maximum offering is sold, will have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of our directors. See Description of Securities. 
+
+ 
+ 
+ 
+
+ 
+
+ 
+
+ 9
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+ Plan of Distribution
+ 
+ This is a self-underwritten offering. This prospectus is part of a registration statement that permits Drew Massey, our Chief Executive Officer and a director, to sell the Shares directly to the public, with no commission or other remuneration payable to him for any Shares he sells. The officers and directors will not purchase Shares in this offering, including, but not limited to, purchases of Shares in order to reach the minimum offering amount.
+
+ 
+ 
+ 
+
+ Escrow Account
+ 
+ Pending sale of the $500,000 minimum, all proceeds will be held in a non-interest bearing escrow account by the Escrow Agent for this offering. The Escrow Agent is Corporate Stock Transfer, Inc. Funds will be deposited in this escrow account promptly following receipt. In the event the minimum is not sold within the 150-day offering period or any extension of an additional 90 days at our discretion, this offering will terminate and all funds will be returned promptly to subscribers by the Escrow Agent without any deductions or payment of interest. Subscribers will not be entitled to a return of funds from such escrow during the 150-day offering period or any extension period, for a potential total of 240 days. See Use of Proceeds and Plan of Distribution. 
+
+ 
+ 
+ 
+
+ Subscription Agreement and 
+ Procedures
+ 
+ We will accept no subscriptions or indications of interest until our registration statement is effective. At that point, all subscriptions must be made by the execution and delivery of a subscription agreement, a form of which is attached to this prospectus as Annex A. Subscriptions are not binding until accepted.
+
+ 
+
+ 
+
+ 10
+ 
+
+ 
+
+ 
+
+ RISK FACTORS
+ 
+
+ An investment in these securities involves an exceptionally high degree of risk and is extremely speculative in nature. Following are what we believe are all of the material risks involved if you decide to purchase shares in this offering.
+ 
+
+ Risks Related to Our Business and Our Industry
+ 
+
+ We are an early stage company with an unproven business model and a limited operating history, and you should consider any investment in us a high-risk investment whereby you could lose your entire investment.
+ 
+
+ We are an early stage company with and a new and unproven business plan and a limited operating history. As an investor, you should be aware that our limited operating history makes it difficult for you to evaluate our business and prospects based on prior performance. Moreover, early stage companies frequently experience significant unanticipated difficulties, delays and expenses, and we cannot assure you that our business as described in this prospectus will ever be achieved or prove successful. If we cannot effectuate our business plan in a timely and profitable manner, you could lose your entire investment. 
+ 
+
+ Internet television is a new and emerging market, which makes it difficult to evaluate our current business and future prospects.
+ 
+
+ Internet television is a new and emerging market, and our current business and future prospects are difficult to evaluate. The market for Internet television has undergone rapid and dramatic changes in its relatively short history and is subject to significant challenges. Many new entrants into Internet television have failed despite expending considerable resources. As a result, the future revenue and income potential of our business is highly uncertain. You should consider our business and prospects in light of the risks and difficulties we may encounter in this new and rapidly evolving market, which risks and difficulties include, among others: 
+ 
+
+ 
+ our new, evolving and unproven business model;
+ 
+ our ability to retain our current viewers, acquire new viewers and increase the amount of time that these viewers spend on our website; 
+ 
+ our ability to effectively monetize our audience; and
+ 
+ our ability to retain existing advertisers, attract new advertisers and prove to advertisers that advertising to our audience through our website is effective enough to justify a pricing structure that is profitable for us. 
+ 
+
+ Our company is small and third parties may choose not to work with us due to our size and limited resources.
+ 
+
+ Our company currently only has one employee and we intend to remain leanly staffed for the foreseeable future. Our success will depend upon our ability to convince third parties such as advertisers, celebrities and content owners to work with us, and such third parties may choose to engage with larger, well-established companies due to brand recognition, longer operating histories and greater financial resources.
+ 
+
+ 
+
+ 11
+ 
+
+ 
+
+ 
+
+ The industry in which we operate is highly competitive.
+ 
+
+ The entertainment industry is intensely competitive, and we compete for content, audiences and advertising dollars against a variety of sources including broadcast, cable and satellite television, movie studios and independent film producers and distributors, online, digital and mobile properties, and other entertainment outlets. The entertainment industry is becoming increasingly dominated by large multi-national, multi-media entities that control key film, magazine, television and/or Internet content, as well as key network, cable, Internet and other distribution outlets. Virtually all of these competitors are substantially larger than we are, have been in business longer, and have numerous advantages over us including the ability to acquire financing for their projects and attract superior properties, personnel, actors and/or celebrity hosts. Our competitors may also have preferential access to content writers, producers, important technologies, data on viewers to our website, competitive information, and other important resources. There can be no assurance that we will be able to compete successfully in the future against existing or potential competitors, or that competition will not have a material adverse effect on our business, financial condition or results of operations. 
+ 
+
+ If our efforts to attract new viewers and to retain our existing viewers are not successful, our growth prospects and revenue will be materially and adversely affected. 
+ 
+
+ Our ability to grow our business and generate advertising revenue depends on retaining and expanding our audience and increasing the amount of time that our audience spends on our website. If we fail to grow our audience, particularly in key demographics such as young adults, we will be unable to grow our advertising revenue, and our business will be materially and adversely affected. 
+ 
+
+ Our ability to grow our audience and improve our viewer demographics is dependent upon our ability to: 
+ 
+
+ 
+ provide viewers with a consistent, high-quality, user-friendly experience; 
+ 
+ build out our content library with compelling content that our viewers will enjoy; and 
+ 
+ innovate and keep pace with the offerings of our competitors.
+ 
+
+ In addition, we have limited resources and will be largely reliant upon viral marketing to build consumer awareness of our service. If our viral marketing strategy is unsuccessful, we may need to build our brand through more traditional marketing campaigns which will increase our marketing expenses and could have an adverse effect on our results of operations. We cannot assure you that we will be successful in maintaining or expanding our audience, and our failure to do so would materially reduce our revenue and adversely affect our business, operating results and financial condition. 
+ 
+
+ 
+
+ 12
+ 
+
+ 
+
+ 
+
+ Our business requires us to spend a substantial investment of capital on new programming, and we will have to pay the expenses of such programming before we will receive any revenue therefrom.
+ 
+
+ To achieve and maintain our competitiveness, we will need to introduce compelling new programming to our viewers. The development and production of new programming will require us to significantly increase our expenditures, and we will consequently bear greater financial risk. A significant amount of time may elapse between the time of our expenditures on new programming and the receipt of revenue therefrom, if any, which will adversely affect our liquidity. If we do not have funds available to introduce new programming, we may not be able to service our existing audience, acquire new audience or attract or retain advertisers, each of which could inhibit the implementation of our business plan and have a material adverse effect on our business, results of operations or financial condition.
+ 
+
+ Audiences may not accept or like our programming and other entertainment content. 
+ 
+
+ The entertainment industry is characterized by continual changes in consumer interests and in the types of programming and personalities who are of interest. These market characteristics are exacerbated by the hypercompetitive nature of the market, and we will be expected to continually introduce new content. Our performance will depend, in part, on our ability to continue to deliver fresh programming, develop new talent relationships that address the interests of our viewers, and license or develop new programming on a timely and cost-effective basis. The development of our programming library entails significant investment and risks. We may not be successful. If we are unable to satisfy the ever-changing interests of consumers, our business, results of operations and financial condition could be materially and adversely affected.
+ 
+
+ An increasing number of individuals are utilizing devices other than personal computers to access the Internet, and our business may suffer if we are unable to adequately display our programming on these devices
+ 
+
+ The number of individuals who access the Internet through devices other than a personal computer, such as smartphones, tablets, televisions and set-top box devices, has increased dramatically, and we believe this trend is likely to continue. These devices generally have lower processing speed, power and functionality than traditional personal computers which could make viewing our programming on these devices more difficult or less compelling to our viewing audience. Moreover, many of these devices access the Internet through wireless infrastructure which may inhibit or prevent high-quality streaming of content. If we are unable to successfully ensure that our programming is available on such platforms and devices, or if our programming becomes less compelling to our viewers because of such devices, our business will suffer. 
+ 
+
+ Our failure to convince advertisers of the benefits of advertising on our website would harm our business. 
+ 
+
+ We currently derive nearly all of our revenue from the sale of advertising and expect to continue to derive most of our revenue from the sale of advertising in the future. Our ability to attract and retain advertisers and to generate advertising revenue depends on a number of factors, including: 
+ 
+
+ 
+
+ 13
+ 
+
+ 
+
+ 
+
+ 
+ increasing our audience and the amount of time that our viewing audience spends on our website; 
+ 
+ competing effectively with other companies for advertising dollars; 
+ 
+ continuing to develop and diversify our advertising base and expand our offerings to include delivery channels such as mobile devices; and 
+ 
+ keeping pace with our competition and with changes in technology; 
+ 
+
+ Our agreements with advertisers are generally short term and may be terminated at any time by the advertiser. Advertisers are spending only a small amount of their overall advertising budget on our website, may view advertising with us as experimental and may leave us for competing alternatives at any time. We may never succeed in capturing a greater share of our advertisers core advertising spending, particularly if we are unable to achieve the scale and market penetration necessary to demonstrate the effectiveness of our website, or if our advertising model proves ineffective or uncompetitive when compared to alternatives. Failure to demonstrate the value of our website would result in reduced spending by, or loss of, existing or potential future advertisers, which would materially harm our revenue and business. 
+ 
+
+ Our success depends upon the continued acceptance of online advertising as an alternative or supplement to offline advertising.
+ 
+
+ The percentage of the advertising market allocated to online advertising lags significantly behind the percentage of time spent by people consuming online media. Growth of our business is dependent upon advertisers increasing their online advertising budgets which may or may not happen. Many advertisers still have limited experience with online advertising and may continue to devote significant portions of their advertising budgets to traditional media. Any lack of growth in the market for online advertising could result in reduced revenue or increased marketing expenses, which would harm our operating results and financial condition. Moreover, even if advertisers increase their online advertising expenditures as a whole, we cannot assure you that we will capture any increased online advertising expenditures. 
+ 
+
+ The impact of worldwide economic conditions, including their effect on advertising budgets and discretionary consumer spending, may adversely affect our business and operating results. 
+ 
+
+ Our financial condition is affected by worldwide economic conditions and their impact on advertising spending. Expenditures by advertisers generally tend to reflect overall economic conditions, and to the extent that the economy continues to stagnate, reductions in spending by advertisers could have a serious adverse impact on our business. In addition, any subscription service we may attempt to sell would be considered discretionary on the part of some of our viewers, who may choose to use a competing free service. To the extent that overall economic conditions reduce spending on discretionary activities, our ability to retain and add subscribers could be hindered, which could reduce our subscription revenue and negatively impact our business.
+ 
+
+ 
+
+ 14
+ 
+
+ 
+
+ 
+
+ Our operating results may fluctuate, which makes our results difficult to predict and could cause our results to fall short of expectations. 
+ 
+
+ Our revenue and operating results could vary significantly from quarter to quarter and year to year because of a variety of factors, many of which are outside our control. As a result, comparing our operating results on a period-to-period basis may not be possible or relevant. In addition to other risk factors discussed in this Risk Factors section, factors that may contribute to the variability of our quarterly and annual results include: 
+ 
+
+ 
+ our ability to effectively grow our audience;
+ 
+ our ability to attract and retain advertisers; 
+ 
+ our ability to effectively manage our growth; 
+ 
+ the effect of increased competition in our business; 
+ 
+ our ability to keep pace with changes in our competition and in technology; 
+ 
+ interruptions in service, whether or not we are responsible for such interruptions, and any related impact on our reputation; 
+ 
+ costs associated with defending any litigation, including intellectual property infringement litigation; 
+ 
+ our ability to successfully add new programming in a timely and cost-effective manner; 
+ 
+ the impact of general economic conditions on our revenue and expenses; and 
+ 
+ changes in government regulation affecting our business.
+ 
+
+ Seasonal variations in audience and advertising behavior may also cause fluctuations in our financial results. For example, we may experience higher advertising sales during the fourth quarter of each calendar year due to greater advertiser demand during the holiday season. In addition, we may experience changes in audience behavior due to fluctuations in Internet usage during vacation and holiday periods as well. Expenditures by advertisers are also cyclical and discretionary in nature, reflecting overall economic conditions, the economic prospects of specific advertisers or industries, budgeting constraints, buying patterns and a number of other factors, many of which are outside our control. We believe these seasonal trends will result in fluctuations in our financial results and make period-to-period comparisons of such financial results more difficult.
+ 
+
+ We have experienced increased growth in recent periods. If we fail to effectively manage our growth, our business and operating results may suffer. 
+ 
+
+ We have experienced increased growth in the past nine months which has placed, and will continue to place, significant demands on our management and infrastructure. We expect that our business plan will require substantial financial, operational and technical resources, and we will need to recruit, integrate and retain skilled and experienced personnel in order to be effective. Qualified individuals are in high demand, particularly in the digital media industry. Moreover, as our operations grow in size, scope and complexity, we will need to improve and upgrade our systems and infrastructure, which will require significant expenditures and allocation of resources. Our business, operating results and financial condition will suffer if we are unable to grow and scale in a productive, efficient and cost-effective manner. 
+ 
+
+ 
+
+ 15
+ 
+
+ 
+
+ 
+
+ We may acquire other companies which could divert our management s attention, result in additional dilution to our shareholders and otherwise disrupt our operations and harm our operating results. 
+ 
+
+ We may in the future seek to acquire businesses, content, products or technologies that we believe could complement or expand our offerings, enhance our technical capabilities or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated. In addition, we do not have any experience in acquiring other businesses. If we acquire additional businesses, we may not be able to integrate the acquired personnel, operations and technologies successfully, or effectively manage the combined business following the acquisition. We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including: 
+ 
+
+ 
+ incurrence of acquisition-related costs; 
+ 
+ diversion of management s attention from other business concerns; 
+ 
+ unanticipated costs or liabilities associated with the acquisition; 
+ 
+ harm to our existing business relationships with business partners and advertisers as a result of the acquisition; 
+ 
+ harm to our brand and reputation; 
+ 
+ the potential loss of key employees; 
+ 
+ use of resources that are needed in other parts of our business; and 
+ 
+ use of substantial portions of our available cash to consummate the acquisition.
+ 
+
+ In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operating results based on this impairment assessment process. Acquisitions may also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results. In addition, if an acquired business fails to meet our expectations, our operating results, business and financial condition may suffer. 
+ 
+
+ Our success depends upon our viewing audience s high-speed Internet access. 
+ 
+
+ Our business model requires consumers to access our programming content through Internet connections including, to a lesser degree, mobile connections. Consequently, our success will depend on third-party Internet service providers and wireless telecommunication companies providing and expanding the availability of high-speed Internet access with the speed and data capacity required to permit high-quality streaming of content. These factors are outside of our control, and any future limitations on broadband Internet access and availability, Internet or wireless network outages, interruptions, bandwidth constraints, rate increases, data usage limits, or intentional blocking of our websites would adversely affect our ability to service our viewers and advertisers.
+ 
+
+ 
+
+ 16
+ 
+
+ 
+
+ 
+
+ Changes in how network operators handle and charge for access to data that travel across their networks could adversely impact our business.
+ 
+
+ We rely upon the ability of viewers to access our service through the Internet. To the extent that network operators implement usage-based pricing such as bandwidth caps, or otherwise try to limit or monetize access to their networks by data providers, we could incur greater operating expenses and our business could be negatively impacted. Furthermore, to the extent network operators were to create tiers of Internet access service and either charge us for or prohibit us from being available through these tiers, our business could be negatively impacted. Many network operators that provide consumers with access to the Internet, such as Comcast, Time Warner Cable and Cablevision, also provide these consumers with multichannel video programming. This may create an incentive for these parties to use their network infrastructure in a manner adverse to our continued growth and success. To the extent that network operators are able to provide preferential treatment to their data as opposed to ours, our business could be negatively impacted.
+ 
+
+ We could face liability for content displayed on our websites, and we might not have adequate resources to fully defend ourselves against third-party actions.
+ 
+
+ We may be subjected to third-party claims for defamation, negligence, copyright or trademark infringement, or other legal theories relating to our programming. These types of claims have been brought, sometimes successfully, against various media companies in the past. We could also be subjected to claims based upon the content that is accessible from our websites and distribution network through links to other websites. Regardless of the merits, the expense of defending any such litigation may have a substantial impact if our insurance carriers fail to cover the cost of the litigation, and the time required to defend the actions could divert management s attention from the day-to-day operations of our business, which could adversely affect our business, results of operations and cash flows. In addition, an unfavorable outcome in such litigation could have a material adverse effect on our business, results of operations and cash flows.
+ 
+
+ Piracy of our entertainment content, including digital copyright theft and other unauthorized exhibitions of our content, may decrease the revenue we receive from our programming and adversely affect our business and profitability.
+ 
+
+ We are fundamentally an entertainment content production and distribution company, and our success is dependent in part upon our ability to monetize our entertainment content. The theft of our programming, digital content, brands, and other intellectual property has the potential to significantly affect us and the value of our content. Copyright theft and other unauthorized uses of content are particularly prevalent in many parts of the world that lack effective enforcements mechanisms and are becoming increasingly easier due to the wide availability of higher bandwidth, reduced storage costs, tools that undermine security features such as encryption, and the ability of pirates to cloak their identities online. The theft or unauthorized use of our content may have an adverse effect on our business, because it could reduce the revenue that we are able to receive from the legitimate use of our content and thereby inhibit our ability to recoup the expenses incurred in creating works. Moreover, if we have to engage in legal action to protect our intellectual property and prevent the unauthorized use of our content, these efforts may adversely affect our profitability and may not ultimately be successful. 
+ 
+
+ 
+
+ 17
+ 
+
+ 
+
+ 
+
+ Government regulation of the Internet is evolving, and unfavorable developments could have an adverse effect on our operating results. 
+ 
+
+ We are subject to general business regulations and laws, as well as regulations and laws specific to the Internet. Such laws and regulations cover taxation, user privacy, data collection and protection, copyrights, electronic contracts, sales procedures, automatic subscription renewals, credit card processing procedures, consumer and child protections, broadband Internet access and content restrictions, We cannot guarantee that we have been or will be fully compliant in every jurisdiction, as it is not entirely clear how existing laws and regulations governing issues such as privacy, taxation and consumer protection apply to the Internet. The adoption of any laws or regulations that adversely affect the popularity or growth in use of the Internet, including laws limiting Internet neutrality, could decrease viewer demand for our service offerings and increase our cost of doing business. Future regulations, or changes in laws and regulations or their existing interpretations or applications, could also hinder our operational flexibility, raise compliance costs and result in additional historical or future liabilities for us, resulting in adverse impacts on our business and our operating results. 
+ 
+
+ Interruptions or delays in service arising from our own systems or from our third-party vendors could impair the delivery of our service and harm our business. 
+ 
+
+ We rely on computer systems, including systems of third-party vendors, to deliver our content in a dependable, timely, and efficient manner. We have previously experienced, and expect to continue to experience, periodic service interruptions and delays involving these systems, and we do not currently maintain a live fail-over capability that would allow us to switch our operations from one facility to another in the event of a service outage. Both our own systems and those of our third-party vendors are vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures and similar events. They also are subject to break-ins, sabotage, intentional acts of vandalism, the failure of physical, administrative, and technical security measures, terrorist acts, natural disasters, human error, the financial insolvency of our third-party vendors and other unanticipated problems or events. The occurrence of any of these events could result in interruptions in our service and in unauthorized access to, or alteration of, the content and data contained on our systems and that these third-party vendors store and deliver on our behalf. We exercise no control over our third-party vendors, which makes us more vulnerable to any errors, interruptions, or delays in their operations. Any disruption in the services provided by these vendors could have a significant adverse impact on our business reputation, audience relations and operating results. Upon expiration or termination of any of our agreements with third-party vendors, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete. 
+ 
+
+ 
+
+ 18
+ 
+
+ 
+
+ 
+
+ Risks Related to Our Company, this Offering and Ownership of Our Common Stock
+ 
+
+ Buying low-priced penny stocks is very risky and speculative and since our shares will be a penny stock, it will be more difficult for investors to sell their shares.
+ 
+
+ The shares being offered are defined as a penny stock under the Securities Exchange Act of 1934, and rules of the U.S. Securities and Exchange Commission. The Exchange Act and such penny stock rules generally impose additional sales practice and disclosure requirements on broker-dealers who sell our securities to persons other than certain accredited investors who are, generally, institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 jointly with spouse, or in transactions not recommended by the broker-dealer. For transactions covered by the penny stock rules, a broker-dealer must make a suitability determination for each purchaser and receive the purchaser s written agreement prior to the sale. In addition, the broker-dealer must make certain mandated disclosures in penny stock transactions, including the actual sale or purchase price and actual bid and offer quotations, the compensation to be received by the broker-dealer and certain associated persons, and deliver certain required disclosures. Consequently, the penny stock rules may affect the ability of broker-dealers to make a market in or trade our common stock and may also affect your ability to resell any shares you may purchase in this offering in the public markets.
+ 
+
+ Our Class A common stock currently has no trading market and if a trading market does not develop, investors will have difficulty selling their shares.
+ 
+
+ There is presently no demand for our Class A common stock and no public market for the shares being offered in this prospectus. While we do intend to apply for quotation in the Over-the-Counter Bulletin Board, we cannot guarantee that our application will be approved and our stock listed and quoted for sale. If no market ever develops for our common stock, it will be difficult for you to sell any shares you purchase in this offering. In such a case, you may find that you are unable to achieve any benefit from your investment or to liquidate your shares without considerable delay, if at all. In addition, if we fail to have our common stock quoted on a public trading market, your common stock will not have a quantifiable value and it may be difficult, if not impossible, to ever resell your shares, resulting in an inability to realize any value from your investment.
+ 
+
+ The over-the-counter market for stock such as ours has had extreme price and volume fluctuations.
+ 
+
+ The securities of companies such as ours have historically experienced extreme price and volume fluctuations during certain periods. These broad market fluctuations and other factors, such as new product developments and trends in our industry and in the investment markets generally, as well as economic conditions and variations in our operational results, may have a negative effect on the market price of our common stock.
+ 
+
+ 
+
+ 19
+ 
+
+ 
+
+ 
+
+ We are selling this offering without an underwriter and may be unable to sell any shares.
+ 
+
+ This offering is self-underwritten, and we intend to sell the shares through our founder, Chairman, CEO and acting CFO, Drew Massey, who will receive no commissions. We do not plan to engage the services of an underwriter to sell the shares. We will hold investment meetings and invite our business associates, friends, relatives and acquaintances in an effort to sell the shares to them; however, there is no guarantee that we will be able to sell any of the shares. In the event we are unable to sell at least the minimum number of the shares in this offering, we will be forced to promptly return all funds to subscribers without any deductions or payment of interest. 
+ 
+
+ The investors may sustain a loss of their investment based on the offering price of our common stock.
+ 
+
+ The price of our Class A common stock in this offering has not been determined by any independent financial evaluation, market demand or other mechanism, third-party underwriter, or by our auditors, and is therefore, arbitrary. Because we have no significant operating history and have generated limited revenues to date, the price of our Class A common stock is not based on past earnings, nor is the price of our Class A common stock indicative of the current market value of the assets owned by us. As a result, the price of the Class A common stock in this offering may not reflect how the stock is received on the market. There can be no assurance that the shares offered hereby are worth the price for which they are offered and investors may therefore lose all or a portion of their investment.
+ 
+
+ You will incur immediate and substantial dilution of the price you pay for your shares. 
+ 
+
+ Our existing shareholders acquired their shares for substantially less than you will pay for any shares you purchase in this offering. As a result, these existing shareholders who control a majority of our outstanding stock will have substantially lower cost basis in their stock than investors in this offering, and as such may have interests that differ from investors in this offering. Your investment in this offering will result in the immediate and substantial dilution of the net tangible book value of your shares from the $0.90 you pay for them. As of December 31, 2012, our net tangible book value was $64,768 or approximately $0.008 per share. Assuming that $960,000 of maximum net proceeds are realized from this offering, the dilution to new investors from the offering price of $0.90 per share will be approximately $0.791 per share, and the gain by existing shareholders will be approximately $0.101 per share. Assuming that $460,000 of minimum net proceeds are realized from this offering, the dilution to new investors from the offering price of $0.90 per share will be approximately $0.841 per share, and the gain by existing shareholders will be approximately $0.051 per share. To the extent outstanding stock options are ultimately exercised, there will be further dilution to investors in this offering.
+ 
+
+ 
+
+ 20
+ 
+
+ 
+
+ 
+
+ We will have broad discretion in the use of proceeds from this offering and may invest or spend the proceeds in ways with which you do not agree and in ways that may not yield a return. 
+ 
+
+ We will have broad discretion over the use of proceeds from this offering. You may not agree with our decisions, and our use of the proceeds may not yield any return on your investment in us. Our failure to apply the net proceeds of this offering effectively could compromise our ability to pursue our business plan. 
+ 
+
+ All of our common stock is restricted but could become eligible for resale under Rule 144; this could cause the market price of our common stock to drop significantly, even if our business is doing well.
+ 
+
+ Of our total outstanding shares following this offering, 8,333,334 or 93.7% (minimum) or 88.2% (maximum) are restricted from immediate resale but may be sold into the market beginning in ________, 2013 (90 days after date of this prospectus), subject to volume and manner of sale limitations under Rule 144. This could cause the market price of our common stock to drop significantly, even if our business is doing well. After this offering, we will have outstanding 9,444,445 shares (maximum) or 8,888,890 (minimum) of common stock based on the number of shares outstanding at December 31, 2012. This includes the common shares we are selling in this offering, which may be resold in the public market immediately. As restrictions on resale end, the market price of our stock could drop significantly if the holders of restricted shares sell them or are perceived by the market as intending to sell them.
+ 
+
+ We do not expect to pay dividends on common stock.
+ 
+
+ We have not paid any cash dividends with respect to our common stock, and it is unlikely that we will pay any dividends on our common stock in the foreseeable future. Earnings, if any, that we may realize will be retained in the business for further development and expansion. 
+ 
+
+ We have the ability to issue additional shares of our common stock and shares of preferred stock without asking for shareholder approval, which could cause your investment to be diluted.
+ 
+
+ Our Articles of Incorporation currently authorize the board of directors to issue up to 100,000,000 shares of Class A common stock, up to 10,000,000 shares of Class B common stock, and up to 5,000,000 shares of Preferred Stock. The power of the board of directors to issue shares of common stock, preferred stock, or warrants or options to purchase shares of common stock or preferred stock, is generally not subject to shareholder approval and may have the effect of diluting your investment.
+ 
+
+ 
+
+ 21
+ 
+
+ 
+
+ 
+
+ By issuing preferred stock, we may be able to delay, defer or prevent a change of control. 
+ 
+
+ Our Articles of Incorporation permit us to issue, without approval from our shareholders, a total of 5,000,000 shares of preferred stock. Our board of directors can also determine the rights, preferences, privileges and restrictions granted to, or imposed upon, and shares of preferred stock we issue and to fix the number of shares constituting any series and the designation of such series. It is possible that our board of directors, in determining the rights, preferences and privileges to be granted when the preferred stock is issued, may include provisions that have the effect of delaying, deferring or preventing a change in control, discouraging bids for our common stock at a premium over the market price, or that adversely affect the market price of and the voting and other rights of the holders of our common stock.
+ 
+
+ We have limited financial resources, and we may be unable to acquire additional financing if needed. 
+ 
+
+ We have limited financial resources. Although we believe that the proceeds from this offering will be adequate to support our operations for the next 12 months, we are an early stage company and may experience unanticipated difficulties, delays and expenses that could force us to either seek additional capital or scale back our operations significantly. In the event that we needed additional capital, there are no assurances that any such financings can be obtained on favorable terms, if at all. Moreover, any public or private offerings we pursue may dilute the ownership interests of our shareholders. 
+ 
+
+ Our founder has control over key decision making as a result of his control of a majority of our voting stock. 
+ 
+
+ As a result of the shares he holds, as well as voting arrangements with another shareholder, Drew Massey, our founder, Chairman, CEO and acting CFO, will be able to exercise voting rights with respect to an aggregate of 7,205,555 shares of Class B common stock and up to 416,667 shares of Class A common stock, which will represent up to 97.4% of the voting power of our outstanding capital stock following our initial public offering assuming all shares are sold. As a result, Mr. Massey has the ability to control the outcome of all matters submitted to our shareholders for approval, including the election of any directors and any merger, consolidation, or sale of all or substantially all of our assets. This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, or sale of all or substantially all of our assets that our other shareholders may support, or conversely this concentrated control could result in the consummation of such a transaction that our other shareholders do not support. This concentrated control could also discourage a potential investor from acquiring our Class A common stock due to the limited voting power of such stock relative to the Class B common stock and might harm the relative market price of our Class A common stock. In addition, Mr. Massey has the ability to control the management and major strategic investments of our company as a result of his position as our CEO and his ability to control the election or replacement of our directors. In the event of his death, the shares of our capital stock that Mr. Massey owns will be transferred to the persons or entities that he designates. As a board member and officer, Mr. Massey owes certain fiduciary duties to our shareholders and must act in good faith in a manner he reasonably believes to be in the best interests of our shareholders. However, as a shareholder, even a controlling shareholder, Mr. Massey is entitled to vote his shares, and shares over which he has voting control as a result of voting arrangements, in his own interests, which may not always be in the interests of our shareholders generally. For a description of these voting arrangements, see Description of Securities Voting Agreements. 
+ 
+
+ 
+
+ 22
+ 
+
+ 
+
+ 
+
+ The two class structure of our common stock has the effect of concentrating voting control with our founder and CEO; this limits our other shareholders and your ability to influence corporate matters. 
+ 
+
+ Our Class B common stock has 10 votes per share, and our Class A common stock, which is the stock we are offering in this offering, has only one vote per share. Drew Massey, our founder, Chairman, CEO and acting CFO, holds all of the Class B shares outstanding and will hold approximately 97.4% of the voting power of our outstanding capital stock immediately following this offering assuming all shares are sold. As a result, Mr. Massey will continue to have significant influence over the management and affairs of the company and control over matters requiring shareholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or our assets, for the foreseeable future. This concentrated voting control will limit your ability to influence corporate matters and could adversely affect the market price of our Class A common stock. 
+ 
+
+ If we lose the services of our founder, we could possibly have to suspend our business or cease operations. 
+ 
+
+ Drew Massey, our founder, Chairman, CEO and acting CFO, devotes substantially all of his time and attention to operating our business and is currently our only employee. Mr. Massey is critical to our vision, strategic direction, culture, programming and relationships with advertisers and talent. Our success depends entirely upon Mr. Massey s decision making, as well as his continued service and engagement. We do not maintain key-man insurance for Mr. Massey. Moreover, we do not have an employment agreement with him and he is not contractually bound to continue his service to us for any period of time or to not pursue other business or personal interests. Mr. Massey has been and continues to be involved in a few startups/ventures where he spends very minimal amounts of his time and attention. We cannot assure you that at some time in the future he will not decide to spend more time on some other business venture and less time on our business. The loss of Mr. Massey or his time and attention, even partially or temporarily, would materially and adversely harm our business and could force us to suspend or cease our operations. 
+ 
+
+ Our lack of experience as a public company could cause you to lose your entire investment.
+ 
+
+ We have never operated as a public company. We have no experience in complying with the various rules and regulations which are required of a public company. As a result, we may not be able to operate successfully as a public company, even if our overall operations are successful. We plan to comply with all of the various rules and regulations which are required of a public company. However, if we cannot operate successfully as a public company, your investment may be materially adversely affected and you could lose your entire investment in us.
+ 
+
+ 
+
+ 23
+ 
+
+ 
+
+ 
+
+ Our general and administrative expenses will increase as a public reporting company.
+ 
+
+ Upon the completion of this public offering our general and administrative expenses will increase. These expenses will include legal, accounting and financial compliance costs. Among other costs, new expenses include annual audits of our financial statements, review of our unaudited financial statements, legal reviews of our filings and Edgar filing costs. Additionally, we must ensure that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis.
+ 
+
+ If we fail to implement and maintain effective internal controls over our financial reporting, the accuracy and timeliness of our financial reporting may be adversely affected, we may be less able to detect fraud, and we may be subject to sanctions by regulatory authorities. 
+ 
+
+ Section 404 of the Sarbanes-Oxley Act of 2002 requires that every public company include in its annual report a management report on such company's internal controls over financial reporting systems that contains an assessment of the effectiveness of such internal controls. We are currently in the process of determining the effectiveness of our existing internal controls over our financial reporting systems and whether such controls are compliant with Section 404. In the event that we determine that our existing internal controls are inadequate, we would need to implement new processes and procedures which could result in higher operating expenses, as well as outside auditor fees. We currently do not have any full-time accounting personnel, and Mr. Massey, our founder, Chairman and CEO, serves as our acting Chief Financial Officer. However, Mr. Massey has not been trained as an accountant. As a result of our limited resources, we may have difficulty in achieving and maintaining the adequacy of our internal controls and could need to hire additional personnel. The failure to maintain effective internal controls could reduce the reliability of our financial statements, increase the potential for fraud and result in a loss of investor confidence. Moreover, if we are not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, we may be subject to sanctions or investigation by regulatory authorities, such as the U.S. Securities and Exchange Commission. Any of the foregoing events could adversely affect our financial results or could cause our stock price to fall. 
+ 
+
+ We do not have an audit or compensation committee, and shareholders will have to rely on our board of directors to perform these functions. 
+ 
+
+ We do not have an audit or compensation committee comprised of independent directors, and these functions are performed by all of the members of our board of directors. None of our board members has the experience or background necessary to be qualified to be an audit committee financial expert under the rules of the U.S. Securities and Exchange Commission, and this may impair their ability to analyze our financial statements and evaluate our internal controls and the procedures for financial reporting. Until we have a qualified and independent audit committee, there may be less oversight of management decisions and activities and little ability for minority shareholders to challenge or reverse those activities and decisions, even if they are not in the best interests of minority shareholders. 
+ 
+
+ 
+
+ 24
+ 
+
+ 
+
+ 
+
+ Only the first $250,000 of proceeds in the Offering Escrow Account will be federally insured by the FDIC.
+ 
+
+ To the extent that we are successful in raising more than $250,000 in our offering, any funds in excess of the $250,000 which are held in the Offering Escrow Account will not be federally insured by the FDIC, and therefore, if Key Bank goes out of business it is highly likely that any funds in excess of $250,000 would be lost and not be returned to investors in this offering.
+ 
+
+ If we do not file a Registration Statement on Form 8-A to become a mandatory reporting company under Section 12(g) of the Securities Exchange Act of 1934, we will continue as a reporting company but we will not be subject to the proxy statement or other information requirements of the 1934 Act, our securities will not be eligible to be quoted on the OTC Bulletin Board, and our officers, directors and 10% stockholders will not be required to submit reports to the SEC on their stock ownership and stock trading activity, all of which could reduce the value of your investment and the amount of publicly available information about us.
+ 
+ As a result of this offering, assuming it is declared effective in the year ended December 31, 2013, Section 15(d) of the Securities Exchange Act of 1934, would require that we will file periodic reports with the Securities and Exchange Commission covering the period through December 31, 2013, including a Form 10-K for the year ending December 31, 2013. Prior to attempting to secure a qualification for our securities to trade on the Over the Counter Bulletin Board, we intend to voluntarily file a registration statement on Form 8-A which will subject us to all of the reporting requirements of the 1934 Act. This will require us to file quarterly and annual reports with the SEC and will also subject us to the proxy rules of the SEC. In addition, our officers, directors and 10% stockholders will be required to submit reports to the SEC on their stock ownership and stock trading activity. We are not required under Section 12(g) or otherwise to become a mandatory 1934 Act filer unless we have more than 500 shareholders and total assets of more than $10 million on December 31, 2013. If we do not file a registration statement on Form 8-A at or prior to December 31, 2013, and if we have less than three hundred record holders on January 1, 2014, our reporting obligations under Section 15(d) will be suspended and we will not be required to file periodic reports following our Form 10-K for the year ended December 31, 2013.
+ 
+
+ Risks Relating to the JOBS Act
+ 
+
+ The recently enacted JOBS Act will allow our company to postpone the date by which it must comply with certain laws and regulations intended to protect investors and to reduce the amount of information provided in reports filed with the SEC. We cannot be certain if these delayed or reduced obligations will make our common stock less attractive to investors. 
+ 
+
+ The JOBS Act was intended to reduce the regulatory burden on emerging growth companies . So long as we qualify as an emerging growth company, we will, among other things: 
+ 
+
+ 
+
+ 25
+ 
+
+ 
+
+ 
+
+ 
+ be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting; 
+ 
+
+ 
+ be exempt from the say on pay provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the say on golden parachute provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of The Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act ) and certain disclosure requirements of the Dodd-Frank Act relating to compensation of Chief Executive Officers; 
+ 
+
+ 
+ be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Exchange Act, as amended and instead provide a reduced level of disclosure concerning executive compensation; and 
+ 
+
+ 
+ be exempt from any rules that may be adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor s report on the financial statements. 
+ 
+ We currently intend to take advantage of all reduced regulatory and reporting requirements that will be available to us so long as we qualify as an emerging growth company , and we have elected not to opt out of the extension of time to comply with new or revised financial accounting standards available under Section 107(b)(1) of the JOBS Act. Among other things, this means that our independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting which may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, we may elect not to provide certain information, including certain financial information and certain information regarding compensation of executive officers, which would otherwise have been required to provide in filings with the SEC, which may make it more difficult for investors and securities analysts to evaluate us. As a result, investor confidence in our company and the market price of our common stock may be adversely affected. 
+ 
+
+ Notwithstanding the above, we are also currently a smaller reporting company , meaning that we have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. In the event that we are still considered a smaller reporting company , at such time as we cease being an emerging growth company , the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an emerging growth company or a smaller reporting company . Specifically, similar to emerging growth companies , smaller reporting companies are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; are not required to conduct say-on-pay and frequency votes until annual meetings occurring on or after January 21, 2013; and have certain other decreased disclosure obligations in our SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status as an emerging growth company or smaller reporting company may make it harder for investors to analyze the Company s results of operations and financial prospects and could make our common stock less attractive to investors. 
+ 
+
+ 
+
+ 26
+ 
+
+ 
+
+ 
+
+ USE OF PROCEEDS
+ 
+
+ We have estimated the total proceeds from this offering to be $500,000, assuming a minimum subscription, or $1,000,000, assuming all shares are sold, which we cannot guarantee. These proceeds do not include offering costs, which we estimate to be $40,000. We expect to use the proceeds from this offering as set forth below, during the first 12 months after successful completion of this offering:
+ 
+
+ 
+ 
+ 
+ Minimum
+ Offering
+ ($500,000)
+ 
+ Total
+ Proceeds of
+ ($750,000)
+ 
+ Maximum
+ Offering
+ ($1,000,000)
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ Total Proceeds
+ 
+ $500,000
+ 
+ $750,000
+ 
+ $1,000,000
+
+ Less: Estimated Offering Expenses(1)
+ 
+ 40,000
+ 
+ 40,000
+ 
+ 40,000
+
+ 
+ 
+ $460,000
+ 
+ $710,000
+ 
+ $ 960,000
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ Programming(2)
+ 
+ $200,000
+ 
+ $300,000
+ 
+ $ 400,000
+
+ Sales and Marketing(3)
+ 
+ $ 75,000
+ 
+ $112,500
+ 
+ $ 150,000
+
+ Technology(4)
+ 
+ $ 50,000
+ 
+ $ 75,000
+ 
+ $ 100,000
+
+ General and Administrative
+ 
+ $ 75,000
+ 
+ $112,500
+ 
+ $ 150,000
+
+ Working Capital
+ 
+ $ 60,000
+ 
+ $110,000
+ 
+ $ 160,000
+
+ _________________________
+ 
+
+ (1)
+ Offering expenses include legal, accounting, printing, and escrow agent fees. The escrow agent fees are estimated at $1,500. 
+ (2)
+ Includes salaries for producers, production and creative personnel, payment for purchasing non-sponsored programming, talent fees to celebrities, and a live studio lease.
+ (3)
+ Consists of minimal sales staff and audience development costs (e.g., ad buys, partnerships and contests).
+ (4)
+ Includes approximately $50,000 upfront for hardware and software and $5,000 per month thereafter.
+ 
+
+ The allocation of the net proceeds of this offering set forth above is based on our cost estimates and current business plans. If actual costs exceed these estimates or unanticipated events require a change in our plans, we may find it necessary or advisable to reallocate some of the proceeds or may be unable to fund certain activities.
+ 
+
+ Specifically, the primary use of proceeds will be an investment to open a studio in the Los Angeles area in order to produce fresh daily premium content to be added to the maniaTV.com library. The secondary use of proceeds is the hiring of the core staff on the programming and advertising sides of the business. Additionally, we will make smaller technological investments in backend broadband servers and the development of a maniaTV App.
+ 
+
+ Until we use the net proceeds for the above purposes, we intend to invest such funds in short-term, interest-bearing, investment-grade obligations and deposit accounts.
+ 
+
+ We believe that our available cash and existing sources of funding, together with the minimum proceeds of this offering and interest earned thereon, will be adequate to maintain our current and planned operations for at least the next twelve months.
+ 
+
+ 27
+ 
+
+ 
+
+ 
+
+ 
+
+ DETERMINATION OF OFFERING PRICE
+ 
+
+ The offering price of the shares has not been determined by any independent financial evaluation, market mechanism or by our auditors, and is therefore, arbitrary. Because we have no significant operating history and have generated limited revenues to date, the price of our Class A common stock is not based on past earnings, nor is the price of our Class A common stock indicative of the current market value of the assets owned by us. As a result, the price of the Class A common stock in this offering may not reflect how the stock is received on the market. There can be no assurance that the shares offered hereby are worth the price for which they are offered and investors may therefore lose a portion or all of their investment. 
+ 
+
+ DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
+ 
+
+ Dilution represents the difference between the offering price and the net tangible book value per share immediately after completion of this offering. Net tangible book value is the amount that results from subtracting total liabilities and intangible assets from total assets. Dilution arises mainly as a result of our arbitrary determination of the offering price of the shares being offered. Dilution of the value of the shares you purchase is also a result of the lower book value of the shares held by our existing stockholders. As of December 31, 2012, the net tangible book value of our shares was $64,768, or approximately $0.008 per share, based upon 8,333,334 shares outstanding. Throughout this Dilution section, we have assumed that all Class B shares have been converted to Class A shares.
+ 
+
+ Upon completion of this offering, but without taking into account any change in the net tangible book value after completion of this offering, other than that resulting from the sale of the minimum (maximum) Shares and receipt of the proceeds of $500,000 ($1,000,000), less offering expenses of $40,000, the net tangible book value of the 9,444,445 shares to be outstanding, assuming a maximum subscription, will be $1,024,768, or approximately $0.109 per Share. If the minimum number of Shares is sold, of which there can be no guarantee, the net tangible book value of the 8,888,890 shares to be outstanding would be $524,768, or approximately $0.059 per share. Accordingly, the net tangible book value of the Shares held by our existing stockholders will be increased by $0.101 per share, assuming a maximum subscription and by $0.051 assuming a minimum subscription. Assuming a maximum subscription, without any additional investment on their part, and the purchasers of Shares in this offering will incur immediate dilution (a reduction in net tangible book value per Share from the offering price of $0.90 per Share) of $0.791 per share. If we sell the minimum amount, they will incur immediate dilution (a reduction in net tangible book value per Share from the offering price of $0.90 per Share) of $0.841 per share. 
+ 
+
+ After completion of the sale of the minimum number of shares in this offering, the new shareholders will own approximately 6.3% of the total number of shares then outstanding, for which they will have made a cash investment of $500,000, or $0.90 per Share. Upon completion of the sale of the maximum number of Shares in this offering, the new shareholders will own approximately 11.8% of the total number of shares then outstanding, for which they will have made a cash investment of $1,000,000, or $0.90 per Share. The existing stockholders will own approximately 93.7% and 88.2% based on the minimum and maximum proceeds received of the total number of shares then outstanding, for which they have made contributions of cash and/or services and/or other assets, totaling $10.00 or $0.000001 per share.
+ 
+
+ 28
+ 
+
+ 
+
+ 
+
+ 
+
+ The following table illustrates the per share dilution to new investors, assuming both the minimum and maximum number of shares being offered, and does not give any effect to the results of any operations subsequent to December 31, 2012 or the date of this registration statement:
+ 
+
+ 
+ 
+ 
+ Minimum
+ Offering
+ 
+ Maximum
+ Offering
+
+ 
+ 
+ 
+ 
+ 
+
+ Public Offering Price Per Share
+ 
+ $0.900
+ 
+ $0.900
+
+ Net Tangible Book Value Prior to This Offering
+ 
+ $0.008
+ 
+ $0.008
+
+ Net Tangible Book Value After This Offering
+ 
+ $0.051
+ 
+ $0.101
+
+ Immediate Dilution Per Share to New Investors
+ 
+ $0.841
+ 
+ $0.791
+
+ 
+
+ The following table summarizes the number and percentage of shares purchased, the amount and percentage of consideration paid and the average price per Share paid by our existing stockholders and by new investors in this offering:
+ 
+
+ 
+ 
+ 
+ Total
+
+ 
+ 
+ Price
+ Per Share
+ 
+ Number of
+ Shares Held
+ 
+ Percent of
+ Ownership
+ 
+ Consideration
+ Paid
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ Existing Shareholders
+ 
+ $0.00
+ 
+ 8,333,334 
+ 
+ 93.7% (Min)
+ 88.2% (Max)
+ 
+ $ 10 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ Investors in This Offering
+ (Minimum)
+ 
+ $0.90
+ 
+ 555,556 
+ 
+ 6.3%
+ 
+ $ 500,000 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ Investors in This Offering
+ (Maximum)
+ 
+ $0.90
+ 
+ 1,111,111 
+ 
+ 11.8%
+ 
+ $1,000,000 
+
+ 
+
+ PLAN OF DISTRIBUTION
+ 
+
+ We are offering 1,111,111 shares of our Class A common stock on a self-underwritten, best-efforts basis with a minimum of 555,556 shares and a maximum of 1,111,111 shares. These shares will be sold through Drew Massey who serves as our Chief Executive Officer, President, Acting Chief Financial Officer, Secretary and a director. Our officers and directors will not purchase shares in this offering, including, but not limited to, purchases of Shares in order to reach the minimum offering amount.
+ 
+
+ In offering the securities on our behalf, Drew Massey will rely on the safe harbor from broker dealer registration set out in Rule 3a4-1 under the Securities Exchange Act of 1934. We believe that Drew Massey specifically meets the provisions of Rule 3a4-1(a)(1)-(3) and (4)(ii) because he is not subject to a statutory disqualification, as that term is defined under Section 3(a)39 of the Securities Exchange Act of 1934; he will not be compensated, directly or indirectly for his participation in the offering; he will not be, at the time of his participation, an associated person of a broker or dealer; and he will meet all of the elements of Rule 3a4-1(a)(4)(ii). 
+ 
+
+ The shares will be sold at the fixed price of $0.90 per Share until the completion of this offering. There is no minimum amount of subscription required by any particular investor. 
+ 
+
+ 
+
+ 29
+ 
+
+ 
+
+ 
+
+ The shares will only be offered and sold in states where the shares have been registered or qualified for sale or where there is an exemption from such registration available which we have complied with.
+ 
+
+ This offering will commence on the date of this prospectus and continue for a period of 150 days, unless we extend the offering period for an additional 90 days, or unless the offering is completed or otherwise terminated by us for a potential total of 240 days (the Expiration Date ). If we extend the offering beyond the initial 150 days, it would most likely be because we are getting close to the minimum and we believe that with a little more time and effort we could reach the minimum or it could be because we have exceeded the minimum but we believe that with a little more time and effort we could raise additional funds. If we do extend the offering beyond the initial 150 days we will use email or regular mail to contact the persons who have already invested and advise them that we are extending the offering.
+ 
+
+ Pending the receipt and payment of any checks gathered to satisfy the $500,000 minimum, all proceeds will be held in a non-interest bearing escrow by the Escrow Agent for this offering at Key Bank in Denver, Colorado. The Escrow Agent is Corporate Stock Transfer, Inc., who has the sole signature authority over this account and determines whether the minimum offering requirements are satisfied. Funds will be deposited in this escrow account promptly following receipt. In the event the minimum is not sold within the 150-day offering period or any extension of an additional 90 days at our discretion, this offering will terminate and all funds will be returned promptly to subscribers by the Escrow Agent without any deductions or payment of interest. Subscribers will not be entitled to a return of funds from such escrow during the 150-day offering period or any extension period, for a potential total of 240 days. Once the minimum offering requirements are satisfied, the funds will be released to us for use in the implementation of our business plans. (See Use of Proceeds. ) The offering will then continue until the maximum offering is sold and the total of $1,000,000 is received, or the offering expires, whichever first occurs. Once the maximum amount has been raised, all funds collected up to the maximum will be deposited directly into our operating bank account for use in operations. In the event the minimum offering amount is not sold prior to the Expiration Date, all monies will be returned to investors, without interest or deduction.
+ 
+
+ There is currently no market for any of our shares, and we cannot give any assurance that our shares will have any market value. Although we intend to apply for trading of our common stock on the Over-the-Counter Bulletin Board electronic quotation service, public trading of our common stock may never materialize. In addition, if a market for our stock does materialize, we cannot give any assurances that a public market for our securities may be sustained.
+ 
+
+ LEGAL PROCEEDINGS
+ 
+
+ We are not involved in any pending legal proceeding nor are we aware of any pending or threatened litigation against us. In addition, there has been no litigation filed against us during the last ten years, and during the same period none of our officers and directors has been involved in any criminal proceedings, bankruptcy filings or other litigation of the type which is required to be disclosed.
+ 
+
+ 
+
+ 30
+ 
+
+ 
+
+ 
+
+ DIRECTORS, EXECUTIVE OFFICERS, 
+ PROMOTERS AND CONTROL PERSONS
+ 
+
+ Each of our directors is elected by the stockholders to a term of one year and serves until his successor is elected and qualified. Each of our officers is appointed by the board of directors to a term of one year and serves until his or her successor is duly appointed and qualified, or until he or she is removed from office. The board of directors has no committees.
+ 
+
+ The name, age and position of our officers and directors are set forth below:
+ 
+
+ 
+ Name
+ 
+ Age
+ 
+ Position(s)
+
+ 
+ 
+ 
+ 
+ 
+
+ Drew C. Massey
+ 
+ 42
+ 
+ President, Chief Executive Officer, Acting Chief Financial Officer, Secretary and Director
+
+ Warren W. Littlefield
+ 
+ 60
+ 
+ Director
+
+ Bruce E. Cunningham
+ 
+ 43
+ 
+ Director
+
+ D. Scott Massey
+ 
+ 47
+ 
+ Director
+
+ 
+
+ The persons named above are expected to hold said offices/positions until the next annual meeting of our stockholders. These are our only officers, directors, promoters and control persons.
+ 
+
+ Background Information about Our Officers and Directors
+ 
+
+ Drew Massey, Chief Executive Officer, Acting Chief Financial Officer, Secretary, and Director. Drew Massey is our founder and he has served as its CEO, acting CFO and a director since April 2009. From January 2003 to July 2007, Mr. Massey served as the Chief Executive Officer and Chairman of the board of directors of The ManiaTV Network, Inc. From July 2007 to March 2009, Mr. Massey served as Chairman of the board of directors of The ManiaTV Network, Inc. Prior to that, Mr. Massey launched national men s magazine POV in 1994 and served as President until March 2000. He has been and continues to be involved in a few startups/ventures, but he spends very minimal amounts of his time and attention on these other business ventures. Mr. Massey graduated from Boston College with a bachelor s degree in Economics and Finance in 1992. We believe that Mr. Drew Massey s twenty years of advertising, media and entertainment experience enables him to make valuable contributions to our board of directors.
+ 
+
+ 
+
+ 31
+ 
+
+ 
+
+ 
+
+ 
+
+ Warren Littlefield, Director. Warren Littlefield has served on our board of directors since September 2012. He founded The Littlefield Company in 1999 which develops and produces television programming for both network and cable. Littlefield had a history-making 2 decade career (1979-1999) at NBC where under his watch as President of the Entertainment Division, NBC won 168 Emmy awards. In this role he oversaw the development and production of NBC s prime-time, late-night and Saturday-morning entertainment programming. While at NBC, Littlefield was responsible for developing many of the series that defined quality programming. As head of the comedy department he developed THE COSBY SHOW, THE GOLDEN GIRLS, ALF, and THE FRESH PRINCE OF BEL-AIR. In his last four years with the network, Mr. Littlefield orchestrated a renaissance at NBC and a return to first place in the ratings race fueled by SEINFELD, ER, FRIENDS, FRASIER, MAD ABOUT YOU, JUST SHOOT ME, 3RD ROCK FROM THE SUN, NEWSRADIO, HOMICIDE: LIFE ON THE STREETS. In his final year at NBC, he supervised the development of WILL & GRACE and THE WEST WING. He initiated the development of LAW AND ORDER: SVU which began the industry trend of procedural spin-offs. During his last three seasons with the network, NBC sold an industry record $6.5 billion in prime-time advertising--$2 billion more than its closest competitor. In 2012, Doubleday published Littlefield s New York Times bestselling memoir TOP OF THE ROCK: INSIDE THE RISE AND FALL OF MUST SEE TV which documents his record-breaking years at NBC. Littlefield is on the Board of Directors of Dynamic Digital Depth (an AIM listed 3D technology company). He graduated from Hobart and William Smith Colleges in Geneva, New York and received a Bachelor of Arts Degree in Psychology. We believe that Mr. Littlefield s 30-plus years of entertainment experience qualify him to serve as a member of our board of directors.
+ 
+
+ Bruce E. Cunningham, Director. Bruce E. Cunningham, Esq., has served on our board of directors since September 2012. Mr. Cunningham is presently Managing Director of Roundtable Venture Partners, LLC. From December 2005 to November 2011, Mr. Cunningham served in a variety of capacities for Jones International, Ltd. and its subsidiaries, a leading media and entertainment conglomerate, including Chief Operating Officer; Chief Strategy Officer; Executive Vice President, Corporate Development; and Chief Legal Officer. During his tenure at Jones, he led several prominent media transactions including the $100 million leveraged buyout of Jones Media Group by Dial Global (NASDAQ: DIAL), a radio programming syndication company affiliated with Oaktree Capital Management and The Gores Group. Mr. Cunningham began his legal career in 1996 with the Silicon Valley-based law firm of Brobeck, Phleger & Harrison LLP where his legal practice focused on media, technology and emerging growth companies. He has also served in leadership roles at Morrison & Foerster LLP and Greenberg Traurig LLP, as well as Inflow, Inc., a leading Internet data center provider, where he served as its Vice President of Strategy and Corporate Development. Mr. Cunningham graduated from the University of Virginia School of Law where he was a Society of Cincinnati Scholar, and he earned his B.A. in Economics from Trinity University where was inducted into the Phi Beta Kappa honor society. Mr. Cunningham has also attended the Aresty Institute of Executive Education at the University of Pennsylvania s Wharton School of Business, as well as the Darden School of Business at the University of Virginia. We believe that Mr. Cunningham s legal training and experience and his 7 years of executive experience with media companies qualifies him to serve as a member of our board of directors.
+ 
+
+ 
+
+ 32
+ 
+
+ 
+
+ 
+
+ D. Scott Massey, Director. Scott Massey has served as one of our directors since September 2012. Mr. Massey has served as Senior Vice President Corporate Partnerships for the Jacksonville Jaguars since he joined the Jaguars in May 2012 to lead the team s sponsorship group. Prior to joining the Jaguars, he spent nine years at the PGA TOUR where he served as Vice President, Business Development/Title Sponsor Relations overseeing many of the TOUR s title sponsor relationships, ranging from automotive (BMW Championship, Honda Classic, Hyundai Tournament of Champions) to financial and insurance services (Wells Fargo Championship, The Barclays, Travelers Championship) to consumer products (Sony Open in Hawaii, HP Byron Nelson Championship) and others. Prior to this role, Mr. Massey managed several of the PGA TOUR s largest Official Marketing Partnerships, including Anheuser-Busch, Delta Airlines, IBM and MasterCard. Prior to joining the PGA TOUR, he held sales and marketing roles with several sports related companies including International Management Group (IMG), golfweb.com and Quokka Sports. Mr. Massey also brings wireless telecom experience to our board of directors, having served as Vice President of Sales for PureMatrix and Director of Business Development for PacketVideo both of which entailed working with wireless carriers in Europe (Orange, O2) and North America (Sprint). Mr. Massey grew up in Boulder, CO and is a graduate of the University of Colorado, earning his Bachelor s Degree in finance in 1987. We believe that Mr. Massey s 20 plus years of media and sports marketing experience plus his wireless telecom experience qualify him to serve as a member of our board of directors.
+ 
+
+ EXECUTIVE COMPENSATION
+ 
+
+ Summary Compensation 
+ 
+
+ The following table sets forth information for our two most recently completed fiscal years concerning the compensation of the Principal Executive Officer. There are no other executive officers, and no employees earned a salary over $100,000 in the last two completed fiscal years.
+ 
+
+ 
+ Name and 
+ Principal Position
+ Year
+ Salary
+ ($)
+ Bonus
+ ($)
+ Stock Awards
+ ($)
+ Option
+ Awards
+ ($)
+ Non-Equity
+ Incentive Plan
+ Compensation
+ ($)
+ Nonqualified
+ Deferred
+ Compensation
+ Earnings ($)
+ All Other
+ Compensation
+ ($)
+ Total ($)
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ Drew Massey
+ 2012
+ $150,000
+ $140,000
+ -
+ -
+ -
+ -
+ -
+ $290,000
+
+ 
+ 2011
+ $ --
+ -
+ -
+ -
+ -
+ -
+ $43,121
+ $43,121
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+
+ During the year ended December 31, 2012, we started paying Mr. Massey compensation as we started generating positive cash flow. Accordingly, during this period he was paid a salary of $150,000 and a year end bonus of $140,000. We expect to continue to pay Mr. Massey a significant part of our free cash flow until such time as we close our initial public offering. At that time we will continue paying him an annual salary of $150,000 plus bonuses as determined by our board of directors.
+ 
+
+ In September 2012 we purchased a vehicle for the use of Mr. Massey using cash generated from our business. We do not have an employment agreement with Mr. Massey.
+ 
+
+ 
+
+ 33
+ 
+
+ 
+
+ 
+
+ Directors Compensation
+ 
+
+ Our directors have not been paid any compensation for serving as directors of the Company, and there are no specific plans or understandings with respect to future compensation other than the issuance of annual stock options or restricted stock in amounts which have not been determined.
+ 
+
+ 2010 Stock Incentive Plan
+ 
+
+ During April 2010, our board of directors and our stockholders adopted our 2010 Stock Incentive Plan (the 2010 Plan or the Plan ). The following is a summary of the 2010 Plan.
+ 
+
+ Description of the Plan
+ 
+
+ The board of directors believes that the 2010 Plan will advance the interests of the Company by encouraging and providing for the acquisition of an equity interest in the Company by employees, officers, directors, consultants, advisors, and service providers who provide services to the Company, and by providing additional incentives and motivation toward superior Company performance. The Board believes it also will enable the Company to attract and retain the services of key employees, officers, directors, consultants, and service providers by providing additional incentives and motivation toward superior Company performance.
+ 
+
+ General
+ 
+
+ The total number of shares that may be issued pursuant to Stock Incentives under this Plan shall not exceed Ten Million (10,000,000), subject to adjustment in the event of certain recapitalizations, reorganizations and similar transactions.
+ 
+
+ The 2010 Plan will be administered by the board of directors or a committee appointed by our board of directors. Our board of directors has administered the Plan since it was created. The board of directors has full and exclusive power within the limitations set forth in the Plan to make all decisions and determinations regarding the selection of participants and the granting of awards; establishing the terms and conditions relating to each award; adopting rules, regulations and guidelines; and interpreting the Plan. The board of directors will determine the appropriate mix of stock options and stock awards to be granted to best achieve the objectives of the Plan. The 2010 Plan may be amended by the board of directors, without the approval of stockholders, but no such amendments may increase the number of shares issuable under the Plan or adversely affect any outstanding awards without the consent of the holders thereof.
+ 
+
+ Eligibility
+ 
+
+ Key employees and directors of the Company or its subsidiaries and consultants, advisors and service providers who are eligible to receive shares which are registered on SEC Form S-8 are eligible to receive awards under the 2010 Plan.
+ 
+
+ 
+
+ 34
+ 
+
+ 
+
+ 
+
+ Types of Awards
+ 
+
+ The board of directors may determine the type and terms and conditions of awards under the 2010 Plan. Awards may be granted in a combination of stock options, stock appreciation rights, and/or stock awards. Such awards may have terms providing that the settlement or payment of one type of award automatically reduces or cancels the remaining award. Awards under the Plan may include the following:
+ 
+
+ Stock Options. Stock options entitle their holders to purchase shares of Common Stock at a specified price for a specified period. The exercise price of each option may not be less than 100% of fair market value on the date of grant. 
+ 
+
+ Any stock option granted in the form of an incentive stock option will be intended to comply with the requirements of Section 422 of the Internal Revenue Code of 1986, as amended. Only options granted to employees qualify for incentive stock option treatment. No incentive stock option shall be granted after April 2, 2020, which is 10 years from the date the Plan was initially adopted. A stock option may be exercised in whole or in installments, which may be cumulative. Shares of Common Stock purchased upon the exercise of a stock option must be paid for in full at the time of the exercise in cash or such other consideration determined by the board of directors. Payment may include tendering shares of Common Stock or surrendering of a stock award, or a combination of methods.
+ 
+
+ Stock Appreciation Rights. A stock appreciation right is the right to receive a payment equal to the excess of the fair market value of a specified number of shares of Common Stock on the date the stock appreciation right is exercised over the fair market value on the date of grant of the stock appreciation right. Any stock appreciation rights granted under the 2010 Plan will require that payment upon exercise be in the form of Common Stock of the Company.
+ 
+
+ Stock Awards. Stock awards are awards made in Common Stock or denominated in Common Stock units which entitle the recipient to receive future payments in either shares, cash, or a combination thereof. Awards may be subject to conditions established by the board of directors and set forth in the award agreement, and which may include, but are not limited to, continuous service with the Company, achievement of specific business objectives, and other measurements of performance. Awards may be subject to restrictions and contingencies regarding vesting and eventual payment as the board of directors may determine.
+ 
+
+ Terms of Awards. All awards made under the 2010 Plan may be subject to vesting and other contingencies as determined by the board of directors and will be evidenced by agreements approved by the board of directors which set forth the terms and conditions of each award. The board of directors, in its discretion, may accelerate or extend the period for the exercise or vesting of any awards.
+ 
+
+ Generally, all awards, except non-incentive stock options, granted under the 2010 Plan shall be nontransferable except by will or in accordance with the laws of descent and distribution or pursuant to a domestic relations order. During the life of the participant, awards can be exercised only by the participant. The board of directors may permit a participant to designate a beneficiary to exercise or receive any rights that may exist under the 2010 Plan upon the participant s death.
+ 
+
+ 
+
+ 35
+ 
+
+ 
+
+ 
+
+ Change in Control
+ 
+
+ Upon the occurrence of an event constituting a change in control of the Company as defined in the 2010 Plan, all awards outstanding will become immediately vested.
+ 
+
+ Tax Consequences
+ 
+
+ The following are the federal tax consequences generally arising with respect to awards granted under the 2010 Plan. The grant of an option will create no tax consequences for an optionee or the Company. The optionee will have no taxable income upon exercising an incentive stock option (except that the alternative minimum tax may apply), and the Company will receive no deduction when an incentive stock option is exercised. Upon exercising an option other than an incentive stock option, the optionee must recognize ordinary income equal to the difference between the exercise price and the fair market value of the stock on the date of exercise; the Company will be entitled to a tax deduction for the same amount. The tax treatment for an optionee on a disposition of shares acquired through the exercise of an option depends on how long the shares have been held and whether such shares were acquired by exercising an incentive stock option or by exercising an option other than an incentive stock option. Generally, there will be no tax consequences to the Company in connection with the disposition of shares acquired under an option except that the Company may be entitled to a tax deduction in the case of a disposition of shares acquired under the incentive stock option before the applicable incentive stock option holding periods have been satisfied.
+ 
+
+ With respect to other awards granted under the 2010 Plan that are settled either in cash or in stock or other property that is either transferable or not subject to substantial risk of forfeiture, the participant must recognize ordinary income equal to the cash or fair market value of shares and the Company will be entitled to a deduction for the same amount. With respect to awards that are restricted as to transferability or subject to substantial risk of forfeiture, the participant must recognize ordinary income equal to the fair market value of the shares received at the time the shares or other property became transferable or not subject to substantial risk of forfeiture, whichever occurs earlier; the Company will be entitled to a deduction for the same amount.
+ 
+
+ Stock Option Grants
+ 
+
+ We granted a total of 363,346 options exercisable at $0.12 per share to a total of 18 persons in November 2010, and none of these persons have ever been officers or directors of the Company, except that three of these persons, William Littlefield, Bruce Cunningham and Scott Massey, became directors in September 2012. These options expire November 1, 2020.
+ 
+
+ Limitations on Liability and Indemnification Matters 
+ 
+ Our amended and restated articles of incorporation contains provisions that limit the liability of our directors for monetary damages to the fullest extent permitted by the Colorado Business Corporation Act. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors, except liability for: 
+ 
+
+ 
+
+ 36
+ 
+
+ 
+
+ 
+
+ 
+ any breach of the director s duty of loyalty to us or our stockholders; 
+ 
+
+ 
+ any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; 
+ 
+
+ 
+ unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 7-106-401 of the Colorado Business Corporation Act; or 
+ 
+
+ 
+ any transaction from which the director derived an improper personal benefit. 
+ 
+
+ Our amended and restated articles of incorporation and bylaws require us to indemnify our directors, executive officers and other key employees to the maximum extent not prohibited by the Colorado Business Corporation Act or any other applicable law and allow us to indemnify other officers, employees and other agents as set forth in the Colorado Business Corporation Act or any other applicable law. 
+ 
+
+ We have entered, and intend to continue to enter, into separate indemnification agreements with our directors, and executive officers, in addition to the indemnification provided for in our amended and restated articles of incorporation and bylaws. These agreements, among other things, require us to indemnify our directors and executive officers for certain expenses, including attorneys fees, judgments, penalties, fines and settlement amounts actually and reasonably incurred by a director or executive officer in any action, suit, or proceeding arising out of their services as one of our directors or executive officers, provided that the director or executive officer acted in good faith and in a manner he reasonably believes to be in or not opposed to the best interests of our company. We believe that these charter provisions and indemnification agreements are necessary to attract and retain qualified persons such as directors and officers. We also plan to maintain directors and officers liability insurance. 
+ 
+
+ The limitation of liability and indemnification provisions in our amended and restated articles of incorporation and bylaws may discourage stockholders from bringing a lawsuit against our directors and officers for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. 
+ 
+
+ At present, there is no pending litigation or proceeding involving any of our directors or executive officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification. 
+ 
+
+ Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (Securities Act), may be permitted to directors, executive officers or persons controlling us, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. 
+ 
+
+ 
+
+ 37
+ 
+
+ 
+
+ 
+
+ PRINCIPAL STOCKHOLDERS
+ 
+
+ The following table sets forth information with respect to the beneficial ownership of our common stock as of March 31, 2013, and as adjusted to reflect the sale of Class A common stock offered by us in our initial public offering, for: 
+ 
+
+ 
+ each stockholder known by us to be the beneficial owner of more than 5% of our outstanding shares of Class A common stock or Class B common stock; 
+ 
+ each of our directors; 
+ 
+ each of our named executive officers; and
+ 
+ all of our directors and executive officers as a group.
+ 
+
+ We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of Class A common stock or Class B common stock that they beneficially own. 
+ 
+
+ Applicable percentage ownership is based on 1,261,113 shares of Class A common stock and 7,205,555 shares of Class B common stock outstanding at November 15, 2012, assuming conversion of the $100,000 convertible promissory note into 133,334 shares of Class A common stock. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed to be outstanding all shares of common stock subject to options, held by that person that are currently exercisable or that will become exercisable within 60 days of March 31, 2013. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o maniaTV Inc., 8335 Sunset Boulevard, West Hollywood, California 90069. 
+ 
+
+ 
+ Name of Beneficial Owner
+ Shares Beneficially Owned
+ Prior to Offering
+ % of Total Voting Power Before Offering
+ % of Total Voting Power After Minimum Offering
+ % of Total Voting Power After Maximum Offering
+
+ Class A
+ Class B
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ Drew Massey
+ 416,667(1)
+ (33.0%) 
+ 7,205,555 
+ (100%) 
+ 98.8%
+ 98.1%
+ 97.4%
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ Warren W. Littlefield
+ 62,500(2)
+ (4.7%) 
+ -- 
+ 0.1%
+ 0.1%
+ 0.1%
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ Bruce Cunningham
+ 41,667(3)
+ (3.2%) 
+ -- 
+ 0.1%
+ 0.1%
+ 0.1%
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ Scott Massey
+ 41,667(4)
+ (3.2%) 
+ -- 
+ 0.1%
+ 0.1%
+ 0.1%
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ EBX V, L.P.
+ 416,667(5)
+ (33.0%) 
+ -- 
+ 0%
+ 0%
+ 0%
+
+ 
+ 
+ 
+ 
+ 
+ 
+
+ All Officers and Directors as
+ a group (4 persons)
+ 562,501 
+ (40.0%) 
+ 7,205,555 
+ 98.9%
+ 98.1%
+ 97.4%
+
+ 
+
+ 
+
+ 38
+ 
+
+ 
+
+ 
+
+ _____________________
+ 
+
+ (1)
+ Represents 416,667 shares of Class A common stock owned by EBX V, L.P. for which Mr. Massey has a proxy and power of attorney to vote the shares.
+ (2)
+ Represents 62,500 shares of Class A common stock underlying options held by Mr. Littlefield.
+ (3)
+ Represents 41,667 shares of Class A common stock underlying options held by Mr. Cunningham.
+ (4)
+ Represents 41,667 shares of Class A common stock underlying options held by Mr. Massey.
+ (5)
+ Drew Massey has a proxy and power of attorney to vote these shares.
+ 
+
+ Future Sales by Existing Stockholders
+ 
+
+ A total of 8,333,334 shares have been issued to the existing stockholders, all of which are restricted securities, as that term is defined in Rule 144 of the Rules and Regulations of the SEC promulgated under the Act. Under Rule 144, such shares can be publicly sold, subject to volume restrictions and certain restrictions on the manner of sale. Any sale of shares held by the existing stockholders (after applicable restrictions expire) and/or the sale of shares purchased in this offering (which would be immediately resalable after the offering), may have a depressive effect on the price of our common stock in any market that may develop, of which there can be no assurance.
+ 
+
+ DESCRIPTION OF SECURITIES
+ 
+
+ The following is a description of the material terms of our second amended and restated certificate of incorporation. This summary does not purport to be complete and is qualified in its entirety by reference to the actual terms and provisions of our second amended and restated certificate of incorporation, a copy of which has been filed as an exhibit to the registration statement of which this prospectus is a part. 
+ 
+
+ Authorized Capitalization 
+ 
+
+ Our authorized capital stock consists of: (i) 100,000,000 shares of Class A common stock, no par value; (ii) 10,000,000 shares of Class B common stock, no par value; and (iii) 5,000,000 shares of preferred stock, no par value. 
+ 
+
+ Common Stock 
+ 
+
+ Except with respect to voting and conversion, shares of Class A common stock and Class B common stock are identical in all respects. 
+ 
+
+ As of March 31, 2013, there were 3 holders of our Class A common stock and one holder of our Class B common stock. The holders of our common stock are entitled to the following rights: 
+ 
+
+ 
+
+ 39
+ 
+
+ 
+
+ 
+
+ Voting Rights 
+ 
+
+ One share of Class A common stock entitles the holders to one vote, and one share of Class B common stock entitles the holder to ten votes. Except as set forth below, all actions submitted to a vote of our stockholders are voted on by the holders of Class A common stock and Class B common stock voting together as a single class. The affirmative vote of the holders of a majority of the outstanding shares of Class A common stock or Class B common stock, voting separately as a class, is required to approve such matters as may require a class vote under the Colorado Business Corporation Act. 
+ 
+
+ Dividends and Other Distributions 
+ 
+
+ Holders of Class A common stock and Class B common stock will share equally in any dividends and other distributions in cash, stock or property (including distributions upon liquidation and consideration to be received upon a sale or conveyance of all or substantially all of our assets), declared by our Board, subject to any preferential rights of the holders of any then outstanding preferred stock. In the case of dividends or other distributions payable on the Class A common stock or the Class B common stock in shares of such stock, including distributions pursuant to stock splits or dividends, only Class A common stock will be distributed with respect to the Class A common stock and only Class B common stock will be distributed with respect to the Class B common stock. In no event will any of the Class A common stock or Class B common stock be split, divided or combined unless each other class of common stock is proportionately split, divided or combined. 
+ 
+
+ Convertibility 
+ 
+
+ The Class B common stock is convertible at any time at the option of the holder of the Class B common stock, into Class A common stock on a share-for-share basis. The shares of our Class B common stock will automatically convert into Class A common stock on a share-for-share basis (1) upon the sale or other transfer to a person that is not an affiliate of Drew Massey. 
+ 
+
+ Preemptive Rights 
+ 
+
+ Neither the Class A common stock nor the Class B common stock carry any preemptive rights entitling a holder to subscribe for or receive shares of any class of our stock or any other securities convertible into shares of any class of our stock. Our Board possesses the power to issue shares of authorized but unissued Class A common stock, Class B common stock and preferred stock without further stockholder action. 
+ 
+
+ 
+
+ 40
+ 
+
+ 
+
+ 
+
+ Liquidation, Dissolution or Winding Up 
+ 
+
+ In the event of any liquidation, dissolution or winding up, whether voluntarily or involuntarily, the holders of the Class A common stock and the Class B common stock shall be entitled to share ratably in any of our assets legally available for distribution to stockholders after payment or provision for payment of our debts and other liabilities. If we have any preferred stock outstanding at such time, holders of the preferred stock may be entitled to distribution or liquidation preferences. In either such case, we must pay the applicable distributions or preferential amounts to the holders of any preferred stock before we pay distributions to the Class A common stock and the Class B common stock. 
+ 
+
+ Preferred Stock
+ 
+
+ Our board of directors will have the authority, without approval by the stockholders, to issue up to a total of 5,000,000 shares of preferred stock in one or more series. Our board of directors may establish the number of shares to be included in each such series and may fix the designations, preferences, powers and other rights of the shares of a series of preferred stock. Our board could authorize the issuance of preferred stock with voting or conversion rights that could dilute the voting power or rights of the holders of common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of our company without further action by the stockholders. As of the date of this Prospectus, there are no outstanding shares of preferred stock and we have no current plans to issue any shares of preferred stock.
+ 
+
+ Options 
+ 
+
+ We have issued a total of 363,346 options exercisable at $0.12 per share pursuant to our 2010 Stock Incentive Plan. See Executive Compensation 2010 Stock Incentive Plan for more information on the 2010 Stock Option Plan and the options granted thereunder.
+ 
+
+ Convertible Note
+ 
+
+ In February 2011 we issued a convertible promissory note in the amount of $100,000 to an investor. The note is payable with our Class A common stock on the earlier of (i) December 31, 2013 or (ii) the closing of an initial public offering resulting in gross proceeds in an amount of not less than five hundred thousand dollars ($500,000). The note accrues interest at the rate of six percent (6%) per annum from February 3, 2011 until the note is paid or converted. 
+ 
+
+ The note is automatically converted into shares of common stock on the earlier of the completion of the initial public offering or December 31, 2013. If it is converted on the completion of the initial public offering, the note plus accrued interest will be converted at the public offering price. The note provides that if the note is converted on the completion of the initial public offering, the interest amount due is 20% of the note or $20,000. Therefore, on the completion of our initial public offering, the note and interest will be convertible into 133,334 shares of Class A common stock.
+ 
+
+ 
+
+ 41
+ 
+
+ 
+
+ 
+
+ If the note is not converted until December 13, 2013, then all principal and accrued but unpaid interest will be converted into such number of shares of common stock that would be equal to a pre-money valuation of the Company equal to $15,000,000.
+ 
+
+ Voting Agreement
+ 
+
+ Drew Massey, our CEO, has entered into a voting agreement with one of our stockholders which will remain in effect after the completion of this offering. This voting agreement is represented by an irrevocable proxy from EBX V, L.P., which owns a total of 416,667 shares of Class A common stock. This irrevocable proxy grants Drew Massey the power to vote the shares owned by EBX V, L.P. at his complete discretion on all matters to be voted upon by stockholders, and the proxy does not have an expiration date. A copy of this proxy is filed as an exhibit to the registration statement of which this prospectus is a part.
+ 
+
+ Anti-Takeover Provisions 
+ 
+
+ So long as the outstanding shares of our Class B common stock represent a majority of the combined voting power of common stock, Drew Massey will effectively control all matters submitted to our stockholders for a vote, as well as the overall management and direction of our company, which will have the effect of delaying, deferring or discouraging another person from acquiring control of our company. 
+ 
+
+ After such time as the shares of our Class B common stock no longer represent a majority of the combined voting power of our common stock, the provisions of our amended and restated articles of incorporation and our bylaws may have the effect of delaying, deferring or discouraging another person from acquiring control of our company. 
+ 
+ Amended and Restated Articles of Incorporation and Bylaw Provisions 
+ 
+ Our amended and restated articles of incorporation and our bylaws include a number of provisions that may have the effect of deterring hostile takeovers or delaying or preventing changes in control of our company, even after such time as the shares of our Class B common stock no longer represent a majority of the combined voting power of our common stock, including the following: 
+ 
+
+ 
+ Dual Class Stock. As described above in Common Stock Voting Rights, our amended and restated articles of incorporation provides for a dual class common stock structure, which provides Drew Massey, our founder and CEO, with the ability to control the outcome of matters requiring stockholder approval, even if he owns significantly less than a majority of the shares of our outstanding Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets. 
+ 
+
+ 
+ Stockholder Action; Special Meeting of Stockholders. Our restated certificate of incorporation provides that stockholders will be able to take action by written consent. When the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock, our stockholders will no longer be able to take action by written consent, and will only be able to take action at annual or special meetings of our stockholders. Stockholders will not be permitted to cumulate their votes for the election of directors.
+ 
+ 42
+ 
+ 
+
+ 
+ Issuance of Undesignated Preferred Stock. Our board of directors has the authority, without further action by the stockholders, to issue up to 5,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by the board of directors. The existence of authorized but unissued shares of preferred stock enables our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise. 
+ 
+
+ Shares Eligible for Future Sale
+ 
+
+ When we complete the maximum offering, we will have outstanding 2,238,890 shares of our Class A common stock and 7,205,555 shares of Class B common stock. The 1,111,111 shares of our Class A common stock sold in this offering will be freely transferable unless they are purchased by our affiliates, as that term is defined in Rule 144 under the Securities Act. The remaining outstanding shares of our Class A common stock and our Class B common stock will be restricted, which means they were originally issued in offerings that were not registered on a registration statement filed with the SEC. These restricted shares may be resold only through registration under the Securities Act or under an available exemption from registration, including the exemption provided by Rule 144.
+ 
+
+ Rule 144 
+ 
+
+ In general, under Rule 144 as currently in effect, once we have been subject to public company reporting requirements for at least 90 days, a person who is not deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least six months, including the holding period of any prior owner other than our affiliates, is entitled to sell those shares without complying with the manner of sale, volume limitation or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then that person is entitled to sell those shares without complying with any of the requirements of Rule 144. 
+ 
+
+ In general, under Rule 144, as currently in effect, our affiliates or persons selling shares on behalf of our affiliates are entitled to sell within any three-month period beginning 90 days after the date of this prospectus, a number of shares that does not exceed the greater of: 
+ 
+
+ 
+ 1% of the number of shares of common stock then outstanding, which will equal approximately 94,444 shares immediately after the maximum offering, or
+ 
+
+ 
+ the average weekly trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale. 
+ 
+
+ Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us. 
+ 
+
+ 43
+ 
+
+ 
+
+ 
+
+ 
+
+ DESCRIPTION OF OUR BUSINESS
+ 
+
+ Introduction
+ 
+
+ We were founded in 2009 by Drew Massey to build a leading pop-culture Internet, mobile and app-based video entertainment destination. Mr. Massey has over 20 years of experience in the media and entertainment industries and has extensive experience working with leading advertising agencies and brands, producing online content, building a media business, and developing relationships with top talent agencies and celebrities. We are currently in operations with the website www.maniaTV.com which has entertainment content and generates pageviews and advertising revenue. We intend to leverage our founder s experience in Internet television, brand advertising, and premium celebrity shows, to build a leading network of original pop-culture TV shows that will be available through our maniaTV jukebox . 
+ 
+
+ 
+
+ 
+ maniaTV homepage at www.maniaTV.com
+ 
+
+ 
+
+ 44
+ 
+
+ 
+
+ 
+
+ Mr. Massey is our founder, Chairman and Chief Executive Officer. From January 2003 until July 2007, he served as the Chief Executive Officer of The ManiaTV! Network, Inc., an Internet television pioneer. While at The ManiaTV! Network, he initiated a strategy of creating professionally produced pop-culture programming anchored by well-known celebrity hosts. His first celebrity show was a live nightly Internet TV talk show with comedian and actor Tom Green, Tom Green Live! , which launched in 2006. Prior to Tom Green Live! , Mr. Green had his own late-night talk show on MTV, had previously served as guest host for The Late Show with David Letterman, and was married to actress Drew Barrymore. We believe the Tom Green Live! show was the first live celebrity Internet TV show, and its launch was covered in dozens of media outlets including a live interview of Tom Green on The Tonight Show with Jay Leno and a national syndicated story by the Associated Press. Tom Green cited one of his main reasons for turning to Internet TV was his dissatisfaction with the lack of creative control over his cable television program on MTV. Following the successful launch of the Tom Green Live! show, Mr. Massey introduced a weekly Internet TV talk show with musician Dave Navarro named Spread TV which launched in 2007. Mr. Navarro is a popular American guitarist and television personality who is currently hosting the second season of Spike TV s Ink Master . Navarro previously hosted CBS s Rock Star and co-starred in MTV s 'Til Death Do Us Part: Carmen & Dave with Carmen Electra. During the production of these shows, Mr. Massey and his team developed new production techniques and ways to leverage new, emerging technologies that enabled them to produce professional-looking, network-style programming for a fraction of the cost of cable and TV networks. One of our principal operating strategies will be to develop professionally produced, pop-culture programming including: celebrity talk shows; reality shows; celebrity, athlete, artist and band interviews; concerts and other music-related shows; comedy shows; and game shows. 
+ 
+
+ Drew Massey has over 20 years of experience working in the media and entertainment industries. He started his career in 1992 working in the publishing industry for Forbes, Inc. where he created a new division, the American Heritage Custom Publishing Group. Following his tenure at Forbes, Mr. Massey founded P.O.V. (Point of View), a lifestyle magazine for young, professional men. P.O.V. launched in 1995 and received various industry accolades, including being named the Adweek Startup of the Year and the Adweek Hot Up & Comer . From 1995 to 2000, Massey and his team sold advertising to nearly 200 different brands while working with leading advertising agencies and attracted a number of well-known celebrities and athletes to appear on the magazine s cover including: Michael Richards (Seinfeld), Matthew Perry (Friends), Samuel Jackson, Matt Dillon, Tyra Banks, John Cusack, Kiefer Sutherland, Jeff Goldblum, KISS, Brett Farve, Ashley Judd, Grant Hill, Eric Lindros, Edward Burns, Matthew Broderick, Minnie Driver, Joaquin Phoenix, Stephen Dorff, Jon Favreau, Jenna Elfman, Mira Sorvino, Oscar de la Hoya, Jeff Goldberg, Jeff Gordon, Anna Kournikova, Debra Messing, Mena Suvari, and Daniela Pestova. 
+ 
+
+ We will seek to leverage the experience and expertise of Drew Massey, our founder, Chairman and Chief Executive Officer, to become a leading pop-culture Internet, mobile and app-based video entertainment destination. We believe that, through the prior experience of Mr. Massey, we have extensive experience working with leading advertising agencies and brands, relationships with content and advertising partners, extensive online content production expertise, and many connections with top talent agencies and celebrities, which will further our ability to execute our business plan. 
+ 
+
+ 
+
+ 45
+ 
+
+ 
+
+ 
+
+ Our Market Opportunity
+ 
+
+ We largely plan to make money the way that television always has through the sale of advertising. Our revenue from advertising sales constituted approximately 100% of our gross revenue in 2011 and 2012, and we expect to continue to derive most of our revenue from the sale of advertising in the future. 
+ 
+
+ We believe that our primary addressable market opportunity for advertising sales exists within the Internet advertising market in the United States. Internet advertising consists of advertising that appears on desktop and laptop computers, as well as mobile phones and tablets. According to an April 2012 report published by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP (PwC), aggregate Internet advertising revenues in the U.S. totaled approximately $26.0 billion in 2010 and grew to approximately $31.7 billion in 2011. Notably, according to this report, revenues from Internet advertising for 2011 surpassed cable television for the first time ever, and Internet advertising revenues have now surpassed every major advertising category other than broadcast television, including cable television, newspaper, magazines, radio, video games and cinema. Growth in Internet advertising is also expected to continue for the foreseeable future. A September 2012 report by eMarketer projects that Internet advertising will grow from approximately $26 billion in 2010 to approximately $52 billion in 2015, or a 5-year compound annual growth rate of approximately 14.9%. 
+ 
+
+ The Internet advertising market is generally divided as follows:
+ 
+
+ 
+ Display Advertising - Advertiser pays an Internet company for space to display a banner ad, video advertisement, rich media ad or sponsorship on one or more of the Internet company s webpages.
+ 
+
+ 
+ Search Fees - Advertisers pay fees to Internet companies to list and/or link their company site domain name to a specific search word or phrase.
+ 
+
+ 
+ Classifieds and Auctions - Advertisers pay fees to Internet companies to list specific products or services (e.g., online job boards and employment listings, real estate listings, automotive listings, auction-based listings, yellow pages).
+ 
+
+ 
+ Lead Generation - Advertisers pay fees to Internet advertising companies that refer qualified purchase inquiries or provide consumer information where the consumer opts into being contacted by a marketer. These processes are priced on a performance basis (e.g., cost-per-action, -lead or -inquiry), and can include user applications (e.g., for a credit card), surveys, contests (e.g., sweepstakes), or registrations. 
+ 
+
+ 
+ Mobile Advertising - Advertising tailored to and delivered through wireless mobile devices such as smartphones and tablets. 
+ 
+
+ 
+ Email - A form of direct marketing that uses banner ads, links or advertiser sponsorships which appear in email newsletters, email marketing campaigns and other commercial email communications. 
+ 
+
+ 
+
+ 46
+ 
+
+ 
+
+ 
+
+ We plan to initially target the display advertising segment of the U.S. Internet advertising market and, to a lesser degree, the mobile advertising segment. The September 2012 Report by eMarketer projected Internet display advertising will grow from approximately $9.9 billion in 2010 to approximately $23.1 billion in 2015, or a 5-year compound annual growth rate of approximately 18.5%. Display advertising sales constituted approximately 100% of our gross revenue in 2011 and 2012, and we expect to continue to derive most of our revenue from the sale of display advertising in the future. We have not had any mobile advertising sales to date and do not anticipate generating any material amount of mobile advertising revenue for some time. However, this market segment is important for strategic reasons, so we intend to devote a portion of our efforts to establishing this segment of our business. 
+ 
+
+ The display advertising market is generally separated into the following four segments:
+ 
+
+ 
+ Video - TV-like, digital video commercials that appear in live, on-demand and downloadable streaming content. Video ads commonly appear as in-page video commercials or before/during/after content such as streaming videos, music videos, animation, etc. 
+ 
+
+ 
+ Sponsorships - Custom content and/or experiences created for a specific advertiser that often incorporate various ad elements such as display advertising, brand logos, or pre-roll video. Examples of sponsorships include:
+ 
+
+ -
+ Custom-built webpages that incorporate an advertiser s brand and house a collection of content typically centered around a particular theme; 
+ 
+
+ -
+ Content and section sponsorship where an advertiser exclusively sponsors a particular section of the website; and
+ 
+
+ -
+ Sweepstakes and contest sponsorships where an advertiser sponsors a branded sweepstakes or contest that includes submissions and judging. 
+ 
+
+ 
+ Banner Ads Advertisements that are embedded into a web page and are typically intended to attract traffic by linking to the website of the advertiser. 
+ 
+
+ 
+ Rich Media - Advertisements that incorporate animation, sound, and/or interactivity. Rich media ads may appear in differing ad formats such as banner ads, buttons and interstitials (e.g., ads which appear in the transition between two pages of content, pop-up windows, etc.). 
+ 
+
+ Although we may from time to time receive revenue from all four display advertising segments, we believe that our Internet television offerings are particularly well suited for video advertising, and we plan to focus our initial advertising sales efforts on the video segment of the U.S. display advertising market and, to a lesser degree, the sponsorship advertising segment. The September 2012 report released by eMarketer projected that the Internet video advertising segment will grow from approximately $1.42 billion in 2010 to approximately $6.96 billion in 2015, or a 5-year compound annual growth rate of approximately 37.42%. Moreover, Internet sponsorship advertising will grow from approximately $710 million in 2010 to approximately $2.6 billion in 2015, or a 5-year compound annual growth rate of approximately 29.64%.
+ 
+
+ 47
+ 
+
+ 
+
+ 
+
+ 
+
+ The youth and young adult population that we intend to focus our pop-culture programming towards presents another key facet of our market opportunity. According to a January 2012 report by comScore, the millennial generation in the United States, consisting of individuals born between 1981 and 2000, is approximately 79 million strong with direct purchasing power of approximately $170 billion per year. This demographic group is approximately 65% larger than the 48 million Generation X ers (i.e., born between 1965 and 1980) and is the largest generation in the U.S. since the Baby Boomers (i.e., born between 1946 and1964). However, beyond its massive size and strong purchasing power, we believe that so-called Millennials are even more critical to advertisers because of the strong influence that youth and young adults typically have on the spending habits of family members and others. Youth and young adults are often so-called early adopters setting trends that are later adopted by other demographic groups, and consequently we believe that savvy marketers are keenly interested in how to more effectively reach and influence them. 
+ 
+
+ We believe that marketing through traditional mediums such as television, newspaper, magazines and radio is becoming increasingly ineffective for younger generations, and recent industry research has shown sharp declines in broadcast and cable viewership for certain key demographic groups. According to Nielsen, in the fall of 2012, the major broadcast networks lost an average of 15% of their viewers in the 18-49 demographic compared with the first two weeks of last season. Additionally, Nielsen found that the youth-focused cable television networks, MTV and Comedy Central, experienced sharp declines in the 18-49 demographic, with a 41% decline at MTV and a 27% drop at Comedy Central. Nielsen also reported that MTV s annual Video Music Awards show dropped over 50% to 6.1 million viewers from 12.5 million in 2011. Moreover, according to the January 2012 report by comScore, even when an advertiser can reach them through traditional television, the Millennial generation has proven to be harder to persuade with television advertising than members of older generations. 
+ 
+
+ Our Strategy
+ 
+
+ Our mission is to build a leading Internet, mobile and app-based video entertainment destination website that houses a jukebox of original, pop-culture oriented TV shows. Our strategy is centered on the development of a production studio, the maniaTV Creative Show Factory , that will enable us work with producers, writers, celebrities and other Hollywood talent to create original, network-style shows, available both live and on-demand and delivered via the Internet, that are designed to appeal to the pop-culture interests of youth and young adults. Key elements of our strategy include:
+ 
+
+ 
+ Opening a production studio: The maniaTV Creative Show Factory 
+We plan to use the proceeds of this offering to open a production studio in the Los Angeles-area to serve as our creative show factory. This studio will serve as our platform to co-create original programming with producers, writers, celebrities and other talent to build our jukebox of pop-culture content.
+ 
+
+ 
+
+ 48
+ 
+
+ 
+
+ 
+
+ 
+ Building an exclusive library of content focused on pop culture that will appeal to youth and young adults
+The company plans to focus its efforts on developing an exclusive library of professionally produced, pop-culture programming including: celebrity talk shows; reality shows; celebrity, athlete, artist and band interviews; concerts and other music-related shows; comedy shows; and game shows. We believe that our pop-culture content will have particular appeal to younger audiences, primarily 13-34 year olds, who have become increasingly more difficult to access through traditional media such as television, newspapers, magazines and radio. Although we plan to develop most of our library of content ourselves, we may from time-to-time license additional video content from third parties. Our long-term goal is to build an extensive library of content that is regularly updated with new programming. An example of the type of pop-culture content we re targeting is the 10-episode series of Snorfin that we produced with MADtv s Bobby Lee and is available via our website. 
+ 
+ Show logo and picture of the host, MADtv s Bobby Lee, for the
+ Snorfin series we produced.
+ 
+
+ 
+ Producing network-style programming at a fraction of network and cable TV costs
+Production costs for network and cable television are very high. We believe these high costs increase the underwriting risks for producers and distributors of new content, as well as decrease the choices available for consumers. We intend to leverage our founder s knowledge and experience to produce network-style programming at a fraction of the production costs of comparable shows produced for network and cable television. 
+ 
+
+ 
+ Leveraging celebrity endorsements and active celebrity participation in our marketing and branding efforts
+We plan to anchor our pop-culture programming with established celebrity personalities and leverage their fan bases and social followers, marketability and press worthiness to grow our audience and create brand awareness. We will seek to use revenue-sharing arrangements and other incentive mechanisms to develop strong relationships with our celebrities and incent them to serve as our marketing ambassadors. For example, we anticipate bearing all costs of production for our programs. However, we will seek to pay our celebrities lower upfront fees in exchange for a percentage of any net revenue received from their shows. We will seek to promote the shows, build the maniaTV brand, and proactively leverage our celebrities fan bases by requiring minimum promotional activities on the part of our celebrities, such as requirements to promote the shows using social media (e.g., Twitter, Facebook and Myspace), provide interviews and other promotional appearances, and participate in press tours.
+ 
+
+ 
+
+ 49
+ 
+
+ 
+
+ 
+
+ 
+ Providing anytime-anywhere access to our programming
+We believe that the Internet and the proliferation of digital video recorders for television have made consumers increasingly accustomed to accessing video content anytime they choose. Similarly, the increased availability of reliable broadband connectivity and video-enabled mobile devices, such as tablets, smartphones, netbooks and laptops, is driving demand for video services irrespective of the consumer s location. We refer to this as anytime-anywhere access and we intend to capitalize on these trends by building the maniaTV Jukebox that will provide anytime, on-demand access to our content library and a downloadable App for viewing our content anywhere on a host of platforms including mobile devices, online videogame consoles (e.g., Microsoft s Xbox), and Internet-to-TV devices (e.g., Apple TV, Roku, Google TV). 
+ 
+
+ 
+ Leveraging our high-quality programming and production capabilities to build strong, direct relationships with advertising agencies and brands
+To date, the majority of our advertising sales have come through third-party advertising networks that effectively serve as wholesalers for the Internet advertising market. Our studio and production capabilities will also enable us to create custom high quality programming and highly customizable, integrated advertising campaigns designed exclusively for certain advertisers. These campaigns may include a combination of: (i) sponsorship where an advertiser s product and messaging are directly integrated into our show, (ii) in-video advertisements (e.g., pre-roll, post-roll, mid-roll advertisements), and (iii) banner advertisements that are delivered either alongside a video or on the top or side of a web page. Our studio and production capabilities will also enable us to create custom programming and other content exclusively created or produced for certain advertisers. We believe that our production of celebrity-based, pop-culture programming will better enable us to sell customizable advertising solutions directly to advertising agencies at higher rates than standard advertising network rates. 
+ 
+
+ Competition
+ 
+
+ The entertainment industry is intensely competitive, and we compete for content, audiences and advertising dollars against a variety of sources including broadcast, cable and satellite television, movie studios and independent film producers and distributors, online, digital and mobile properties, and other entertainment outlets. The entertainment industry is becoming increasingly dominated by large multi-national, multi-media entities that control key film, magazine, television and/or Internet content, as well as key network, cable, Internet and other distribution outlets. Some of our competitors within the online video market include Viacom (one of the largest owners of cable TV channels and programming), YouTube (a video-sharing website owned by Google), Vevo (a music video website), and Hulu (a website that provides subscription service and free ad-supported on-demand streaming video). Virtually all of these competitors are substantially larger than we are, have been in business longer, and have numerous advantages over us including the ability to acquire financing for their projects and attract superior properties, personnel, actors and/or celebrity hosts. Our competitors may also have preferential access to content writers, producers, important technologies, data on viewers to our website, competitive information, and other important resources. There can be no assurance that we will be able to compete successfully in the future against existing or potential competitors, or that competition will not have a material adverse effect on our business, financial condition or results of operations. 
+ 
+
+ 
+
+ 50
+ 
+
+ 
+
+ 
+
+ Privacy
+ 
+
+ Government Regulation
+ 
+
+ As a company conducting business on the Internet, we are subject to a number of foreign and domestic laws and regulations relating to information security, data protection and privacy, among other things. We are also subject to a variety of legal and regulatory restrictions on how and to whom we market to, for instance marketing to children, which may limit our ability to generate advertising revenue and extend our brand image. Many of these laws and regulations are still evolving and could be interpreted in ways that could harm our business. In the area of information security and data protection, the laws in several states require companies to implement specific information security controls to protect certain types of personally identifiable information. Likewise, all but a few states have laws in place requiring companies to notify users if there is a security breach that compromises certain categories of their personally identifiable information. Any failure on our part to comply with these laws may subject us to significant liabilities. 
+ 
+
+ We are also subject to federal and state laws regarding privacy of audience data. Our privacy policy and terms of use describe our practices concerning the use, transmission and disclosure of viewer information and are posted on our website. Any failure to comply with our posted privacy policy or privacy-related laws and regulations could result in proceedings against us by governmental authorities or others, which could harm our business. Further, any failure by us to adequately protect the privacy or security of our viewers information could result in a loss of confidence in our service among existing and potential viewers, and ultimately, in a loss of viewers and advertising customers, which could adversely affect our business. 
+ 
+
+ Privacy Policy
+ 
+
+ We collect and use certain types of information from our viewers in accordance with the privacy policy that is posted on our website. We may collect personally identifiable information directly from viewers when they register with our website, set up a profile, participate in surveys or otherwise provide information directly to us, send emails or other written or electronic communications to us, and post information on areas of our website that may be viewed by other users or the public. We may also obtain information about our viewers from other viewers and third parties. Our policy is to use the collected information to customize and personalize advertising and content for viewers and to enhance our viewers experience when using our website. 
+ 
+
+ We may also use automated data collection technology, such as tracking cookies, to collect non-personally identifiable information in order to help us track user interactions with our website. Third-party advertisers may also use tracking technologies in order to collect non-personally identifiable information regarding use of our website. Although we believe that we have implemented commercially reasonable physical and electronic security measures to protect against the loss, misuse, and alteration of personally identifiable information, no security measures are perfect or impenetrable, and we may be unable to anticipate or prevent unauthorized access to our viewers personally identifiable information. 
+ 
+
+ 
+
+ 51
+ 
+
+ 
+
+ 
+
+ Intellectual Property
+ 
+
+ Our business is significantly based on the creation, acquisition, use and protection of intellectual property which is primarily in the form of our audio-visual content. While most of the intellectual property we use is created by us, we may also obtain rights to use intellectual property through license agreements with third parties. These licenses will typically limit our use of intellectual property to specific uses and for specific time periods. 
+ 
+
+ We protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions. We control access to our proprietary information by entering into proprietary information and invention assignment agreements with our employees and confidentiality agreements with third parties. We also attempt to monitor for any infringing uses of our intellectual property by third parties. 
+ 
+
+ In addition to these contractual arrangements, we also may rely on a combination of trade secret and copyright protections, and trademark and domain name registrations to protect our content and other intellectual property. We have one registered trademark ManiaTV that was initially filed on November 18, 1998 by our founder, Drew Massey, and re-registered for 10 years on August 18, 2011. We own and operate the website www.maniaTV.com, which domain name expires on November 17, 2018. We also own domain names maniaTV.org (expires on July 6, 2013), maniaTV.net (expires on July 6, 2013) and maniaTV.tv (expires on April 1, 2013). We do not own any patents, nor do we have any pending patent applications. ManiaTV , the maniaTV logo, and other common law trademarks or services marks of maniaTV appearing in this prospectus are the exclusive property of maniaTV. All other service marks, trademarks and trade names referred to in this prospectus are property of their respective holders. 
+ 
+
+ The success of our business depends in part on our ability to maintain and monetize our intellectual property rights to our entertainment content. We are fundamentally a content company and theft of our brands, digital content and other intellectual property has the potential to significantly affect us and the value of our content. Copyright theft is particularly prevalent in many parts of the world that lack effective copyright and technical protective measures similar to those existing in the U.S. or that lack effective enforcement of such measures. The interpretation of copyright, privacy and other laws as applied to our content, and piracy detection and enforcement efforts, remain in flux. The failure to strengthen or the weakening of existing intellectual property laws could make it more difficult for us to adequately protect our intellectual property and negatively affect its value. 
+ 
+
+ Circumstances outside our control could pose a threat to our intellectual property rights. For example, copyright theft may have an adverse effect on our business, because it may reduce the revenue that we are able to receive from the legitimate sale and distribution of our content, undermine lawful distribution channels and inhibit our ability to recoup or profit from the costs incurred to create such works. Also, the efforts we have taken to prevent the unauthorized distribution, performance and copying of our content may not be sufficient. 
+ 
+
+ Any significant impairment of our intellectual property rights could harm our business or our ability to compete. Also, protecting our intellectual property rights is costly and time-consuming. Any unauthorized disclosure or use of our intellectual property could make it more expensive to do business, thereby harming our operating results. 
+ 
+
+ 
+
+ 52
+ 
+
+ 
+
+ 
+
+ Companies in the media and entertainment, Internet, and other industries may own large numbers of patents, copyrights and trademarks and may request license agreements, threaten litigation or file suit against us based on allegations of infringement or other violations of intellectual property rights. In the future and as our business grows, we may face allegations by third parties, including our competitors, that we have infringed their trademarks, copyrights, patents and other intellectual property rights. 
+ 
+
+ Seasonality
+ 
+
+ Our business has experienced and is expected to continue to experience seasonality due to, among other things, seasonal advertising patterns and seasonal influences on audiences viewing habits and attendance. Typically, we can expect our revenue from advertising to be the lowest in the first quarter and highest in the fourth quarter due to the holiday season. The effects of these variances make it difficult to estimate future operating results based on the results of any specific quarter. Viewership is also affected by products and programs available on other media, including traditional cable and television programming.
+ 
+
+ Corporate Information
+ 
+
+ Our headquarters are currently located at 8335 Sunset Boulevard, West Hollywood, California 90069, but once we complete this offering, we intend to lease a studio in the Los Angeles area which we will use to produce videos and for our executive offices. Our phone number is (855) 886-2642. Our website is www.maniaTV.com. The information on or that can be accessed through our website is not part of, and is not incorporated, into this prospectus. 
+ 
+
+ Employees 
+ 
+
+ As of March 31, 2013, we had one full-time employee and he is not represented by a labor union or other labor organization. We also have approximately six independent contractors who provide services to the Company. 
+ 
+
+ 
+
+ 53
+ 
+
+ 
+
+ 
+
+ MANAGEMENT S DISCUSSION AND ANALYSIS OF 
+ FINANCIAL CONDITION AND RESULTS OF OPERATIONS
+ 
+
+ The following discussion and analysis of the combined results of operations and financial condition of maniaTV Inc. for the fiscal years ended December 31, 2011 and 2012 should be read in conjunction with the Selected Financial Data and the audited financial statements and related notes for the years ended December 31, 2011 and 2012, that are included elsewhere in this prospectus. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors. We use words such as anticipate, estimate, plan, project, continuing, ongoing, expect, believe, intend, may, will, should, could, and similar expressions to identify forward-looking statements.
+ 
+
+ Overview
+ 
+
+ We are an Internet television company focused on building a leading pop-culture Internet, mobile and app-based video entertainment destination. We deliver a library of entertainment programming directly to consumers via the Internet on maniaTV.com. We were incorporated in April 2009 and are headquartered in West Hollywood, California.
+ 
+
+ In 2011, we recorded revenue of $95,041, an operating loss of $52,922, and a net loss of ($59,246). In 2012, we recorded revenue of $750,655, operating income of $395,179, and net income of $75,975. The primary reason we had a net loss in 2011 was due to the fact that we were focused on consummating a financing transaction for most of 2011. The increase in our revenues and net income in 2012 is primarily due to management refocusing on selling advertising and generating revenues instead of focusing on raising capital.
+ 
+
+ Plan of Operations
+ 
+
+ Our mission is to build a leading Internet, mobile and app-based video entertainment destination website that houses a jukebox of original, pop-culture oriented TV shows. Our plan of operations for the first 12 months following this offering include: 
+ 
+
+ 
+ Within the first 90 days after we close the offering, we plan to open the maniaTV Creative Show Factory , a production studio that will allow us to create original programming with producers, writers, celebrities and other talent and build our jukebox of pop-culture content. We expect to use about 15% of the proceeds from this offering to fund the studio. The cost to open the studio will be approximately $100,000 to $200,000.
+ 
+
+ 
+ Once our studio is open, we expect to start building and expanding our exclusive library of content focused on pop culture that will appeal to youth and young adults who have become increasingly more difficult to access through traditional media such as television, newspapers, magazines and radio. We should be producing content within 60-90 days after our studio is open. We expect to use about 25% of the proceeds for programming and development of our exclusive content library.
+ 
+ 54
+ 
+ 
+ 
+ Approximately 90 days after we close the offering, we expect to start to expand our sales team and build strong, direct relationships with advertising agencies and brands. We expect to use about 15% of the proceeds of our offering for sales and marketing efforts.
+ 
+
+ 
+ 
+ Within the 90 days after opening our studio, we expect to start to invest in application development, distribution partners and infrastructure to expand the opportunities to view our content anywhere on a host of platforms in order to provide anytime-anywhere access. We expect to use about 5% of the proceeds of our offering for this purpose.
+ 
+
+ 
+ In about nine to twelve months after closing the offering, we expect to start the development of a new product offering that would provide viewers with access to premium portions of our entertainment programming on a monthly subscription fee basis. We expect to use about 5% of the proceeds of our offering for this purpose.
+ 
+
+ How We Make Money
+ 
+
+ We currently derive all of our revenue from the sale of advertising on our website by packaging our entertainment programming with different forms of advertising, including video, banner ads, site sponsored and direct brand integration advertising. To date, our revenue growth has been attributable to selling advertising through traditional computer-based platforms. We also plan to generate additional revenue through expanding anytime-anywhere access to our content through smartphones, tablets and other viewing platforms that would allow us to offer additional distribution channels to current and potential advertisers for delivery of their advertising messages. Moreover, we plan to also provide viewers with access to premium entertainment programming on a monthly subscription fee basis. 
+ 
+
+ Key Performance Indicators
+ 
+
+ Management believes that the following financial and operating measurements are key indicators of the strength of our business:
+ 
+
+ Audience 
+ 
+
+ The size of our audience is a primary performance metric we focus on in order to grow our revenue. The more persons who view our content and who visit multiple pages of content, the more pageviews we have which results in an increased advertising inventory to be sold to advertisers. The more visits by existing and new viewers drives more revenue opportunities for display advertising (banners) and video advertising (pre-rolls, mid-rolls, etc.) in addition to sponsorship opportunities. Our website generated approximately 36 million and 21 millon pageviews, with 6 million and 11 million unique visitors in 2010 and 2011, respectively. For the year ended December 31, 2012, our website generated approximately 290 million pageviews and 37 million unique visitors. 
+ 
+ 55
+ 
+ 
+ A unique visitor is the count of how many different people access a Web site. For example, if a user leaves and comes back to the site five times during the measurement period, that person is counted as one unique visitor. Unique visitors are determined by the number of unique IP addresses on incoming requests that a site receives. Depending on configuration issues and type of ISP service, in some cases, one IP address can represent many users; in other cases, several IP addresses can be from the same user. The more unique visitors ultimately results in a larger audience.
+ 
+
+ Advertising Revenue
+ 
+
+ Revenue generated from campaigns sold directly to advertising agencies and/or top brand clients is the most advantageous type of revenue to generate for the company. Direct agency/client advertising is sold at a premium rate (cost per thousand viewers). Revenue generated from advertising networks generally delivers a lower rate (cost per thousand viewers) than revenue from advertising agencies, but it allows us to monetize unsold or remnant inventory that would otherwise not be sold. Continuing to focus on selling all of the daily advertising inventory generated is a primary performance goal. We generated $95,041 and $750,655 in advertising revenue in 2011 and 2012, respectively. All revenue in 2011 and 2012 has been generated by advertising networks.
+ 
+ Premium Subscriptions
+ 
+
+ To date, all our revenue is generated through the sale of advertising, however, we plan to develop a premium offering that would permit our audience to view extra content via a nominal monthly subscription fee. Revenue generated from premium subscriptions is a potential future performance indicator that we plan to track, as we have no premium subscription revenue to date.
+ 
+
+ Basis of Presentation
+ 
+
+ Revenue 
+ 
+
+ We generate advertising revenue primarily from advertising display (video and banner ads), site sponsored and direct brand integration advertising, which is typically sold on a cost-per-thousand impressions, or CPM, basis. Advertising campaigns typically range from one to six months, and advertisers generally pay us based on a minimum number of impressions or the satisfaction of other criteria, such as total video views. In the future we may earn referral revenue when, for example, a listener clicks on an advertisement and signs up for membership with an advertiser. We also have arrangements with advertising agencies and brokers pursuant to which we provide the ability to sell advertising inventory on our service directly to advertisers. We report revenue under these arrangements net of amounts due to agencies and brokers. 
+ 
+ 56
+ 
+ 
+ Costs and Expenses
+ 
+
+ Costs and expenses consist of sales and marketing, content development and acquisition, technology, and general and administrative expenses. Content development expenses have been negligible to date but are expected to become a significant component of our costs and expenses once we open our production studio and begin to produce new shows. We also expect to hire new employees in order to support our anticipated growth. In any particular period, the timing of additional hires could materially affect our operating expenses, both in absolute dollars and as a percentage of revenue. We anticipate that our costs and expenses will increase in the future. Our costs and expenses include: 
+ 
+
+ 
+ Sales and Marketing Expenses - Compensation and commissions related to sales, marketing and advertising personnel. In addition, marketing and sales expenses include third-party marketing, branding, advertising, audience measurement and research services, and public relations expenses, as well as facility and other supporting overhead costs. We expect marketing and sales expenses to increase as we build out our sales team.
+ 
+
+ 
+ Content Development and Acquisition Expenses Expenses principally relating to the production and acquisition of content, as well as talent fees paid to celebrities. It is expected that this will become our primary expense item as we grow our company. Content acquisition expenses may also include royalties paid for content we license and distribute to our viewers. 
+ 
+
+ 
+ 
+ Technology Expenses - Infrastructure costs related to content storage, delivery and streaming, maintaining our Internet television service, and creating and serving advertisements through third-party ad servers, including the employee costs associated with supporting these functions. Technology expenses also include our product development expenses for information technology, consulting, facilities-related expenses and costs associated with supporting our website and developing additional distribution channels for our content.
+ 
+
+ 
+ General and Administrative Expenses Expenses relating to employee salaries and benefits for finance, accounting, legal, internal information technology and other administrative personnel. In addition, general and administrative expenses include outside legal and accounting services, facility and other supporting overhead costs. We expect to incur additional expenses in future periods as we continue to invest in corporate infrastructure, including adding personnel and systems to our finance and administrative functions. We also expect to incur additional expenses associated with being a public company, including increased legal and accounting costs, investor relations costs and SEC compliance costs.
+ 
+
+ 
+ Provision for Income Taxes. Income tax expenses consist of state and federal income taxes. Since our inception, we have been subject to income taxes only in the United States, and we do not contemplate operations outside the U.S. for the foreseeable future. 
+ 
+ 57
+ 
+ 
+ Results of Operation for year ended December 31, 2012 as compared to the year ended December 31, 2011
+ 
+
+ Revenues for the year ended December 31, 2012 increased by $655,614, or approximately 690%, to $750,655 from $95,041 for the year ended December 31, 2011. The increase in revenues was due to management refocusing on selling advertising and generating revenues instead of focusing on raising capital.
+ 
+
+ Cost of sales for the year ended December 31, 2012 increased by $189,606, or approximately 290%, to $254,956 from $65,350 for the year ended December 31, 2011. The increase in cost of sales was due to increased sales and marketing expenses. 
+ 
+
+ General and administrative expenses for the year ended December 31, 2012 increased by $308,133, or approximately 395%, to $386,086 from $77,957 for the year ended December 31, 2011. The increase was due in large part to the $290,000 salary and bonuses paid to our CEO in 2012 while he was not paid any salary or bonuses in the corresponding period in 2011.
+ 
+
+ The interest expense for the two twelve-month periods was relatively constant since most of the interest expense was related to the $100,000 promissory note that was outstanding during both periods.
+ 
+
+ There was a provision for income tax of $18,545 in the year ended December 31, 2012 compared to no such provision in the year ended December 31, 2011. This was due to the fact that we had a net income in the 2012 period and a net loss in the 2011 period.
+ 
+
+ Net income for the year ended December 31, 2012 increased by $135,221 to $75,975 from a net loss of $59,246 in the year ended December 31, 2011. The primary reason for the large improvement in income was the 690% increase in revenues from 2011. This large increase in revenues was somewhat offset by the 395% increase in general and administrative expenses in the 2012 period.
+ 
+
+ Results of Operation for the year ended December 31, 2011 as compared to the year ended December 31, 2010
+ 
+
+ Revenues for the year ended December 31, 2011 decreased by $88,251, or approximately 48%, to $95,041 from $183,292 for the year ended December 31, 2010. This decrease in revenues was primarily due to our management s focus on a financing transaction in 2011 that eventually was not consummated.
+ 
+
+ Cost of Sales for the year ended December 31, 2011 decreased by $46,218, or approximately 41.4%, to $65,350 from $111,568 for the year ended December 31, 2010. The decrease was mainly due to managing the selling expenses to adjust to the lower revenue.
+ 
+
+ General and administrative expenses for the year ended December 31, 2011 increased by $57,764, or approximately 28.6%, to $77,953 for the year ended December 31, 2010. The increase was due to increased accounting fees and shareholder consulting expenses related to a financing transaction which was not consummated.
+ 
+ 58
+ 
+
+ Interest expense increased by $5,757 to $6,324 for the year ended December 31, 2011 from $567 in the year ended December 31, 2010. The interest was related to a $100,000 loan the Company received in February of 2011. 
+ 
+
+ We had a net loss of ($59,246) for the year ended December 31, 2011 as compared to a net income of $37,869 for the year ended December 31, 2010. The primary reason we went from a net profit in 2010 to a net loss in 2011 was due to the fact that we were focused on consummating a financing transaction for most of 2011.
+ 
+ Liquidity and Capital Resources
+ 
+
+ As of December 31, 2012, we had a negative working capital of ($3,598) compared to negative working capital of ($18,274) as of December 31, 2011.
+ 
+
+ Net cash provided by operating activities was $62,226 for the year ended December 31, 2012 as compared to $1,352 for the year ended December 31, 2011. This improvement in net cash for the most recent twelve-month period was due to our net income of $75,975 as compared to the net loss of $59,246 in the year ended December 31, 2011. This increased net cash position was offset in large part by the $178,141 increase in accounts receivable for the year ended December 31, 2012. 
+ 
+ There was $70,392 cash used for investing activities in the year ended December 31, 2012 compared to no cash used for investing activities in the year ended December 31, 2011. The cash was used to purchase a Company vehicle.
+ 
+
+ There was no cash provided by or used for financing activities during the year ended December 31, 2012 as compared to $100,000 of net cash provided by financing activities in the year ended December 31, 2011. This $100,000 represented the proceeds of a $100,000 convertible promissory note received in February 2011.
+ 
+
+ Future Liquidity and Cash Requirements
+ 
+
+ We believe we will be able to fund our future cash requirements for operations from our cash available, operating cash flows, additional borrowings, and issuance of equity securities. We believe these sources of funds, including the minimum $500,000 in proceeds from this offering, will be sufficient to continue our operations and planned expenditures set forth in the Use of Proceeds table for the next 12 months. If we are not successful in this offering, we believe we will be able to continue to slowly grow our business with current cash available and operating cash-flow until we choose to complete a future offering to accelerate growth. If we are not successful in this offering and are unable to generate sufficient cash flow from operations to fund the continued expansion of our sales and to satisfy the related working capital requirements for the next twelve months, we will be required to refinance or restructure our indebtedness or raise additional debt or equity capital. Additionally, we may be required to sell material assets or operations or delay or forego expansion and growth opportunities. We might not be able to effect these alternative strategies on satisfactory terms, if at all. Our ability to satisfy such obligations also depends upon our future performance, which in turn is subject to general economic conditions, and to financial, business and other factors affecting our operations, including factors beyond our control. See Risk Factors included in this Prospectus.
+ 
+
+ 59
+ 
+ 
+ For a discussion of the outstanding $100,000 convertible promissory note, see page 41 above.
+ 
+
+ Critical Accounting Policies and Estimates
+ 
+
+ Certain of the Company s accounting policies are important to the portrayal of the Company s financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Estimates associated with these policies are susceptible to material changes as a result of changes in facts and circumstances.
+ 
+ While our significant accounting policies are more fully described in Note 2 to our combined financial statements, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis:
+ 
+
+ Use of Estimates
+ 
+
+ The preparation of financial statements in conformity with accounting principles generally acted 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 at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. 
+ 
+
+ Allowance for Doubtful Accounts
+ 
+
+ The Company does not maintain an allowance for doubtful accounts.
+ 
+
+ Revenue Recognition
+ 
+
+ The Company recognizes revenue when persuasive evidence of an arrangement exists, the price is fixed or determinable, collection is reasonably assured and delivery of products has occurred or services have been rendered. As such, advertising revenues are recognized as advertising services are rendered, delivered, collection is assured, and price is determined. 
+ 
+
+ Recent Accounting Pronouncements
+ 
+
+ In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS ( ASU 2011-04 ). ASU 2011-04 was issued to achieve common fair value measurement and disclosure requirements between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 amends current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. ASU 2011-04 is effective for fiscal years and interim periods beginning after December 15, 2011. We do not believe our adoption of ASU 2011-04 in the first quarter of 2012 will have a material impact on our financial position, results of operations or cash flows.
+ 
+ 60
+ 
+ 
+ In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income ( ASU 2011-05 ). ASU 2011-05 allows an entity to have the option to present the components of net income and comprehensive income in either one or two consecutive financial statements. ASU 2011-05 eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. While the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under current accounting guidance. ASU 2011-05 is effective for fiscal years and interim periods beginning after December 15, 2011. In November 2011, the Board decided to defer the effective date of certain changes related to the presentation of reclassification adjustments. A final effective date for those changes is expected to be issued soon. While ASU 2011-05 will require us to change the manner in which we present other comprehensive income and its components on a retrospective basis, we do not believe our adoption of ASU 2011-05 in the first quarter of 2012 will have a material impact on our financial position, results of operations or cash flows.
+ 
+ 
+ DESCRIPTION OF PROPERTY
+ 
+
+ We currently have a temporary office located at 8335 Sunset Boulevard, West Hollywood, California 90069. Once we complete this offering, we intend to lease a studio in the Los Angeles area which we will use to produce videos and as our executive offices.
+ 
+
+ CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
+ 
+
+ When we were first formed on April 8, 2009, we borrowed $10,100 from Drew Massey in order to purchase certain assets from The ManiaTV Network, Inc. and its major secured creditor. This loan was repaid without interest during the latter part of 2009.
+ 
+
+ Indemnification Agreements
+ 
+ We have entered into indemnification agreements with each of our directors and our executive officer. The indemnification agreements and our amended and restated articles of incorporation and bylaws will require us to indemnify our directors to the fullest extent permitted by Colorado law. For more information regarding these agreements, see Executive Compensation Limitations on Liability and Indemnification Matters
+ 
+
+ MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
+ 
+
+ No public market currently exists for shares of our common stock. Following completion of this offering, we intend to apply to have our common stock listed for quotation on the Over-the-Counter Bulletin Board. As of March 31, 2013, we had three holders of our Class A common stock and one holder of our Class B common stock.
+ 
+
+ The Securities and Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).
+ 
+ 61
+ 
+ 
+ A purchaser is purchasing penny stock which limits the ability to sell the stock. The shares offered by this prospectus constitute penny stock under the Securities and Exchange Act. The shares will remain penny stocks for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his/her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock.
+ 
+
+ The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the Commission, which:
+ 
+ 
+ contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; 
+ 
+ contains a description of the broker s or dealer s duties to the client and of the rights and remedies available to the client with respect to a violation to such duties or other requirements of the Securities Act of 1934, as amended; 
+ 
+ contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; 
+ 
+ contains a toll-free telephone number for inquiries on disciplinary actions; 
+ 
+ defines significant terms in the disclosure document or in the conduct of trading penny stocks; and 
+ 
+ contains such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission shall require by rule or regulation.
+ 
+
+ The broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the client: 
+ 
+
+ 
+ the bid and offer quotations for the penny stock; 
+ 
+ the compensation of the broker-dealer and its salesperson in the transaction; 
+ 
+ the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and 
+ 
+ monthly account statements showing the market value of each penny stock held in the client s account. 
+ 
+
+ In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling their securities.
+ 
+ 62
+ 
+
+ Reports
+ 
+
+ Once our registration statement under
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001560443_new_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001560443_new_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..bef633dd29ab72cdd4ce5d06adf5cabc175d7cce
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001560443_new_prospectus_summary.txt
@@ -0,0 +1 @@
+This summary highlights information contained elsewhere in this prospectus. You should read the entire prospectus carefully, including Risk Factors beginning on page 26 and the historical financial statements and the notes to those financial statements. The information presented in this prospectus assumes (i) an initial public offering price of $20.00 per common unit (the midpoint of the price range set forth on the cover of this prospectus) and (ii) unless otherwise indicated, that the underwriters do not exercise their option to purchase up to 600,000 additional common units to cover over-allotments, if any. Unless we indicate otherwise, our financial, reserve and operating information in this prospectus reflects the results and financial position attributable to the Partnership Properties and is presented on a historical basis, without giving effect to this offering and the other transactions contemplated by this prospectus, including the formation transactions described in Our Partnership Structure and Formation Transactions. The estimated proved reserve information for the Partnership Properties as of June 30, 2012 contained in this prospectus is based on a report prepared by Ralph E. Davis Associates, Inc., our independent reserve engineers, a summary of which is included in this prospectus as Appendix C. We refer to this report as our reserve report. New Source Energy Partners L.P.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001561092_avangard_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001561092_avangard_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2c3d3a7993b7922cd03895a85106060b27866b46
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001561092_avangard_prospectus_summary.txt
@@ -0,0 +1,317 @@
+PROSPECTUS
+SUMMARY 
+
+ 
+
+This
+summary highlights certain information found in greater detail elsewhere in this prospectus. This summary may not contain all
+of the information that may be important to you. We urge you to read this entire prospectus carefully, including the risks of
+investing in our Units discussed under "Risk Factors" and the financial statements and other information that are
+included in this prospectus, before making an investment decision. In addition, this prospectus summarizes other documents which
+we urge you to read. 
+
+ 
+
+Our
+Company 
+
+ 
+
+Avangard
+Capital Group Inc. ("we", "us", the "Company", "Avangard") was incorporated in
+Nevada on June 13, 2012, and is a provider of nonprime automobile floor plan financing for used car dealers. Our executive offices
+are located at 2708 Commerce Way, Philadelphia, Pennsylvania 19154 and our telephone number is 215 464-7300.
+
+ 
+
+Our
+Business 
+
+ 
+
+We
+are an independent auto sales finance company that provides floor plan financing for independent used car dealers based on the
+value of collateral (the car) as determined by us using the automobile industry s nationally-recognized valuation sources.
+We currently operate in Pennsylvania, New Jersey and Florida.
+
+ 
+
+Pursuant
+to an Assignment Agreement with Avangard Auto Financing, Inc., an affiliate ("AAF") dated June 13, 2012, we acquired
+AAF s floor plan financing portfolio for $151,979, the face value of the contracts plus accrued interest and fees at that
+time. The assignment agreement with AAF included the following agreements with Autosource Enterprises, Inc., an unaffiliated third
+party ("Autosource Enterprises"): (i) Floor Plan Agreement, (ii) Demand Promissory Note, (iii) Business Line of Credit
+Agreement, (iv) Surety Agreement and (v) Confessions of Judgment. Pursuant thereto, we have assumed the obligations of AAF under
+the above agreements. AAF is owned 60% by Friedman Financial Group, LLC and 40% by DJS Investments, LLC, both of whom are the
+sole shareholders of the Company.
+
+ 
+
+Utilizing
+the $744,451 we received in August 2012 from our existing shareholders which we plan to use to expand our auto dealer floor plan
+financing business and for working capital purposes, we believe we have sufficient working capital to sustain our current operations
+for the next 12 months.
+
+ 
+
+Our
+Expansion Plans
+
+ 
+
+We
+are seeking funds to expand our business over the next 12 months in the following ways. Assuming we raise the entire amount we
+are seeking in this offering ($29,900,000) we will invest up to $13,500,000 in auto dealer floor plan financing, up to $9,000,000
+to expand these operations into South Florida, Southern New Jersey and Nevada, up to $900,000 to obtain state licenses and software
+for retail auto finance operations, up to $4,500,000 to launch consumer auto financing operations, and up to $2,000,000 for general
+and administrative costs. In the event we do not raise the entire amount we are seeking, we will focus our expansion on auto dealer
+floor plan financing and establishment of the sales and administrative aspects of these operations. We believe that we need to
+raise a minimum of $3,000,000 in this offering and complete $2,500,000 of floor plan financing transactions to achieve a profitable
+level of sustainable operations. We expect to generate an effective yield on our floor plan loans, including all fees and interest,
+of approximately 30% per annum, or $75,000 per month with total operating expenses at this level of operations of approximately
+$50,000 per month. See "Use of Proceeds."
+
+ 
+
+Risk
+Factors 
+
+ 
+
+An
+investment in our securities involves a high degree of risk. For a discussion of some of the risks you should consider before
+purchasing our securities, you are urged to carefully review and consider the section entitled "Risk Factors" beginning
+on page 4 of this prospectus. These risks relate to various aspects of our business, including our continued need for funding
+and the other risks set forth under "Risk Factors".
+
+ 
+
+ - 2 -
+
+ 
+
+ 
+
+ 
+
+Summary
+of the Offering 
+
+ 
+
+ Issuer:
+ Avangard
+ Capital Group Inc, a Nevada corporation.
+
+ 
+ 
+
+ Securities
+ Offered
+ We
+ are offering (the "Offering") on a direct primary basis up to 5,000,000 Units (each a "Unit") at a
+ price per Unit of $6.00 for a total offering of up to $30,000,000. Each Unit consists of four shares of common stock, $0.0001
+ par value (the "Shares"), and one redeemable common stock warrant (a "Warrant"). There is no minimum
+ number of Units required to be purchased, and subscriptions, once received and accepted, are irrevocable. Our transfer agent,
+ Interwest Transfer Company, Inc., will issue common stock and warrants subscribed for in this offering promptly after we accept
+ subscriptions from investors. Securities purchase by investors in this offering will remain outstanding upon its termination
+ regardless of the number of Units subscribed for.
+
+ 
+ 
+
+ Common
+ Stock outstanding before this Offering (1)
+ 10,000,000
+ basic Shares and 12,715,000 Shares on a fully-diluted basis (assuming conversion of the 905,000 shares of Series A Convertible
+ Preferred Stock into 2,715,000 shares of common Stock)(1).
+
+ 
+ 
+
+ Common
+ Stock outstanding after this Offering (1)
+ Up
+ to 30,000,000 Shares and 32,715,000 on a fully-diluted basis (assuming all 5,000,000 Units are sold).(1)(2)
+
+ 
+ 
+
+ Common
+ Stock Warrants offered
+ 5,000,000
+ Warrants. The Warrants will become exercisable and separately transferable from the Shares commencing 30 calendar days after
+ the effective date of this prospectus (the "Effective Date"). At any time thereafter until three years following
+ the Effective Date, subject to earlier redemption, each Warrant entitles the holder to purchase one Share at an exercise price
+ of $2.00 (133% of the per Share price of the common stock included in the Units), subject to adjustment. The Warrants are
+ subject to redemption by the Company for $0.0001 per Warrant upon 30 days prior written notice, provided that the last sale
+ price of the Shares equals or exceeds $3.00 (150% of the Warrant exercise price), subject to adjustment, for 10 consecutive
+ trading days.
+
+ 
+ 
+
+ Offering
+ Period
+ The
+ Units will be offered for a period of six (6) months from the date of this prospectus unless extended by the Board of Directors
+ for an additional six (6) months or unless the offering is fully subscribed before such date or we decided to terminate the
+ offering prior to such date. In either event, the offering may be closed without further notice to you.
+
+ 
+ 
+
+ Proceeds
+ to the Company
+ $30,000,000,
+ if all the Units are sold in the Offering. We will receive an additional $10,000,000 (assuming the exercise of all the Warrants,
+ of which there is no assurance). There is no minimum number of Units required to be purchased.
+
+ 
+ 
+
+ Use
+ of Proceeds
+ We
+ intend to use the proceeds to further our auto dealer floor plan financing operations, general and administrative costs, obtain
+ licenses and software for retail auto finance operations, launch retail auto financing operations and expand our operations
+ into South Florida, Southern New Jersey and Nevada. See "Use of Proceeds."
+
+ 
+
+(1)In
+ addition
+ to
+ the
+ Common
+ Stock,
+ we
+ have
+ outstanding
+ 905,000
+ shares
+ of
+ Series
+ A
+ Convertible
+ Preferred
+ Stock.
+ Each
+ share
+ of
+ Series
+ A
+ Convertible
+ Preferred
+ Stock
+ is
+ convertible
+ into
+ three
+ (3)
+ shares
+ of
+ our
+ Common
+ Stock,
+ and
+ the
+ holders
+ thereof
+ are
+ entitled
+ to
+ vote
+ shares
+ of
+ Series
+ A
+ Convertible
+ Preferred
+ Stock
+ held
+ as
+ common
+ stock
+ in
+ accordance
+ with
+ the
+ number
+ of
+ shares
+ of
+ common
+ stock
+ into
+ which
+ such
+ preferred
+ shares
+ are
+ convertible.
+ Conversion
+ of
+ all
+ these
+ Series
+ A
+ shares
+ would
+ result
+ in
+ the
+ issuance
+ of
+ an
+ additional
+ 2,715,000
+ shares
+ of
+ common
+ stock.
+ 
+(2)In
+ the
+ event
+ the
+ Warrants
+ offered
+ hereby
+ are
+ converted
+ into
+ shares
+ of
+ our
+ common
+ stock,
+ we
+ will
+ have
+ up
+ to
+ 35,000,000
+ Shares
+ and
+ 37,715,000
+ on
+ a
+ fully-diluted
+ bases
+ (assuming
+ all
+ 5,000,000
+ Units
+ are
+ sold
+ and
+ all
+ 5,000,000
+ Warrants
+ are
+ exercised).
+
+ 
+
+ - 3 -
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001561686_starstream_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001561686_starstream_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..661afdbb243d3e6011de9c3c9551177e708364cc
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001561686_starstream_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, WE, US, OUR, AND GELIA GROUP, CORP. REFERS TO GELIA GROUP, CORP. THE FOLLOWING SUMMARY DOES NOT CONTAIN ALL OF THE INFORMATION THAT MAY BE IMPORTANT TO YOU. YOU SHOULD READ THE ENTIRE PROSPECTUS BEFORE MAKING AN INVESTMENT DECISION TO PURCHASE OUR COMMON STOCK. GELIA GROUP, CORP. Gelia Group, Corp. was founded in the State of Nevada on August 200, 2012. We are a development stage company and intend to provide 3D printing services. 3D printing is a process of making three dimensional solid objects from a digital model. We intend to use the net proceeds from this offering to develop our business operations (See Description of Business and Use of Proceeds ). To implement our plan of operations we require a minimum of $40,000 for the next twelve months as described in our Plan of Operations. We expect our operations to begin to generate revenues during months 8-12 after completion of this offering. However, there is no assurance that we will generate any revenue in the first 12 months after completion our offering or ever generate any revenue. Being a development stage company, we have very limited operating history. If we do not generate any revenue we may need a minimum of $10,000 of additional funding to pay for ongoing SEC filing requirements. We do not currently have any arrangements for additional financing. Our principal executive offices are located at Klenovy Blvd, 6-7, Moscow, Russia 115470. Our phone number is (702) 605-4165. From inception until the date of this filing, we have had limited operating activities. Our financial statements from inception (August 20, 2012) through January 31, 2013 , reports no revenues and a net loss of $ 4,705 . Our independent registered public accounting firm has issued an audit opinion for Gelia Group, Corp. which includes a statement expressing substantial doubt as to our ability to continue as a going concern. To date, we have developed our business plan and entered into a Referral Agreement with Alexey Hramtsov, an independent contractor on November 8, 2012. As of the date of this prospectus, Yulia Marach, our sole officer and director, owns 100% of the company s stocks. She will continue to own after completion of the offering sufficient shares to control the operations of the company. As of the date of this prospectus, there is no public trading market for our common stock and no assurance that a trading market for our securities will ever develop. We do not anticipate earning revenues until we enter into commercial operation. Since we are presently in the development stage of our business, we can provide no assurance that we will successfully assemble, construct and sell any products or services related to our planned activities. Page | 5 THE OFFERING The Issuer: GELIA GROUP, CORP. Securities Being Offered: 4,000,000 shares of common stock. Price Per Share: $0.02 Nature of the Offering The offering is a self-underwritten, best-efforts offering with no minimum subscription requirement. Duration of the Offering: The shares will be offered for a period of two hundred and forty (240) days from the effective date of this prospectus. The offering shall terminate on the earlier of (i) when the offering period ends (240 days from the effective date of this prospectus), (ii) the date when the sale of all 4,000,000 shares is completed, (iii) when the Board of Directors decides that it is in the best interest of the Company to terminate the offering prior the completion of the sale of all 4,000,000 shares registered under the Registration Statement of which this Prospectus is part. We do not reserve the right to extend the offering beyond the 240-day period. Gross Proceeds $80,000 Securities Issued and Outstanding: There are 4,000,000 shares of common stock issued and outstanding as of the date of this prospectus, held by our sole officer and director, Yulia Marach. If we are successful at selling all the shares in this offering, we will have 8,000,000 shares issued and outstanding. Subscriptions All subscriptions once accepted by us are irrevocable. Registration Costs We estimate our total offering registration costs to be approximately $8,000.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001561972_great_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001561972_great_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..05d34738c12faf2a4a732df7c8b86ed4b1723f9a
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001561972_great_prospectus_summary.txt
@@ -0,0 +1 @@
+included elsewhere in this prospectus. This summary does not contain all the information you should consider before investing in the Notes. You should read the following summary carefully together with the more detailed information, the section entitled Risk Factors beginning on page 7 and the audited consolidated financial statements of US Foods, including the accompanying notes, and the unaudited consolidated interim financial statements of US Foods, including the accompanying notes, included elsewhere in this prospectus before making any investment decision. Our Company We are a leading foodservice distributor, and one of only two national foodservice distributors in the United States. In fiscal year 2012, we generated approximately $22 billion in net sales providing an important link between over 5,000 suppliers and our more than 200,000 foodservice customers nationwide. We offer an extensive array of fresh, frozen and dry food and non-food products with approximately 350,000 stock-keeping units or SKUs as well as value-added distribution services that meet specific customer needs. We have also developed what we believe to be one of the most extensive private label product portfolios in the foodservice distribution industry, representing approximately 30,000 SKUs and over $6 billion in net sales in fiscal year 2012. In addition, many of our customers depend on us for critical business functions, including product selection, menu preparation and costing strategies. We market our food products through a sales force of approximately 5,000 associates to a diverse mix of foodservice customers. Our principal customers include independently owned, single location restaurants, regional concepts, national chains, hospitals, nursing homes, hotels and motels, country clubs, fitness centers, government and military organizations, colleges and universities and retail locations. Our customers are managed either locally or by our national sales team. Due to the similarity of our operations across the country, we manage our operations as a single operating segment that encompasses 64 divisions nationwide. Our primary operating activities include providing a broad line of foodservice products and value-added distribution services focused on meeting the needs of our customers. We support our business with one of the largest private refrigerated fleets in the United States, with approximately 6,000 refrigerated trucks traveling approximately 230 million miles annually. We also provide our customers with expertise for their center of the plate needs through our Stock Yards brand and essential restaurant equipment and supplies through US Foods Culinary Equipment & Supplies. Industry Overview The foodservice distribution industry is highly fragmented with approximately 16,500 foodservice distributors nationwide. The foodservice distribution industry includes a wide spectrum of companies ranging from businesses selling a single category of product (e.g., produce) to large broadline distributors with many divisions and thousands of products across all categories. Recent trends show large-scale distributors taking market share from smaller regional and local distributors as a result of acquisitions of smaller distributors by larger distributors. We expect this trend to continue through additional acquisitions and also organically due to scale efficiencies inherent to larger distributors with broader product and value-added service offerings. Based upon data provided by the USDA Economic Research Service, for over 25 years prior to 2008, the foodservice market in the United States was characterized by stable, predictable industry growth with annual year-over-year increases in total food purchases by dollar value. In 2008, the economic recession and dislocation in the financial markets adversely impacted the foodservice industry leading to unprecedented levels of decline, impacting both large and small operators. In 2010, as the macroeconomic environment began to recover, the Table of Contents The information in this prospectus is not complete and may be changed. The selling noteholders named herein may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED JULY 12, 2013 PRELIMINARY PROSPECTUS $26,183,000 8.5% Senior Notes due 2019 US FOODS, INC. Selling noteholders, affiliates of Kohlberg Kravis Roberts & Co., L.P., may sell, from time to time, up to $26,183,000 aggregate principal amount of our 8.5% Senior Notes due 2019 (the Notes ). We are not selling any Notes pursuant to this prospectus. We will not receive any proceeds from the sale of the Notes by the selling noteholders. The selling noteholders may offer for sale the Notes covered by this prospectus in one or more transactions, directly to purchasers or through underwriters, brokers or dealers or agents, in public or private transactions, at fixed prices, prevailing market prices at the times of sale, prices related to the prevailing market prices, varying prices determined at the times of sale or negotiated prices. For additional information on the methods of sale, you should refer to the section of this prospectus entitled Plan of Distribution. We will bear all expenses in connection with this offering of our Notes, other than any underwriting fees, discounts, selling commissions and transfer taxes, if any. Interest on the Notes will accrue at a rate of 8.5% per annum and will be payable on June 30 and December 31 of each year. The Notes will mature on June 30, 2019 unless earlier redeemed. At any time (which may be more than once) on or prior to June 30, 2014, we may redeem some or all of the Notes for cash at a redemption price equal to 100% of their principal amount plus an applicable make-whole premium plus accrued and unpaid interest to the redemption date. Beginning on June 30, 2014, we may redeem some or all of the Notes at specified redemption prices plus accrued and unpaid interest to the redemption date. The Notes are our unsecured senior obligations and rank senior in right of payment to our future debt and other obligations that are, by their terms, expressly subordinated in right of payment to the Notes; rank equally in right of payment to all of our existing and future debt and other obligations that are not, by their terms, expressly subordinated in right of payment to the Notes; and are effectively subordinated in right of payment to all of our existing and future secured debt, to the extent of the value of the assets securing such debt, and are structurally subordinated to all obligations of each of our subsidiaries that is not a guarantor of the Notes. The Notes are fully and unconditionally guaranteed on an unsecured basis by the subsidiaries indicated herein. We have not applied, and do not intend to apply, for listing of the Notes on any national securities exchange. You should carefully read this prospectus before you invest. Investing in our Notes involves risk. See Risk Factors beginning on page 7. Neither the Securities and Exchange Commission (the SEC or the Commission ) nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. The date of this prospectus is , 2013 Table of Contents THIS PROSPECTUS DOES NOTE CONSTITUTES AN OFFER TO PURCHASE NOTES IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER UNDER APPLICABLE SECURITIES OR BLUE SKY LAWS. MARKET AND INDUSTRY DATA Information in this prospectus about the foodservice distribution industry, including our general expectations concerning the industry, are based on estimates prepared using data from various sources and on assumptions made by us. We believe data regarding the foodservice industry are inherently imprecise, but generally indicate our size and position within the industry. While we are not aware of any misstatements regarding any industry data presented in this prospectus, our estimates, in particular as they relate to our general expectations concerning the foodservice industry, involve risks and uncertainties and are subject to change based on various factors, including those discussed
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001562788_natfresh_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001562788_natfresh_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..ee67465373ae1ed4c9be79e8a0de70967323a983
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001562788_natfresh_prospectus_summary.txt
@@ -0,0 +1,695 @@
+SUMMARY COMPENSATION TABLE 
+
+ 
+
+ 
+ 
+ 
+ 
+
+Name
+and
+Principal
+Position
+ 
+
+ 
+ 
+ 
+
+Year
+ 
+
+Salary
+ FY 2010
+($)
+ 
+
+ 
+ 
+ 
+Bonus
+($)
+ 
+
+ 
+ 
+ 
+
+Stock
+Awards
+($)(1)
+ 
+
+ 
+ 
+ 
+
+Option
+Awards
+($)(1)
+ 
+
+ 
+ 
+ 
+
+Non-Equity
+Incentive
+Plan
+Compensation
+($)
+ 
+ 
+ 
+Change in
+Pension
+Value and
+Nonqualified
+Deferred
+Compensation
+Earnings
+($)
+ 
+
+ 
+ 
+ 
+
+All
+Other
+Compens-
+ation
+($)
+ 
+
+ 
+ 
+ 
+
+Total
+($)
+
+ Yi Lung Lin, President, CEO, 
+Secretary, Treasurer, CFO, Principal Accounting Officer and Director
+ 2012
+ 
+ 
+ 
+ None
+ None
+ None
+ None
+ None
+ None
+ None
+ None
+
+ 
+ Stock Option Grants
+ 
+ We have not granted any stock options to the executive officers since our inception. 
+ Employment Agreements 
+ We do not have any employment agreements.
+
+ 41 
+ 
+ 
+ Security Ownership of Certain Beneficial Owners and Management
+ The following tables set forth the ownership, as of the date of this Prospectus, of our common stock by each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, our directors, and our executive officers and directors as a group. To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are not any pending or anticipated arrangements that may cause a change in control. 
+ The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below and under applicable community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown. The mailing address for all persons is Two Allen Center, 1200 Smith Street, Suite 1600, Houston, Texas 77002, United States of America. 
+ Shareholders
+ Number of Shares
+ Percentage
+ 
+
+ Yi Lung Lin (1)
+ 210,000,000
+ 18.2%
+ 
+
+ All directors and executive officers as a group [1person] 
+ 210,000,000 
+ 18.2%
+ 
+
+ Toprise International Investment Ltd. (2)
+ 500,000,000
+ 
+ 43.2%
+ 
+
+ 
+ (1) Yi Lung Lin is our President. Mr. Lin s beneficial ownership includes 10,000,000 shares held by Access Equity Capital Management Corp, 150,000,000 shares held by Access Management Consulting and Marketing Pte Ltd and 50,000,000 shares held by Access Finance and Securities (NZ) Limited, all companies which Mr. Lin has voting and investment control over. Access Equity Capital Management Corp and Access Finance Securities (NZ) Limited are both underwriters of this offering.
+
+ (2) Kuei Hua Tsai has voting and investment control over shares held by Toprise International Investment Ltd.
+ 
+ This table is based upon information derived from our stock records. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, each of the shareholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based upon 1,156,460,641 shares of common stock outstanding as of May 31, 2013 . 
+ 
+ 
+ Certain Relationships and Related Transactions
+ 
+ Our President and CEO, Yi Lung Lin, is the managing director of the two consulting companies that provides consulting services to us. During year ended August 31, 2012, we converted $200,000 owed to these two consulting companies into 200,000,000 common shares. We also owed a total $118,500 for consulting services to one of the consulting companies during the year ended August 31, 2012.
+ 
+ On July 9, 2012, we sold 10,000,000 shares of Common Stock at $0.001 per share to Access Equity Capital Management Corp where our President, Yi Lung Lin, has control and voting rights. These shares were sold for cash consideration of $10,000.
+ 
+On July 12, 2012, the Company further received stock subscriptions from a stockholder being the second founder member. 50,000,000 common shares were sold to that stockholder at a purchase price of $0.001 per share for cash received of $50,000.
+ 
+On August 13, 2012, we sold 50,000,000 shares of Common Stock at $0.001 per share to the wife of our President, Yi Lung Lin, for cash consideration of $50,000.
+ 
+On September 7, 2012, we sold 50,000,000 shares of common stock at $0.001 per share to a related party. These shares were sold for cash consideration of $50,000.
+ 
+On September 7, 2012, we sold 500,000,000 shares of common stock at $0.001 per share to Toprise International Investment Ltd. These shares were sold for cash consideration of $500,000.
+
+ On September 24, 2012, we purchased 1,666,667 common stock of Genufood Energy Enzymes Corp. ( GEEC ) at a price of $0.3 per share. Our President is also the President of GEEC.
+ 
+We have entered into an Agreement with Access Management Consulting and Marketing Pte Ltd., Singapore (a company controlled by our President, Yi Lung Lin, appointing them as our Sole Marketing Agent in the sourcing of buyers for our range of NATfresh beverage products in and outside of Singapore.
+ 
+ We entered into a Manager Consulting Service Agreement on July 2, 2012 with Access Finance and Securities (NZ) Limited, a company controlled by our President, Yi Lung Lin, to provide management and consulting services related to the following: negotiate with professionals on behalf of us, manage parties related to the S-1 registration statement, and assist us in determining an effective future strategy. A copy of this agreement is filed as an exhibit to this registration statement. Pursuant to this agreement, we incurred $300,000 in general and administrative fees of $250,000 to be paid for in cash and the remaining expenses of $50,000 were paid for in our common shares.
+ 
+ We also entered a Prospectus Service Agreement on July 2, 2012 with Access Management Consulting and Marketing Pte Ltd., a company controlled by our President, Yi Lung Lin, to provide us the management services related to the engagement of professionals, preparation of business plan for the prospectus, liaison with the securities lawyer for the S-1, and assist us in the development and formulation of effective S-1 strategy. A copy of this agreement is filed as an exhibit to this registration statement. According to this agreement, we incurred $800,000 in management fees. These fees are payable by cash of $650,000 and by the issuance of 150,000,000 common shares at a price of $0.001, valued at $150,000.
+
+ Except as disclosed above, none of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us: 
+ Any of our directors or officers; Any person proposed as a nominee for election as a director; Any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock; Our sole promoter, Yi Lung Lin; Any relative or spouse of any of the foregoing persons who has the same house as such person; Immediate family members of directors, director nominees, executive officers and owners of 5% or more of our common stock. 
+ We do not have a formal written policy for review and approval of transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K. Our board members are responsible for review, approval and ratification of related-person transactions between us and any related person. Under SEC rules, a related person is an officer, director, nominee for director or beneficial holder of more than 5% of any class of our voting securities since the beginning of the last fiscal year or an immediate family member of any of the foregoing.
+ 
+Disclosure of Commission Position of Indemnification for
+Securities Act Liabilities 
+ Our sole officer and director are indemnified as provided by the Nevada Revised Statutes and our Bylaws. We have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to court of appropriate jurisdiction. We will then be governed by the court's decision. 
+ 42 
+ 
+
+ Financial Statements 
+ 
+ INDEX TO FINANCIAL STATEMENTS
+
+ 
+Report of Independent Registered Public Accounting Firm
+ F-1
+ Balance Sheet as of August 31, 2012
+ F-2
+ Statement of Operations for the period ended August 31, 2012
+ F-3
+ Statement of Stockholders Equity for the period from June 18, 2012 (Date of Inception) to August 31, 2012
+ F-4
+ Statement of Cash Flows for the period from June 18, 2012 (Date of Inception) to August 31, 2012
+ F-5
+ Notes to Financial Statements
+ F-6
+ 
+ 43 
+ 
+ 
+ REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
+ 
+ 
+ To the Board of Directors
+ NATfresh Beverages Corp.
+ (A Development Stage Company)
+ 
+ We have audited the accompanying balance sheet of NATfresh Beverages Corp. (a development stage company) as of August 31, 2012 and the related statement of operations, changes in stockholders' equity, and cash flows for period from inception (June 18, 2012) through August 31, 2012. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 NATfresh Beverages Corp. as of August 31, 2012, and the results of its operations, changes in stockholders' equity and cash flows for the periods described above in conformity with accounting principles generally accepted in the United States of America.
+ 
+ The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company had a cumulative net loss from operations of $533,027 as of August 31, 2012 and expects to incur additional losses in the near future. These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters also are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
+ 
+ 
+ /s/ M&K CPAS, PLLC 
+ www.mkacpas.com
+ Houston, Texas
+ November 30, 2012
+ F-1 
+ 
+
+ 
+ 
+ NATFRESH BEVERAGES CORP.
+
+ (A Development Stage Company)
+
+ BALANCE SHEET
+
+ August 31, 2012
+
+ 
+ 
+ 
+ 
+
+ ASSETS
+ CURRENT ASSETS
+ Cash
+ $
+ 3,100,449
+
+ TOTAL CURRENT ASSETS
+ 3,100,449 
+
+ TOTAL ASSETS
+ $
+ 3,100,449 
+
+ LIABILITIES AND STOCKHOLDERS' EQUITY
+ CURRENT LIABILITIES
+ Accounts payable and accrued liabilities related party
+ $
+ 123,476 
+
+ TOTAL CURRENT LIABILITIES
+ 
+ 123,476 
+
+ STOCKHOLDERS' EQUITY (DEFICIT)
+ Common stock, $0.001 par value; 1,000,000,000 shares authorized;
+ 310,000,000 shares issued and outstanding as of August 31, 2012
+ 
+ 310,000
+
+ Additional paid-in capital
+ 
+ 200,000
+
+ Common stock payable
+ 
+ 
+ 3,000,000
+
+ Deficit accumulated during the development stage
+ 
+ (533,027)
+
+ TOTAL STOCKHOLDERS' EQUITY
+ 
+ 2,976,973 
+
+ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
+ 
+ $
+ 3,100,449 
+
+ 
+ The accompanying notes are an integral part of these financial statements.
+ 
+
+ 
+ F-2 
+ 
+
+ 
+ NATfresh BEVERAGES CORP.
+
+ (A Development Stage Company)
+
+ STATEMENT OF OPERATIONS
+
+ For the period from inception (June 18, 2012) to August 31, 2012
+
+ Period from inception
+
+ (June 18, 2012) to
+
+ 
+ 
+ August 31, 2012
+
+ REVENUE
+ $
+ -
+
+ 
+ 
+ 
+
+ GENERAL AND ADMINISTRATIVE EXPENSES
+ Administrative Expenses 
+ $
+ 6,688
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ Consulting service fees
+ 506,433 
+
+ Legal and professional
+ 19,910 
+
+ 
+ 
+ 
+
+ 
+ 
+ 
+
+ Total expenses
+ 
+ 533,031 
+
+ 
+ OTHER INCOME
+ Interest income
+ $
+ 4 
+
+ Total income
+ 
+ 4
+
+ 
+ 
+ 
+
+ NET LOSS
+ $
+ (533,027) 
+
+ BASIC AND DILUTED LOSS PER COMMON SHARE
+ $
+ (0.00)
+
+ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
+ 
+ 272,162,162
+
+ 
+
+ The accompanying notes are an integral part of these financial statements.
+ 
+
+ 
+ 
+ F-3 
+ 
+
+ 
+ NATfresh BEVERAGES CORP.
+
+ (A Development Stage Company)
+
+ STATEMENT OF STOCKHOLDERS' EQUITY
+
+ From inception (June 18, 2012) to August 31, 2012
+
+ 
+
+ 
+ 
+ 
+ 
+ 
+ Common Stock
+ 
+ 
+ 
+ 
+ Number of 
+ Additional Paid-in
+ 
+ Common stock
+ Deficit accumulated during the development
+ 
+ shares
+ 
+ Amount
+ 
+ Capital
+ 
+ payable
+ 
+ stage
+ 
+ Total
+
+ Balance at June 18, 2012 (inception) 
+ -
+ $
+ -
+ $
+ -
+ $
+ -
+ $
+ -
+ $
+ -
+
+ 
+ 
+ Common stock issued for services at $0.001 per share on July 2, 2012 
+ 200,000,000
+ 200,000 
+ 200,000
+ 
+ -
+ -
+ 400,000 
+
+ 
+ 
+ Common stock issued for cash at $0.001 per share on July 9, 2012
+ 10,000,000
+ 10,000 
+ -
+ 
+ -
+ -
+ 10,000 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ Common stock issued for cash at $0.001 per share on July 12, 2012
+ 50,000,000
+ 50,000 
+ -
+ 
+ -
+ -
+ 50,000 
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ Common stock issued for cash at $0.001 per share on August 13, 2012
+ 50,000,000
+ 
+ 50,000 
+ 
+ -
+ 
+ -
+ 
+ -
+ 
+ 50,000 
+
+ 
+ 
+ 
+ Common stock payable
+ -
+ 
+ -
+ 
+ -
+ 
+ 3,000,000
+ 
+ -
+ 
+ 3,000,000
+
+ 
+ 
+ Net loss 
+ -
+ 
+ -
+ 
+ -
+ 
+ -
+ 
+ (533,027)
+ 
+ (533,027)
+
+ 
+ 
+ Balance, August 31, 2012 
+ 310,000,000 
+ $ 
+ 310,000 
+ $
+ 200,000
+ $
+ 3,000,000
+ $ 
+ (533,027)
+ $
+ 2,976,973 
+
+ 
+ 
+ 
+ 
+ The accompanying notes are an integral part of these financial statements
+
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+
+ 
+ 
+ F-4 
+ 
+
+ 
+ 
+ NATfresh BEVERAGES CORP.
+
+ (A Development Stage Company)
+
+ STATEMENT OF CASH FLOWS
+
+ For the period from inception (June 18, 2012) to August 31, 2012
+
+ Period from
+
+ inception
+
+ (June 18, 2012) to
+
+ 
+ 
+ 
+ August 31, 2012
+
+ CASH FLOWS FROM OPERATING ACTIVITIES
+ Net loss
+ $
+ (533,027)
+
+ 
+ Adjustments to reconcile net loss to net cash used in operating activities:
+ 
+ 
+
+ 
+ Shares issued for consulting services expense
+ 
+ 400,000
+
+ Change in operating assets and liabilities:
+ Increase in accounts payable and accrued expenses - related party
+ 123,476 
+
+ NET CASH USED IN OPERATING ACTIVITIES
+ 
+ (9,551)
+
+ 
+ CASH FLOWS FROM INVESTING ACTIVITIES
+ $
+ -
+
+ 
+ CASH FLOWS FROM FINANCING ACTIVITIES
+ Common stock payable
+ $
+ 3,000,000
+
+ Proceeds from sale of common shares
+ 110,000
+
+ NET CASH PROVIDED BY FINANCING ACTIVITIES
+ 
+ 3,110,000 
+
+ 
+ 
+ 
+
+ NET INCREASE IN CASH
+ 3,100,449 
+
+ CASH, BEGINNING OF PERIOD
+ 
+ - 
+
+ CASH, END OF PERIOD
+ $
+ 3,100,449 
+
+ 
+
+ The accompanying notes are an integral part of these financial statements.
+ 
+
+ 
+ F-5 
+ 
+
+ 
+ NATfresh BEVERAGES CORP.
+
+ (A Development Stage Company)
+
+ NOTES TO THE AUDITED FINANCIAL STATEMENTS
+
+ August 31, 2012
+
+ NOTE 1 NATURE OF OPERATIONS AND BASIS OF PRESENTATION
+ 
+ Organization and Business Operations
+
+ The Company was incorporated in the State of Nevada as a for-profit Company on June 18, 2012 and established a fiscal year end of August 31. It is a company that will import and distribute natural spring water. At the same time, it focuses through its wholly owned subsidiary company in Singapore, NATfresh Productions (S) Pte Ltd., processed and bottled the natural spring water. The natural spring water is also used for the production of instant tea, and microbrewery operations for the production of lager beer. All manufactured goods will be marketed, promoted and distributed in the Republic of Singapore and exported to the neighboring country, Malaysia. The Company is the owner of the following brands or trademarks: NATfresh , Tani Premium and Tani Magic.
+ 
+ Development Stage Activities
+ 
+ The Company is currently in the development stage as defined under FASB ASC 915-10, "Development Stage Entities" and has as yet no products and with no significant revenues. All activities of the Company to date relate to its organization, initial funding, share issuances, and target markets identification and developing marketing plans, and equipment and factory premise sourcing.
+
+ NOTE 2
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001563778_panther_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001563778_panther_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001563778_panther_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001564709_truett_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001564709_truett_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001564709_truett_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001566025_toledo_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001566025_toledo_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001566025_toledo_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001566093_delaware_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001566093_delaware_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001566093_delaware_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001566675_eauker_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001566675_eauker_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..6c16ec01d7d4ac9753b9f7d81307744063815f26
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001566675_eauker_prospectus_summary.txt
@@ -0,0 +1,1197 @@
+Summary Financial Information
+ 
+
+ The following financial information summarizes the more complete historical financial information at the end of this prospectus.
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+ 
+
+ November 30, 2011
+ (audited)
+ As of August 31, 2012
+ (unaudited)
+ 
+
+ Balance Sheet 
+ 
+
+ 
+
+ 
+ 
+
+ Total Assets 
+ $ 
+ 331 
+ $ 
+ 5,364 
+
+ Total Liabilities 
+ $
+ 63,284
+ $ 
+ 80,481 
+
+ Stockholders Deficit 
+ $
+ 75,117
+ $ 
+ 62,953 
+
+ 
+ 
+
+ For the three months ended August 31, 2012
+ (unaudited)
+ 
+ Period from inception (July 1, 2010)
+ to
+ August 31, 2012 (unaudited)
+
+ Income Statement 
+ 
+
+ 
+
+ 
+ 
+
+ Revenue 
+ $
+ -
+ $ 
+ -
+
+ Total Operating Expenses 
+ $
+ (4,319)
+ $ 
+ (88,417)
+
+ Net Loss 
+ $
+ (4,319)
+ $ 
+ (88,417)
+
+ 
+
+ 
+
+ Risk Factors
+ 
+ An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The trading price of our common stock, when and if we trade at a later date, could decline due to any of these risks, and you may lose all or part of your investment.
+ 
+
+ RISKS RELATED TO OUR COMPANY
+ 
+
+ BECAUSE WE HAVE ONLY RECENTLY COMMENCED BUSINESS OPERATIONS, WE HAVE NO HISTORY OF EARNINGS AND NO FORESEEABLE EARNINGS, AND WE MAY NEVER ACHIEVE PROFITABILITY OR PAY DIVIDENDS. 
+ 
+
+ We were incorporated on July 1, 2010, and to date have been involved primarily in organizational activities, evaluating resource projects and acquiring our mining claims. Therefore, our ability to operate our business successfully remains untested. If we are successful in developing our properties, we anticipate that we will retain future earnings and other cash resources for the future operation and development of our business as appropriate. We do not currently anticipate declaring or paying any cash dividends in the foreseeable future. Payment of any future dividends is solely at the discretion of our board of directors, which will take into account many factors including our operating results, financial conditions and anticipated cash needs. For these reasons, we may never achieve profitability or pay dividends.
+ 
+
+ BECAUSE WE DO NOT HAVE ANY REVENUES, WE EXPECT TO INCUR OPERATING LOSSES FOR THE FORESEEABLE FUTURE.
+ 
+
+ We have never earned revenues and we have never been profitable. Prior to completing exploration on our mineral properties, we anticipate that we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. If we are unable to generate financing to continue the exploration of our mineral claims, we will fail and you will lose your entire investment in this offering.
+ 
+
+ 6
+ 
+
+ 
+
+ IF OUR COSTS OF EXPLORATION ARE GREATER THAN ANTICIPATED, THEN WE WILL NOT BE ABLE TO COMPLETE THE EXPLORATION PROGRAM FOR OUR MINING CLAIMS WITHOUT ADDITIONAL FINANCING, OF WHICH THERE IS NO ASSURANCE THAT WE WOULD BE ABLE TO OBTAIN.
+ 
+
+ We are proceeding with the initial phase of the exploration program on the properties covered by our four mining claims. The exploration program includes a budget of estimated costs. However, there is no assurance that our actual costs will not exceed the budgeted costs. Factors that could cause actual costs to exceed budgeted costs include increased prices due to competition for personnel and supplies during the Whitehorse winter mining season, unanticipated problems in completing the exploration program and delays experienced in completing the exploration program. Increases in exploration costs could result in us not being able to carry out our exploration program without additional financing. There is no assurance that we would be able to obtain additional financing in this event.
+ 
+
+ BECAUSE OF THE SPECULATIVE NATURE OF EXPLORATION OF MINING PROPERTIES, THERE IS SUBSTANTIAL RISK THAT NO COMMERCIALLY EXPLOITABLE MINERALS WILL BE FOUND AND OUR BUSINESS WILL FAIL.
+ 
+
+ We are in the initial stages of exploration of the properties covered by our mining claims, and thus have no way to evaluate the likelihood that we will be successful in establishing commercially exploitable reserves of gold or other valuable minerals on the property. Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The search for valuable minerals as a business is extremely risky. We may not find commercially exploitable reserves of gold or other minerals on the property. Exploration for minerals is a speculative venture necessarily involving substantial risk. The expenditures to be made by us on our exploration program may not result in the discovery of commercial quantities of ore. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. Problems such as unusual or unexpected formations, the inability to obtain suitable or adequate machinery, equipment or labor, and other risks involved in mineral exploration, often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan. In addition, any determination that the property contains commercially recoverable quantities of ore may not be reached until such time that final comprehensive feasibility studies have been concluded that establish that a potential mine is likely to be economically viable. There is a substantial risk that any preliminary or final feasibility studies carried out by us will not result in a positive determination that the property can be commercially developed. 
+ 
+
+ OUR EXPLORATION ACTIVITIES MAY NOT BE COMMERCIALLY SUCCESSFUL, WHICH COULD LEAD US TO ABANDON OUR PLANS TO DEVELOP OUR PROPERTIES AND OUR INVESTMENTS IN EXPLORATION.
+ 
+
+ Our long-term success depends on our ability to establish commercially recoverable quantities of ore on the properties that are the subject of our mining claims. Mineral exploration is highly speculative in nature, involves many risks and is frequently non-productive. Substantial expenditures are required to establish proven and probable reserves through drilling and analysis, to develop metallurgical processes to extract metal, and to develop the mining and processing facilities and infrastructure at any site chosen for mining. Whether a mineral deposit will be commercially viable depends on a number of factors, which include, without limitation, the particular attributes of the deposit, such as size, grade and proximity to infrastructure; metal prices, which fluctuate widely; and government regulations, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. We may invest significant capital and resources in exploration activities and abandon such investments if it is unable to identify commercially exploitable mineral reserves. The decision to abandon a project may reduce the trading price of our common stock and impair our ability to raise future financing. We cannot provide any assurance to investors that we will discover or acquire any mineralized material in sufficient quantities on any of our properties to justify commercial operations. Further, we will not be able to recover the funds that we spend on exploration if we are not able to establish commercially recoverable quantities of ore on our properties.
+ 
+
+ 7
+ 
+
+ 
+
+ WE WILL REQUIRE SIGNIFICANT ADDITIONAL FINANCING IN ORDER TO CONTINUE OUR EXPLORATION ACTIVITIES AND OUR ASSESSMENT OF THE COMMERCIAL VIABILITY OF OUR PROPERTIES. EVEN IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS ON OUR MINERAL PROPERTIES, WE CAN PROVIDE NO ASSURANCE THAT WE WILL BE ABLE TO SUCCESSFULLY ADVANCE OUR MINING CLAIMS INTO COMMERCIAL PRODUCTION.
+ 
+
+ The properties that are the subject of our mining claims in Whitehorse do not contain any known bodies of ore. Our business plan calls for significant expenditures in connection with the exploration of the properties. We will, however, require additional financing in order to complete the remaining phases of the exploration programs, and to conduct the economic evaluation that would be necessary for us to assess whether sufficient mineral reserves exist to justify commercial exploitation of our mining claims. We currently are in the exploration stage and have no revenue from operations. We currently do not have any arrangements in place for additional financing, and we may not be able to obtain financing on terms that are acceptable to us, or at all. If we are unable to obtain additional financing, we will not be able to continue our exploration activities and our assessment of the commercial viability of our properties. Further, if we are able to establish that development of our properties is commercially viable, our inability to raise additional financing at this stage would result in our inability to place the particular property or properties into production and recover our investment.
+ 
+ AS WE UNDERTAKE EXPLORATION OF OUR MINING CLAIMS, WE WILL BE SUBJECT TO COMPLIANCE WITH GOVERNMENT REGULATION THAT MAY INCREASE THE ANTICIPATED TIME AND COST OF OUR EXPLORATION PROGRAM.
+ 
+
+ There are several governmental regulations that materially restrict the exploration of minerals. We will be subject to the mining laws and regulations of the Whitehorse Region as we carry out our exploration program. We may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these regulations. 
+ 
+
+ BECAUSE ACCESS TO OUR MINING CLAIMS IS OFTEN RESTRICTED BY INCLEMENT WEATHER, WE WILL BE DELAYED IN OUR EXPLORATION AND ANY FUTURE MINING EFFORTS.
+ 
+
+ Access to the properties that are the subject of our mining claims is restricted to the period between November extending into April of each year due to snow and storms in the area. As a result, any attempts to visit, test or explore the property are largely limited to the few months out of the year when weather permits such activities. These limitations can result in significant delays in exploration efforts, as well as mining and production in the event that commercial amounts of minerals are found. This may cause our business venture to fail and the loss of your entire investment in our common stock.
+ 
+
+ CURRENT GLOBAL FINANCIAL CONDITIONS HAVE MADE ACCESS TO FINANCING MORE DIFFICULT. 
+ 
+ Since the fall of 2008 there has been severe deterioration in global credit and equity markets. This has resulted in the need for government intervention in major banks, financial institutions and insurers, and has also led to greater volatility, increased credit losses and tighter credit conditions. These unprecedented disruptions in the credit and financial markets have had a significant adverse impact on a number of financial institutions and have limited access to capital and credit for many companies. These disruptions could, among other things, make it more difficult for us to obtain, or increase our cost of obtaining, capital and financing for our operations. 
+ 
+ 8
+ 
+
+ 
+
+ WE ARE SUBJECT TO RISKS INHERENT IN THE MINING INDUSTRY AND AT PRESENT WE DO NOT HAVE ANY INSURANCE AGAINST SUCH RISKS. ANY LOSSES WE MAY INCUR THAT ARE ASSOCIATED WITH SUCH RISKS MAY CAUSE US TO INCUR SUBSTANTIAL COSTS WHICH WILL HAVE A MATERIAL ADVERSE EFFECT UPON OUR RESULTS OF OPERATIONS.
+ 
+
+ Any mining operations that we may undertake in the future will be subject to risks normally encountered in the mining business. Mining for gold and other valuable minerals is generally subject to a number of risks and hazards including environmental hazards, industrial accidents, labor disputes, unusual or unexpected geological conditions, pressures, cave-ins, changes in the regulatory environment and natural phenomena such as inclement weather conditions, floods, blizzards and earthquakes. At the present we do not intend to obtain insurance coverage and even if we were to do so, no assurance can be given that such insurance will continue to be available or that it will be available at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration and production is not generally available to companies in the mining industry on acceptable terms. We might also become subject to liability for pollution or other hazards which may not be insured against or which we may elect not to insure against because of premium costs or other reasons. Losses from these events may cause us to incur significant costs that could have a material adverse effect upon our financial performance and results of operations. Such costs could potentially exceed our asset value and cause us to liquidate all of our assets, resulting in the loss of your entire investment in our common stock. 
+ 
+ IF WE DO NOT FIND A JOINT VENTURE PARTICIPANT FOR THE CONTINUED DEVELOPMENT OF OUR MINING CLAIMS, WE MAY NOT BE ABLE TO ADVANCE THE EXPLORATION WORK.
+ 
+
+ If the initial results of our mineral exploration program are successful, we may try to enter into a joint venture agreement with a third party for the further exploration and possible production of the properties covered by our mining claims. We would face competition from other junior mineral resource exploration companies if we attempt to enter into a joint venture agreement with a third party. A prospective joint venture participant could have a limited ability to enter into joint venture agreements with junior exploration companies, and will seek the junior exploration companies who have the properties that it deems to be the most attractive in terms of potential return and investment cost. In addition, if we entered into a joint venture agreement, we would likely assign a percentage of our interest in the mining claims to the joint venture participant. If we are unable to enter into a joint venture agreement with a third party, we may fail and you will lose your entire investment in our common stock. 
+ 
+
+ WE RELY ON OUR MEMBER OF MANAGEMENT, THE LOSS OF WHOSE SERVICES WOULD HAVE A MATERIAL ADVERSE EFFECT ON OUR SUCCESS AND DEVELOPMENT.
+ 
+
+ Our success depends to a certain degree upon our only member of management. This individual is a significant factor in our growth and success. The loss of the service of our manager could have a material adverse effect on us. In particular, our success is highly dependent upon the efforts of our sole officer and sole director, the loss of whose services would have a material adverse effect on our success and development.
+ 
+ BECAUSE OUR DIRECTOR AND OFFICER HAVE NO EXPERIENCE IN MINERAL EXPLORATION AND DO NOT HAVE FORMAL TRAINING SPECIFIC TO THE TECHNICALITIES OF MINERAL EXPLORATION, THERE IS A HIGHER RISK OUR BUSINESS WILL FAIL.
+ 
+
+ Our sole officer and director has no experience in mineral exploration and does not have formal training as a geologist or in the technical aspects of management of a mineral exploration company. As a result of this inexperience there is a higher risk of our being unable to complete our business plan for the exploration of our mining claims. In addition, we will have to rely on the technical services of others with expertise in geological exploration in order for us to carry out planned exploration program. If we are unable to contract for the services of such individuals, it will make it difficult and maybe impossible to pursue our business plan. There is thus a higher risk that our operations, earnings and ultimate financial success could suffer irreparable harm and our business will likely fail and you will lose your entire investment in our common stock.
+ 
+ 9
+ 
+ 
+ 
+ BECAUSE OUR MANAGER LACKS TECHNICAL TRAINING AND EXPERIENCE WITH EXPLORING FOR, STARTING AND/OR OPERATING A MINE, THERE IS A HIGHER RISK OUR BUSINESS WILL FAIL.
+ 
+
+ Our manager lacks technical training and experience with exploring for, starting and/or operating a mine. With no direct training or experience in these areas, our manager may not be fully aware of many of the specific requirements related to working within this industry. Our manager s decisions and choices may not take into account standard engineering or managerial approaches which mineral exploration companies commonly use. Consequently, our operations, earnings and ultimate financial success could suffer irreparable harm due to our manager s lack of experience in the industry.
+ 
+ BECAUSE OF THE FIERCELY COMPETITIVE NATURE OF THE MINING INDUSTRY WE MAY BE UNABLE TO MAINTAIN OR ACQUIRE ATTRACTIVE MINING PROPERTIES ON ACCEPTABLE TERMS WHICH WILL MATERIALLY AFFECT OUR FINANCIAL CONDITION.
+ 
+
+ The mining industry is competitive in all of its phases. We face strong competition from other mining companies in connection with the acquisition of properties producing, or capable of producing, precious and base metals. Many of these companies have greater financial resources, operational experience and technical capabilities. As a result of this competition, we may be unable to maintain or acquire attractive mining properties on terms we consider acceptable or at all. Consequently, our revenues, operations and financial condition could be materially adversely affected.
+ 
+
+ BECAUSE OUR EXECUTIVE OFFICER HAS OTHER BUSINESS INTERESTS, HE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS OPERATION, CAUSING OUR BUSINESS TO FAIL.
+ 
+
+ Our executive officer is spending only approximately 10% of his business time on providing management services to us. While our officer presently possesses adequate time to attend to our interests, it is possible that the demands on him from her other obligations could increase with the result that they would no longer be able to devote sufficient time to the management of our business. This could negatively impact our business development.
+ 
+
+ THE RECENTLY ENACTED JOBS ACT WILL ALLOW US TO POSTPONE THE DATE BY WHICH WE MUST COMPLY WITH SOME OF THE LAWS AND REGULATIONS INTENDED TO PROTECT INVESTORS AND TO REDUCE THE AMOUNT OF INFORMATION WE PROVIDE IN OUR REPORTS FILED WITH THE SEC, WHICH COULD UNDERMINE INVESTOR CONFIDENCE IN OUR COMPANY AND ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK. 
+ 
+
+ For so long as we remain an emerging growth company as defined in the JOBS Act, we may take advantage of certain exemptions from various requirements that are applicable to public companies that are not emerging growth companies including: 
+ 
+
+ 
+ the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting; 
+ 
+
+ 
+ the say on pay provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the say on golden parachute provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of the Dodd-Frank Act and some of the disclosure requirements of the Dodd-Frank Act relating to compensation of its chief executive officer; 
+ 
+
+ 
+ the requirement to provide detailed compensation discussion and analysis in proxy statements and reports filed under the Securities Exchange Act of 1934, and instead provide a reduced level of disclosure concerning executive compensation; and 
+ 
+
+ any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor s report on the financial statements. 
+ 
+
+ We may take advantage of these exemptions until we are no longer an emerging growth company. We would cease to be an emerging growth company upon the earliest of: (i) the first fiscal year following the fifth anniversary of this offering; (ii) the first fiscal year after our annual gross revenues are $1 billion or more; (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities; or (iv) as of the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year. 
+ 
+
+ Although we are still evaluating the JOBS Act, we currently intend to take advantage of some, but not all, of the reduced regulatory and reporting requirements that will be available to us so long as we qualify as an emerging growth company. For example, we have irrevocably elected not to take advantage of the extension of time to comply with new or revised financial accounting standards available under Section 102(b) of the JOBS Act. Our independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting so long as we qualify as an emerging growth company, which may increase the risk that weaknesses or deficiencies in our internal control over financial reporting go undetected. Likewise, so long as we qualify as an emerging growth company, we may elect not to provide you with certain information, including certain financial information and certain information regarding compensation of our executive officers, that we would otherwise have been required to provide in filings we make with the SEC, which may make it more difficult for investors and securities analysts to evaluate our company. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile and may decline. 
+ 
+
+ 10
+ 
+RISKS RELATED TO OUR COMMON STOCK
+ 
+
+ THERE IS NO ACTIVE TRADING MARKET FOR OUR COMMON STOCK AND IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, OUR INVESTORS WILL BE UNABLE TO SELL THEIR SHARES.
+ 
+
+ There is currently no active trading market for our common stock and such a market may not develop or be sustained. We currently plan to have our common stock quoted on FINRA's OTC Bulletin Board upon the effectiveness of this registration statement of which this prospectus forms a part. In order to do this, a market maker must file a Form 15c-211 to allow the market maker to make a market in our shares of common stock. At the date hereof we are not aware that any market maker has any such intention. However, we cannot provide our investors with any assurance that our common stock will be traded on the OTC Bulletin Board or, if traded, that a public market will materialize. Further, the OTC Bulletin Board is not a listing service or exchange, but is instead a dealer quotation service for subscribing members. If our common stock is not quoted on the OTC Bulletin Board or if a public market for our common stock does not develop, then investors may not be able to resell the shares of our common stock that they have purchased and may lose all of their investment. If we establish a trading market for our common stock, the market price of our common stock may be significantly affected by factors such as actual or anticipated fluctuations in our operation results, general market conditions and other factors. In addition, the stock market has from time to time experienced significant price and volume fluctuations that have particularly affected the market prices for the shares of developmental stage companies, which may materially adversely affect the market price of our common stock.
+ 
+ OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S PENNY STOCK REGULATIONS AND THE NASD'S SALES PRACTICE REQUIREMENTS, WHICH MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.
+ 
+
+ Our common stock will be subject to the "Penny Stock" Rules of the Securities and Exchange Commission (the "SEC"), which will make transactions in our common stock cumbersome and may reduce the value of an investment in our common stock. 
+ 
+
+ We currently plan to have our common stock quoted on the OTC Bulletin Board, which is generally considered to be a less efficient market than markets such as NASDAQ or the national exchanges, and which may cause difficulty in conducting trades and difficulty in obtaining future financing. There is no assurance of when, if ever, our stock will be listed on an exchange. Further, our securities will be subject to the "penny stock rules" adopted pursuant to Section 15(g) of the Securities Exchange Act of 1934, as amended. The penny stock rules apply generally to companies whose common stock trades at less than $5.00 per share, subject to certain limited exemptions. Such rules require, among other things, that brokers who trade "penny stock" to persons other than "established customers" complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade "penny stock" because of the requirements of the "penny stock rules" and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. In the event that we remain subject to the "penny stock rules" for any significant period, there may develop an adverse impact on the market, if any, for our securities. Because our securities are subject to the "penny stock rules, investors will find it more difficult to dispose of our securities. Further, it is more difficult: (i) to obtain accurate quotations, (ii) to obtain coverage for significant news events because major wire services, such as the Dow Jones News Service, generally do not publish press releases about such companies, and (iii) to obtain needed capital.
+ 
+ 
+
+ Forward-Looking Statements
+ 
+ This prospectus contains forward-looking statements that involve risks and uncertainties, including statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve risks and uncertainties regarding the market price of gold and other valuable minerals, availability of funds, government regulations, operating costs, exploration costs, outcomes of exploration programs and other factors. Forward-looking statements are made, without limitation, in relation to operating plans, property exploration and development, availability of funds, environmental reclamation, operating costs and permit acquisition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined in this prospectus. These factors may cause our actual results to differ materially from any forward-looking statement. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding our business plans, our actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. We do not intend to update any of the forward-looking statements to conform these statements to actual results, except as required by applicable law, including the securities laws of the United States. 
+ 
+
+ The safe harbor for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995 does not apply to the offering made in this prospectus
+ 
+ Use of Proceeds
+ 
+ The Selling Stockholders are selling shares of common stock covered in the prospectus for their own account. We will not receive any of the proceeds from the resale of these shares. We have agreed to bear the expenses relating to the registration of the shares for the Selling Stockholders.
+ 
+
+ 11
+ 
+
+ 
+
+ Determination of Offering Price
+ 
+ Not applicable. The selling stockholders may offer their shares through public or private transactions, on or off OTCBB, at prevailing market prices, or at privately negotiated prices. There is no assurance of when, if ever, our stock will be listed on an exchange.
+ 
+
+ Dilution
+ 
+ Not applicable. We are not offering any shares in this registration statement. All shares are being registered on behalf of our selling shareholders. 
+ 
+ Selling Shareholders
+ 
+ The selling shareholders named in this prospectus are offering all of the 330,000 shares of common stock offered through this prospectus. These shares were acquired from us in private placements that were exempt from registration provided under Regulation 4(2) of the Securities Act of 1933. All shares were issued by us in transactions not involving any public offering, to purchasers who had enough knowledge and experience in finance and business matters to evaluate the risks and merits of the investment, who had access to the type of information normally provided in a prospectus, and who agreed not to resell or distribute the securities to the public. In addition, we did not use any form of public solicitation or general advertising in connection with the issuance of the shares. 
+ 
+
+ The following table provides as of the date of this prospectus, information regarding the ownership of our common stock held by each of the selling shareholders, including: 
+ 
+
+ 
+ the number of shares owned by each prior to this offering;
+ 
+
+ 
+ the total number of shares that are to be offered for each;
+ 
+
+ 
+ the total number of shares that will be owned by each upon completion of the offering; and
+ 
+
+ 
+ the percentage owned by each upon completion of the offering.
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ Name Of Selling
+ Shareholder
+ Shares Owned Prior
+ To This Offering
+ Total Number Of Shares To Be Offered
+ For Selling Shareholders Account
+ Total Shares to Be Owned Upon
+ Completion Of This Offering
+ Percentage of Shares owned Upon
+ Completion of This Offering
+
+ Eliberto Pajoy Gil
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Lina Yecsenia Ordonez Bravo
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Virginia Vander Leest (1)
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Alexander Bravo Ordonez
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Edwin Javier Castaneda Romero
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Diego Armando Munoz Munoz
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Juan Pablo Velasquez Losada
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Jhonathan Alexander Mendoza Gomez
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Yader Esmitson Arteaga Yascual
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Viviana Yuridia Arteaga Yascual
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Milton Alveiro Gomez Rosero
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Maria Del Carmen Yascual Titistar
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Giancarlo Pajoy Rivas
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Stella Guzman
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Debora Katherine Urbano
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Maria Sohe Osorio Giraldo
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Randy Guzman Salazar
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Mabel Adriana Narvaez Duque
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Leyder Oliveros Salcedo
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Carlos Humberto Salazar Osorio
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Carl Ekstrom
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Cristhian Paul Salazar Gaviria
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Jefferson Enrique Velasquez Guzman
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Reid Campbell
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Ashton Reinboldt
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Johny Penaloza Millan
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Evely Yojana Ordonez Bravo
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Ruben Lopez Perez
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Libardo Andres Chaux Martinez
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Dylan Exton
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Dustin Walz
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ Taylor Langford
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ John Adam Vander Leest
+ 10,000
+ 10,000
+ Nil
+ Nil
+
+ 
+
+ (1)
+ Virginia Vander Leest is the mother of our sole officer and director.
+ 
+
+ The numbers in this table assume that none of the selling shareholders sells shares of common stock not being offered in this prospectus or purchases additional shares of common stock, and assumes that all shares offered are sold. The percentages are based on 10,330,000 shares of common stock outstanding on the date of this prospectus. 
+ 
+ Other than disclosed above, none of the selling shareholders: 
+ 
+
+ 1.
+ has had a material relationship with us other than as a shareholder at any time within the past three years; 
+ 2.
+ has ever been one of our officers or directors; or
+ 3.
+ is a broker-dealer; or broker-dealer's affiliate.
+ 
+ 12
+ 
+
+ Plan of Distribution
+ 
+ Timing of Sales
+ 
+
+ The selling stockholders may offer and sell the shares covered by this prospectus at various times. The selling stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale. 
+ 
+ Offering Price
+ 
+
+ The selling stockholders will sell their shares at an offering price of $0.10 per share until our shares are quoted on the OTC Bulletin Board, or listed for trading or quoted on any other public market. Thereafter, the sales price offered by the selling stockholders to the public may be:
+ 
+
+ 1.
+ the market price prevailing at the time of sale;
+ 2.
+ a price related to such prevailing market price; or
+ 3.
+ such other price as the selling stockholders determine from time to time.
+ 
+
+ Our common stock is not currently listed on any national exchange or electronic quotation system. To date, no actions have been taken to list our shares on any national exchange or electronic quotation system. If our common stock becomes publicly traded, then the sales price to the public will vary according to the selling decisions of each selling stockholder and the market for our stock at the time of resale. 
+ 
+ Manner of Sale
+ 
+
+ The selling stockholders may sell their shares directly to purchasers or may use brokers, dealers, underwriters or agents to sell their shares. Brokers or dealers engaged by the selling stockholders may arrange for other brokers or dealers to participate. Brokers or dealers may receive commissions, discounts or concessions from the selling stockholders, or, if any such broker-dealer acts as agent for the purchaser of shares, from the purchaser in amounts to be negotiated immediately prior to the sale. The compensation received by brokers or dealers may, but is not expected to, exceed that which is customary for the types of transactions involved. Broker-dealers may agree with a selling stockholder to sell a specified number of shares at a stipulated price per share, and, to the extent the broker-dealer is unable to do so acting as agent for a selling stockholder, to purchase as principal any unsold shares at the price required to fulfill the broker-dealer commitment to the selling stockholder. Broker-dealers who acquired shares as principal may thereafter resell the shares from time to time in transactions, which may involve block transactions and sales to and through other broker-dealers, including transactions of the nature described above, in the over-the-counter market or otherwise at prices and on terms then prevailing at the time of sale, at prices then related to the then-current market price or in negotiated transactions. In connection with resales of the shares, broker-dealers may pay to or receive from the purchasers of shares commissions as described above. 
+ 
+
+ If our selling stockholders enter into arrangements with brokers or dealers, as described above, we are obligated to file a post-effective amendment to this registration statement disclosing such arrangements, including the names of any broker dealers acting as underwriters.
+ 
+ The selling stockholders and any broker-dealers or agents that participate with the selling stockholders in the sale of the shares may be deemed to be "underwriters" within the meaning of the Securities Act. In that event, any commissions received by broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. 
+ 
+ Sales Pursuant to Rule 144
+ 
+
+ Any shares of common stock covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act, as amended, may be sold under Rule 144 rather than pursuant to this prospectus.
+ 
+ 
+
+ 13
+ 
+
+ Regulation M
+ 
+
+ We have advised the selling security holders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling security holders and their affiliates. Regulation M under the Exchange Act prohibits, with certain exceptions, participants in a distribution from bidding for, or purchasing for an account in which the participant has a beneficial interest, any of the securities that are the subject of the distribution. Accordingly, the selling stockholder is not permitted to cover short sales by purchasing shares while the distribution of it taking place. Regulation M also governs bids and purchases made in order to stabilize the price of a security in connection with a distribution of the security. In addition, we will make copies of this prospectus available to the selling security holders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. 
+ 
+ State Securities Laws
+ 
+
+ Under the securities laws of some states, the shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares may not be sold unless the shares have been registered or qualified for sale in the state or an exemption from registration or qualification is available and is complied with. 
+ 
+ Expenses of Registration
+ 
+
+ We are bearing all costs relating to the registration of the common stock. These expenses are estimated to be $88,417, including, but not limited to, legal, accounting, printing and mailing fees. The selling stockholders, however, will pay any commissions or other fees payable to brokers or dealers in connection with any sale of the common stock.
+ 
+ Description of Securities
+ 
+ General 
+ 
+
+ Our authorized capital stock consists of 75,000,000 shares of common stock, with a par value of $0.001 per share. As of August 31, 2012, there were 10,330,000 shares of our common stock issued and outstanding held by 34 shareholders of record. 
+ 
+ Common Stock 
+ 
+
+ Registered holders of our common stock are entitled to exercise one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Except as otherwise required by law or as provided in any resolution adopted by our board of directors with respect to any series of preferred stock, the holders of our common stock will possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy, subject to any voting rights granted to holders of any preferred stock. The holders of a majority of the shares issued, outstanding, and entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum at all meetings of the shareholders for the transaction of business except as otherwise provided by Nevada statute or by the Articles. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our Articles of Incorporation do not provide for cumulative voting in the election of directors. 
+ 
+
+ Subject to any preferential rights of any outstanding series of preferred stock created by our board of directors from time to time, the holders of shares of our common stock will be entitled to such cash dividends as may be declared from time to time by our board of directors from funds available therefore. See "Dividend Policy."
+ 
+
+ Subject to any preferential rights of any outstanding series of preferred stock created from time to time by our board of directors, upon liquidation, dissolution or winding up of our company, the holders of shares of our common stock will be entitled to receive pro rata all of our assets available for distribution to such holders.
+ 
+ In the event of any merger or consolidation of our company with or into another company in connection with which shares of our common stock are converted into or exchangeable for shares of stock, other securities or property (including cash), all holders of our common stock will be entitled to receive the same kind and amount of shares of stock and other securities and property (including cash).
+ 
+
+ Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock. 
+ 
+ 14
+ 
+ 
+ Preferred Stock 
+ 
+
+ As of the date of this prospectus, there is no preferred stock issued or authorized.
+ 
+ Dividend Policy 
+ 
+
+ We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.
+ 
+ Share Purchase Warrants 
+ 
+
+ There are no outstanding warrants to purchase our securities.
+ 
+ Options 
+ 
+
+ There are no options to purchase our securities outstanding.
+ 
+
+ Interests of Named Experts and Counsel
+ 
+
+ The legality of the shares offered under this registration statement is being passed upon by Anthony Giordano. The financial statements included in this prospectus have been audited by De Joya Griffith, LLC. to the extent and for the periods set forth in their report appearing elsewhere herein and in the registration statement, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.
+ 
+ Description of Business 
+ 
+ General
+ 
+
+ We are an exploration stage company engaged in the acquisition and exploration of mineral properties. Our business plan is not yet complete. We own our placer prospecting lease to prospect approximately a 0.0613 square mile portion of land located off Canol Highway, 18 miles north of its junction with the Alaskan Highway and 45 miles east south east of Whitehorse, the capital city of the Yukon. We purchased these claims for $31,500. The placer prospecting lease covers an area of approximately 0.0613 square miles. The mining claims cannot be mined but can be eventually staked into claim, if it is kept in good standing. To keep a claim in good standing the claim holder must work the claim and apply for a certificate of work, or pay a fee in lieu of work. A claim is in good standing for one year after the date it is recorded. The official recorded date is the date the mining recorder receives your application form, sketch and fees. During this one year period, the claim holder is required to do $100.00 worth of representation work on the claim. 
+ 
+
+ The property covered by our mining claims does not contain any substantiated mineral deposits or reserves of minerals. The region is principally a logging region. The property has no encumbrances. Minimal exploration has been carried out on the property. Accordingly, additional exploration of the property is required before any determination as to whether any commercially viable mineral deposit may exist. Our plan of operations is to carry out preliminary exploration work on the property in order to ascertain whether our mining claims warrants advanced exploration to determine whether they possess commercially exploitable deposits of gold. We will not be able to determine whether or not the property contains a commercially exploitable mineral deposit, or reserve, until appropriate exploratory work is done and an economic evaluation based on that work concludes economic viability.
+ 
+
+ We acquired our mining claims in August of 2011. We have obtained a geological report on the underlying property that has recommended an exploration program. The geological report was obtained from APEX Geoscience, an unaffiliated third party. We have determined to proceed with the first phase of this recommended exploration program. The estimated cost of this exploration program is $20,000. As at August 31, 2012, we had cash reserves of $5,094 and working capital deficit of $75,117. We have insufficient funds to enable us to complete this initial phase of our exploration program, thus we will require additional financing in order to complete full exploration of the property to determine whether sufficient mineralized material, if any, exists to justify staking the mining claims into claim with the view to facilitating eventual mining and production. Even if we determine that a mineral deposit exists on the property, an economic evaluation must be completed before the economic viability of commercial exploitation of the property could be completed. Both advanced exploration and an economic determination will be contingent upon the results of our preliminary exploration programs and our ability to raise additional financing in order to proceed with advanced exploration and an economic evaluation. There is no assurance that we will be able to obtain any additional financing to fund our exploration activities.
+
+ 15
+ 
+ 
+ Exploration Stage Company
+ 
+
+ We are considered an exploration or exploratory stage company as we are involved in the examination and investigation of land that we believe may contain valuable minerals, for the purpose of discovering the presence of ore, if any, and its extent. Since we are an exploration stage company, there is no assurance that a commercially viable mineral deposit exists on the property covered by the mining claims, and a great deal of further exploration will be required before a final evaluation as to the economic and legal feasibility for our future exploration is determined. We have no known reserves of any type of mineral. To date, we have not discovered an economically viable mineral deposit on the property, and there is no assurance that we will discover one.
+ 
+ Acquisition of Our mining claims
+ 
+
+ On August 11, 2010, we entered into an agreement with Oro Quest Inc. to purchase Joe and Bob, both located in the Whitehorse district. Joe s information is as follows: YD117413 grant number. Reg type: Quartz. Karl Gruber Jr. -100% claim owner. 105C14 NTS map number. Ops number 500226871. Operation recording date; 2010-11-03. Staking date: 2010-10-24. Claim expiry date: 2012-11-03. Bob s information is as follows: YD117415 grant number. Reg type: Quartz. Karl Gruber Jr. -100% claim owner. 105C05 NTS map number. Ops number 500226872. Operation recording date: 2010-11-03, staking date: 2010-10-29. Claim expiry date: 2012-11-03. Both claims were purchased for $18,500.
+ 
+
+ On November 8, 2011, we entered into an agreement with Oro Quest Inc. to purchase Zee and Dio, both located at Whitehorse district. Zee s information is as follows: YD117414 grant number. Reg type: Quartz. Jenny Gruber-100% claim owner. 105C05 NTS map number. Ops number 500229162. Operation recording date: 2010-11-25. Staking date: 2010-10-30. Claim expiry date: 2012-11-25. Dio s information is as follows: YD117412 grant number. Reg type: Quartz. Karl Gruber Jr. -100% claim owner. 105D14 NTS map number. Ops number 500231165. Operation recording date: 2010-12-03. Staking date: 2010-11-06. Claim expiry date: 2012-12-03. Both claims were purchased for $13,000.00. 
+ 
+ 
+
+ 
+
+ The mining claims constitute a disposition of land granted under the Placer Mining Act (Yukon Territory, Canada). The mining claims cannot be mined but can be staked into claim if it is kept in good standing. 
+ 
+
+ The area is part of the Yukon Plateau of the Canadian Cordillera with subdued rounded mountains with broad rolling upland interstream areas between north-northwesterly trending ranges which constitute the north-westward extension of the Cassiar Mountains into Alaska. In the area of the Nisutlin River valley the elevations range from the 2,500 feet to above 6,000 feet and in the area of the placer claims the elevation is just below 3,000 feet. 
+ 
+ 16
+ 
+
+ Our Ownership Interest in the mining claims
+ 
+
+ We own title to the mining claims.
+ 
+ Our claim was evaluated upon the initiation by James Oei, the President of Silica Resources Corp. The area was researched, and several trips were undertaken to various placer areas to get more information and a better understanding of the area s potential. An extensive report has been provided by geologist Laurence Stephenson. 
+ 
+
+ Property Description and Location of Our mining claims
+ 
+
+ The property that is the subject of our mining claims lies below the confluence of Sydney and Iron Creeks, tributaries of Nisutlin River, which flows in to Lake Teslin, just off the Alaskan Highway, in the Yukon s Coastal Mountain ranges. The property is 20 miles west of the town of Carcross, Yukon and approximately 45 miles east southeast of Whitehorse. To date we have not discovered an economically viable mineral deposit on the mineral property, and there is no assurance that we will discover one.
+ 
+
+ The Togsquanga claim YD 117415 is located in the interior Yukon Plateau, approximately 100km from Whitehorse, in NTS zone 105C. The claim name Togsquanga is a hybrid name coined from the Squanga Lake to the north, and a previously drilled gold prospect named Tog situated 1km to the south of the claim. The officially recorded name of the claim with the Yukon Government is Bob . The Company refers to this claim as the Togsquanga/Bob property. 
+ 
+ 
+ 17
+ 
+
+ The total area of the claim is approximately 0.209 square kilometers and it is located directly on the Klondike Highway, 102 km east of Whitehorse by highway, or 84km by direct helicopter flight. The Togsquanga claim is situated 50km by helicopter and 82km by road from the Company s Sidney Creek property, via Canol Road. See 1:75,000, 1:200,000, and 1:700,000 maps included herein
+ The Sidney Creek property is comprised of two active mineral claims quartz claim Joe YD 117413, and placer claim Pete P 50716 (also known as Euker to the Company), located in the interior Yukon Plateau. The two claims are situated 6.5 km apart, 8km west of Canol Road and are accessible via an 8km all-weather ATV trail which intersects both claims. The property is approximately 180km from Whitehorse to the west by highway, or 106 km by helicopter flight. The Bob/Togsquanga property is located 80km from the Sidney Creek claims by highway or 50km by helicopter.
+ 
+ 18
+ 
+
+ 19
+ 
+
+ Access, Climate, and Physiography, Local Resources and Infrastructure of Our mining claims
+ The area can be accessed by two wheel drive vehicle about 3 hours from Whitehorse via the Alaskan Highway and is just 7 miles off the Canol Highway. Whitehorse, the capital city of the Yukon Territory, is fully serviced community of approximately 15,000 people and with Rail and air transport and major power transmission. Lower slopes forested and mantled by glacial drift and colluvium, reflecting the various phases of continental and alpine glaciations although local cliffs and creek canyons afford good rock exposure.
+ 
+
+ The Togsquanga claim is considered by the Company to be prospective for several reasons. Firstly, the proximity of the claim to the Klondike Highway, Whitehorse, and the U.S, Canadian, and global markets is important for the provision of labor, communication, supplies, and for the development of a viable export mining operation. Secondly, the property is located within 1-4km of three Yukon Government Minifile Mineral Occurances, including one drilled gold prospect - The Tog/Dalayee Lake Occurance . Most importantly, the geology of the area, particularly the ultramafic intrusions surrounding the Tog claim, are known traps for gold, silver and other precious mineral occurances, as is shown in the 1:75,000 , 1:200,000, and 1:700,000 scale maps of the property. Note how the mineral occurances can clearly be seen to trace the ultramafic occurances near the Tog claim.
+ All amenities including police, hospitals, groceries, fuel, helicopter services, hardware and other necessary items are located within 80-100km of the properties and are accessible via a short helicopter ride or highway drive. Labor, construction, and placer equipment companies are also present in Whitehorse. There is a campsite located close to the Bob claim along the Klondike Highway, 1 km to the north east. 
+ The vegetation is typical of the interior Yukon Plateau with a mix of fir trees with alder, willow and cottonwood on old trails and poorly drained areas. Climate is dramatically changed with long, cold winters and warmer summers. Exploration is expected to be conducted on the property primarily during summer months when ground conditions permit sampling, staking of additional claims to tie on to existing claims, removal of overburden, drilling and underground exploration. Mapping has been done on the property by an independent consultant which has identified targets for future exploration and possible expansion of the property through additional tie-on staking.
+ Lower slopes are forested and mantled by glacial drift and colluvium, reflecting the various phases of continental and alpine glaciation, although local cliffs and creek canyons afford good rock exposure. (Colluvium refers to loose bodies of sediment that has been deposited or built up at the bottom of a low grade slope or against a barrier on that slope, transported by gravity.) The Bob claim is located 1000m above sea level and is surrounded by several lakes, namely Squanga lake to the north and Dalayee lake to the south. 
+
+ The Sidney Creek claims are considered highly prospective by the Company due to their proximity to existing infrastructure, active mineral operations, and previously discovered Yukon Minifile prospects and showings, including drilled gold prospects (please see 1:75,000, 1:200,000 and 1:700,000 scale maps of the property). The Sidney Creek property is bisected by a large ultramafic intrusion which follows along Sidney Creek. 
+ Less than one kilometer to the south is the Bruno Poulin Mining Land Use Permit (LQ00257). Currently, the Yukon Government has approved a water use application (PM05-482) for a placer mining undertaking pursuant to mining land use approval AP05-42. Limited regional mapping by a consultant on this property uncovered a Cretaceous pluton and argillite, quartzite, limestone and chloritic volcanics assumed to belong to the Big Salmon Complex. 
+ The Bruno Poulin mining land use operation hosts 2 mineral occurances (Bobo and Rae occurances) positioned immediately south of Sidney Creek. The regional geology of this area shows a large ultramafic intrusion which covers the entire length of the creek. The Euker claim is directly positioned on the creek. Another mining land use permit 8km to the north west also follows along Sidney Creek. Mineral occurances can be found in abundance along Sidney Creek as alluvial glacial deposits have deposited precious minerals such as gold, silver, copper, zinc, iron, and chromium near the creek. Similarly to the Bob claim area, the ultramafic occurances along Sidney Creek are traps for gold and silver mineralization and host a variety of other precious metals including zinc, copper and chromium.Lower slopes are forested and mantled by glacial drift and colluvium, reflecting the various phases of continental and alpine glaciation although local cliffs and creek canyons afford good rock exposure. (Colluvium refers to loose bodies of sediment that has been deposited or built up at the bottom of a low grade slope or against a barrier on that slope, transported by gravity.) The vegetation is typical of the interior Yukon Plateau with a mix of fir trees with alder, willow and cottonwood on old trails and poorly drained areas. Climate is dramatically changed with long, cold winters and warmer summers. Exploration is expected to be conducted on the property primarily during summer months when ground conditions permit sampling, staking of additional claims to tie on to existing claims, removal of overburden, drilling and underground exploration. Mapping has been done on the property by an independent consultant which has identified targets for future exploration and possible expansion of the property through additional tie-on staking.
+ Lower slopes are forested and mantled by glacial drift and colluvium, reflecting the various phases of continental and alpine glaciation although local cliffs and creek canyons afford good rock exposure. (Colluvium refers to loose bodies of sediment that has been deposited or built up at the bottom of a low grade slope or against a barrier on that slope, transported by gravity.)All amenities including police, hospitals, groceries, fuel, helicopter services, hardware and other necessary items are available via short helicopter ride. Construction and placer equipment companies are present in communities nearby. There is a campground approximately 10km up Canol Road from the Sidney Creek properties. 
+ The vegetation is typical of the interior Yukon Plateau with a mix of fir trees with alder, willow and cottonwood on old trails and poorly drained areas. Climate is dramatically changed with long, cold winters and warmer summers.
+ The most snow is observed on the tops of the hills in late January. All the population centers in the area totaling almost 15,000 people are within a one to two hour drive of the project and provide all amenities including police, hospitals, groceries, fuel, helicopter services, hardware and other necessary items. Construction and placer equipment companies are present in the communities nearby while assay facilities are located in Whitehorse. A small map showing the location to our mining claims is presented below:
+ 20
+ 
+
+ 
+ 21
+ 
+
+ 22
+ 
+
+ 
+ 23
+ 
+
+ 24
+ 
+
+ Prior Exploration
+ 
+
+ No full scale or systematic exploration of the placers has been undertaken. Little surface mapping or sampling has been completed on the property that is the subject of our mining claims. None of the prior exploration on the property has been completed by us, other than the preparation of a geological report.
+ 
+
+ The deposits were discovered in 1905, worked intermittently until the mid-1930 s, and then received an examination of the placers at the Sidney and Iron Creeks junction in the 1950 s by geologist Robert Steiner. No recent work has been conducted since the late 1980 s. At that time, there were at least two and possibly three rudimentary placer sampling and evaluation programs undertaken on Iron and Sidney Creeks. The drop in price of gold in the 1980 s paused exploration and has only experienced resurgence with the surge in price of gold.
+ 
+
+ Present Condition and Current State of Exploration
+ 
+
+ Our mining claims presently do not have any mineral reserves. The property that is the subject of our claim is undeveloped and does not contain any open-pit or underground mines. There is no plant or equipment located on the property.
+ 
+
+ Geology of Our mining claims
+ 
+
+ The area's bedrock geology includes younger Paleozoic and Mesozoic stratified rocks to the southwest, including the area of the claims and a broad terrain of early Paleozoic and Proterozoic rocks to the northeast. The northwesterly trending fold axes of the stratified rocks are intruded by Cretaceous felsic and Permian- Jurassic mafic bodies. 
+ 
+
+ Glaciation in the area consists of several different episodes and includes both continental and alpine types. The most recent continental ice sheets moved in a westerly to southwesterly direction and are antedated by alpine glaciation and prior continental glaciation. The peneplanation which is reflected in the rounded mountainous terrain tops was due to the continental ice sheets while the sharp cirque and U-shaped valleys gravel terraces were shaped by the latter alpine glacial reconcentration of the ancient detritus into the present day features. 
+ 
+
+ Placer deposits occur as a result of the scouring of the rock by the glaciation, deposition of the debris and subsequent sifting by their melt waters into active valley stream channels or old stream channels. Since this is an ongoing process that has occurred throughout the geological time scale, there are older "tertiary" channels that were deposited. Repetition of the alluvial process has had occasion to concentrate or redistribute these older channels into new auriferous high grade "Eldorados. 
+ 
+ Regional Geochemical 
+ 
+
+ Regionally the area is anomalous in gold values, but no systematic surveying of the area by government can be identified as useful to the definition of concentrations of placer deposits.
+ 
+
+ Our Planned Exploration Program
+ 
+
+ Our phased exploration work program on the mining claims will include gaining information to assess the amount of placer material involved and a detailed placer pit testing program. 
+ 
+
+ A budget of $20,000 is estimated for phase one and it is expected to take approximately 6 months to complete. We expect to commence this phase of the exploration program in Spring 2011 depending on the availability of personnel and equipment. If we are unable to fine the necessary personnel and equipment, phase one of our exploration program could possibly be delayed until Summer 2011 or Fall 2011, depending on when this requirement is fulfilled. To date, we have spent nothing on exploration expenditures on the property, other than amounts spent in completing geological reports on our mining claims. 
+ 
+ 25
+ 
+
+ 
+
+ The components of the budget for phase one of the work programs are as follows:
+ 
+
+ 
+
+ Phase One
+ Budgeted Expense
+
+ Geologist Geomorphology (5 days @ $500/day)
+ $ 2,500
+
+ Geological technicians (2) (5 days @ $250/day)
+ 2,500
+
+ Equipment rental (bulldozer, backhoe, processing plant vehicles, pumps for test pits @ $4000/day)
+ 8,000
+
+ Fuel, Food, Field Supplies
+ 2,500
+
+ Analysis - concentrate
+ 200
+
+ Mobilizing equipment to site 
+ 1,000
+
+ Supervising report analysis 
+ 1,500
+
+ Contingency
+ 1,800
+
+ Phase One Total:
+ $ 20,000
+
+ 
+
+ Our Board of Directors will make a determination whether to proceed with further exploration work upon completion of phase one. In completing this determination we will assess whether the results of phase one are sufficiently positive to enable us to obtain any additional financing that we will then require. This analysis will include an assessment of the market for financing of junior mineral exploration projects at the time of our assessment. 
+ 
+
+ It is presently expected that phase two of the exploration program will cover detailed geological mapping and sampling of the area. Phase two is expected to take up to 6 months to complete. Phase three will involve permitting for full-scale mining operations. Phase three is also expected to take up to 6 months to complete. The components of the budget for the second and third phases of the exploration work program are as follows:
+ 
+
+ Phase Two
+ Budgeted Expense
+
+ Mapping alluvium
+ $ 5,000
+
+ Drill site preparation including permitting
+ 2,500
+
+ Drilling 300 meters (reverse circulation/water well drilling)
+ 20,000
+
+ Bulk sample testing
+ 26,000
+
+ Supervising report analysis
+ 1,500
+
+ Contingency
+ 5,000
+
+ Phase Two Total:
+ $ 60,000
+
+ 
+
+ 
+ 
+
+ 
+
+ Phase Three
+ Budgeted Expense
+
+ Permitting
+ $ 10,000
+
+ Initial preparation and equipment surety
+ 55,000
+
+ Reporting and supervision
+ 5,000
+
+ Phase Three Total:
+ $ 70,000
+
+ 
+
+ Our Board of Directors will make a determination whether to proceed with the third phase of the recommended work program only upon completion of phase two. In completing this determination we will make an assessment as to whether the results are sufficiently positive to enable us to obtain the additional financing that would be necessary for us to proceed. Positive results means that a geoscientist states that there is a strong likelihood of value being added by completing the next phase of exploration.
+ 
+
+ We have not chosen anyone specific to conduct exploration work on the property. We intend to choose a geologist recognized in the Yukon Territory who has had experience working in the regional area of the property. We intend to field offers from different geologists who are keen to build on their previous experiences working in the area and we will choose the most qualified person amongst the various interested candidates. We will like to begin this process within the next 2 months; we are estimating it will take up to 3 months to hire the right geologist.
+ 
+
+ The contingency funds allocated in phases one and two are there to cover unexpected expenses which may arise while the actual work commences, such as severe weather issues which cause delays, causing additional days needed for personnel and/or equipment.
+
+ 
+ 26
+ 
+ 
+ Compliance with Government Regulation
+ 
+
+ We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration of minerals in the Whitehorse Region. The term of our mining claims is one year and it can be renewed twice. Accordingly, the claim may be held for a maximum of three years. Testing work must be performed and filed pursuant a prospecting program meeting certain minimal requirements under the Placer Mining Act no later than the anniversary date of the claim in each year. 
+ 
+
+ Any testing work undertaken on our mining claims must be conducted in a manner that minimizes disruption to the environment, and must comply with applicable legislation including the Waters Act (Yukon Territory). Mining and preparing the ground for mining are not permitted on mining claims.
+ 
+
+ Additional approvals and authorizations may be required from other government agencies, depending upon the nature and scope of the proposed exploration program. The amount of these costs is not known at this time as we do not know the size, quality of any resource or reserve at this time, it is impossible to assess the impact of any capital expenditures on earnings or our competitive position. 
+ 
+
+ We already have approval to proceed with phase one of our exploration program. During the one year period of acquiring the claim, the Company, as the claim holder, is required to do $100 worth of representation work on the claim. To apply to do work on a claim, the fee is $5 per claim per year. 
+ 
+Competition
+ 
+
+ We are a junior mineral resource exploration company. We compete with other mineral resource exploration companies for financing and for the acquisition of new mineral properties. Many of the mineral resource exploration companies with whom we compete have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford more geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could adversely impact on our ability to achieve the financing necessary for us to conduct further exploration of our mineral properties.
+ 
+
+ We will also compete with other junior mineral exploration companies for financing from a limited number of investors that are prepared to make investments in junior mineral exploration companies. The presence of competing junior mineral exploration companies may impact on our ability to raise additional capital in order to fund our exploration programs if investors are of the view that investments in competitors are more attractive based on the merit of the mineral properties under investigation and the price of the investment offered to investors.
+ 
+
+ We will also be compete with other junior and senior mineral companies for available resources, including, but not limited to, professional geologists, camp staff, helicopter or float planes, mineral exploration supplies and drill rigs. 
+ 
+ Employees
+ 
+
+ As of the date of this prospectus we have no significant employees other than the officer and director described above under "Directors, Executive Officers, Promoters and Control Persons. We intend to retain independent geologists and consultants on a contract basis to conduct the work programs on the mineral property in order to carry our plan of operations.
+ 
+
+ Research and Development Expenditures
+ 
+
+ We have not incurred any research or development expenditures since our incorporation.
+ 
+
+ Subsidiaries
+ 
+
+ We do not have any subsidiaries.
+ 
+Patents and Trademarks
+ 
+
+ We do not own, either legally or beneficially, any patent or trademark.
+ 
+Offices
+ 
+
+ Our executive offices are located at 1422 Beech Tree Drive, Green Bay, WI 54304, USA. Mr. Vander Leest, our President, Chief Executive Officer, Principal Executive Officer and a director, currently provides this space to us free of charge. This space may not be available to us free of charge in the future. This office space is part of a residence.
+ 
+
+ We also have the rights to four mining claims located in the Whitehorse Mining Division of the Yukon Territory, as described above under "Description of Business. 
+ 
+
+ 27
+ 
+Legal Proceedings
+ 
+ There are no pending or threatened lawsuits against us. 
+ 
+
+ Market for Common Equity and Related Stockholder Matters
+ 
+ Market Information 
+ 
+
+ There is no established public trading market for our securities and a regular trading market may not develop, or if developed, may not be sustained. A shareholder in all likelihood, therefore, will not be able to resell his or her securities should he or she desire to do so when eligible for public resales. Furthermore, it is unlikely that a lending institution will accept our securities as pledged collateral for loans unless a regular trading market develops. We would like to register our shares for resale by our selling stockholders and then obtain a trading symbol to trade our shares over the OTC Bulletin Board. However, there is no assurance that we will be successful in getting our common stock quoted on the OTC Bulletin Board. 
+ 
+
+ Penny Stock Considerations
+ 
+
+ Our shares will be "penny stocks" as that term is generally defined in the Securities Exchange Act of 1934 to mean equity securities with a price of less than $5.00. Our shares thus will be subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock. 
+ 
+
+ Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or accredited investor must make a special suitability determination regarding the purchaser and must receive the purchaser's written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net worth in excess of $10,000,000, or annual income exceeding $100,000 individually or $400,000 together with his or her spouse, is considered an accredited investor. In addition, under the penny stock regulations the broker-dealer is required to: 
+ 
+
+ 
+ Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt;
+ 
+
+ 
+ Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt;
+ 
+
+ 
+ Disclose commissions payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities; 
+ 
+
+ 
+ Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer's account, the account's value and information regarding the limited market in penny stocks; and
+ 
+
+ 
+ Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction, prior to conducting any penny stock transaction in the customer's account. 
+ 
+
+ Because of these regulations, broker-dealers may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling shareholders or other holders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities, if our securities become publicly traded. In addition, the liquidity for our securities may be decreased, with a corresponding decrease in the price of our securities. Our shares in all probability will be subject to such penny stock rules and our shareholders will, in all likelihood, find it difficult to sell their securities. 
+ 
+
+ 28
+ 
+
+ 
+ OTC Bulletin Board Qualification for Quotation 
+ 
+
+ To have our shares of common stock on the OTC Bulletin Board, a market maker must file an application on our behalf in order to make a market for our common stock. As of the date of this prospectus we have not yet found a Market Maker to file our application on Form 15c211 with FINRA and as of the date of this Prospectus, no filing has been made. There are 330,000 shares of our common stock held by non-affiliates and 10,000,000 shares of our common stock held by one affiliate, Mr. Vander Leest; Rule 144 of the Securities Act of 1933 defines as restricted securities. The 330,000 shares being held by non-affiliates are being registered under this registration statement and will be available for sale when the registration statement is declared effective. The 10,000,000 affiliate shares held by Mr. Vander Leest and shares not being registered in this registration statement will be subject to the resale restrictions of Rule 144. In general, affiliates holding restricted securities, must hold their shares for a period of at least six months assuming we are current in our SEC reports or one year if we are not, may not sell more than one percent of the total issued and outstanding shares in any 90-day period, and must resell the shares in an unsolicited brokerage transaction at the market price. These restrictions do not apply to re-sales under Rule 144for non-affiliates holding unregistered shares for at least one year. The availability for sale of substantial amounts of common stock under Rule 144 could reduce prevailing market prices for our securities. 
+ 
+
+ Once this registration statement is effective, the shares of our common stock being offered by our selling shareholders will be freely tradable without restrictions under the Securities Act of 1933.
+ 
+
+ In addition to the shares available for resale under this registration statement, as a result of the provisions of Rule 144, all of the restricted securities could be available for sale in a public market, if developed, beginning 90 days after the date of this Prospectus, assuming the volume and method of sale limitations in Rule 144 can be satisfied to the extent required. The volume limitations limit affiliate sales to no more than 1% of our total issued and outstanding securities every 90 days. The manner of sale limitations requires sales through a broker on the market in an unsolicited transaction. The availability for sale of substantial amounts of common stock under Rule 144 could reduce prevailing market prices for our securities. 
+ 
+
+ Holders
+ 
+
+ As of the date of this registration statement, we had approximately 34 shareholders of record of our common stock. 
+ 
+ Dividends 
+ 
+
+ We have not declared any cash dividends on our common stock since our inception and do not anticipate paying such dividends in the foreseeable future. We plan to retain any future earnings for use in our business. Any decisions as to future payments of dividends will depend on our earnings and financial position and such other facts, as the Board of Directors deems relevant. 
+ 
+ Stock Option Grants 
+ 
+
+ As of the date of this prospectus, we had not granted any stock options.
+ 
+
+ 
+
+ 29
+ 
+
+ Plan of Operation
+ 
+ Our plan of operations for the next twelve months is to complete the following objectives within the time periods specified, subject to our obtaining the funding necessary for the continued exploration of our mining claims:
+ 
+
+ 1.
+ Register our shares for resale by our selling stockholders and then obtain a trading symbol to trade our shares over the OTC Bulletin Board. However, there is no assurance that we will be successful in getting our common stock quoted on the OTC Bulletin Board. 
+ 
+
+ 2.
+ We plan to conduct phase one of our recommended exploration program on our mining claims. 
+ 
+
+ 3.
+ If warranted by the results of phase one, we intend to proceed with a further phase of a recommended exploration program on the relevant property or properties. 
+ 
+
+ 4.
+ We anticipate spending approximately $1,000 in ongoing general and administrative expenses per month for the next twelve months, for a total anticipated expenditure of $12,000 over the next twelve months. The general and administrative expenses for the year will consist primarily of professional fees for the audit and legal work relating to our regulatory filings throughout the year, as well as transfer agent fees, annual mining claims fees and general office expenses. 
+ 
+As at August 31, 2012, we had cash reserves of $5,094 and working capital deficit of $75,117. We anticipate that our cash and working capital will not be sufficient to enable us to complete phase one of our exploration program and to pay for the costs of this offering and our general and administrative expenses for the next 12 months. Also, our ability to complete phase two of the recommended work program will be subject to us obtaining additional financing as these expenditures will exceed our cash reserves. 
+ 
+
+ During the 12 month period following the date of this registration statement, we anticipate that we will not generate any revenue. Accordingly, we will be required to obtain additional financing in order to continue our plan of operations. We believe that debt financing will not be an alternative for funding additional phases of exploration as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund phase two of our exploration program. In the absence of such financing, we will not be able to continue exploration of our mining claims and our business plan will fail. Even if we are successful in obtaining equity financing to fund phase two our exploration program, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our mining claims following the completion of phase two. If we do not continue to obtain additional financing, we will be forced to abandon our mining claims and our plan of operations will fail. Our business plan is not yet complete. We may consider entering into a joint venture arrangement to provide the required funding to develop our mining claims. We have not undertaken any efforts to locate a joint venture participant for our mining claims. Even if we determined to pursue a joint venture participant, there is no assurance that any third party would enter into a joint venture agreement with us in order to fund exploration of our mining claims. If we entered into a joint venture arrangement, we would likely have to assign a percentage of our interest in our mining claims to the joint venture participant. 
+ 
+
+ Results of Operations
+ 
+
+ In the following discussions references to 2010 are to the period from inception (July 1, 2010) to August 31, 2012. 
+ 
+ Revenues
+ 
+
+ We have had no operating revenues since our inception on July 1, 2010 to August 31, 2012. We anticipate that we will not generate any revenues for so long as we are an exploration stage company. 
+ 
+ Expenses
+ 
+
+ We have incurred total operating expenses of $88,417 since our inception on July 1, 2010 to August 31, 2012. These expenses were comprised of office and general expenses of $8,574 and professional fees of $48,051. The office and general expenses consists of utilities, insurance, depreciation of equipment and office supplies.
+ 
+
+ Liquidity and Capital Resources
+ 
+
+ As at August 31, 2012, we had cash reserves of $5,094 and working capital deficit of $75,117.
+ 
+ Cash Used in Operating Activities
+ 
+
+ Cash used in operating activities was $17,544 for 2012 and $40,486 from inception on July 1, 2010 to August 31, 2012. We anticipate that cash used in operating activities will increase in 2013 as discussed under "Plan of Operations. 
+ 
+ Cash from Financing Activities
+ 
+
+ We have funded our business to date primarily from sales of our common stock. From our inception, on July 1, 2010, to August 31, 2012, we have raised a total of $77,480 from private offerings of our securities.
+ 
+
+ There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our exploration of our mining claims and our venture will fail.
+ 30
+ 
+
+ Going Concern
+ 
+
+ We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive exploration activities. For these reasons our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.
+ 
+ Future Financings 
+ 
+
+ We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for other financing to fund our planned exploration activities. 
+ 
+ Off-Balance Sheet Arrangements
+ 
+
+ We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
+ 
+ Results of Operations for the Period from July 1, 2010 (Inception) to August 31, 2012 
+ 
+
+ We did not earn any revenues for the period from July 1, 2010 (Inception) to August 31, 2012. We incurred operating expenses in the amount of $88,417 for the period from July 1, 2010 (Inception) to August 31, 2012. These operating expenses were comprised of office and general fees of $8,574 professional fees of $48,051, impairment of mineral claims of $31,500, foreign exchange loss of $162 and depreciation of $130. The professional fees consist of the expenses associated with this offering.
+ 
+
+ We have not attained profitable operations and are dependent upon obtaining financing to pursue marketing and distribution activities. For these reasons, there is substantial doubt that we will be able to continue as a going concern. 
+ 
+ 
+ Changes In and Disagreements with Accountants 
+ 
+ We have had no changes in or disagreements with our accountants. 
+ 
+ Available Information 
+ 
+ We have filed with the Securities and Exchange Commission a registration statement on Form S-1. For further information about us and the shares of common stock to be sold in the offering, please refer to the registration statement and the exhibits and schedules thereto. The registration statement and exhibits may be inspected, without charge, and copies may be obtained at prescribed rates, at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The registration statement and other information filed with the SEC are also available at the web site maintained by the SEC at http://www.sec.gov. 
+ 
+
+ 31
+ 
+
+ Directors, Executive Officers, Promoters and Control Persons
+ 
+ The Board of Directors elects our executive officers annually. A majority vote of the directors who are in office is required to fill vacancies. Each director shall be elected for the term of one year and until his successor is elected and qualified or until his earlier resignation or removal. Our directors and executive officers are as follows: 
+ 
+
+ 
+
+ 
+
+ 
+
+ 
+
+ Name
+ 
+ Age
+ 
+ Position
+
+ Mr. John Vander Leest
+ 
+ 33
+ 
+ CEO, President & Director
+
+ 
+
+ Mr. Vander Leest is responsible for establishing the company s business model and development. He has served as our President & CEO since inception. For the past 5 years Mr. Vander Leest has been employed or is still employed by three different corporations. From September 2001 to May 2008, Mr. Vander Leest was employed at Kimberly-Clark Corporation. Between the years September 2001 to December 2005 and February 2007 to May 2008, he held the title of Customer Logistics Analyst. He also held the title of Brand Development Analyst Project Team from January 2006 to January 2007. 
+ 
+
+ Currently, along with his duties as our sole officer and director, Mr. Vander Leest has two other jobs. Since January 2009, he has been working for the Green Bay Real Estate LLC as a Broker Associate and since April 2010, he has been working as a Campaign Consultant for New Frontier Group. Mr. Vander Leest will devote approximately 15 hours a week to our operations. 
+ 
+
+ Family Relationships 
+ 
+
+ There are no family relationships among our officers or directors. 
+ 
+
+ Legal Proceedings 
+ 
+
+ No officer, director or persons nominated for such positions, promoter or significant employee has been involved in the last ten years in any of the following:
+ 
+
+ 
+ Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
+ 
+
+ 
+ Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
+ 
+
+ 
+ Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and
+ 
+
+ Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
+ 
+
+ Executive Compensation
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001566844_mazor_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001566844_mazor_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2dfd9a983891522e2ad5c30c6facd0a755c4f1ad
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001566844_mazor_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001569737_jishanye_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001569737_jishanye_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..dbb1604e8efa89cfbcca46101a2031cb0ea883cf
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001569737_jishanye_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information that you should consider before investing in the common stock. You should carefully read the entire prospectus, including "Risk Factors", "Management s Discussion and Analysis of Financial Condition and Results of Operations" and the Consolidated Financial Statements, before making an investment decision. THE COMPANY Company Structure Yambear Bio-tech, Inc. ("Yambear" or the "Company") is a Delaware corporation organized on April 12, 2012 by Hsin-Lung Lin, a Taiwanese citizen, as a holding company for Yambear Bio-Tech Co. Ltd. Taiwan ("Yambear Taiwan"), Taiwanese limited liability company. Yambear Taiwan, being the operating company of Yambear in Taiwan, was established on August 17, 2012 and is a wholly owned subsidiary of Yambear. On July 16, 2012, we issued a total of 12,500,000 shares of our common stock, $0.0001 par value per share, to several non U.S. persons in consideration for their previous investment of $100,000 in the Company, among which $93,560 has been contributed into its wholly-owned subsidiary Yambear Taiwan on July 19, 2012 as its capital contribution. The issuance was made pursuant to an exemption from registration contained in Regulation S under the Securities Act of 1933, as amended. The following flow chart illustrates our companies organizational structure: Our Business We are a development stage company. We do not have significant revenues. We have minimal assets and have incurred losses since inception. We are currently selling enzymes products manufactured in Taiwan through Yambear Taiwan, our operating company in Taiwan, to public consumers across Taiwan, and we intend to expand business operations by distributing and exporting our enzymes products to Hong Kong, mainland China, Singapore and Malaysia in 2013. Our goal is to distribute and market our enzymes products to high-end consumers by exploring a variety of marketing channels, including, without limitation, telephone selling, sales on TV shopping channels, as well as selling in special counters located in big shopping malls and our self-operated stores. Enzyme is a substance produced by a living organism that acts as a catalyst for biochemical reactions in living things (including animals, plants, micro-organisms) such as synthesis, decomposition, oxidation, transfer and isomerization. Isomerization is the chemical process by which one molecule is transferred into another molecule which has exactly the same atoms, but the atoms are rearranged. This biotic phenomena would stop without the presence of enough enzymes. Without sufficient enzymes DNA would undergo a drastic change, unusual illness may occur and metabolism may become abnormal. Enzyme is a complex globule protein that reacts optimally under human body temperature. The isomerization reaction is many times faster with added enzymes. As a result, regular consumption of enzyme has alleged positive effects on human s well-being. Our body loses enzymes as we grow old. It is believed that many chronic, hereditary diseases and functional imbalance are allegedly caused by the deficiency of certain enzymes. For example, lipase (fat enzyme) deficiency allegedly causes hepatic diseases, diabetes and Vitamin A deficiency. Amylase (carbohydrate enzyme) deficiency allegedly results in liver diseases and gastro enteric diseases. Enzyme is neither a drug, medicine nor a herb. It is extracted from fruits and vegetables. It can be a natural complex enzyme, plant-based complex enzyme or microbial enzyme. It is the body "Cell Activator." A Cell Activator refers to the enzymes that catalyze and regulate every biochemical reaction that occurs within the human body, making them essential to cellular function and health. Enzymes products are the products that use enzymes as their primary ingredients with various formulas focusing on the improvement of different organs of human bodies. All of our enzymes products are manufactured in Taiwan by Bioenergy Biotechnology Corp., our designated manufacturer, in accordance with our formulas, with substantially all of the ingredients purchased within Taiwan. We currently have a limited line of enzymes products, consisting of five-phases enzymes products. We ve been marketing the five enzymes products in one package to our customers, as we have deliberately designed the formula for each of them to contain ingredients, especially certain traditional Chinese medicine (TCM, as defined below), allegedly with corresponding nutritional effect on each of five key organs of human bodies, namely, heart, liver, stomach, lung and kidney. Each of the above-mentioned enzymes products, other than the water enzymes product, requires over 60 different ingredients. Furthermore, we specifically instructed Bioenergy Biotechnology Corp., our manufacturer, to apply a six-stage fermentation manufacturing process on all of our enzymes products. The production cycle for our enzymes products usually takes approximately fourteen months. Please refer to Competitive Strengths section for a detailed introduction for such six-stage fermentation manufacturing process. One of the unique features of our enzymes products is that we have combined TCM concept "Five Fundamental Elements", namely, gold, wood, water, fire and earth, with our enzymes products. The Five Fundamental Elements concept is a well-known concept in Chinese culture, where it believes that each element represents and corresponds to a key organ in our bodies. Therefore, in addition to the basic ingredients used for enzymes products, we also added certain Chinese herbs with special effect on improvement and reconciliation of function for the corresponded organs. The formula for each of our enzymes products is the result of extensive research and experiments conducted by our staff teamed up with Bioenergy Biotechnology Corp., our designated manufacturer. Our future products are being developed by our staff and two professors of Department of Food Science of NPUST, who dedicated most of their leisure time to research and development of our enzymes products. Our executive office is located in 3F., No.10, Yuanxi 2nd Rd., Pingtung Agricultural Biotechnology Park, Changzhi Township, Pingtung 908, Taiwan, Republic of China, where we lease approximately 572 square meters with a monthly rent of $1,669 (NT$48,480). For the period from inception (April 12, 2012) to December 31, 2012, we generated revenues of $21,502 and incurred a net loss of $41,982. As of December 31, 2012, the Company s current assets exceeded its current liabilities by $57,542 and the Company s total assets exceeded its total liabilities by $60,448. The Company generated a net loss of $41,982 for the period from inception (April 12, 2012) to December 31, 2012 and the Company s cash position on December 31, 2012 was $16,302. Summary of the Offering The selling stockholders named in this prospectus are offering all of the shares of common stock offered through this prospectus. The selling stockholders are selling shares of common stock covered by this prospectus for their own account. We will not receive any of the proceeds from the sale of these shares. The offering price of $0.008 was determined by the price for certain shares issued to our shareholders in a private placement issuance in exchange for $100,000 investment, which has been used for the contribution into the capital account of Yambear Taiwan. The offering price of $0.008 is a fixed price at which the selling stockholders may sell their shares until our common stock is quoted on the OTCBB, at which time the shares may be sold at prevailing market prices or privately negotiated prices. We have agreed to bear the expenses relating to the registration of the shares for the selling stockholders. The offering will conclude upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) such time as all of the common stock becomes eligible for resale without volume limitations pursuant to Rule 144 under the Securities Act. There is currently no public market for our securities and you may not be able to liquidate your investment since there is no assurance that a public market will develop for our common stock or that our common stock will ever be approved for trading on a recognized exchange. After this document is declared effective by the U.S. Securities and Exchange Commission, we intend to seek a market maker to apply for a quotation on the OTCBB in the United States. Our shares are not and have not been listed or quoted on any exchange or quotation system. We cannot assure you that a market maker will agree to file the necessary documents with the OTCBB, nor can there be any assurance that such an application for quotation will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor may be unable to liquidate its investment. We intend to apply for quoting of our common stock on the OTCBB, which we estimate will cost around $100,000. The breakdown of such costs is estimated as following: Legal Counsel $70,000 Auditor $20,000 Other vendors $10,000 Total: $100,000 We estimate that to maintain a quoting status will cost us $80,000to $150,000 annually which will include legal and auditing expenses. We will rely on professional services to carry out this plan, which includes, but is not limited to, a U.S. law firm with corporate and securities practice, a PCAOB registered auditor and consultants. We have engaged The Chiang Law Offices as our legal counsel. We have engaged Goldman Kurland Mohidin, LLP, as our independent auditor. To be quoted on the OTCBB, we must engage a market maker to file an application for a trading symbol on our behalf with the Financial Industry Regulatory Authority ("FINRA"). This process may take between three (3) to six (6) months. We plan to engage a market maker after our registration statement is declared effective by the U.S. Securities and Exchange Commission (the "SEC"). The Common Stock offered hereby involves a high degree of risk and should not be purchased by investors who cannot afford the loss of their entire investments. See "Risk Factors" beginning on page 8. Where You Can Find Us We presently maintain our executive office at 3F., No.10, Yuanxi 2nd Rd., Pingtung Agricultural Biotechnology Park, Changzhi Township, Pingtung 908, Taiwan, Republic of China. Our telephone number is +00886 08 7621913. Our Taiwan subsidiary Yambear Taiwan maintains a website at www.yambear.com.
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001573054_nex-i-com_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001573054_nex-i-com_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..efc3a56bdef422ea7f2ebe4caa72341889d8888e
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001573054_nex-i-com_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that may be important to you. You should read the entire prospectus carefully together with our consolidated financial statements and the related notes appearing elsewhere in this prospectus. This prospectus contains forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those discussed in the Risk Factors and other sections of this prospectus. Company Overview We are a leading cloud-based service provider of communications and information technology solutions to small and medium sized business ( SMB ) and enterprise customers nationwide. After several years of development, we began providing cloud-based communication services in 2005 and later introduced into our product portfolio a variety of cloud-based computing solutions. Today, we offer a full suite of cloud-based systems and services to customers nationwide, with more than 100,000 active licenses on our flagship product offering, our cloud-based business communications platform named OfficeSuite , which comprises a growing percentage of our overall revenue and the vast majority of our existing cloud-based revenue stream. We benefit from software development expertise, proprietary technology and a strong next-generation network infrastructure. This allows us to offer our customers more than just cloud-based services, but additionally products that include advanced, converged communications services and network access by leveraging our network infrastructure, on a cost-effective basis. For the three months ended March 31, 2013, over 82% of all new revenue installed during the period was provisioned on our next-generation IP network. We have provided cloud-based services in the Northeast and Mid-Atlantic United States since 2005 and offered cloud-based services nationwide since late 2009. Prior to 2009, our focus had been solely on markets across 10 states, including the major metropolitan markets of New York, Boston, Philadelphia, Baltimore and Washington, D.C. These markets remain important markets for us and we have the majority of our direct sales efforts focused on these markets. We distribute our products through quota-bearing sales representatives, including a direct sales force primarily based in the Northeast and Mid-Atlantic United States, sales agents nationwide, and by our expanded efforts in wholesale, web marketing, Value Added Resellers ( VARs ) and nationwide distributor channels. As of March 31, 2013, we provided our services to approximately 30,000 business customers nationwide. For the three months ended March 31, 2013 and the year ended December 31, 2012, approximately 90% and 89%, respectively, of our total revenue was generated from retail end users in a wide array of industries, including professional services, health care, education, manufacturing, real estate, retail, automotive, non-profit groups and others. For the same periods, approximately 10% and 11%, respectively, of our total revenue was generated from wholesale, carrier access and other sources. We have transitioned a significant percentage of our revenue base to T-1- and IP-based products and cloud-based communications services. For the three months ended March 31, 2013 and the year ended December 31, 2012, revenue from these accounts represented 78% and 76%, respectively, of our retail revenue with cloud-based communications services generating 18% and 16%, respectively, of retail revenue. From the first quarter of 2009 to the first quarter of 2013, cloud-based communications products and services have grown at approximately a 27% compound annual growth rate ( CAGR ). For the three months ended March 31, 2013 and the year ended December 31, 2012, we generated total revenues of $80.8 million and $340.9 million, respectively, and Adjusted EBITDA of $11.7 million and $60.2 million, respectively. For more information, see the section entitled Management s Discussion and Analysis of Financial Condition and Results of Operations Adjusted EBITDA Presentation. Our product portfolio provides bundled packages that include cloud computing and cloud-based voice services and network connectivity with a focus on addressing the productivity, flexibility, security and business continuity needs of end users operating within complex infrastructures. In addition, our growth initiatives focus Table of Contents TABLE OF CONTENTS Page SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 1 PROSPECTUS SUMMARY 3
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001573060_eureka_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001573060_eureka_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..efc3a56bdef422ea7f2ebe4caa72341889d8888e
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001573060_eureka_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that may be important to you. You should read the entire prospectus carefully together with our consolidated financial statements and the related notes appearing elsewhere in this prospectus. This prospectus contains forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those discussed in the Risk Factors and other sections of this prospectus. Company Overview We are a leading cloud-based service provider of communications and information technology solutions to small and medium sized business ( SMB ) and enterprise customers nationwide. After several years of development, we began providing cloud-based communication services in 2005 and later introduced into our product portfolio a variety of cloud-based computing solutions. Today, we offer a full suite of cloud-based systems and services to customers nationwide, with more than 100,000 active licenses on our flagship product offering, our cloud-based business communications platform named OfficeSuite , which comprises a growing percentage of our overall revenue and the vast majority of our existing cloud-based revenue stream. We benefit from software development expertise, proprietary technology and a strong next-generation network infrastructure. This allows us to offer our customers more than just cloud-based services, but additionally products that include advanced, converged communications services and network access by leveraging our network infrastructure, on a cost-effective basis. For the three months ended March 31, 2013, over 82% of all new revenue installed during the period was provisioned on our next-generation IP network. We have provided cloud-based services in the Northeast and Mid-Atlantic United States since 2005 and offered cloud-based services nationwide since late 2009. Prior to 2009, our focus had been solely on markets across 10 states, including the major metropolitan markets of New York, Boston, Philadelphia, Baltimore and Washington, D.C. These markets remain important markets for us and we have the majority of our direct sales efforts focused on these markets. We distribute our products through quota-bearing sales representatives, including a direct sales force primarily based in the Northeast and Mid-Atlantic United States, sales agents nationwide, and by our expanded efforts in wholesale, web marketing, Value Added Resellers ( VARs ) and nationwide distributor channels. As of March 31, 2013, we provided our services to approximately 30,000 business customers nationwide. For the three months ended March 31, 2013 and the year ended December 31, 2012, approximately 90% and 89%, respectively, of our total revenue was generated from retail end users in a wide array of industries, including professional services, health care, education, manufacturing, real estate, retail, automotive, non-profit groups and others. For the same periods, approximately 10% and 11%, respectively, of our total revenue was generated from wholesale, carrier access and other sources. We have transitioned a significant percentage of our revenue base to T-1- and IP-based products and cloud-based communications services. For the three months ended March 31, 2013 and the year ended December 31, 2012, revenue from these accounts represented 78% and 76%, respectively, of our retail revenue with cloud-based communications services generating 18% and 16%, respectively, of retail revenue. From the first quarter of 2009 to the first quarter of 2013, cloud-based communications products and services have grown at approximately a 27% compound annual growth rate ( CAGR ). For the three months ended March 31, 2013 and the year ended December 31, 2012, we generated total revenues of $80.8 million and $340.9 million, respectively, and Adjusted EBITDA of $11.7 million and $60.2 million, respectively. For more information, see the section entitled Management s Discussion and Analysis of Financial Condition and Results of Operations Adjusted EBITDA Presentation. Our product portfolio provides bundled packages that include cloud computing and cloud-based voice services and network connectivity with a focus on addressing the productivity, flexibility, security and business continuity needs of end users operating within complex infrastructures. In addition, our growth initiatives focus Table of Contents TABLE OF CONTENTS Page SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 1 PROSPECTUS SUMMARY 3
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001573065_atx_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001573065_atx_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..efc3a56bdef422ea7f2ebe4caa72341889d8888e
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001573065_atx_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that may be important to you. You should read the entire prospectus carefully together with our consolidated financial statements and the related notes appearing elsewhere in this prospectus. This prospectus contains forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those discussed in the Risk Factors and other sections of this prospectus. Company Overview We are a leading cloud-based service provider of communications and information technology solutions to small and medium sized business ( SMB ) and enterprise customers nationwide. After several years of development, we began providing cloud-based communication services in 2005 and later introduced into our product portfolio a variety of cloud-based computing solutions. Today, we offer a full suite of cloud-based systems and services to customers nationwide, with more than 100,000 active licenses on our flagship product offering, our cloud-based business communications platform named OfficeSuite , which comprises a growing percentage of our overall revenue and the vast majority of our existing cloud-based revenue stream. We benefit from software development expertise, proprietary technology and a strong next-generation network infrastructure. This allows us to offer our customers more than just cloud-based services, but additionally products that include advanced, converged communications services and network access by leveraging our network infrastructure, on a cost-effective basis. For the three months ended March 31, 2013, over 82% of all new revenue installed during the period was provisioned on our next-generation IP network. We have provided cloud-based services in the Northeast and Mid-Atlantic United States since 2005 and offered cloud-based services nationwide since late 2009. Prior to 2009, our focus had been solely on markets across 10 states, including the major metropolitan markets of New York, Boston, Philadelphia, Baltimore and Washington, D.C. These markets remain important markets for us and we have the majority of our direct sales efforts focused on these markets. We distribute our products through quota-bearing sales representatives, including a direct sales force primarily based in the Northeast and Mid-Atlantic United States, sales agents nationwide, and by our expanded efforts in wholesale, web marketing, Value Added Resellers ( VARs ) and nationwide distributor channels. As of March 31, 2013, we provided our services to approximately 30,000 business customers nationwide. For the three months ended March 31, 2013 and the year ended December 31, 2012, approximately 90% and 89%, respectively, of our total revenue was generated from retail end users in a wide array of industries, including professional services, health care, education, manufacturing, real estate, retail, automotive, non-profit groups and others. For the same periods, approximately 10% and 11%, respectively, of our total revenue was generated from wholesale, carrier access and other sources. We have transitioned a significant percentage of our revenue base to T-1- and IP-based products and cloud-based communications services. For the three months ended March 31, 2013 and the year ended December 31, 2012, revenue from these accounts represented 78% and 76%, respectively, of our retail revenue with cloud-based communications services generating 18% and 16%, respectively, of retail revenue. From the first quarter of 2009 to the first quarter of 2013, cloud-based communications products and services have grown at approximately a 27% compound annual growth rate ( CAGR ). For the three months ended March 31, 2013 and the year ended December 31, 2012, we generated total revenues of $80.8 million and $340.9 million, respectively, and Adjusted EBITDA of $11.7 million and $60.2 million, respectively. For more information, see the section entitled Management s Discussion and Analysis of Financial Condition and Results of Operations Adjusted EBITDA Presentation. Our product portfolio provides bundled packages that include cloud computing and cloud-based voice services and network connectivity with a focus on addressing the productivity, flexibility, security and business continuity needs of end users operating within complex infrastructures. In addition, our growth initiatives focus Table of Contents TABLE OF CONTENTS Page SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 1 PROSPECTUS SUMMARY 3
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001573166_jones_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001573166_jones_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..6fd1b31a26ec10bc1fd1e216e073634da63e7929
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001573166_jones_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574741_np-auburn_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574741_np-auburn_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574741_np-auburn_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574767_np-fh_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574767_np-fh_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574767_np-fh_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574784_np-fresno_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574784_np-fresno_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574784_np-fresno_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574788_sonoma_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574788_sonoma_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574788_sonoma_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574796_np-hanger_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574796_np-hanger_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574796_np-hanger_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574801_np-lake_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574801_np-lake_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574801_np-lake_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574820_np-reno_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574820_np-reno_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574820_np-reno_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574823_np-rotma_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574823_np-rotma_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574823_np-rotma_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001574829_np-texas_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001574829_np-texas_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001574829_np-texas_prospectus_summary.txt
@@ -0,0 +1 @@
+Prospectus Summary 1
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001575295_allied_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001575295_allied_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..be34159fcb9265c0c5529e2c45d99875c7377c8f
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001575295_allied_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY The following summary highlights material
\ No newline at end of file
diff --git a/parsed_sections/prospectus_summary/2013/CIK0001577603_delanco_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001577603_delanco_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..d1c98da75748a49c572f799ecd358a49770994a3
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/CIK0001577603_delanco_prospectus_summary.txt
@@ -0,0 +1 @@
+This summary highlights material information from this prospectus and may not contain all the information that is important to you. To understand the conversion and offering fully, you should read this entire document carefully. Our Company New Delanco Bancorp, Inc. The shares being offered will be issued by new Delanco Bancorp, Inc., a New Jersey corporation. Upon completion of the conversion, new Delanco Bancorp will become the successor corporation to old Delanco Bancorp and the parent holding company for Delanco Federal Savings Bank. New Delanco Bancorp will be subject to comprehensive regulation and examination by the Board of Governors of the Federal Reserve System, which we refer to herein as the Federal Reserve Board. Old Delanco Bancorp, Inc. and Delanco MHC. Old Delanco Bancorp is a federally chartered corporation that owns all of the outstanding shares of common stock of Delanco Federal. Old Delanco Bancorp s common stock is currently quoted on the OTCQB Marketplace under the symbol DLNO and we expect the common stock of new Delanco Bancorp will also be quoted on the OTCQB Marketplace under the symbol DLNO. At March 31, 2013, old Delanco Bancorp had consolidated total assets of $129.4 million, net loans of $88.4 million, total deposits of $117.0 million and total stockholders equity of $11.4 million. As of the date of this prospectus, old Delanco Bancorp had 1,634,725 shares of common stock outstanding. We have experienced net losses of $324 thousand and $494 thousand for the years ended March 31, 2013 and 2012, respectively. Our profitability has suffered due to lower net interest income resulting from the prolonged low interest rate environment, as well as heightened provisions for loan losses, expenses for and losses on the sale of real estate owned, and other problem loan expenses. Delanco MHC is the federally chartered mutual holding company of old Delanco Bancorp. Delanco MHC s sole business activity is the ownership of 899,099 shares of common stock of old Delanco Bancorp, or 55.0% of the common stock outstanding as of the date of this prospectus. After completion of the conversion, Delanco MHC will cease to exist. Delanco Federal Savings Bank. Delanco Federal operates from two full-service locations in Delanco Township and Cinnaminson, New Jersey. We offer a variety of deposit and loan products to individuals and small businesses in our market area. Delanco and Cinnaminson are in western Burlington County, New Jersey, across the Delaware River from northeastern Philadelphia. We did not participate in any of the U.S. Treasury s capital raising programs for financial institutions. Our principal executive offices are located at 615 Burlington Avenue, Delanco, New Jersey 08075 and our telephone number is (856) 461-0611. Our web site address is www.delancofsb.com. Information on our web site should not be considered a part of this prospectus. Regulatory Agreement Delanco Federal is a party to a written agreement with the Office of the Comptroller of the Currency (the OCC ) dated November 21, 2012. The written agreement supersedes and terminates the Order to Cease and Desist issued by the Office of Thrift Supervision on March 17, 2010. The written agreement requires Delanco Federal to take the following actions: prepare a three-year strategic plan that establishes objectives for Delanco Federal s overall risk profile, earnings performance, growth, balance sheet mix, liability structure, reduction in the volume of nonperforming assets, and product line development; prepare a capital plan that includes specific proposals related to the maintenance of adequate capital, identifies strategies to strengthen capital if necessary and includes detailed quarterly financial projections. If the OCC determines that Delanco Federal has failed to submit an acceptable capital plan or fails to implement or adhere to its capital plan, then the OCC may require Delanco Federal to develop a contingency capital plan detailing Delanco Federal s proposal to sell, merge or liquidate Delanco Federal; prepare a criticized asset plan that will include strategies, targets and timeframes to reduce Delanco Federal s level of criticized assets; implement a plan to improve Delanco Federal s credit risk management and credit administration practices; implement programs and policies related to Delanco Federal s allowance for loan and lease losses, liquidity risk management, independent loan review and other real estate owned; review the capabilities of Delanco Federal s management to perform present and anticipated duties and to recommend and implement any changes based on such assessment; Table of Contents Questions and Answers You should read this document for more information about the conversion and offering. The plan of conversion described in this document has been conditionally approved by the Federal Reserve Board. The Proxy Vote Q. What am I being asked to approve? A. Old Delanco Bancorp shareholders as of [RECORDDATE], 2013 are asked to vote on the plan of conversion. Under the plan of conversion, Delanco Federal will convert from the mutual holding company form of organization to the stock holding company form, and as part of such conversion, new Delanco Bancorp will offer for sale, in the form of shares of its common stock, Delanco MHC s 55.0% ownership interest in old Delanco Bancorp. In addition to the shares of common stock to be issued to those who purchase shares in the offering, public shareholders of old Delanco Bancorp as of the completion of the conversion and offering will receive shares of new Delanco Bancorp common stock in exchange for their existing shares of old Delanco Bancorp common stock based on an exchange ratio that will result in old Delanco Bancorp s existing public shareholders owning approximately the same percentage of new Delanco Bancorp common stock as they owned of old Delanco Bancorp immediately prior to the conversion and offering. Shareholders also are asked to vote on the following informational proposals with respect to the certificate of incorporation of new Delanco Bancorp: Approval of a provision in new Delanco Bancorp s certificate of incorporation requiring a super-majority vote to approve certain amendments to new Delanco Bancorp s certificate of incorporation; and Approval of a provision in new Delanco Bancorp s certificate of incorporation to limit the voting rights of shares beneficially owned in excess of 10% of new Delanco Bancorp s outstanding voting stock. The provisions of new Delanco Bancorp s certificate of incorporation which are summarized as informational proposals were approved as part of the process in which the board of directors of old Delanco Bancorp approved the plan of conversion. These proposals are informational in nature only, because the Federal Reserve Board s regulations governing mutual-to-stock conversions do not provide for votes on matters other than the plan of conversion. While we are asking you to vote with respect to each of the informational proposals listed above, the proposed provisions for which an informational vote is requested will become effective if shareholders approve the plan of conversion, regardless of whether shareholders vote to approve any or all of the informational proposals. The provisions of new Delanco Bancorp s certificate of incorporation which are summarized as informational proposals may have the effect of deterring or rendering more difficult attempts by third parties to obtain control of new Delanco Bancorp, if such attempts are not approved by the board of directors, or may make the removal of the board of directors or management, or the appointment of new directors, more difficult. In addition, shareholders will vote on the election of directors, the ratification of the appointment of auditors, and a proposal to adjourn the annual meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the annual meeting to approve the plan of conversion. Table of Contents Summary This summary highlights material information from this document and may not contain all the information that is important to you. To understand the conversion and offering fully, you should read this entire document carefully. Annual Meeting of Shareholders Date, Time and Place; Record Date The annual meeting of old Delanco Bancorp shareholders is scheduled to be held at , , New Jersey at :00 .m., local time, on [MEETINGDATE], 2013. Only old Delanco Bancorp shareholders of record as of the close of business on [RECORDDATE], 2013 are entitled to notice of, and to vote at, the annual meeting of shareholders and any adjournments or postponements of the meeting. Purpose of the Meeting Shareholders will be voting on the following proposals at the annual meeting: 1. Approval of the plan of conversion; 2. The following informational proposals: 2a Approval of a provision in new Delanco Bancorp s certificate of incorporation requiring a super-majority vote to approve certain amendments to new Delanco Bancorp s certificate of incorporation; and 2b Approval of a provision in new Delanco Bancorp s certificate of incorporation to limit the voting rights of shares beneficially owned in excess of 10% of new Delanco Bancorp s outstanding voting stock; 3. The election of two directors for terms of three years each and one director for a term of two years; 4. The ratification of the appointment of Connolly, Grady & Cha, P.C. as independent registered public accountants for the fiscal year ending March 31, 2014; and 5. The approval of the adjournment of the annual meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the annual meeting to approve the plan of conversion. The provisions of new Delanco Bancorp s certificate of incorporation which are summarized as informational proposals 2a and 2b were approved as part of the process in which the board of directors of old Delanco Bancorp approved the plan of conversion. These proposals are informational in nature only, because the Federal Reserve Board s regulations governing mutual-to-stock conversions do not provide for votes on matters other than the plan of conversion. While we are asking you to vote with respect to each of the informational proposals listed above, the proposed provisions for which an informational vote is requested will become effective if shareholders approve the plan of conversion, regardless of whether shareholders vote to approve any or all of the informational proposals. The provisions of new Delanco Bancorp s certificate of incorporation which are summarized as informational proposals may have the effect of deterring or rendering more difficult attempts by third parties to obtain control of new Delanco Bancorp, if such attempts are not approved by the board of directors, or may make the removal of the board of directors or management, or the appointment of new directors, more difficult. Table of Contents PROSPECTUS (Proposed holding company for Delanco Federal Savings Bank) Up to 610,938 Shares of Common Stock (Subject to increase to 702,579 shares) Delanco Bancorp, Inc., a newly formed New Jersey corporation that is referred to as new Delanco Bancorp throughout this prospectus, is offering common stock for sale in connection with the conversion of Delanco Federal Savings Bank from the mutual holding company form of organization to the stock form of organization. We are offering up to 610,938 shares of common stock for sale on a best efforts basis, subject to certain conditions. We must sell a minimum of 451,563 shares to complete the offering. All shares are offered at a price of $8.00 per share. Purchasers will not pay a commission to purchase shares of common stock in the offering. The amount of capital being raised is based on an independent appraisal of new Delanco Bancorp. Most of the terms of this offering are required by regulations of the Board of Governors of the Federal Reserve System. If, as a result of regulatory considerations, demand for the shares or changes in financial market conditions, the independent appraiser determines that our market value has increased, we may sell up to 702,579 shares without giving you further notice or the opportunity to change or cancel your order. The shares we are offering represent the 55.0% ownership interest in Delanco Bancorp, Inc., a federal corporation that is referred to as old Delanco Bancorp throughout this prospectus, now owned by Delanco MHC. The remaining 45.0% interest in old Delanco Bancorp currently owned by the public will be exchanged for shares of common stock of new Delanco Bancorp. The 735,626 shares of old Delanco Bancorp currently owned by the public will be exchanged for between 361,185 shares and 488,662 shares of common stock of new Delanco Bancorp (subject to increase to 561,962 shares if we sell 702,579 shares in the offering) so that old Delanco Bancorp s existing public shareholders will own approximately the same percentage of new Delanco Bancorp common stock as they owned of old Delanco Bancorp s common stock immediately before the conversion. Old Delanco Bancorp and Delanco MHC will cease to exist upon completion of the conversion and offering. We are offering the shares of common stock in a subscription offering to eligible depositors and borrowers of Delanco Federal and Delanco Federal s tax-qualified employee stock ownership plan. Shares of common stock not purchased in the subscription offering may be offered for sale in a community offering, with a preference given to natural persons residing in Burlington County, New Jersey, then to shareholders of old Delanco Bancorp and then to other members of the general public. To the extent any shares offered for sale are not purchased in the subscription or community offerings, they may be sold in a syndicated community offering to be managed by Keefe, Bruyette & Woods, Inc. With respect to the subscription offering, the community offering and the syndicated community offering Keefe, Bruyette & Woods will use its best efforts to assist Delanco Bancorp in its selling efforts but is not required to purchase any shares of common stock that are being offered for sale in such offerings. The minimum order is 25 shares. The subscription offering will end at 2:00 p.m., Eastern time, on [Date 1], 2013. We expect that the community offering, if held, will terminate at the same time, although it may continue without notice to you until [Date 2], 2013 or longer if the Federal Reserve Board approves a later date. No single extension may exceed 90 days and the offering must be completed by [ ], 2015. Once submitted, orders are irrevocable unless the offering is terminated or is extended beyond [Date 2], 2013, or the number of shares of common stock to be sold is increased to more than 702,579 shares or decreased to less than 451,563 shares. If we extend the offering beyond [Date 2], 2013, all subscribers will be notified and given the opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will promptly return your funds with interest calculated at Delanco Federal s passbook savings rate or cancel your deposit account withdrawal authorization. If we intend to sell fewer than 451,563 shares or more than 702,579 shares, we will promptly return all funds and set a new offering range. All subscribers will be notified and given the opportunity to place a new order. Funds received before the completion of the subscription and community offerings will be held in a segregated account at Delanco Federal and will earn interest at Delanco Federal s passbook savings rate, which is currently .10%. Old Delanco Bancorp s common stock is currently quoted on the OTCQB Marketplace under the symbol DLNO and we expect the common stock of new Delanco Bancorp will also be quoted on the OTCQB Marketplace under the symbol DLNO. This investment involves a degree of risk, including the possible loss of principal. Please read Risk Factors beginning on page 14. OFFERING SUMMARY Price Per Share: $8.00 Minimum Midpoint Maximum Maximum, as Adjusted Number of shares 451,563 531,250 610,938 702,579 Gross offering proceeds $ 3,612,504 $ 4,250,000 $ 4,887,504 $ 5,620,632 Estimated offering expenses, excluding selling agent fees $ 710,000 $ 710,000 $ 710,000 $ 710,000 Estimated selling agent fees (1)(2) $ 160,000 $ 160,000 $ 160,000 $ 160,000 Estimated net proceeds $ 2,742,504 $ 3,380,000 $ 4,017,504 $ 4,750,632 Estimated net proceeds per share $ 6.07 $ 6.36 $ 6.58 $ 6.76 (1) Assumes all shares are sold in the subscription and community offerings and excludes reimbursable expenses and conversion agent fees. For information regarding compensation to be received by Keefe, Bruyette & Woods, see Pro Forma Data on page and The Conversion and Offering Marketing Arrangements on page . (2) If all shares of common stock are sold in the syndicated community offering, excluding shares purchased by the employee stock ownership plan and shares purchased by insiders of Delanco Bancorp, Inc., for which no selling agent commissions would be paid, the maximum selling agent fees and commissions would be $354,516 at the minimum, $427,574 at the maximum, and $469,582 at the adjusted maximum. See The Conversion and Offering Syndicated Community Offering; Marketing Arrangements for a discussion of the fees to be paid to Keefe, Bruyette & Woods and other FINRA member firms in the event that all shares are sold in the syndicated community offering. These securities are not deposits or savings accounts and are not insured or guaranteed by the FDIC or any other government agency. Neither the Securities and Exchange Commission, the Board of Governors of the Federal Reserve System nor any state securities regulator has approved or disapproved of these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense. For assistance, please contact the Stock Information Center at The date of this prospectus is , 2013 Table of Contents not pay any dividends or make any other capital distributions without the prior written approval of the OCC; not make any severance or indemnification payments without complying with regulatory requirements regarding such payments; and comply with prior regulatory notification requirements for any changes in directors or senior executive officers. We have submitted strategic and capital plans to the OCC and have developed the other plans and policies required by the written agreement. The written agreement will remain in effect until terminated, modified, or suspended in writing by the OCC. The written agreement does not require Delanco Federal to maintain any specific minimum regulatory capital ratios. However, by letter dated January 2, 2013, the OCC established higher individual minimum capital requirements for Delanco Federal. Specifically, Delanco Federal must maintain Tier 1 capital at least equal to 8% of adjusted total assets, Tier 1 capital at least equal to 12% of risk-weighted assets, and total capital at least equal to 13% of risk-weighted assets. At March 31, 2013, Delanco Federal s Tier 1 leverage capital ratio, Tier 1 risk-based capital ratio and total risk-based capital ratio were 7.79%, 13.41% and 14.67%, respectively. Since the imposition of the Order to Cease and Desist, our capital preservation activities have included balance sheet contraction, curtailed lending activities, reduced concentrations in commercial lending, and working to reduce adversely classified assets. We are undertaking the conversion in furtherance of our capital plan. Our Business We operate as a community bank. Our primary business is generating funds from deposits and investing such funds in loans and investment securities. Retail Lending. Our primary line of business is originating loans to consumers in our market area. The largest segment of our loan portfolio is one- to four-family mortgage loans. We also offer home equity loans, construction loans and consumer loans. Commercial Lending. Our loan portfolio includes multi-family and commercial real estate loans and commercial business loans and lines of credit. We have made very few loans of this type in recent years due to asset quality problems and restrictions imposed by our regulators. Deposit Products and Services. We offer a full range of traditional deposit products for consumers and businesses, such as checking accounts, savings accounts, money market accounts and certificates of deposit. We provide features such as direct deposit, ATM and check card services, and on-line banking and bill pay services. Our Business Strategy Our mission is to operate and grow a profitable, independent community-oriented financial institution serving primarily retail customers and small businesses in our market area. In pursuing our mission, our goal is to improve our capital, earnings and asset quality so that we can be released from our written agreement with the OCC and our higher individual minimum capital requirements. The following are key elements of our business strategy: Improve asset quality. Working through our problem assets remains one of our top priorities. Non-performing loans spiked significantly during the recent recession and totaled $6.3 million at March 31, 2013. Real estate owned totaled $2.5 million at the same date. Total non-performing assets and troubled debt restructurings represented 6.8% of total assets at March 31, 2013. We continue to work with delinquent borrowers to restore loans to performing status where possible and to pursue foreclosure and disposition of collateral when it is not. In January 2013, we engaged an independent third party to conduct periodic loan portfolio reviews. Implementing a controlled growth strategy to prudently increase profitability. We intend to pursue a controlled growth strategy for the foreseeable future, with the goal of improving the profitability of our core business through increased net interest income. We anticipate moderate growth in our one- to four-family mortgage loan portfolio and in our investment securities portfolio. To a lesser extent, we also intend to originate multi-family and commercial real estate loans and commercial business loans to provide diversification to our loan portfolio. Continuing our community-oriented focus. As a community-oriented financial institution, we emphasize providing exceptional customer service as a means to attract and retain customers. We believe that our community orientation is attractive to our customers and distinguishes us from the large banks that operate in our market area. Improve our funding mix by attracting lower cost core deposits. Core deposits (demand, money market and savings accounts) comprised 53% of our total deposits at March 31, 2013, up from 47% at March 31, 2012. We value core deposits because they represent longer-term customer relationships and a lower cost of funding compared to certificates of deposit. Table of Contents Q. What is the conversion? A. Delanco Federal is converting from a mutual holding company structure to a fully-public stock holding company ownership structure. Currently, Delanco MHC owns 55.0% of old Delanco Bancorp s common stock. The remaining 45.0% of old Delanco Bancorp s common stock is owned by public shareholders. As a result of the conversion, our newly formed company, also called Delanco Bancorp, will become the parent of Delanco Federal. Shares of common stock of new Delanco Bancorp, representing the 55.0% ownership interest of Delanco MHC in old Delanco Bancorp, are being offered for sale to eligible depositors of Delanco Federal and, possibly, to the public. At the completion of the conversion and offering, public shareholders of old Delanco Bancorp will exchange their shares of old Delanco Bancorp common stock for shares of common stock of new Delanco Bancorp. After the conversion and offering are completed, Delanco Federal will be a wholly-owned subsidiary of new Delanco Bancorp, and 100% of the common stock of new Delanco Bancorp will be owned by public shareholders. As a result of the conversion and offering, old Delanco Bancorp and Delanco MHC will cease to exist. See Proposal 1 Approval of the Plan of Conversion beginning on page of this proxy statement/prospectus, for more information about the conversion and offering. Q. What are reasons for the conversion and offering? A. Our primary reasons for the conversion and offering are the following: To improve our capital position to support our risk profile and to assure compliance with regulatory capital requirements and additional individual minimum capital requirements imposed on us by the Office of the Comptroller of the Currency ( OCC ); To support controlled growth beyond levels possible utilizing only retained earnings; and To adopt the stock holding company structure, which is a more familiar form of organization and which we believe will make our common stock more appealing to investors and give us greater flexibility to access the capital markets through possible future equity and debt offerings. Our current mutual holding company structure limits our ability to raise capital because Delanco MHC must own at least 50.1% of the shares of old Delanco Bancorp. We currently have no plans, agreements or understandings regarding any additional securities offerings. Q. Why should I vote? A. You are not required to vote, but your vote is very important. In order for us to implement the plan of conversion, we must receive the affirmative vote of (1) the holders of at least two-thirds of the outstanding shares of old Delanco Bancorp common stock, including shares held by Delanco MHC and (2) the holders of a majority of the outstanding shares of old Delanco Bancorp common stock entitled to vote at the annual meeting, excluding shares held by Delanco MHC. Your board of directors recommends that you vote FOR the plan of conversion. Q. What happens if I don t vote? A. Your prompt vote is very important. Not voting will have the same effect as voting Against the plan of conversion. Without sufficient favorable votes FOR the plan of conversion, we will not proceed with the conversion and offering. Table of Contents Vote Required Proposal 1: Approval of the Plan of Conversion. Approval of the plan of conversion requires the affirmative vote of holders of at least two-thirds of the outstanding shares of old Delanco Bancorp, including shares held by Delanco MHC and a majority of the votes eligible to be cast by shareholders of old Delanco Bancorp, excluding shares held by Delanco MHC. Informational Proposals 2a and 2b. While we are asking you to vote with respect to each of the informational proposals listed above, the proposed provisions for which an informational vote is requested will become effective if shareholders approve the plan of conversion, regardless of whether shareholders vote to approve any or all of the informational proposals. Proposal 3: Election of Directors. Directors are elected by a plurality of the votes cast at the annual meeting. This means that the nominees receiving the greatest number of votes will be elected. Proposal 4: Ratification of Auditor. Ratification of the selection of Connolly, Grady & Cha, P.C. as our independent registered public accounting firm for fiscal 2014 requires the affirmative vote of a majority of the votes represented at the annual meeting and entitled to vote. Proposal 5: Approval of the adjournment of the annual meeting. We must obtain the affirmative vote of the majority of the votes represented at the annual meeting and entitled to vote to adjourn the annual meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the annual meeting to approve the proposal to approve the plan of conversion. As of the record date, there were 1,634,725 shares of old Delanco Bancorp common stock outstanding, of which Delanco MHC owned 899,099. The directors and executive officers of old Delanco Bancorp (and their affiliates), as a group, beneficially owned shares of old Delanco Bancorp common stock, representing % of the outstanding shares of old Delanco Bancorp common stock and % of the shares held by persons other than Delanco MHC as of such date. Delanco MHC and our directors and executive officers intend to vote their shares in favor of the plan of conversion. Our Company Old Delanco Bancorp is, and new Delanco Bancorp following the completion of the conversion and offering will be, the unitary savings and loan holding company for Delanco Federal, a federally chartered savings bank. Delanco Federal is headquartered in Delanco, New Jersey and operates two full-service locations in Delanco Township and Cinnaminson, New Jersey. Our common stock is listed on the OTC Bulletin Board under the symbol DLNO. At March 31, 2013, old Delanco Bancorp had consolidated total assets of $129.4 million, net loans of $88.4 million, total deposits of $117.0 million and total stockholders equity of $11.4 million. Our principal executive offices are located at 615 Burlington Avenue, Delanco, New Jersey 08075 and our telephone number is (856) 461-0611. Our web site address is www.delancofsb.com. Information on our website should not be considered a part of this proxy statement. Table of Contents Table of Contents Description of the Conversion (page ) In 2002, we reorganized Delanco Federal into a stock savings bank with a mutual holding company structure and formed old Delanco Bancorp as the mid-tier holding company for Delanco Federal. In 2007, we sold a minority interest in old Delanco Bancorp common stock to our depositors, our borrowers and our employee stock ownership plan in a subscription offering. The majority of old Delanco Bancorp s shares were issued to Delanco MHC, a mutual holding company organized under federal law. As a mutual holding company, Delanco MHC does not have any shareholders, does not hold any significant assets other than the common stock of old Delanco Bancorp, and does not engage in any significant business activity. Our current ownership structure is as follows: The second-step conversion process that we are now undertaking involves a series of transactions by which we will convert our organization from the partially public mutual holding company form to the fully public stock holding company structure. In the stock holding company structure, all of Delanco Federal s common stock will be owned by new Delanco Bancorp, and all of new Delanco Bancorp s common stock will be owned by the public. We are conducting the conversion and offering under the terms of our plan of conversion and reorganization (which is referred to as the plan of conversion ). Upon completion of the conversion and offering, old Delanco Bancorp and Delanco MHC will cease to exist. As part of the conversion, we are offering for sale common stock representing the ownership interest of old Delanco Bancorp that is currently held by Delanco MHC. At the conclusion of the conversion and offering, existing public shareholders of old Delanco Bancorp will receive shares of common stock in new Delanco Bancorp in exchange for their existing shares of common stock of old Delanco Bancorp, based upon an exchange ratio of 0.4910 to 0.6643 at the minimum and maximum of the offering range, respectively. If, as a result of regulatory considerations, demand for the shares or changes in financial market conditions, the independent appraiser determines that our market value has increased, we may sell up to 702,579 shares in the offering and the exchange ratio will be increased to 0.7639. The actual exchange ratio will be determined at the conclusion of the conversion and the offering based on the total number of shares sold in the offering, and is intended to result in old Delanco Bancorp s existing public shareholders owning 44.44% of new Delanco Bancorp common stock, which is based on the 45% ownership interest that existing public shareholders currently own of old Delanco Bancorp common stock adjusted to reflect the assets of Delanco MHC, without giving effect to cash paid in lieu of issuing fractional shares or shares that existing shareholders may purchase in the offering. Table of Contents Q. How do I vote? A. You should sign your proxy card and return it in the enclosed proxy reply envelope. PLEASE VOTE PROMPTLY. NOT VOTING HAS THE SAME EFFECT AS VOTING AGAINST THE PLAN OF CONVERSION. Q. If my shares are held in street name, will my broker automatically vote on my behalf? A. No. Your broker will not be able to vote your shares without instructions from you. You should instruct your broker to vote your shares, using the directions that your broker provides to you. Q. What if I do not give voting instructions to my broker? A. Your vote is important. If you do not instruct your broker to vote your shares, the unvoted proxy will have the same effect as a vote against the plan of conversion. The Exchange Q: I currently own shares of old Delanco Bancorp common stock. What will happen to my shares as a result of the conversion? A: At the completion of the conversion, your shares of old Delanco Bancorp common stock will be canceled and exchanged for shares of common stock of new Delanco Bancorp, a newly formed New Jersey corporation. The number of shares you will receive will be based on an exchange ratio determined as of the closing of the conversion and offering that is intended to result in old Delanco Bancorp s existing public shareholders owning approximately 45.0% of new Delanco Bancorp s common stock, which is the same percentage of old Delanco Bancorp common stock currently owned by existing public shareholders. Q: Does the exchange ratio depend on the market price of old Delanco Bancorp common stock? A: No, the exchange ratio will not be based on the market price of old Delanco Bancorp common stock. Therefore, changes in the price of old Delanco Bancorp common stock between now and the completion of the conversion and offering will not affect the calculation of the exchange ratio. Q: How will the actual exchange ratio be determined? A: Because the purpose of the exchange ratio is to maintain the ownership percentage of the existing public shareholders of old Delanco Bancorp, the actual exchange ratio will depend on the number of shares of new Delanco Bancorp s common stock sold in the offering and, therefore, cannot be determined until the completion of the conversion and offering. Q: How many shares will I receive in the exchange? A: You will receive between 0.4910 and 0.6643 (subject to increase to 0.7639) shares of new Delanco Bancorp common stock for each share of old Delanco Bancorp common stock you own on the date of the completion of the conversion and offering. For example, if you own 100 shares of old Delanco Bancorp common stock, and the exchange ratio is 0.5776 (at the midpoint of the offering range), after the conversion and offering you will receive 57 shares of new Delanco Bancorp common stock and $4.80 in cash, the value of the fractional share, based on the $8.00 per share purchase price in the offering. Shareholders who hold shares in street-name at a brokerage firm will receive these funds in their brokerage account. Shareholders with stock certificates will receive checks when they receive their new stock certificates. Table of Contents The Conversion Description of the Conversion (page ) [Same as Prospectus] Reasons for the Conversion and Offering (page ) [Same as Prospectus] Conditions to Completing the Conversion and Offering [Same as Prospectus] The Exchange of Existing Shares of Old Delanco Bancorp Common Stock (page ) [Same as Prospectus] Effect of the Conversion on Shareholders of Old Delanco Bancorp The following table compares historical information for old Delanco Bancorp with similar information on a pro forma and per equivalent old Delanco Bancorp share basis. The information listed as per equivalent old Delanco Bancorp share was obtained by multiplying the pro forma amounts by the exchange ratio indicated in the table. Dividends per share have been omitted from this table because old Delanco Bancorp does not currently pay a cash dividend on its common stock. Old Delanco Bancorp Historical Pro Forma Exchange Ratio Per Equivalent Old Delanco Bancorp Share Book value per share at March 31, 2013: Sale of 451,563 shares $ 6.97 $ 17.31 0.4910 $ 8.50 Sale of 531,250 shares 6.97 15.35 0.5776 8.87 Sale of 610,938 shares 6.97 13.90 0.6643 9.23 Sale of 702,579 shares 6.97 12.64 0.7639 9.66 Earnings per share for the year ended March 31, 2013: Sale of 451,563 shares $ (0.20 ) (0.43 ) 0.4910 $ (0.21 ) Sale of 531,250 shares (0.20 ) (0.37 ) 0.5776 (0.21 ) Sale of 610,938 shares (0.20 ) (0.32 ) 0.6643 (0.21 ) Sale of 702,579 shares (0.20 ) (0.27 ) 0.7639 (0.21 ) Price per share (1): Sale of 451,563 shares $ 8.00 0.4910 Sale of 531,250 shares 8.00 0.5776 Sale of 610,938 shares 8.00 0.6643 Sale of 702,579 shares 8.00 0.7639 (1) At May 28, 2013, which was the day of the adoption of the plan of conversion. How We Determined the Offering Range and Exchange Ratio (page ) [Same as Prospectus] Table of Contents After the conversion and offering, our ownership structure will be as follows: We may cancel the conversion and offering with the concurrence of the Federal Reserve Board. If canceled, orders for common stock already submitted will be canceled, subscribers funds will be promptly returned with interest calculated at Delanco Federal s passbook savings rate and all deposit account withdrawal authorizations will be canceled. The normal business operations of Delanco Federal will continue without interruption during the conversion and offering, and the same officers and directors who currently serve Delanco Federal in the mutual holding company structure will serve the new holding company and Delanco Federal in the fully converted stock form. Reasons for the Conversion and Offering (page ) Our primary reasons for the conversion and offering are the following: To improve our capital position to support our risk profile and to assure compliance with regulatory capital requirements and additional individual minimum capital requirements imposed on us by the OCC; To support controlled growth beyond levels possible utilizing only retained earnings; and To adopt the stock holding company structure, which is a more familiar form of organization and which we believe will make our common stock more appealing to investors and give us greater flexibility to access the capital markets through possible future equity and debt offerings. Our current mutual holding company structure limits our ability to raise capital because Delanco MHC must own at least 50.1% of the shares of old Delanco Bancorp. We currently have no plans, agreements or understandings regarding any additional securities offerings. At March 31, 2013, Delanco Federal s Tier 1 leverage ratio was 7.79%, which was not in compliance with the individual minimum capital requirement imposed by the OCC that requires Delanco Federal to maintain a Tier 1 leverage capital ratio of at least 8%. The proceeds from the offering will result in a pro forma Tier 1 leverage ratio of 9.21% at the minimum of the offering range and enable us to comply with the individual minimum capital requirement imposed by the OCC and the capital plan that we submitted to our regulators while allowing us to pursue modest growth. Our board of directors considered current market conditions, the amount of capital needed for compliance with our regulatory requirements and continued growth, the amount of capital being raised in the offering and the interests of existing shareholders in deciding to conduct the conversion and offering at this time. Terms of the Offering We are offering between 451,563 and 610,938 shares of common stock in a subscription offering to eligible depositors and borrowers of Delanco Federal and to our tax-qualified employee benefit plans, including our employee stock ownership plan. To the extent shares remain available, we may offer shares in a community offering to natural persons residing in Burlington County, New Jersey, to our existing public shareholders and to the general public. With regulatory approval, we may increase the number of shares to be sold up to 702,579 shares without giving you further notice or the opportunity to change or cancel your order. In considering whether to increase the offering size, the Federal Reserve Board will consider the level of subscriptions, the views of our independent appraiser, our financial condition and results of operations, and changes in financial market conditions. Once submitted, orders are irrevocable unless the offering is terminated or is extended beyond [Date 2], 2013, or the number of shares of common stock to be sold is increased to more than 702,579 shares or decreased to less than 451,563 shares. If we extend the offering beyond [Date 2], 2013, all subscribers will be notified and given the opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will promptly return your funds with interest calculated at Delanco Federal s passbook savings rate or cancel your deposit account withdrawal authorization. If we intend to sell fewer than 451,563 shares or more than 702,579 shares, we will promptly return all funds and set a new offering range. All subscribers will be notified and given the opportunity to place a new order. Table of Contents Q. Should I submit my stock certificates now? A. No. If you hold a stock certificate for old Delanco Bancorp common stock, instructions for exchanging your certificate will be sent to you after completion of the conversion and offering. Until you submit the transmittal form and certificate, you will not receive your new certificate and check for cash in lieu of fractional shares, if any. If your shares are held in street name at a brokerage firm, the share exchange will occur automatically upon completion of the conversion and offering, without any action on your part. Please do not send in your stock certificate until you receive a transmittal form and instructions. Q. Do I have dissenters and appraisal rights? A. No. Shareholders of old Delanco Bancorp do not have dissenters rights in connection with the conversion and offering. Stock Offering Q. May I place an order to purchase shares in the offering, in addition to the shares that I will receive in the exchange? A. Yes. Eligible depositors and borrowers of Delanco Federal have priority subscription rights allowing them to purchase common stock in the subscription offering. Shares not purchased in the subscription offering may be available for sale to the public in a community offering. Old Delanco Bancorp shareholders have a preference in the community offering after orders submitted by residents of our communities. If you would like to receive a prospectus and stock order form, please call our Stock Information Center toll-free at ( ) from 10:00 a.m. to 4:00 p.m. Eastern time, Monday through Friday. Order forms must be received (not postmarked) no later than 2:00 p.m., Eastern time on [DATE1], 2013. Other Questions? For answers to other questions, please read this proxy statement/prospectus. Questions about voting may be directed to our proxy information agent, , by calling toll-free ( ) - . A copy of the plan of conversion is available from Delanco Federal Savings Bank upon written request to the Corporate Secretary and is available for inspection at the offices of Delanco Federal Savings Bank and the Federal Reserve Board. Table of Contents Possible Change in Offering Range [Same as Prospectus] How We Intend to Use the Proceeds of the Offering (page ) [Same as Prospectus] Benefits of the Conversion to Management (page ) [Same as Prospectus] Purchases by Directors and Executive Officers (page ) [Same as Prospectus] Market for New Delanco Bancorp s Common Stock (page ) [Same as Prospectus] Our Dividend Policy (page ) [Same as Prospectus] Dissenters Rights (page ) Shareholders of old Delanco Bancorp do not have dissenters rights in connection with the conversion and offering. Differences in Shareholder Rights (page ) As a result of the conversion, existing shareholders of old Delanco Bancorp will become shareholders of new Delanco Bancorp. In some instances, the rights of shareholders of new Delanco Bancorp will be less than the rights shareholders currently have. The decrease in shareholder rights results from differences between the certificate of incorporation and bylaws of new Delanco Bancorp and the charter and bylaws of old Delanco Bancorp and from distinctions between New Jersey and federal law. The differences in shareholder rights under the certificate of incorporation and bylaws of new Delanco Bancorp are not mandated by New Jersey law but have been chosen by management as being in the best interests of the corporation and all of its shareholders. However, the provisions in new Delanco Bancorp s certificate of incorporation and bylaws may make it more difficult to pursue a takeover attempt that management opposes. These provisions will also make the removal of the board of directors or management, or the appointment of new directors, more difficult. The differences in shareholder rights include the following: supermajority voting requirements for certain business combinations and changes to some provisions of the certificate of incorporation and bylaws; limitation on the right to vote shares; shareholders must apply to a court to call special meetings of shareholders; and greater lead time required for shareholders to submit business proposals or director nominations. Table of Contents Shares of our common stock not purchased in the subscription or community offerings may be sold in a syndicated community offering. We may begin the syndicated community offering at any time following commencement of the subscription offering. The purchase price is $8.00 per share. All investors will pay the same purchase price per share. Investors will not be charged a commission to purchase shares of common stock in the offering. Keefe, Bruyette & Woods, our conversion advisor and marketing agent in the offering, will use its best efforts to assist us in selling shares of our common stock in the subscription, community and syndicated community offerings. Keefe, Bruyette & Woods is not obligated to purchase any shares of common stock in the subscription, community or syndicated community offerings. Risks Relating to the Offering and Our Business (page ) An investment in the common stock of new Delanco Bancorp involves a degree of risk, including the possible loss of principal. You should carefully read and consider the information set forth in
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001579717_perk_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001579717_perk_prospectus_summary.txt
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+PROSPECTUS SUMMARY The following summary highlights material information contained in this prospectus. This summary does not contain all of the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus carefully, including the risk factors section, the financial statements and the notes to the financial statements. You should also review the other available information referred to in the section entitled Where You Can Find More Information in this prospectus and any amendment or supplement hereto. Company Overview Perk International Inc. ( Perk or the Company ) was incorporated in the State of Nevada on April 10, 2013. We plan to become an e-commerce marketplace that connects merchants to consumers by offering daily discounts on goods and services through our website located at www.usellisave.com. Our corporate headquarters are located at 2470 East 16th Street, Brooklyn, NY 11235, but we plan to launch our business in the Greater Toronto Area (GTA). We plan to be an Internet-based company that provides daily deals/coupons to consumers within the GTA. Our goal is to utilize the business models of companies such as Groupon and Living Social to design and develop a daily deal e-commerce company that will focus on consumer goods. Although there is a trend of slowing growth in daily deals purchases, which is discussed more fully in this Prospectus, we believe that with the right approach we will be able to enter and maintain a presence in this space. We have retained a qualified website developer on a contract basis to build the website platform that we envision under the name www.usellisave.com. Our website is currently under development. Once we complete our website platform, we plan to provide consumers with savings on consumer items, restaurant dining and consumer services. We believe that by linking consumers with merchants, our business model will benefit consumers and merchants within the GTA by creating savings for consumer families, stimulating the local economy. We are currently a development stage company and to date we have recorded no revenue. Accordingly, our independent registered public accountants have issued a comment regarding our ability to continue as a going concern (please refer to the footnotes to the financial statements). Until such time that we are able to establish a consistent flow of revenues from our operations which is sufficient to sustain our operating needs, management intends to rely primarily upon equity or debt financing to supplement cash flows, if any, generated by our products and services. We have nominal operations and assets and, as such, we are a shell company under Rule 405 of the Securities Act and are subject to additional regulatory requirements as a result of this status, including limitations on our shareholder s ability to re-sell their shares in our company, as well as additional disclosure requirements. Please review our Risk Factors contained in this Prospectus for more information of the limitations we face as a shell company. We believe that we are not a blank check company, as defined by applicable securities laws, and we, including our officers and directors, any company promoters, or their affiliates, have no intention for our company, once we are reporting, to be used as a vehicle for a private company to become a reporting company. Although we were only recently incorporated and have not yet commenced business operations, we believe that conducting this Offering will allow us added flexibility to raise capital in today's unsteady financial climate. There can be no assurance that we will be successful in our attempt to sell 100% of the Units being registered hereunder; however, we believe that investors in today's markets demand full transparency and by registering this Offering and becoming a reporting company, we will be able to meet this demand and hopefully have a better chance of raising capital. Currently, there is no public trading market for our Common Stock and no such market may ever develop, which may limit our ability to raise funds through equity financings. However, management believes that we will be able to meet all requirements to be quoted on the OTCBB operated by the Financial Industry Regulatory Authority, Inc. ( FINRA ) and the OTCQB operated by OTC Markets Group, Inc. Further, even though our Common Stock will likely be considered a penny stock, becoming a reporting company will provide us with enhanced visibility and give us a greater opportunity to provide liquidity to our shareholders. TABLE OF CONTENTS Our current cash and working capital is not sufficient to cover our current estimated expenses of $30,000, which include those fees associated with obtaining a Notice of Effectiveness from the SEC for this Registration Statement. Upon obtaining effectiveness, we will conduct the Offering contemplated hereby, and anticipate raising sufficient capital from this Offering to market and grow our Company. We hope that we will be able to complete this Offering within the coming months. If 100% of the offered Units are sold we will receive the maximum proceeds of $17,500, after offering expenses have been deducted. If 75% of the offered Units are sold we will receive $10,000 after offering expenses have been deducted. If 50% of the offered Units are sold we would receive $2,500 after offering expenses have been deducted. We must sell 12,000,000 Units (or 40% of the Offering) to cover the estimated costs of this Offering. If we sell less than 12,000,000 of our Units under the Offering, we will not have sufficient proceeds to cover repaying our offering expenses and we will have to pay the remainder of such expenses out of additional financing we have not yet received. We anticipate fully-launching our business operations approximately three to four months after the completion of this Offering. We believe that the maximum amount of funds generated from the Offering will provide us with enough proceeds to fund our plan of operations for up to twelve months after the completion of this Offering. If we raise less from this Offering, we will have to seek out additional capital from alternate sources execute our business plan. We do not currently have any arrangements for obtaining additional financing and there is no assurance that any additional financing will be available or, if available, on terms that will be acceptable to us. We will seek such funds from friends, family, and business acquaintances; however, we have not received any firm commitments or indications of interest from our friends, family members, or business acquaintances regarding potential investments in our company and cannot predict when such funding may be available to us. Failure to raise additional financing will cause us to go out of business. SUMMARY OF THIS OFFERING The Issuer Perk International Inc. Securities being offered Up to 30,000,000 Units, our Common Stock is described in further detail in the section of this prospectus titled DESCRIPTION OF SECURITIES Common Stock. Each Unit consists of one share of Common Stock and a warrant to purchase one share of Common Stock. The warrant may be exercised into one share of Common Stock at an exercise price of $0.25 per share and expires on September 30, 2017. Offering Type
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001581220_xalles_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001581220_xalles_prospectus_summary.txt
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+PROSPECTUS SUMMARY As used in this Prospectus, references to "Stella Blu, Inc.," the "Company," "we," "our" or "us" refer to Stella Blu, Inc., unless the context otherwise indicates. The Company began limited operations, related solely to capital formation activities, on February 10, 2013, is considered a development stage company and has not yet realized any revenues from its planned operations. The following summary highlights selected information contained in this Prospectus. Before making an investment decision, you should read the entire prospectus carefully, including the "Risk Factors" section, the financial statements and the notes to the financial statements. Corporate Background Stella Blu, Inc (the "Company") is an emerging growth company (as defined in the Jumpstart Our Business Startups (JOBS) Act), which was formed in the State of
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001581834_esir1-inc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001581834_esir1-inc_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..b4f4049711b4cbe11e4e350f6c4b07f62f37dcb0
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+PROSPECTUS SUMMARY As used in this prospectus, references to the "Company," "we," "our" or "us" refer to Esir1, Inc., unless the context otherwise indicates. You should read the following summary together with the entire prospectus, including the more detailed information regarding us and the common stock being sold in this offering and our financial statements and the related notes appearing elsewhere in this prospectus. You should carefully consider, among other things, the matters discussed in the section entitled "Risk Factors" beginning on page 6. Corporate Background Esir1 was started in California in 2005 which turned into Esir1, LLC and recently Esir1, Inc. which it is today. Holding oil and gas rights as well as underground imaging for the discovery of mineral resource deposits. The implementation of Esir1 strategic planning has led to beneficial operating relationships with several highly reputed oil and gas experts who have been instrumental in the expansion of Esir1 s holdings. Esir1 has targeted the most successful producing oil trends and contracted for or purchased the available mineral rights leasehold to those trends in the most highly concentrated areas. Intellectual Property We do have any intellectual property rights. However, we may use a combination of patents, trademarks and trade secrets to protect the way in which we produce. Employees We currently have employees. Executive Offices Our offices are in several locations. 9903 Santa Monica Blvd #576,Beverly Hills, CA. 90212, 433 North Camden Dr., Beverly Hills, CA. 90212 Calculation of Registration Fee Proposed Proposed Maximum Maximum Amount Aggregate Aggregate Amount of to be Price Offering Registration Title of Class of Securities to be Registered Registered Per Share Price Fee Common Stock, $0.0001 per share (1) 15,000,000 $ 0.05 (2) $ 785,000 $ 107.07 (1)Represents common shares currently outstanding to be sold by the selling security holders. (2)The offering price has been estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457(o). Our common stock is not traded and any national exchange and in accordance with Rule 457, the offering price was determined by the price shares were sold to the selling security holders in .private placement transactions. The selling shareholders may sell shares of our common stock at a fixed price of $0.05 per share until our shares are quoted at prevailing market prices or privately negotiated prices. The fixed price of $0.05 has been determined as the selling price based upon the original purchase price paid by the selling security holders of $0.003 plus an increase based on the fact the shares will be liquid and registered. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders. In the event of a stock split, stock dividend or similar transaction involving our common stock, the number of shares registered shall automatically be increased to cover the additional shares of common stock issuable pursuant to Rule 416 under the Securities Act of 1933, as amended. The Registrant hereby amends this registration statement on such date or dates as maybe necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. The Offering Securities offered: 15,000,000 shares of common stock Offering price: The selling security holders purchased their shares of common stock from the Company at the price of $0.003 per share and will be offering their shares of common stock at a price of $0.05 per share, which includes an increase, based on the fact the shares will be liquid and registered. This is a fixed price at which the selling security holders may sell their shares until our common stock is quoted at which time the shares may be sold at prevailing market prices or privately negotiated prices. Shares outstanding prior to offering: 2,000,000,000 shares of common stock. Shares outstanding after offering: 2,015,000,000 shares of common stock. Our executive officer and directors currently own 40% of our outstanding shares of common stock. As a result, our executive officer and directors have substantial control over all matters submitted to our stockholders for approval. Market for the common shares: There has been no market for our securities. Our common stock is not traded on any exchange or on the over-the-counter market. After the effective date of the registration statement relating to this prospectus, we hope to have a market maker file an application for our common stock to be eligible for trading . We do have Merrill Lynch/Merrill Edge as a market maker who has agreed to file such application. There is no assurance that a trading market will develop, or, if developed, that it will be sustained. Consequently, a purchaser of our common stock may find it difficult to resell the securities offered herein should the purchaser desire to do so when eligible for public resale. As a result of their ownership and positions, our directors and executive officers collectively are able to influence all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions. In addition, the future prospect of sales of significant amounts of shares held by our directors and executive officers could affect the market price of our common stock if the marketplace does not orderly adjust to the increase in shares in the market and the value of your investment in the Company may decrease. Management s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn. could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001581889_quartet_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001581889_quartet_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..3acf6c1c91ab9347b01b60b8c05bc5e50578fa1a
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+PROSPECTUS SUMMARY This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under Risk Factors and our financial statements and the related notes included elsewhere in this prospectus, before investing. Unless otherwise stated in this prospectus: references in this prospectus to we, us or our company refer to Quartet Merger Corp.; references in this prospectus to insider shares refer to the 2,415,000 shares of common stock currently held by our sponsors (as defined below), which include up to an aggregate of 315,000 shares of common stock subject to forfeiture by our sponsors to the extent that the underwriters over-allotment option is not exercised in full or in part, after giving effect to a stock dividend of 0.2 shares of common stock for each outstanding share of common stock effectuated in September 2013; references in this prospectus to private units refer to the units we are selling privately to our sponsors and EarlyBirdCapital upon consummation of this offering and references to private shares and private rights refers to the shares of common stock and rights included within the private units; references in this prospectus to our management or our management team refer to our officers and directors; references in this prospectus to our public shares refer to shares of common stock which are being sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market) and references to public stockholders refer to the holders of our public shares, including our sponsors to the extent our sponsors purchase public shares, provided that their status as public stockholders shall exist only with respect to such public shares; references in this prospectus to our rights or public rights refer to the rights which are being sold as part of the units in this offering; references in this prospectus to our sponsors refer to the holders of the insider shares prior to the consummation of this offering; and except as specifically provided otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different information. We are not, and the underwriters are not, making an offer of these securities in any jurisdiction where the offer is not permitted. Table of Contents General We are a blank check company formed under the laws of the State of Delaware on April 19, 2013. We were formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination, which we refer to throughout this prospectus as our initial business combination, with one or more businesses or entities, which we refer to throughout this prospectus as a target business. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not selected any target business on which to concentrate our search for our initial business combination. Our efforts to identify a prospective target business will not be limited to any particular industry or geographic region, although it is very likely that our target will want to be a public reporting company. We do not have any specific business combination under consideration and we have not (nor has anyone on our behalf), directly or indirectly, contacted any prospective target business or had any discussions, formal or otherwise, with respect to such a transaction. We will have until 18 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a definitive agreement for an initial business combination within 18 months from the closing of this offering but have not completed the initial business combination within such 18-month period) to consummate our initial business combination. If we are unable to consummate our initial business combination within such time period, we will, as promptly as possible but not more than ten business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account and then seek to dissolve and liquidate. In such event, the public rights will expire and will be worthless. In connection with any stockholder meeting called to approve an initial business combination, any public holder of shares of common stock voting either in favor of or against such proposed business combination will be entitled to demand that his shares of common stock be converted for a pro rata portion of the amount then in the trust account (initially approximately $10.20 per share regardless of whether the over-allotment option is exercised), plus any pro rata interest earned on the funds held in the trust account and not previously released to us for our working capital requirements or necessary to pay our taxes (subject to our obligations under Delaware law to provide for claims of creditors). However, we may not be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of our public stockholders. Notwithstanding the foregoing, an increase in the size of the offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended, or the Securities Act, could result in the per-share conversion or liquidation price decreasing by as much as $0.09. Pursuant to Nasdaq listing rules, our initial business combination must be with a target business or businesses whose collective fair market value is at least equal to 80% of the balance in the trust account at the time of the execution of a definitive agreement for such business combination, although this may entail simultaneous acquisitions of several target businesses. The fair market value of the target will be determined by our board of directors based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). The target business or businesses that we acquire may have a collective fair market value substantially in excess of 80% of the trust account balance. We currently anticipate structuring our initial business combination to acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination where we merge directly with the target business or where we acquire less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT NO. 4 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 QUARTET MERGER CORP. Delaware 6770 46-2596459 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 777 Third Avenue, 37th Floor New York, New York 10017 (212) 319-7676 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) Table of Contents the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. As more fully discussed in Management Conflicts of Interest, if any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or contractual obligations, he may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. All of our officers and directors currently have certain relevant pre-existing fiduciary duties or contractual obligations. We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (which we refer to herein as the JOBS Act) and will remain such for up to five years. However, if our non-convertible debt issued within a three-year period or our total revenues exceed $1 billion or the market value of our shares of common stock that are held by non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth company as of the following fiscal year. As an emerging growth company, we have elected, under Section 107(b) of the JOBS Act, to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Private Placements In June 2013, our sponsors purchased an aggregate of 2,012,500 shares of our Class A common stock, which we refer to throughout this prospectus as the insider shares, for an aggregate purchase price of $25,000, or approximately $0.01 per share. On September 9, 2013, we effected a stock dividend of 0.2 shares of Class A common stock for each outstanding share of Class A common stock, resulting in our sponsors owning an aggregate of 2,415,000 insider shares. On October 3, 2013, we amended our certificate of incorporation to reclassify our authorized capital into a single class of common stock such that each share of Class A common stock became a share of common stock. The 2,415,000 insider shares held by our sponsors include an aggregate of up to 315,000 shares subject to forfeiture to the extent that the underwriters over-allotment option is not exercised in full or in part, so that our sponsors will collectively own 20.0% of our issued and outstanding shares after this offering (excluding the sale of the private units and assuming our sponsors do not purchase units in this offering). None of our sponsors has indicated any intention to purchase units in this offering. The insider shares are identical to the shares of common stock included in the units being sold in this offering. However, our sponsors have agreed (A) to vote their insider shares and any public shares acquired in or after this offering in favor of any proposed business combination, (B) not to propose, or vote in favor of, an amendment to our amended and restated certificate of incorporation with respect to our pre-business combination activities prior to the consummation of such a business combination, (C) not to convert any shares (including the insider shares) into the right to receive cash from the trust account in connection with a stockholder vote to approve our proposed initial business combination or a vote to amend the provisions of our amended and restated certificate of incorporation relating to stockholders rights or pre-business combination activity and (D) that such shares shall not participate in any liquidating distribution upon winding up if a business combination is not consummated. Additionally, our sponsors have agreed not to transfer, assign or sell any of the insider shares (except to certain permitted transferees as described below) until, with respect to 50% of the insider shares, the earlier of one year after the date of the consummation of our initial business combination and the date on which the closing price of our common stock exceeds $12.50 per share for any 20 trading days within a 30-trading day period following the consummation of our initial business combination and, with respect to the remaining 50% of the insider shares, one year after the date of the consummation of our initial business combination, or earlier in each case if, subsequent to our initial business combination, we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. Eric S. Rosenfeld, Chairman and Chief Executive Officer Quartet Merger Corp. 777 Third Avenue, 37th Floor New York, New York 10017 (212) 319-7676 (Name, address, including zip code, and telephone number, including area code, of agent for service) Table of Contents On the date of this prospectus, the insider shares will be placed into an escrow account maintained in New York, New York by Continental Stock Transfer & Trust Company, acting as escrow agent. Subject to certain limited exceptions, 50% of these shares will not be transferred, assigned, sold or released from escrow until the earlier of one year after the date of the consummation of our initial business combination and the date on which the closing price of our common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after our initial business combination and the remaining 50% of the insider shares will not be transferred, assigned, sold or released from escrow until one year after the date of the consummation of our initial business combination, or earlier, in either case, if, subsequent to our initial business combination, we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. The limited exceptions referred to above include (1) transfers amongst the holders, to our officers, directors and employees, to a holder s affiliates or its members upon its liquidation, (2) transfers to relatives and trusts for estate planning purposes, (3) by virtue of the laws of descent and distribution upon death, (4) pursuant to a qualified domestic relations order, (5) private sales made at prices no greater than the price at which the securities were originally purchased or (6) to us for cancellation in connection with the consummation of an initial business combination, in each case (except for clause 6) where the transferee agrees to the terms of the escrow agreement and forfeiture, as the case may be, as well as the other applicable restrictions and agreements of the holders of the insider shares. In addition, our sponsors and EarlyBirdCapital, Inc. (and/or its designees) have committed to purchase an aggregate of 542,500 private units at a price of $10.00 per unit ($5,425,000 in the aggregate) in a private placement that will occur simultaneously with the closing of this offering. Our sponsors and EarlyBirdCapital have also agreed that if the over-allotment option is exercised by the underwriters, they will purchase from us at a price of $10.00 per unit the number of private units (up to a maximum of 65,625 private units) that is necessary to maintain in the trust account an amount equal to approximately $10.20 per share of common stock sold to the public in this offering. These additional private units will be purchased in a private placement that will occur simultaneously with the purchase of units resulting from the exercise of the over-allotment option. The foregoing purchases will only be made by our sponsors and EarlyBirdCapital, Inc. (and/or its designees) if they are able to do so in accordance with Regulation M and Sections 9(a)(2) and 10(b) and Rule 10b-5 of the Exchange Act. The proceeds from the private placement of the private units will be added to the proceeds of this offering and placed in a trust account in the United States at JP Morgan Chase Bank, N.A. with Continental Stock Transfer & Trust Company, as trustee. If we do not complete our initial business combination within 18 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a definitive agreement for an initial business combination within 18 months from the closing of this offering but have not completed the initial business combination within such 18-month period), the proceeds from the sale of the private units will be included in the liquidating distribution to the holders of our public shares. The private units are identical to the units sold in this offering. However, the holders have agreed (A) to vote their private shares in favor of any proposed business combination, (B) not to propose, or vote in favor of, an amendment to our amended and restated certificate of incorporation with respect to our pre-business combination activities prior to the consummation of such a business combination, (C) not to convert any private shares into the right to receive cash from the trust account in connection with a stockholder vote to approve our proposed initial business combination or a vote to amend the provisions of our amended and restated certificate of incorporation relating to stockholders rights or pre-business combination activity and (D) that the private shares shall not participate in any liquidating distribution upon winding up if a business combination is not consummated. Additionally, the holders have agreed not to transfer, assign or sell any of the private units or underlying securities (except to the same permitted transferees as the insider shares and provided the transferees agree to the same terms and restrictions as the permitted transferees of the insider shares must agree to, each as described above) until the completion of our initial business combination. We have also agreed to sell to EarlyBirdCapital (and/or its designees), for $100, an option to purchase up to a total of 420,000 units exercisable at $11.75 per unit (or an aggregate exercise price of $4,935,000) commencing on the later of the consummation of a business combination and one year from the date of this Copies to: David Alan Miller, Esq. Jeffrey M. Gallant, Esq. Graubard Miller The Chrysler Building 405 Lexington Avenue New York, New York 10174 (212) 818-8800 (212) 818-8881 Facsimile Robert H. Cohen, Esq. Joel L. Rubinstein, Esq. McDermott Will & Emery LLP 340 Madison Avenue New York, New York 10173-1922 (212) 547-5400 (212) 547-5444 Facsimile Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer o Accelerated filer o Non-accelerated filer [X] (Do not check if a smaller reporting company) Smaller reporting company o CALCULATION OF REGISTRATION FEE Title of each Class of Security being registered Table of Contents prospectus. Since the option is not exercisable until at the earliest the consummation of a business combination, and the rights included in the units will automatically entitle the holder to receive shares of common stock upon consummation of a business combination, the option will effectively represent the right to purchase 462,000 shares of common stock (which includes the 42,000 shares of common stock which will be issued for the rights included in the units) for $4,935,000. Our executive offices are located at 777 Third Avenue, 37th floor, New York, New York 10117, and our telephone number is (212) 319-7676. Proposed Maximum Aggregate Offering Price (1)(2) Table of Contents The Offering In making your decision on whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled Risk Factors beginning on page 16 of this prospectus. Securities offered 8,400,000 units, at $10.00 per unit, each unit consisting of one share of common stock and one right, each right entitling the holder to automatically receive one-tenth (1/10) of a share of common stock upon consummation of our initial business combination. This is different from other offerings similar to ours whose units include one share of common stock and one warrant. Our management believes that investors in similarly structured blank check offerings, and those likely to invest in this offering, have come to expect the units of such companies to include one share of common stock and another security which would allow the holders to acquire additional shares of common stock. Without the ability to acquire such additional shares of common stock, our management believes that the investors would not be willing to purchase units in such companies initial public offerings. In this offering, by offering rights as part of the units that automatically entitle the holder to receive only one-tenth of a share of common stock, as opposed to warrants included in units of similarly structured blank check offerings that most often entitle the holder to receive a full share of common stock, our management believes we have significantly (although not entirely) reduced the number of shares of common stock that we would be obligated to issue after the offering. Our management also believes this will make us a more attractive merger partner for target businesses as our capitalization structure will be simpler without the warrants present. However, our management may be incorrect in this belief. This unit structure may also cause our units to be worth less than if they included a warrant. Listing of our securities and proposed symbols We anticipate the units, and the shares of common stock and rights once they begin separate trading, will be listed on Nasdaq under the symbols QTETU, QTET and QTETR, respectively. Each of the common stock and rights may trade separately on the 90th day after the date of this prospectus unless EarlyBirdCapital determines that an earlier date is acceptable (based upon, among other things, its assessment of the relative strengths of the securities markets and small capitalization companies in general, and the trading pattern of, and demand for, our securities in particular). In no event will EarlyBirdCapital allow separate trading of the common stock and rights until we file an audited balance sheet reflecting our receipt of the gross proceeds of this offering. Amount of Registration Fee 1 This number includes an aggregate of 315,000 insider shares that are subject to forfeiture if the over-allotment option is not exercised by the underwriters. 2 Assumes the over-allotment option has not been exercised and an aggregate of 315,000 insider shares have been forfeited. 3 Assumes the over-allotment option has not been exercised. Units, each consisting of one share of Common Stock, $.0001 par value, and one Right entitling the holder to receive one-tenth (1/10) of a share of Common Stock Shares of Common Stock, $.0001 par value, included as part of the Units Rights included as part of the Units Shares of Common Stock, $.0001 par value, underlying Rights included as part of the Units Total $96,600,000 $13,176.24 (1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act. (2) Includes Units and shares of Common Stock and Rights underlying such Units which may be issued on exercise of a 45-day option granted to the Underwriters to cover over-allotments, if any. (3) The filing fee was previously paid. The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Table of Contents Offering proceeds to be held in the trust account $80,220,000 of the net proceeds of this offering (or $92,410,500 if the over-allotment option is exercised in full), plus the $5,425,000 (or $6,081,250 if the over-allotment option is exercised in full) we will receive from the sale of the private units, for an aggregate of $85,645,000 (or $98,491,750 if the over-allotment option is exercised in full) or approximately $10.20 per unit sold to the public in this offering, will be placed in a trust account in the United States at JP Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee pursuant to an agreement to be signed on the date of this prospectus. The remaining $550,000 of net proceeds of this offering will not be held in the trust account. Except as set forth below, the proceeds held in the trust account will not be released until the earlier of: (1) the completion of our initial business combination within the required time period and (2) our redemption of 100% of the outstanding public shares if we have not completed a business combination in the required time period. Therefore, unless and until our initial business combination is consummated, the proceeds held in the trust account will not be available for our use for any expenses related to this offering or expenses which we may incur related to the investigation and selection of a target business and the negotiation of an agreement to acquire a target business. Notwithstanding the foregoing, there can be released to us from the trust account (1) any interest earned on the funds in the trust account that we need to pay our income or other tax obligations and (2) any remaining interest earned on the funds in the trust account up to $750,000 that we need for our working capital requirements. With these exceptions, expenses incurred by us may be paid prior to a business combination only from the net proceeds of this offering not held in the trust account of approximately $550,000; provided, however, that in order to meet our working capital needs following the consummation of this offering if the funds not held in the trust account and interest earned on the funds held in the trust account available to us are insufficient, our sponsors, officers and directors or their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination, without interest, or, at the lender s discretion, up to $500,000 of the notes may be converted upon consummation of our business combination into additional private units at a price of $10.00 per unit (which, for example, would result in the holders being issued 55,000 Table of Contents shares of common stock if $500,000 of notes were so converted since the 50,000 rights included in the private units would result in the issuance of 5,000 shares of common stock upon the closing of our business combination). Our stockholders have approved the issuance of the shares of common stock upon conversion of such notes, to the extent the holder wishes to so convert them at the time of the consummation of our initial business combination. If we do not complete a business combination, the loans will not be repaid. Limited payments to insiders There will be no fees, reimbursements or other cash payments paid to our sponsors, officers, directors or their affiliates prior to, or for any services they render in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is) other than: repayment at the closing of this offering of a non-interest bearing loan in an aggregate amount of $65,000 made by Eric S. Rosenfeld, our Chairman of the Board and Chief Executive Officer; payment of $10,000 per month to Crescendo Advisors II, LLC, an affiliate of Eric S. Rosenfeld, for office space and related services; reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on our behalf, such as identifying and investigating possible business targets and business combinations; and repayment of loans which may be made by our sponsors or an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. There is no limit on the amount of out-of-pocket expenses reimbursable by us; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the trust account and the interest income earned on the amounts held in the trust account that may be released to us, such expenses would not be reimbursed by us unless we consummate an initial business combination. Our audit committee will review and approve all reimbursements and payments made to any sponsor or member of our management team, or our or their respective affiliates, and any reimbursements and payments made to members of our audit committee will be reviewed and approved by our Board of Directors, with any interested director abstaining from such review and approval. Table of Contents Stockholder approval of initial business combination In connection with any proposed initial business combination, we will seek stockholder approval of such initial business combination at a meeting called for such purpose at which stockholders may seek to convert their shares, regardless of whether they vote for or against the proposed business combination. We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the outstanding shares of common stock voted are voted in favor of the business combination. We chose our net tangible asset threshold of $5,000,001 to ensure that we would avoid being subject to Rule 419 promulgated under the Securities Act. However, if we seek to consummate an initial business combination with a target business that imposes any type of working capital closing condition or requires us to have a minimum amount of funds available from the trust account upon consummation of such initial business combination, our net tangible asset threshold may limit our ability to consummate such initial business combination (as we may be required to have a lesser number of shares converted) and may force us to seek third party financing which may not be available on terms acceptable to us or at all. As a result, we may not be able to consummate such initial business combination and we may not be able to locate another suitable target within the applicable time period, if at all. Our sponsors and our officers and directors have agreed (1) to vote any of their insider shares and private shares (which will represent approximately 23.9% of the issued and outstanding shares of common stock after the offering) as well as any public shares purchased in or after this offering in favor of any proposed business combination and (2) not to convert any shares (including the insider shares) into the right to receive cash from the trust account in connection with a stockholder vote to approve a proposed initial business combination or a vote to amend the provisions of our amended and restated certificate of incorporation relating to stockholders rights or pre-business combination activity. None of our sponsors, officers, directors or their affiliates has indicated any intention to purchase units in this offering or any units or shares of common stock in the open market or in private transactions. However, if a significant number of stockholders vote, or indicate an intention to vote, against a proposed business combination, our sponsors, officers, directors or their affiliates could make such purchases in the open market or in private transactions in order to influence the vote. Notwithstanding the foregoing, our officers, directors, sponsors and their affiliates will not make purchases of shares of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a company s stock. Table of Contents The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED OCTOBER 25 , 2013 PRELIMINARY PROSPECTUS $84,000,000 Quartet Merger Corp. 8,400,000 Units Quartet Merger Corp. is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination, which we refer to throughout this prospectus as our initial business combination, with one or more businesses or entities, which we refer to throughout this prospectus as a target business. Our efforts to identify a target business will not be limited to a particular industry or geographic region. This is an initial public offering of our securities. Each unit that we are offering has a price of $10.00 and consists of one share of common stock and one right to receive one-tenth (1/10) of a share of common stock automatically on the consummation of an initial business combination. We refer to these rights as rights or the public rights. If we are unable to consummate a business combination within 18 months from the closing of this offering, or 24 months from the closing of this offering if we have entered into a definitive agreement with a target business for a business combination within 18 months from the closing of this offering and such business combination has not yet been consummated within such 18-month period, we will redeem 100% of the public shares using the funds in the trust account described below. In such event, the public rights will expire and be worthless. We have also granted EarlyBirdCapital, Inc., the representative of the underwriters, a 45-day option to purchase up to 1,260,000 units (over and above the 8,400,000 units referred to above) solely to cover over-allotments, if any. Our sponsors and EarlyBirdCapital, Inc., or EarlyBirdCapital, (and/or its designees) have committed to purchase from us an aggregate of 542,500 units (500,500 units by our sponsors and 42,000 units by EarlyBirdCapital), or private units, at $10.00 per unit (for a total purchase price of $5,425,000). These purchases will take place on a private placement basis simultaneously with the consummation of this offering. Our sponsors and EarlyBirdCapital have also agreed that if the over-allotment option is exercised by the underwriters in full or in part, they will purchase from us at a price of $10.00 per unit the number of private units (up to a maximum of 65,625 private units) that is necessary to maintain in the trust account an amount equal to approximately $10.20 per share of common stock sold to the public in this offering. These additional private units will be purchased in a private placement that will occur simultaneously with the purchase of units resulting from the exercise of the over-allotment option. The foregoing purchases will only be made by our sponsors and EarlyBirdCapital, Inc. (and/or its designees) if they are able to do so in accordance with Regulation M and Sections 9(a)(2) and 10(b) and Rule 10b-5 of the Exchange Act. All of the proceeds we receive from these purchases will be placed in the trust account described below. There is presently no public market for our units, shares of common stock or public rights. We intend to apply to have our units listed on the Nasdaq Capital Market, or Nasdaq, under the symbol QTETU on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on Nasdaq. Once the securities comprising the units begin separate trading as described in this prospectus, the common stock and public rights will be traded on Nasdaq under the symbols QTET and QTETR, respectively. We cannot assure you that our securities will continue to be listed on Nasdaq after this offering. We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 and will therefore be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See Risk Factors beginning on page 16 of this prospectus for a discussion of information that should be considered in connection with an investment in our securities. Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Price to Public Table of Contents Conversion rights At any meeting called to approve an initial business combination, any public stockholder voting either for or against such proposed business combination will be entitled to demand that his shares of common stock be converted for a pro rata portion of the amount then in the trust account (initially approximately $10.20 per share, plus any pro rata interest earned on the funds held in the trust account and not previously released to us or necessary to pay our taxes). We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the outstanding shares of common stock voted are voted in favor of the business combination. As a result, if stockholders owning approximately 94.2% (or approximately 94.9% if the over-allotment option is exercised in full) or more of the shares of common stock sold in this offering exercise conversion rights, the business combination will not be consummated. However, the actual percentages will only be able to be determined once a target business is located and we can assess all of the assets and liabilities of the combined company (which would include the fee payable to EarlyBirdCapital in an amount equal to 3.75% of the total gross proceeds raised in the offering as described elsewhere in this prospectus, any out-of-pocket expenses incurred by our sponsors, officers, directors or their affiliates in connection with certain activities on our behalf, such as identifying and investigating possible business targets and business combinations that have not been repaid at that time, as well as any other liabilities of ours and the liabilities of the target business) upon consummation of the proposed business combination, subject to the requirement that we must have at least $5,000,001 of net tangible assets upon closing of such business combination. As a result, the actual percentages of shares that can be converted may be significantly lower than our estimates. We chose our net tangible asset threshold of $5,000,001 to ensure that we would avoid being subject to Rule 419 promulgated under the Securities Act of 1933, as amended. However, if we seek to consummate an initial business combination with a target business that imposes any type of working capital closing condition or requires us to have a minimum amount of funds available from the trust account upon consummation of such initial business combination, our net tangible asset threshold may limit our ability to consummate such initial business combination (as we may be required to have a lesser number of shares converted) and may force us to seek third party financing which may not be available on terms acceptable to us or at all. Alternatively, we may not be able to consummate a business combination unless the number of shares of common stock seeking conversion rights is significantly less than the 94.2% (or 94.9% if the over-allotment Underwriting Discounts and Commissions(1) Table of Contents option is exercised in full) indicated above. As a result, we may not be able to consummate such initial business combination and we may not be able to locate another suitable target within the applicable time period, if at all. Notwithstanding the foregoing, a public stockholder, together with any affiliate of his or any other person with whom he is acting in concert or as a group (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking conversion rights with respect to 20% or more of the shares of common stock sold in this offering without our prior written consent. We believe this restriction will prevent an individual stockholder or group from accumulating large blocks of shares before the vote held to approve a proposed business combination and attempt to use the conversion right as a means to force us or our management to purchase its shares at a significant premium to the then current market price. By limiting a stockholder s ability to convert no more than 20% of the shares of common stock sold in this offering, we believe we have limited the ability of a small group of stockholders to unreasonably attempt to block a transaction which is favored by our other public stockholders. We may require public stockholders, whether they are a record holder or hold their shares in street name, to either tender their certificates to our transfer agent at any time through the vote on the business combination or to deliver their shares to the transfer agent electronically using Depository Trust Company s DWAC (Deposit/Withdrawal At Custodian) System, at the holder s option. The requirement for physical or electronic delivery prior to the meeting ensures that a holder s election to convert his shares is irrevocable once the business combination is approved. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $45 and it would be up to the broker whether or not to pass this cost on to the converting holder. However, this fee would be incurred regardless of whether or not we require holders to deliver their shares prior to the vote on the business combination in order to exercise conversion rights. This is because a holder would need to deliver shares to exercise conversion rights regardless of the timing of when such delivery must be effectuated. However, in the event we require stockholders to deliver their shares prior to the vote on the proposed business combination and the proposed business combination is not consummated, this may result in an increased cost to stockholders. Liquidation if no business combination If we are unable to complete our initial business combination within 18 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a definitive agreement for a business Proceeds, Before Expenses, to us Table of Contents combination within 18 months from the closing of this offering but have not completed such business combination with the 18-month period), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining holders of common stock and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. If we execute a definitive agreement for our initial business combination within 18 months and we are unable to consummate that transaction for any reason, we would be free to consummate another business combination so long as we complete such transaction within 24 months from the closing of this offering. In connection with our redemption of 100% of our outstanding public shares for a portion of the funds held in the trust account, each holder will receive a full pro rata portion of the amount then in the trust account, plus any pro rata interest earned on the funds held in the trust account and not previously released to us for our working capital requirements or necessary to pay our taxes payable on such funds (subject in each case to our obligations under Delaware law to provide for claims of creditors). Holders of rights will receive no proceeds in connection with the liquidation with respect to such rights, which will expire worthless. We may not have funds sufficient to pay or provide for all creditors claims. Although we will seek to have all third parties (including any vendors or other entities we engage after this offering) and any prospective target businesses enter into valid and enforceable agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee that they will execute such agreements. There is also no guarantee that the third parties would not challenge the enforceability of these waivers and bring claims against the trust account for monies owed them. The holders of the insider shares and private units will not participate in any redemption distribution with respect to their insider shares, private shares or private rights. If we are unable to conclude our initial business combination and we expend all of the net proceeds of this offering not deposited in the trust account, without taking into account any interest earned on the trust account, we expect that the initial per-share redemption price will be Per Unit $ 10.00 $ 0.325 $ 9.675 Total $ 84,000,000 $ 2,730,000 $ 81,270,000 Table of Contents approximately $10.20. The proceeds deposited in the trust account could, however, become subject to claims of our creditors that are in preference to the claims of our stockholders. In addition, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. Therefore, the actual per-share redemption price may be less than approximately $10.20. We will pay the costs of any subsequent liquidation from our remaining assets outside of the trust account. If such funds are insufficient, Mr. Rosenfeld has agreed to pay the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and has agreed not to seek repayment for such expenses. Risks We are a newly formed company that has conducted no operations and has generated no revenues. Until we complete our initial business combination, we will have no operations and will generate no operating revenues. In making your decision on whether to invest in our securities, you should take into account not only the background of our management team, but also the special risks we face as a blank check company, as well as the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act of 1933, as amended, and, therefore, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additional information concerning how Rule 419 blank check offerings differ from this offering, please see Proposed Business Comparison to offerings of blank check companies subject to Rule 419. You should carefully consider these and the other risks set forth in the section entitled Risk Factors beginning on page 16 of this prospectus. (1) Please see the section titled Underwriting for further information relating to the underwriting arrangements agreed to between us and the underwriters in this offering. Upon consummation of the offering, approximately $10.20 per unit sold to the public in this offering (whether or not the over-allotment option has been exercised in full or part) will be deposited into a United States-based trust account at JP Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee. Except as described in this prospectus, these funds will not be released to us until the earlier of the completion of our initial business combination and our redemption of the shares of common stock sold in this offering upon our failure to consummate a business combination within the required period. The underwriters are offering the units on a firm commitment basis. EarlyBirdCapital, acting as the representative of the underwriters, expects to deliver the units to purchasers on or about ____________, 2013. EarlyBirdCapital, Inc. _____________, 2013 Income Statement Data: Revenue $ 0 $ 0 Net loss (563 ) (563 ) Basic and diluted net loss per share (0.00 ) (0.00 ) (1) Includes the $5,425,000 we will receive from the sale of the private units. (2) The as adjusted working capital and total assets is derived by adding total stockholders equity and the value of the common stock which may be converted for cash. (3) The as adjusted value of common stock which may be converted for cash is derived by taking 7,909,603 shares of common stock which may be converted, representing the maximum number of shares that may be converted while maintaining at least $5,000,001 in net tangible assets after the offering, multiplied by a conversion price of approximately $10.20. The as adjusted information gives effect to the sale of the units we are offering, including the application of the related gross proceeds and the payment of the estimated remaining costs from such sale and the repayment of the accrued and other liabilities required to be repaid such that we have at least $5,000,001 of net tangible assets upon consummation of this offering and upon consummation of our initial business combination. The as adjusted working capital and total assets amounts include the $85,645,000 to be held in the trust account, which, except for limited situations described in this prospectus, will be available to us only upon the consummation of our initial business combination within the time period described in this prospectus. If our initial business combination is not so consummated, the trust account, less amounts we are permitted to withdraw as described in this prospectus, will be distributed solely to our public stockholders (subject to our obligations under Delaware law to provide for claims of creditors). We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the outstanding shares of common stock voted are voted in favor of the business combination. Table of Contents RISK FACTORS An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, which we believe represent the material risks related to the offering, together with the other information contained in this prospectus, before making a decision to invest in our units. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline and you could lose all or part of your investment. This prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks described below. Risks Associated with Our Business We are a newly formed blank check company in the development stage with no operating history and, accordingly, you will not have any basis on which to evaluate our ability to achieve our business objective. We are a newly formed blank check company in the development stage with no operating results to date. Therefore, our ability to commence operations is dependent upon obtaining financing through the public offering of our shares. Since we do not have an operating history, you will have no basis upon which to evaluate our ability to achieve our business objective, which is to acquire an operating business. We have not conducted any discussions and we have no plans, arrangements or understandings with any prospective acquisition candidates. We will not generate any revenues until, at the earliest, after the consummation of our initial business combination. Our independent registered public accounting firm s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a going concern. As of June 30, 2013, we had $77,500 in cash and cash equivalents and a working capital deficiency of $28,063. Further, we have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. Management s plans to address this need for capital through this offering are discussed in the section of this prospectus titled Management s Discussion and Analysis of Financial Condition and Results of Operations. Our plans to raise capital and to consummate our initial business combination may not be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial statements contained elsewhere in this prospectus do not include any adjustments that might result from our inability to consummate this offering or our inability to continue as a going concern. If we are unable to consummate our initial business combination, our public stockholders may be forced to wait more than 24 months before receiving distributions from the trust account. We will have until 18 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a definitive agreement for an initial business combination within 18 months from the closing of this offering but have not completed the initial business combination within such 18-month period) to consummate our initial business combination. We have no obligation to return funds to investors prior to such date unless we consummate our initial business combination prior thereto and only then in cases where investors have sought to convert their shares. Only after the expiration of this full time period will holders of our common stock be entitled to distributions from the trust account if we are unable to complete our initial business combination. Accordingly, investors funds may be unavailable to them until after such date and to liquidate your investment, public security holders may be forced to sell their public shares, potentially at a loss. You will not be entitled to protections normally afforded to investors of blank check companies. Since the net proceeds of this offering are intended to be used to complete our initial business combination with a target business that has not been identified, we may be deemed to be a blank check company under the United States securities laws. However, since we will have net tangible assets in excess Table of Contents of $5,000,001 upon the successful consummation of this offering and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors of blank check companies such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules which would, for example, completely restrict the transferability of our securities, require us to complete our initial business combination within 18 months of the effective date of the initial registration statement and restrict the use of interest earned on the funds held in the trust account. Because we are not subject to Rule 419, our units will be immediately tradable, we will be entitled to withdraw amounts from the funds held in the trust account prior to the completion of our initial business combination and we may have a longer period of time to complete such a business combination than we would if we were subject to such rule. If we determine to change our acquisition criteria or guidelines, many of the disclosures contained in this prospectus would be rendered irrelevant and you would be investing in our company without any basis on which to evaluate the potential target business we may acquire. We could seek to deviate from the acquisition criteria or guidelines disclosed in this prospectus although we have no current intention to do so. For instance, as required by Nasdaq, we currently anticipate acquiring a target business that has a fair market value that is at least equal to 80% of the balance of the trust account at the time of the execution of a definitive agreement for a business combination. However, we could be delisted from Nasdaq and therefore no longer be required to meet this requirement. Furthermore, there are numerous agreements between us and our affiliates that could be amended between the parties without approval of public stockholders. In such event, many of the acquisition criteria and guidelines set forth in this prospectus (such as the voting, transfer and liquidation restrictions agreed to by the holders of the insider shares described elsewhere in this prospectus, the indemnification obligations of Eric S. Rosenfeld described below and the obligations of Mr. Rosenfeld to pay the cost of liquidation if the funds held outside the trust account are insufficient for such purposes) would be rendered irrelevant. Accordingly, investors may be making an investment in our company without any basis on which to evaluate the potential target business we may acquire. If we deviate from the acquisition criteria or guidelines set forth in this prospectus, investors in this offering may have recission rights or may bring an action for damages against us or we could be subject to civil or criminal actions taken by governmental authorities. If we were to elect to deviate from the acquisition criteria or guidelines set forth in this prospectus, each person who purchased units in this offering and still held such securities upon learning of the facts relating to the deviation may seek rescission of the purchase of the units he acquired in the offering (under which a successful claimant has the right to receive the total amount paid for his or her securities pursuant to an allegedly deficient prospectus, plus interest and less any income earned on the securities, in exchange for surrender of the securities) or bring an action for damages against us (compensation for loss on an investment caused by alleged material misrepresentations or omissions in the sale of a security). In such event, we could also be subject to civil or criminal actions taken by governmental authorities. For instance, the SEC can seek injunctions under Section 20(b) of the Securities Act if it believes a violation under the Securities Act has occurred or is imminent. The SEC can also seek civil penalties under Sections 20(d) and 24 if a party has violated the Securities Act or an injunctive action taken by the SEC or if a party willfully, in a registration statement filed under the Securities Act, makes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading. Furthermore, Section 20 allows the SEC to refer matters to the attorney general to bring criminal penalties against an issuer. We may issue shares of our capital stock to complete our initial business combination, which would reduce the equity interest of our stockholders and likely cause a change in control of our ownership. Our certificate of incorporation currently authorizes the issuance of up to 15,000,000 shares of common stock, par value $.0001 per share, and 1,000,000 shares of preferred stock, par value $.0001 per share. Immediately after this offering and the purchase of the private units (assuming no exercise of the Table of Contents underwriters over-allotment option), there will be 2,601,250 authorized but unissued shares of common stock available for issuance (after appropriate reservation for the issuance of the shares underlying the rights issuable upon consummation of our initial business combination and the unit purchase option being issued to EarlyBirdCapital and/or its designees). Although we have no commitment as of the date of this offering, we may issue a substantial number of additional shares of common stock or shares of preferred stock, or a combination of common stock and preferred stock, to complete our initial business combination. The issuance of additional shares of common stock or preferred stock: may significantly reduce the equity interest of investors in this offering; may subordinate the rights of holders of shares of common stock if we issue shares of preferred stock with rights senior to those afforded to our shares of common stock; may cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and may adversely affect prevailing market prices for our shares of common stock. We may incur significant indebtedness in order to consummate our initial business combination. If we find it necessary to incur significant indebtedness in connection with our initial business combination, it could result in: default and foreclosure on our assets if our operating revenues after our initial business combination are insufficient to repay our debt obligations; acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; and our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding. The funds held in the trust account may not earn significant interest and, as a result, we may be limited to the funds held outside of the trust account to fund our search for target businesses, to pay our tax obligations and to complete our initial business combination. Of the net proceeds of this offering, $550,000 is anticipated to be available to us initially outside the trust account to fund our working capital requirements. We will depend on sufficient interest being earned on the proceeds held in the trust account to provide us with up to $750,000 of additional working capital we will need to identify one or more target businesses and to complete our initial business combination, as well as to pay any tax obligations that we may owe. Interest rates on permissible investments for us have been less than 1% over the last several months. Accordingly, if we do not earn a sufficient amount of interest on the funds held in the trust account and use all of the funds held outside of the trust account, we may not have sufficient funds available with which to structure, negotiate or close our initial business combination. In such event, we would need to borrow funds from our sponsors, officers or directors to operate or may be forced to liquidate. Our sponsors, officers and directors are under no obligation to loan us any funds. If we are unable to obtain the funds necessary, we may be forced to cease searching for a target business and may be unable to complete our initial business combination. If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption price received by stockholders may be less than approximately $10.20. Our placing of funds in the trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors and service providers we engage and prospective target businesses we negotiate with execute agreements with us waiving any right, title, interest or claim of any kind in or to Table of Contents any monies held in the trust account for the benefit of our public stockholders, they may not execute such agreements. Furthermore, even if such entities execute such agreements with us, they may seek recourse against the trust account. A court may not uphold the validity of such agreements. Accordingly, the proceeds held in the trust account could be subject to claims which could take priority over those of our public stockholders. If we are unable to complete an initial business combination within the required time period, Eric S. Rosenfeld has agreed that he will be personally liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us, but only if such a vendor or prospective target business does not execute such a waiver. However, he may not be able to meet such obligation as we have not required Mr. Rosenfeld to retain any assets to provide for his indemnification obligations, nor have we taken any further steps to ensure that he will be able to satisfy any indemnification obligations that arise. Moreover, he will not be personally liable to our public stockholders if he should fail to satisfy his obligations under this agreement and instead will only be liable to us. Therefore, the distribution from the trust account to each holder of shares of common stock may be less than approximately $10.20, plus interest, due to such claims. Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we may not be able to return to our holders of shares of common stock at least approximately $10.20. Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them. If we have not completed our initial business combination within 18 months from the closing of this offering (or 24 months from the closing of this offering if we have entered into a definitive agreement with a target business for a business combination within 18 months from the closing of this offering but the business combination has not been consummated within such 18-month period), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. We may not properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of the date of distribution. Accordingly, third parties may seek to recover from our stockholders amounts owed to them by us. If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a preferential transfer or a fraudulent conveyance. As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, because we intend to distribute the proceeds held in the trust account to our public stockholders promptly after expiration of the 18 or 24-month deadline, this may be viewed or interpreted as giving preference to our public stockholders over any potential creditors with respect to access to or distributions from our assets. Furthermore, our board may be viewed as having breached their fiduciary duties to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public holders of common stock from the trust account prior to addressing the claims of creditors. Claims may be brought against us for these reasons. Table of Contents Unlike other blank check companies, our units are comprised of common stock and rights rather than units comprised of common stock and warrants and therefore investors will not be issued warrants as part of their investment. Unlike other blank check companies that sell units comprised of shares of common stock and warrants in their initial public offerings, we are selling units comprised of shares of common stock and rights. The rights will not have any voting rights, will automatically entitle the holder to receive one-tenth of a share of common stock upon consummation of our initial business combination and will expire and be worthless if we do not consummate an initial business combination. Accordingly, investors in this offering will not be issued any warrants as part of their investment which may have the effect of limiting the potential upside value of your investment in our company. Holders of rights will not participate in liquidating distributions if we are unable to complete an initial business combination within the required time period. If we are unable to complete an initial business combination within the required time period and we liquidate the funds held in the trust account, the rights will expire and holders will not receive any of such proceeds with respect to the rights. In this case, holders of rights are treated in the same manner as holders of warrants of blank check companies whose units are comprised of shares and warrants, as the warrants in those companies do not participate in liquidating distributions. Nevertheless, the foregoing may provide a financial incentive to public stockholders to vote in favor of any proposed initial business combination as their rights would automatically entitle the holder to receive one-tenth of a share of common stock upon consummation of such business combination, resulting in an increase in their overall economic stake in our company. If a business combination is not approved, the rights will expire and will be worthless. Since we have not yet selected a particular industry or target business with which to complete our initial business combination, we are unable to currently ascertain the merits or risks of the industry or business in which we may ultimately operate. We may consummate our initial business combination with a company in any industry we choose and are not limited to any particular industry or type of business. Accordingly, there is no current basis for you to evaluate the possible merits or risks of the particular industry in which we may ultimately operate or the target business which we may ultimately acquire. To the extent we complete our initial business combination with a financially unstable company or an entity in its development stage, we may be affected by numerous risks inherent in the business operations of those entities. If we complete our initial business combination with an entity in an industry characterized by a high level of risk, we may be affected by the currently unascertainable risks of that industry. We may not properly ascertain or assess all of the significant risk factors. An investment in our shares may not ultimately prove to be more favorable to investors in this offering than a direct investment, if an opportunity were available, in a target business. The requirement that the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account at the time of the execution of a definitive agreement for our initial business combination may limit the type and number of companies that we may complete such a business combination with. Pursuant to the Nasdaq listing rules, the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account at the time of the execution of a definitive agreement for our initial business combination. This restriction may limit the type and number of companies that we may complete a business combination with. If we are unable to locate a target business or businesses that satisfy this fair market value test, we may be forced to liquidate and you will only be entitled to receive your pro rata portion of the funds in the trust account. Table of Contents Our management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business. We may structure a business combination so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-transaction company acquires 50% or more of the outstanding voting securities of the target or otherwise acquire a controlling interest in the target sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares of common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company s stock than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain our control of the target business. Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. While we intend to closely scrutinize any individuals we engage after our initial business combination, our assessment of these individuals may not prove to be correct. Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. We believe that our success depends on the continued service of our key personnel, at least until we have consummated our initial business combination. None of our officers are required to commit any specified amount of time to our affairs (although we expect them to devote approximately 10 hours per week to our business) and, accordingly, they will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have employment agreements with, or key-man insurance on the life of, any of our officers. The unexpected loss of the services of our key personnel could have a detrimental effect on us. The role of our key personnel after our initial business combination, however, remains to be determined. Although some of our key personnel serve in senior management or advisory positions following our initial business combination, it is likely that most, if not all, of the management of the target business will remain in place. These individuals may be unfamiliar with the requirements of operating a public company which could cause us to have to expend time and resources helping them become familiar with such requirements. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations. Our officers and directors may not have significant experience or knowledge regarding the jurisdiction or industry of the target business we may seek to acquire. We may consummate a business combination with a target business in any geographic location or industry we choose. Our officers and directors may not have enough experience or sufficient knowledge relating to the jurisdiction of the target or its industry to make an informed decision regarding our initial business combination. Table of Contents Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous. Our key personnel will be able to remain with the company after the consummation of our initial business combination only if they are able to negotiate employment or consulting agreements or other appropriate arrangements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to the company after the consummation of the business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. Our officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to consummate our initial business combination. Our officers and directors are not required to commit their full time to our affairs, which could create a conflict of interest when allocating their time between our operations and their other commitments. We presently expect each of our employees to devote such amount of time as they reasonably believe is necessary to our business. We do not intend to have any full time employees prior to the consummation of our initial business combination. All of our officers and directors are engaged in several other business endeavors and are not obligated to devote any specific number of hours to our affairs. If our officers and directors other business affairs require them to devote more substantial amounts of time to such affairs, it could limit their ability to devote time to our affairs and could have a negative impact on our ability to consummate our initial business combination. These conflicts may not be resolved in our favor. Members of our management team may in the future have affiliations with entities engaged in business activities similar to those intended to be conducted by us and accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented. Members of our management team may in the future have affiliations with companies, including companies that are engaged in business activities similar to those intended to be conducted by us. Accordingly, they may participate in transactions and have obligations that may be in conflict or competition with our consummation of our initial business combination. As a result, a potential target business may be presented by our management team to another entity prior to its presentation to us and we may not be afforded the opportunity to engage in a transaction with such target business. For a more detailed description of the potential conflicts of interest of our management, see the section titled Management Conflicts of Interest. The shares beneficially owned by our officers and directors will not participate in liquidation distributions and, therefore, our officers and directors may have a conflict of interest in determining whether a particular target business is appropriate for our initial business combination. Our officers and directors have waived their right to convert their insider shares, private shares or any other shares of common stock acquired in this offering or thereafter, or to receive distributions with respect to their insider shares or private shares upon our liquidation if we are unable to consummate our initial business combination. Accordingly, these securities will be worthless if we do not consummate our initial business combination. Any rights they hold, like those held by the public, will also be worthless if we do not consummate an initial business combination. The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. Consequently, our directors and officers discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders best interest. Table of Contents Once the shares of common stock and rights commence separate trading, holders will have the option to continue to hold units or separate their units into the component pieces. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of common stock and rights. Upon consummation of an initial business combination, each holder of a right will automatically receive one-tenth (1/10) of a share of common stock. At that time, the units will cease trading. We will file a Current Report on Form 8-K with the SEC, including an audited balance sheet, promptly upon the consummation of this offering, which is anticipated to take place three business days from the date the units commence trading. The audited balance sheet will reflect our receipt of the proceeds from the exercise of the over-allotment option if the over-allotment option is exercised on the date of this prospectus. If the over-allotment option is exercised after the date of this prospectus, we will file an amendment to the Form 8-K or a new Form 8-K to provide updated financial information to reflect the exercise of the over-allotment option. We will also include in the Form 8-K, or amendment thereto, or in a subsequent Form 8-K, information indicating if EarlyBirdCapital has allowed separate trading of the common stock and rights prior to the 90th day after the date of this prospectus. Shares of common stock: Number outstanding before this offering 2,415,000 shares1 Number to be outstanding after this offering and sale of private units 11,042,500 shares2 Rights: Number outstanding before this offering 0 Number to be outstanding after this offering and sale of private units 8,942,500 rights3 Terms of the Rights Each holder of a right will automatically receive one-tenth (1/10) of a share of common stock upon consummation of our initial business combination. If we are unable to complete an initial business combination within the required time period and we liquidate the funds held in the trust account, holders of rights will not receive any of such funds for their rights and the rights will expire worthless. Table of Contents If we are unable to consummate a business combination, any loans made by our sponsors, officers, directors or their affiliates would not be repaid, resulting in a potential conflict of interest in determining whether a potential transaction is in our stockholders best interest. In order to meet our working capital needs following the consummation of this offering, our sponsors, officers, directors or their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. The loans would be non-interest bearing and would be payable at the consummation of a business combination. If we fail to consummate a business combination within the required time period, the loans would not be repaid. Consequently, our directors and officers may have a conflict of interest in determining whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders best interest. Nasdaq may delist our securities from quotation on its exchange which could limit investors ability to make transactions in our securities and subject us to additional trading restrictions. We anticipate that our securities will be listed on Nasdaq, a national securities exchange, upon consummation of this offering. Although, after giving effect to this offering, we meet the minimum initial listing standards of Nasdaq on a pro forma basis, which generally only requires that we meet certain requirements relating to stockholders equity, market capitalization, aggregate market value of publicly held shares and distribution, our securities may not continue to be listed on Nasdaq in the future prior to an initial business combination. Additionally, in connection with our initial business combination, it is likely that Nasdaq will require us to file a new initial listing application and meet its initial listing requirements as opposed to its more lenient continued listing requirements. We may not be able to meet those initial listing requirements at that time. If Nasdaq delists our securities from trading on its exchange, we could face significant material adverse consequences, including: a limited availability of market quotations for our securities; reduced liquidity with respect to our securities; a determination that our shares are a penny stock, which will require brokers trading in our shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares; a limited amount of news and analyst coverage for our company; and a decreased ability to issue additional securities or obtain additional financing in the future. We may only be able to complete one business combination with the proceeds of this offering, which will cause us to be solely dependent on a single business which may have a limited number of products or services. It is likely we will consummate our initial business combination with a single target business, although we have the ability to simultaneously acquire several target businesses. By consummating a business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be: solely dependent upon the performance of a single business, or dependent upon the development or market acceptance of a single or limited number of products, processes or services. This lack of diversification may subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination. Table of Contents Alternatively, if we determine to simultaneously acquire several businesses and such businesses are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete the business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations. The ability of our public stockholders to exercise their conversion rights may not allow us to effectuate the most desirable business combination or optimize our capital structure. If our initial business combination requires us to use substantially all of our cash to pay the purchase price, because we will not know how many public stockholders may exercise conversion rights, we may either need to reserve part of the trust account for possible payment upon such conversion, or we may need to arrange third party financing to help fund our initial business combination. In the event that the acquisition involves the issuance of our stock as consideration, we may be required to issue a higher percentage of our stock to make up for a shortfall in funds. Raising additional funds to cover any shortfall may involve dilutive equity financing or incurring indebtedness at higher than desirable levels. This may limit our ability to effectuate the most attractive business combination available to us. We may be unable to consummate an initial business combination if a target business requires that we have a certain amount of cash at closing, in which case public stockholders may have to remain stockholders of our company and wait until our redemption of the public shares to receive a pro rata share of the trust account or attempt to sell their shares in the open market. A potential target may make it a closing condition to our initial business combination that we have a certain amount of cash in excess of the $5,000,001 of net tangible assets we are required to have pursuant to our organizational documents available at the time of closing. If the number of our public stockholders electing to exercise their conversion rights has the effect of reducing the amount of money available to us to consummate an initial business combination below such minimum amount required by the target business and we are not able to locate an alternative source of funding, we will not be able to consummate such initial business combination and we may not be able to locate another suitable target within the applicable time period, if at all. In that case, public stockholders may have to remain stockholders of our company and wait the full 24 months in order to be able to receive a portion of the trust account, or attempt to sell their shares in the open market prior to such time, in which case they may receive less than they would have in a liquidation of the trust account. We will offer each public stockholder the option to vote in favor of the proposed business combination and still seek conversion of his, her or its shares. In connection with any meeting held to approve an initial business combination, we will offer each public stockholder (but not our sponsors, officers or directors) the right to have his, her or its shares of common stock converted to cash (subject to the limitations described elsewhere in this prospectus) regardless of whether such stockholder votes for or against such proposed business combination; provided that a stockholder must in fact vote for or against a proposed business combination in order to have his, her or its shares of common stock converted to cash. If a stockholder fails to vote for or against a proposed business combination, that stockholder would not be able to have his shares of common stock so converted. We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the outstanding shares of common stock voted are voted in favor of the business combination. Accordingly, public stockholders owning 7,909,603 shares of common stock sold in this offering may exercise their conversion rights and we could still consummate a proposed business combination so long as a majority of shares voted at the meeting are voted in favor of the proposed business combination. This is different than other similarly structured blank check companies where stockholders are offered the Table of Contents right to convert their shares only when they vote against a proposed business combination. This threshold and the ability to seek conversion while voting in favor of a proposed business combination may make it more likely that we will consummate our initial business combination. A public stockholder that fails to vote either in favor of or against a proposed business combination will not be able to have his shares converted to cash. In order for a public stockholder to have his shares converted to cash in connection with any proposed business combination, that public stockholder must vote either in favor of or against a proposed business combination. If a public stockholder fails to vote in favor of or against a proposed business combination, whether that stockholder abstains from the vote or simply does not vote, that stockholder would not be able to have his shares of common stock so converted to cash in connection with such business combination. Public stockholders, together with any affiliates of theirs or any other person with whom they are acting in concert or as a group, will be restricted from seeking conversion rights with respect to more than 20% of the shares of common stock sold in this offering. In connection with any meeting held to approve an initial business combination, we will offer each public stockholder (but not our sponsors, officers or directors) the right to have his, her, or its shares of common stock converted into cash. Notwithstanding the foregoing, a public stockholder, together with any affiliate of his or any other person with whom he is acting in concert or as a group will be restricted from seeking conversion rights with respect to more than 20% of the shares of common stock sold in this offering. Generally, in this context, a stockholder will be deemed to be acting in concert or as a group with another stockholder when such stockholders agree to act together for the purpose of acquiring, voting, holding or disposing of our equity securities. Accordingly, if you purchase more than 20% of the shares of common stock sold in this offering and our proposed business combination is approved, you will not be able to seek conversion rights with respect to the full amount of your shares and may be forced to hold such additional shares of common stock or sell them in the open market. The value of such additional shares may not appreciate over time following our initial business combination, and the market price of our shares of common stock may not exceed the per-share conversion price. We may require public stockholders who wish to convert their shares of common stock in connection with a proposed business combination to comply with specific requirements for conversion that may make it more difficult for them to exercise their conversion rights prior to the deadline for exercising their rights. In connection with any stockholder meeting called to approve a proposed initial business combination, each public stockholder will have the right, regardless of whether he is voting for or against such proposed business combination, to demand that we convert his shares of common stock into a share of the trust account. We may require public stockholders who wish to convert their shares of common stock in connection with a proposed business combination to either tender their certificates to our transfer agent at any time prior to the vote taken at the stockholder meeting relating to such business combination or to deliver their shares to the transfer agent electronically using the Depository Trust Company s DWAC (Deposit/Withdrawal At Custodian) System, at the holder s option. In order to obtain a physical stock certificate, a stockholder s broker and/or clearing broker, DTC and our transfer agent will need to act to facilitate this request. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. While we have been advised that it takes a short time to deliver shares through the DWAC System, this may not be the case. Under Delaware law and our bylaws, we are required to provide at least 10 days advance notice of any stockholder meeting, which would be the minimum amount of time a stockholder would have to determine whether to exercise conversion rights. Accordingly, if it takes longer than we anticipate for stockholders to deliver their shares, stockholders who wish to convert may be unable to meet the deadline for exercising their conversion rights and thus may be unable to convert their shares. Table of Contents If we require public stockholders who wish to convert their shares of common stock to comply with the delivery requirements discussed above for conversion, such converting stockholders may be unable to sell their securities when they wish to in the event that the proposed business combination is not approved. If we require public stockholders who wish to convert their shares of common stock to comply with the delivery requirements discussed above for conversion and such proposed business combination is not consummated, we will promptly return such certificates to the tendering public stockholders. Accordingly, investors who attempted to convert their shares in such a circumstance will be unable to sell their securities after the failed acquisition until we have returned their securities to them. The market price for our shares of common stock may decline during this time and you may not be able to sell your securities when you wish to, even while other stockholders that did not seek conversion may be able to sell their securities. Because of our structure, other companies may have a competitive advantage and we may not be able to consummate an attractive business combination. We expect to encounter intense competition from entities other than blank check companies having a business objective similar to ours, including venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. Therefore, our ability to compete in acquiring certain sizable target businesses may be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, seeking stockholder approval of our initial business combination may delay the consummation of a transaction. Additionally, our rights, and the future dilution they represent (automatically entitling the holders to receive shares of common stock on consummation of our initial business combination), may not be viewed favorably by certain target businesses. Any of the foregoing may place us at a competitive disadvantage in successfully negotiating our initial business combination. Our ability to consummate an attractive business combination may be impacted by the market for initial public offerings. Our efforts to identify a prospective target business will not be limited to any particular industry or geographic region, although it is very likely that our target will want to be a public reporting company. If the market for initial public offerings is limited, we believe there will be a greater number of attractive target businesses open to being acquired by us as a means to achieve publicly held status. Alternatively, if the market for initial public offerings is robust, we believe that there will be fewer attractive target businesses amenable to being acquired by us to become a public reporting company. Accordingly, during periods with strong public offering markets, it may be more difficult for us to complete an initial business combination. We may be unable to obtain additional financing, if required, to complete our initial business combination or to fund the operations and growth of the target business, which could compel us to restructure or abandon a particular business combination. Although we believe that the net proceeds of this offering will be sufficient to allow us to consummate a business combination, because we have not yet identified any prospective target business, the capital requirements for any particular transaction remain to be determined. If the net proceeds of this offering prove to be insufficient, either because of the size of the business combination, the depletion of the available net proceeds in search of a target business, or the obligation to convert into cash a significant number of shares of common stock, we will be required to seek additional financing. Such financing may not be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to consummate a particular business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. In addition, if we consummate a business combination, we may require additional financing to fund the operations or growth Table of Contents of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after our initial business combination. Our sponsors, including our officers and directors, will control a substantial interest in us and thus may influence certain actions requiring a stockholder vote. Upon consummation of our offering and sale of the private units, our sponsors, including our officers and directors, will collectively own approximately 23.9% of our issued and outstanding shares of common stock (assuming they do not purchase any units in this offering). None of our sponsors, officers, directors or their affiliates has indicated any intention to purchase units in this offering or any units or shares from persons in the open market or in private transactions. However, our sponsors, officers, directors or their affiliates could determine in the future to make such purchases in the open market or in private transactions, to the extent permitted by law, in order to influence the vote. In connection with any vote for a proposed business combination, our sponsors, as well as all of our officers and directors, have agreed to vote the shares of common stock owned by them immediately before this offering as well as the private shares and any shares of common stock acquired in this offering or in the aftermarket in favor of such proposed business combination. Our board of directors is and will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. It is unlikely that there will be an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, in which case all of the current directors will continue in office until at least the consummation of the business combination. Accordingly, you may not be able to exercise your voting rights under corporate law for up to 24 months. If there is an annual meeting, as a consequence of our staggered board of directors, fewer than half of the board of directors will be considered for election and our sponsors, because of their ownership position, will have considerable influence regarding the outcome. Accordingly, our sponsors will continue to exert control at least until the consummation of our initial business combination. We may not hold an annual meeting of stockholders until after the consummation of our initial business combination. In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the Delaware General Corporation Law, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. It is unlikely that there will be an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the Delaware General Corporation Law, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the Delaware General Corporation Law. Our sponsors paid an aggregate of $25,000, or approximately $0.01 per share, for the insider shares and will pay $10.00 per unit for the private units, for an average price of approximately $2.02 per share (assuming the issuance of 0.1 of a share for each right outstanding), and, accordingly, you will experience immediate and substantial dilution from the purchase of our shares of common stock. The difference between the public offering price per share and the pro forma net tangible book value per share of common stock after this offering constitutes the dilution to the investors in this offering. For the purposes of the dilution calculation, in order to present the maximum estimated dilution as a result of this offering, we have assumed the issuance of 0.1 of a share of common stock for each right outstanding, as such issuance will occur automatically upon a business combination without the payment of additional consideration. Accordingly, for the purposes of the dilution calculation, the number of shares included in the units offered hereby will be deemed to be 9,240,000, the price per share in this offering will be deemed to be $9.09 and the number of shares included in the private units will be deemed to be 596,750. Table of Contents Our sponsors acquired the insider shares and will acquire the private shares for an average of $2.02 per share, significantly contributing to this dilution. Upon consummation of this offering, you and the other new investors will incur an immediate and substantial dilution of approximately 84.8% or $7.71 per share (the difference between the pro forma net tangible book value per share of $1.38, and the initial offering price of $9.09 per share). This is because investors in this offering will be contributing approximately 93.9% of the total amount paid to us for our outstanding shares of common stock after this offering but will only own 77.4% of our outstanding shares of common stock. Accordingly, the per-share purchase price you will be paying substantially exceeds our per share net tangible book value. If our security holders exercise their registration rights, it may have an adverse effect on the market price of our shares of common stock and the existence of these rights may make it more difficult to effect our initial business combination. Our sponsors are entitled to make a demand that we register the resale of the insider shares at any time commencing three months prior to the date on which their shares may be released from escrow. Additionally, the purchasers of the private units and our sponsors, officers, directors or their affiliates are entitled to demand that we register the resale of the private units (and underlying securities) and any shares our sponsors, officers, directors or their affiliates may be issued in payment of working capital loans made to us commencing on the date that we consummate our initial business combination. The presence of these additional shares of common stock trading in the public market may have an adverse effect on the market price of our securities. In addition, the existence of these rights may make it more difficult to effectuate our initial business combination or increase the cost of acquiring the target business, as the stockholders of the target business may be discouraged from entering into a business combination with us or will request a higher price for their securities because of the potential effect the exercise of such rights may have on the trading market for our shares of common stock. EarlyBirdCapital may have a conflict of interest in rendering services to us as our non-exclusive investment banker in connection with our initial business combination. We have engaged EarlyBirdCapital as an investment banker to provide us with merger and acquisition services in connection with our initial business combination. We will pay EarlyBirdCapital a cash fee for such services upon the consummation of our initial business combination in an amount equal to 3.75% of the total gross proceeds raised in the offering. Additionally, EarlyBirdCapital is buying private units and will be issued unit purchase options in connection with this offering. These financial interests may result in EarlyBirdCapital having a conflict of interest when providing the services to us as our investment banker in connection with an initial business combination. If we are deemed to be an investment company, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination. A company that, among other things, is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, owning, trading or holding certain types of securities would be deemed an investment company under the Investment Company Act of 1940. Since we will invest the proceeds held in the trust account, it is possible that we could be deemed an investment company. Notwithstanding the foregoing, we do not believe that our anticipated principal activities will subject us to the Investment Company Act of 1940. To this end, the proceeds held in the trust account may be invested by the trustee only in United States government treasury bills, bonds or notes having a maturity of 180 days or less or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 and that invest solely in U.S. treasuries. By restricting the investment of the proceeds to these instruments, we intend to meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act of 1940. If we are nevertheless deemed to be an investment company under the Investment Company Act of 1940, we may be subject to certain restrictions that may make it more difficult for us to complete our initial business combination, including: Table of Contents restrictions on the nature of our investments; and restrictions on the issuance of securities. In addition, we may have imposed upon us certain burdensome requirements, including: registration as an investment company; adoption of a specific form of corporate structure; and reporting, record keeping, voting, proxy, compliance policies and procedures and disclosure requirements and other rules and regulations. Compliance with these additional regulatory burdens would require additional expense for which we have not allotted. The determination for the offering price of our units is more arbitrary compared with the pricing of securities for an operating company in a particular industry. Prior to this offering there has been no public market for any of our securities. The public offering price of the units was negotiated between us and the representative of the underwriters. Factors considered in determining the price of the shares of units include: the history of other similarly structured blank check companies; prior offerings of those companies; our prospects for acquiring an operating business at attractive values; our capital structure; securities exchange listing requirements; market demand; expected liquidity of our securities; and general conditions of the securities markets at the time of the offering. However, although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities for an operating company in a particular industry since we have no historical operations or financial results to compare them to. The requirement that we complete our initial business combination within 18 or 24 months from the closing of this offering may give potential target businesses leverage over us in negotiating our initial business combination. We have 18 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a definitive agreement for an initial business combination within 18 months from the closing of this offering but have not completed the business combination within such 18-month period) to complete our initial business combination. Any potential target business with which we enter into negotiations concerning a business combination will be aware of this requirement. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete a business combination with that particular target business, we may be unable to complete a business combination with any other target business. This risk will increase as we get closer to the time limit referenced above. We may not obtain a fairness opinion with respect to the target business that we seek to acquire and therefore you may be relying solely on the judgment of our board of directors in approving a proposed business combination. We will only be required to obtain a fairness opinion with respect to the target business that we seek to acquire if it is an entity that is affiliated with any of our officers, directors or sponsors. In all other instances, Table of Contents we will have no obligation to obtain an opinion. Accordingly, investors will be relying solely on the judgment of our board of directors in approving a proposed business combination. We may not be required to obtain an opinion from an independent investment banking firm as to the fair market value of the target business we are seeking to acquire. We will not be required to obtain an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions on the type of target business we are seeking to acquire, as to the fair market value of such target business if our board of directors independently determines that the target business complies with the 80% threshold. Accordingly, investors will be relying solely on the judgment of our board of directors in valuing such target business or businesses, and our board of directors may not properly value such target business or businesses. The personal and financial interests of our directors in consummating a business combination may result in a conflict of interest when determining the value of such target business or business in this case. Resources could be spent researching acquisitions that are not consummated, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. It is anticipated that the investigation of each specific target business and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision is made not to complete a specific business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, even if an agreement is reached relating to a specific target business, we may fail to consummate the business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. Compliance with the Sarbanes-Oxley Act of 2002 will require substantial financial and management resources and may increase the time and costs of completing an acquisition. Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, requires that we evaluate and report on our system of internal controls and may require that we have such system of internal controls audited. If we fail to maintain the adequacy of our internal controls, we could be subject to regulatory scrutiny, civil or criminal penalties and/or stockholder litigation. Any inability to provide reliable financial reports could harm our business. Section 404 of the Sarbanes-Oxley Act also requires that our independent registered public accounting firm report on management s evaluation of our system of internal controls, although as an emerging growth company as defined in the JOBS Act, we may take advantage of an exemption to this requirement. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition. Furthermore, any failure to implement required new or improved controls, or difficulties encountered in the implementation of adequate controls over our financial processes and reporting in the future, could harm our operating results or cause us to fail to meet our reporting obligations. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock. We are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our securities less attractive to investors. We are an emerging growth company, as defined in the JOBS Act. We will remain an emerging growth company for up to five years. However, if our non-convertible debt issued within a three-year period or revenues exceeds $1 billion, or the market value of our shares of common stock that are held by non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth company as of the following fiscal year. As an emerging growth company, we Table of Contents are not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, we have reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and we are exempt from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Additionally, as an emerging growth company, we have elected to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates. We cannot predict if investors will find our shares of common stock less attractive because we may rely on these provisions. If some investors find our shares of common stock less attractive as a result, there may be a less active trading market for our shares and our share price may be more volatile. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, will not adopt the new or revised standard until the time private companies are required to adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used. If we effect our initial business combination with a company located outside of the United States, we would be subject to a variety of additional risks that may negatively impact our operations. We may effect our initial business combination with a company located outside of the United States. If we did, we would be subject to any special considerations or risks associated with companies operating in the target business home jurisdiction, including any of the following: rules and regulations or currency conversion or corporate withholding taxes on individuals; tariffs and trade barriers; regulations related to customs and import/export matters; longer payment cycles; tax issues, such as tax law changes and variations in tax laws as compared to the United States; currency fluctuations and exchange controls; challenges in collecting accounts receivable; cultural and language differences; employment regulations; crime, strikes, riots, civil disturbances, terrorist attacks and wars; and deterioration of political relations with the United States. We may not be able to adequately address these additional risks. If we are unable to do so, our operations may suffer. Table of Contents SUMMARY FINANCIAL DATA The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, and accordingly only balance sheet data is presented. June 30, 2013 Table of Contents If we effect our initial business combination with a target business located outside of the United States, the laws applicable to such target business will likely govern all of our material agreements and we may not be able to enforce our legal rights. If we effect our initial business combination with a target business located outside of the United States, the laws of the country in which such target business is domiciled will govern almost all of the material agreements relating to its operations. The target business may not be able to enforce any of its material agreements in such jurisdiction and appropriate remedies to enforce its rights under such material agreements may not be available in this new jurisdiction. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital. Additionally, if we acquire a company located outside of the United States, it is likely that substantially all of our assets would be located outside of the United States and some of our officers and directors might reside outside of the United States. As a result, it may not be possible for investors in the United States to enforce their legal rights, to effect service of process upon our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties of our directors and officers under Federal securities laws. Provisions in our amended and restated certificate of incorporation and bylaws and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our common stock and could entrench management. Our amended and restated certificate of incorporation and bylaws contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. Our board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. As a result, at a given annual meeting only one-third of the board of directors may be considered for election. Since our staggered board may prevent our stockholders from replacing a majority of our board of directors at any given annual meeting, it may entrench management and discourage unsolicited stockholder proposals that may be in the best interests of stockholders. Moreover, our board of directors has the ability to designate the terms of and issue new series of preferred stock. We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. Because we must furnish our stockholders with target business financial statements prepared in accordance with U.S. generally accepted accounting principles or international financial reporting standards, we will not be able to complete our initial business combination with prospective target businesses unless their financial statements are prepared in accordance with U.S. generally accepted accounting principles. The federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire. There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities. There is currently no market for our securities. Stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained. Actual Table of Contents Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations. We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations. Investors may not appropriately allocate a tax basis to the components of the unit. Because investors in this offering will be investing in units comprised of one share of common stock and one right, investors will need to allocate a tax basis to each item in proportion to their values at the time of the investment. We are not required to provide any guidance as to the proper allocation of tax basis. Failure to properly allocate a tax basis could result in adverse tax consequences to an investor. As Adjusted(1) Table of Contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS The statements contained in this prospectus that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words anticipate, believe, continue, could, estimate, expect, intend, may, might, plan, possible, potential, predict, project, should, would and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about our: ability to complete our initial business combination; success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination, as a result of which they would then receive expense reimbursements; potential ability to obtain additional financing to complete our initial business combination; pool of prospective target businesses; the ability of our officers and directors to generate a number of potential investment opportunities; potential change in control if we acquire one or more target businesses for stock; the potential liquidity and trading of our securities; the lack of a market for our securities; use of proceeds not held in the trust account or available to us from interest income on the trust account balance; or financial performance following this offering. The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading Risk Factors. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Balance Sheet Data: Working capital (deficiency) $ (28,063 ) $ 86,219,537 (2) Total assets 130,000 86,219,537 (2) Total liabilities 105,563 Value of common stock which may be converted for cash 80,644,994 (3) Stockholders equity 24,437 5,574,543 June 30, 2013 (1) A portion of the offering expenses, including the SEC registration fee, the FINRA filing fee, the non-refundable portion of the Nasdaq listing fee and a portion of the legal and audit fees, have been paid from the funds we received from Eric S. Rosenfeld described below. These funds will be repaid out of the proceeds of this offering available to us. (2) No discounts or commissions will be paid with respect to the purchase of the private units. (3) The funds held in the trust account may, but need not, be used to pay our expenses relating to acquiring a target business, including a fee payable to EarlyBirdCapital in an amount equal to 3.75% of the total gross proceeds raised in the offering described below. Actual Table of Contents (4) The amount of proceeds not held in the trust account will remain constant at $550,000 even if the over-allotment is exercised. In addition, interest income earned on the amounts held in the trust account (after payment of taxes owed on such interest income) in an amount up to $750,000 will be available to us to pay for our working capital requirements. We estimate the interest earned on the trust account will be approximately $150,000 over a 24-month period assuming an interest rate of approximately 0.1% per year. (5) These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring our initial business combination based upon the level of complexity of that business combination. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would be deducted from our excess working capital. Our sponsors and EarlyBirdCapital have committed that they and/or their designees will purchase the private units (for an aggregate purchase price of $5,425,000) from us on a private placement basis simultaneously with the consummation of this offering. Our sponsors and EarlyBirdCapital have also agreed that if the over-allotment option is exercised by the underwriters in full or in part, they will purchase from us at a price of $10.00 per unit the number of private units (up to a maximum of 65,625 private units) that is necessary to maintain in the trust account an amount equal to approximately $10.20 per share of common stock sold to the public in this offering. The foregoing purchases will only be made by our sponsors and EarlyBirdCapital, Inc. (and/or its designees) if they are able to do so in accordance with Regulation M and Sections 9(a)(2) and 10(b) and Rule 10b-5 of the Exchange Act. All of the proceeds we receive from these purchases will be placed in the trust account described below. $85,645,000, or $98,491,750 if the over-allotment option is exercised in full, of net proceeds of this offering and the sale of the private units, will be placed in a trust account in the United States at JP Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, as trustee. The funds held in the trust account will be invested only in United States government treasury bills, bonds or notes having a maturity of 180 days or less, or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 and that invest solely in U.S. treasuries, so that we are not deemed to be an investment company under the Investment Company Act. Except with respect to (1) interest earned on the funds held in the trust account that may be released to us to pay our income or other tax obligations and (2) interest earned on the funds held in the trust account that may be released to us for our working capital requirements, the proceeds will not be released from the trust account until the earlier of the completion of our initial business combination or our redemption of 100% of the outstanding public shares if we have not completed a business combination in the required time period. The proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we complete our initial business combination to the extent not used to pay converting stockholders. Any amounts not paid as consideration to the sellers of the target business may be used to finance operations of the target business. The payment to Crescendo Advisors II, LLC, an affiliate of Eric S. Rosenfeld, of a monthly fee of $10,000 is for general and administrative services including office space, utilities and secretarial support. This arrangement is being agreed to by Crescendo Advisors II, LLC for our benefit and is not intended to provide Mr. Rosenfeld with compensation in lieu of a salary. We believe, based on rents and fees for similar services in New York City, that the fee charged by Crescendo Advisors II, LLC is at least as favorable as we could have obtained from an unaffiliated person. This arrangement will terminate upon completion of our initial business combination or the distribution of the trust account to our public stockholders. Other than the $10,000 per month fee, no compensation of any kind (including finder s and consulting fees or other similar compensation) will be paid to our sponsors, members of our management team or any of our or their respective affiliates, for services rendered to us prior to or in connection with the consummation of our initial business combination (regardless of the type of transaction that it is). However, such individuals will receive reimbursement for any out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses, performing business due diligence on suitable target businesses and business combinations as well as traveling to and from the offices, plants or similar locations of As Adjusted Table of Contents prospective target businesses to examine their operations. Since the role of present management after our initial business combination is uncertain, we have no ability to determine what remuneration, if any, will be paid to those persons after our initial business combination. Regardless of whether the over-allotment option is exercised in full, the net proceeds from this offering available to us out of trust for our working capital requirements in searching for our initial business combination will be approximately $550,000. In addition, interest earned on the funds held in the trust account (after payment of taxes owed on such interest income) up to $750,000 may be released to us to fund our working capital requirements in searching for our initial business combination. We intend to use the after-tax interest earned for miscellaneous expenses such as paying fees to consultants to assist us with our search for a target business and for director and officer liability insurance premiums, with the balance being held in reserve in the event due diligence, legal, accounting and other expenses of structuring and negotiating business combinations exceed our estimates, as well as for reimbursement of any out-of-pocket expenses incurred by our sponsors, officers and directors in connection with activities on our behalf as described below. The allocation of the net proceeds available to us outside of the trust account, along with the interest earned on the funds held in the trust account available to us, represents our best estimate of the intended uses of these funds. In the event that our assumptions prove to be inaccurate, we may reallocate some of such proceeds within the above described categories. If our estimate of the costs of undertaking in-depth due diligence and negotiating our initial business combination is less than the actual amount necessary to do so, or the amount of interest available to us from the trust account is insufficient as a result of the current low interest rate environment, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. In this event, we could seek such additional capital through loans or additional investments from members of our management team, but such members of our management team are not under any obligation to advance funds to, or invest in, us. We will likely use substantially all of the net proceeds of this offering, including the funds held in the trust account, to acquire a target business and to pay our expenses relating thereto, including a fee payable to EarlyBirdCapital in an amount equal to 3.75% of the total gross proceeds raised in the offering upon consummation of our initial business combination for acting as our investment banker on a non-exclusive basis to assist us in structuring and negotiating a business combination (but not for the purpose of identifying a target business). To the extent that our capital stock is used in whole or in part as consideration to effect our initial business combination, the proceeds held in the trust account which are not used to consummate a business combination will be disbursed to the combined company and will, along with any other net proceeds not expended, be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business operations, for strategic acquisitions and for marketing, research and development of existing or new products. To the extent we are unable to consummate a business combination, we will pay the costs of liquidation from our remaining assets outside of the trust account. If such funds are insufficient, Mr. Rosenfeld has agreed to pay the funds necessary to complete such liquidation (currently anticipated to be no more than $15,000) and has agreed not to seek repayment of such expenses. As of June 30, 2013, Eric S. Rosenfeld loaned to us an aggregate of $65,000 to be used to pay a portion of the expenses of this offering referenced in the line items above for SEC registration fee, FINRA filing fee, the non-refundable portion of the Nasdaq listing fee and a portion of the legal and audit fees and expenses. The loan is payable without interest on the earlier of (i) June 26, 2014, (ii) the date on which we consummate our initial public offering or (iii) the date on which we determine to not proceed with our initial public offering. The loan will be repaid out of the proceeds of this offering available to us for payment of offering expenses. We believe that, upon consummation of this offering, we will have sufficient available funds (which includes amounts that may be released to us from the trust account) to operate for up to the next 24 months, assuming that our initial business combination is not consummated during that time. However, if necessary, in order to meet our working capital needs following the consummation of this offering, our sponsors, officers and directors may, but are not obligated to, loan us funds, from time to time or at any time, in whatever Table of Contents amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination, without interest, or, at the lender s discretion, up to $500,000 of the notes may be converted upon consummation of our business combination into additional private units at a price of $10.00 per unit (which, for example, would result in the holders being issued 55,000 shares of common stock if $500,000 of notes were so converted since the 50,000 rights included in the private units would result in the issuance of 5,000 shares of common stock upon the closing of our business combination). Our stockholders have approved the issuance of the shares of common stock upon conversion of such notes, to the extent the holder wishes to so convert them at the time of the consummation of our initial business combination. If we do not complete our initial business combination, the loans will not be repaid. A public stockholder will be entitled to receive funds from the trust account (including interest earned on his, her or its portion of the trust account to the extent not previously released to us) only in the event of (1) our redemption of 100% of the outstanding public shares if we have not completed a business combination in the required time period or (2) if that public stockholder elects to convert shares of common stock in connection with a stockholder vote. In no other circumstances will a public stockholder have any right or interest of any kind to or in the trust account. Table of Contents DIVIDEND POLICY We have not paid any cash dividends on our shares of common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board of directors does not anticipate declaring any dividends in the foreseeable future. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future, except if we increase the size of the offering, including pursuant to Rule 462(b) under the Securities Act, in which case we will effect a stock dividend immediately prior to the consummation of the offering in such amount as to maintain our sponsors ownership at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering (excluding ownership of the private units). Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith. (1) Assumes the over-allotment option has not been exercised and an aggregate of 315,000 insider shares have been forfeited as a result thereof. Includes 542,500 private shares issued simultaneously with the consummation of this offering. Assumes the issuance of an additional 54,250 shares underlying the private rights. (2) Assumes the issuance of an additional 840,000 public shares underlying the public rights. (1) Assumes that the underwriters over-allotment option has not been exercised and an aggregate of 315,000 insider shares have been forfeited as a result thereof. (1) June 30, 2013 balances reflect (i) the effect of a stock dividend of 0.2 shares of Class A common stock for each outstanding share of Class A common stock effectuated in September 2013 and (ii) the reclassification of our Class A common stock and Class B common stock into a single class of common stock. (2) Includes the $5,425,000 we will receive from the sale of the private units. Assumes the over-allotment option has not been exercised. (3) Note payable to related party is a promissory note issued in the aggregate amount of $65,000 to Eric S. Rosenfeld. The note is non-interest bearing and is payable on the earliest to occur of (i) June 26, 2014, (ii) the consummation of this offering or (iii) the date on which we determine not to proceed with this offering. (4) Assumes the over-allotment option has not been exercised and an aggregate of 315,000 insider shares have been forfeited by our sponsors as a result thereof. (5) Derived by taking 7,909,603 shares of common stock which may be converted, representing the maximum number of shares that may be converted while maintaining at least $5,000,001 in net tangible assets after the offering, multiplied by a conversion price of approximately $10.20. (6) Derived by adding total stockholders equity and the value of the common stock which may be converted for cash. Table of Contents MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS We were formed on April 19, 2013 for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more target businesses. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region. We intend to utilize cash derived from the proceeds of this offering and the private placement of the private units, our securities, debt or a combination of cash, securities and debt, in effecting our initial business combination. The issuance of additional shares of common stock or preferred stock in our initial business combination: may significantly dilute the equity interest of our investors in this offering who would not have pre-emption rights in respect of any such issuance; may subordinate the rights of holders of shares of common stock if we issue shares of preferred stock with rights senior to those afforded to our shares of common stock; will likely cause a change in control if a substantial number of our shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and most likely will also result in the resignation or removal of our present officers and directors; and may adversely affect prevailing market prices for our securities. Similarly, if we issue debt securities, it could result in: default and foreclosure on our assets if our operating revenues after our initial business combination are insufficient to pay our debt obligations; acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contains covenants that required the maintenance of certain financial ratios or reserves and we breach any such covenant without a waiver or renegotiation of that covenant; our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; and our inability to obtain additional financing, if necessary, if the debt security contains covenants restricting our ability to obtain additional financing while such security is outstanding. We have neither engaged in any operations nor generated any revenues to date. Our entire activity since inception has been to prepare for our proposed fundraising through an offering of our equity securities. As indicated in the accompanying financial statements, at June 30, 2013, we had $77,500 in cash and cash equivalents and a working capital deficiency of $28,063. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. Management s plans to address this uncertainty through this offering are discussed above. Our plans to raise capital or to consummate our initial business combination may not be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Liquidity and Capital Resources Our liquidity needs have been satisfied to date through receipt of $25,000 from the sale of the insider shares and a loan from Eric S. Rosenfeld in an aggregate amount of $65,000 that is more fully described below. We estimate that the net proceeds from (1) the sale of the units in this offering, after deducting offering expenses of approximately $500,000 and underwriting discounts and commissions of $2,730,000 (or $3,139,500 if the over-allotment option is exercised in full) and (2) the sale of the private units for a purchase price of $5,425,000, will be $86,195,000 (or $99,041,750 if the over-allotment option is exercised in full). $85,645,000 (or $98,491,750 if the over-allotment option is exercised in full) will be held in the trust account. The remaining $550,000 will not be held in the trust account. Table of Contents We intend to use substantially all of the net proceeds of this offering, including the funds held in the trust account, to acquire a target business or businesses and to pay our expenses relating thereto, including a fee payable to EarlyBirdCapital in an amount equal to 3.75% of the total gross proceeds raised in the offering upon consummation of our initial business combination for acting as our investment banker on a non-exclusive basis to assist us in structuring and negotiating a business combination (but not for the purpose of identifying a target business). To the extent that our capital stock is used in whole or in part as consideration to effect our initial business combination, the remaining proceeds held in the trust account as well as any other net proceeds not expended will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders fees which we had incurred prior to the completion of our initial business combination if the funds available to us outside of the trust account were insufficient to cover such expenses. We believe that, upon consummation of this offering, the $550,000 of net proceeds not held in the trust account, plus the interest earned on the trust account balance (net of income, and other tax obligations) that may be released to us to fund our working capital requirements (up to $750,000) which we anticipate will be approximately $150,000, will be sufficient to allow us to operate for at least the next 24 months, assuming that a business combination is not consummated during that time. Over this time period, we will be using these funds for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination. We anticipate that we will incur approximately: $150,000 of expenses for the search for target businesses and for the legal, accounting and other third-party expenses attendant to the due diligence investigations, structuring and negotiating of our initial business combination; $10,000 of expenses for the due diligence and investigation of a target business by our officers, directors and sponsors; $75,000 of expenses in legal and accounting fees relating to our SEC reporting obligations; $240,000 for the payment of the administrative fee to Crescendo Advisors II, LLC (of $10,000 per month for up to 24 months); $150,000 for corporate and franchise taxes; and $75,000 for general working capital that will be used for miscellaneous expenses, liquidation obligations and reserves, including director and officer liability insurance premiums. If our estimates of the costs of undertaking in-depth due diligence and negotiating our initial business combination is less than the actual amount necessary to do so, or the amount of interest available to us from the trust account is less than we expect as a result of the current interest rate environment, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to consummate our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations. Related Party Transactions As of June 30, 2013, Eric S. Rosenfeld loaned an aggregate of $65,000 to us, on a non-interest bearing basis, for payment of offering expenses on our behalf. The loan is payable without interest on the earlier of (i) Table of Contents June 26, 2014, (ii) the date on which we consummate our initial public offering or (iii) the date on which we determine to not proceed with our initial public offering. The loan will be repaid out of the proceeds of this offering not being placed in the trust account. We are obligated, commencing on the date of this prospectus, to pay Crescendo Advisors II, LLC, an affiliate of Eric S. Rosenfeld, a monthly fee of $10,000 for general and administrative services. Our sponsors and EarlyBirdCapital have committed that they and/or their designees will purchase an aggregate of 542,500 private units at $10.00 per private unit (for a total purchase price of $5,425,000) from us. These purchases will take place on a private placement basis simultaneously with the consummation of this offering. Our sponsors and EarlyBirdCapital have also agreed that if the over-allotment option is exercised by the underwriters in full or in part, they will purchase from us at a price of $10.00 per unit the number of private units (up to a maximum of 65,625 private units) that is necessary to maintain in the trust account an amount equal to approximately $10.20 per share of common stock sold to the public in this offering. These additional private units will be purchased in a private placement that will occur simultaneously with the purchase of units resulting from the exercise of the over-allotment option. We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, in order to finance transaction costs in connection with an intended initial business combination, our sponsors, officers, directors or their affiliates may, but are not obligated to, loan us funds as may be required. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used for such repayment. Such loans would be evidenced by promissory notes. The notes would either be paid upon consummation of our initial business combination, without interest, or, at the lender s discretion, up to $500,000 of the notes may be converted upon consummation of our business combination into additional private units at a price of $10.00 per unit (which, for example, would result in the holders being issued 55,000 shares of common stock if $500,000 of notes were so converted since the 50,000 rights included in the private units would result in the issuance of 5,000 shares of common stock upon the closing of our business combination). We believe the purchase price of these shares will approximate the fair value of such shares when issued. However, if it is determined, at the time of issuance, that the fair value of such shares exceeds the purchase price, we would record compensation expense for the excess of the fair value of the shares on the day of issuance over the purchase price in accordance with ASC 718 Compensation Stock Compensation. Controls and Procedures We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2014. As of the date of this prospectus, we have not completed an assessment, nor have our auditors tested our systems, of internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as: staffing for financial, accounting and external reporting areas, including segregation of duties; reconciliation of accounts; proper recording of expenses and liabilities in the period to which they relate; evidence of internal review and approval of accounting transactions; documentation of processes, assumptions and conclusions underlying significant estimates; and documentation of accounting policies and procedures. Table of Contents Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expense in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting. Once our management s report on internal controls is complete, we will retain our independent auditors to audit and render an opinion on such report when required by Section 404. The independent auditors may identify additional issues concerning a target business s internal controls while performing their audit of internal control over financial reporting. Quantitative and Qualitative Disclosures about Market Risk The net proceeds of this offering, including amounts in the trust account, will be invested in United States government treasury bills, bonds or notes having a maturity of 180 days or less, or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 and that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk. Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results As of the date of this prospectus, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have conducted no operations to date. JOBS Act On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an emerging growth company and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we will not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates. Table of Contents PROPOSED BUSINESS Introduction We are a Delaware blank check company incorporated on April 19, 2013 formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more target businesses. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region, although it is very likely that our target will want to be a public reporting company. Eric S. Rosenfeld, our Chairman and Chief Executive Officer, also served as Chairman and Chief Executive Officer of three prior publicly-held blank check companies: (i) Arpeggio Acquisition Corporation, or Arpeggio, which raised $36 million in June 2004 and consummated a business combination with Hill International, Inc., or Hill International, in June 2006, (ii) Rhapsody Acquisition Corp., or Rhapsody, which raised $36 million in October 2006 and consummated a business combination with Primoris Corporation, or Primoris, in July 2008 and (iii) Trio Merger Corp., or Trio, which raised $69 million in June 2011 and consummated a business combination with SAExploration Holdings Inc., or SAE, in June 2013. David D. Sgro, our Chief Financial Officer, also served as Chief Financial Officer of Rhapsody and Trio. We believe that potential sellers of target businesses will view the fact that our management team has successfully closed three business combinations with vehicles similar to our company as a positive factor in considering whether or not to enter into a business combination with us. However, there is no assurance that we will complete a business combination. In June 2004, Arpeggio, a blank check company founded by Eric S. Rosenfeld, consummated its initial public offering, raising $36 million (at $6.00 per unit each consisting of one share of common stock and two warrants, each to purchase one share of common stock). In June 2006, Arpeggio completed a merger with Hill International. Hill International provides fee-based project management and construction claims services worldwide primarily serving the United States and other national governments, state and local governments, and the private sector. It was founded in 1976 and is headquartered in Marlton, New Jersey. Hill International has grown substantially since its business combination with Arpeggio. For example, its revenues have grown from $112 million in 2005 to approximately $481 million in 2012. In the merger, Arpeggio issued approximately 14.5 million shares of its common stock to Hill International s stockholders and provided for an additional 6.6 million contingent shares issuable if certain earnings targets were achieved from 2006 2009. All of such contingent shares were issued as Hill International was successful in achieving its earnings targets. Immediately following the merger, Arpeggio s former stockholders owned approximately 36% of Hill International and the remaining 64% was owned by Hill International s former stockholders. The warrants issued in Arpeggio s initial public offering were subsequently redeemed by Hill International in accordance with their terms, the result of which was Hill International receiving approximately $68 million from the exercise of such warrants. Hill International s common stock currently trades on the New York Stock Exchange under the symbol HIL and its price has ranged from $2.35 to $19.30 following the completion of its business combination with Arpeggio, with a closing price of $3.54 on October 23, 2013. Eric S. Rosenfeld served as a director of Hill International from June 2006 to June 2010. In October 2006, Rhapsody, a blank check company founded by Mr. Rosenfeld and David Sgro, our Chief Financial Officer, consummated its initial public offering, raising $36 million (at $8.00 per unit each consisting of one share of common stock and one warrant to purchase one share of common stock). In July 2008, Rhapsody completed a merger with Primoris and, shortly thereafter, the company changed its name to Primoris Services Corporation. Primoris provides construction, fabrication, maintenance, replacement, and engineering services to public utilities, petrochemical companies, energy companies, and municipalities primarily in the United States and Canada. Primoris is headquartered in Dallas, Texas. Its revenues have grown from $543 million in 2007, the year before the merger with Rhapsody, to approximately $1.5 billion in 2012. In the merger, Rhapsody issued approximately 24.1 million shares of its common stock to Primoris s stockholders and provided for an additional 5.0 million contingent shares issuable if certain earnings targets were achieved for 2008 and 2009. All of such contingent shares were issued as Primoris was successful in achieving its earnings targets. The warrants issued in Rhapsody s initial public offering expired by their terms Table of Contents in October 2010. Primoris s common stock currently trades on the Nasdaq Capital Market under the symbol PRIM and its price has ranged from $3.25 to $24.08 following the completion of its business combination with Rhapsody, with a closing price of $27.04 on October 23, 2013. Eric S. Rosenfeld currently serves as a director of Primoris. David D. Sgro served as a director of Primoris from 2008 to 2011. In March 2008, Mr. Rosenfeld became the chairman of the board, chief executive and president, and Mr. Sgro became the chief financial officer, secretary and a director, of Symphony Acquisition Corp. and Staccato Acquisition Corp., two blank check companies, each formed to complete a business combination with one or more businesses or entities. Due to market conditions, neither Symphony Acquisition Corp. nor Staccato Acquisition Corp. completed its initial public offering and neither engaged in any substantive operations. In June 2011, Trio, a blank check company founded by Messrs. Rosenfeld and Sgro consummated its initial public offering, raising $69 million (at $10.00 per unit each consisting of one share of common stock and one warrant to purchase one share of common stock). In June 2013, Trio completed a merger with SAE and in connection therewith the company changed its name to SAExploration Holdings, Inc. SAE is a holding company of various subsidiaries which collectively form a geophysical services company offering seismic data acquisition services to the oil and gas industry in North America, South America, and Southeast Asia. SAE provides a full range of services related to the acquisition of 2D, 3D and time-lapse 4D seismic data on land, in transition zones between land and water and in shallow water, as well as seismic data field processing. In the merger, the SAE common stockholders, on a fully-diluted basis, received: (i) an aggregate of 6,448,413 shares of Trio common stock at the closing; (ii) an aggregate of $7,500,000 in cash at the closing; (iii) an aggregate of $17,500,000 represented by a promissory note issued by Trio at the closing; and (iv) the right to receive up to 992,064 additional shares of Trio common stock after the closing based on the achievement of specified earnings targets by the combined company for the 2013 and/or the 2014 fiscal years. Additionally, Trio paid the holder of SAE s outstanding Series A preferred stock an aggregate of $5,000,000 in cash for all of such securities. In August 2013, SAE made a determination to restate its previously-filed interim financial statements for the quarter ended March 31, 2013, to correct misstatements in the accounting for certain of its expenses as a result of errors in the accounting for liabilities relating to certain of its operations, and informed investors that they should not rely upon SAE s previously released financial statements for such quarter. This determination resulted in SAE failing to timely file its quarterly report on Form 10-Q for the quarter ended June 30, 2013. SAE s common stock and warrants currently trade on the Nasdaq Capital Market and OTC Bulletin Board, respectively, under the symbol SAEX and SAEXW, respectively, and the price of the common stock has ranged from $9.15 to $10.55 following completion of its business combination with Trio, with a closing price of $7.95 on October 23, 2013. Eric S. Rosenfeld and David D. Sgro currently serve as directors of SAE. Competitive Strengths We believe our competitive strengths to be the following: Status as a public company We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination. In this situation, the owners of the target business would exchange their shares of stock in the target business for shares of our stock or for a combination of shares of our stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses might find this method a more certain and cost effective method to becoming a public company than the typical initial public offering. In a typical initial public offering, there are additional expenses incurred in marketing, roadshow and public reporting efforts that will likely not be present to the same extent in connection with a business combination with us. Furthermore, once the business combination is consummated, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters ability to complete the offering, as well as general market conditions, that could prevent the offering from occurring. Once public, we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent with Table of Contents stockholders interests than it would have as a privately-held company. It can offer further benefits by augmenting a company s profile among potential new customers and vendors and aid in attracting talented employees. While we believe that our status as a public company will make us an attractive business partner, some potential target businesses may view the inherent limitations in our status as a blank check company, such as our lack of an operating history and our requirements to seek stockholder approval of any proposed initial business combination and provide holders of public shares the opportunity to convert their shares into cash from the trust account, as a deterrent and may prefer to effect a business combination with a more established entity or with a private company. Transaction flexibility We offer a target business a variety of options such as providing the owners of a target business with shares in a public company and a public means to sell such shares, providing cash for stock, and providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to consummate our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, since we have no specific business combination under consideration, we have not taken any steps to secure third party financing and it may not be available to us. Offering Structure Unlike other blank check companies that sell units comprised of shares of common stock and warrants in their initial public offerings, we are selling units comprised of shares of common stock and rights. Our management believes that investors in similarly structured blank check offerings, and those likely to invest in this offering, have come to expect the units of such companies to include one share of common stock and another security which would allow the holders to acquire additional shares of common stock. Without the ability to acquire such additional shares of common stock, our management believes the investors would not be willing to purchase units in such companies initial public offerings. Upon consummation of our initial business combination, each right included in our units shall automatically entitle the holder to receive one-tenth of a share of common stock, leaving us with only one class of common stock. Accordingly, because the number of shares ordinarily issuable upon exercise of the warrants found in the typical structure of other blank check initial public offerings is lessened in our case (since such warrants most often entitle the holder to receive a full share of common stock as opposed to the one-tenth of a share the rights entitle a holder to receive) although not completely eliminated, our management believes we will be viewed more favorably by potential target companies when determining which company to engage in a business combination with. Our management also believes this will make us a more attractive merger partner for target businesses as our capitalization structure will be simpler without the warrants present. However, our management may be incorrect in these beliefs. Effecting Our Initial Business Combination General We are not presently engaged in, and we will not engage in, any substantive commercial business for an indefinite period of time following this offering. We intend to utilize cash derived from the proceeds of this offering and the private placement of private units, our capital stock, debt or a combination of these in effecting our initial business combination. Although substantially all of the net proceeds of this offering and the private placement of private units are intended to be applied generally toward effecting a business combination as described in this prospectus, the proceeds are not otherwise being designated for any more specific purposes. Accordingly, investors in this offering are investing without first having an opportunity to evaluate the specific merits or risks of any one or more business combinations. Our initial business combination may involve the acquisition of, or merger with, a company which does not need substantial Table of Contents additional capital but which desires to establish a public trading market for its shares, while avoiding what it may deem to be adverse consequences of undertaking a public offering itself. These include time delays, significant expense, loss of voting control and compliance with various Federal and state securities laws. In the alternative, we may seek to consummate a business combination with a company that may be financially unstable or in its early stages of development or growth. While we may seek to effect simultaneous business combinations with more than one target business, we will probably have the ability, as a result of our limited resources, to effect only a single business combination. We Have Not Identified a Target Business We do not have any specific business combination under consideration and we have not (nor has anyone on our behalf), directly or indirectly, contacted any prospective target business or had any discussions, formal or otherwise, with respect to such a transaction. Additionally, we have not contacted any of the prospective target businesses that Arpeggio, Rhapsody or Trio, the only other blank check companies that our principals have been involved with, had considered and rejected while such entities were blank check companies searching for target businesses to acquire. We do not currently intend to contact any of such targets; however, we may do so in the future if we become aware that the valuations, operations, profits or prospects of such target business, or the benefits of any potential transaction with such target business, would be attractive. Additionally, we have not, nor has anyone on our behalf, taken any measure, directly or indirectly, to identify or locate any suitable acquisition candidate, nor have we engaged or retained any agent or other representative to identify or locate such an acquisition candidate. We have also not conducted any research with respect to identifying the number and characteristics of the potential acquisition candidates. As a result, we may not be able to locate a target business, and we may not be able to engage in a business combination with a target business on favorable terms or at all. Subject to our management team s pre-existing fiduciary duties and the limitations that a target business have a fair market value of at least 80% of the balance in the trust account at the time of the execution of a definitive agreement for our initial business combination, as described below in more detail, we will have virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. We have not established any other specific attributes or criteria (financial or otherwise) for prospective target businesses. Accordingly, there is no basis for investors in this offering to evaluate the possible merits or risks of the target business with which we may ultimately complete a business combination. To the extent we effect our initial business combination with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we may be affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. Although our management will endeavor to evaluate the risks inherent in a particular target business, we may not properly ascertain or assess all significant risk factors. Sources of Target Businesses While we have not yet identified any acquisition candidates, we believe based on our management s business knowledge and past experience that there are numerous acquisition candidates. We anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment bankers, venture capital funds, private equity funds, leveraged buyout funds, management buyout funds and other members of the financial community. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read this prospectus and know what types of businesses we are targeting. For instance, the transaction between Primoris and Rhapsody was made possible because an industry professional that was aware of Rhapsody s management team and their prior deal with Hill International encouraged Primoris to contact Rhapsody. Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. For instance, the Hill International transaction was brought to Eric Rosenfeld as a result of his prior work experience with a member of an investment banking firm that was representing Hill International as it Table of Contents explored strategic alternatives. In addition to our engagement of EarlyBirdCapital described elsewhere in this prospectus, we may engage professional firms or other individuals that specialize in business acquisitions in the future, in which event we may pay a finder s fee, consulting fee or other compensation to be determined in an arm s length negotiation based on the terms of the transaction. In no event, however, will any of our sponsors or members of our management team or special advisors or our or their respective affiliates be paid any finder s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is). We have no present intention to enter into a business combination with a target business that is affiliated with any of our officers, directors or sponsors. However, we are not restricted from entering into any such transactions and may do so if (1) such transaction is approved by a majority of our disinterested and independent directors (if we have any at that time) and (2) we obtain an opinion from an independent investment banking firm that the business combination is fair to our unaffiliated stockholders from a financial point of view. As of the date of this prospectus, there are no affiliated entities that we would consider as a business combination target. Selection of a Target Business and Structuring of Our Initial Business Combination Subject to our management team s pre-existing fiduciary duties and the limitation that a target business have a fair market value of at least 80% of the balance in the trust account at the time of the execution of a definitive agreement for our initial business combination, as described below in more detail, our management will have virtually unrestricted flexibility in identifying and selecting a prospective target business. We have not established any specific attributes or criteria (financial or otherwise) for prospective target businesses. In evaluating a prospective target business, our management may consider a variety of factors, including one or more of the following: financial condition and results of operation; growth potential; brand recognition and potential; return on equity or invested capital; market capitalization or enterprise value; experience and skill of management and availability of additional personnel; capital requirements; competitive position; barriers to entry; stage of development of the products, processes or services; existing distribution and potential for expansion; degree of current or potential market acceptance of the products, processes or services; proprietary aspects of products and the extent of intellectual property or other protection for products or formulas; impact of regulation on the business; regulatory environment of the industry; costs associated with effecting the business combination; industry leadership, sustainability of market share and attractiveness of market industries in which a target business participates; and macro competitive dynamics in the industry within which the company competes. Table of Contents These criteria are not intended to be exhaustive. Our management may not consider any of the above criteria in evaluating a prospective target business. Any evaluation relating to the merits of a particular business combination will be based, to the extent relevant, on the above factors as well as other considerations deemed relevant by our management in effecting a business combination consistent with our business objective. In evaluating a prospective target business, we will conduct an extensive due diligence review which will encompass, among other things, meetings with incumbent management and inspection of facilities, as well as review of financial and other information which is made available to us. This due diligence review will be conducted either by our management or by unaffiliated third parties we may engage, although we have no current intention to engage any such third parties. The time and costs required to select and evaluate a target business and to structure and complete our initial business combination remain to be determined. Any costs incurred with respect to the identification and evaluation of a prospective target business with which a business combination is not ultimately completed will result in a loss to us and reduce the amount of capital available to otherwise complete a business combination. Fair Market Value of Target Business Pursuant to Nasdaq listing rules, the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account at the time of the execution of a definitive agreement for our initial business combination, although we may acquire a target business whose fair market value significantly exceeds 80% of the trust account balance. We currently anticipate structuring a business combination to acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure a business combination where we merge directly with the target business or where we acquire less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. In order to consummate such an acquisition, we may issue a significant amount of our debt or equity securities to the sellers of such businesses and/or seek to raise additional funds through a private offering of debt or equity securities. Since we have no specific business combination under consideration, we have not entered into any such fund raising arrangement and have no current intention of doing so. The fair market value of the target will be determined by our board of directors based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). If our board is not able to independently determine that the target business has a sufficient fair market value, we will obtain an opinion from an unaffiliated, independent investment banking firm, or another independent entity that commonly renders valuation opinions on the type of target business we are seeking to acquire, with respect to the satisfaction of such criteria. We will not be required to obtain an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions on the type of target business we are seeking to acquire, as to the fair market value if our board of directors independently determines that the target business complies with the 80% threshold. However, if we seek to consummate an initial business combination with an entity that is affiliated with any of our officers, directors or sponsors and are therefore required to obtain an opinion from an independent investment banking firm that the business Table of Contents combination is fair to our unaffiliated stockholders from a financial point of view, we would ask that banking firm to opine on whether the target business met the 80% fair market value test. Nevertheless, we are not required to do so and could determine not to do so without consent of our stockholders. Lack of Business Diversification We expect to complete only a single business combination, although this process may entail the simultaneous acquisitions of several operating businesses. Therefore, at least initially, the prospects for our success may be entirely dependent upon the future performance of a single business operation. Unlike other entities which may have the resources to complete several business combinations of entities operating in multiple industries or multiple areas of a single industry, it is probable that we will not have the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. By consummating our initial business combination with only a single entity, our lack of diversification may: subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination, and result in our dependency upon the performance of a single operating business or the development or market acceptance of a single or limited number of products, processes or services. If we determine to simultaneously acquire several businesses and such businesses are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other acquisitions, which may make it more difficult for us, and delay our ability, to complete the business combination. With multiple acquisitions, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. Limited Ability to Evaluate the Target Business Management Team Although we intend to scrutinize the management team of a prospective target business when evaluating the desirability of effecting our initial business combination, our assessment of the target business management team may not prove to be correct. In addition, the future management team may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of our officers and directors, if any, in the target business following our initial business combination remains to be determined. While it is possible that some of our key personnel will remain associated in senior management or advisory positions with us following our initial business combination, it is unlikely that they will devote their full time efforts to our affairs subsequent to our initial business combination. Moreover, they would only be able to remain with the company after the consummation of our initial business combination if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for them to receive compensation in the form of cash payments and/or our securities for services they would render to the company after the consummation of the business combination. While the personal and financial interests of our key personnel may influence their motivation in identifying and selecting a target business, their ability to remain with the company after the consummation of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. Additionally, our officers and directors may not have significant experience or knowledge relating to the operations of the particular target business. Following our initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We may not have the ability to recruit additional managers, or that any such additional managers we do recruit will have the requisite skills, knowledge or experience necessary to enhance the incumbent management. Stockholder Approval of Business Combination In connection with any proposed business combination, we will seek stockholder approval of our initial business combination at a meeting called for such purpose at which public stockholders (but not our sponsors, officers or directors) may seek to convert their shares of common stock, regardless of whether they vote for or Table of Contents against the proposed business combination, into a portion of the aggregate amount then on deposit in the trust account, subject to the limitations described herein. We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the outstanding shares of common stock voted are voted in favor of the business combination. As a result, if stockholders owning approximately 94.2% (or approximately 94.9% if the over-allotment option is exercised in full) or more of the shares of common stock sold in this offering exercise conversion rights, the business combination will not be consummated. However, the actual percentages will only be able to be determined once a target business is located and we can assess all of the assets and liabilities of the combined company (which would include the fee payable to EarlyBirdCapital in an amount equal to 3.75% of the total gross proceeds raised in the offering as described elsewhere in this prospectus, any out-of-pocket expenses incurred by our sponsors, officers, directors or their affiliates in connection with certain activities on our behalf, such as identifying and investigating possible business targets and business combinations that have not been repaid at that time, as well as any other liabilities of ours and the liabilities of the target business) upon consummation of the proposed business combination, subject to the requirement that we must have at least $5,000,001 of net tangible assets upon closing of such business combination. . As a result, the actual percentages of shares that can be converted may be significantly lower than our estimates. We chose our net tangible asset threshold of $5,000,001 to ensure that we would avoid being subject to Rule 419 promulgated under the Securities Act of 1933, as amended. However, if we seek to consummate an initial business combination with a target business that imposes any type of working capital closing condition or requires us to have a minimum amount of funds available from the trust account upon consummation of such initial business combination, our net tangible asset threshold may limit our ability to consummate such initial business combination (as we may be required to have a lesser number of shares converted) and may force us to seek third party financing which may not be available on terms acceptable to us or at all. Alternatively, we may not be able to consummate a business combination unless the number of shares of common stock seeking conversion rights is significantly less than the 94.2% (or 94.9% if the over-allotment option is exercised in full) indicated above. As a result, we may not be able to consummate such initial business combination and we may not be able to locate another suitable target within the applicable time period, if at all. Public shareholders may therefore have to wait 18 months from the closing of this offering (or 24 months from the closing of this offering if we have executed a definitive agreement for a business combination within 18 months from the closing of this offering but have not consummated the business combination with such 18-month period) in order to be able to receive a portion of the trust account. Our sponsors and our officers and directors have agreed (1) to vote any shares of common stock owned by them in favor of any proposed business combination and (2) not to convert any shares of common stock into the right to receive cash from the trust account in connection with a stockholder vote to approve a proposed initial business combination or a vote to amend the provisions of our amended and restated certificate of incorporation relating to stockholders rights or pre-business combination activity. None of our officers, directors, sponsors or their affiliates has indicated any intention to purchase units or shares of common stock in this offering or from persons in the open market or in private transactions. However, if we hold a meeting to approve a proposed business combination and a significant number of stockholders vote, or indicate an intention to vote, against such proposed business combination, our officers, directors, sponsors or their affiliates could make such purchases in the open market or in private transactions in order to influence the vote. Notwithstanding the foregoing, our officers, directors, sponsors and their affiliates will not make purchases of shares of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a company s stock. Conversion Rights At any meeting called to approve an initial business combination, any public stockholder, whether voting for or against such proposed business combination, will be entitled to demand that his shares of common stock be converted for a full pro rata portion of the amount then in the trust account (initially approximately $10.20 per share, plus any pro rata interest earned on the funds held in the trust account and not previously released to us or necessary to pay our taxes). Table of Contents Notwithstanding the foregoing, a public stockholder, together with any affiliate of his or any other person with whom he is acting in concert or as a group (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking conversion rights with respect to 20% or more of the shares of common stock sold in this offering. Such a public stockholder would still be entitled to vote against a proposed business combination with respect to all shares of common stock owned by him or his affiliates. We believe this restriction will prevent stockholders from accumulating large blocks of shares before the vote held to approve a proposed business combination and attempt to use the conversion right as a means to force us or our management to purchase their shares at a significant premium to the then current market price. By limiting a stockholder s ability to convert no more than 20% of the shares of common stock sold in this offering, we believe we have limited the ability of a small group of stockholders to unreasonably attempt to block a transaction which is favored by our other public stockholders. Our sponsors, including our officers and directors, will not have the right to receive cash from the trust account in connection with a stockholder vote to approve a proposed initial business combination or a vote to amend the provisions of our amended and restated certificate of incorporation relating to stockholders rights or pre-business combination activity with respect to any shares of common stock owned by them, directly or indirectly, whether acquired prior to this offering or purchased by them in this offering or in the aftermarket. We may also require public stockholders who wish to convert, whether they are a record holder or hold their shares in street name, to either tender their certificates to our transfer agent at any time through the vote on the business combination or to deliver their shares to the transfer agent electronically using Depository Trust Company s DWAC (Deposit/Withdrawal At Custodian) System, at the holder s option. The proxy solicitation materials that we will furnish to stockholders in connection with the vote for any proposed business combination will indicate whether we are requiring stockholders to satisfy such delivery requirements. Accordingly, a stockholder would have from the time the stockholder received our proxy statement through the vote on the business combination to deliver his shares if he wishes to seek to exercise his conversion rights. Under Delaware law and our bylaws, we are required to provide at least 10 days advance notice of any stockholder meeting, which would be the minimum amount of time a stockholder would have to determine whether to exercise conversion rights. There is a nominal cost associated with the above-referenced delivery process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $45.00 and it would be up to the broker whether or not to pass this cost on to the holder. However, this fee would be incurred regardless of whether or not we require holders to deliver their shares prior to the vote on the business combination in order to exercise conversion rights. This is because a holder would need to deliver shares to exercise conversion rights regardless of the timing of when such delivery must be effectuated. However, in the event we require stockholders to deliver their shares prior to the vote on the proposed business combination and the proposed business combination is not consummated, this may result in an increased cost to stockholders. The foregoing is different from the procedures used by many blank check companies. Traditionally, in order to perfect conversion rights in connection with a blank check company s business combination, the company would distribute proxy materials for the stockholders vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his conversion rights. After the business combination was approved, the company would contact such stockholder to arrange for him to deliver his certificate to verify ownership. As a result, the stockholder then had an option window after the consummation of the business combination during which he could monitor the price of the company s stock in the market. If the price rose above the conversion price, he could sell his shares in the open market before actually delivering his shares to the company for cancellation. As a result, the conversion rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become a continuing right surviving past the consummation of the business combination until the holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a holder s election to convert his shares is irrevocable once the business combination is approved. Any request to convert such shares once made, may be withdrawn at any time up to the vote on the proposed business combination. Furthermore, if a holder of a public share delivered his certificate in Table of Contents connection with an election of their conversion and subsequently decides prior to the vote on the proposed business combination not to elect to exercise such rights, he may simply request that the transfer agent return the certificate (physically or electronically). If the initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their conversion rights would not be entitled to convert their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any shares delivered by public holders. Liquidation if No Business Combination If we do not complete a business combination within 18 months from the closing of this offering (or 24 months from the closing of this offering if we have entered into a definitive agreement for a business combination within 18 months from the closing of this offering but the business combination has not been completed within such 18-month period), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In connection with our redemption of 100% of our outstanding public shares for a portion of the funds held in the trust account, any holder that voted against the last proposed business combination prior to such redemption will only receive $10.00 per share, while any holder that voted in favor of the last proposed business combination prior to such redemption will receive a full pro rata portion of the amount then in the trust account, plus any pro rata interest earned on the funds held in the trust account and not previously released to us for our working capital requirements or necessary to pay our taxes payable on such funds (subject in each case to our obligations under Delaware law to provide for claims of creditors). At such time, the rights will expire, holder of rights will receive nothing upon a liquidation with respect to such rights and the rights will be worthless. Under the Delaware General Corporation Law, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of 100% of our outstanding public shares in the event we do not complete our initial business combination within the required time period may be considered a liquidation distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the Delaware General Corporation Law intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of 100% of our public shares in the event we do not complete our initial business combination within the required time period is not considered a liquidation distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the Delaware General Corporation Law, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation distribution. If we are unable to complete a business combination within the prescribed time frame, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the Table of Contents requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 18th or 24th month and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date. Because we will not be complying with Section 280 of the Delaware General Corporation Law, Section 281(b) of the Delaware General Corporation Law requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. We will seek to have all third parties (including any vendors or other entities we engage after this offering) and any prospective target businesses enter into valid and enforceable agreements with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account. The underwriters in this offering have already executed such a waiver agreement. As a result, the claims that could be made against us will be limited, thereby lessening the likelihood that any claim would result in any liability extending to the trust. We therefore believe that any necessary provision for creditors will be reduced and should not have a significant impact on our ability to distribute the funds in the trust account to our public stockholders. Nevertheless, there is no guarantee that vendors, service providers and prospective target businesses will execute such agreements. In the event that a potential contracted party was to refuse to execute such a waiver, we will execute an agreement with that entity only if our management first determines that we would be unable to obtain, on a reasonable basis, substantially similar services or opportunities from another entity willing to execute such a waiver. Examples of instances where we may engage a third party that refused to execute a waiver would be the engagement of a third party consultant who cannot sign such an agreement due to regulatory restrictions, such as our auditors who are unable to sign due to independence requirements, or whose particular expertise or skills are believed by management to be superior to those of other consultants that would agree to execute a waiver or a situation in which management does not believe it would be able to find a provider of required services willing to provide the waiver. There is also no guarantee that, even if they execute such agreements with us, they will not seek recourse against the trust account. Eric S. Rosenfeld has agreed that he will be liable to pay debts and obligations to target businesses or vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us. Our board of directors has questioned Mr. Rosenfeld on his financial net worth and believes he will be able to satisfy any indemnification obligations that may arise. However, he may not be able to satisfy his indemnification obligations if he is required to so as we have not required Mr. Rosenfeld to retain any assets to provide for his indemnification obligations, nor have we taken any further steps to ensure that he will be able to satisfy any indemnification obligations that arise. Additionally the agreement entered into by Mr. Rosenfeld specifically provides that he will have no personal liability as to any claimed amounts owed to a target business or vendor or other entity who has executed a valid and enforceable agreement with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account. Moreover, he will not be personally liable to our public stockholders and instead will only have liability to us. As a result, if we liquidate, the per-share distribution from the trust account could be less than approximately $10.20 due to claims or potential claims of creditors. We will distribute to all of our public stockholders, in proportion to their respective equity interests, an aggregate sum equal to the amount then held in the trust account, inclusive of any interest not previously released to us, plus any remaining net assets (subject to our obligations under Delaware law to provide for claims of creditors as described below). We anticipate notifying the trustee of the trust account to begin liquidating such assets promptly after such date and anticipate it will take no more than 10 business days to effectuate such distribution. Our sponsors have waived their rights to participate in any liquidation distribution with respect to their insider shares. We will pay the costs of any subsequent liquidation from our remaining assets outside of the trust account and from the interest income on the balance of the trust account (net income and other tax obligations) that may be released to us to fund our working capital requirements. If such funds are Table of Contents USE OF PROCEEDS We estimate that the net proceeds of this offering, in addition to the funds we will receive from the sale of the private units (all of which will be deposited into the trust account), will be used as set forth in the following table: Without Over-Allotment Option Table of Contents insufficient, Mr. Rosenfeld has agreed to pay the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and has agreed not to seek repayment of such expenses. If we are unable to consummate an initial business combination and are forced to redeem 100% of our outstanding public shares for a portion of the funds held in the trust account, each holder will receive a full pro rata portion of the amount then in the trust account, plus any pro rata interest earned on the funds held in the trust account and not previously released to us or necessary to pay our taxes. The proceeds deposited in the trust account could, however, become subject to claims of our creditors that are in preference to the claims of public stockholders. Our public stockholders shall be entitled to receive funds from the trust account only in the event of our failure to complete our initial business combination in the required time period or if the stockholders seek to have us convert their respective shares of common stock upon a business combination which is actually completed by us. In no other circumstances shall a stockholder have any right or interest of any kind to or in the trust account. If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we may not be able to return to our public stockholders at least approximately $10.20 per share. If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a preferential transfer or a fraudulent conveyance. As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, because we intend to distribute the proceeds held in the trust account to our public stockholders promptly after 18 or 24 months from the closing of this offering, this may be viewed or interpreted as giving preference to our public stockholders over any potential creditors with respect to access to or distributions from our assets. Furthermore, our board may be viewed as having breached their fiduciary duties to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. Claims may be brought against us for these reasons. Amended and Restated Certificate of Incorporation Our amended and restated certificate of incorporation contains certain requirements and restrictions relating to this offering that will apply to us until the consummation of our initial business combination. If we seek to amend any provisions of our amended and restated certificate of incorporation relating to stockholder s rights or pre-business combination activity (including the time within which we have to complete a business combination), we will provide dissenting public stockholders with the opportunity to convert their public shares in connection with any such vote. Our sponsors have agreed to waive any conversion rights with respect to any insider shares, private units and any public shares they may hold in connection with any vote to amend our amended and restated certificate of incorporation. Specifically, our amended and restated certificate of incorporation provides, among other things, that: prior to the consummation of our initial business combination, we shall seek stockholder approval of our initial business combination at a meeting called for such purpose at which public stockholders may seek to convert their shares of common stock, regardless of whether they vote for or against the proposed business combination, into a portion of the aggregate amount then on deposit in the trust account, subject to the limitations described herein; we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the outstanding shares of common stock voted are voted in favor of the business combination; Over-Allotment Option Exercised Table of Contents if our initial business combination is not consummated within 18 (or 24) months of the closing of this offering, then our existence will terminate and we will distribute all amounts in the trust account and any net assets remaining outside the trust account to all of our public holders of shares of common stock; upon the consummation of this offering, $85,645,000, or $98,491,750 if the over-allotment option is exercised in full, shall be placed into the trust account; we may not consummate any other business combination, merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar transaction prior to our initial business combination; and prior to our initial business combination, we may not issue (i) any shares of common stock or any securities convertible into common stock, or (ii) any securities that participate in any manner in the proceeds of the trust account, or that vote as a class with the common stock sold in this offering on our initial business combination. Competition In identifying, evaluating and selecting a target business, we may encounter intense competition from other entities having a business objective similar to ours. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than us and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there may be numerous potential target businesses that we could acquire with the net proceeds of this offering, our ability to compete in acquiring certain sizable target businesses may be limited by our available financial resources. The following also may not be viewed favorably by certain target businesses: our obligation to seek stockholder approval of our initial business combination may delay the completion of a transaction; our obligation to convert shares of common stock held by our public stockholders may reduce the resources available to us for our initial business combination; our outstanding rights and unit purchase options, and the potential future dilution they represent; our obligation to ensure that if we enter into a definitive agreement for a business combination in which we will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share consideration the holders of the common stock will receive in the transaction on an as-converted into common stock basis (for instance, if the business combination would result in each share of common stock outstanding being exchanged for two shares of common stock, each right would result in the holder receiving two-tenths (2/10) of a share of common stock upon consummation of such business combination); our obligation to pay the fee to EarlyBirdCapital for acting as an investment banker in connection with our initial business combination; our obligation to either repay or issue private units upon conversion of up to $500,000 of working capital loans that may be made to us by our sponsors, officers, directors or their affiliates; our obligation to register the resale of the insider shares, as well as the private units (and underlying securities) and any shares issued to our sponsors, officers, directors or their affiliates upon conversion of working capital loans; and the impact on the target business assets as a result of unknown liabilities under the securities laws or otherwise depending on developments involving us prior to the consummation of a business combination. Any of these factors may place us at a competitive disadvantage in successfully negotiating our initial business combination. Our management believes, however, that our status as a public entity and potential Gross proceeds From offering $ 84,000,000 $ 96,600,000 From private placement 5,425,000 6,081,250 Total gross proceeds 89,425,000 102,681,250 Offering expenses(1) Underwriting discount (3.25% of gross proceeds from offering) 2,730,000 (2) 3,139,500 (2) Legal fees and expenses 250,000 250,000 Nasdaq listing fee 50,000 50,000 Printing and engraving expenses 55,000 55,000 Accounting fees and expenses 40,000 40,000 FINRA filing fee 14,990 14,990 SEC registration fee 13,176 13,176 Miscellaneous expenses 76,834 76,834 Total offering expenses 3,230,000 3,639,500 Net proceeds Held in the trust account(3) 85,645,000 98,491,750 Not held in the trust account 550,000 550,000 Total net proceeds $ 86,195,000 $ 99,041,750 Use of net proceeds not held in the trust account and amounts available from interest income earned on the trust account(4)(5) Legal, accounting and other third party expenses attendant to the search for target businesses and to the due diligence investigation, structuring and negotiation of our initial business combination $ 150,000 21.4 % Due diligence of prospective target businesses by officers, directors and sponsors 10,000 1.4 % Legal and accounting fees relating to SEC reporting obligations 75,000 10.7 % Payment of administrative fee to Crescendo Advisors II, LLC ($10,000 per month for up to 24 months) 240,000 34.3 % Corporate and franchise taxes 150,000 21.4 % Working capital to cover miscellaneous expenses, D&O insurance, general corporate purposes, liquidation obligations and reserves 75,000 10.7 % Total $ 700,000 100.0 % Table of Contents access to the United States public equity markets may give us a competitive advantage over privately-held entities having a similar business objective as ours in acquiring a target business with significant growth potential on favorable terms. If we succeed in effecting our initial business combination, there will be, in all likelihood, intense competition from competitors of the target business. Subsequent to our initial business combination, we may not have the resources or ability to compete effectively. Facilities We currently maintain our principal executive offices at 777 Third Avenue, 37th floor, New York, NY 10017. The cost for this space is included in the $10,000 per-month fee Crescendo Advisors II, LLC, an affiliate of Eric S. Rosenfeld, will charge us for general and administrative services commencing upon the date of this prospectus pursuant to a letter agreement between us and Crescendo Advisors II, LLC. We believe, based on rents and fees for similar services in New York, that the fee charged by Crescendo Advisors II, LLC is at least as favorable as we could have obtained from an unaffiliated person. We consider our current office space, combined with the other office space otherwise available to our executive officers, adequate for our current operations. Employees We have two executive officers. These individuals are not obligated to devote any specific number of hours to our matters and intend to devote only as much time as they deem necessary to our affairs. The amount of time they will devote in any time period will vary based on whether a target business has been selected for the business combination and the stage of the business combination process the company is in. Accordingly, once a suitable target business to acquire has been located, management will spend more time investigating such target business and negotiating and processing the business combination (and consequently spend more time on our affairs) than had been spent prior to locating a suitable target business. We presently expect our executive officers to devote an average of approximately 10 hours per week to our business. We do not intend to have any full time employees prior to the consummation of our initial business combination. Periodic Reporting and Audited Financial Statements We have registered our units, common stock and rights under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual report will contain financial statements audited and reported on by our independent registered public accountants. We will provide stockholders with audited financial statements of the prospective target business as part of any proxy solicitation materials sent to stockholders to assist them in assessing the target business. These financial statements will need to be prepared in accordance with or reconciled to United States GAAP or IFRS. A particular target business identified by us as a potential acquisition candidate may not have the necessary financial statements. To the extent that this requirement cannot be met, we may not be able to acquire the proposed target business. We may be required by the Sarbanes-Oxley Act to have our internal control procedures audited for the fiscal year ending December 31, 2014. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition. Legal Proceedings There is no material litigation, arbitration, governmental proceeding or any other legal proceeding currently pending or known to be contemplated against us or any members of our management team in their capacity as such, and we and the members of our management team have not been subject to any such proceeding in the 10 years preceding the date of this prospectus. Escrow of offering proceeds $85,645,000 of the net offering proceeds and proceeds from the sale of the private units will be deposited into a trust account in the United States at JP Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee. $73,143,000 of the offering proceeds would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account. Investment of net proceeds The $85,645,000 of net offering proceeds and proceeds from the sale of the private units held in the trust account will only be invested in United States government treasury bills, bonds or notes with a maturity of 180 days or less or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 and that invest solely in U.S. treasuries. Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act of 1940 or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States. Limitation on fair value or net assets of target business The initial target business that we acquire must have a fair market value equal to at least 80% of the balance in our trust account at the time of the execution of a definitive agreement for our initial business combination. We would be restricted from acquiring a target business unless the fair value of such business or net assets to be acquired represent at least 80% of the maximum offering proceeds. Trading of securities issued The units may commence trading on or promptly after the date of this prospectus. The common stock and rights comprising the units will begin to trade separately on the 90th day after the date of this prospectus unless EarlyBirdCapital informs us of its decision to allow earlier separate trading (based upon its assessment of the relative strengths of the securities markets and small capitalization companies in general, and the trading pattern of, and demand for, our securities in particular), provided we have filed with the SEC a Current Report on Form 8-K, which includes an audited balance sheet reflecting our receipt of the proceeds of this offering. No trading of the shares of common stock would be permitted until the completion of our initial business combination. During this period, the securities would be held in the escrow or trust account. Election to remain an investor We will give our stockholders the opportunity to vote on the business combination. We will send each stockholder a proxy statement containing information required by the SEC. Under Delaware law and our bylaws, we must provide at least 10 days advance notice of any meeting of stockholders. Accordingly, this is the minimum amount of time we would need to provide holders to determine whether to exercise their rights to convert their shares into cash or to remain an investor in our company. A prospectus containing information required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company, in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of the post-effective amendment, to decide whether he or she elects to remain a stockholder of the company or require the return of his or her investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account would automatically be returned to the stockholder. Unless a sufficient number of investors elect to remain investors, all of the deposited funds in the escrow account must be returned to all investors and none of the securities will be issued. Business combination deadline Pursuant to our amended and restated certificate of incorporation, if we are unable to complete our initial business combination within 18 months from the closing of this offering (or 24 months from the closing of this offering if the extension criteria described elsewhere is satisfied), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. If an acquisition has not been consummated within 18 months after the effective date of the initial registration statement, funds held in the trust or escrow account would be returned to investors Interest earned on the funds in the trust account There can be released to us, from time to time, any interest earned on the funds in the trust account (1) that we may need to pay our tax obligations and (2) any remaining interest up to $750,000 that we need for our working capital requirements. All interest earned on the funds in the trust account will be held in the trust account for the benefit of public stockholders until the earlier of the completion of our initial business combination and our liquidation upon failure to effect our initial business combination within the allotted time. Release of funds Except for (1) interest earned on the funds in the trust account that may be released to us to pay our tax obligations and (2) any remaining interest up to $750,000 that we may need for our working capital requirements that may be released to us from the interest earned on the trust account balance, the proceeds held in the trust account will not be released until the earlier of the completion of our initial business combination and our liquidation upon failure to effect our initial business combination within the allotted time. The proceeds held in the escrow account would not be released until the earlier of the completion of our initial business combination or the failure to effect our initial business combination within the allotted time. Eric S. Rosenfeld 56 Chairman of the Board and Chief Executive Officer David D. Sgro 37 Chief Financial Officer, Secretary and Director John P. Schauerman 56 Director Jeffrey M. Moses 53 Director Margery Kraus 67 Director Eric S. Rosenfeld has served as our chairman of the board and chief executive officer since our inception. Mr. Rosenfeld was Trio s chairman of the board and chief executive officer from its inception in June 2011 until its merger with SAE in June 2013 and has served as a director of SAE since such time. Mr. Rosenfeld has been the president and chief executive officer of Crescendo Partners, L.P., a New York-based investment firm, since its formation in November 1998. He has also been the senior managing member of Crescendo Advisors II LLC, the entity providing Quartet with general and administrative services, since its formation in August 2000. In March 2008, Mr. Rosenfeld became the chairman of the board, chief executive and president of Symphony Acquisition Corp. and Staccato Acquisition Corp., two blank check companies, each formed to complete a business combination with one or more businesses or entities. Due to market conditions, neither Symphony Acquisition Corp. nor Staccato Acquisition Corp. completed its initial public offering and neither engaged in any substantive operations. From April 2006 until July 2008, Mr. Rosenfeld served as the chairman of the board, chief executive officer and president of Rhapsody, an OTCBB-listed blank check company. Rhapsody completed its business combination in July 2008 with Primoris and changed its name to Primoris Services Corporation and is now listed on the NASDAQ Stock Market. Mr. Rosenfeld has served as a director of that company since the merger. From its inception in April 2004 until June 2006, he was the chairman of the board, chief executive officer and president of Arpeggio, an OTCBB-listed blank check company. Arpeggio completed its business combination in June 2006 with Hill International, now listed on the NYSE. Mr. Rosenfeld served as a director of Hill International from the time of the business combination until June 2010. Mr. Rosenfeld is currently chairman of the board of CPI Aerostructures, Inc. a NYSE MKT-listed company engaged in the contract production of structural aircraft parts principally for the U.S. Air Force and other branches of the U.S. armed forces. He became a director in April 2003 and chairman in January 2005. Mr. Rosenfeld has also served on the board of Cott Corporation, a NYSE-listed beverage company, since June 2008. Since December 2012, Mr. Rosenfeld has been a board member of Absolute Software Corporation, a Toronto Stock Exchange listed provider of security and management for computers and ultra-portable devices. Prior to forming Crescendo Partners, Mr. Rosenfeld had been managing director at CIBC Oppenheimer and its predecessor company Oppenheimer & Co., Inc. since 1985. He was also chairman of the board of Spar Aerospace Limited, a company that provides repair and overhaul services for aircraft and helicopters used by governments and commercial airlines, from May 1999 through November 2001, until its sale to L-3 Communications. He served as a director of Hip Interactive, a Toronto Stock Exchange-listed company that distributed and developed electronic entertainment products, from November 2004 until July 2005. Mr. Rosenfeld also served as a director of AD OPT Technologies Inc., which was a Toronto Stock Exchange-listed company from April 2003 to November 2004, when it was acquired by Kronos Inc. Mr. Rosenfeld also served as a director and head of the special committee of Pivotal Corporation, a Canadian-based customer relations management software company that was sold to Chinadotcom in February 2004. He was a director of Sierra Systems Group, Inc., a Toronto Stock Exchange-listed information technology, management consulting and systems integration firm based in Canada from October 2003 until its sale in January 2007. From October 2005 through March 2006, Mr. Rosenfeld was a director of Geac Computer Corporation Limited, a Toronto Stock Exchange and NASDAQ-listed software company, which was acquired by Golden Gate Capital. He was also a director of Emergis Inc., a Toronto Stock Exchange-listed company that enables the electronic processing of transactions in the finance and healthcare industries, from July 2004 until its sale Table of Contents to Telus Corporation in January 2008. Mr. Rosenfeld also served on the board of Matrikon Inc. a Toronto Stock Exchange-listed provider of solutions for industrial intelligence, from July 2007 until its sale to Honeywell International, Inc. in June 2010. He was also a member of the board of Dalsa Corporation, a Toronto Stock Exchange-listed company that designs and manufactures digital imaging products, from February 2008 until its sale to Teledyne in February 2011. From October 2005 until its final liquidation in December 2012, he was the chairman of the board of Computer Horizons Corp., quoted on the OTCBB, that, before the sale of the last of its operating businesses in February 2007 (at which time it was NASDAQ-listed), provided information technology professional services with a concentration in sourcing and managed services. Mr. Rosenfeld is a regular guest lecturer at Columbia Business School and has served on numerous panels at Queen s University Business Law School Symposia, McGill Law School, the World Presidents Organization and the Value Investing Congress. He is a faculty member at the Director s College. He has also been a regular guest host on CNBC. Mr. Rosenfeld received an A.B. in economics from Brown University and an M.B.A. from the Harvard Business School. We believe Mr. Rosenfeld is well-qualified to serve as a member of the board due to his public company experience, operational experience, experience in prior blank check offerings, such as Arpeggio, Rhapsody and Trio, and his business contacts. David D. Sgro, CFA, has served as our chief financial officer, secretary and a member of our board of directors since our inception. Mr. Sgro served as Trio s chief financial officer and secretary from its inception in June 2011, and a member of its board of directors from March 2011, until its merger with SAE in June 2013 and has served as a director of SAE since such time. From April 2006 to July 2008, Mr. Sgro served as the chief financial officer of Rhapsody and from July 2008 to May 2011, Mr. Sgro served as a director of Primoris. Mr. Sgro has been a Managing Director of Crescendo Partners, L.P., a Delaware limited partnership, since December 2008, a Senior Vice President from December 2007 to December 2008, a Vice President from December 2005 to December 2007, and an investment analyst from May 2005 to December 2005. Mr. Sgro served on the board of Bridgewater Systems, Inc., a TSX listed telecommunications software company, from June 2008 until its sale to Amdocs in August 2011. In March 2008, Mr. Sgro became the chief financial officer, secretary and a director of each of Symphony Acquisition Corp. and Staccato Acquisition Corp. From August 2003 to May 2005, Mr. Sgro attended Columbia Business School. From June 1998 to May 2003, he worked as an analyst and then senior analyst at Management Planning, Inc., a firm engaged in the valuation of privately held companies. Simultaneously, Mr. Sgro worked as an associate with MPI Securities, Management Planning, Inc. s boutique investment banking affiliate. From June 2004 to August 2004, Mr. Sgro worked as an analyst at Brandes Investment Partners. Mr. Sgro currently serves on the board of directors of COM DEV International Ltd., a global designer and manufacturer of space hardware. Mr. Sgro received a B.S. in Finance from The College of New Jersey and an M.B.A. from Columbia Business School. In 2001, he became a Chartered Financial Analyst (CFA) Charterholder. Mr. Sgro is a regular guest lecturer at the College of New Jersey and Columbia Business School. We believe Mr. Sgro is well-qualified to serve as a member of our board due to his public company experience, operational experience and experience in prior blank check offerings, such as Rhapsody and Trio. John P. Schauerman has served as a director since June 2013. Mr. Schauerman served as executive vice president, corporate development of Primoris from February 2009 to May 2013, and served as a Director of Primoris from July 2008 to May 2013. He served as the chief financial officer of Primoris from February 2008 to February 2009. He also served as a director of Primoris and its predecessor entity from 1993 to July 2008. He joined Primoris wholly-owned subsidiary, ARB, Inc., in 1993, as senior vice president. In his current role, he is responsible for developing and integrating Primoris overall strategic plan, including the evaluation and structuring of new business opportunities and acquisitions. Prior to joining ARB, Inc., he was senior vice president of Wedbush Morgan Securities. Mr. Schauerman received a B.S. in Electrical Engineering from UCLA and an M.B.A. from Columbia Business School. We believe Mr. Schauerman is well-qualified to serve as a member of our board due to his public company experience, operational experience and contacts. Table of Contents DILUTION The difference between the public offering price per share and the pro forma net tangible book value per share after this offering constitutes the dilution to investors in this offering. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of shares of common stock which may be converted into cash), by the number of outstanding shares of common stock. For the purposes of the dilution calculation, in order to present the maximum estimated dilution as a result of this offering, we have assumed the issuance of 0.1 of a share of common stock for each right outstanding, as such issuance will occur automatically upon a business combination without the payment of additional consideration. Accordingly, for the purposes of the dilution calculation, the number of shares included in the units offered hereby will be deemed to be 9,240,000, the price per share in this offering will be deemed to be $9.09 and the number of shares included in the private units will be deemed to be 596,750. At June 30, 2013, our net tangible book value was $(28,063), or approximately $(0.01) per share. After giving effect to the sale of 8,400,000 shares of common stock included in the units we are offering by this prospectus, and the deduction of underwriting discounts and estimated expenses of this offering, and the sale of the private units, and assuming the issuance of 894,250 shares of common stock for the outstanding rights, our pro forma net tangible book value at June 30, 2013 would have been $5,574,543 or $1.38 per share, representing an immediate increase in net tangible book value of $1.39 per share to the sponsors and an immediate dilution of 84.8% per share or $7.71 to new investors not exercising their conversion rights. For purposes of presentation, our pro forma net tangible book value after this offering is $5.84 less than it otherwise would have been because if we effect our initial business combination, the conversion rights of the public stockholders (but not our sponsors) may result in the conversion of up to 7,909,603 shares sold in this offering. The following table illustrates the dilution to our public stockholders on a per-share basis. Public offering price $ 9.09 Net tangible book value before this offering $ (0.01 ) Increase attributable to new investors and private sales 1.39 Pro forma net tangible book value after this offering 1.38 Dilution to new investors $ 7.71 Percentage of dilution to new investors 84.8 % The following table sets forth information with respect to our sponsors and the new investors: Shares Purchased Table of Contents Jeffrey M. Moses has served as a director since June 2013. Mr. Moses has served as the chief operating officer of Lyrical Partners, L.P., an investment advisory firm, since July 2006. From September 2003 to September 2006, Mr. Moses served as a senior managing director at Bear Stearns & Co. Inc. and portfolio manager of its multi-strategy funds of hedge funds since their inception. From February 1998 to September 2003, Mr. Moses served as a senior vice president and in capacities ranging from director of investment research to general counsel for Asset Alliance Corporation, an investment management holding company. Prior to Asset Alliance Corporation, Mr. Moses was with Systematic Financial Management, LP, where he served in roles including portfolio manager, executive vice president and limited partner. Mr. Moses began his career as an attorney with concentrations in mergers and acquisitions and investment advisor representation. Mr. Moses received a B.S. in economics from the Wharton School of the University of Pennsylvania with a double major in finance and accounting, a J.D. from New York University School of Law, and an M.B.A. from New York University Graduate School of Business Administration. We believe Mr. Moses is well-qualified to serve as a member of our board due to his financing experience and contacts. Margery Kraus has served as a director since June 2013. Ms. Kraus founded APCO Worldwide in 1984 and has served as its chief executive officer since its inception. APCO is a global communication, stakeholder engagement and business strategy firm headquartered in Washington, D.C. Prior to founding APCO, Kraus helped create and develop the Close Up Foundation, an educational foundation, on whose board of directors she still serves. She is also active on other institutional and corporate boards and committees, serving as a trustee of Northwestern Mutual, the Arthur W. Page Society, the Catherine B. Reynolds Foundation and the Institute for Public Relations; and as chairman of the Women Presidents Organization and past chairman of the Public Affairs Council and the Council of Public Relations Firms. She also serves as a trustee of American University and sits on the advisory board of the J.L. Kellogg Graduate School of Management at Northwestern University. Ms. Kraus holds a Bachelor of Arts and Masters of Arts in Political Science and Public Law from the American University. We believe Ms. Kraus is well-qualified to serve as a member of our board due to her experience as a chief executive officer of a multinational consulting firm and her business strategy and communications expertise. Our board of directors is divided into three classes with only one class of directors being elected in each year and each class serving a three-year term. The term of office of the first class of directors, consisting of Margery Kraus, will expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of John P. Schauerman and Jeffrey M. Moses, will expire at the second annual meeting. The term of office of the third class of directors, consisting of Eric S. Rosenfeld and David D. Sgro, will expire at our third annual meeting of stockholders. Special Advisor We may seek guidance and advice from the following special advisor. We have no formal arrangement or agreement with this advisor to provide services to us and he has no fiduciary obligation to present business opportunities to us. This special advisor will simply provide advice, introductions to potential targets, and assistance to us, at our request, only if he is able to do so. Nevertheless, we believe with his business background and extensive contacts, he will be helpful to our search for a target business and our consummation of a business combination. Joel Greenblatt is our special advisor who will advise us concerning our acquisition of a target business. Mr. Greenblatt is the managing partner of Gotham Capital III, L.P., an investment partnership he founded in April 1985, a managing member of Gotham Capital V LLC and managing principal and Co-Chief Investment officer of Gotham Asset Management. He was also a special advisor to Rhapsody, Arpeggio and Trio. He is the former chairman of the board and a former board member of Alliant Techsystems, a New York Stock Exchange-listed aerospace and defense contractor. Since 1996, he has been on the adjunct faculty of Columbia Business School where he teaches Security Analysis. Mr. Greenblatt is the author of You Can Be A Stock Market Genius (Simon & Schuster, 1997), The Little Book That Beats the Market (John Wiley & Sons, Total Consideration Table of Contents 2005), The Little Book That Still Beats the Market (John Wiley & Sons, 2010) and The Big Secret for the Small Investor (Crown Business, 2011). He received a B.S. (summa cum laude) and an MBA from the Wharton School of the University of Pennsylvania. Executive Compensation No executive officer has received any cash compensation for services rendered to us. Commencing on the date of this prospectus through the acquisition of a target business, we will pay Crescendo Advisors II, LLC, an affiliate of Eric S. Rosenfeld, a fee of $10,000 per month for providing us with office space and certain office and secretarial services. However, this arrangement is solely for our benefit and is not intended to provide Eric S. Rosenfeld compensation in lieu of a salary. Other than the $10,000 per month administrative fee, no compensation or fees of any kind, including finder s, consulting fees and other similar fees, will be paid to our sponsors, members of our management team or their respective affiliates, for services rendered prior to or in connection with the consummation of our initial business combination (regardless of the type of transaction that it is). However, such individuals will receive reimbursement for any out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses, performing business due diligence on suitable target businesses and business combinations as well as traveling to and from the offices, plants or similar locations of prospective target businesses to examine their operations. There is no limit on the amount of out-of-pocket expenses reimbursable by us; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the trust account and the interest income earned on the amounts held in the trust account, such expenses would not be reimbursed by us unless we consummate an initial business combination. After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of a stockholder meeting held to consider our initial business combination, as it will be up to the directors of the post-combination business to determine executive and director compensation. In this event, such compensation will be publicly disclosed at the time of its determination in a Current Report on Form 8-K, as required by the SEC. Director Independence Currently John P. Schauerman, Jeffrey M. Moses and Margery Kraus would each be considered an independent director under the Nasdaq listing rules, which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company s board of directors would interfere with the director s exercise of independent judgment in carrying out the responsibilities of a director. Our independent directors will have regularly scheduled meetings at which only independent directors are present. We will only enter into a business combination if it is approved by a majority of our independent directors. Additionally, we will only enter into transactions with our officers and directors and their respective affiliates that are on terms no less favorable to us than could be obtained from independent parties. Any related-party transactions must be approved by our audit committee and a majority of disinterested directors. Audit Committee Effective as of the date of this prospectus, we will establish an audit committee of the board of directors, which will consist of John P. Schauerman, Jeffrey M. Moses and Margery Kraus, each of whom is an independent director. The audit committee s duties, which are specified in our Audit Committee Charter, include, but are not limited to: reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our Form 10-K; Average Price per Share Table of Contents discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements; discussing with management major risk assessment and risk management policies; monitoring the independence of the independent auditor; verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; reviewing and approving all related-party transactions; inquiring and discussing with management our compliance with applicable laws and regulations; pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed; appointing or replacing the independent auditor; determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and approving reimbursement of expenses incurred by our management team in identifying potential target businesses. Financial Experts on Audit Committee The audit committee will at all times be composed exclusively of independent directors who are financially literate as defined under the Nasdaq listing standards. The Nasdaq listing standards define financially literate as being able to read and understand fundamental financial statements, including a company s balance sheet, income statement and cash flow statement. In addition, we must certify to Nasdaq that the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual s financial sophistication. The board of directors has determined that John Schauerman qualifies as an audit committee financial expert, as defined under rules and regulations of the SEC. Nominating Committee Effective upon consummation of this offering, we will establish a nominating committee of the board of directors, which will consist of John P. Schauerman, Jeffrey M. Moses and Margery Kraus, each of whom is an independent director. The nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. The nominating committee considers persons identified by its members, management, stockholders, investment bankers and others. Guidelines for Selecting Director Nominees The guidelines for selecting nominees, which are specified in our Nominating Committee Charter, generally provide that persons to be nominated: should have demonstrated notable or significant achievements in business, education or public service; should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and Number Table of Contents should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of our stockholders. The Nominating Committee will consider a number of qualifications relating to management and leadership experience, background, integrity and professionalism in evaluating a person s candidacy for membership on the board of directors. The nominating committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The nominating committee does not distinguish among nominees recommended by stockholders and other persons. Other Board Committees Our board of directors intends to establish a compensation committee upon completion of our initial business combination, or such earlier time as our board of directors may determine or as required by Nasdaq listing standards. At that time our board of directors expects to adopt a charter for such committee. Prior to such time we do not intend to establish such committee. Accordingly, there will not be a separate formal committee to review the reasonableness of expense reimbursement requests by anyone other than our board of directors, which includes persons who may seek such reimbursements. We do not believe a compensation committee is necessary prior to a business combination as there will be no salary, fees or other compensation being paid to our officers or directors prior to our business combination other than as disclosed in this prospectus. Compensation Committee Interlocks and Insider Participation We may not have a compensation committee in place prior to the completion of our initial business combination. Any executive compensation matters that arise prior to the time we have a compensation committee in place will be determined by our independent directors. Except as provided hereafter, none of our executive officers currently serves, or in the last fiscal year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors. Mr. Rosenfeld, our Chief Executive Officer, currently serves on the board of directors of Primoris, a company for which Mr. Schauerman served as executive vice president, corporate development until May 2013. Code of Ethics Effective upon consummation of this offering, we will adopt a code of ethics that applies to all of our executive officers, directors and employees. The code of ethics codifies the business and ethical principles that govern all aspects of our business. Conflicts of Interest Investors should be aware of the following potential conflicts of interest: None of our officers and directors is required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating their time among various business activities. In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to our company as well as the other entities with which they are affiliated. Our officers and directors may have conflicts of interest in determining to which entity a particular business opportunity should be presented. Our officers and directors may in the future become affiliated with entities, including other blank check companies, engaged in business activities similar to those intended to be conducted by our company. Unless we consummate our initial business combination, our officers, directors and sponsors will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such Percentage Primoris Services Corporation Eric S. Rosenfeld Mr. Rosenfeld will be required to present all business opportunities which are suitable for Primoris Services Corporation to Primoris Services Corporation prior to presenting them to us. Primoris Services Corporation is a holding company with various subsidiaries that cumulatively form a diversified construction company providing a wide range of construction and product engineering services. CPI Aerostructures, Inc. Eric S. Rosenfeld Mr. Rosenfeld will be required to present all business opportunities which are suitable for CPI Aerostructures to CPI Aerostructures prior to presenting them to us. CPI Aerostructures is engaged in the contract production of structural aircraft parts principally for the United States Air Force and other branches of the U.S. armed forces. Absolute Software Eric S. Rosenfeld Mr. Rosenfeld will be required to present all business opportunities which are suitable for Absolute Software to Absolute Software provides persistent endpoint security and management for computers, laptops, tablets and smartphone devices. Amount COM DEV International David D. Sgro Mr. Sgro will be required to present all business opportunities which are suitable for COM DEV International to COM DEV International prior to presenting them to us. COM DEV International is a global designer and manufacturer of space hardware. Cott Corporation Eric S. Rosenfeld Mr. Rosenfeld will be required to present all business opportunities which are suitable for the Cott Corporation to the Cott Corporation prior to presenting them to us. Cott Corporation is a private label beverage company. SAExploration Holdings Inc. Eric S. Rosenfeld David D. Sgro Each of Messrs. Rosenfeld and Sgro will be required to present all business opportunities which are suitable for SAExploration Holdings Inc. to SAExploration Holdings Inc. prior to presenting them to us. SAE is a holding company of various subsidiaries which collectively form a geophysical services company offering seismic data acquisition services to the oil and gas industry in North America, South America, and Southeast Asia. Lyrical Partners, L.P. Jeffrey M. Moses Mr. Moses will be required to present all business opportunities which are suitable for Lyrical Partners, L.P. to Lyrical Partners, L.P. prior to presenting them to us. Lyrical Partners, L.P. is an investment advisory firm. Our sponsors, as well as all of our officers and directors, have agreed to vote any shares of common stock held by them in favor of our initial business combination. In addition, they have agreed to waive their respective rights to participate in any liquidation distribution with respect to their insider shares and private shares. If they purchase shares of common stock in this offering or in the open market, however, they would be entitled to participate in any liquidation distribution in respect of such shares but have agreed not to convert such shares in connection with the consummation of our initial business combination. All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions will require prior approval by our audit committee and a majority of our uninterested independent directors, or the members of our board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our audit committee and a majority of our disinterested independent directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties. To further minimize conflicts of interest, we have agreed not to consummate our initial business combination with an entity that is affiliated with any of our officers, directors or sponsors, unless we have obtained (i) an opinion from an independent investment banking firm that the business combination is fair to our unaffiliated stockholders from a financial point of view and (ii) the approval of a majority of our disinterested and independent directors (if we have any at that time). Furthermore, in no event will any of our Percentage Table of Contents sponsors, members of our management team or their respective affiliates be paid any finder s fee, consulting fee or other similar compensation prior to, or for any services they render in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is). Limitation on Liability and Indemnification of Directors and Officers Our amended and restated certificate of incorporation provides that our directors and officers will be indemnified by us to the fullest extent authorized by Delaware law as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation provides that our directors will not be personally liable for monetary damages to us for breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions as directors. Notwithstanding the foregoing, as set forth in our amended and restated certificate of incorporation, such indemnification will not extend to any claims Mr. Rosenfeld may make to us to cover any loss that he may sustain as a result of his agreement to pay debts and obligations to target businesses or vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us as described elsewhere in this prospectus. Our bylaws also will permit us to secure insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit indemnification. We will purchase a policy of directors and officers liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify the directors and officers. These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced directors and officers. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. Sponsors and Underwriters 2,696,750 (1) 22.6 % $ 5,450,000 6.1 % $ 2.02 New investors 9,240,000 (2) 77.4 % 84,000,000 93.9 % $ 9.09 11,936,750 100.0 % $ 89,450,000 100.0 % * Less than 1% (1) Unless otherwise indicated, the business address of each of the individuals is 777 Third Avenue, 37th floor, New York, NY 10017. (2) Includes the 542,500 private units to be purchased by the sponsors and EarlyBirdCapital and/or their designees simultaneously with the consummation of this offering. Assumes no exercise of the over-allotment option and, therefore, the forfeiture of an aggregate of 315,000 shares of common stock held by our sponsors. (3) Does not include beneficial ownership of any shares of common stock issuable to holders of outstanding rights as such shares are not issuable within 60 days of the date of this prospectus. (4) Does not include shares of common stock he may receive in the event that David Sgro s shares do not vest as described in footnote 5 below. Also does not include up to an aggregate of 72,675 shares of common stock he may receive in the event that shares held by Gregory Monahan and Victor Bonilla, each an employee of Crescendo Advisors II, LLC, do not vest under similar terms as the shares held by Mr. Sgro. (5) Of these shares, 1/3 is currently vested, 1/3 shall vest upon consummation of a business combination and 1/3 shall vest after the shares are released from escrow and are no longer subject to any restrictions on transferability imposed in connection with our initial business combination, provided Mr. Sgro is still an employee of Crescendo Advisors II, LLC. If Mr. Sgro is no longer employed by Crescendo Advisors II, LLC at such times, as a result of Mr. Sgro s termination for cause or his voluntary resignation, shares unvested shall revert to Mr. Rosenfeld. (6) The business address of DKU 2013, LLC is 405 Park Avenue, 6th Floor, New York, NY 10022. Jeff Keswin has ultimate voting and dispositive power over the shares held by DKU 2013, LLC. (7) The business address of The K2 Principal Fund L.P. is 2 Bloor Street West, Suite 801, Toronto, Ontario, Canada M4W 3E2. Shawn Kimel has ultimate voting and dispositive power over the shares held by The Table of Contents K2 Principal Fund L.P. as he is President of K2 Genpar 2009 Inc., the General Partner of K2 Genpar L.P., the General Partner of The K2 Principal Fund L.P. Immediately after this offering, our sponsors will beneficially own approximately 23.9% of the then issued and outstanding shares of common stock (assuming they do not purchase any units offered by this prospectus). None of our sponsors, officers and directors has indicated to us that it or he intends to purchase our units in the offering. Because of the ownership block held by our sponsors, such individuals may be able to effectively exercise influence over all matters requiring approval by our stockholders, including the election of directors and approval of significant corporate transactions other than approval of our initial business combination. If the underwriters do not exercise all or a portion of the over-allotment option, an aggregate of up to 315,000 insider shares will be forfeited in amounts as determined amongst the holders of such insider shares and not proportional to their ownership percentages in our shares of common stock. Only a number of shares necessary to maintain our sponsors collective 20% ownership interest (excluding the private units) in our shares of common stock after giving effect to the offering and the exercise, if any, of the underwriters over-allotment option will be forfeited. All of the insider shares outstanding prior to the date of this prospectus will be placed in escrow with Continental Stock Transfer & Trust Company, as escrow agent. Subject to certain limited exceptions, 50% of these shares will not be transferred, assigned, sold or released from escrow until the earlier of one year after the date of the consummation of our initial business combination and the closing price of our common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after our initial business combination and the remaining 50% of the insider shares will not be transferred, assigned, sold or released from escrow until one year after the date of the consummation of our initial business combination or earlier in either case if, subsequent to our initial business combination, we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. Up to 315,000 of the insider shares may also be released from escrow earlier than this date for cancellation if the over-allotment option is not exercised in full as described above. During the escrow period, the holders of these shares will not be able to sell or transfer their securities except (1) amongst themselves, to our officers, directors and employees, to a holder s affiliates or its members upon its liquidation, (2) to relatives and trusts for estate planning purposes, (3) by virtue of the laws of descent and distribution upon death, (4) pursuant to a qualified domestic relations order, (5) by certain pledges to secure obligations incurred in connection with purchases of our securities, (6) by private sales made at or prior to the consummation of our initial business combination at prices no greater than the price at which the shares were originally purchased or (7) to us for no value for cancellation in connection with the consummation of our initial business combination, in each case (except for clause 7) where the transferee agrees to the terms of the escrow agreement, but will retain all other rights as our stockholders, including, without limitation, the right to vote their shares of common stock and the right to receive cash dividends, if declared. If dividends are declared and payable in shares of common stock, such dividends will also be placed in escrow. If we are unable to effect a business combination and liquidate, there will be no liquidation distribution with respect to the insider shares. Our sponsors and EarlyBirdCapital have committed that they and/or their designees will purchase the private units (for an aggregate purchase price of $5,425,000) from us in amounts as determined amongst the parties and not proportional to their ownership percentages in our shares of common stock. These purchases will take place on a private placement basis simultaneously with the consummation of this offering. Our sponsors and EarlyBirdCapital have also agreed that if the over-allotment option is exercised by the underwriters in full or in part, they will purchase from us at a price of $10.00 per unit the number of private units (up to a maximum of 65,625 private units) that is necessary to maintain in the trust account an amount equal to approximately $10.20 per share sold to the public in this offering. These additional private units will be purchased in a private placement that will occur simultaneously with the purchase of units resulting from Table of Contents The pro forma net tangible book value per share after the offering is calculated as follows: Numerator: Net tangible book value before the offering $ (28,063 ) Net proceeds from this offering and private placement of private units 86,195,000 Plus: Offering costs accrued for and paid in advance, excluded from tangible book value before this offering 52,500 Plus: Proceeds from sale of unit purchase option to underwriters 100 Less: Proceeds held in the trust account subject to conversion (80,644,994 ) $ 5,574,543 Denominator: Shares of common stock outstanding prior to this offering 2,100,000 (1) Shares of common stock to be sold in this offering 8,400,000 Shares of common stock underlying the rights to be sold in this offering 840,000 Shares of common stock to be sold in private placement 542,500 Shares of common stock underlying the rights to be sold in private placement 54,250 Less: Shares subject to conversion (7,909,603 ) 4,027,147 Table of Contents the exercise of the over-allotment option. The foregoing purchases will only be made by our sponsors and EarlyBirdCapital, Inc. (and/or its designees) if they are able to do so in accordance with Regulation M and Sections 9(a)(2) and 10(b) and Rule 10b-5 of the Exchange Act. The private units are identical to the units sold in this offering. However, the holders have agreed (A) to vote their private shares in favor of any proposed business combination, (B) not to propose, or vote in favor of, an amendment to our amended and restated certificate of incorporation with respect to our pre-business combination activities prior to the consummation of such a business combination, (C) not to convert any private shares in connection with a stockholder vote to approve our proposed initial business combination and (D) that such private shares shall not participate in any liquidating distribution upon winding up if a business combination is not consummated. Additionally, the purchasers of the private units have agreed not to transfer, assign or sell any of the private units until after the completion of our initial business combination. In order to meet our working capital needs following the consummation of this offering, our sponsors, officers and directors may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination, without interest, or, at the lender s discretion, up to $500,000 of the notes may be converted upon consummation of our business combination into additional private units at a price of $10.00 per unit (which, for example, would result in the holders being issued 55,000 shares of common stock if $500,000 of notes were so converted since the 50,000 rights included in the private units would result in the issuance of 5,000 shares of common stock upon the closing of our business combination). Our stockholders have approved the issuance of the shares of common stock upon conversion of such notes, to the extent the holder wishes to so convert them at the time of the consummation of our initial business combination. If we do not complete a business combination, the loans will not be repaid. Eric S. Rosenfeld is our promoter, as that term is defined under the Federal securities laws. Eric S. Rosenfeld 1,128,750 Chairman and Chief Executive Officer DKU 2013, LLC 378,750 Sponsor The K2 Principal Fund L.P. 505,000 Sponsor In July 2013, Eric Rosenfeld transferred 15,000 shares to each of John P. Schauerman, Jeffrey M. Moses, Margery Kraus, each a member of the board of directors, and Joel Greenblatt, our special advisor, at the same purchase price originally paid by him for such shares. In September 2013, we effected a stock dividend of 0.2 shares of Class A common stock for each outstanding share of Class A common stock, resulting in our sponsors owning an aggregate of 2,415,000 insider shares. Thereafter, Mr. Rosenfeld transferred 224,437 shares to David Sgro, 96,188 shares to Gregory Monahan and 12,825 shares to Victor Bonilla, at the same purchase price originally paid by him for such shares. On October 3, 2013, we amended our certificate of incorporation to reclassify our authorized capital into a single class of common stock such that each share of Class A common stock became a share of common stock. If the underwriters do not exercise all or a portion of their over-allotment option, our sponsors will forfeit up to an aggregate of 315,000 insider shares in proportion to the portion of the over-allotment option that was not exercised. If such shares are forfeited, we will record the forfeited shares as treasury stock and simultaneously retire the shares. Upon receipt, such forfeited shares would then be immediately cancelled which would result in the retirement of the treasury shares and a corresponding charge to additional paid-in capital. If the underwriters determine the size of the offering should be increased (including pursuant to Rule 462(b) under the Securities Act) or decreased, a share dividend or a contribution back to capital, as applicable, would be effectuated in order to maintain our sponsors ownership at a percentage of the number of shares of common stock to be sold in this offering. An increase in offering size of up to 20% could result in the per-share conversion or liquidation price decreasing by as much as $0.09. Our sponsors and EarlyBirdCapital have committed that they and/or their designees will purchase, pursuant to a written subscription agreement with us and Graubard Miller, as escrow agent, the 542,500 private units (500,500 units by our sponsors and 42,000 units by EarlyBirdCapital), for a total purchase price of $5,425,000, from us. These purchases will take place on a private placement basis simultaneously with the consummation of this offering. Our sponsors and EarlyBirdCapital have also agreed that if the over-allotment option is exercised by the underwriters in full or in part, they will purchase from us at a price of $10.00 per unit the number of private units (up to a maximum of 65,625 private units) that is necessary to maintain in the trust account an amount equal to approximately $10.20 per share sold to the public in this offering. These additional private units will be purchased in a private placement that will occur simultaneously with the purchase of units resulting from the exercise of the over-allotment option. The foregoing purchases will only be made by our sponsors and EarlyBirdCapital, Inc. (and/or its designees) if they are able to do so in accordance with Regulation M and Sections 9(a)(2) and 10(b) and Rule 10b-5 of the Exchange Act. The purchase price for the private units will be delivered to Graubard Miller, our counsel in connection with this offering, who will also be acting solely as escrow agent in connection with the private sale of private units, at least 24 hours prior to the date of this prospectus to hold in a non-interest bearing account until we consummate this offering. Graubard Miller will deposit the purchase price into the trust account simultaneously with the consummation of the offering or the over-allotment option, as the case may be. The private units are identical to the units sold in this offering. However, the holders have agreed (A) to vote their private shares in favor of any proposed business combination, (B) not to propose, or vote in favor of, an Table of Contents CAPITALIZATION The following table sets forth our capitalization at June 30, 2013 and as adjusted to give effect to the sale of our units offered by this prospectus and the private units and the application of the estimated net proceeds derived from the sale of such securities: June 30, 2013(1) Table of Contents amendment to our amended and restated certificate of incorporation with respect to our pre-business combination activities prior to the consummation of such a business combination, (C) not to convert any private shares into the right to receive cash from the trust account in connection with a stockholder vote to approve our proposed initial business combination or a vote to amend the provisions of our amended and restated certificate of incorporation relating to stockholders rights or pre-business combination activity and (D) that such private shares shall not participate in any liquidating distribution upon winding up if a business combination is not consummated. Additionally, the purchasers have agreed not to transfer, assign or sell any of the private units (except to certain permitted transferees) until the completion of our initial business combination. Our sponsors have agreed that if, in order to consummate any initial business combination, the holders of insider shares or private units are required by the sellers of any target business to contribute back to our capital a portion of any such securities for cancellation by our company, they will contribute back to our capital a proportionate number of insider shares or private units, as applicable, pro rata with the other holders of insider shares or private units, as applicable. However, they will only be able to contribute back to our capital such securities if such contribution is consistent with Regulation M and Section 10(b) and Rule 10b-5 of the Exchange Act. In order to meet our working capital needs following the consummation of this offering, our sponsors, officers and directors may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination, without interest, or, at the lender s discretion, up to $500,000 of the notes may be converted upon consummation of our business combination into additional private units at a price of $10.00 per unit (which, for example, would result in the holders being issued 55,000 shares of common stock if $500,000 of notes were so converted since the 50,000 rights included in the private units would result in the issuance of 5,000 shares of common stock upon the closing of our business combination). Our stockholders have approved the issuance of the shares of common stock upon conversion of such notes, to the extent the holder wishes to so convert them at the time of the consummation of our initial business combination. If we do not complete a business combination, the loans will not be repaid. The holders of our insider shares issued and outstanding on the date of this prospectus, as well as the holders of the private units (and underlying securities) and any shares our sponsors, officers, directors or their affiliates may be issued in payment of working capital loans made to us, will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of this offering. The holders of a majority of these securities are entitled to make up to two demands that we register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the private units or shares issued in payment of working capital loans made to us can elect to exercise these registration rights at any time after we consummate a business combination. In addition, the holders have certain piggy-back registration rights with respect to registration statements filed subsequent to our consummation of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements. As of June 30, 2013, Eric S. Rosenfeld loaned to us an aggregate of $65,000 to cover expenses related to this offering. The loan is payable without interest on the earlier of (i) June 26, 2014, (ii) the date on which we consummate our initial public offering or (iii) the date on which we determine to not proceed with our initial public offering. We intend to repay this loan from the proceeds of this offering not being placed in the trust account. Crescendo Advisors II, LLC, an affiliate of Eric S. Rosenfeld, has agreed that, commencing on the date of this prospectus through the earlier of our consummation of our initial business combination or our liquidation, it will make available to us certain general and administrative services, including office space, utilities and administrative support, as we may require from time to time. We have agreed to pay Crescendo Advisors II, LLC $10,000 per month for these services. Eric S. Rosenfeld is the majority holder of Crescendo Advisors II, LLC. Accordingly, Eric S. Rosenfeld will benefit from the transaction to the extent of his interest Actual Table of Contents in Crescendo Advisors II, LLC. However, this arrangement is solely for our benefit and is not intended to provide Eric S. Rosenfeld compensation in lieu of a salary. We believe, based on rents and fees for similar services in the New York City metropolitan area, that the fee charged by Crescendo Advisors II, LLC is at least as favorable as we could have obtained from an unaffiliated person. Other than the fees described above, no compensation or fees of any kind, including finder s fees, consulting fees or other similar compensation, will be paid to any of our sponsors, officers, directors or their respective affiliates, for services rendered to us prior to, or in connection with the consummation of our initial business combination (regardless of the type of transaction that it is). However, such individuals will receive reimbursement for any out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses, performing business due diligence on suitable target businesses and business combinations as well as traveling to and from the offices, plants or similar locations of prospective target businesses to examine their operations. There is no limit on the amount of out-of-pocket expenses reimbursable by us; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the trust account and the interest income earned on the amounts held in the trust account, such expenses would not be reimbursed by us unless we consummate an initial business combination. After our initial business combination, members of our management team who remain with us may be paid consulting, board, management or other fees from the combined company with any and all amounts being fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of a stockholder meeting held to consider our initial business combination, as it will be up to the directors of the post-combination business to determine executive and director compensation. In this event, such compensation will be publicly disclosed at the time of its determination in a Current Report on Form 8-K, as required by the SEC. All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions will require prior approval by our audit committee and a majority of our uninterested independent directors, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our audit committee and a majority of our disinterested independent directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties. Related Party Policy Our Code of Ethics requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except under guidelines approved by the board of directors (or the audit committee). Related-party transactions are defined as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) we or any of our subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a director, (b) greater than 5% beneficial owner of our shares of common stock, or (c) immediate family member, of the persons referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of his or her position. We also require each of our directors and executive officers to annually complete a directors and officers questionnaire that elicits information about related party transactions. These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer. To further minimize conflicts of interest, we have agreed not to consummate our initial business combination with an entity that is affiliated with any of our sponsors, officers or directors unless we have As Adjusted(2) Table of Contents obtained an opinion from an independent investment banking firm and the approval of a majority of our disinterested and independent directors (if we have any at that time) that the business combination is fair to our unaffiliated stockholders from a financial point of view. Furthermore, in no event will any of our sponsors, officers, directors or their respective affiliates be paid any finder s fee, consulting fee or other similar compensation prior to, or for any services they render in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is). Note payable to related party(3) $ 65,000 $ Common stock, $.0001 par value, -0- and 7,909,603 shares which are subject to possible conversion 80,644,994 (5) Stockholders equity: Preferred stock, $.0001 par value, 1,000,000 shares authorized; none issued or outstanding Common stock, $.0001 par value, 15,000,000 shares authorized; 2,415,000 shares issued and outstanding, actual; 3,132,897 shares(4) issued and outstanding (excluding 7,909,603 shares subject to possible conversion), as adjusted 241 313 Additional paid-in capital 24,759 5,574,793 Deficit accumulated during the development stage (563 ) (563 ) Total stockholders equity: $ 24,437 $ 5,574,543 Total capitalization $ 89,437 $ 86,219,537 (6) Table of Contents DESCRIPTION OF SECURITIES General Our certificate of incorporation currently authorizes the issuance of 15,000,000 shares of common stock, par value $0.0001, and 1,000,000 shares of preferred stock, par value $0.0001. As of the date of this prospectus, 2,415,000 shares of common stock are outstanding, held by ten stockholders of record. No shares of preferred stock are currently outstanding. The following description summarizes all of the material terms of our securities. Because it is only a summary, it may not contain all the information that is important to you. For a complete description you should refer to our amended and restated certificate of incorporation and bylaws, which are filed as exhibits to the registration statement of which this prospectus is a part. Common Stock Our holders of record of our common stock are entitled to one vote for each share held on all matters to be voted on by stockholders. In connection with any vote held to approve our initial business combination, our sponsors, as well as all of our officers and directors, have agreed to vote their respective shares of common stock owned by them immediately prior to this offering, including both the insider shares and the private shares, and any shares acquired in this offering or following this offering in the open market, in favor of the proposed business combination. We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the outstanding shares of common stock voted are voted in favor of the business combination. Our board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares eligible to vote for the election of directors can elect all of the directors. Pursuant to our amended and restated certificate of incorporation, if we do not consummate our initial business combination within 18 months from the closing of this offering (or 24 months from the closing of this offering if the extension criteria described elsewhere in this prospectus is met), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Our sponsors have agreed to waive their rights to share in any distribution with respect to their insider shares and private shares. Our stockholders have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the shares of common stock, except that public stockholders have the right to have their shares of common stock converted to cash equal to their pro rata share of the trust account if they vote on the proposed business combination and the business combination is completed. Additionally, if we were to seek to amend any provisions of our amended and restated certificate of incorporation relating to stockholders rights or pre-business combination activity, dissenting public stockholders will have the right to convert their public shares to cash in connection with any such vote. In either of such events, converting stockholders would be paid their pro rata portion of the trust account promptly following consummation of the business combination or the approval of the amendment to the amended and restated certificate of incorporation. If the business combination is not consummated or the amendment is not approved, stockholders will not be paid such amounts. Preferred Stock There are no shares of preferred stock outstanding. Our amended and restated certificate of incorporation authorizes the issuance of 1,000,000 shares of preferred stock with such designation, rights and preferences as Table of Contents may be determined from time to time by our board of directors. No shares of preferred stock are being issued or registered in this offering. Accordingly, our board of directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of common stock. However, the underwriting agreement prohibits us, prior to a business combination, from issuing preferred stock which participates in any manner in the proceeds of the trust account, or which votes as a class with the common stock on our initial business combination. We may issue some or all of the preferred stock to effect our initial business combination. In addition, the preferred stock could be utilized as a method of discouraging, delaying or preventing a change in control of us. Although we do not currently intend to issue any shares of preferred stock, we reserve the right to do so in the future. Rights Each holder of a right will automatically receive one-tenth (1/10) of a share of common stock upon consummation of our initial business combination, even if the holder of such right converted all shares of common stock held by him, her or it in connection with the initial business combination or an amendment to our amended and restated certificate of incorporation with respect to our pre-business combination activities. No additional consideration will be required to be paid by a holder of rights in order to receive his, her or its additional shares of common stock upon consummation of an initial business combination as the consideration related thereto has been included in the unit purchase price paid for by investors in this offering. The shares issuable upon exchange of the rights will be freely tradable (except to the extent held by affiliates of ours). If we enter into a definitive agreement for a business combination in which we will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share consideration the holders of the common stock will receive in the transaction on an as-converted into common stock basis. If we are unable to complete an initial business combination within the required time period and we liquidate the funds held in the trust account, holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution from our assets held outside of the trust account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders of the rights upon consummation of an initial business combination. Additionally, in no event will we be required to net cash settle the rights. Accordingly, the rights may expire worthless. Purchase Option We have agreed to sell to EarlyBirdCapital an option to purchase up to a total of 420,000 units at $11.75 per unit. The units issuable upon exercise of this option are identical to those offered by this prospectus. Accordingly, after the business combination shares of the purchase option will be to purchase 462,000 shares of common stock as the rights will result in the issuance of 42,000 additional shares for the same aggregate purchase price. Dividends We have not paid any cash dividends on our shares of common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any dividends subsequent to our initial business combination will be within the discretion of our then board of directors. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board does not anticipate declaring any dividends in the foreseeable future. Our Transfer Agent The transfer agent for our securities is Continental Stock Transfer & Trust Company, 17 Battery Place, New York, New York 10004. Table of Contents Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and By-Laws Staggered board of directors Our amended and restated certificate of incorporation provides that our board of directors will be classified into three classes of directors of approximately equal size. As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at two or more annual meetings. Special meeting of stockholders Our bylaws provide that special meetings of our stockholders may be called only by a majority vote of our board of directors, by our president or by our chairman or by our secretary at the request in writing of stockholders owning a majority of our issued and outstanding capital stock entitled to vote. Advance notice requirements for stockholder proposals and director nominations Our bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders must provide timely notice of their intent in writing. To be timely, a stockholder s notice will need to be delivered to our principal executive offices not later than the close of business on the 60th day nor earlier than the close of business on the 90th day prior to the scheduled date of the annual meeting of stockholders. In the event that less than 70 days notice or prior public disclosure of the date of the annual meeting of stockholders is given, a stockholder s notice shall be timely if delivered to our principal executive offices not later than the 10th day following the day on which public announcement of the date of our annual meeting of stockholders is first made or sent by us. Our bylaws also specify certain requirements as to the form and content of a stockholders meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders. Authorized but unissued shares Our authorized but unissued shares of common stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved shares of common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise. Table of Contents SHARES ELIGIBLE FOR FUTURE SALE Immediately after this offering, we will have 11,042,500 shares of common stock outstanding, or 12,683,125 shares of common stock if the over-allotment option is exercised in full. Of these shares, the 8,400,000 shares of common stock sold in this offering, or 9,660,000 shares of common stock if the over-allotment option is exercised in full, will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the remaining shares are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering. Rule 144 A person who has beneficially owned restricted shares of common stock for at least six months would be entitled to sell their shares provided that (1) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (2) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale. Persons who have beneficially owned restricted shares of common stock for at least six months but who are our affiliates at the time of, or any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period a number of shares that does not exceed the greater of either of the following: 1% of the number of shares then outstanding, which will equal 110,425 shares of common stock immediately after this offering (or 126,831 shares of common stock if the over-allotment option is exercised in full); and the average weekly trading volume of the shares of common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. Sales under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us. Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies Historically, the SEC staff had taken the position that Rule 144 is not available for the resale of securities initially issued by companies that are, or previously were, blank check companies, like us. The SEC has codified and expanded this position in the amendments discussed above by prohibiting the use of Rule 144 for resale of securities issued by any shell companies (other than business combination related shell companies) or any issuer that has been at any time previously a shell company. The SEC has provided an important exception to this prohibition, however, if the following conditions are met: the issuer of the securities that was formerly a shell company has ceased to be a shell company; the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. As a result, it is likely that pursuant to Rule 144, our sponsors will be able to sell their insider shares and private units freely without registration one year after we have completed our initial business combination assuming they are not an affiliate of ours at that time. Registration Rights The holders of our insider shares issued and outstanding on the date of this prospectus, as well as the holders of the private units and any shares our sponsors, officers, directors or their affiliates may be issued in payment of working capital loans made to us, will be entitled to registration rights pursuant to an agreement Table of Contents to be signed prior to or on the effective date of this offering. The holders of a majority of these securities are entitled to make up to two demands that we register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the private units or shares issued in payment of working capital loans made to us can elect to exercise these registration rights at any time commencing on the date that we consummate our initial business combination. In addition, the holders have certain piggy-back registration rights with respect to registration statements filed subsequent to our consummation of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements. EarlyBirdCapital, Inc. Total 8,400,000 A copy of the underwriting agreement has been filed as an exhibit to the registration statement of which this prospectus forms a part. As described elsewhere in this prospectus, our sponsors and EarlyBirdCapital have committed that they and/or their designees will purchase the private units (for an aggregate purchase price of $5,425,000). These purchases will take place on a private placement basis simultaneously with the consummation of this offering. Our sponsors and EarlyBirdCapital have also agreed that if the over-allotment option is exercised by the underwriters in full or in part, they will purchase from us at a price of $10.00 per unit the number of private units (up to a maximum of 65,625 private units) that is necessary to maintain in the trust account an amount equal to approximately $10.20 per share sold to the public in this offering. These additional private units will be purchased in a private placement that will occur simultaneously with the purchase of units resulting from the exercise of the over-allotment option. The sponsors have further agreed that if the underwriters determine that additional private units must be purchased in order to consummate this offering based on market conditions at that time, the sponsors will purchase such additional private units. Accordingly, the commitment to make such purchase has been made prior to the execution of the underwriting agreement referred to above. The determination of whether additional private units must be purchased will be made by the underwriters prior to the effective date of the registration statement of which this prospectus forms a part and in no event will such determination occur after the signing of the underwriting agreement. All such purchases would be consummated simultaneously with the consummation of this offering or the over-allotment option, as the case may be. Furthermore, a breach on the part of the sponsors to purchase any such additional private units after the execution of the underwriting agreement will in no way release the underwriters from their obligations to purchase the number of units set forth above in connection with this offering. Listing of our Securities We expect our units, common stock and rights to be quoted on Nasdaq under the symbols QTETU, QTET, and QTETR, respectively. We anticipate that our units will be listed on Nasdaq on or promptly after the effective date of the registration statement. Following the date the shares of our common stock and rights are eligible to trade separately, we anticipate that the shares of our common stock and rights will be listed separately and as a unit on Nasdaq. We cannot guarantee that our securities will be approved for listing on Nasdaq or that they will continue to be listed on Nasdaq after this offering. Pricing of this Offering We have been advised by the representative that the underwriters propose to offer the units to the public at the offering price set forth on the cover page of this prospectus. They may allow some dealers concessions not in excess of $0.__ per unit and the dealers may reallow a concession not in excess of $0.__ per unit to other dealers. Prior to this offering there has been no public market for our securities. The public offering price of the units was negotiated between us and the representative of the underwriters. Factors considered in determining the prices and terms of the shares include: the history of other similarly structured blank check companies; (1) The offering expenses are estimated at $500,000. In addition, we have agreed to pay for the FINRA-related fees and expenses of the underwriters legal counsel and certain diligence and other fees, which are capped at $27,000. In connection the merger and acquisition services described below, we have agreed to reimburse certain reasonable costs and expenses incurred by EarlyBirdCapital in its capacity as our investment banker, which are capped at $15,000 with respect to expenses reimbursed prior to the closing of a business combination. No discounts or commissions will be paid on the sale of the private units. Merger/Acquisition Fee We have engaged EarlyBirdCapital as an investment banker to provide us with merger and acquisition services in connection with our initial business combination. Pursuant to this arrangement, we anticipate EarlyBirdCapital will assist us in negotiating and structuring the terms of our initial business combination, valuing and structuring any proposed offer to be made to a target business and negotiating a letter of intent and/or definitive agreement with any potential target business. We will pay EarlyBirdCapital a cash fee for such services upon the consummation of our initial business combination in an amount equal to 3.75% of the total gross proceeds raised in the offering (exclusive of any applicable finders fees which might become payable). Table of Contents Private Units EarlyBirdCapital has committed to purchase 42,000 private units for an aggregate purchase price of $420,000, or $10.00 per unit. EarlyBirdCapital has also agreed that if the over-allotment option is exercised by the underwriters in full or in part, it will purchase from us at a price of $10.00 per unit the number of private units (up to a maximum of 6,300 private units) that is necessary to maintain in the trust account an amount equal to approximately $10.20 per share of common stock sold to the public in this offering. The foregoing purchases will only be made by EarlyBirdCapital, Inc. (and/or its designees) if it is able to do so in accordance with Regulation M and Sections 9(a)(2) and 10(b) and Rule 10b-5 of the Exchange Act. The private units are identical to the units being sold in this offering. The private units and underlying shares of common stock and rights have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1) of the FINRA Manual. Additionally, the private units purchased by EarlyBirdCapital may not be sold, transferred, assigned, pledged or hypothecated for a one-year period (including the foregoing 180-day period) following the date of this prospectus except to any selected dealer participating in the offering and the bona fide officers or partners of the underwriter and any such participating selected dealer. EarlyBirdCapital has agreed that the private units it purchases will not be sold or transferred by it (except to certain permitted transferees) until after we have completed an initial business combination. We have granted the holders of private units, including EarlyBirdCapital, the registration rights as described under the section Shares Eligible for Future Sale Registration Rights. Purchase Option We have agreed to sell to EarlyBirdCapital (and/or its designees), for $100, an option to purchase up to a total of 420,000 units exercisable at $11.75 per unit (or an aggregate exercise price of $4,935,000) commencing on the later of the consummation of a business combination and one year from the date of this prospectus. Since the option is not exercisable until at the earliest the consummation of a business combination, and the rights will automatically result in the offering of shares of common stock upon consummation of a business combination, the option will effectively represent the right to purchase 462,000 shares of common stock (which includes the 42,000 shares of common stock issuable for the rights included in the units) for $4,935,000. The purchase option may be exercised for cash or on a cashless basis, at the holder s option, and expires five years from the effective date of the registration statement of which this prospectus forms a part. The option and the 420,000 units, as well as the 462,000 shares of common stock that may be issued upon exercise of the option, have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1) of FINRA s NASD Conduct Rules. Additionally, the option may not be sold, transferred, assigned, pledged or hypothecated for a one-year period (including the foregoing 180-day period) following the date of this prospectus except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners. The option grants to holders demand and piggy back rights for periods of five and seven years, respectively, from the effective date of the registration statement of which this prospectus forms a part with respect to the registration under the Securities Act of the securities directly and indirectly issuable upon exercise of the option. We will bear all fees and expenses attendant to registering the securities, other than underwriting commissions which will be paid for by the holders themselves. The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances including in the event of a stock dividend, or our recapitalization, reorganization, merger or consolidation. However, the option will not be adjusted for issuances of common stock at a price below its exercise price. Regulatory Restrictions on Purchase of Securities Rules of the SEC may limit the ability of the underwriters to bid for or purchase our units before the distribution of the units is completed. However, the underwriters may engage in the following activities in accordance with the rules: Stabilizing Transactions. The underwriters may make bids or purchases soley for the purpose of preventing or retarding a decline in the price of our units, as long as stabilizing bids do not exceed the offering price of $10.00 and the underwriters comply with all other applicable rules. Table of Contents Over-Allotments and Syndicate Coverage Transactions. The underwriters may create a short position in our units by selling more of our units than are set forth on the cover page of this prospectus up to the amount of the over-allotment option. This is known as a covered short position. The underwriters may also create a short position in our units by selling more of our units than are set forth on the cover page of this prospectus and the units allowed by the over-allotment option. This is known as a naked short position. If the underwriters create a short position during the offering, the representative may engage in syndicate covering transactions by purchasing our units in the open market. The representative may also elect to reduce any short position by exercising all or part of the over-allotment option. Determining what method to use in reducing the short position depends on how the units trade in the aftermarket following the offering. If the unit price drops following the offering, the short position is usually covered with shares purchased by the underwriters in the aftermarket. However, the underwriters may cover a short position by exercising the over-allotment option even if the unit price drops following the offering. If the unit price rises after the offering, then the over-allotment option is used to cover the short position. If the short position is more than the over-allotment option, the naked short must be covered by purchases in the aftermarket, which could be at prices above the offering price. Penalty Bids. The representative may reclaim a selling concession from a syndicate member when the units originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions. Stabilization and syndicate covering transactions may cause the price of our securities to be higher than they would be in the absence of these transactions. The imposition of a penalty bid might also have an effect on the prices of our securities if it discourages resales of our securities. Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of our securities. These transactions may occur on Nasdaq, in the over-the-counter market or on any trading market. If any of these transactions are commenced, they may be discontinued without notice at any time. Other Terms Except as set forth above, we are not under any contractual obligation to engage any of the underwriters to provide any services for us after this offering, and have no present intent to do so. However, any of the underwriters may, among other things, introduce us to potential target businesses or assist us in raising additional capital, as needs may arise in the future. If any underwriter provides services to us after this offering, we may pay the underwriter fair and reasonable fees that would be determined at that time in an arm s length negotiation; provided that no agreement will be entered into with the underwriter and no fees for such services will be paid to the underwriter prior to the date which is 90 days after the date of this prospectus, unless FINRA determines that such payment would not be deemed underwriter s compensation in connection with this offering. Indemnification We have agreed to indemnify the underwriters against some liabilities, including civil liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in this respect. Selling Restrictions Canada Resale Restrictions We intend to distribute our securities in the Province of Ontario, Canada (the Canadian Offering Jurisdiction ) by way of a private placement and exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in such Canadian Offering Jurisdiction. Any resale of our Table of Contents securities in Canada must be made under applicable securities laws that will vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Canadian resale restrictions in some circumstances may apply to resales of interests made outside of Canada. Canadian purchasers are advised to seek legal advice prior to any resale of our securities. We may never be a reporting issuer , as such term is defined under applicable Canadian securities legislation, in any province or territory of Canada in which our securities will be offered and there currently is no public market for any of the securities in Canada, and one may never develop. Canadian investors are advised that we have no intention to file a prospectus or similar document with any securities regulatory authority in Canada qualifying the resale of the securities to the public in any province or territory in Canada. Representations of Purchasers A Canadian purchaser will be required to represent to us and the dealer from whom the purchase confirmation is received that: the purchaser is entitled under applicable provincial securities laws to purchase our securities without the benefit of a prospectus qualified under those securities laws; where required by law, that the purchaser is purchasing as principal and not as agent; the purchaser has reviewed the text above under Resale Restrictions; and the purchaser acknowledges and consents to the provision of specified information concerning its purchase of our securities to the regulatory authority that by law is entitled to collect the information. Rights of Action Ontario Purchasers Only Under Ontario securities legislation, certain purchasers who purchase a security offered by this prospectus during the period of distribution will have a statutory right of action for damages, or while still the owner of our securities, for rescission against us in the event that this prospectus contains a misrepresentation without regard to whether the purchaser relied on the misrepresentation. The right of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the cause of action and three years from the date on which payment is made for our securities. The right of action for rescission is exercisable not later than 180 days from the date on which payment is made for our securities. If a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against us. In no case will the amount recoverable in any action exceed the price at which our securities were offered to the purchaser and if the purchaser is shown to have purchased the securities with knowledge of the misrepresentation, we will have no liability. In the case of an action for damages, we will not be liable for all or any portion of the damages that are proven to not represent the depreciation in value of our securities as a result of the misrepresentation relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to an Ontario purchaser. The foregoing is a summary of the rights available to an Ontario purchaser. Ontario purchasers should refer to the complete text of the relevant statutory provisions. Enforcement of Legal Rights All of our directors and officers as well as the experts named herein are located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All of our assets and the assets of those persons are located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada. Collection of Personal Information If a Canadian purchaser is resident in or otherwise subject to the securities laws of the Province of Ontario, the Purchaser authorizes the indirect collection of personal information pertaining to the Canadian purchaser by the Ontario Securities Commission (the OSC ) and each Canadian purchaser will be required to Table of Contents acknowledge and agree that the Canadian purchaser has been notified by us (i) of the delivery to the OSC of personal information pertaining to the Canadian purchaser, including, without limitation, the full name, residential address and telephone number of the Canadian purchaser, the number and type of securities purchased and the total purchase price paid in respect of the securities, (ii) that this information is being collected indirectly by the OSC under the authority granted to it in securities legislation, (iii) that this information is being collected for the purposes of the administration and enforcement of the securities legislation of Ontario, and (iv) that the title, business address and business telephone number of the public official in Ontario who can answer questions about the OSC s indirect collection of the information is the Administrative Assistant to the Director of Corporate Finance, the Ontario Securities Commission, Suite 1903, Box 5520, Queen Street West, Toronto, Ontario, M5H 3S8, Telephone: (416) 593-8086, Facsimile: (416) 593-8252. Table of Contents LEGAL MATTERS Graubard Miller, New York, New York, is acting as our counsel in connection with the registration of our securities under the Securities Act of 1933, and as such, will pass upon the validity of the securities offered in this offering. McDermott Will & Emery LLP, New York, New York, is acting as counsel to the underwriters. EXPERTS The financial statements of Quartet Merger Corp. (a company in the development stage) as of June 30, 2013 and for the period from April 19, 2013 (inception) through June 30, 2013 appearing in this prospectus have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report, thereon (which contains an explanatory paragraph relating to substantial doubt about the ability of Quartet Merger Corp. (a company in the development stage) to continue as a going concern as described in Note 1 to the financial statements), appearing elsewhere in this prospectus, and are included in reliance on such report given on the authority of such firm as an experts in auditing and accounting. WHERE YOU CAN FIND ADDITIONAL INFORMATION We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the units we are offering by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information about us and our shares, you should refer to the registration statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document. Upon completion of this offering, we will be subject to the information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the SEC s website at www.sec.gov . You may also read and copy any document we file with the SEC at its public reference facility at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities. Table of Contents Comparison to Offerings of Blank Check Companies Subject to Rule 419 The following table compares and contrasts the terms of our offering and the terms of an offering of blank check companies under Rule 419 promulgated by the SEC assuming that the gross proceeds, underwriting discounts and underwriting expenses for the Rule 419 offering are the same as this offering and that the underwriters will not exercise their over-allotment option. None of the terms of a Rule 419 offering will apply to this offering because we will have net tangible assets in excess of $5,000,001 upon the successful consummation of this offering and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact. Terms of the Offering Terms Under a Rule 419 Offering Table of Contents Terms of the Offering Terms Under a Rule 419 Offering Table of Contents Terms of the Offering Terms Under a Rule 419 Offering Table of Contents MANAGEMENT Directors and Executive Officers Our current directors and executive officers are as follows: Name Age Position Table of Contents expenses exceed the amount of available proceeds not deposited in the trust account and the amount of interest income from the trust account that may be released to us as working capital. The insider shares beneficially owned by our officers and directors will be released from escrow only if our initial business combination is successfully completed. Additionally, our officers and directors will not receive liquidation distributions with respect to any of their insider shares or private shares. Furthermore, our sponsors have agreed that the private units will not be sold or transferred by them until after we have completed our initial business combination. For the foregoing reasons, our board may have a conflict of interest in determining whether a particular target business is appropriate to effect our initial business combination with. In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if: the corporation could financially undertake the opportunity; the opportunity is within the corporation s line of business; and it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation. Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. In addition, conflicts of interest may arise when our board evaluates a particular business opportunity with respect to the above-listed criteria. The above mentioned conflicts may not be resolved in our favor. The following table summarizes the other relevant pre-existing fiduciary or contractual obligations of our officers and directors: Name of Affiliated Company Name of Individual(s) Priority/Preference relative to Quartet Merger Corp. Table of Contents Name of Affiliated Company Name of Individual(s) Priority/Preference relative to Quartet Merger Corp. Table of Contents PRINCIPAL STOCKHOLDERS The following table sets forth information regarding the beneficial ownership of our shares of common stock and rights as of the date of this prospectus and as adjusted to reflect the sale of our shares of common stock and rights included in the units offered by this prospectus (assuming none of the individuals listed purchase units in this offering), by: each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock and rights; each of our officers and directors; and all of our officers and directors as a group. Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock and rights beneficially owned by them. Prior to Offering After Offering(2) Name and Address of Beneficial Owner(1) Amount and Nature of Beneficial Ownership of Common Stock Approximate Percentage of Outstanding Shares of Common Stock Amount and Nature of Beneficial Ownership of Common Stock(3) Approximate Percentage of Outstanding Shares of Common Stock Amount and Nature of Beneficial Ownership of Rights Approximate Percentage of Outstanding Rights Eric S. Rosenfeld 949,051 (4) 39.3 % 868,409 (4) 7.9 % 46,786 * David D. Sgro 224,437 (5) 9.3 % 196,802 (5) 1.8 % 2,500 * John P. Schauerman 18,000 * 25,500 * 7,500 * Jeffrey M. Moses 18,000 * 25,500 * 7,500 * Margery Kraus 18,000 * 25,500 * 7,500 * DKU 2013, LLC(6) 454,500 18.8 % 573,300 5.2 % 180,000 2.1 % The K2 Principal Fund L.P.(7) 606,000 25.1 % 764,400 6.9 % 240,000 2.9 % All directors and executive officers as a group (five individuals) 1,227,488 50.8 % 1,141,711 10.3 % 71,786 * Table of Contents CERTAIN TRANSACTIONS In June 2013, we issued 2,012,500 shares of Class A common stock to our sponsors for $25,000 in cash, at a purchase price of approximately $0.01 per share, in connection with our organization, as follows: Name Number of Shares Relationship to Us Table of Contents UNDERWRITING We intend to offer our securities described in this prospectus through the underwriters named below. Subject to the terms and conditions of the underwriting agreement, the underwriters, through their representative EarlyBirdCapital, Inc., have severally agreed to purchase from us on a firm commitment basis the following respective number of units at a public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus: Underwriter Number of Units Table of Contents prior offerings of those companies; our prospects for acquiring an operating business at attractive values; our capital structure; securities exchange listing requirements; market demand; expected liquidity of our securities; and general conditions of the securities markets at the time of the offering. However, although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities for an operating company in a particular industry since the underwriters are unable to compare our financial results and prospects with those of public companies operating in the same industry. Over-allotment Option We have granted the underwriters an option to buy up to 1,260,000 additional units. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with this offering. The underwriters have 45 days from the date of this prospectus to exercise this option. If the underwriters exercise this option, they will each purchase additional units approximately in proportion to the amounts specified in the table above. Commissions and Discounts The following table shows the public offering price, underwriting discount to be paid by us to the underwriters and the proceeds, before expenses, to us. This information assumes either no exercise or full exercise by the representative of the underwriters of its over-allotment option. Per Unit Without Over-allotment With Over-allotment Public offering price $ 10.00 $ 84,000,000 $ 96,600,000 Discount $ 0.325 $ 2,730,000 $ 3,139,500 Proceeds before expenses (1) $ 9.675 $ 81,270,000 $ 93,460,500 Table of Contents Quartet Merger Corp. (A Company in the Development Stage) INDEX TO FINANCIAL STATEMENTS Page Table of Contents Quartet Merger Corp. (A Company In the Development Stage) Balance Sheet June 30, 2013 ASSETS Current assets Cash $ 77,500 Deferred offering costs associated with initial public offering (Note 4) 52,500 Total assets $ 130,000 LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities: Accounts payable $ 563 Deferred offering costs payable 40,000 Note payable to stockholder (Note 5) 65,000 Total liabilities 105,563 Commitments (Note 6) Stockholders equity (Notes 6 & 7) Preferred stock, $.0001 par value Authorized 1,000,000 shares; none issued Common stock, $.0001 par value Authorized 12,500,000 shares, 2,415,000 shares issued and outstanding(1)(2) 241 Additional paid-in capital 24,759 Deficit accumulated during the development stage (563 ) Total stockholders equity 24,437 Total liabilities and stockholders equity $ 130,000 Table of Contents Quartet Merger Corp. (A Company In the Development Stage) Statement of Operations For the period April 19, 2013 (Inception) to June 30, 2013 Formation costs $ 496 General and administrative costs 67 Net loss $ (563 ) Weighted average shares outstanding(1)(2) 2,100,000 Basic and diluted net loss per share $ (0.00 ) Table of Contents Quartet Merger Corp. (A Company In the Development Stage) Statement of Changes in Stockholders Equity For the period April 19, 2013 (Inception) to June 30, 2013 Common Stock Shares(1)(2) Amount Additional Paid-in Capital Deficit Accumulated During the Development Stage Stockholders Equity Table of Contents Until _________, 2013, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. No dealer, salesperson or any other person is authorized to give any information or make any representations in connection with this offering other than those contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or a solicitation of an offer to buy any securities by anyone in any jurisdiction in which the offer or solicitation is not authorized or is unlawful. $84,000,000 Quartet Merger Corp. 8,400,000 Units PROSPECTUS EarlyBirdCapital, Inc. ____________, 2013 Table of Contents PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 13. Other Expenses of Issuance and Distribution. The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions) will be as follows: Initial Trustees fee $ 500 (1) SEC Registration Fee 13,176 FINRA filing fee 14,990 Accounting fees and expenses 40,000 Nasdaq listing fees 50,000 Printing and engraving expenses 55,000 Directors & Officers liability insurance premiums 75,000 (2) Legal fees and expenses 250,000 Miscellaneous 76,334 (3) Total $ 575,000 (1) In addition to the initial acceptance fee that is charged by Continental Stock Transfer & Trust Company, as trustee, the registrant will be required to pay to Continental Stock Transfer & Trust Company $5,500 for acting as trustee, as transfer agent of the registrant s shares of common stock and as escrow agent. (2) This amount represents the approximate amount of director and officer liability insurance premiums the registrant anticipates paying following the consummation of its initial public offering and until it consummates a business combination. (3) This amount represents additional expenses that may be incurred by the Company in connection with the offering over and above those specifically listed above, including distribution and mailing costs. Item 14. Indemnification of Directors and Officers. Our amended and restated certificate of incorporation provides that all directors, officers, employees and agents of the registrant shall be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the Delaware General Corporation Law. Section 145 of the Delaware General Corporation Law concerning indemnification of officers, directors, employees and agents is set forth below. Section 145. Indemnification of officers, directors, employees and agents; insurance. (a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or 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 expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person s conduct was unlawful. The termination of any action, suit or II-1 Table of Contents proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person s conduct was unlawful. (b) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or 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 expenses (including attorneys fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. (c) To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys fees) actually and reasonably incurred by such person in connection therewith. (d) Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer of the corporation at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders. (e) Expenses (including attorneys fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys fees) incurred by former directors and officers or other employees and agents of the corporation or by persons serving at the request of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the corporation deems appropriate. (f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to such provision after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred. II-2 Table of Contents (g) A corporation shall have power to 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 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 such person and incurred by such person in any such capacity, or arising out of such person s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section. (h) For purposes of this section, references to the corporation shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. (i) For purposes of this section, references to other enterprises shall include employee benefit plans; references to fines shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to serving at the request of the corporation shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner not opposed to the best interests of the corporation as referred to in this section. (j) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, 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 a person. (k) The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation s obligation to advance expenses (including attorneys fees). Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. Paragraph B of Article Eighth of our amended and restated certificate of incorporation provides: The Corporation, to the full extent permitted by Section 145 of the GCL, as amended from time to time, shall indemnify all persons whom it may indemnify pursuant thereto. Expenses (including attorneys fees) incurred by an officer or director in defending any civil, criminal, administrative, or investigative action, suit or proceeding for which such officer or director may be entitled to indemnification hereunder shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized hereby. II-3 Table of Contents Pursuant to the Underwriting Agreement filed as Exhibit 1.1 to this Registration Statement, we have agreed to indemnify the Underwriters and the Underwriters have agreed to indemnify us against certain civil liabilities that may be incurred in connection with this offering, including certain liabilities under the Securities Act. Item 15. Recent Sales of Unregistered Securities. (a) During the past three years, we sold the following shares of common stock without registration under the Securities Act: Name Number of Shares Eric S. Rosenfeld 1,068,750 John P. Schauerman 15,000 Jeffrey M. Moses 15,000 Margery Kraus 15,000 DKU 2013, LLC 378,750 The K2 Principal Fund L.P. 505,000 Joel Greenblatt 15,000 All such shares were issued in June 2013 in connection with our organization pursuant to the exemption from registration contained in Section 4(2) of the Securities Act as they were sold to accredited investors. The shares issued to the individuals and entities above were sold for an aggregate offering price of $25,000 at an average purchase price of approximately $0.01 per share. Effective September 9, 2013, we authorized a stock dividend of 0.2 shares of Class A common stock for each outstanding share of Class A common stock. In addition, the Company s sponsors and EarlyBirdCapital, Inc. have committed to purchase an aggregate of 542,500 private units from us on a private placement basis simultaneously with the consummation of this offering, for an aggregate purchase price of $5,425,000. These purchases will take place on a private placement basis simultaneously with the consummation of our initial public offering. Our sponsors and EarlyBirdCapital, Inc. have also agreed that if the over-allotment option is exercised by the underwriters in full or in part, they will purchase from us at a price of $10.00 per unit the number of private units (up to a maximum of 65,625 private units) that is necessary to maintain in the trust account an amount equal to approximately $10.20 per share sold to the public in this offering. These issuances will be made pursuant to the exemption from registration contained in Section 4(2) of the Securities Act. No underwriting discounts or commissions were paid with respect to such sales. Item 16. Exhibits and Financial Statement Schedules. (a) The following exhibits are filed as part of this Registration Statement: Exhibit No. Description 1.1 Form of Underwriting Agreement. 1.2 Merger and Acquisition Agreement. 3.1 Certificate of Incorporation.* 3.2 Certificate of Amendment of Certificate of Incorporation.* 3.3 Bylaws.* 3.4 Form of Amended and Restated Certificate of incorporation. 4.1 Specimen Unit Certificate.* 4.2 Specimen Common Stock Certificate.* 4.3 Specimen Rights Certificate.* 4.4 Form of Unit Purchase Option to be issued to EarlyBirdCapital, Inc.* 4.5 Form of Rights Agreement.* II-4 Table of Contents Exhibit No. Description 5.1 Opinion of Graubard Miller.* 10.1 Form of Letter Agreement among the Registrant, EarlyBirdCapital, Inc. and each of the Registrant s Officers, Directors and Sponsors.* 10.2 Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant. 10.3 Form of Escrow Agreement between the Registrant, Continental Stock Transfer & Trust Company and the Initial Stockholders.* 10.4 Form of Letter Agreement between Crescendo Advisors II, LLC and Registrant regarding administrative support.* 10.5 Promissory Note issued to Eric S. Rosenfeld.* 10.6 Form of Registration Rights Agreement among the Registrant and the Sponsors and EarlyBirdCapital, Inc.* 10.7 Form of Subscription Agreements among the Registrant, Graubard Miller and the Purchasers of Private Units.* 14 Code of Ethics.* 23.1 Consent of Marcum LLP. 23.2 Consent of Graubard Miller (included in Exhibit 5.1).* 24 Power of Attorney (included on signature page of this Registration Statement). 99.1 Form of Audit Committee Charter.* 99.2 Form of Nominating Committee Charter.* * Previously filed. Item 17. Undertakings. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: i. To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; ii. To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement; iii. To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-5 Table of Contents (4) That for the purpose of determining any liability under the Securities Act of 1933 in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; (ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; (iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and (iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. (5) That for the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. (b) The undersigned hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (d) The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-6 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York, on the 25 th day of October, 2013. QUARTET MERGER CORP. By: /s/ Eric S. Rosenfeld Name: Eric S. Rosenfeld Title Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Eric S. Rosenfeld and David D. Sgro his true and lawful attorney-in-fact, with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities to sign any and all amendments including post-effective amendments to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute, each acting alone, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Name Position Date /s/ Eric S. Rosenfeld Eric S. Rosenfeld Chairman and Chief Executive Officer (Principal executive officer) October 25, 2013 /s/ David D. Sgro David D. Sgro Chief Financial Officer (Principal financial and accounting officer), Secretary and Director October 25, 2013 /s/ John P. Schauerman John P. Schauerman Director October 25, 2013 /s/ Jeffrey M. Moses Jeffrey M. Moses Director October 25, 2013 /s/ Margery Kraus Margery Kraus Director October 25, 2013 II-7 Common shares issued to initial stockholders on June 24, 2013, at approximately $0.01242 per share 2,415,000 $ 241 $ 24,759 $ $ 25,000 Net Loss (563 ) (563 ) Balance at June 30, 2013 2,415,000 $ Table of Contents QUARTET MERGER CORP. TABLE OF CONTENTS Page Prospectus Summary 1
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+PROSPECTUS SUMMARY As used in this prospectus, references to the Company, we, our , us or Transfer Enterprises refer to Transfer Enterprises, Inc. unless the context otherwise indicates. As used in this prospectus, references to the customer, client, client company, or issuer refer to those companies that will utilize our services as a Transfer Agent. The following summary highlights selected information contained in this prospectus. Before making an investment decision, you should read the entire prospectus carefully, including the Risk Factors section, the financial statements, and the notes to the financial statements. Our Company Transfer Services, Inc. was incorporated on May 9, 2013, under the laws of the State of Delaware for the purpose of acquiring U.S. Stock Transfer Corp. and providing transfer agent services to an array of both public and privately held companies directly and/or through agreements with third party transfer agents ( White Label Arrangements ). As of the date of this prospectus, we have cash reserves of $0. Although the Company is currently provided free access to office space and telephone and internet service by The Owings Group, LLC, it is anticipated that we will begin to pay for these expenses if we realize 75% participation or higher in this Offering (See "Use of Proceeds" on page 15. As the Company begins to expand and increase its client base, we expect additional administrative and operational costs. We anticipate that some of these costs will be covered revenues from Company operations and the balance will be covered by using proceeds from this Offering. If we are unsuccessful in raising sufficient funds from this Offering, we may need to seek alternative means of funding. We are a development stage company that has not realized any revenues to date. We are in the early stages of developing our business which is to perform the responsibilities of a transfer agent for corporations with shares that are both actively and inactively traded in the AMEX, NASDAQ, OTC Bulletin Board, and pink sheets markets directly and/or through a white label arrangement with an existing transfer agent. Our business is regulated by the Securities and Exchange Commission (SEC). On behalf of our corporate clients, we will perform three main functions: Issue and cancel certificates to reflect changes in ownership Act as an intermediary for the company Handle lost, destroyed, or stolen certificates Our plan of operations over the 12 month period following successful completion of our offering of 2,000,000 shares of common stock is to (i) establish a white label arrangement with an existing transfer agent, (ii) continue to develop and enhance our website for $35,000 to $75,000, (iii) engage in marketing efforts to solicit our services to prospective clients for $50,000 to $125,000, (iv) hiring new employees for $60,000 to $100,000, (v) set up a new office for between $25,000 and $45,000, (vi) payoff our $200,000 obligation to Owings-1, LLC, and (vii) cover the costs of being a reporting issuer which are estimated to be $15,000 (See "Plan of Operations" on page 38). Our estimated annual cost of $15,000 for being a reporting issuer under the Securities Exchange Act of 1934 does not include the cost of this offering. We need to raise at least $200,000 from this Offering to satisfy an obligation to Owings-1, LLC for services rendered in relation to this S-1 registration (See Client Services Agreement" in Exhibit 10.1. The $200,000 is due to Owings-1, LLC once this prospectus is declared effective. In the event that we fail to raise sufficient proceeds through this Offering to satisfy this obligation, Owings-1, LLC has verbally agreed to renegotiate or extend the repayment terms of this liability. We need to realize maximum participation in this Offering to implement our complete Plan of Operation. If we are unsuccessful in this offering, we will need minimum financing of $15,000 over the next 12 months to cover the costs of our quarterly and annual filing requirements. If necessary, The Owings Group, LLC, has verbally agreed to provide us with an on demand, non-interest bearing loan to cover these costs. In this event, The Owings Group, LLC has also verbally agreed to continue providing us with office space and access to internet and telephone services free of charge. There is, however, no guarantee that Owings-1, LLC will make accommodations in relation to our $200,000 obligation or that The Owings Group, LLC will extend a loan to us or provide free access to office space and internet and telephone service in the event our Offering fails. If we do not realize sufficient participation in our Offering, and are unable to negotiate alternative means of financing, we could be forced to cease operations. From inception until the date of this filing we have had limited operating activities, primarily consisting of (i) the incorporation of the Company, (ii) development of our business plan, (iii) our initial equity funding by The Owings Group, LLC, (iv) the acquisition of U.S. Stock Transfer Corp. and its transfer agent license from Sycamore Ventures, Inc., (v) preliminary sales efforts with target companies, and (vi) the pursuit of a White Label Arrangement. On May 10, 2013, The Owings Group, LLC, was issued 19,000,000 shares of our common stock, with a par value of $0.001, for a commitment to pay $1,000 once our bank account is opened and good will consideration in the form of access to its existing professional relationships with potential customers, management-related expertise, rent-free office space, access to internet and phone service, as well as access to a client relationship management (CRM) database. On May 10, 2013 the Company issued 1,000,000 shares of common stock, with a par value of $0.001, to Sycamore Ventures, Inc. in return for ownership of U.S. Stock Transfer Corp. and the rights to its transfer agent license. Using this license, the Company intends on marketing its services to small-to-medium sized public and private companies, with a special emphasis on newly public companies as well as those listed on the Over-The-Counter Bulletin Board ( OTCBB ). The Company will accomplish this by capitalizing on our President s existing professional relationships and contacts as well as by marketing directly by telephone and email - to those companies listed on the OTCBB. On May 20, 2013, Sycamore Ventures, Inc. acquired 19,000,000 shares of the Company s common stock from The Owings Group, LLC. As a result, Sycamore Ventures, Inc. currently owns 100% of our issued and outstanding common stock. Neither our President nor our Secretary have prior experience performing the responsibilities of a transfer agent and have no direct training or experience in the responsibilities of a transfer agent, and as such our President and Secretary may not be fully aware of many of the specific requirements related to the responsibilities of a transfer agent. As such, we will initially be heavily dependent on the White Label partner partner to ensure compliance with pertinent rules and regulations as well as for the successful administration of transfer agent services. However, our President is a licensed attorney who has been practicing in the field of securities law for over 25 years. Our President currently devotes approximately 5 to 10 hours a week to Company matters and expects to devote approximately 10 to 15 hours a week to Company matters after the completion of this offering. Our Secretary currently devotes approximately 5 hours a week to Company matters and expects to devote approximately 5 to 10 hours a week to Company matters after the completion of this offering. Neither our Director, Mary Radomsky, nor our President, Jerry Gruenbaum, nor our Secretary, David Mathias, agreed to serve as a Director or Officers of the Company at least in part due to any plan, agreement, or understanding that he would solicit, participate in, or facilitate the sale of the enterprise to (or a business combination with) a third party looking to obtain or become a public reporting entity and also confirms that he has no such present intentions. Our financial statements from inception on May 9, 2013 through May 31, 2013 report no revenues and a net loss of $119,196. Our independent auditor has issued an audit opinion for our Company which includes a statement expressing substantial doubt as to our ability to continue as a going concern. The Company s principal office is located at 10045 Red Run Boulevard, suite 140, Owings Mills, MD 21117. Our telephone number is 443-334-8840. We are an emerging growth company within the meaning of the federal securities laws. For as long as we are an emerging growth company, we will not be required to comply with the requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and the exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We intend to take advantage of these reporting exemptions until we are no longer an emerging growth company. For a description of the qualifications and other requirements applicable to emerging growth companies and certain elections that we have made due to our status as an emerging growth company, see RISK FACTORS--RISKS RELATED TO THIS OFFERING AND OUR COMMON STOCK - WE ARE AN EMERGING GROWTH COMPANY AND WE CANNOT BE CERTAIN IF THE REDUCED DISCLOSURE REQUIREMENTS APPLICABLE TO EMERGING GROWTH COMPANIES WILL MAKE OUR COMMON STOCK LESS ATTRACTIVE TO INVESTORS on page 6 of this prospectus. This is a direct participation offering since we are offering the stock directly to the public without the participation of an underwriter. Our President will be solely responsible for selling shares under this offering and no commission will be paid on any sales. There has been no market for our securities and a public market may never develop, or, if any market does develop, it may not be sustained. Our common stock is not traded on any exchange or on the over-the-counter market. After the effective date of the registration statement relating to this prospectus, we hope to have a market maker file an application with the Financial Industry Regulatory Authority ( FINRA ) for our common stock to be eligible for trading on the Over-the-Counter Bulletin Board. We do not yet have a market maker who has agreed to file such application. There can be no assurance that our common stock will ever be quoted on a stock exchange or a quotation service or that any market for our stock will develop. You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common shares. Under U.S. federal securities legislation, our common stock will be penny stock . Penny stock is any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investor s account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve an investor s account for transactions in penny stocks, the broker or dealer must obtain financial information, investment experience, and objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and that the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the penny stock rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001583138_pulse_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001583138_pulse_prospectus_summary.txt
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+PROSPECTUS SUMMARY As used in this prospectus, references to the Company, we, our , us or QurApps refer to QurApps, Inc. unless the context otherwise indicates. The following summary highlights selected information contained in this prospectus. Before making an investment decision, you should read the entire prospectus carefully, including the Risk Factors section, the financial statements, and the notes to the financial statements. Our Company QurApps, Inc., was incorporated on May 31, 2013, under the laws of the State of Nevada, for the purpose of the development of a mobile software app, called I Feed Me , that enables consumers to obtain meal recipes by selecting 3 to 5 food products, and once entered, the software app will provide a list of recipes from which to cook meals, based on the 3 to 5 food products chosen. Additionally, app users will be able to rate recipes, add their personal recipes and receive real-time notifications when new consumers select their recipes to use. We have not commenced development of our planned mobile software application. We are a development stage company that has not realized any revenues to date, and our accumulated deficit as of June 30, 2013 is $7,930. To date we have raised an aggregate of $18,000 through a private placement of our securities to our sole officer and director, Alon Nigri. Proceeds from the private placement were used for working capital. Our independent auditor has issued an audit opinion for our Company which includes a statement expressing substantial doubt as to our ability to continue as a going concern. The Company s principal offices are located at Gilboa 26 Street, Pardes-Hanna, Israel. Our telephone number is +972-544474070. Because we are a shell company, the Rule 144 safe harbor is not available for the resale of any restricted securities issued by us in any subsequent unregistered offering. This will likely make it more difficult for us to attract additional capital through subsequent unregistered offerings because purchasers of securities in such unregistered offerings will not be able to resell their securities in reliance on Rule 144, a safe harbor on which holders of restricted securities usually rely to resell securities. We plan to raise the additional funding for our twelve month business plan by selling the 1,666,668 shares in this offering. We cannot provide any assurance that we will be able to sell any of the shares being offered to raise sufficient funds to proceed with our twelve month business plan. From inception until the date of this filing we have had limited operating activities, primarily consisting of the incorporation of our company, the initial equity funding by our sole officer and director, completing our business plan and developing our website. We received our initial funding of $18,000 through the sale of common stock to our sole officer and director, Alon Nigri, who purchased an aggregate of 6,000,000 shares of common stock at $0.003 per share, for aggregate proceeds of $18,000. Our financial statements from inception from inception on May 31, 2013, through June 30, 2013, report no revenues and a net loss of $7,930. Our independent auditor has issued an audit opinion for our Company which includes a statement expressing substantial doubt as to our ability to continue as a going concern. Alon Nigri, our sole officer and director did not agree to serve as an officer or director of the Company at least in part due to a plan, agreement or understanding that he would solicit, participate in, or facilitate the sale of the enterprise to (or a business combination with) a third party which desires to obtain or become a public reporting entity, and Mr. .Nigri confirms that he has no such present intention. As of the date of this prospectus, there is no public trading market for our common stock and no assurance that a trading market for our securities will ever develop. We are an emerging growth company within the meaning of the federal securities laws. For as long as we are an emerging growth company, we will not be required to comply with the requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and the exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We intend to take advantage of these reporting exemptions until we are no longer an emerging growth company. For a description of the qualifications and other requirements applicable to emerging growth companies and certain elections that we have made due to our status as an emerging growth company, see RISK FACTORS RISKS RELATED TO THIS OFFERING AND OUR COMMON STOCK - WE ARE AN `EMERGING GROWTH COMPANY AND WE CANNOT BE CERTAIN IF THE REDUCED DISCLOSURE REQUIREMENTS APPLICABLE TO EMERGING GROWTH COMPANIES WILL MAKE OUR COMMON STOCK LESS ATTRACTIVE TO INVESTORS on page 6 of this prospectus. This is a direct participation offering since we are offering the stock directly to the public without the participation of an underwriter. Our sole officer and director will be solely responsible for selling shares under this offering and no commission will be paid on any sales. There has been no market for our securities and a public market may never develop, or, if any market does develop, it may not be sustained. Our common stock is not traded on any exchange or on the over-the-counter market. After the effective date of the registration statement relating to this prospectus, we hope to have a market maker file an application with the Financial Industry Regulatory Authority ( FINRA ) for our common stock to be eligible for trading on the Over-the-Counter Bulletin Board. We do not yet have a market maker who has agreed to file such quotation service or that any market for our stock will develop. You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common shares. Under U.S. federal securities legislation, our common stock will be penny stock . Penny stock is any equity that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investor s account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve an investor s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the penny stock rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. THE OFFERING Securities offered: 1,666,668 shares of our common stock, par value $0.003 per share. Offering price: $0.03 Duration of offering: The 1,666,668 shares of common stock are being offered for a period of 16 months. Net proceeds to us: $50,000, assuming the maximum number of shares sold. For further information on the Use of Proceeds, see page 14 (1). Market for the common shares: There is no public market for our shares. Our common stock is not traded on any exchange or on the over-the-counter market. After the effective date of the registration statement relating to this prospectus, we hope to have a market maker file an application with the Financial Industry Regulatory Authority ( FINRA ) for our common stock to eligible for trading on the Over The Counter Bulletin Board. We do not yet have a market maker who has agreed to file such application. There is no assurance that a trading market will develop, or, if developed, that it will be sustained. Consequently, a purchaser of our common stock may find it difficult to resell the securities offered herein should the purchaser desire to do so when eligible for public resale. Shares outstanding prior to offering: 6,000,000 Shares outstanding after offering: 7,666,668
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+MULTRI PRECISION, LLC NOTES TO CONDENSED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2013 (UNAUDITED) NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATIONS (A) Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in Accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations. It is management's opinion, however that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year. Activities during the development stage include developing the business plan and raising capital. (B) Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. (C) Cash For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. (D) Earnings/ Loss Per Share Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB Accounting Standards Codification No. 260, Earnings per Share. As of March 31, 2013 and 2012, warrants were not included in the computation of income/ (loss) per share because their inclusion is anti-dilutive. (E) Research and Development Costs The Company expenses all research and development costs as incurred for which there is no alternative future use. These costs also include the expensing of employee compensation and employee stock based compensation. (F) Income Taxes The Company accounts for income taxes under FASB Codification Topic 740-10-25 ( ASC 740-10-25 ). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Effective January 1, 2009, the Company adopted guidance regarding accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold an income tax position is required to meet before being recognized in the financial statements and applies to all federal or state income tax positions. Each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. As of December 31, 2012 and 2011 there were no amounts that had been accrued in respect to uncertain tax positions. None of the Company s federal or state income tax returns is currently under examination by the Internal Revenue Service ( IRS ) or state authorities. However, fiscal years 2009 and later remain subject to examination by the IRS and respective states. (G) Derivative Financial Instruments Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model. (H) Stock-Based Compensation In December 2004, the FASB issued FASB Accounting Standards Codification No. 718, Compensation Stock Compensation. Under FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company applies this statement prospectively. Equity instruments ( instruments ) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards Codification No. 718. FASB Accounting Standards Codification No. 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments. In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification. (I) Business Segments The Company operates in one segment and therefore segment information is not presented. (J) Recent Accounting Pronouncements In February 2013, FASB issued Accounting Standards Update 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (a consensus of the FASB Emerging Issues Task Force). This guidance requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date. This stipulates that (1) it will include the amount the entity agreed to pay for the arrangement between them and the other entities that are also obligated to the liability and (2) any additional amount the entity expects to pay on behalf of the other entities. The objective of this update is to provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements. The amendments in this update are effective for fiscal periods (and interim reporting periods within those years) beginning after December 15, 2013. This standard is not expected to have a material impact on the Company s reported results of operations or financial position.
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diff --git a/parsed_sections/prospectus_summary/2013/CIK0001595092_soloro_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIK0001595092_soloro_prospectus_summary.txt
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index 0000000000000000000000000000000000000000..556d7f3d234a01dd427c520f3828472343194a33
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@@ -0,0 +1,38 @@
+Prospectus Summary
+ This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information that you should consider before investing in the common stock. You should carefully read the entire prospectus, including Risk Factors , Management s Discussion and Analysis of Financial Condition and Results of Operations and the Financial Statements, before making an investment decision. In this prospectus, the terms ( Company, we, us and our refer to Soloro Gold).
+ About the Company
+ We are an exploration stage company, incorporated in the State of Nevada on November 2, 2005 as Nevada Gold Corp. On January 23, 2013 we changed our name to Oro Nevada Resources Inc., and on February 15, 2013, after further consideration, we change our name to Soloro Gold. 
+ Business Summary
+ We plan on engaging in the exploration and development of gold mining properties. The Company owns unpatented gold and mineral resource claims located in Elko County, Nevada, Hidalgo County, New Mexico, Grant County, New Mexico, and Chaffee County, Colorado (collectively the Claims ).
+ Nevada Claims
+ We own fifty-one (51) unpatented gold and mineral mining claims in Elko County, Nevada ( Nevada Claims ) pursuant to a Claim Transfer Agreement (the CTA ) between the Company and Matchpoint International Limited fka Isaiah Capital Trust ( ICT ) dated January 1, 2013. Prior to entering into the CTA and owning the Nevada Claims, we had the exclusive right and option to mine the Nevada Claims pursuant to an Exploration and Mineral Option Agreement with ICT, dated January 1, 2006, as amended November 30, 2008 (the EMOA ).
+ New Mexico and Colorado Claims
+ We own an aggregate of one hundred eighty-four (184) unpatented lode mining claims in New Mexico and Colorado (the NM and CO Claims ), of which eighty-eight (88) are in Grant County, New Mexico, thirty-nine (39) in Chaffee County, Colorado, and fifty-seven (57) in Hidalgo County, New Mexico, pursuant to a Purchase and Sale Agreement with Kenneth P. Hodgson and Rita J. Hodgson dated November 30, 2012.
+ Principle Executive Offices
+ Our corporate offices are located at 2681 Chateau Clermont Street, Henderson, NV 89044, and our telephone number is. Our website is www.solorogold.com.
+ 4
+
+ 
+
+ Offering Summary
+ 
+ 
+
+ 
+ Securities being offered by the Selling Shareholders
+ 
+
+ 
+
+ Up to 6,598,885 shares of common stock, par value $0.001 offered by the selling shareholders.
+
+ Offering price per share
+ 
+
+ The price of $0.20 is a fixed price at which the selling security holders may sell their shares until our common stock is quoted on the OTC at which time the shares may be sold at prevailing market prices or privately negotiated prices.
+ 
+
+ Market for the common stock
+ 
+
+ There is no public market for the common stock.
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diff --git a/parsed_sections/prospectus_summary/2013/CIVB_civista_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/CIVB_civista_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..6c13f72ddb85543f486990e21dc12601d048271b
--- /dev/null
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@@ -0,0 +1 @@
+This summary highlights selected information contained elsewhere or incorporated by reference in this prospectus and may not contain all the information that you need to consider in making your investment decision to purchase the depositary shares. You should carefully read this entire prospectus, as well as the information incorporated by reference herein, before deciding whether to invest in the depositary shares. You should carefully consider the section entitled Risk Factors in this prospectus and the documents incorporated by reference herein to determine whether an investment in the depositary shares is appropriate for you. The Company First Citizens was organized under the laws of the State of Ohio on February 19, 1987 and is a registered financial holding company under the Gramm-Leach-Bliley Act of 1999, as amended. Through our subsidiary bank, The Citizens Banking Company ( Citizens or the Bank ), we are primarily engaged in the business of community banking, which accounts for substantially all of our revenue, operating income and assets. Citizens conducts a general banking business that involves collecting customer deposits, making loans, purchasing securities, and offering Trust services. Citizens maintains its main office at 100 East Water Street, Sandusky, Ohio and operates branch banking offices in the following Ohio communities: Sandusky (2), Norwalk (2), Berlin Heights, Huron, Port Clinton, Castalia, New Washington, Shelby (3), Willard, Chatfield, Tiro, Greenwich, Plymouth, Shiloh, Akron, Dublin, Hilliard, Plain City, Russells Point, Urbana (2), West Liberty and Quincy. At September 30, 2013, we had total consolidated assets of approximately $1.1 billion, total loans (net of allowance) of approximately $802.3 million, total deposits of approximately $942.5 million and total shareholders equity of approximately $102.9 million. Our principal executive offices are located at 100 East Water Street, Sandusky, Ohio 44870, and our telephone number is (419) 625-4121. Our Internet address is www.fcza.com. The information on our website is not a part of or incorporated by reference in this prospectus. Business and Strategy Through organic growth and five acquisitions since 1990, First Citizens Banc Corp has transformed into a $1.1 billion financial services company operating in Central and North Central Ohio from a $201 million company as of December 31, 1989. Through Citizens, the Company provides community banking products and services to customers located in both urban and rural areas in its markets. We believe this model has resulted in a historically strong net interest margin and a loyal customer base, which we believe is reflected in our net interest margin of 3.77% at September 30, 2013 and our core deposits constituting 90.1% of total deposits at September 30, 2013. Focus on Long-Term Customer Relationships. We focus on acquiring and retaining long-term customer relationships. We train and educate our commercial lending, select banking, cash management, and wealth management groups to work together as a cohesive, interactive unit designed to build and grow customer relationships. We focus on building multi-account customer relationships as opposed to one off transactions, which we believe is reflected in our loan growth during 2012 of approximately $31.0 million, net of the approximately $15.0 million a month in repayments. Our branch network is focused on taking care of our deposit customers and seeking out referral opportunities, with the goal of cementing a long-term relationship and providing us with low-cost funding and cross-sell opportunities to generate additional fee income. The results of these efforts can be seen in the percentage of total deposits represented by noninterest-bearing deposits (checking accounts), which increased from 15% of total deposits in 2008 to approximately 22% of total deposits at year end 2012. We have also seen growth in our wealth management department, which had over $440 million in assets under management at September 30, 2013. Table of Contents The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where an offer or sale thereof is not permitted. Subject to Completion, dated November 1, 2013 PROSPECTUS Up to 1,000,000 Depositary Shares Each Representing a 1/40th Interest in a 6.50% Noncumulative Redeemable Convertible Perpetual Preferred Share, Series B We are offering up to 1,000,000 depositary shares, each representing a 1/40th ownership interest in a 6.50% Noncumulative Redeemable Convertible Perpetual Preferred Share, Series B, of First Citizens Banc Corp with a liquidation preference of $1,000 per share (equivalent to $25.00 per depositary share) (the Series B Preferred Shares ). We are offering the depositary shares for sale to the public in the following descending order of priority: our existing shareholders, our customers and members of the communities we serve, and, to the extent that depositary shares remain available for purchase, in a syndicated offering managed by Keefe, Bruyette & Woods, Inc. See Plan of Distribution Offering Priorities. We must sell a minimum of 800,000 depositary shares to complete the offering. The minimum number of depositary shares you may purchase in the offering is 40 depositary shares. The maximum number of depositary shares that you may purchase in the offering is the lesser of (i) 160,000 depositary shares or (ii) the number of depositary shares, assuming conversion of such depositary shares into our common shares, whereby your total beneficial ownership of our common shares (including any common shares currently owned) would not exceed 5% of our outstanding common shares after the offering. The filling of all subscriptions that we receive will depend on the availability of depositary shares after satisfaction of all subscriptions of all persons having a higher priority in the offering and to the minimum, maximum and overall purchase limitations.
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diff --git a/parsed_sections/prospectus_summary/2013/COTY_coty-inc_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/COTY_coty-inc_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a1f3e47c2af3f5be6bc3401dbc822f6821adba63
--- /dev/null
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@@ -0,0 +1 @@
+Prospectus Summary 1
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diff --git a/parsed_sections/prospectus_summary/2013/ESPR_esperion_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/ESPR_esperion_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..9bd1fa5073aa752e945e8a59bd2ec8a406188bf4
--- /dev/null
+++ b/parsed_sections/prospectus_summary/2013/ESPR_esperion_prospectus_summary.txt
@@ -0,0 +1 @@
+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should carefully read this entire prospectus, including our financial statements and the related notes included elsewhere in this prospectus. You should also consider, among other things, the matters described under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in each case appearing elsewhere in this prospectus. Unless otherwise stated, all references to "us," "our," "Esperion," "we," the "Company" and similar designations refer to Esperion Therapeutics, Inc. Overview We are a biopharmaceutical company focused on the research, development and commercialization of therapies for the treatment of patients with elevated levels of low-density lipoprotein cholesterol (LDL-C) and other cardiometabolic risk factors. ETC-1002, our lead product candidate, is a novel, first in class, orally available, once-daily small molecule therapy designed to target known lipid and carbohydrate metabolic pathways to lower levels of LDL-C and to avoid many of the side effects associated with existing LDL-C lowering therapies. To date, we have treated 275 subjects in six completed clinical trials, including three Phase 2a trials. We own the exclusive worldwide rights to ETC-1002. Our founder, Executive Chairman and Chief Scientific Officer, Roger S. Newton, Ph.D., FAHA, co-discovered the statin marketed as Lipitor (atorvastatin calcium), the most prescribed LDL-C lowering therapy in the world and the best-selling drug in the history of the pharmaceutical industry. We believe our management team has demonstrated expertise in understanding cholesterol biosynthesis and other related cardiometabolic pathways, the strengths and weaknesses of currently marketed therapies and the ability to recognize the potential of novel cholesterol regulating therapies. Statins are the current standard of care for LDL-C lowering for approximately 30 million patients in the United States. However, based upon a recent academic survey, we estimate that more than 2 million U.S. adults have discontinued statin therapy because of muscle pain or weakness. We also believe that because symptoms of muscle pain or weakness occur in up to 20% of patients on statin therapy in clinical practice, the size of the statin intolerant market is poised to grow if a novel non-statin therapy becomes available. On June 7, 2013, we reported top-line results for our Phase 2a clinical trial evaluating ETC-1002 as an LDL-C lowering agent specifically in patients with a history of intolerance to two or more statins. This clinical trial met its primary endpoint, demonstrating that ETC-1002 lowered LDL-C by an average of 32%. ETC-1002 was well tolerated and no patients treated with ETC-1002 discontinued the trial because of muscle pain or weakness. We expect to initiate a larger Phase 2b clinical trial in this targeted population by the end of 2013 and to report top-line results by the end of 2014. Our completed Phase 2a clinical trials have demonstrated significant average LDL-C reductions as high as 43% and reductions comparable to statins in levels of high sensitivity C-reactive protein, or hsCRP, a key marker of inflammation. We also intend to advance the development of ETC-1002 as a therapy for the approximately 11 million U.S. patients currently on statin therapy but who are unable to achieve their LDL-C goals. These patients, known as residual risk patients, remain at increased risk for cardiovascular disease. We are currently evaluating the efficacy and interaction of ETC-1002 and a 10 mg dose of atorvastatin calcium in an ongoing Phase 2a clinical trial, and we expect to initiate a larger Phase 2b clinical trial in this patient population by the end of 2013 and to report top-line results by the end of 2014. Amendment No. 2 to FORM S-1 REGISTRATION STATEMENT Under The Securities Act of 1933 Table of Contents ETC-1002 ETC-1002 is a novel, first in class, orally available, once-daily LDL-C lowering small molecule therapy with unique dual mechanisms of action that have the potential to regulate both lipid and carbohydrate metabolism. ETC-1002 works by inhibiting ATP citrate lyase (ACL) and activating 5'-adenosine monophosphate-activated protein kinase (AMPK). Its regulation of ACL and AMPK is complementary, since both enzymes are known to play significant roles in the synthesis of cholesterol and glucose in the liver. By inhibiting cholesterol synthesis in the liver, ETC-1002 causes the liver to take up LDL particles from the blood, which reduces blood LDL-C levels. To date, we have studied ETC-1002 in six clinical trials. The results of our completed Phase 2a clinical trials are summarized below. Patient Population Average Reduction in LDL-C from Baseline p-value Elevated LDL-C and Up to 32% <0.0001 Statin Intolerant Elevated LDL-C Up to 27% <0.0001 Type 2 Diabetes and Up to 43% <0.0001 Elevated LDL-C We have also demonstrated significant reductions in hsCRP in our completed clinical trials. Our post hoc analyses have further indicated that ETC-1002 could potentially have a beneficial effect on blood glucose, blood pressure and excess weight. Across all of our completed clinical trials, ETC-1002 has been well-tolerated and not associated with serious side effects. There have been no serious adverse events in ETC-1002 treated patients. Populations of Interest Statin Intolerant Market We are initially pursuing the clinical development of ETC-1002 as a therapy for patients with elevated levels of LDL-C, or hypercholesterolemia, who are statin intolerant. Various studies estimate that more than 50% of patients stop taking statins within one year of initiating treatment. Not surprisingly, poor statin adherence is associated with worse cardiovascular outcomes. Although several reasons are cited for poor adherence, muscle pain or weakness is the most common side effect experienced by statin users and the most common cause for discontinuing therapy. In addition to the 2 million U.S. adults who have discontinued statin therapy because of muscle pain or weakness, a significant proportion of patients still remain on statin therapy despite these side effects. A study published in the Journal of General Internal Medicine in August 2008 estimated that up to 20% of statin-treated patients in clinical practice complained of muscle pain. The most prescribed therapies for elevated LDL-C levels other than statins each reported average LDL-C lowering of up to 18% in pivotal clinical trials. We believe these modest LDL-C lowering capacities are often insufficient for most hypercholesterolemic patients to reach their LDL-C goals. We believe these points underscore the need for a safe and efficacious non-statin, oral, once-daily, small molecule LDL-C lowering therapy. Residual Risk Market We also intend to continue the development of ETC-1002 as an add-on therapy for hypercholesterolemic patients who are unable to reach their recommended LDL-C goals despite the use of statin therapy. The severity of hypercholesterolemia in these patients, their level of residual cardiovascular disease risk and their therapeutic options all vary widely. Using data from the Centers ESPERION THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 2834 (Primary Standard Industrial Classification Code Number) 26-1870780 (I.R.S. Employer Identification Number) 46701 Commerce Center Drive Plymouth, MI 48170 (734) 862-4840 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Table of Contents for Disease Control and Prevention study, "Vital Signs: Prevalence, Treatment, and Control of High Levels of Low-Density Lipoprotein Cholesterol United States, 1999 - 2002 and 2005 - 2008," we estimate that 70% of the 11 million residual risk patients in the United States, or 7.7 million people, are within 30% of their LDL-C goal. Based upon the clinical results we have observed to date, we believe that ETC-1002, if approved, could be a preferred therapeutic alternative for patients with residual risk, physicians and payors. Our Strategy Our objective is to be a leader in the discovery, development and commercialization of novel therapies for the treatment of patients with hypercholesterolemia and other cardiometabolic risk factors. The core elements of our strategy include: Rapidly advance the clinical development of ETC-1002 as a novel, first in class, orally available, once-daily, small molecule therapy for hypercholesterolemic patients who are statin intolerant. On June 7, 2013, we announced top-line efficacy and safety results from ETC-1002-006, our Phase 2a clinical trial in patients with elevated LDL-C and a history of intolerance to two or more statins. We plan to initiate a Phase 2b clinical trial in approximately 200 statin intolerant patients by the end of 2013 and plan to report its top-line results by the end of 2014. Demonstrate ETC-1002's potential as an add-on therapy for residual risk patients, those who cannot achieve their LDL-C goals despite the use of statin therapy. In the third quarter of 2013, we expect to announce top-line efficacy and safety results from ETC-1002-007, our Phase 2 clinical trial using increasing doses of ETC-1002 as an add-on to a 10 mg dose of atorvastatin calcium. We plan to initiate a Phase 2b clinical trial in approximately 200 residual risk patients by the end of 2013 and plan to report its top-line results by the end of 2014. Residual risk patients in our Phase 2b clinical trial will receive multiple dose strengths of ETC-1002 in tandem with atorvastatin calcium. Develop ETC-1002 for LDL-C lowering in targeted patient populations, and develop our other product candidates to treat cardiometabolic risk factors in additional patient populations. We may initiate additional clinical trials to explore ETC-1002 as a potential therapy for patients with multiple cardiometabolic risk factors, including elevated levels of hsCRP, blood glucose, blood pressure and excess weight. Leverage the expertise of our experienced team of drug developers that are expert in the development of small molecule and biologic cholesterol regulating therapies. Esperion is led by Dr. Roger S. Newton who is joined by an experienced group of pre-clinical and clinical drug developers with prior success in the development of lipid regulating therapies. Our key strengths lie in our understanding of the biology of cholesterol biosynthesis and other complex metabolic pathways and our ability to discover and develop novel therapies to modulate targets in these pathways. Maintain flexibility in commercializing and maximizing the value of our development programs. We may enter into strategic relationships with biotechnology or pharmaceutical companies to realize the full value of ETC-1002 or our other earlier-stage development programs. Risks Affecting Us
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diff --git a/parsed_sections/prospectus_summary/2013/FANG_diamondbac_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/FANG_diamondbac_prospectus_summary.txt
new file mode 100644
index 0000000000000000000000000000000000000000..f102e8e65f9092bc005abbaae31fb62ed7fc9c65
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@@ -0,0 +1 @@
+Table of Contents Congress adopted the Dodd-Frank Wall Street Reform and Consumer Protection Act (HR 4173), which, among other provisions, establishes federal oversight and regulation of the over-the-counter derivatives market and entities that participate in that market. The legislation was signed into law by the President on July 21, 2010. In its rulemaking under the legislation, the Commodities Futures Trading Commission, or CFTC, has issued a final rule on position limits for certain futures and option contracts in the major energy markets and for swaps that are their economic equivalents (with exemptions for certain bona fide hedging transactions). The CFTC s final rule was set aside by the U.S. District Court for the District of Columbia on September 28, 2012 and remanded to the CFTC to resolve ambiguity as to whether statutory requirements for such limits to be determined necessary and appropriate were satisfied. As a result, the rule has not yet taken effect, although the CFTC has indicated that it intends to appeal the court s decision and that it believes the Dodd-Frank Act requires it to impose position limits. The impact of such regulations upon our business is not yet clear. Certain of our hedging and trading activities and those of our counterparties may be subject to the position limits, which may reduce our ability to enter into hedging transactions. In addition, the Dodd-Frank Act does not explicitly exempt end users (such as us) from the requirement to use cleared exchanges, rather than hedging over-the-counter, and the requirements to post margin in connection with hedging activities. While it is not possible at this time to predict when the CFTC will finalize certain other related rules and regulations, the Dodd-Frank Act and related regulations may require us to comply with margin requirements and with certain clearing and trade-execution requirements in connection with our derivative activities, although whether these requirements will apply to our business is uncertain at this time. If the regulations ultimately adopted require that we post margin for our hedging activities or require our counterparties to hold margin or maintain capital levels, the cost of which could be passed through to us, or impose other requirements that are more burdensome than current regulations, our hedging would become more expensive and we may decide to alter our hedging strategy. The financial reform legislation may also require us to comply with margin requirements and with certain clearing and trade-execution requirements in connection with our existing or future derivative activities, although the application of those provisions to us is uncertain at this time. The financial reform legislation may also require the counterparties to our derivative instruments to spin off some of their derivatives activities to separate entities, which may not be as creditworthy as the current counterparties. The new legislation and any new regulations could significantly increase the cost of derivative contracts (including through requirements to post collateral which could adversely affect our available liquidity), materially alter the terms of derivative contracts, reduce the availability of derivatives to protect against risks we encounter, reduce our ability to monetize or restructure our derivative contracts in existence at that time, and increase our exposure to less creditworthy counterparties. If we reduce or change the way we use derivative instruments as a result of the legislation and regulations, our results of operations may become more volatile and our cash flows may be less predictable, which could adversely affect our ability to plan for and fund capital expenditures. Finally, the legislation was intended, in part, to reduce the volatility of oil and natural gas prices, which some legislators attributed to speculative trading in derivatives and commodity instruments related to oil and natural gas. Our revenues could therefore be adversely affected if a consequence of the legislation and regulations is to lower commodity prices. Any of these consequences could have a material adverse effect on our consolidated financial position, results of operations or cash flows. Proposed changes to U.S. tax laws, if adopted, could have an adverse effect on our business, financial condition, results of operations and cash flows. The U.S. President s Fiscal Year 2014 Budget Proposal includes provisions that would, if enacted, make significant changes to U.S. tax laws. These changes include, but are not limited to, (i) eliminating the immediate deduction for intangible drilling and development costs, (ii) eliminating the deduction from income for domestic production activities relating to oil and natural gas exploration and development, (iii) the repeal of the percentage depletion allowance for oil and natural gas properties, (iv) an extension of the amortization period for certain geological and geophysical expenditures and (iv) implementing certain international tax reforms. These proposed changes in the U.S. tax laws, if adopted, or other similar changes that reduce or eliminate deductions currently available with respect to oil and natural gas exploration and development, could adversely affect our business, financial condition, results of operations and cash flows. The adoption of climate change legislation by Congress could result in increased operating costs and reduced demand for the oil and natural gas we produce. In December 2009, the EPA issued an Endangerment Finding that determined that emissions of carbon dioxide, methane and other GHGs present an endangerment to public health and the environment because, according to the EPA, emissions of such gases contribute to warming of the earth s atmosphere and other climatic changes. These findings by the EPA allowed the agency to proceed with the adoption and implementation of regulations that would restrict emissions of GHGs under existing provisions of the federal Clean Air Act. Subsequently, the EPA adopted two sets of related rules, one of which purports to regulate emissions of GHGs from motor vehicles and the other of which regulates emissions of GHGs from certain large stationary sources of emissions such as power plants or industrial facilities. The EPA finalized the motor vehicle rule, which purports to limit emissions of GHGs from motor vehicles manufactured in model years 2012 2016, in April 2010 and it became effective in January 2011. A recent rulemaking proposal by the EPA and the Department of Transportation s National Table of Contents Highway Traffic Safety Administration seeks to expand the motor vehicle rule to include vehicles manufactured in model years 2017 2025. The EPA adopted the stationary source rule, also known as the Tailoring Rule, in May 2010, and it also became effective in January 2011. The Tailoring Rule establishes new GHG emissions thresholds that determine when stationary sources must obtain permits under the Prevention of Significant Deterioration, or PSD, and Title V programs of the Clean Air Act. Facilities required to obtain PSD permits for their GHG emissions also will be required to meet best available control technology standards, which will be established by the states or, in some instances, by the EPA on a case-by-case basis. Additionally, in September 2009, the EPA issued a final rule requiring the reporting of GHG emissions from specified large GHG emission sources in the U.S., including natural gas liquids fractionators and local natural gas/distribution companies, beginning in 2011 for emissions occurring in 2010. In November 2010, the EPA expanded its existing GHG reporting rule to include onshore and offshore oil and natural gas production and onshore processing, transmission, storage and distribution facilities, which may include certain of our facilities, beginning in 2012 for emissions occurring in 2011. The EPA has continued to adopt GHG regulations of other industries, such as the March 2012 proposed GHG rule restricting future development of coal-fired power plants. The proposed rule underwent an extended public comment process, which concluded on June 25, 2012. The EPA is also under a legal obligation pursuant to a consent decree with certain environmental groups to issue new source performance standards for refineries. The EPA is also considering additional regulation of greenhouse gases as air pollutants. As a result of this continued regulatory focus, future GHG regulations of the oil and gas industry remain a possibility. In addition, the U.S. Congress has from time to time considered adopting legislation to reduce emissions of greenhouse gases and almost one-half of the states have already taken legal measures to reduce emissions of greenhouse gases primarily through the planned development of greenhouse gas emission inventories and/or regional greenhouse gas cap and trade programs. Although the U.S. Congress has not adopted such legislation at this time, it may do so in the future and many states continue to pursue regulations to reduce greenhouse gas emissions. Most of these cap and trade programs work by requiring major sources of emissions, such as electric power plants, or major producers of fuels, such as refineries and gas processing plants, to acquire and surrender emission allowances corresponding with their annual emissions of GHGs. The number of allowances available for purchase is reduced each year until the overall GHG emission reduction goal is achieved. As the number of GHG emission allowances declines each year, the cost or value of allowances is expected to escalate significantly. Restrictions on emissions of methane or carbon dioxide that may be imposed in various states could adversely affect the oil and natural gas industry. Currently, while we are subject to certain federal GHG monitoring and reporting requirements, our operations are not adversely impacted by existing federal, state and local climate change initiatives and, at this time, it is not possible to accurately estimate how potential future laws or regulations addressing greenhouse gas emissions would impact our business. In addition, there has been public discussion that climate change may be associated with extreme weather conditions such as more intense hurricanes, thunderstorms, tornados and snow or ice storms, as well as rising sea levels. Another possible consequence of climate change is increased volatility in seasonal temperatures. Some studies indicate that climate change could cause some areas to experience temperatures substantially colder than their historical averages. Extreme weather conditions can interfere with our production and increase our costs and damage resulting from extreme weather may not be fully insured. However, at this time, we are unable to determine the extent to which climate change may lead to increased storm or weather hazards affecting our operations. A change in the jurisdictional characterization of some of our assets by federal, state or local regulatory agencies or a change in policy by those agencies may result in increased regulation of our assets, which may cause our revenues to decline and operating expenses to increase. Section 1(b) of the Natural Gas Act of 1938, or the NGA, exempts natural gas gathering facilities from regulation by the Federal Energy Regulatory Commission, or FERC. We believe that the natural gas pipelines in our gathering systems meet the traditional tests FERC has used to establish whether a pipeline performs a gathering function and therefore is exempt from FERC s jurisdiction under the NGA. However, the distinction between FERC regulated transmission services and federally unregulated gathering services is a fact-based determination. The classification of facilities as unregulated gathering is the subject of ongoing litigation, so the classification and regulation of our gathering facilities are subject to change based on future determinations by FERC, the courts or Congress, which could cause our revenues to decline and operating expenses to increase and may materially adversely affect our business, financial condition or results of operations. In addition, FERC has adopted regulations that may subject certain of our otherwise non-FERC jurisdictional facilities to FERC annual reporting and daily scheduled flow and capacity posting requirements. Additional rules and legislation pertaining to those and other matters may be considered or adopted by FERC from time to time. Failure to comply with those regulations in the future could subject us to civil penalty liability, which could have a material adverse effect on our business, financial condition or results of operations. Table of Contents We rely on a few key employees whose absence or loss could adversely affect our business. Many key responsibilities within our business have been assigned to a small number of employees. The loss of their services could adversely affect our business. In particular, the loss of the services of one or more members of our executive team, including our Chief Executive Officer, Travis D. Stice, could disrupt our operations. We have employment agreements with these executives which contain restrictions on competition with us in the event they cease to be employed by us. However, as a practical matter, such employment agreements may not assure the retention of our employees. Further, we do not maintain key person life insurance policies on any of our employees. As a result, we are not insured against any losses resulting from the death of our key employees. A significant reduction by Wexford of its ownership interest in us could adversely affect us Prior to October 11, 2012, Wexford beneficially owned 100% of our equity interests. Upon completion of our initial public offering, Wexford beneficially owned approximately 44.4% of our common stock. Upon completion of this offering, assuming Wexford or its affiliates make no additional purchases of our common stock, Wexford will beneficially own approximately 25.5% of our common stock (approximately 25.2% if the underwriters option to purchase additional shares is exercised in full). Further, the Chairman of our Board of Directors is an affiliate of Wexford. We believe that Wexford s substantial ownership interest in us provides Wexford with an economic incentive to assist us to be successful. Upon the expiration of the lock-up restrictions on transfers or sales of our securities by or on behalf of entities controlled by Wexford imposed in connection with this offering, Wexford will not be subject to any obligation to maintain its ownership interest in us and may elect at any time thereafter to sell all or a substantial portion of or otherwise reduce its ownership interest in us. If Wexford sells all or a substantial portion of its ownership interest in us, Wexford may have less incentive to assist in our success and its affiliate(s) that serve as members of our board of directors may resign. Such actions could adversely affect our ability to successfully implement our business strategies which could adversely affect our cash flows or results of operations. We also receive certain services, including drilling services from entities controlled by Wexford. These service contracts may generally be terminated on 30-days notice. In the event Wexford ceases to own a significant ownership interest in us, such services may not be available to us on terms acceptable to us, if at all. Drilling for and producing oil and natural gas are high-risk activities with many uncertainties that may result in a total loss of investment and adversely affect our business, financial condition or results of operations. Our drilling activities are subject to many risks. For example, we cannot assure you that new wells drilled by us will be productive or that we will recover all or any portion of our investment in such wells. Drilling for oil and natural gas often involves unprofitable efforts, not only from dry wells but also from wells that are productive but do not produce sufficient oil or natural gas to return a profit at then realized prices after deducting drilling, operating and other costs. The seismic data and other technologies we use do not allow us to know conclusively prior to drilling a well that oil or natural gas is present or that it can be produced economically. The costs of exploration, exploitation and development activities are subject to numerous uncertainties beyond our control, and increases in those costs can adversely affect the economics of a project. Further, our drilling and producing operations may be curtailed, delayed, canceled or otherwise negatively impacted as a result of other factors, including: unusual or unexpected geological formations; loss of drilling fluid circulation; title problems; facility or equipment malfunctions; unexpected operational events; shortages or delivery delays of equipment and services; compliance with environmental and other governmental requirements; and adverse weather conditions. Any of these risks can cause substantial losses, including personal injury or loss of life, damage to or destruction of property, natural resources and equipment, pollution, environmental contamination or loss of wells and other regulatory penalties. Table of Contents Our development and exploratory drilling efforts and our well operations may not be profitable or achieve our targeted returns. Historically, we have acquired significant amounts of unproved property in order to further our development efforts and expect to continue to undertake acquisitions in the future. Development and exploratory drilling and production activities are subject to many risks, including the risk that no commercially productive reservoirs will be discovered. We acquire unproved properties and lease undeveloped acreage that we believe will enhance our growth potential and increase our earnings over time. However, we cannot assure you that all prospects will be economically viable or that we will not abandon our investments. Additionally, we cannot assure you that unproved property acquired by us or undeveloped acreage leased by us will be profitably developed, that new wells drilled by us in prospects that we pursue will be productive or that we will recover all or any portion of our investment in such unproved property or wells. Drilling for oil and natural gas may involve unprofitable efforts, not only from dry wells but also from wells that are productive but do not produce sufficient commercial quantities to cover the drilling, operating and other costs. The cost of drilling, completing and operating a well is often uncertain, and many factors can adversely affect the economics of a well or property. Drilling operations may be curtailed, delayed or canceled as a result of unexpected drilling conditions, equipment failures or accidents, shortages of equipment or personnel, environmental issues and for other reasons. In addition, wells that are profitable may not meet our internal return targets, which are dependent upon the current and expected future market prices for oil and natural gas, expected costs associated with producing oil and natural gas and our ability to add reserves at an acceptable cost. Operating hazards and uninsured risks may result in substantial losses and could prevent us from realizing profits. Our operations are subject to all of the hazards and operating risks associated with drilling for and production of oil and natural gas, including the risk of fire, explosions, blowouts, surface cratering, uncontrollable flows of natural gas, oil and formation water, pipe or pipeline failures, abnormally pressured formations, casing collapses and environmental hazards such as oil spills, gas leaks and ruptures or discharges of toxic gases. In addition, our operations are subject to risks associated with hydraulic fracturing, including any mishandling, surface spillage or potential underground migration of fracturing fluids, including chemical additives. The occurrence of any of these events could result in substantial losses to us due to injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigations and penalties, suspension of operations and repairs required to resume operations. We endeavor to contractually allocate potential liabilities and risks between us and the parties that provide us with services and goods, which include pressure pumping and hydraulic fracturing, drilling and cementing services and tubular goods for surface, intermediate and production casing. Under our agreements with our vendors, to the extent responsibility for environmental liability is allocated between the parties, (i) our vendors generally assume all responsibility for control and removal of pollution or contamination which originates above the surface of the land and is directly associated with such vendors equipment while in their control and (ii) we generally assume the responsibility for control and removal of all other pollution or contamination which may occur during our operations, including pre-existing pollution and pollution which may result from fire, blowout, cratering, seepage or any other uncontrolled flow of oil, gas or other substances, as well as the use or disposition of all drilling fluids. In addition, we generally agree to indemnify our vendors for loss or destruction of vendor-owned property that occurs in the well hole (except for damage that occurs when a vendor is performing work on a footage, rather than day work, basis) or as a result of the use of equipment, certain corrosive fluids, additives, chemicals or proppants. However, despite this general allocation of risk, we might not succeed in enforcing such contractual allocation, might incur an unforeseen liability falling outside the scope of such allocation or may be required to enter into contractual arrangements with terms that vary from the above allocations of risk. As a result, we may incur substantial losses which could materially and adversely affect our financial condition and results of operation. In accordance with what we believe to be customary industry practice, we historically have maintained insurance against some, but not all, of our business risks. Our insurance may not be adequate to cover any losses or liabilities we may suffer. Also, insurance may no longer be available to us or, if it is, its availability may be at premium levels that do not justify its purchase. The occurrence of a significant uninsured claim, a claim in excess of the insurance coverage limits maintained by us or a claim at a time when we are not able to obtain liability insurance could have a material adverse effect on our ability to conduct normal business operations and on our financial condition, results of operations or cash flow. In addition, we may not be able to secure additional insurance or bonding that might be required by new governmental regulations. This may cause us to restrict our operations, which might severely impact our financial position. We may also be liable for environmental damage caused by previous owners of properties purchased by us, which liabilities may not be covered by insurance. Since hydraulic fracturing activities are part of our operations, they are covered by our insurance against claims made for bodily injury, property damage and clean-up costs stemming from a sudden and accidental pollution event. However, we may Table of Contents not have coverage if we are unaware of the pollution event and unable to report the occurrence to our insurance company within the time frame required under our insurance policy. We have no coverage for gradual, long-term pollution events. In addition, these policies do not provide coverage for all liabilities, and we cannot assure you that the insurance coverage will be adequate to cover claims that may arise, or that we will be able to maintain adequate insurance at rates we consider reasonable. A loss not fully covered by insurance could have a material adverse effect on our financial position, results of operations and cash flows. Competition in the oil and natural gas industry is intense, which may adversely affect our ability to succeed. The oil and natural gas industry is intensely competitive, and we compete with other companies that have greater resources than us. Many of these companies not only explore for and produce oil and natural gas, but also carry on midstream and refining operations and market petroleum and other products on a regional, national or worldwide basis. These companies may be able to pay more for productive oil and natural gas properties and exploratory prospects or define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit. In addition, these companies may have a greater ability to continue exploration activities during periods of low oil and natural gas market prices. Our larger competitors may be able to absorb the burden of present and future federal, state, local and other laws and regulations more easily than we can, which would adversely affect our competitive position. Our ability to acquire additional properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment. In addition, because we have fewer financial and human resources than many companies in our industry, we may be at a disadvantage in bidding for exploratory prospects and producing oil and natural gas properties. Our use of 2-D and 3-D seismic data is subject to interpretation and may not accurately identify the presence of oil and natural gas, which could adversely affect the results of our drilling operations. Even when properly used and interpreted, 2-D and 3-D seismic data and visualization techniques are only tools used to assist geoscientists in identifying subsurface structures and hydrocarbon indicators and do not enable the interpreter to know whether hydrocarbons are, in fact, present in those structures. In addition, the use of 3-D seismic and other advanced technologies requires greater predrilling expenditures than traditional drilling strategies, and we could incur losses as a result of such expenditures. As a result, our drilling activities may not be successful or economical. We will be subject to certain requirements of Section 404 of the Sarbanes-Oxley Act. If we are unable to timely comply with Section 404 or if the costs related to compliance are significant, our profitability, stock price and results of operations and financial condition could be materially adversely affected. We will be required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act of 2002 as of December 31, 2013. Section 404 requires that we document and test our internal control over financial reporting and issue management s assessment of our internal control over financial reporting. This section also requires that our independent registered public accounting firm opine on those internal controls if and when we become a large accelerated filer, as defined in the SEC rules, or if we otherwise cease to qualify for an exemption from the requirement to provide auditors attestation on internal controls afforded to emerging growth companies under the Jumpstart Our Business Startups Act enacted by the U.S. Congress in April 2012. We are currently evaluating our existing controls against the standards adopted by the Committee of Sponsoring Organizations of the Treadway Commission. During the course of our ongoing evaluation and integration of our internal control over financial reporting, we may identify areas requiring improvement, and we may have to design enhanced processes and controls to address issues identified through this review. We believe that the out-of-pocket costs, the diversion of management s attention from running the day-to-day operations and operational changes caused by the need to comply with the requirements of Section 404 of the Sarbanes-Oxley Act could be significant. If the time and costs associated with such compliance exceed our current expectations, our results of operations could be adversely affected. We cannot be certain at this time that we will be able to successfully complete the procedures, certification and attestation requirements of Section 404 of the Sarbanes-Oxley Act or that we or our auditors will not identify material weaknesses in internal control over financial reporting. If we fail to comply with the requirements of Section 404 of the Sarbanes-Oxley Act or if we or our auditors identify and report such material weaknesses, the accuracy and timeliness of the filing of our annual and quarterly reports may be materially adversely affected and could cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock. In addition, a material weakness in the effectiveness of our internal control over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition. Table of Contents Increased costs of capital could adversely affect our business. Our business and operating results could be harmed by factors such as the availability, terms and cost of capital, increases in interest rates or a reduction in our credit rating. Changes in any one or more of these factors could cause our cost of doing business to increase, limit our access to capital, limit our ability to pursue acquisition opportunities, reduce our cash flows available for drilling and place us at a competitive disadvantage. Continuing disruptions and volatility in the global financial markets may lead to an increase in interest rates or a contraction in credit availability impacting our ability to finance our operations. We require continued access to capital. A significant reduction in the availability of credit could materially and adversely affect our ability to achieve our planned growth and operating results. We recorded stock-based compensation expense in 2012 and the first quarter of 2013 and we may incur substantial additional compensation expense related to our future grants of stock compensation which may have a material negative impact on our operating results for the foreseeable future. As a result of outstanding stock-based compensation awards, we recorded $6.3 million of compensation expense in 2012 and $1.4 million of compensation expense in the first six months of 2013. In addition, our compensation expenses may increase in the future as compared to our historical expenses because of the costs associated with our existing and possible future incentive plans. These additional expenses could adversely affect our net income. The future expense will be dependent upon the number of share-based awards issued and the fair value of the options or shares of common stock at the date of the grant; however, they may be significant. We will recognize expenses for restricted stock awards and stock options generally over the vesting period of awards made to recipients. Our level of indebtedness may increase and reduce our financial flexibility. As of the date of this prospectus, we have $180.0 million of borrowing base availability under our revolving credit facility. In the future, we may incur significant indebtedness under our revolving credit facility or otherwise in order to make acquisitions, to develop our properties or for other purposes. Our level of indebtedness could affect our operations in several ways, including the following: a significant portion of our cash flows could be used to service our indebtedness; a high level of debt could increase our vulnerability to general adverse economic and industry conditions; the covenants contained in the agreements governing our outstanding indebtedness will limit our ability to borrow additional funds, dispose of assets, pay dividends and make certain investments; a high level of debt may place us at a competitive disadvantage compared to our competitors that are less leveraged and, therefore, may be able to take advantage of opportunities that our indebtedness would prevent us from pursuing; our debt covenants may also affect our flexibility in planning for, and reacting to, changes in the economy and in our industry; a high level of debt may make it more likely that a reduction in our borrowing base following a periodic redetermination could require us to repay a portion of our then-outstanding bank borrowings; and a high level of debt may impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate or other purposes. A high level of indebtedness increases the risk that we may default on our debt obligations. Our ability to meet our debt obligations and to reduce our level of indebtedness depends on our future performance. General economic conditions, oil and natural gas prices and financial, business and other factors affect our operations and our future performance. Many of these factors are beyond our control. We may not be able to generate sufficient cash flows to pay the interest on our debt, and future working capital, borrowings or equity financing may not be available to pay or refinance such debt. Factors that will affect our ability to raise cash through an offering of our capital stock or a refinancing of our debt include financial market conditions, the value of our assets and our performance at the time we need capital. Our revolving credit facility contains restrictive covenants that may limit our ability to respond to changes in market conditions or pursue business opportunities. Our revolving credit facility contains restrictive covenants that limit our ability to, among other things: incur additional indebtedness; create additional liens; Table of Contents sell assets; merge or consolidate with another entity; pay dividends or make other distributions; engage in transactions with affiliates; and enter into certain swap agreements. In addition, our revolving credit facility requires us to maintain certain financial ratios and tests. The requirement that we comply with these provisions may materially adversely affect our ability to react to changes in market conditions, take advantage of business opportunities we believe to be desirable, obtain future financing, fund needed capital expenditures or withstand a continuing or future downturn in our business. If we are unable to comply with the restrictions and covenants in our revolving credit facility, there could be an event of default under the terms of our revolving credit facility, which could result in an acceleration of repayment. If we are unable to comply with the restrictions and covenants in our revolving credit facility, there could be an event of default under the terms of this facility. Our ability to comply with these restrictions and covenants, including meeting the financial ratios and tests under our revolving credit facility, may be affected by events beyond our control. As a result, we cannot assure that we will be able to comply with these restrictions and covenants or meet such financial ratios and tests. In the event of a default under our revolving credit facility, the lenders under such facility could terminate their commitments to lend or accelerate the loans and declare all amounts borrowed due and payable. If any of these events occur, our assets might not be sufficient to repay in full all of our outstanding indebtedness and we may be unable to find alternative financing. Even if we could obtain alternative financing, it might not be on terms that are favorable or acceptable to us. Additionally, we may not be able to amend our revolving credit facility or obtain needed waivers on satisfactory terms. Our borrowings under our revolving credit facility expose us to interest rate risk. Our earnings are exposed to interest rate risk associated with borrowings under our revolving credit facility, which bear interest at a rate elected by us that is based on the prime, LIBOR or federal funds rate plus margins ranging from 1.25% to 3.50% depending on the base rate used and the amount of the loan outstanding in relation to the borrowing base. As of May 21, 2013 (the last day on which borrowings were outstanding under our revolving credit facility), the weighted average interest rate on such borrowings was 2.70%. If interest rates increase, so will our interest costs, which may have a material adverse effect on our results of operations and financial condition. Any significant reduction in our borrowing base under our revolving credit facility as a result of the periodic borrowing base redeterminations or otherwise may negatively impact our ability to fund our operations. Under our revolving credit facility, which currently provides for a $180.0 million borrowing base, we are subject to semi-annual and other elective collateral borrowing base redeterminations based on our oil and natural gas reserves. Any significant reduction in our borrowing base as a result of such borrowing base redeterminations or otherwise may negatively impact our liquidity and our ability to fund our operations and, as a result, may have a material adverse effect on our financial position, results of operation and cash flow. Loss of our information and computer systems could adversely affect our business. We are heavily dependent on our information systems and computer based programs, including our well operations information, seismic data, electronic data processing and accounting data. If any of such programs or systems were to fail or create erroneous information in our hardware or software network infrastructure, possible consequences include our loss of communication links, inability to find, produce, process and sell oil and natural gas and inability to automatically process commercial transactions or engage in similar automated or computerized business activities. Any such consequence could have a material adverse effect on our business. A terrorist attack or armed conflict could harm our business. Terrorist activities, anti-terrorist efforts and other armed conflicts involving the United States or other countries may adversely affect the United States and global economies and could prevent us from meeting our financial and other obligations. If any of these events occur, the resulting political instability and societal disruption could reduce overall demand for oil and natural gas, potentially putting downward pressure on demand for our services and causing a reduction in our revenues. Oil and natural gas related facilities could be direct targets of terrorist attacks, and our operations could be adversely impacted if Table of Contents infrastructure integral to our customers operations is destroyed or damaged. Costs for insurance and other security may increase as a result of these threats, and some insurance coverage may become more difficult to obtain, if available at all. Risks Related to this Offering and Our Common Stock Our two largest stockholders control a significant percentage of our common stock, and their interests may conflict with those of our other stockholders. Upon completion of this offering, Wexford and Gulfport (assuming neither Wexford nor Gulfport or any of their respective affiliates makes any additional purchases of our common stock) will beneficially own approximately 25.5% and 12.3%, respectively, of our common stock or 25.2% and 12.1%, respectively, if the underwriters exercise their option to purchase additional shares in full. See Principal Stockholders on page 77 of this prospectus. In addition, individuals affiliated with Wexford and Gulfport serve on our Board of Directors, and Gulfport has the right to designate one individual as a nominee for election to our Board of Directors so long as it continues to beneficially own more than 10% of our outstanding common stock. As a result, Wexford and Gulfport, together, are able to control, and Wexford alone will continue to be able to exercise significant influence over, matters requiring stockholder approval, including the election of directors, changes to our organizational documents and significant corporate transactions. This concentration of ownership makes it unlikely that any other holder or group of holders of our common stock will be able to affect the way we are managed or the direction of our business. The interests of Wexford and Gulfport with respect to matters potentially or actually involving or affecting us, such as future acquisitions, financings and other corporate opportunities and attempts to acquire us, may conflict with the interests of our other stockholders. This continued concentrated ownership will make it impossible for another company to acquire us and for you to receive any related takeover premium for your shares unless Wexford approves the acquisition. The corporate opportunity provisions in our certificate of incorporation could enable Wexford, our equity sponsor, or other affiliates of ours to benefit from corporate opportunities that might otherwise be available to us. Subject to the limitations of applicable law, our certificate of incorporation, among other things: permits us to enter into transactions with entities in which one or more of our officers or directors are financially or otherwise interested; permits any of our stockholders, officers or directors to conduct business that competes with us and to make investments in any kind of property in which we may make investments; and provides that if any director or officer of one of our affiliates who is also one of our officers or directors becomes aware of a potential business opportunity, transaction or other matter (other than one expressly offered to that director or officer in writing solely in his or her capacity as our director or officer), that director or officer will have no duty to communicate or offer that opportunity to us, and will be permitted to communicate or offer that opportunity to such affiliates and that director or officer will not be deemed to have (i) acted in a manner inconsistent with his or her fiduciary or other duties to us regarding the opportunity or (ii) acted in bad faith or in a manner inconsistent with our best interests. These provisions create the possibility that a corporate opportunity that would otherwise be available to us may be used for the benefit of one of our affiliates. We have engaged in transactions with our affiliates and expect to do so in the future. The terms of such transactions and the resolution of any conflicts that may arise may not always be in our or our stockholders best interests. We have engaged in transactions and expect to continue to engage in transactions with affiliated companies. As described under the caption Related Party Transactions beginning on page 73 of this prospectus, these transactions include, among others, drilling services provided to us by Bison Drilling and Field Services, LLC, real property leased by us from Fasken Midland, LLC and certain administrative services provided to us by Everest Operations Management LLC. Each of these entities is either controlled by or affiliated with Wexford, and the resolution of any conflicts that may arise in connection with such related party transactions, including pricing, duration or other terms of service, may not always be in our or our stockholders best interests because Wexford may have the ability to influence the outcome of these conflicts. For a discussion of potential conflicts, see Risks Related to this Offering and our Common Stock Our two largest stockholders control a significant percentage of our common stock, and their interests may conflict with those of our other stockholders on page 33 of this prospectus. We incur increased costs as a result of being a public company, which may significantly affect our financial condition. We completed our initial public offering in October 2012. As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. We also incur costs associated with our public company Table of Contents reporting requirements and with corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002, as well as rules implemented by the SEC and the Financial Industry Regulatory Authority. These rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly, and we expect that these costs may increase further after we are no longer an emerging growth company. These rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. However, for as long as we remain an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Since the market value of our common stock held by non-affiliates exceeded $700 million as of June 30, 2013, we will cease to be an emerging growth company as of December 31, 2013. After we are no longer an emerging growth company, we expect to incur significant additional expenses and devote substantial management effort toward ensuring compliance with those requirements applicable to companies that are not emerging growth companies, including Section 404 of the Sarbanes-Oxley Act. See Risks Related to the Oil and Natural Gas Industry and Our Business We will be subject to certain requirements of Section 404 of the Sarbanes-Oxley Act. If we are unable to timely comply with Section 404 or if the costs related to compliance are significant, our profitability, stock price and results of operations and financial condition could be materially adversely affected on page 30 of this prospectus. We are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors. We are, and through December 31, 2013 will remain, an emerging growth company, as defined in the Jumpstart our Business Startups Act of 2012, and until we cease to be an emerging growth company we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Investors may find our common stock less attractive because we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. Under the Jumpstart Our Business Startups Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves to this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. If the price of our common stock fluctuates significantly, your investment could lose value. Although our common stock is listed on the NASDAQ Select Global Market, we cannot assure you that an active public market will continue for our common stock. If an active public market for our common stock does not continue, the trading price and liquidity of our common stock will be materially and adversely affected. If there is a thin trading market or float for our stock, the market price for our common stock may fluctuate significantly more than the stock market as a whole. Without a large float, our common stock would be less liquid than the stock of companies with broader public ownership and, as a result, the trading prices of our common stock may be more volatile. In addition, in the absence of an active public trading market, investors may be unable to liquidate their investment in us. Furthermore, the stock market is subject to significant price and volume fluctuations, and the price of our common stock could fluctuate widely in response to several factors, including: our quarterly or annual operating results; changes in our earnings estimates; investment recommendations by securities analysts following our business or our industry; additions or departures of key personnel; changes in the business, earnings estimates or market perceptions of our competitors; Table of Contents our failure to achieve operating results consistent with securities analysts projections; changes in industry, general market or economic conditions; and announcements of legislative or regulatory changes. The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices of the securities of many companies, including companies in our industry. The changes often appear to occur without regard to specific operating performance. The price of our common stock could fluctuate based upon factors that have little or nothing to do with our company and these fluctuations could materially reduce our stock price. Future sales of our common stock, or the perception that such future sales may occur, may cause our stock price to decline. Sales of substantial amounts of our common stock in the public market, or the perception that these sales may occur, could cause the market price of our common stock to decline. See Shares Eligible for Future Sale beginning on page 83 of this prospectus. In addition, the sale of these shares could impair our ability to raise capital through the sale of additional common or preferred stock. Except for any shares purchased by our affiliates, all of the shares sold in our initial public offering, our May 2013 offering and the June 2013 secondary offering are, and all of the shares sold in this offering will be, freely tradable. Our directors and executive officers, Gulfport and certain entities controlled by Wexford are subject to agreements that limit their ability to sell our common stock held by them. These holders cannot sell or otherwise dispose of any shares of our common stock for a period of 60 days after the date of this prospectus, or in the case of Gulfport, 60 days after the date of the prospectus (June 18, 2013) for the June 2013 secondary offering, without the prior written approval of Credit Suisse Securities (USA) LLC. However, these lock-up agreements are subject to certain specific exceptions, including transfers of common stock as a bona fide gift or by will or intestate succession and transfers to such person s immediate family or to a trust or to an entity controlled by such holder, provided that the recipient of the shares agrees to be bound by the same restrictions on sales and, in the case of our executive officers and directors, the right of such individuals to sell up to 300,000 shares in the aggregate. In connection with this offering, Credit Suisse Securities (USA) LLC granted a release of the lock-up agreements entered into by us, each of our directors and officers and certain entities controlled by Wexford in connection with the June 2013 secondary offering. In connection with our initial public offering, we also granted DB Energy Holdings LLC, or DB Holdings, and Gulfport certain registration rights obligating us to register with the SEC their shares of our common stock. In the event that one or more of our stockholders sells a substantial amount of our common stock in the public market, or the market perceives that such sales may occur, the price of our stock could decline. If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our stock or if our operating results do not meet their expectations, our stock price could decline. The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if one or more of the analysts who cover our company downgrade our stock or if our operating results do not meet their expectations, our stock price could decline. We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock. Our certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as our board of directors may determine. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our common stock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the common stock. Provisions in our certificate of incorporation and bylaws and Delaware law make it more difficult to effect a change in control of the company, which could adversely affect the price of our common stock. The existence of some provisions in our certificate of incorporation and bylaws and Delaware corporate law could delay or prevent a change in control of our company, even if that change would be beneficial to our stockholders. Our certificate of incorporation and bylaws contain provisions that may make acquiring control of our company difficult, including: provisions regulating the ability of our stockholders to nominate directors for election or to bring matters for action at annual meetings of our stockholders; Table of Contents limitations on the ability of our stockholders to call a special meeting and act by written consent; the ability of our board of directors to adopt, amend or repeal bylaws, and the requirement that the affirmative vote of holders representing at least 66 2/3% of the voting power of all outstanding shares of capital stock be obtained for stockholders to amend our bylaws; the requirement that the affirmative vote of holders representing at least 66 2/3% of the voting power of all outstanding shares of capital stock be obtained to remove directors; the requirement that the affirmative vote of holders representing at least 66 2/3% of the voting power of all outstanding shares of capital stock be obtained to amend our certificate of incorporation; and the authorization given to our board of directors to issue and set the terms of preferred stock without the approval of our stockholders. These provisions also could discourage proxy contests and make it more difficult for you and other stockholders to elect directors and take other corporate actions. As a result, these provisions could make it more difficult for a third party to acquire us, even if doing so would benefit our stockholders, which may limit the price that investors are willing to pay in the future for shares of our common stock. We do not intend to pay cash dividends on our common stock in the foreseeable future, and therefore only appreciation of the price of our common stock will provide a return to our stockholders. We currently anticipate that we will retain all future earnings, if any, to finance the growth and development of our business. We do not intend to pay cash dividends in the foreseeable future. Any future determination as to the declaration and payment of cash dividends will be at the discretion of our board of directors and will depend upon our financial condition, results of operations, contractual restrictions, capital requirements, business prospects and other factors deemed relevant by our board of directors. In addition, the terms of our revolving credit facility prohibit us from paying dividends and making other distributions. As a result, only appreciation of the price of our common stock, which may not occur, will provide a return to our stockholders. Table of Contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This prospectus, including the documents incorporated by reference, contains forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about our: business strategy; exploration and development drilling prospects, inventories, projects and programs; expectations regarding the consummation of the pending acquisitions described under "Summary Recent Developments Pending Acquisitions"; oil and natural gas reserves; identified drilling locations; ability to obtain permits and governmental approvals; technology; financial strategy; realized oil and natural gas prices; production; lease operating expenses, general and administrative costs and finding and development costs; future operating results; and plans, objectives, expectations and intentions. All of these types of statements, other than statements of historical fact included or incorporated by reference in this prospectus, are forward-looking statements. These forward-looking statements may be found in the Prospectus Summary, Risk Factors and Business beginning on pages 1, 15 and 50, respectively, in Management s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report for the year ended December 31, 2012 incorporated by reference herein and in our Quarterly Reports on Form 10-Q for the three months ended March 31, 2013 and June 30, 2013 incorporated by reference herein and elsewhere in this prospectus and the documents incorporated herein. In some cases, you can identify forward-looking statements by terminology such as may, could, should, expect, plan, project, intend, anticipate, believe, estimate, predict, potential, pursue, target, seek, objective or continue, the negative of such terms or other comparable terminology. The forward-looking statements contained or incorporated by reference in this prospectus are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, our management s assumptions about future events may prove to be inaccurate. Our management cautions all readers that the forward-looking statements contained in this prospectus are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to the many factors including those described under Risk Factors herein and in our Annual Report on Form 10-K for the year ended December 31, 2012 incorporated by reference herein and elsewhere in this prospectus. All forward-looking statements contained in this prospectus or included in a document incorporated by reference herein speak only as of the date hereof or thereof, respectively. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf. Table of Contents USE OF PROCEEDS Our net proceeds from the sale of 4,000,000 shares of common stock in this offering are estimated to be approximately $161.3 million, after deducting underwriting discounts and commissions and estimated offering expenses, based on an assumed public offering price of $42.08 per share (the last sales price of our common stock on the NASDAQ Global Select Market on August 12, 2013). The net proceeds would be approximately $185.5 million if the underwriters option to purchase additional shares is exercised in full. Following the closing of this offering, we intend to use the net proceeds to fund our pending acquisitions of additional acreage in the Permian Basin. To the extent the pending acquisitions are not consummated, or the applicable purchase prices are less than we currently estimate, we intend to use any remaining net proceeds from this offering to fund a portion of our exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions and working capital. DIVIDEND POLICY We have never declared or paid any cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business and do not anticipate declaring or paying any cash dividends in the foreseeable future. Any future determination as to the declaration and payment of dividends will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, results of operations, contractual restrictions, capital requirements, business prospects and other factors that our board of directors considers relevant. In addition, the terms of our revolving credit facility restrict the payment of dividends to the holders of our common stock and any other equity holders. Table of Contents CAPITALIZATION The following table sets forth our cash and cash equivalents and capitalization as of June 30, 2013: on an actual basis; and as adjusted to give effect to the sale of 4,000,000 shares of our common stock in this offering, our receipt of an estimated $161.3 million of net proceeds from this offering, after deducting underwriting discounts and commissions and estimated offering expenses, and the use of the net proceeds to fund the pending acquisitions as described under the caption Use of Proceeds on page 38. You should read the following table in conjunction with Management s Discussion and Analysis of Financial Condition and Results of Operations and our combined consolidated financial statements and related notes which are incorporated by reference into this prospectus. As of June 30, 2013 Actual As Adjusted Cash and cash equivalents $ 81,898,000 $ 78,185,200 Debt: Revolving credit facility $ $ Note payable 266,000 266,000 Total debt 266,000 266,000 Stockholders equity: Common stock, par value $0.01; 100,000,000 shares authorized and 42,161,532 shares issued and outstanding actual; and 100,000,000 shares authorized and 46,161,532 shares issued and outstanding as adjusted 422,000 462,000 Additional paid-in capital 659,394,000 820,641,200 Accumulated deficit (32,207,000) (32,207,000 ) Total stockholders equity 627,609,000 788,896,200 Total capitalization $ 627,875,000 $ 789,162,200 Table of Contents PRICE RANGE OF COMMON STOCK Our common stock is listed and traded on the NASDAQ Global Select Market under the symbol FANG. Our common stock began trading on October 12, 2012 at an initial public offering price of $17.50 per share. The following table sets forth the range of high and low sales prices of our common stock for the periods presented: Year Quarter High Low 2012 4th Quarter(1) $19.89 $15.65 2013 1st Quarter $27.21 $18.60 2013 2nd Quarter $35.91 $23.83 2013 3rd Quarter(2) $43.84 $33.42 _______________ (1) Represents the period from October 12, 2012, the date on which our common stock began trading on the NASDAQ Global Select Market, through December 31, 2012. (2) Through August 12, 2013. The closing price of our common stock on the NASDAQ Global Select Market on August 12, 2013 was $42.08 per share. Immediately prior to this offering, we had 42,161,532 issued and outstanding shares of common stock, which were held by six holders of record. This number does not include owners for whom common stock may be held in street name or whose common stock is restricted. Table of Contents SELECTED HISTORICAL COMBINED CONSOLIDATED FINANCIAL DATA The following selected historical combined consolidated financial data as of December 31, 2012 and 2011 and for each of the three years in the period ended December 31, 2012 are derived from our audited combined consolidated financial statements incorporated by reference into this prospectus. The selected combined consolidated balance sheet data as of December 31, 2010 and the selected historical combined consolidated financial data for 2009 and 2008 are derived from our audited financial statements of the Predecessors not included in or incorporated by reference into this prospectus. The consolidated statements of operations data for the six months ended June 30, 2013 and June 30, 2012 and the consolidated balance sheet data at June 30, 2013 are derived from our unaudited consolidated financial statements appearing in our most recent Quarterly Report on Form 10-Q incorporated by reference into this prospectus. The consolidated balance sheet data at June 30, 2012 are derived from our unaudited consolidated financial statements that are not included in or incorporated by reference into this prospectus. The unaudited pro forma C Corporation financial data presented give effect to income taxes assuming we operated as a taxable corporation since inception for the 2011, 2010, 2009 and 2008 columns and since December 31, 2011 for the 2012 columns. Operating results for the periods presented below are not necessarily indicative of results that may be expected for any future periods. You should review this information together with Management s Discussion and Analysis of Financial Condition and Results of Operations and our historical combined consolidated financial statements and related notes which are incorporated by reference into this prospectus. Table of Contents Six Months Ended June 30, Year Ended December 31, 2013 2012(1) 2012(2) 2011(1) 2010(1) 2009 2008 Statement of Operations Data: Oil and natural gas revenues $ 74,303,000 $ 32,381,000 $ 74,962,000 $ 47,875,000 $ 26,442,000 $ 12,716,000 $ 18,239,000 Other revenues 1,491,000 811,000 Expenses: Lease operating expense 11,522,000 6,318,000 16,793,000 10,597,000 4,589,000 2,366,000 3,375,000 Production taxes 3,623,000 1,579,000 3,691,000 2,366,000 1,347,000 663,000 1,009,000 Gathering and transportation 380,000 146,000 424,000 202,000 106,000 42,000 53,000 Oil and natural gas services 1,733,000 811,000 Depreciation, depletion and amortization 25,553,000 10,416,000 26,273,000 15,601,000 8,145,000 3,216,000 10,200,000 Impairment of oil and gas properties 83,164,000 General and administrative 5,092,000 2,837,000 10,376,000 3,655,000 3,036,000 5,063,000 5,460,000 Asset retirement obligation accretion expense 88,000 41,000 98,000 65,000 38,000 28,000 24,000 Total expenses 46,258,000 21,337,000 57,655,000 34,219,000 18,072,000 11,378,000 103,285,000 Income (loss) from operations 28,045,000 11,044,000 17,307,000 15,147,000 9,181,000 1,338,000 (85,046,000) Other income (expense): Interest income 2,000 3,000 11,000 34,000 35,000 625,000 Interest expense (1,020,000 ) (2,054,000) (3,610,000) (2,528,000) (836,000) (11,000) Other income 777,000 1,011,000 2,132,000 Gain (loss) on derivative instruments 3,029,000 5,165,000 2,617,000 (13,009,000) (148,000) (4,068,000) (9,528,000) Loss from equity investment (67,000) (67,000) (7,000) Total other income (expense), net 2,786,000 4,057,000 1,075,000 (15,533,000) (950,000) (4,044,000) (8,903,000) Net income (loss) before income taxes 30,831,000 15,101,000 18,382,000 (386,000) 8,231,000 (2,706,000) (93,949,000) Provision for income taxes 10,964,000 54,903,000 Net income (loss) $ 19,867,000 $ 15,101,000 $ (36,521,000 ) $ (386,000 ) $ 8,231,000 $ (2,706,000 ) $ (93,949,000 ) Earnings per common share Basic $ 0.52 Diluted $ 0.52 Weighted average common shares outstanding Basic 38,237,149 Diluted 38,476,719 Pro Forma C Corporation Data(3): Net income (loss) before income taxes $ 15,101,000 $ 18,382,000 $ (386,000 ) $ 8,231,000 $ (2,706,000 ) $ (93,949,000 ) Pro forma for income taxes 5,384,000 6,553,000 Pro forma net income (loss) $ 9,717,000 $ 11,829,000 $ (386,000 ) $ 8,231,000 $ (2,706,000 ) $ (93,949,000 ) Pro forma earnings per common share(4) Basic $ 0.66 $ 0.60 Diluted $ 0.66 $ 0.60 Weighted average shares outstanding(4) Basic 14,697,496 19,720,734 Diluted 14,697,496 19,723,774 Table of Contents Six Months Ended June 30, Year Ended December 31, 2013 2012(1) 2012(2) 2011(1) 2010(1) 2009 2008 Selected Cash Flow and Other Financial Data: Net income (loss) $ 19,867,000 $ 15,101,000 $ (36,521,000 ) $ (386,000 ) $ 8,231,000 $ (2,706,000 ) $ (93,949,000 ) Depreciation, depletion and amortization 25,553,000 10,416,000 26,273,000 16,104,000 8,145,000 3,216,000 10,200,000 Other non-cash items 6,847,000 (4,273,000 ) 56,390,000 13,845,000 344,000 4,109,000 92,715,000 Change in operating assets and liabilities (2,469,000) 1,417,000 3,550,000 1,435,000 (11,528,000) (1,917,000) 3,076,000 Net cash provided by operating activities $ 49,798,000 $ 22,661,000 $ 49,692,000 $ 30,998,000 $ 5,192,000 $ 2,702,000 $ 12,042,000 Net cash used in investing activities $ (138,675,000 ) $ (59,616,000 ) $ (183,078,000 ) $ (81,108,000 ) $ (55,236,000 ) $ (32,150,000 ) $ (84,197,000 ) Net cash provided by financing activities $ 144,417,000 $ 32,337,000 $ 152,785,000 $ 52,950,000 $ 51,733,000 $ 23,849,000 $ 80,183,000 Six Months Ended June 30, Year Ended December 31, 2013 2012(1) 2012(2) 2011(1) 2010(1) 2009 2008 Balance sheet data: Cash and cash equivalents $ 81,898,000 $ 2,341,000 $ 26,358,000 $ 6,959,000 $ 4,119,000 $ 2,430,000 $ 8,029,000 Other current assets 34,638,000 23,226,000 23,917,000 23,853,000 20,947,000 2,263,000 1,390,000 Oil and gas properties, net using full cost method of accounting 677,446,000 268,353,000 552,640,000 220,465,000 144,552,000 89,778,000 73,786,000 Well equipment to be used in development of oil and gas properties 5,413,000 8,503,000 Other property and equipment, net 3,726,000 1,540,000 1,602,000 684,000 11,059,000 106,000 161,000 Other assets 931,000 1,998,000 2,184,000 11,617,000 638,000 83,000 Total assets $ 798,639,000 $ 297,458,000 $ 606,701,000 $ 263,578,000 $ 181,315,000 $ 100,073,000 $ 91,869,000 Current liabilities $ 97,487,000 $ 51,897,000 $ 79,232,000 $ 42,298,000 $ 19,070,000 $ 13,973,000 $ 18,012,000 Note payable-long term 121,000 339,000 193,000 Note payable credit facility-long term 90,000,000 85,000,000 44,767,000 Note payable-related party-long term 14,110,000 Derivative instruments-long term 1,667,000 388,000 6,139,000 1,374,000 1,416,000 2,868,000 Asset retirement obligations 2,324,000 1,221,000 2,125,000 1,104,000 742,000 482,000 374,000 Deferred income taxes 71,098,000 62,695,000 Stockholders equity 627,609,000 138,224,000 462,068,000 129,037,000 115,362,000 84,202,000 70,615,000 Total liabilities and member s/stockholders equity $ 798,639,000 $ 297,458,000 $ 606,701,000 $ 263,578,000 $ 181,315,000 $ 100,073,000 $ 91,869,000 Six Months Ended June 30, Year Ended December 31, 2013 2012(1) 2012(2) 2011(1) 2010(1) 2009 2008 Other financial data: Adjusted EBITDA(5) $ 55,399,000 $ 22,806,000 $ 48,223,000 $ 31,758,000 $ 17,398,000 $ 4,617,000 $ 8,967,000 _____________ Table of Contents (1) The years ended December 31, 2011 and 2010 and the six months ended June 30, 2012 reflect the combined historical financial data of Windsor Permian LLC and Windsor UT LLC due to the transfer of a business between entities under common control. See Note 1 to our combined consolidated financial statements incorporated by reference into this prospectus. (2) The year ended December 31, 2012 reflects (a) the combined historical financial data of Windsor Permian LLC and Windsor UT LLC due to the transfer of a business between entities under common control and (b) the results of operations attributable to the acquisition of properties from Gulfport Energy Corporation beginning October 11, 2012, the closing date of the property acquisition. See Note 1 and Note 2 to our combined consolidated financial statements incorporated by reference into this prospectus. (3) Diamondback was formed as a holding company on December 30, 2011, and did not conduct any material business operations until October 11, 2012 when Diamondback merged with its parent entity, Diamondback Energy LLC, with Diamondback continuing as the surviving entity. Diamondback is a C-Corp under the Internal Revenue Code and is subject to income taxes. The Company computed a pro forma income tax provision for 2012 as if the Company and the Predecessors were subject to income taxes since December 31, 2011. For 2011, 2010, 2009 and 2008 comparative purposes, we have included pro forma financial data to give effect to income taxes assuming the earnings of the Company and the Predecessors had been subject to federal income tax as a subchapter C corporation since inception. If the earnings of the Company and the Predecessors had been subject to federal income tax as a subchapter C corporation since inception, we would have incurred net operating losses for income tax purposes in each period. We would have been in a net deferred tax asset, or DTA, position as a result of such tax losses and would have recorded a valuation allowance to reduce each period s DTA balance to zero. A valuation allowance to reduce each period s DTA would have resulted in an equal and offsetting credit for the respective expenses or an equal and offsetting debit for the respective benefits for income taxes, with the resulting tax expenses for each 2011 and 2010 of zero. The unaudited pro forma data is presented for informational purposes only, and does not purport to project our results of operations for any future period or our financial position as of any future date. The pro forma tax provision has been calculated at a rate based upon a federal corporate level tax rate and a state tax rate, net of federal benefit, incorporating permanent differences. See Note 1 to our combined consolidated financial statements incorporated by reference into this prospectus. (4) The Company s pro forma basic earnings per share amounts have been computed based on the weighted-average number of shares of common stock outstanding for the period, as if the common shares issued upon the merger of Diamondback Energy LLC into Diamondback were outstanding for the entire year. Diluted earnings per share reflects the potential dilution, using the treasury stock method, which assumes that options were exercised and restricted stock awards and units were fully vested. During periods in which the Company realizes a net loss, options and restricted stock awards would not be dilutive to net loss per share and conversion into common stock is assumed not to occur. See Note 1 to our combined consolidated financial statements incorporated by reference into this prospectus. (5) Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDA as net income (loss) before income taxes, gain/loss on derivative instruments, interest expense, depreciation, depletion and amortization, impairment of oil and gas properties, non-cash equity based compensation and asset retirement obligation accretion expense. Adjusted EBITDA is not a measure of net income (loss) as determined by United States generally accepted accounting principles, or GAAP. Management believes Adjusted EBITDA is useful because it allows it to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company s financial performance, such as a company s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measure of other companies or to such measure in our revolving credit facility. The following presents a reconciliation of the non-GAAP financial measure of Adjusted EBITDA to the GAAP financial measure of net income (loss). Table of Contents Six Months Ended June 30, Year Ended December 31, 2013 2012(1) 2012(2) 2011(1) 2010(1) 2009 2008 Net income (loss): $ 19,867,000 $ 15,101,000 $ (36,521,000 ) $ (386,000 ) $ 8,231,000 $ (2,706,000 ) $ (93,949,000 ) (Gain) loss on derivative instruments (3,029,000) (5,165,000) (2,617,000) 13,009,000 148,000 4,068,000 9,528,000 Interest expense 1,020,000 2,054,000 3,610,000 2,528,000 836,000 11,000 Depreciation, depletion and amortization 25,553,000 10,416,000 26,273,000 16,104,000 8,145,000 3,216,000 10,200,000 Impairment of oil and gas properties 83,164,000 Non-cash equity based compensation expense 936,000 359,000 2,477,000 438,000 Asset retirement obligation accretion expense 88,000 41,000 98,000 65,000 38,000 28,000 24,000 Deferred income tax provision 10,964,000 54,903,000 Adjusted EBITDA $ 55,399,000 $ 22,806,000 $ 48,223,000 $ 31,758,000 $ 17,398,000 $ 4,617,000 $ 8,967,000 Table of Contents UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENT Diamondback Energy, Inc. Unaudited Pro Forma Condensed Consolidated Financial Statement Introduction The following unaudited pro forma condensed consolidated statement of operations and related notes of the Company have been prepared to show the effect of the Gulfport transaction and the distribution by Windsor Permian to its equity holders of its minority equity interests in Bison and Muskie. The unaudited pro forma condensed consolidated statement of operations should be read together with the Company s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC on March 1, 2013 and the historical Statements of Revenues and Direct Operating Expenses of certain property interests of Gulfport Energy Corporation included in this prospectus. The accompanying unaudited pro forma condensed consolidated statement of operations is based on assumptions and include adjustments as explained in the accompanying notes. The acquisition of certain property interests of Gulfport Energy Corporation (the Gulfport properties) was treated as a business combination accounted for under the acquisition method of accounting with the identifiable assets recognized at fair value on the date of transfer. The pro forma data presented reflect events directly attributable to the described transactions and certain assumptions the Company believes are reasonable. The pro forma data are not necessarily indicative of financial results that would have been attained had the described transactions occurred on the dates indicated below. The pro forma data also necessarily exclude various operation expenses related to the Gulfport properties and the statement of operations should not be viewed as indicative of operations in future periods. As the current operator of the properties acquired by the Company upon completion of the Gulfport transaction, the Company does not expect any material impact from these transactions on its existing employees or infrastructure. The Gulfport transaction was completed on October 11, 2012, and the distribution of the equity interests in Bison and Muskie occurred in June 2012. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2012 assumes that the described transactions occurred on January 1, 2012. Table of Contents Diamondback Energy, Inc. Unaudited Pro Forma Condensed Consolidated Statement of Operations Year ended December 31, 2012 Gulfport Properties Diamondback Nine Months Ended Energy, Inc. September 30, 2012 Pro Forma Historical Historical Adjustments Pro Forma Revenues: Oil and natural gas revenues $ 74,962,000 $ 21,217,000 $ 1,276,000 (a) $ 97,455,000 Costs and expenses: Lease operating expenses 16,793,000 6,359,000 209,000 (a) 23,361,000 Production taxes 3,691,000 1,119,000 (6,000 ) (a) 4,804,000 Gathering and transportation 424,000 99,000 (a) 523,000 Depreciation, depletion and amortization 26,273,000 7,932,000 (c) 34,205,000 General and administrative 10,376,000 10,376,000 Asset retirement obligation accretion expense 98,000 24,000 (b) 122,000 Total costs and expenses 57,655,000 7,478,000 8,258,000 73,391,000 Income (loss) from operations 17,307,000 13,739,000 (6,982,000 ) 24,064,000 Other income (expense) Interest income 3,000 3,000 Interest expense (3,610,000 ) (3,610,000 ) Other income 2,132,000 2,132,000 Gain on derivative instruments 2,617,000 2,617,000 Loss from equity investment (67,000 ) 67,000 (d) Total other income (expense), net 1,075,000 67,000 1,142,000 Income (loss) before income taxes 18,382,000 13,739,000 (6,915,000 ) 25,206,000 Provision for income taxes Deferred income tax provision 54,903,000 54,903,000 Net income (loss) $ (36,521,000 ) $ 13,739,000 $ (6,915,000 ) $ (29,697,000 ) Pro forma loss per common share(e) Basic $ (1.15 ) Diluted $ (1.15 ) Pro forma weighted average common shares outstanding(e) Basic 25,856,823 Diluted 25,859,863 Table of Contents Diamondback Energy, Inc. Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements 1. Basis of Presentation The historical financial information is derived from the historical financial statements of Diamondback Energy, Inc. and the historical statements of revenues and direct operating expenses of certain property interests of Gulfport Energy Corporation. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2012 assumes that the Gulfport transaction and the distribution of the equity interests in Bison and Muskie occurred on January 1, 2012. 2. Pro Forma Assumptions and Adjustments We made the following adjustments in the preparation of the unaudited pro forma condensed consolidated statement of operations. (a) To record the operating results of the certain property interests of Gulfport Energy Corporation from the nine months ended September 30, 2012 to the closing date of the Gulfport transaction on October 11, 2012. (b) To record incremental accretion of discount of asset retirement obligations associated with the Gulfport transaction. (c) To record incremental depletion, depreciation, and amortization of oil and natural gas properties associated with the Gulfport transaction, amortized on a unit-of-production basis over the remaining life of total proved reserves. (d) To record the effects of the distribution of minority equity interests in Bison and Muskie to Windsor Permian s sole member which occurred on June 15, 2012. (e) The Company s pro forma basic earnings per share amounts have been computed based on the weighted-average number of shares of common stock outstanding for the period, as if the common shares issued in connection with the Gulfport transaction (7,914,036 shares) and to DB Holdings in connection with the merger of Diamondback Energy LLC with and into Diamondback Energy, Inc. (14,697,496 shares) were outstanding for the entire year. Diluted earnings per share reflects the potential dilution, using the treasury stock method, which assumes that options were exercised and restricted stock awards and units were fully vested. 3. Other Income Tax and Earnings Per Share Considerations As presented in the unaudited pro forma condensed consolidated statement of operations, income tax expense includes the $54,142,000 charge relating to the change in tax status as of October 11, 2012 and the related income taxes incurred as a result of operations from October 11, 2012 to December 31, 2012. The following supplemental pro forma information gives effect to income taxes assuming the Company operated as a taxable corporation since December 31, 2011. Pro forma Pro forma, C Corporation Data(a) as adjusted(b) Income before income taxes $ 18,382,000 $ 25,206,000 Pro forma provision for income taxes 6,553,000 8,973,000 Pro forma net income $ 11,829,000 $ 16,233,000 Pro forma earnings per common share Basic $ 0.60 $ 0.63 Diluted $ 0.60 $ 0.63 Pro forma weighted average common shares outstanding Basic 19,720,734 25,856,823 Diluted 19,723,774 25,859,863 (a) The pro forma financial data adjusts the Diamondback Energy, Inc. historical column to give effect to income taxes assuming the earnings of the Company had been subject to federal income tax as a subchapter C corporation since December 31, 2011, thus excluding the $54,142,000 charge relating to the change in tax status as of October 11, 2012. The pro forma tax provision has been calculated at a rate based upon a federal corporate level tax rate and a state tax rate, net of federal benefit, incorporating permanent differences. (b) The pro forma financial data adjusts the pro forma column to give effect to income taxes assuming the earnings of the Company had been subject to federal income tax as a subchapter C corporation since December 31, 2011, thus excluding the $54,142,000 charge relating to the change in tax status as of October 11, 2012. The pro forma tax provision has been Table of Contents calculated at a rate based upon a federal corporate level tax rate and a state tax rate, net of federal benefit, incorporating permanent differences. 4. Pro Forma Adjusted EBITDA Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDA as net income (loss) before income taxes, gain/loss on derivative instruments, interest expense, depreciation, depletion and amortization, impairment of oil and gas properties, non-cash equity based compensation and asset retirement obligation accretion expense. Adjusted EBITDA is not a measure of net income (loss) as determined by United States generally accepted accounting principles, or GAAP. Management believes Adjusted EBITDA is useful because it allows it to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company s financial performance, such as a company s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measure of other companies or to such measure in our credit facility. The following presents a reconciliation of the non-GAAP financial measure of Adjusted EBITDA to the net loss reported in the unaudited pro forma condensed consolidated statement of operations. Year Ended December 31, 2012 Pro forma net loss: $ (29,697,000 ) (Gain) loss on derivative instruments (2,617,000) Interest expense 3,610,000 Depreciation, depletion and amortization 34,205,000 Non-cash equity based compensation expense 2,477,000 Asset retirement obligation accretion expense 122,000 Deferred income tax provision 54,903,000 Pro forma Adjusted EBITDA $ 63,003,000 Table of Contents BUSINESS General Overview We are an independent oil and natural gas company currently focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. This basin, which is one of the major producing basins in the United States, is characterized by an extensive production history, a favorable operating environment, mature infrastructure, long reserve life, multiple producing horizons, enhanced recovery potential and a large number of operators. We began operations in December 2007 with our acquisition of 4,174 net acres with production at the time of acquisition of approximately 800 BOE/d from 34 gross (16.8 net) wells in the Permian Basin. Subsequently, we acquired approximately 49,861 additional net acres, which brought our total net acreage position in the Permian Basin to 54,035 net acres at June 30, 2013. We are the operator of approximately 99% of this acreage. As of June 30, 2013, we had drilled 230 gross (209 net) wells, and participated in an additional 19 gross (eight net) non-operated wells, in the Permian Basin. Of these 249 gross (216 net) wells, 240 were completed as producing wells and nine were in various stages of completion. In the aggregate, as of June 30, 2013, we held interests in 274 gross (242 net) producing wells in the Permian Basin. As discussed in more detail under Recent Developments Pending Acquisitions, we have entered into agreements to acquire approximately 11,150 additional net acres in the Permian Basin. Our activities are primarily focused on the Clearfork, Spraberry, Wolfcamp, Cline, Strawn and Atoka formations, which we refer to collectively as the Wolfberry play. The Wolfberry play is characterized by high oil and liquids rich natural gas, multiple vertical and horizontal target horizons, extensive production history, long-lived reserves and high drilling success rates. The Wolfberry play is a modification and extension of the Spraberry play, the majority of which is designated in the Spraberry Trend area field. According to the U.S. Energy Information Administration, the Spraberry trend area ranks as the second largest oilfield in the United States, based on 2009 reserves. As of December 31, 2012, our estimated proved oil and natural gas reserves were 40,210 MBOE based on a reserve report prepared by Ryder Scott Company, L.P., or Ryder Scott, our independent reserve engineers. Of these reserves, approximately 29.5% are classified as proved developed producing, or PDP. Proved undeveloped, or PUD, reserves included in this estimate are from 306 vertical gross well locations on 40-acre spacing and four gross horizontal well locations. As of December 31, 2012, these proved reserves were approximately 65% oil, 21% natural gas liquids and 14% natural gas. We have 867 identified potential vertical drilling locations on 40-acre spacing based on our evaluation of applicable geologic and engineering data as of June 30, 2013, and we have an additional 1,128 identified potential vertical drilling locations based on 20-acre downspacing. We have also identified 862 potential horizontal drilling locations in multiple horizons on our acreage. We intend to grow our reserves and production through development drilling, exploitation and exploration activities on this multi-year project inventory of identified potential drilling locations and through acquisitions that meet our strategic and financial objectives, targeting oil-weighted reserves. The gross estimated ultimate recoveries, or EURs, from our future PUD vertical wells on 40-acre spacing, as estimated by Ryder Scott, range from 102 MBOE per well, consisting of 46 MBbls of oil, 151 MMcf of natural gas and 31 MBbls of natural gas liquids, to 158 MBOE per well, consisting of 112 MBbls of oil, 114 MMcf of natural gas and 27 MBbls of natural gas liquids, with an average EUR per well of 133 MBOE, consisting of 91 MBbls of oil, 101 MMcf of natural gas and 25 MBbls of natural gas liquids. We also intend to continue to refine our drilling pattern and completion techniques in an effort to increase our average EUR per well from vertical wells drilled on 40-acre spacing. We currently anticipate a reduction of approximately 20% in our EURs from vertical wells drilled on 20-acre spacing. Recent Developments Pending Acquisitions. We recently entered into two separate definitive agreements to acquire additional leasehold interests in the Permian Basin for an aggregate purchase price of $165.0 million, subject to certain adjustments. On August 2, 2013, we entered into a purchase and sale agreement in which we agreed to acquire from an unrelated third party certain assets located in northwestern Martin County, Texas, consisting of a 100% working interest (80% net revenue interest) in 4,506 gross and net acres, with 16 gross and net producing vertical wells, an estimated 1,138 MBOE of proved developed reserves (including 167 MBOE attributable to two PDNP wells) as of July 1, 2013 and 457 gross (365 net) BOE per day of production during July 2013. We have identified approximately 96 gross and net horizontal drilling locations on this acreage, of which 32 gross and net locations are located in the Wolfcamp B interval, with lateral lengths expected to range from approximately 5,000 feet to 8,000 feet. In addition, on August 1, 2013, we entered into a purchase and sale agreement in which we agreed to acquire from an unrelated third party certain assets located in southwestern Dawson County, Texas, consisting of a 70% working Table of Contents interest (54% net revenue interest) in 9,390 gross (6,647 net) acres, with 28 gross (18 net) producing vertical wells, an estimated 838 MBOE of proved developed reserves (including 77 MBOE attributable to one PDNP well) as of June 1, 2013 and 777 gross (417 net) BOE per day of production during June 2013. We have identified approximately 156 gross (109 net) potential horizontal drilling locations on this acreage, of which 53 gross (37 net) locations are located in the Wolfcamp B interval, with lateral lengths ranging from approximately 5,000 feet to 9,500 feet. Estimated proved reserves for both acquisitions relate solely to existing vertical wells, are based on management s internal assessment of information provided to us in the course of our due diligence, and have not been verified by us or any independent petroleum engineers. Both acquisitions remain subject to completion of due diligence and satisfaction of other closing conditions and may not be completed. We will be the operator of all of the acreage to be acquired in these acquisitions. We expect to close these acquisitions by the end of September 2013. We intend to fund the purchase price for these acquisitions from cash on hand and the net proceeds from this offering. See Use of Proceeds included elsewhere in this prospectus. Horizontal Wells. In 2012, we began testing the horizontal well potential of our acreage. Our first horizontal well was the Janey 16H in Upton County with a 3,842 foot lateral in the Wolfcamp B interval. We are the operator of this well with a 100% working interest. It was completed in June 2012 and had a peak 24-hour IP rate of 618 BOE/d and a peak consecutive 30-day average initial production rate of 486 BOE/d, of which 86% was oil. Through June 30, 2013, the Janey 16H had produced a total of 61 MBbls of oil and 73 MMcf of natural gas. Our second horizontal well was the Kemmer 4209H in Midland County. It is a non-operated well in which we own a 47% working interest. It was completed in September 2012 in the Wolfcamp B interval with a 3,733 foot lateral. The production as reported to us by the operator was a peak 24-hour initial production rate of 892 BOE/d and a peak 30-day average initial production rate of 712 BOE/d, of which 85% was oil. Through June 30, 2013, the Kemmer 4209H had produced a total of 63 MBbls of oil and 64 MMcf of natural gas. Based on the decline curve analysis of the current production, we anticipate that the EUR for each of these wells will be in the range of 400 to 500 MBOE. Subsequent to the Janey 16H and Kemmer 4209H wells, we have drilled or are currently drilling 17 horizontal wells as operator and have participated in one additional horizontal well as a non-operator, all of which are Wolfcamp B wells in various stages of development. The table below presents certain data regarding our horizontal wells. Horizontal Wells: Midland County Peak Peak 30 Day Lateral Number of 24-HR IP IP Rate Well Name Length Frac Stages (BOE/d) (BOE/d) % Oil(a) Kemmer 4209H(b) 3,733 15 892 712(d) 85% ST NW 2501H 4,451 19 1,054 655(d) 90% ST NW 2502H 4,351 16 651 500(c) 88% Sarah Ann 3812H(b) 4,830 18 892 711(d) 88% ST W 4301H 7,141 29 1,136 916(d) 85% ST W 701H 7,280 29 1,042(d) N/A(e) 94% ST W 4302H 7,071 30 701(d) N/A(e) 93% ST W 706H 7,541 Currently completing 30 stage frac Horizontal Wells: Upton County Peak Peak 30 Day Lateral Number of 24-HR IP IP Rate Well Name Length Frac Stages (BOE/d) (BOE/d) % Oil(a) Janey 16H 3,842 16 618 486(c) 86% Neal A Unit 8-1H 7,441 32 871 697(c) 87% Janey 3H 4,411 19 724 488(d) 82% Neal B Unit 8-2H 6,501 26 1,134 617(d) 73% Kendra A Unit 1H 7,411 30 970 677(d) 82% Jacee A Unit 1H 7,541 30 1,085 632(d) 83% Janey 2H 4,572 19 930(d) N/A(e) 87% Janey 4H 4,564 10 880(d) N/A(e) 77% Charlotte A Unit 1H 10,353 Currently completing 39 stage frac Neal C Unit 8 3H 6,851 Currently completing 15 stage frac Table of Contents Horizontal Wells: Andrews County Peak Peak 30 Day Lateral Number of 24-HR IP IP Rate Well Name Length Frac Stages (BOE/d) (BOE/d) % Oil(a) UL III 4-1H 4,051 Flowback operations underway UL Viper 6-1H 7,540 Well drilled; frac scheduled (a) During the period for which the Peak 30 day IP Rate is presented except in the case of the ST W 701H, Janey 2H and Janey 4H wells, which is based on the Peak 24-hour IP rate. (b) Non-operated. (c) On gas lift. (d) On sub pump. (e) A peak 30 day IP Rate is not available. In addition, we are currently drilling three additional horizontal wells. The production results from the wells in Midland and Upton Counties, along with geoscience and engineering data that we have gathered and analyzed, give us confidence that our acreage in Midland and Upton Counties is prospective in the Wolfcamp B interval. Our Business Strategy Our business strategy is to increase stockholder value through the following: Grow production and reserves by developing our oil-rich resource base. We intend to actively drill and develop our acreage base in an effort to maximize its value and resource potential. Through the conversion of our undeveloped reserves to developed reserves, we will seek to increase our production, reserves and cash flow while generating favorable returns on invested capital. As of June 30, 2013, we had 867 identified potential vertical drilling locations and 862 identified potential horizontal drilling locations on our acreage in the Permian Basin based on 40-acre spacing and an additional 1,128 vertical locations based on 20-acre downspacing. We were operating a one vertical rig drilling program as of June 30, 2013, as we increase our focus on horizontal wells. Focus on increasing hydrocarbon recovery through horizontal drilling and increased well density. We believe there are opportunities to target various intervals in the Wolfberry play with horizontal wells. Our initial horizontal focus has been on the Wolfcamp B interval in Midland and Upton Counties. Our first two horizontal wells were completed in 2012 and had lateral lengths of less than 4,000 feet. Subsequently, we have drilled or are currently drilling 17 horizontal wells as operator and have participated in one additional horizontal well as a non-operator, 19 of which are Wolfcamp B wells and one of which is a Clearfork well. These wells have had lateral lengths ranging from approximately 4,300 feet to 10,300 feet. In the future, we expect that our optimal average lateral lengths will be in the range of 7,500 feet to 8,000 feet, although the actual length will vary depending on the layout of our acreage and other factors. We expect that longer lateral lengths will result in higher per well recoveries and lower development costs per BOE. During the first six months of 2013, we were able to drill our horizontal wells with approximately 7,500 foot lateral lengths to total depth in an average of 21 days and we recently drilled a 10,353 foot lateral well in 19 days. Our future horizontal drilling program is designed to further capture the upside potential that may exist on our properties. We also believe our horizontal drilling program may significantly increase our recoveries per section as compared to drilling vertical wells alone. Horizontal drilling may also be economical in areas where vertical drilling is currently not economical or logistically viable. In addition, we believe increased well density opportunities may exist across our acreage base. We closely monitor industry trends with respect to higher well density, which could increase the recovery factor per section and enhance returns since infrastructure is typically in place. We were using three horizontal drilling rigs as of June 30, 2013, and currently intend to add a fourth horizontal rig in the fourth quarter of 2013, and are currently contemplating adding one or two horizontal drilling rigs in 2014. Leverage our experience operating in the Permian Basin. Our executive team, which has an average of approximately 24 years of industry experience per person and significant experience in the Permian Basin, intends to continue to seek ways to maximize hydrocarbon recovery by refining and enhancing our drilling and completion techniques. The time to reach total depth, or TD, for our vertical Wolfberry wells decreased from an average of 18 days during the second quarter of 2011 to an average of 14 days during the period from April 2012 through August 2012 to an average of 11 days during the fourth quarter of 2012 to an average of eight days during the second quarter of 2013, with three of our recent vertical wells reaching TD in less than seven days. Our focus on efficient drilling and completion techniques, and the reduction in time to reach TD, is an important part of the continuous Table of Contents drilling program we have planned for our significant inventory of identified potential drilling locations. We believe that the experience of our executive team in deviated and horizontal drilling and completions should help reduce the execution risk normally associated with these complex well paths. In addition, our completion techniques are continually evolving as we evaluate hydraulic fracturing practices that may potentially increase recovery and reduce completion costs. Our executive team regularly evaluates our operating results against those of other operators in the area in an effort to benchmark our performance against the best performing operators and evaluate and adopt best practices. Enhance returns through our low cost development strategy of resource conversion, capital allocation and continued improvements in operational and cost efficiencies. In the current commodity price environment, our oil and liquids rich asset base provides attractive returns. Our acreage position in the Wolfberry play is generally in contiguous blocks which allows us to develop this acreage efficiently with a manufacturing strategy that takes advantage of economies of scale and uses centralized production and fluid handling facilities. We are the operator of approximately 99% of our acreage. This operational control allows us to more efficiently manage the pace of development activities and the gathering and marketing of our production and control operating costs and technical applications, including horizontal development. Our average 88% working interest in our acreage allows us to realize the majority of the benefits of these activities and cost efficiencies. Pursue strategic acquisitions with exceptional resource potential. We have a proven history of acquiring leasehold positions in the Permian Basin that have substantial oil-weighted resource potential and can achieve attractive returns on invested capital. Our executive team, with its extensive experience in the Permian Basin, has what we believe is a competitive advantage in identifying acquisition targets and a proven ability to evaluate resource potential. We regularly review acquisition opportunities and intend to pursue acquisitions that meet our strategic and financial targets. As discussed in more detail under Recent Developments Pending Acquisitions, we have entered into agreements to acquire approximately 11,150 additional net acres in the Permian Basin. Maintain financial flexibility. We seek to maintain a conservative financial position. Upon completion of our initial public offering in October 2012, we used a portion of the net proceeds from the offering to repay the entire balance outstanding under our revolving credit facility. On December 28, 2012, the borrowing base under our revolving credit facility was redetermined, resulting in an increase in our availability to $135.0 million, and it was redetermined again on May 6, 2013, resulting in an increase in availability to $180.0 million. We used a portion of the net proceeds of our May 2013 common stock offering to repay all borrowings outstanding under our revolving credit facility and, as of the date of this prospectus, we have $180.0 million of borrowing base availability. Our Strengths We believe that the following strengths will help us achieve our business goals: Oil rich resource base in one of North America s leading resource plays. All of our leasehold acreage is located in one of the most prolific oil plays in North America, the Permian Basin in West Texas. The majority of our current properties are well positioned in the core of the Wolfberry play. We believe that our historical vertical development success will be complemented with horizontal drilling locations that could ultimately translate into an increased recovery factor on a per section basis. Our production for the six months ended June 30, 2013 was approximately 73% oil, 15% natural gas liquids and 12% natural gas. As of December 31, 2012, our estimated net proved reserves were comprised of approximately 65% oil and 21% natural gas liquids, which allows us to benefit from the currently more favorable pricing of oil and natural gas liquids as compared to natural gas. Multi-year drilling inventory in one of North America s leading oil resource plays. We have identified a multi-year inventory of potential drilling locations for our oil-weighted reserves that we believe provides attractive growth and return opportunities. As of June 30, 2013, we had 867 identified potential vertical drilling locations based on 40-acre spacing and an additional 1,128 identified potential vertical drilling locations based on 20-acre downspacing. We also believe that there are a significant number of horizontal locations that could be drilled on our acreage. Based on our initial results and those of other operators in the area to date, combined with our interpretation of various geologic and engineering data, we have identified 862 potential horizontal locations on our acreage. These locations exist across most of our acreage blocks and in multiple horizons. Of the 862 locations, 376 are in the Wolfcamp A horizon or the Wolfcamp B horizon, with the remaining locations in either the Clearfork, Spraberry, Wolfcamp C or Cline horizons. We have assigned horizontal locations to the Lower Spraberry, but have not assigned locations to other intervals within the Spraberry, which we believe may have development potential. Our current horizontal location count is based on 880 foot spacing between wells in the Wolfcamp B horizon in Midland and Upton Counties, and 1,320 foot spacing between wells in all other counties and horizons. The ultimate inter-well spacing may be less than these amounts, which would result in a higher location count. Based on horizontal wells drilled to date, we currently estimate that EURs for our Wolfcamp B Table of Contents horizontal wells will be approximately 550 to 650 MBOE for lateral lengths averaging 7,500 feet. In addition, we have approximately 182 square miles of proprietary 3-D seismic data covering our acreage. This data facilitates the evaluation of our existing drilling inventory and provides insight into future development activity, including horizontal drilling opportunities and strategic leasehold acquisitions. Experienced, incentivized and proven management team. Our executive team has an average of approximately 24 years of industry experience per person, most of which is focused on resource play development. This team has a proven track record of executing on multi-rig development drilling programs and extensive experience in the Permian Basin. In addition, our executive team has significant experience with both drilling and completing horizontal wells as well as horizontal well reservoir and geologic expertise, which will be of strategic importance as we expand our horizontal drilling activity. Prior to joining us, our Chief Executive Officer held management positions at Apache Corporation, Laredo Petroleum Holdings, Inc. and Burlington Resources. Favorable and stable operating environment. We have focused our drilling and development operations in the Permian Basin, one of the oldest hydrocarbon basins in the United States, with a long and well-established production history and developed infrastructure. With approximately 380,000 wells drilled in the Permian Basin since the 1940s, we believe that the geological and regulatory environment is more stable and predictable, and that we are faced with less operational risks, in the Permian Basin as compared to emerging hydrocarbon basins. High degree of operational control. We are the operator of approximately 99% of our Permian Basin acreage. This operating control allows us to better execute on our strategies of enhancing returns through operational and cost efficiencies and increasing ultimate hydrocarbon recovery by seeking to continually improve our drilling techniques, completion methodologies and reservoir evaluation processes. Additionally, as the operator of substantially all of our acreage, we retain the ability to adjust our capital expenditure program based on commodity price outlooks. This operating control also enables us to obtain data needed for efficient exploration of horizontal prospects. Financial flexibility to fund expansion. We have a conservative balance sheet. We will seek to maintain financial flexibility to allow us to actively develop our drilling, exploitation and exploration activities in the Wolfberry play and maximize the present value of our oil-weighted resource potential. As of the date of this prospectus, we had no borrowings outstanding under our revolving credit facility and available borrowing capacity of $180.0 million. We expect that our borrowing base will be further increased as we increase our reserves. Our Properties Location and Land We acquired approximately 4,174 net acres in West Texas (near Midland) in the Permian Basin on December 20, 2007, with an effective date of November 1, 2007, from ExL Petroleum, LP, Ambrose Energy I, Ltd. and certain other sellers. Subsequently, we acquired approximately 49,861 additional net acres, which brought our total net acreage position in the Permian Basin to approximately 54,035 net acres at June 30, 2013. Since our initial acquisition in the Permian Basin through June 30, 2013, we drilled or participated in the drilling of 249 gross (216 net) wells on our leasehold in this area, primarily targeting the Wolfberry play. We are the operator of approximately 99% of our Permian Basin acreage. The Permian Basin area covers a significant portion of western Texas and eastern New Mexico and is considered one of the major producing basins in the United States. As discussed in more detail under Recent Developments Pending Acquisitions, we have entered into agreements to acquire approximately 11,150 additional net acres in the Permian Basin. Area History Our proved reserves are located in the Permian Basin of West Texas, in particular in the Clearfork, Spraberry, Wolfcamp, Cline, Strawn and Atoka formations. The Spraberry play was initiated with production from several new field discoveries in the late 1940s and early 1950s. It was eventually recognized that a regional productive trend was present, as fields were extended and coalesced over a broad area in the central Midland Basin. Development in the Spraberry play was sporadic over the next several decades due to typically low productive rate wells, with economics being dependent on oil prices and drilling costs. The Wolfcamp formation is a long-established reservoir in West Texas, first found in the 1950s as wells aiming for deeper targets occasionally intersected slump blocks or debris flows with good reservoir properties. Exploration using 2-D seismic data located additional fields, but it was not until the use of 3-D seismic data in the 1990s that the greater extent of the Wolfcamp formation was revealed. The additional potential of the shales within this formation as reservoir rather than just source rocks was not recognized until very recently. During the late 1990s, Atlantic Richfield Company, or Arco, began a drilling program targeting the base of the Spraberry formation at 10,000 feet, with an additional 200 to 300 feet drilled to produce from the upper portion of the Wolfcamp Table of Contents formation. Henry Petroleum, a private firm, owned interests in the Pegasus field in Midland and Upton counties. While drilling in the same area as the Arco project, Henry Petroleum decided to drill completely through the Wolfcamp section. Henry Petroleum mapped the trend and began acquiring acreage and drilling wells using multiple slick-water fracturing treatments across the entire Wolfcamp interval. In 2005, former members of Henry Petroleum s Wolfcamp team formed their own private company, ExL Petroleum, and began replicating Henry Petroleum s program. After ExL had drilled 32 productive Wolfcamp/Spraberry wells through late 2007, they monetized a portion of their acreage position, which led to the acquisition that enabled us to begin our participation in this play. Recent advancements in enhanced recovery techniques and horizontal drilling continue to make this play attractive to the oil and gas industry. By mid-2010, approximately half of the rigs active in the Permian Basin were drilling wells in the Wolfberry play. As of June 30, 2013, we held interests in 274 gross (242 net) producing wells. Geology The Permian Basin formed as an area of rapid Mississippian-Pennsylvanian subsidence in the foreland of the Ouachita fold belt. It is one of the largest sedimentary basins in the U.S., and has oil and gas production from several reservoirs from Permian through Ordovician in age. The term Wolfberry was coined initially to indicate commingled production from the Permian Spraberry, Dean and Wolfcamp formations. In this prospectus, we refer to the Clearfork, Spraberry, Wolfcamp, Cline, Strawn and Atoka formations collectively as the Wolfberry play. The Wolfberry play of the Midland Basin lies in the area where the historically productive Spraberry trend geographically overlaps the productive area of the emerging Wolfcamp play. The Spraberry was deposited as turbidites in a deep water submarine fan environment, while the Wolfcamp reservoirs consist of debris-flow and grain-flow sediments, which were also deposited in a submarine fan setting. The best carbonate reservoirs within the Wolfcamp are generally found in proximity to the Central Basin Platform, while the shale reservoirs within the Wolfcamp thicken basinward away from the Central Basin Platform. Both the Spraberry and Wolfcamp contain organic-rich mudstones and shales which, when buried to sufficient depth for maturation, became the source of the hydrocarbons found in the reservoirs. The Wolfberry play can be generally characterized as a combination of low-permeability clastic, carbonate and shale reservoirs which are hydrocarbon-charged and are economic due to the overall thickness of the section (more than 3,000 feet) and application of enhanced stimulation (fracking) techniques. The Wolfberry is an unconventional basin-centered oil resource play, in the sense that there is no regional downdip oil/water contact. Several shale intervals within the Wolfcamp formation are currently being evaluated for horizontal development potential, and initial drilling to explore these intervals commenced in 2012. The shales exhibit micro-darcy permeabilities which result in relatively small drainage areas and recovery factors. Because of this, we believe the horizontal exploitation of these reservoirs will supplement, and not replace, our vertical development program. There are also productive carbonate and shale intervals within the shallower Permian Clearfork formation. Two shale intervals within the Clearfork formation are currently being evaluated for potential horizontal development. Below the Wolfcamp formation lie the Pennsylvanian Strawn and Atoka formations. Although difficult to predict, there are conventional pay intervals that develop locally within these formations which, when present, can add significant reserves. Debris flows within the Spraberry and Wolfcamp carbonates have been observed on 3-D seismic surveys. Initial tests have confirmed the presence of enhanced reservoir. Additionally, structural closures have been mapped and are being evaluated for drilling to test deeper targets. Our extensive geophysical database, which includes approximately 182 square miles of proprietary 3-D seismic data, will be used to enhance grading of future locations. Production Status During the year ended December 31, 2012, net production from our Permian Basin acreage was 1,078,320 BOE, or an average of 2,946 BOE/d, of which 70% was oil, 17% was natural gas liquids and 13% was natural gas. During the six months ended June 30, 2013, our average daily production was approximately 5,694 BOE, of which 73% was oil, 15% was natural gas liquids and 12% was natural gas. Facilities Our land oil and gas processing facilities are typical of those found in the Permian Basin. Our facilities located at well locations include storage tank batteries, oil/gas/water separation equipment and pumping units. Table of Contents Future Activity During 2013, we expect to drill an estimated 38 gross (33 net) vertical wells and 33 gross (30 net) horizontal wells on our acreage. We currently estimate that our capital expenditures for 2013 will be between $290.0 million and $320.0 million, which includes costs for infrastructure and non-operated wells but does not include the cost of any land acquisitions. During the six months ended June 30, 2013, we drilled 24 gross (20.5 net) vertical wells and 14 gross (12.5 net) horizontal wells and participated in the drilling of one gross (0.4 net) non-operated well in the Permian Basin. During the six months ended June 30, 2013, our aggregate capital expenditures for drilling and infrastructure were $112.1 million, and we spent an additional $6.2 million for leasehold acquisitions. Oil and Natural Gas Data Proved Reserves SEC Rule-Making Activity In December 2008, the SEC released its final rule for Modernization of Oil and Gas Reporting. These rules require disclosure of oil and gas proved reserves by significant geographic area, using the arithmetic 12-month average beginning-of-the-month price for the year, as opposed to year-end prices as had previously been required, unless contractual arrangements designate the price to be used. Other significant amendments included the following: Disclosure of unproved reserves: probable and possible reserves may be disclosed separately on a voluntary basis. Proved undeveloped reserve guidelines: reserves may be classified as proved undeveloped if there is a high degree of confidence that the quantities will be recovered and they are scheduled to be drilled within the next five years, unless the specific circumstances justify a longer time. Reserves estimation using new technologies: reserves may be estimated through the use of reliable technology in addition to flow tests and production history. Reserves personnel and estimation process: additional disclosure is required regarding the qualifications of the chief technical person who oversees the reserves estimation process. We are also required to provide a general discussion of our internal controls used to assure the objectivity of the reserves estimate. Non-traditional resources: the definition of oil and gas producing activities has expanded and focuses on the marketable product rather than the method of extraction. We adopted the rules effective December 31, 2009, as required by the SEC. Evaluation and Review of Reserves Our historical reserve estimates were prepared by Ryder Scott as of December 31, 2012 and 2011 and by Pinnacle as of December 31, 2010, in each case with respect to our assets in the Permian Basin. Each of Ryder Scott and Pinnacle is an independent petroleum engineering firm. The technical persons responsible for preparing our proved reserve estimates meet the requirements with regards to qualifications, independence, objectivity and confidentiality set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers. Neither independent third-party engineering firm owns an interest in any of our properties or is employed by us on a contingent basis. Under SEC rules, proved reserves are those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs and under existing economic conditions, operating methods and government regulations prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. If deterministic methods are used, the SEC has defined reasonable certainty for proved reserves as a high degree of confidence that the quantities will be recovered. All of our 2012 proved reserves were estimated using a deterministic method. The estimation of reserves involves two distinct determinations. The first determination results in the estimation of the quantities of recoverable oil and gas and the second determination results in the estimation of the uncertainty associated with those estimated quantities in accordance with the definitions established under SEC rules. The process of estimating the quantities of recoverable oil and gas reserves relies on the use of certain generally accepted analytical procedures. These analytical procedures fall into three broad categories or methods: (1) performance-based methods, (2) volumetric-based methods and (3) analogy. These methods may be used singularly or in combination by the reserve evaluator in the process of estimating the quantities of reserves. The proved reserves for our properties were estimated by performance methods, analogy or a combination of both methods. Approximately 85% of the proved producing reserves attributable to producing wells were estimated by performance methods. These Table of Contents performance methods include, but may not be limited to, decline curve analysis, which utilized extrapolations of available historical production and pressure data. The remaining 15% of the proved producing reserves were estimated by analogy, or a combination of performance and analogy methods. The analogy method was used where there were inadequate historical performance data to establish a definitive trend and where the use of production performance data as a basis for the reserve estimates was considered to be inappropriate. All proved developed non-producing and undeveloped reserves were estimated by the analogy method. To estimate economically recoverable proved reserves and related future net cash flows, Ryder Scott considered many factors and assumptions, including the use of reservoir parameters derived from geological, geophysical and engineering data which cannot be measured directly, economic criteria based on current costs and the SEC pricing requirements and forecasts of future production rates. To establish reasonable certainty with respect to our estimated proved reserves, the technologies and economic data used in the estimation of our proved reserves included production and well test data, downhole completion information, geologic data, electrical logs, radioactivity logs, core analyses, available seismic data and historical well cost and operating expense data. We maintain an internal staff of petroleum engineers and geoscience professionals who worked closely with our independent reserve engineers to ensure the integrity, accuracy and timeliness of the data used to calculate our proved reserves relating to our assets in the Permian Basin. Our internal technical team members met with our independent reserve engineers periodically during the period covered by the reserve report to discuss the assumptions and methods used in the proved reserve estimation process. We provide historical information to the independent reserve engineers for our properties such as ownership interest, oil and gas production, well test data, commodity prices and operating and development costs. Our Vice President Reservoir Engineering is primarily responsible for overseeing the preparation of all of our reserve estimates. Our Vice President Reservoir Engineering is a petroleum engineer with over 30 years of reservoir and operations experience and our geoscience staff has an average of approximately 26 years of industry experience per person. Our technical staff uses historical information for our properties such as ownership interest, oil and gas production, well test data, commodity prices and operating and development costs. The preparation of our proved reserve estimates are completed in accordance with our internal control procedures. These procedures, which are intended to ensure reliability of reserve estimations, include the following: review and verification of historical production data, which data is based on actual production as reported by us; preparation of reserve estimates by our Vice President Reservoir Engineering or under his direct supervision; review by our Vice President Reservoir Engineering of all of our reported proved reserves at the close of each quarter, including the review of all significant reserve changes and all new proved undeveloped reserves additions; direct reporting responsibilities by our Vice President Reservoir Engineering to our Chief Executive Officer; verification of property ownership by our land department; and no employee s compensation is tied to the amount of reserves booked. The following table presents our estimated net proved oil and natural gas reserves and the present value of our reserves as of December 31, 2012 and 2011, based on the reserve report prepared by Ryder Scott, and as of December 31, 2010, based on the reserve report prepared by Pinnacle, each an independent petroleum engineering firm, and such reserve reports have been prepared in accordance with the rules and regulations of the SEC. All our proved reserves included in the reserve reports are located in North America. Ryder Scott and Pinnacle prepared all our reserve estimates as of the periods covered by their respective reports. Table of Contents Historical Year Ended December 31, 2012 2011 2010 Estimated proved developed reserves: Oil (Bbls) 7,189,367 3,949,099 3,371,460 Natural gas (Mcf) 12,864,941 5,285,945 4,336,720 Natural gas liquids (Bbls) 2,999,440 1,263,710 1,126,431 Total (BOE) 12,332,964 6,093,800 5,220,678 Estimated proved undeveloped reserves: Oil (Bbls) 19,007,492 14,151,337 16,258,700 Natural gas (Mcf) 21,705,207 15,265,522 18,358,360 Natural gas liquids (Bbls) 5,251,989 3,785,849 4,706,536 Total (BOE) 27,877,016 20,481,440 24,024,963
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+PROSPECTUS SUMMARY This summary highlights selected information contained in greater detail elsewhere in this prospectus or in the materials incorporated by reference into this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, especially the risks of investing in our common stock discussed under "Risk Factors." Company Overview First Internet Bancorp is a bank holding company that conducts its business activities through its wholly-owned subsidiary, First Internet Bank, an Indiana chartered bank. The Bank was the first state-chartered, FDIC-insured Internet bank. We offer a full complement of products and services on a nationwide basis. We conduct our deposit operations primarily over the Internet and have no branch offices. The Bank commenced banking operations in 1999 and grew organically in the consumer market in its early years by adding new customers, products and capabilities through its Internet-based platform. The Company was incorporated under the laws of the State of Indiana on September 15, 2005. On March 21, 2006, we consummated a plan of exchange by which we acquired all of the outstanding shares of the Bank. In 2007, we acquired Indianapolis-based Landmark Financial Corporation. The acquisition merged Landmark Savings Bank, FSB, into the Bank. The Landmark acquisition added a turnkey retail mortgage lending operation that we then expanded on a nationwide basis through our Internet platform. Since then, we have added commercial real estate ("CRE") lending, including a nationwide credit tenant lease financing program, and more recently, commercial and industrial ("C&I") lending and business banking/treasury management services to meet the needs of high-quality, underserved commercial borrowers and depositors. Our commercial banking activities are highly dependent on establishing and maintaining strong relationships with our business customers. As of September 30, 2013, there were 2,861,326 shares of our common stock outstanding. As of September 30, 2013, we had total assets of $738.5 million, total liabilities of $676.6 million, and shareholders' equity of $61.9 million. Our principal office is located at 8888 Keystone Crossing, Suite 1700, Indianapolis, Indiana 46240. The low cost of living in Indianapolis (a 2009 Forbes study showed Indianapolis to be the most affordable place to live among the largest 40 MSAs in the United States) gives us access to highly skilled employees and office space at a competitive cost. Our website is www.firstinternetbancorp.com. The information on our website is not part of this prospectus and the reference to our website address does not constitute incorporation by reference of any information on our website into this prospectus. Market Areas Our business model is significantly different from that of a typical community bank. We do not have a conventional brick and mortar branch system; rather, we operate through our scalable internet banking platform. The market area for our residential real estate lending, consumer lending, and deposit gathering activities is the entire United States. We also offer credit tenant lease financing on a nationwide basis. Our other commercial lending activities, including CRE loans, C&I loans, corporate credit cards and corporate treasury management services, are offered by our commercial banking team to businesses primarily within a one hundred (100) mile radius of our corporate headquarters. The commercial banking market in central Indiana is primarily composed of larger regional and community banks. We have no significant customer concentrations within our loan portfolio. Table of Contents Lack of seasoning of our commercial loan portfolios may increase the risk of credit defaults in the future. Due to our increasing emphasis on CRE and C&I lending, a substantial amount of the loans in our commercial loan portfolios and our lending relationships are of relatively recent origin. In general, loans do not begin to show signs of credit deterioration or default until they have been outstanding for some period of time, a process referred to as "seasoning." A portfolio of older loans will usually behave more predictably than a newer portfolio. As a result, because a large portion of our commercial loan portfolio is relatively new, the current level of delinquencies and defaults may not be representative of the level that will prevail when the portfolio becomes more seasoned, which may be higher than current levels. If delinquencies and defaults increase, we may be required to increase our provision for loan losses, which would have a material adverse effect on our business, financial condition and results of operations. If our mortgage lending business does not grow, we will not be as profitable as we have been in recent years. The residential mortgage business is highly competitive, and highly susceptible to changes in market interest rates, consumer confidence levels, employment statistics, the capacity and willingness of secondary market purchasers to acquire and hold or securitize loans, and other factors beyond our control. Additionally, in many respects, the mortgage origination business is relationship based and dependent on the services of individual mortgage loan officers. The loss of services of one or more loan officers could have the effect of reducing the level of our mortgage production. As a result of these factors, we cannot be certain that we will be able to maintain or grow the volume or percentage of revenue or net income produced by our residential mortgage loan business. A decline in our residential mortgage business may have an adverse effect on our financial condition and results of operations. A sustained decline in the mortgage loan markets or the related real estate markets could reduce loan origination activity or increase delinquencies, defaults and foreclosures, which could adversely affect our financial results. Historically, our mortgage loan business has provided a significant portion of our revenue and our ability to maintain or grow that revenue is dependant upon our ability to originate loans and sell them on the secondary market. During the year ended December 31, 2012, income from mortgage banking activities was $10.7 million and for the nine months ended September 30, 2013, $7.8 million. Mortgage loan origination is sensitive to changes in economic conditions, including decreased economic activity, a slowdown in the housing market, or higher market interest rates, and has historically been cyclical, enjoying periods of strong growth and profitability followed by periods of lower volumes and market-wide losses. During periods of rising interest rates, refinancing originations for many mortgage products tend to decrease as the economic incentives for borrowers to refinance their existing mortgage loans are reduced. In addition, the mortgage loan origination business is affected by changes in real property values. A reduction in real property values could also negatively affect our ability to originate mortgage loans because the value of the real properties underlying the loans is a primary source of repayment in the event of foreclosure. The national market for residential mortgage loan refinancing has recently experienced a decline, and a continuation of that trend may adversely impact our business. Any sustained period of increased delinquencies, foreclosures or losses could harm our ability to originate and sell mortgage loans, and the price received on the sale of such loans, which could have a material adverse effect on our business, financial condition and results of operations. RISKS RELATING TO THE REGULATION OF OUR INDUSTRY We operate in a highly regulated environment, which could restrain our growth and profitability. We are subject to extensive laws and regulations that govern almost all aspects of our operations. These laws and regulations, and the supervisory framework that oversees the administration of these laws and Table of Contents About this Prospectus You should rely only on the information contained in or incorporated by reference into this prospectus and any "free writing prospectus" we authorize to be delivered to you. We have not, and the underwriters have not, authorized anyone to provide you with additional information or information different from that contained in or incorporated by reference into this prospectus and any "free writing prospectus." If anyone provides you with different or inconsistent information, you should not rely on it. To the extent information in this prospectus and any "free writing prospectus" is inconsistent with any of the documents incorporated by reference into this prospectus and any "free writing prospectus," you should rely on this prospectus and any "free writing prospectus." We are offering to sell, and seeking offers to buy, our common stock only in states where those offers and sales are permitted. You should assume that the information contained in or incorporated by reference into this prospectus and any "free writing prospectus" is accurate only as of their respective dates. Our business, financial condition, results of operations and prospects may have changed since those dates. You should read this prospectus, all of the information incorporated by reference into this prospectus and the additional information about us described in the section titled "Where You Can Find More Information" before making your investment decision. No action is being taken in any jurisdiction outside the United States to permit a public offering of our common stock or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about, and to observe, any restrictions as to the offering and the distribution of this prospectus applicable to those jurisdictions. Unless otherwise expressly stated or the context otherwise requires, all information in this prospectus assumes that (i) the underwriters will not exercise their option to purchase additional shares of our common stock to cover over-allotments, if any, and (ii) no options, warrants, stock rights or shares of common stock were issued after November 14, 2013 and that no outstanding warrants were exercised after November 14, 2013. In addition, except as otherwise noted, all information in this prospectus reflects a three-for-two (3:2) stock split of our outstanding common stock that was effected on June 21, 2013. This prospectus includes market size, market share and industry data that we have obtained from internal company surveys, market research, publicly available information and various industry publications. The third-party sources from which we have obtained information generally state that the information contained therein has been obtained from sources believed to be reliable, but we cannot assure you that this information is accurate or complete. We have not independently verified any of the data from third-party sources nor have we verified the underlying economic assumptions relied upon by those third parties. Similarly, internal company surveys, industry forecasts and market research, which we believe to be reliable based upon management's knowledge of the industry, have not been verified by any independent sources. Our internal company surveys are based on data we have collected over the past several years. As used in this prospectus, the terms "we," "our," "us," "First Internet Bancorp," and the "Company" refer to First Internet Bancorp and its consolidated subsidiaries, unless the context indicates otherwise. References to "First Internet Bank" or "Bank" refer to First Internet Bank of Indiana, a wholly owned subsidiary of the Company. Table of Contents Performance Growth. Total assets have increased from $504.6 million at December 31, 2009 to $738.5 million at September 30, 2013. This increase of $233.9 million or 46.4% was driven by strong organic growth. During the same time period, total net loans increased from $305.4 million to $434.2 million and deposits increased from $411.6 million to $636.7 million, an increase of 42.2% and 54.7%, respectively. Our sustained growth profile is the result of our flexible and highly scalable Internet banking strategy that allows us to target a broad reach of customers across 50 states. Additionally, key strategic commercial banking hires have enabled us to further expand our product offerings on both a local and national basis. At September 30, 2013, CRE and C&I loans comprised 38.7% of the loan portfolio, excluding residential mortgage loans held for sale, compared to 7.7% at December 31, 2009. Earnings Trend. Net income was a negative $2.1 million in the year ended December 2009, and we generated positive net income of $5.0 million, $3.2 million and $5.6 million for the years ended December 31, 2010, 2011 and 2012, respectively. In addition, net income amounted to $3.9 million for the nine months ended September 30, 2013. The loss of $2.1 million incurred for the year ended December 31, 2009 primarily related to provisioning expense as we sought to address the effect of the financial crisis on our customers. The earnings performance since January 1, 2009 reflects (1) our substantial asset growth funded by an increasing amount of lower cost core deposits, (2) our ability to operate with lower overhead costs due to our technology-based operating model, and (3) the continued expansion of our local and national presence with enhanced loan and deposit product offerings. Asset Quality. At September 30, 2013, our nonperforming assets to total assets amounted to 1.23% and our allowance for loan losses to total loans receivable amounted to 1.26%. We have maintained a high quality loan portfolio due to our emphasis on a strong credit culture, conservative underwriting standards, and a diverse national and local customer base. Strategic Focus Our business model is significantly different from that of a typical community bank. We operate on a national basis through our scalable Internet banking platform to gather deposits and offer residential mortgage and consumer lending products rather than relying on a conventional brick and mortar branch system. We also conduct commercial banking and related activities, primarily on a local basis. Our overriding strategic focus is enhancing franchise and shareholder value. We believe the continued creation of franchise and shareholder value will be driven by profitable growth in consumer and commercial banking, effective underwriting, strong asset quality and efficient technology-driven operations. National Focus on Deposit and Consumer Banking Growth Our first product offerings were basic deposit accounts, certificates of deposit, electronic bill pay and credit cards. Within 90 days of opening, we had accounts with consumers in all 50 states. Over the years, we added secured consumer loans, lines of credit, home equity loans and single-family mortgages. Our footprint for deposit gathering and these consumer lending activities is the entire nation. With the use of our Internet-based technology platform, we do not face geographic boundaries that traditional banks must overcome for customer acquisition. Armed with smart phones and tablet computers, our customers can access our online banking system, bill pay, and remote deposit capture 24 hours a day, seven days a week, on a real time basis. In addition, we have eight dedicated banking specialists who can service customer needs via telephone, email or online chat. We intend to continue to expand our deposit base by leveraging technology and marketing. The average size of our checking account at September 30, 2013 was $11,000 as compared to a national average checking account balance of $3,000. Commercial Banking Growth Over the past three years, we have diversified our operations by adding commercial banking to complement our consumer platform. We now offer CRE loans, credit tenant leases, C&I loans and corporate credit cards to commercial businesses. Our commercial First Internet Bancorp 8888 Keystone Crossing, Suite 1700 Indianapolis, Indiana 46240 Telephone: (317) 532-7900 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) Table of Contents Cautionary Note Regarding Forward-Looking Statement This prospectus contains forward-looking statements. In some cases, you can identify forward-looking statements by the following words: "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "ongoing," "plan," "potential," "predict," "project," "should," "will," "would" or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this prospectus. These factors include: failures of or interruptions in the communications and information systems on which we rely to conduct our business could reduce our revenues, increase our costs or lead to disruptions in our business; our plans to grow our commercial real estate and commercial and industrial loan portfolios which may carry greater risks of non-payment or other unfavorable consequences; competitive factors, including competition with national, regional and community financial institutions, that may lead to pricing pressures that reduce the yields the Bank earns on loans and increase rates the Bank pays on deposits, the loss of our most valued customers, defection of key employees or groups of employees or other losses; the loss of any key members of senior management; fluctuation in interest rates; monetary and fiscal policies of the Board of Governors of the Federal Reserve System and the U.S. Government and other government initiatives affecting the financial services industry; general economic conditions, whether national or regional, and conditions in the lending markets in which we participate that may hinder our ability to increase lending activities or have an adverse effect on the demand for our loans and other products, our credit quality and related levels of nonperforming assets and loan losses, and the value and salability of the real estate that we own or that is the collateral for our loans; results of examinations of us by our regulators, including the possibility that our regulators may, among other things, require us to increase our reserve for loan losses or to write-down assets; changing bank regulatory conditions, policies or programs, whether arising as new legislation or regulatory initiatives, that could lead to restrictions on activities of banks generally, or First Internet Bank of Indiana (the "Bank") in particular, more restrictive regulatory capital requirements, increased costs, including deposit insurance premiums, regulation or prohibition of certain income producing activities or changes in the secondary market for loans and other products; and other risk factors included under the heading "Risk Factors" beginning on page 10. Furthermore, forward-looking statements are subject to risks and uncertainties related to our ability to, among other things: generate loan and deposit balances at projected spreads; sustain fee generation including gains on sales of loans; maintain asset quality and control risk; limit the amount of net loan charge-offs; adapt to changing customer deposit, investment and borrowing behaviors; control expenses; dispose of properties or other assets obtained through foreclosures at expected prices and within a reasonable period of time; attract and retain key personnel; and monitor and manage our financial reporting, operating and disclosure control environments. Table of Contents lending teams consist of seasoned commercial bankers, most of whom have had extensive careers with larger money center, super-regional or regional banks. These lenders have developed long-term, core relationships with a consistent base of commercial borrowers. We recently introduced a treasury management product to capture the deposit side of these commercial relationships. We are continuing to develop new products and services for this market that will produce additional loan interest income as well as non-interest income. We also intend to grow and expand our commercial banking platform by hiring additional seasoned loan officers and relationship managers. Experience Our management team and our Board of Directors are integral to our success. Our management team and Board of Directors are led by David B. Becker, the founder of First Internet Bank of Indiana. Mr. Becker is a seasoned business executive and entrepreneur with over three decades of management experience in the financial services and financial technology space, and has served as our Chief Executive Officer since 2005. Mr. Becker has been the recipient of numerous business awards, including Ernst & Young Entrepreneur of the Year in 2002, and is a recent inductee to the Central Indiana Business Hall of Fame. Our Chief Financial Officer, Kay E. Whitaker, brings over 20 years of experience in the financial services industry, most recently as the CFO of Central Indiana Community Foundation ("CICF") from 2007 to 2012. At CICF, Ms. Whitaker provided financial oversight for 800 philanthropic funds and 165 investment accounts across multiple portfolios, and was named 2012 CFO of the Year in the not-for-profit sector by the Indianapolis Business Journal. Ms. Whitaker also brings over 15 years of accounting experience with PriceWaterhouseCoopers focused on financial institutions. The senior management team is complemented by a dedicated Board of Directors with a wide range of experience from careers in financial services, legal, regulatory, and industrial services. The leaders of our lending teams and members of their staff are highly seasoned, career bankers who bring deep banking knowledge and relationships from regional, super-regional or money center banks. Our core management team has a wealth of banking knowledge from a wide variety of backgrounds which gives us significant market insight and allows us to leverage their comprehensive, long-term customer relationships. We organize our lending teams as follows: Commercial and Industrial, Commercial Real Estate, Consumer and Mortgage Banking. Our C&I and CRE teams are both composed of eight members each. The Consumer team has four lenders and the Residential Mortgage Banking team has 30 loan producers and 37 support staff. We will continue to search for seasoned bankers who can add new lending verticals and sources of non-interest income. Profitability We intend to continue to leverage our technology, our long-term commercial relationships and our non-interest income sources to drive profitability. As we continue to grow, we believe that our model will produce a better efficiency ratio than more traditional community banks, with a goal of higher returns on assets and equity. Exceptional Asset Quality, Diversified Loan Portfolio and Effective Underwriting We have had an exceptional credit quality record since the Bank's inception. We will continue to place an emphasis on our strong credit culture and strict underwriting standards of diverse loan products to maintain our excellent credit quality. Our loan portfolio is diversified with a low level of construction loans. At September 30, 2013, the loan portfolio consisted of 27.83% CRE, 10.89% C&I, 25.60% consumer, and 35.68% residential real estate loans. Our Chief Credit Officer has approximately twenty-five years of experience with a major regional bank and joined us in August 2012. Our Compliance Officer has approximately thirty years of banking and compliance experience. Efficiency Through Technology To date, we have pursued growth in a prudent and disciplined fashion. We will continue to monitor our efficiency ratio and intend to invest in and utilize technology to compete more effectively as we grow in the future. Through our online account access services, augmented by our team of dedicated banking specialists, we can satisfy all of the needs of our retail and commercial customers in an efficient manner. Our data processing systems run on a "real-time" Kay E. Whitaker Senior Vice President-Finance, Chief Financial Officer and Secretary First Internet Bancorp 8888 Keystone Crossing, Suite 1700 Indianapolis, Indiana 46240 Telephone: (317) 532-7900 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) Table of Contents Some of these and other factors are discussed in this prospectus under the caption "Risk Factors" and elsewhere in this prospectus and in the documents incorporated by reference into this prospectus. The development of any or all of these factors could have an adverse impact on our financial position and our results of operations. Any forward-looking statements are based upon management's beliefs and assumptions at the time they are made. We undertake no obligation to publicly update or revise any forward-looking statements included or incorporated by reference in this prospectus or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this prospectus or the incorporated documents might not occur, and you should not put undue reliance on any forward-looking statements. Table of Contents basis, unlike many banks that run a "batch system," so customers benefit from an up-to-the-minute picture of their financial position particularly our commercial customers, who complete numerous transactions in a single day. Scalable Platform We believe we have built a scalable banking infrastructure based upon technology rather than a branch network, and that our Internet banking processes are capable of supporting continued growth while improving operational efficiencies. We believe our support team has the ability to grow our consumer loan and deposit base without significant additional hires. Copies to: David C. Worrell Kevin M. Houlihan Faegre Baker Daniels LLP Patton Boggs LLP 600 East 96th Street, Suite 600 2550 M Street, NW Indianapolis, Indiana 46240 Washington, DC 20037 Phone: (317) 569-9600 Phone: (202) 457-6000 Fax: (317) 569-4800 Fax: (202) 457-6315 Table of Contents
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+S-1 1 deepdown_s1.htm S-1 As filed with the Securities and Exchange Commission on October 4, 2013 Registration No. 333-_______ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________ FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ____________________ DEEP DOWN, INC. (Exact name of Registrant as specified in its charter) Nevada 3533 75-2263732 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number (I.R.S. Employer Identification No.) 8827 W. Sam Houston Parkway N., Suite 100 Houston, Texas 77040 (281) 517-5000 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) Ronald E. Smith, President and Chief Executive Officer Deep Down, Inc. 8827 W. Sam Houston Parkway N., Suite 100 Houston, Texas 77040 (281) 517-5000 (Name, address, including zip code, and telephone number, including area code of agent for service) Copy to: Brock Niezgoda Scott MacTaggert Looper Reed & McGraw P.C. Lewis Roca Rothgerber LLP 1300 Post Oak Blvd., Suite 2000 3993 Howard Hughes Parkway, Suite 600 Houston, Texas 77056 Las Vegas, Nevada 89169 Telephone: (713) 986-7122 Telephone: (702) 949-8200 Facsimile: (713) 730-5839 Facsimile: (702) 949-8398 Approximate date of commencement of proposed sale to the public: From time to time, after this Registration Statement becomes effective. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. o If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. o If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. o Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company CALCULATION OF REGISTRATION FEE Title of each class of securities to be registered Amount to be registered (1) Proposed maximum offering price per share (2) Proposed maximum aggregate offering price (2) Amount of registration fee Common Stock, $0.001 par value 4,443,611 Shares 2.47 $10,975,719 $1,417 These shares were issued to the Selling Shareholders pursuant to a private placement with closing dates on September 10, 2013 and September 26, 2013 (the "Private Placement"), and issued pursuant to an exemption provided by Rule 506 of the Securities Act of 1933, as amended. The term "Selling Shareholders" also covers persons to whom the original Selling Shareholders transfer their shares, including transferees, donees, pledgees, or other successors. The methods of sale of the common stock offered by this Prospectus are described under the heading "Plan of Distribution" on page 16. We will receive none of the proceeds from the sale of any of the common stock to which this Prospectus relates. See "Use of Proceeds" on page 9. The prices at which the Selling Shareholders may sell the shares of common stock that are part of this offering will be determined by the prevailing market price for the shares at the time the shares are sold, a price related to the prevailing market price, at negotiated prices, or prices determined from time to time by the Selling Shareholders. See "Plan of Distribution" on page 16. Sales of our common stock are reported on the OTCQX U.S., a segment of the OTCQX marketplace, under the symbol "OTCQX: DPDW." On October 3, 2013, the last reported sale price of our common stock was $2.34 per share. A current Prospectus must be in effect at the time of the sale of the shares of common stock discussed above. The Selling Shareholders will be responsible for any commissions or discounts due to brokers or dealers. We will pay all of the other offering expenses. Each Selling Shareholder or dealer selling the common stock is required to deliver a current Prospectus upon the sale. In addition, for the purposes of the Securities Act of 1933, as amended, Selling Shareholders may be deemed underwriters. The information in this Prospectus is not complete and may be changed. The Selling Shareholders may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. This Prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. Investing in our common stock involves a high degree of risk. You should carefully read and consider the "Risk Factors" beginning on page 3. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense. Prospectus dated October __, 2013. TABLE OF CONTENTS PART I - INFORMATION REQUIRED IN PROSPECTUS Page No. Prospectus Summary 1
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+PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read the entire prospectus carefully, including the section describing the risks related to our common stock under the caption Risk Factors, and the documents incorporated by reference in the section entitled Incorporation of Documents by Reference before making an investment decision. Some of the statements in this summary constitute forward-looking statements. For more information, please see Cautionary Note Regarding Forward-Looking Statements. We are an international direct-selling and e-commerce company headquartered in Dallas, Texas. Subsidiaries controlled by us sell personal care, wellness, and quality of life products under the NHT Global brand. In most markets, we sell our products to a network of consumers or business builders that either use the products themselves or resell them to consumers. Our majority-owned subsidiaries have an active physical presence in the following markets: North America; Greater China, which consists of Hong Kong, Taiwan and China; Russia; South Korea; Japan; and Europe, which consists of Italy and Slovenia. In June 2013, we opened a marketing center in Almaty, Kazakhstan through our engagement with our Russian service provider. The center also opened for sales and distribution purposes in September 2013. We seek to sell our products into many markets, primarily through our direct selling marketing operations. Our objectives are to enrich the lives of the users of our products and enable our distributors to benefit financially from the sale of our products. We were originally incorporated as a Florida corporation in 1988. We merged into one of our subsidiaries and re-incorporated in Delaware effective June 29, 2005. We maintain executive offices at 4514 Cole Avenue, Suite 1400, Dallas, Texas 75205 and our telephone number is (972) 241-4080. Our website is located at www.naturalhealthtrendscorp.com. The information provided on or accessed through our website is not incorporated into this prospectus and should not be considered part of this prospectus. Private Placement Financing On October 19, 2007, we entered into definitive agreements that resulted in the consummation of a private placement financing generating gross proceeds of approximately $3,740,000. The financing consisted of the sale of variable rate convertible debentures having an aggregate face amount of $4,250,000, seven-year warrants representing the right to purchase 1,495,952 shares of our common stock, and one-year warrants representing the right to purchase 1,495,952 shares of our common stock. The selling stockholders identified in this prospectus are the original investors or assignees of the original investors in transactions exempt from registration under the Securities Act. The convertible debentures were fully redeemed and retired without conversion. The one-year warrants expired unexercised. Pursuant to a requirement in the debentures, the Company obtained stockholder approval of the issuance of all of the shares of common stock underlying both the debentures and the warrants sold in the private placement financing at our 2008 annual stockholder meeting. The unexpired seven-year warrants have a seven-year term beginning April 21, 2008. All such warrants have an exercise price of $3.52 per share and otherwise have identical terms. The exercise price and the number of shares underlying the warrants are subject to adjustment in certain specified circumstances. If, at any time after the completion of the then applicable holding period under Rule 144, there is no effective registration statement for the underlying shares of common stock, the warrants may be exercised on a cashless basis. Dawson James Securities, Inc. ( Dawson James ) acted as placement agent in connection with the private placement described above. In addition to a cash transaction fee of approximately $280,500, Dawson James received five-year warrants to purchase an aggregate of 149,595 shares of our common stock at an exercise price of $3.52 per share. Those five-year warrants expired unexercised. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ___________________________________________ NATURAL HEALTH TRENDS CORP. (Exact name of registrant as specified in its charter) Delaware 5122 59-2705336 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) 4514 Cole Avenue Suite 1400 Dallas, Texas 75205 (972) 241-4080 (Address, including zip code, and telephone number, including area code, of registrant s principal executive offices) ___________________________________________ Timothy S. Davidson Senior Vice President and Chief Financial Officer Natural Health Trends Corp. 4514 Cole Avenue Suite 1400 Dallas, Texas 75205 (972) 241-4080 (Name, address, including zip code, and telephone number, including area code, of agent for service) ___________________________________________ Copy to: John B. McKnight Locke Lord LLP 2200 Ross Avenue, Suite 2200 Dallas, Texas 75201 (214) 740-8000 ___________________________________________ Approximate date of commencement of proposed sale to the public: From time to time after the effectiveness of the registration statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box.
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+This summary highlights information contained elsewhere in this prospectus. You should read the entire prospectus carefully, including the historical consolidated financial statements and pro forma condensed consolidated financial statements and the notes to those financial statements, and the other documents to which we refer for a more complete understanding of this offering. Furthermore, you should carefully read "Risk Factors" and "Forward-Looking Statements" for more information about important risks that you should consider before making a decision to purchase Class A shares in this offering. We include a glossary of some of the terms used in this prospectus as Appendix B.
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+PROSPECTUS SUMMARY 1
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+Prospectus Summary 1
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+PROSPECTUS SUMMARY 1
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+PROSPECTUS SUMMARY 1
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diff --git a/parsed_sections/prospectus_summary/2013/VCYT_veracyte_prospectus_summary.txt b/parsed_sections/prospectus_summary/2013/VCYT_veracyte_prospectus_summary.txt
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+PROSPECTUS SUMMARY This summary highlights information contained in greater detail elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider in making your investment decision. You should read the entire prospectus carefully before making an investment in our common stock. You should carefully consider, among other things, our financial statements and the related notes and the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus. Overview We are a diagnostics company pioneering the field of molecular cytology to improve patient outcomes and lower healthcare costs. We specifically target diseases that often require invasive procedures for an accurate diagnosis diseases where many healthy patients undergo costly interventions that ultimately prove unnecessary. We improve the accuracy of diagnosis at an earlier stage of patient care by deriving clinically actionable genomic information from cytology samples collected in an outpatient setting. Our first commercial solution, the Afirma Thyroid FNA Analysis, includes as its centerpiece our Gene Expression Classifier, which we refer to as the GEC. The GEC helps physicians reduce the number of unnecessary surgeries by employing a proprietary 142-gene signature to preoperatively determine whether thyroid nodules previously classified by cytopathology as indeterminate can be reclassified as benign. We have demonstrated the clinical utility and cost effectiveness of the GEC in studies published in peer-reviewed journals and established the clinical validity of the GEC in a study published in The New England Journal of Medicine in 2012. Since we commercially launched Afirma in January 2011, we have processed over 50,000 fine needle aspiration, or FNA, samples for evaluation using Afirma and performed more than 10,000 GECs to resolve indeterminate cytopathology results. We have obtained positive coverage decisions from Aetna, Humana, Medicare and UnitedHealthcare. Collectively, these payers represent more than 100 million covered lives. Additionally, we have entered into a global co-promotion agreement with Genzyme Corporation, a subsidiary of Sanofi. Our revenue has increased from $2.6 million in 2011 to $17.1 million for the trailing twelve months ending June 30, 2013. For decades, pathologists have diagnosed complex diseases by evaluating cells taken from a surgical tissue sample. More recently, molecular diagnostic tests that analyze the genomic material in these samples have emerged as an important complement to surgical pathology by helping to predict outcomes and guide treatment decisions. Both approaches, however, typically require relatively large quantities of tissue that must be obtained through an invasive surgical procedure. Cytopathology, which relies on small samples such as FNAs collected in an outpatient setting, is often the first step in the diagnostic process because it offers a minimally invasive and cost-effective alternative to surgery. However, cytology samples tend to be small and non-uniform, which contributes to a relatively high rate of diagnostic ambiguity and results in many patients undergoing surgery to obtain an accurate diagnosis. Molecular diagnostics broadly used today are not designed to reduce this ambiguity. We are building our molecular cytology business by developing molecular diagnostics that yield clinically actionable genomic information from cytology samples, as opposed to surgical tissue samples. Molecular cytology identifies genomic signatures from cytology samples to inform clinical decisions pre-operatively. We believe molecular cytology has the potential to improve patient care while simultaneously lowering costs to the healthcare system in a broad range of areas including thyroid, pulmonology, dermatology and reproductive endocrinology. We estimate that the use of molecular diagnostic solutions in thyroid and in three potential expansion areas could represent an approximately $4.0 billion opportunity. This estimate is based on our internal market assessment, from which we estimated the number of patients with ambiguous diagnostic results that we believe could benefit from Amendment No. 4 to Form S-1 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 Table of Contents using genomic tests, and the estimated price of such tests, which price takes into account the estimated cost savings to payers from avoidance of surgery. Our strategy is to focus on diseases where a large number of patients undergo invasive and costly diagnostic procedures that could be avoided with a more accurate diagnosis from a cytology sample taken pre-operatively. In prioritizing our opportunities, we develop a detailed understanding of the unmet clinical need and the shortcomings of the current standard of care. We define the precise clinical question in these diseases that, if informed by genomic information, would alter the standard of care in a way that improves patient outcomes while reducing costs in both the short- and long-term. Only then do we deploy our scientific expertise in biomarker discovery and algorithm development to derive a genomic signature that provides meaningful diagnostic information. We developed our first commercial offering, Afirma, to address a significant unmet need in thyroid nodule diagnosis. Thyroid nodules, or bumps under the skin of the neck around the thyroid gland, are usually benign; however, patients with nodules are generally referred to an endocrinologist for evaluation. Endocrinologists typically collect cells from the nodule for cytopathology with an FNA and send these samples to a cytopathologist for analysis. According to an abstract presented at the American Association of Endocrine Surgeons 2013 Annual Meeting, approximately 525,000 thyroid FNAs were performed in the United States in 2011. The American Thyroid Association, or ATA, guidelines indicate that 15% to 30% of FNAs yield indeterminate results, meaning they cannot be diagnosed as definitively benign or malignant by cytopathology alone. Because the risk of malignancy ranges from 20% to 30%, as referenced in the ATA guidelines, for an indeterminate diagnosis, clinical practice guidelines have historically recommended patients with indeterminate cytopathology results undergo surgery to remove part or all of their thyroid to obtain an accurate pathology diagnosis. Accordingly, in 70% to 80% of these cases, the thyroid nodule proves to be benign for cancer. We estimate the average cost of this surgery to be $15,000, and surgery can result in complications and leave a patient in need of hormone replacement therapy for life. We believe Afirma, if fully adopted, could result in over $500 million in direct cost savings to the healthcare system over five years. This estimate is based on a health economics study published in the Journal of Endocrinology and Metabolism in 2011. Afirma is a comprehensive solution that consists of cytopathology and the GEC. According to a clinical validity study published in The New England Journal of Medicine in 2012, the GEC reduces the number of unnecessary diagnostic surgeries by analyzing the genomic signature of FNA samples judged to be indeterminate by cytopathology and reclassifies 52% of those nodules to a benign diagnosis. The study authors concluded that the GEC could be useful to physicians in making important patient care decisions, such as recommending watchful waiting in lieu of diagnostic surgery for patients who receive a GEC benign result following indeterminate cytopathology findings. A subsequent clinical utility study published in Thyroid in 2012 covered 368 patients from 51 different endocrinologists. Each of these patients had both a cytopathology indeterminate result and a GEC benign result. This study found that physicians recommended surgery in only 7.6% of these cases, compared with a historical surgery rate of 74% for patients with indeterminate cytopathology results alone, representing an approximate 90% reduction in surgeries for the 52% of patients receiving a GEC benign result. In other words, approximately 90% of the 52% of patients receiving a GEC benign result make the decision to avoid a surgery. We believe the GEC is currently the only diagnostic test that meets the criteria of the National Comprehensive Cancer Network, or NCCN, for safely monitoring patients with indeterminate cytopathology results in lieu of surgery. In addition to thyroid cancer, there are many other complex diseases in which cytology samples play a critical role in clinical decision making. As with thyroid nodule diagnosis, inherent ambiguity in evaluation of cytopathology samples often results in unnecessary costs and procedures that would be avoidable if a molecular diagnostic test could refine diagnoses reached by cytopathology alone. We are currently developing the Afirma Malignant GEC test for rare forms of thyroid cancer or metastases to the thyroid that is intended to better inform surgical strategy. We are also in late biomarker discovery in interstitial lung disease, a group of lung diseases affecting the tissue and space around the microscopic air sacs of the VERACYTE, INC. (Exact name of registrant as specified in its charter) Table of Contents lungs that are difficult to diagnose prior to surgery. Specifically, we intend to improve the accuracy of diagnosis of idiopathic pulmonary fibrosis, one of the more progressive, often fatal, interstitial lung diseases, and to provide critical information to physicians and patients as they decide whether to pursue potentially lifesaving treatments or participate in clinical studies. Company Highlights Clinically validated solution with demonstrated utility and significant payer adoption. We have demonstrated the benefits of Afirma in multiple clinical studies that have been published in leading peer-reviewed publications. As a result of Afirma's demonstrated utility and our managed care expertise, we have obtained positive coverage decisions from a range of payers, including Aetna, Humana, Medicare and UnitedHealthcare. Large, underserved specialty markets. Approximately 525,000 thyroid FNAs were performed in the United States in 2011, by an estimated 3,500 endocrinologists whom we believe specialize in thyroid disease. We estimate the thyroid nodule diagnostic market to be approximately $500 million per year in the United States and approximately $300 million outside of the United States. Our domestic estimate is based on FNA volume and the estimated reimbursement per test for both cytology and the GEC. Our international estimate is based on our research in our primary international target markets. We believe we can effectively market Afirma with a small specialty sales force, in part because Afirma represents a significant innovation in the underserved thyroid cancer diagnostic market. Because Afirma represents a significant innovation for this underserved and relatively concentrated base of physicians, we believe we can effectively market Afirma with a small specialty sales force. Turnkey solution that drives customer retention. We market Afirma as a comprehensive offering that combines cytopathology with the GEC. Afirma simplifies the diagnostic process for physicians while optimizing utilization of our molecular diagnostic to maximize clinical benefits for patients and cost savings for payers. We believe these characteristics are key drivers of a physician's decision to convert their existing FNA protocol to Afirma. Since we commercially launched Afirma in 2011, more than 80% of physicians who ordered five or more Afirma tests in 2011 remain customers today. As a result, our targeted sales force devotes fewer resources to maintaining business with our existing base of physicians and instead focuses on driving adoption of Afirma among new customers. We intend to duplicate this model with solutions we develop for other diseases. Demonstrated core competencies leverageable across multiple products. We successfully advanced Afirma from the concept stage in early 2008 to a commercial product with broad physician and payer adoption today. We believe our expertise in disease selection, genomic signature discovery, clinical study design, commercialization and managed care, all of which we have demonstrated with the success of Afirma, will allow us to establish molecular cytology solutions in a range of diseases. Product pipeline with multiple high-value solutions. We believe we are well-positioned to introduce multiple new products in the near- and medium-term. In the second quarter of 2014, we plan to introduce the Afirma Malignant GEC, our first product line extension for Afirma, to help guide surgical strategy for the treatment of medullary thyroid cancer and other rare and metastatic forms of thyroid cancer. We plan to commercialize our first product for interstitial lung disease in 2016 and believe this product will serve as the foundational application to expand our molecular cytology platform to the treatment of lung disease. Our Solution We are pioneering the field of molecular cytology by developing molecular diagnostics that yield clinically actionable genomic information from cytology samples. Molecular cytology combines the screening benefits of a minimally invasive cytology sample with genomic information to inform disease Table of Contents diagnosis or treatment decisions pre-operatively. We focus on diseases in which a large number of patients undergo invasive and costly diagnostic procedures that could be avoided with a more accurate diagnosis from a cytology sample taken prior to surgery. Positioning our test as an alternative to an invasive procedure allows us to efficiently validate the accuracy of our diagnostic test by comparing our test results to those obtained using the more invasive approach. Armed with clinical data that supports the use of molecular cytology in lieu of a more invasive or costly procedure, we believe we are well-positioned to support clinical studies that demonstrate how our products change the standard of care, improve patient outcomes and reduce costs. In contrast to molecular diagnostics developed for surgical tissue, we have developed the expertise to solve many of the technical challenges associated with generating analytically valid and clinically relevant genomic information from smaller, heterogeneous cytology samples. To this end, we use a whole-genome approach for gene selection and proprietary machine-learning algorithms with statistical methods to identify the genomic signature that achieves the desired performance. Afirma is our first laboratory-developed commercial solution based on our molecular cytology platform. We drive physician adoption and retention by marketing Afirma as the centerpiece of a comprehensive solution for improved disease diagnosis, which allows our offering to seamlessly integrate into a physician's practice workflow. We offer Afirma to physicians as a turnkey solution that combines cytopathology for every patient with our molecular diagnostic test when cytopathology yields ambiguous results. Our solution includes a complete patient report that helps guide decision making. By integrating disparate diagnostic procedures into one comprehensive offering, we can simplify and improve the diagnostic process for physicians and their patients while optimizing utilization of our molecular diagnostics to maximize clinical benefits and cost savings. We intend to duplicate this model with solutions we develop for other diseases. Our capabilities in managed care and claims adjudication are essential to our success in obtaining positive coverage decisions and reimbursement. Our integrated team combines expertise in advocating for positive coverage decisions with specific insights into what tactical steps will maximize reimbursement from each payer. As a result, we have developed detailed knowledge of the intricacies of specific payer practices and requirements, which informs our strategy across disease selection, clinical study design, marketing and sales. Advantages of Afirma FNA Analysis for Stakeholders Benefits for patients. With the GEC, approximately half of the patients with indeterminate cytology results that are reclassified to benign may avoid invasive diagnostic surgery. Patients who obtain an Afirma benign result avoid the potential for surgery-related complications, the effects of life-long hormone replacement therapy and the associated costs. Of the approximately 525,000 FNAs performed in the United States in 2011, we estimate that approximately 115,000 yielded an indeterminate result. Benefits for physicians. Afirma enables every physician, regardless of practice setting, to offer his or her patients access to advanced technology for the diagnosis and management of thyroid nodules. Afirma does not introduce any new steps into the physician's patient-care routine and often simplifies their workflow. In addition, our cytopathology provider, Thyroid Cytology Partners, is a specialized practice focused solely on performing thyroid FNAs and meets high-quality standards with short turnaround times. Benefits for payers. Payers differentiate themselves by offering their insured the most advanced care available in medicine. However, payers are also under increased pressure to contain rising healthcare costs. Afirma allows payers to provide advanced care at a cost lower than the current standard of care. The first peer-reviewed economic impact study, published in the Journal of Clinical Endocrinology and Metabolism in 2011, concluded that routine use of the GEC in the United States 7000 Shoreline Court, Suite 250 South San Francisco, California 94080 (650) 243-6300 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Table of Contents would prevent tens of thousands of surgeries each year. Based on our estimate of the average costs of surgery of $15,000 as well as the findings from this study and the clinical utility study published in Thyroid in 2012, we believe full adoption of Afirma would result in over $500 million in direct cost savings to the healthcare system over five years. Our Strategy Our goal is to resolve diagnostic ambiguity pre-operatively, allowing patients to avoid unnecessary procedures and generating significant cost savings for the healthcare system. Our strategy includes the following key elements: Accelerate the growth of Afirma by expanding our base of prescribing physicians and achieving broader reimbursement. Market our novel molecular diagnostic tests as the centerpiece of a comprehensive patient-care solution. Drive cost and capital efficiencies by offering turnkey solutions to physicians in specialty markets. Broaden our addressable market in endocrinology by leveraging our thyroid expertise to introduce new products. Capitalize on our demonstrated core competencies to expand molecular cytology to additional diseases. Risks Associated with Our Business Our business is subject to numerous risks and uncertainties, including those identified in "Risk Factors" immediately following this prospectus summary. You should read these risks before you invest in our common stock. We may be unable, for many reasons, including those that are beyond our control, to implement our business strategy. In particular, risks associated with our business include: We are an early-stage company with a history of losses, and we expect to incur net losses for the foreseeable future and may never achieve or sustain profitability. Our financial results depend solely on sales of Afirma, and we will need to generate sufficient revenue from this and other diagnostic solutions to grow our business. We depend on Medicare, Aetna and UnitedHealthcare for a significant portion of our revenue and if one or more significant payers stop providing reimbursement or decrease the amount of reimbursement for our tests, our revenue could decline. If payers do not provide reimbursement, rescind or modify their reimbursement policies or delay payments for our tests, or if we are unable to successfully negotiate reimbursement contracts, our commercial success could be compromised. We may experience limits on our revenue if physicians decide not to order Afirma. The success of our relationship with Genzyme to co-promote Afirma may have a significant effect on our business. Because we do not recognize a significant portion of our revenue on an accrual basis, our quarterly operating results are likely to fluctuate. We rely on sole suppliers for some of the reagents, equipment, chips and other materials used in Afirma, and we may not be able to find replacements or transition to alternative suppliers. Bonnie H. Anderson President and Chief Executive Officer 7000 Shoreline Court, Suite 250 South San Francisco, California 94080 (650) 243-6300 (Name, address, including zip code, and telephone number, including area code, of agent for service) Table of Contents We depend on a specialized cytopathology practice to perform the cytopathology component of Afirma, and our ability to perform our diagnostic solution would be harmed if we were required to secure a replacement. If we are unable to support demand for Afirma or any of our future products or solutions, our business could suffer. If the FDA were to begin regulating our tests, we could incur substantial costs and delays associated with trying to obtain premarket clearance or approval. Corporate Information We were incorporated in Delaware as Calderome, Inc. in August 2006. Calderome operated as an incubator until early 2008. We changed our name to Veracyte, Inc. in March 2008. Our principal executive offices are located at 7000 Shoreline Court, Suite 250, South San Francisco, California 94080 and our telephone number is (650) 243-6300. Our website address is www.veracyte.com. We do not incorporate the information on, or accessible through, our website into this prospectus, and you should not consider any information on, or accessible through, our website as part of this prospectus. Unless the context indicates otherwise, as used in this prospectus, the terms "Veracyte," "Company," "we," "us" and "our" refer to Veracyte, Inc. Veracyte and Afirma are our trademarks. This prospectus also contains trademarks and trade names that are the property of their respective owners. We do not intend our use or display of other companies' trade names, trademarks or service marks to imply relationships with, or endorsements or sponsorship of us by, these other companies. Reverse Stock Split On October 9, 2013, we effected a 4-for-1 reverse split of our outstanding common stock. The par value per share and the authorized number of shares of common stock and preferred stock were not adjusted as a result of the reverse stock split. All references to issued and outstanding shares of common stock, options to purchase common stock and related per share amounts in this prospectus have been retroactively adjusted to reflect the reverse stock split for all periods presented. A proportional adjustment to the conversion ratio for each series of preferred stock was also effected in connection with the reverse stock split. Unless otherwise indicated, the information in this prospectus does not give effect to the automatic conversion of the preferred stock upon the closing of this offering. Accordingly, unless otherwise indicated, the proportional adjustment to the preferred stock conversion ratio and resulting number of shares of common stock to be issued upon conversion of the preferred stock into common stock upon the closing of the offering have not been retroactively adjusted. Copies to: Stanton D. Wong Gabriella A. Lombardi Heidi E. Mayon Pillsbury Winthrop Shaw Pittman LLP Four Embarcadero Center, 22nd Floor San Francisco, California 94111 Shelly D. Guyer Chief Financial Officer Veracyte, Inc. 7000 Shoreline Court, Suite 250 South San Francisco, California 94080 William H. Hinman Simpson Thacher & Bartlett LLP 2475 Hanover Street Palo Alto, California 94304 Table of Contents THE OFFERING Common stock offered by us 4,700,000 shares Common stock to be outstanding after this offering 20,689,890 shares (21,394,890 shares if the underwriters exercise their over-allotment option in full) Over-allotment option We have granted to the underwriters the option, exercisable for 30 days from the date of this prospectus, to purchase up to 705,000 additional shares of common stock. Use of proceeds We currently intend to use the net proceeds from this offering as follows: approximately $20.0 million for selling and marketing activities, including expansion of our sales force to support the ongoing commercialization of our products; approximately $20.0 million for research and development, including medical and clinical costs, related to the continued support of Afirma as well as the development of our product pipeline; and the remainder for general and administrative expenses (including compensation of officers and directors and other personnel-related costs and the costs of operating as a public company), and for working capital and other general corporate purposes. See "Use of Proceeds" for additional information.
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